already have a regulation covering this. Let me supply something for the record on this. I don't have vividly enough in mind just what the section does. (The information follows:) SECTION 232 OF H.R. 1 Section 232 was included in H.R. 1 to permit States to develop their own methods and standards for payment of reasonable costs of inpatient hospital care under both title XIX (medicaid) and title V (maternal and child health) of the Social Security Act. It had already been included in the Social Security Amendments of 1970 (H.R. 17550, which was passed by the House, but not voted on in the Senate) and is fundamentally incorporated in a departmental regulation issued on July 1, 1971. This regulation (40-4(C-3)) allows States to devise their own reimbursement plans for the payment of reasonable costs of inpatient hospital care on an experimental or demonstration basis. The criteria used to approve experiments or demonstrations under the regulation will encourage use of incentives for efficiency and economy; reimbursement on a reasonable cost basis; and reimbursement at a level not to exceed the title XVIII (medicare) level. It also will encourage assurance of adequate participation by hospitals and the availability of hospital services of high quality. The regulation allows for approval, by the Secretary, of State plans which includes these criteria. In their comments on the draft regulations, States supported the authority to allow implementation of alternate methods of reimbursement. Under this authority the Deparment will continue to encourage cooperation between States, hospital associations, and other providers in the development of plans. Section 232 provides fundamentally the same approach to reimbursement under title XIX. It does not dictate use of a particular system in any State. Moreover, under both the current regulation and section 232 adequate reasonable cost reimbursement would be required. BALANCING OF HEALTH BUDGET REDUCTIONS WITH INCREASES Mr. CONTE. Some talk has been engendered here about the inadequacies of the health budget, and we anticipate floor debate on this point. Dr. Michel DeBakey has said publicly in the newspapers that the budget did not properly reflect the administration's announced concern about health matters. I wonder if you could elaborate on that? Secretary RICHARDSON. I am glad to have that opportunity. Thank you. Dr. DeBakey failed to take into account the very significant increases in the President's health budget. He added up some offsetting decreases, which do not, in their actual impact, represent the equivalent dollar reduction in program. We have a situation here somewhat like the one we were discussing yesterday in education. For example, we are promoting greater reliance under the Hill-Burton program on subsidized and guaranteed loans. We have in 1972 a nonrecurring loan fund capitalizations for Hill-Burton construction loans and for HMO's that will not have to be carried forward. There was a very substantial supplemental appropriation for construction for the new health manpower legislation in fiscal 1972, as you will recall, which means, therefore, that with the carryover of some of the 1972 funds into 1973, we don't have to ask for as much money proportionately in 1973 to maintain the same level of health manpower obligations planned for 1972. That accounts for $161 million alone, so that if you add up the decreases, totaling over $47 million, they all, in one way or another, are of this kind. They involve construction and nonrecurring items. On the increase side, we have increases totaling $486 million, including the largest year to year increase ever sought for the Food and Drug Administration, a total of $77 million, and a major increase, considering the rate at which funds have been built up over the preceding 2 years, for drug abuse, increases for health planning, HMO's, child health, a nearly $50 million increase for family planning services, $22 million for Indian health, and so on. I would be glad to, in fact I would appreciate having inserted in the record at this point, Mr. Chairman, the full tabulation from which I have been giving these figures. (The information follows:) |