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Section 12 of S. 1470 amends the definition of physicians' services to exclude services which a physician performs "as an educator, an executive, or a researcher". This is generally in accord with present BHI practice and with the policies underlying Part B reimbursement. Part B of Medicare provides supplemental medical coverage only to those eligible persons who choose to participate and who pay monthly premiums for their coverage. As both an accounting and an equitable matter, Part B reimbursement should be provided only for those services actually received by the particular patient who has obtained Part B coverage. The cost of services whose sole purpose is to teach other physicians or to provide for the smooth functioning of the hospital should be borne either by all the patients who use the hospital or by the teaching institution itself. Conversely, a specific patient care service should be reimbursed by the patient who receives that service. This is true whether or not an intern or resident learns from watching, or performing part of, that procedure. Otherwise, virtually all surgical and anesthesia care given in teaching hospitals, which include some of the finest hospitals in the country, would be given "free" to Medicare and private patients alike, for the most efficient, and the dominant, means of teaching surgical and anesthesia residents and interns is in the operating room. Denying reimbursement in this type of teaching setting would seriously impair the ability of the hospitals to train new physicians in these specialties.

I have been assured by the staff of the Senate Finance Committee that this is not an intended result of S. 1470. Instead, in S. 1470, the term "services performed as an educator" is intended to refer only to services performed in a classroom setting, not to individual patient care services which also are used to teach. To clarify this intention, ASA and SAAC recommend that the term "physicians' services" exclude only those services that a physician may perform as an educator when such educational function is not performed simultaneously and in connection with the personal performance or personal direction of an identifiable patient care service. In the alternative, language specifying this intent could be inserted in the Committee Report. (Suggested language is attachd to my statement.)


Section 12 of S. 1470 also states that "in the case of anesthesiology services", a procedure is "personally performed in its entirety" (and hence entitled to full reimbursement under Part B) when the physician performs certain specified activities. These activities are entirely reasonable and appropriate when the anesthesia services are administered to facilitate surgery, obstetric delivery, and the like. However, anesthesiologists now perform a varity of services outside the operating room. For example, anesthesiologists render extensive services in pain therapy clinics, intensive care units and respiratory therapy clinics. It would be quite impossible for those services to include the activities specified in Section 12. For example, one activity listed is personal participation in "induction" and "emergence". Those terms are inapplicable to respiratory therapy. And indeed, staff members of the Senate Finance Committee have assured us that the listed activities are not intended to apply to respiratory therapy and other anesthesia services rendered outside the operating room.

However, we have found in the past that unless such intentions are embodied in the statute or in the Committee Report, problems do arise. Thus, ASA suggests that the listed activities refer only to "aneshesiology services, where anesthesia is administered to facilitate surgery, obstetric delivery, or special examinations." Again, although ASA and SAAC would prefer a change in the statutory language, this result could also be accomplished through language in the Committee Report. (Suggested language is attached to my testimony.)

I would also like to confirm ASA's understanding that Section 12 of S. 1470 permits full Part B reimbursement to an anesthesiologist who performs each of the activities specified in that section so long as he is not responsible for the care of more than one other patient when he performs the most critical of those activities (namely, personal participation in the most demanding procedures in the anesthesia plan; following the course of anesthesia administration at

frequent intervals; and remaining physically available for the immediate diagnosis and treatment of emergencies). Thus, an anesthesiologist who is assisted by nurse anesthetists or other nonphysician personnel may receive full reimburement for each patient whose anesthesia he directs, so long as he does not direct the administration of anesthesia to more than two patients during the enumerated critical portions of the anesthesia plan. (If the anesthesiologist is responsible for more than two patients, but no more than four patients, he will be reimbursed at one-half of the Medicare-determined reasonable charge for each patient.)

This provision will permit anesthesiologists to delegate the more routine portions of the anesthesia plan to trained nonphysician personnel without incurring a financial penalty for so doing-an important result given the fact that there are simply not enough anesthesiologists in this country to provide all needed anesthesia services. By mandating Medicare reimbursement where an anesthesiologist does effectively utilize his time and skill, this section will both lower anesthesia costs in the long run and make available the skills and knowledge of anesthesiologists to maximum number of patients.

