The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SECTION 1. 20.670 (25) and (26) of the statutes are created to read:

20.670 (25) MEDICAL ASSISTANCE FOR CERTAIN AGED PERSONS. Biennially, beginning July 1, 1961, $9,400,000 for state aid to aged persons eligible for health assistance, to be expended according to ch. 150.

(26) ADMINISTRATION, STATE.

Biennially, beginning July 1, 1961, $1,000,000 for expenditures incurred in administering health assistance to aged persons, to be expended according to ch. 150.

SECTION 2. 20.670 (58) and (59) of the statutes are created to read:

20.670 (58) MEDICAL ASSISTANCE FOR THE AGED, FEDERAL AID. All moneys received from the federal government for medical assistance to the aged, to be expended according to ch. 150.

(59) ADMINISTRATION, FEDERAL AID. All moneys received from the federal government for the administration of medical assistance to the aged shall be paid into the general fund.

SECTION 3. Chapter 150 of the statutes is created to read :

CHAPTER 150.

HEALTH ASSISTANCE PAYMENTS.

150.01 TITLE. This chapter shall be known as: "The Health Assistance Payments Act."

150.02 PURPOSE. This chapter recognizes that unusual and unanticipated illness or accident, sometimes requiring health care over a long period of time, has an impact upon the income and resources of the elderly beyond and different from that experienced by those in younger age categories. It provides that where such costs present a financial hardship which might impoverish the elderly, or require liquidation of home and other assets, the working population, through general taxation, should join in a cooperative effort to alleviate such problem. In no manner is it intended to relieve the sense of family responsibility which has been a bulwark of American life. It is intended to keep as many aging citizens as possible on a self-sustaining basis and protect them against certain major health costs. It is also the intent of this chapter to enable those persons age 65 and over who provide for much of their health care needs through the purchase of private health insurance, but who qualify for the assistance provided by this chapter, to acquire or retain their personal prepaid insurance with the aid of state funds, rather than through assistance provided at the time services are rendered.

150.03 DEFINITIONS. As used in this chapter unless the context indicates otherwise:

(1) "Beneficiary" means a person eligible for, and a recipient of, assistance under this chapter.

(2) "Charge" means the customary, usual and reasonable demand for payment for services, care or commodities which does not exceed the general level of charges by others who render such services or care, or provide such commodities, under similar or comparable circumstances within the community in which the charge is incurred.

(3) "Department" means the state department of public welfare.

(4) "Hospital" means an institution providing 24-hour continuous nursing service to patients confined therein; which provides standard dietary, nursing, diagnostic and therapeutic facilities; and whose professional staff is composed only of physicians and surgeons, or of physicians and surgeons and doctors of dental surgery.

(5) "Illness" means a bodily disorder, bodily injury, disease or mental disease. All illnesses existing simultaneously which are due to the same or related causes shall be considered "one illness." Successive periods of illness less than 6 months apart, which are due to the same or related causes, shall also be considered "one illness."

(6) "Income" means adjusted gross income reportable annually for federal income tax purposes; except that for the purposes of this chapter it includes social security benefits, alimony, gross amount of any pension, annuity or other retirement income however denominated, and the reasonable value of income in kind, except where the value is less than $300. "Income" shall not include net capital gains or insurance benefits for loss of time or for total or partial disability.

(7) "Mental disease" means any condition classified as a neurosis, psychoneurosis, psychopathy or psychosis.

(8) "Personal assets" means a home and the land used and operated in connection therewith, or a mobile home used as a place of abode; household and personal possessions, including an automobile; and additional property not in excess of $4,500 in value, if single, or $7,500, if married, in any combination of real property, tangible personal property, cash value of life insurance, or cash or other liquid assets.

(9) "Physician" means a person licensed to practice medicine and surgery, and includes graduates of osteopathic colleges holding an unlimited license to practice medicine and surgery.

(10) "Prescribed" means a product or service requiring written or oral prescription by one having that authority under the laws of the state in which such act is performed.

(11) "Skilled nursing home" means a facility, licensed or approved as such by the state board of health or other state agency having jurisdiction over it, for the accommodation of convalescents or other persons who are not acutely ill and not in need of hospital care.

(12) "Spouse" means the legal husband or wife of the beneficiary, whether or not eligible for benefits under this chapter.

150.04 ELIGIBILITY. (1) Any resident of this state is eligible for benefits under this chapter who:

(a) Is within the intent of s. 150.02; and

(b) Has attained the age of 65; and

((c) Is a citizen, or has filed a declaration to become one; and

(d) Is not receiving old-age assistance; and

(e) Shows by a sworn statement on a form prescribed by the department that his annual income does not exceed $1,500, if single, or $2,500, if married; except that any applicant shall be eligible when all income in excess of these limits has been paid for health services available under this section, for insurance premiums covering the same or both.

(f) Has not conveyed, transferred or disposed of property so as to make himself eligible for benefits under this chapter.