In making these comments, however, I am constrained once more to emphasize to the Committee the fact that in terms of optimal medical care, there is no substitute for the one-to-one relationship between anesthesiologist and patient. ASA's support for those portions of the bill which contemplate reimbursement in another context-that is, where the anesthesiologist directs care provided by nonphysicians under his responsibility and control-rests upon the recognition that in many communities, there are insufficient anesthesiologists to provide this optimal form of care. In these situations, we believe, the best practical solution is to encourage the anesthesiologist where possible to assume a medical direction function, so that his medical skills are available to the maximum number of patients consistent with sound medical care for each.

Finally, ASA would like to comment upon Section 15 of S. 1470, which is entitled "Use of approved relative value schedules." This section sets up a procedure for HEW to establish a system of procedural terminology and of relative values which would provide a basis for the reimbursement of physicians by Medicare. Most significantly from ASA's viewpoint, this procedure explicitly provides for the participation of physicians, through their medical societies, in the process of determining relative values. This provision, while it falls far short both in philosophy and methodology from that advocated by ASA, is nonetheless a step in the right direction. Quite apart from its recognition of the constitutional right of physicians to petition the government to communicate their ideas and to protest injustices and outright errors in the method by which they are reimbursed, this provision accomplishes a very practical result. For as government carriers and private insurance companies have found over and over again, it is totally impractical to manage a health care delivery system without establishing channels of communication and cooperation between the administrators of the plan and physicians. In short, it is impossible to effectively administer that which you do not understand. A year or two ago, for example, the Bureau of Health Insurance promulgated regulations which provided Medicare reimbursement only for local anesthesia for cataract surgery, unless special justification in writing was provided for the use of general anesthesia. Reimbursement for cataract operations would no longer be generally provided for the services of a surgeon's assistant or, as a practical matter, for the services of an anesthesiologist. Because of the increasing average age of our patients and the frequency of cataracts in the elderly, both opthamologists and anesthesiologists were justifiably concerned. An increased number of elderly patients with heart disease, high blood pressure, and chronic lung disease are requiring cataract surgery. Even if they do not receive a general anesthetic, they benefit from the intravenous sedation, oxygen by nasal cannulae, and constant electrocardiographic and respiratory monitoring that the anesthesiologist provides. Thus, it was clear that BHI's reimbursement policies-which failed to reflect valid medical needswould adversely and seriously affect the quality of medical services rendered to the elderly. These medically inappropriate regulations were finally withdrawnbut only after a combined effort on the part of the national societies representing anesthesiologists and ophthamologists.

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As this example illustrates, to understand the health care delivery system, it is most efficient to utilize-not to ignore the combined knowledge of physicians. Using this accumulated experience and expertise of physicians is quite clearly the fairest, quickest, and consequently the cheapest way to administer a health care reimbursement system. For this reason, the input of organized medicine has been provided for, and effectively utilized, in virtually every health delivery system throughout the world. And for this reason also, insertion of a provision such as Section 15, providing for the input of physicians into the determination of reimbursement methodology at the earliest stages of the development of that methodology, is a most appropriate provision in a bill such as S. 1470 which seeks to streamline, reform, and increase the cost-effectiveness of the far-reaching Medicare system.

Thank you.


Section 12 amends the definition of "physicians services" contained in Section 1861 (a) of the Social Security Act to exclude those services which a physician performs "as an educator, an executive, or a researcher". This provision is generally in accord with present B.H.I. policy and with the policies underlying Part B reimbursement. Under this section, Part B reimbursement is provided only for those services actually received by a particular patient who has obtained part B coverage. The cost of services whose sole purpose is to teach other physicians, to provide for the smooth functioning of the hospital or to carry out research should be borne either by all the patients who use the hospital (in the case of Medicare patients, such costs would be proportionately allocated under Part A) or by the teaching institution itself. Particular patient care services, on the other hand, should be reimbursed by the patient who receives them. This principle would apply whether or not an intern or resident learns from watching, or performing part of, those services. Thus, Section 12 permits reimbursement to a physician under Part B for those specific patient care services which he performs or directs ether or not those services are also used to teach. But it denies reimbursement for those teaching, administrative and research services which do not provide a direct patient care service.


Section 12 states that "in the case of anesthesiology services", a procedure is "personally performed in its entirety" (and hence entitled to full Part B reimbursement) when the physician performs certain specified activities. These activities refer to certain steps which should be taken whenever anesthesiology services are administered to facilitate surgery, obstetric delivery, or special examinations. They do not, of course, refer to various services which an anesthesiologist may perform outside the operating room, such as respiratory therapy, pain therapy, intensive care, etc. Reimbursement under Part B for those services should be provided in accordance with general Part B reimbursement principles and policies.

Senator TALMADGE. Ms. Ecklund, if you could submit that for the record?

Ms. ECKLUND. We will.

[The following was subsequently supplied for the record:]

Chicago, Ill., June 20, 1977.

Chairman, Subcommittee on Health, Senate Finance Committee, U.S. Senate,
Dirksen Senate Office Building, Washington, D.C.

DEAR SENATOR TALMADGE: We are greatly interested in the statements made by the witness representing the American Society of Anesthesiologists who followed us on Friday, June 10, before your subcommittee. We are responding to your invitation to submit for the record any comments we wished to make on the statements made by Dr. Richard Ament. This letter is for that purpose, and we would appreciate it being made a part of the record.

We wish to mention that we appreciated the suggestion made to us by the staff counsel, Mr. Jay Constantine, some weeks ago, to the effect that it would be helpful to the staff, and certainly everyone concerned if representatives of our Association and of the American Society of Anesthesiologists got together with the staff to discuss various issues in a very informal and frank way. We could see the value of such an exchange and were warmly receptive to it. Thus, we offered to host a dinner for representatives of the two associations along with the staff of the Committee. We were keenly disappointed when the anesthesiologists refused the invitation to participate, giving for an excuse that their legal counsel had advised against it. Their reason, frankly, appeared to us as being without foundation and we wonder at their unwillingness to make statements to the staff of the Committee in our presence so that there might be an opportunity for some thoughtful discussion of them. Thus, as you know, we had a discussion with the Committee staff but without the anesthesiologists being present.

In regard to your invitation to submit for the record any comments on the statements made by Dr. Ament we offer the following:

I. In response to a question regarding the role of the nurse anesthetist, Dr. Ament made the point that the nurse anesthetist must practice under the direct supervision of a physician and he referred, in particular, to the State of Georgia in this respect. There is no question as to the relationship of a nurse anesthetist to the physician, and we have always stated that this fact is recognized under the law.

However, Dr. Ament failed to mention very importantly that "this physician" need not be an anesthesiologist. State laws do not require the presence of an anesthesiologist, and, as we have stated in our testimony, in many, many instances no anesthesiologist is present or available. In such situations the nurse anesthetist is always working under the supervision of a physician but it is the surgeon. And, as we have also pointed out in testimony, very often in such cases the surgeon does not presume to be authoritative with respect to the anesthetic administered but relies on the experience, training, and proficiency of the nurse anesthetist.

In this respect we would also like to comment upon the role of supervision where the anesthesiologist is expected to be and can be present. We believe one of the significant improvements which could be brought about by the amendments which we have recommended in recognition of nurse anesthetists is a clarification of the term "supervision." There are instances where this term has very real meaning and where a Board Certified anesthesiologist works with nurse anesthetists in a helpful and collaborative role. However, there are far too many examples where the term "supervision" is meaningless and is simply used by the anesthesiologist as a basis for financial gain. In discussions with staff of the Bureau of Health Insurance of H.E. W., they have indicated to us that defining the term "supervision" is very difficult and, as a result, they are aware of substantial economic waste and abuse.

II. A question was asked with respect to a clarification of terminology, and the particular question was whether Dr. Ament considered the nurse anesthetist as "an equivalent colleague." Nurse anesthetists are not physicians and we have always made this quite clear.