(g) Satisfies the department which finds that the future annual income of the applicant, or of the applicant and spouse, probably will not exceed the amounts specified in par. (e).

(2) Persons eligible as beneficiaries shall not be denied the benefits of this chapter because of absence from the state.

(3) Every applicant shall receive notification in writing promptly as to the action taken on his application.

150.05 BENEFITS; EXCLUSIONS; PRIORITIES OF PAYMENT. (1) The department shall develop and adopt a plan providing payment of part or all of the charges for the following care and services for those eligible under this chapter: inpatient hospital care; skilled nursing home care when authorized by a physician; professional services performed by a physician or doctor of dental surgery in a hospital or skilled nursing home; outpatient services provided by a physician or through a hospital; and diagnostic services which require X-ray or laboratory procedures.

(2) Wherever, in its judgment sufficient funds are available, the department may authorize benefits in addition to those enumerated in sub. (1), such as drugs or care by a visiting nurse; provided all such additional benefits have been prescribed by the physician in charge.

(3) Benefits do not include any payments with respect to:

(a) Care or services for any individual who is an inmate of a public institution, except as a patient in a medical institution, or any individual who is a patient in an institution for tuberculosis or mental disease; or

(b) Care or services for any individual who is a patient in a medical institution as a result of a diagnosis of tuberculosis or mental disease, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for 42 days.

(c) Care or services in any other private or public institution unless it has been approved by a standard-setting authority responsible by law for establishing and maintaining standards for such institution.

(4) Benefits do not include payment for that part of any services under this section which are payable through insurance, third party liability or any other federal, state, county, municipal or private benefit systems to which the recipient may be entitled.

(5) Payments made under this section shall be subject to the following limitations:

(a) Before payments can be made under this section an applicant must first expend such percentage or dollar amount of his annual allowable income as is determined by the department for the health services available under this section;

(b) Expenses of skilled nursing home care will be paid only for beneficiaries transferring to such facility from a hospital; and

(c) The maximum liability for payment for care in a hospital and skilled nursing home under this section shall be 45 days per illness.

(6) If the funds appropriated are found or estimated to be insufficient to provide the maximum benefits provided under a plan, the department is authorized to apportion the benefits under rules promulgated by it, giving priority to services or care in the following order:

(a) Inpatient hospital services;

(b) Services of physicians and of doctors of dental surgery;

(c) X-ray and laboratory services wherever performed;

(d) Skilled nursing home care; and

(e) Charges for services or materials authorized under sub. (2).

150.06 ADMINISTRATION. (1) The department shall exercise responsibility relating to fiscal matters, the eligibility of all beneficiaries, and general responsibility for the supervision of a plan established by it under s. 150.05 (1). The state board of health shall serve in an advisory capacity in the health care as distinguished from the administrative aspects of such a plan.

(2) Payments shall not include health services rendered earlier than during the month preceding the month of the application.

(3) Payments of these benefits shall be made directly to the furnisher of the care and services, except as provided in sub. (5).

(4) Payment for services provided under this section shall be made directly to the hospital, skilled nursing home, organization or individual providing such services pursuant to rules made by the department or to any insurance carrier or private agency pursuant to the provisions of any contract that may be entered into under sub. (5). The department shall certify all proper charges to the department of administration for payment and the department of administration shall draw its warrant forthwith; provided that if the funds available are insufficient to make payment in full the department shall certify to the department of administration only the pro rata share of each claim.

(5) (a) The department shall employ necessary personnel within the limitations of the sums appropriated by s. 20.670 (26) for the efficient and economical performance of duties imposed by this section, and shall supply residents of this state with information concerning this program and procedures to be followed by an applicant believing himself to be eligible for assistance under this section. (b) The department may authorize one or more insurance companies licensed to do business in this state, a hospital service corporation organized and operating under s. 182.032, and any corporation established pursuant to ch. 148 to issue contracts to eligible beneficiaries insuring the benefits or to administer the benefits of a plan authorized or established by the department.

(c) The department shall be authorized to audit all such claims and make proper fiscal adjustments.

(6) The state shall reimburse the county in full for allowable expenditures incurred pursuant to departmental rules in exercising functions in connection with this chapter delegated to the county agency by the department.

(7) The department may delegate to the county welfare agency in each county duties and functions to be performed in assisting the state in administration of this section, and the agency shall perform such duties and functions and shall file with the department all forms and reports as required. Any personnel in the county agency performing duties under this subsection shall be employed pursuant to the merit system.

(8) No source of service may bill the beneficiary of a plan established under s. 150.05, except for benefits not provided or not payable in full under that section.

150.07 APPEAL. Any person whose application is denied or is not acted upon promptly or who believes that the payments made in his behalf have not been properly determined may file an appeal with the department pursuant to s. 49.50 (8).

150.08. RECOVERY OF PAYMENTS. After the death of the recipient and his surviving spouse, recovery shall be made from such individual's estate. For bene

fits incorrectly paid recovery shall be made before the death of the recipient only pursuant to the judgment of a court of record.