In terms of the qualifications of nurse anesthetists we wish to point out that they provide the anesthetic for patients undergoing the most highly specialized surgery such as heart surgery, transplants, etc., and, in such instances, of course, the nurse anesthetist is working in the large medical teaching centers. Just as there is no specific evidence or measures as to the quality of the anesthesia provided by physicians, there is none either with respect to the quality of services provided by nurse anesthetists. We can only refer you to the situation in which nurse anesthetists function and specifically perhaps to the Armed Services where we are sure you will find that nurse anesthetists are well recognized in terms of their ability and the quality of their work.

There have not been any substantial and extensive studies on the quality of anesthesia. In our testimony we stressed our belief in the need for such a national study and recommended, in fact, that the Committee and the Congress instruct H.E. W. specifically to see that such a study be undertaken without further delay. Such a study would be helpful to the field of anesthesia and certainly would be in the best interest of patient care. The study should be performed by an independent research team.

We are disappointed that Dr. Ament did not support our recommendations to the Committee that a study of quality of anesthesia be undertaken. We are particularly concerned that the bill (S. 1470) contains language (which Mr. Constantine said was supplied by the anesthesiologists' leadership) which would not support good quality anesthesia practice and in this regard, we made several recommendations to the present language which we believe to be essential.

III. The matter of basic education and preparation of nurse anesthetists was also raised by Dr. Ament in the questioning. Dr. Ament in his answer to the question appeared to suggest that the American Society of Anesthesiologists had great concerns about the education of nurse anesthetists. Our national association has a very strong program directed towards the quality of the education process of students undertaking graduate training in anesthesia. We wish to state very clearly that we see no reason to apologize for the education received by nurse anesthetists. In general, their education, knowledge, and ability with respect to the basic sciences learned first as graduate nurses is certainly valid.

We have worked very closely with the United States Office of Education, Department of Health, Education, and Welfare, and the approval of the program of accreditation for schools of nurse anesthesia is given by this department of the United States Government. Just recently the accreditation program was reviewed by the Office of Education and once again the representative of the anesthesiologists appeared before the review committee and raised numerous questions about the quality of the education, all of which were considered thoroughly by the review committee appointed by the Office of Education and rejected. We now feel impelled to conclude that this continued effort on the part of the anesthesiologists to denigrate the quality of education of nurse anesthetists has little to do with any documented concern for their education or for protecting the public. Rather, it is directed by a strong desire to control and dominate nurse anesthetists by being in a position to control their education. We state very strongly our belief that such control is not in the public's interest, and we do not intend to submit to it.

IV. Dr. Ament stated that the Council on Post secondary Accreditation (COPA) had recently denied AANA's request for accreditation. This simply is not true. COPA is a national non-profit organization whose purpose is to support, coordinate and improve all non-governmental accrediting activities conducted at the post secondary educational level in the United States. It is the first organization that was created to serve as the national voice on behalf of all institutions and associations concerned with non-governmental accreditation. On October 24, 1976 the AANA Council on Accreditation submitted an application for recognition by the Council on Post secondary Accreditation. Action on this application has been delayed pending receipt of additional evidence of compliance with certain COPA provisions for recognition. A revised petition will be submitted to the COPA Board on, or before September 1, 1977 and representatives of the AANA Council on Accreditation will make an oral presentation before members of the COPA Board on October 12, 1977. For Dr. Ament to state that the AANA Council on Accreditation was denied recognition by COPA is simply a misstatement of fact.

In addition, Dr. Ament seemed to suggest that the Council on Accreditation was under the control of the Association and that this somehow was an insidious relationship. The autonomous nature of the Council on Accreditation was insisted upon by the U.S. Office of Education, and we have thus moved toward strengthening its independence. We might point out that several representatives of the American Society of Anesthesiologists participate as members of this accreditation council.

We are sure you will agree with us that it is a little odd for a physician to appear overly critical of a national association instigating various processes to improve a given field of practice. Without doubt one of the great contributions of the American Medical Association to the whole field of health care resulted from its taking the initiative in past years to see that a variety of efforts were made to establish standards and quality measures for various fields of practice. We take great pride in the fact that our national association, which in fact initiated and subscribes to the whole process of accreditation, has developed the accreditation council to the point where it can and does function as an autonomous body. It is worth pointing out also that as a result of this effort, a basic twoyear program of graduate education is strongly encouraged and new programs will not be recognized unless they have a two-year course of study.

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