150.09. INFORMATION RESTRICTED. The use or disclosure of any information concerning applicants and recipients for any purpose not connected with the administration of this section is prohibited.

150.10 RULE-MAKING POWERS. The department shall be authorized to make such rules and establish such standards and procedures as are consistent with the objectives of this chapter and shall be empowered to co-operate with the federal government in carrying out the purposes of the federal act.

150.11 FREE CHOICE. Nothing contained in this chapter shall alter the right of each eligible person to the free choice of physician, dentist, hospital, or skilled nursing home. The legal responsibility of physician or dentist to patients and all other contract and tort relationships with patients shall remain as though dealings were direct between such physician or dentist and patient. No physician or dentist shall be required to practice exclusively in any plan established under this chapter.

150.12 PENALTY. Any person who receives or assists another in receiving assistance under this chapter, to which he is not entitled, shall be subject to the penalties provided in s. 49.12.

STATE OF WISCONSIN

IN ASSEMBLY

AMENDMENT No. 2, A., TO SUBSTITUTE AMENDMENT No. 3, A., TO BILL NO.

500, A.

June 15, 1961-Offered by Mr. POMMERENING.

Amend the substitute amendment No. 3, A., as printed, as follows:

On page 5, line 10, after "that" insert: "he does not have personal assets in excess of the amounts specified in s. 150.03 (8), and that".

Dr. ALLIN. I have familiarized myself in a general way with H.R. 4222. I shall leave to others more expert than myself analysis and commentary on its economic, tax, fiscal, and legal aspects. As a physician, I wish to discuss briefly two parts of the bills. First, I would take you to the four findings relative to persons 65 and over, contained in section 2 of the bill, beginning at page 3, and extending into page 4.

As a physician for more than 25 years, as an internist who has cared for many people over 65, and still does so, I take strong exception to the first finding on page 3 of the bill which states that-

The heavy costs of hospital care and related health care are a grave threat to the security of aged beneficiaries.

Finding 2 on page 3 of the bill states that-

Most of them are not able to qualify for and to afford private insurance adequately protecting them against such costs.

I am unable to refute that finding as a matter of personal knowledge, but I am informed by those in a position to know, that it is inaccurate and that increasingly comprehensive insurance is available to people 65 and over.

Finding 3 on page 4 of the bill states with reference to those 65 and over that

Many of them are accordingly forced to apply for private or public aid, accentuating the financial difficulties of hospitals and private or public welfare agencies and the burdens on the general revenues.

Certainly those supporting the bill should make it clear what is meant by the word "many." The finding certainly is nothing new, and it seems to me it does not deserve emphasis in this bill any more

than it would at other times and for other age categories where lack of foresight or personal misfortune have always required elements of the population of all ages to apply for private or public aid. The fourth and final finding that

It is in the interest of the general welfare for financial burdens resulting from hospital services and related services required by these individuals to be met through social insurance—

certainly has no medical basis.

Second, I wish to point out that the stated purposes of the legislation on page 4 of the bill, together with the prohibition against interference with the practice of medicine, or with institutions which care for the sick, are simply not consistent with the actual provisions of the bill. It is my opinion that such prohibition against interference with physicians or institutions is something which is unattainable despite what the designers of the bill may intend or claim.

Institutions for the sick cannot operate independently of the medical profession. They can help their patients only in proportion as they have professional direction and skills available. The selection of institutions, the approval of teaching programs, the determinations of costs and reimbursements either under the bill, or under rules and regulations promulgated by the Secretary of the Department of Health, Education, and Welfare, are all forms of control. Since an institution for the care of the sick is not self-operating, the many economic and other controls provided by this bill will inescapably have an impact upon patterns of practice not only on the part of the specialties named in the bill, but also upon the other physicians on the staffs of such institutions.

I remind this committee that pathology, radiology, physiatry, and anesthesiology are four specialties of medicine; that these fields are specifically not exempt from the definition of "medical or surgical services" under the wording of subsection (4), page 7, of the bill, beginning at line 9; that these specialized services are rendered outside of health institutions as well as within them; that under Wisconsin law no physician can be employed by a hospital, which means that the exceptions to the King bill may sweep these four specialties into its net, despite State law to the contrary and despite the many professional considerations which caused the adoption of such State legislation.

Can it be the intent of the designers of this bill to "freeze" these four medical specialties, plus house staffs, and to compel these segments of medicine to submit to Federal legislation contrary to their professional wishes and even contrary to the laws of some States, including Wisconsin.

As a physician, I repeat that I find it misleading for the bill to claim, as it does in section 1601 on page 5, that there shall be no "supervision or control over the practice of medicine or the manner in which medical services are provided."

Note as a single example, that the teaching programs in a particular institution are not to be those approved by the medical staff, or by the trustees, or the owners of the institution. No, such teaching programs must be those approved by someone unnamed in the bill, who in turn must be approved by the Secretary of Health, Education, and Welfare.

To save you time, I attach as exhibit Ca reference to numerous other examples in the bill which involve either the activity of physicians in