tion of prevailing charge levels for physicians. Certainly, the several fliers which we have examined which were given to patients by doctors or sent to recipients of Medicare by insurance carriers fail to adequately explain the rationale for the 1972 amendments.

We have faced a dilemma in the Medicare program: succinctly stated, the program is costing the public more and providing less and less medical protection. In facing this dilemma during consideration of the 1972 amendments, Congress expressed the hope that placing a lid upon accelerating physician fees by requiring that prevailing charge levels used in determining reasonable charges may be increased above the level for fiscal year 1973 only to the extent determined justified by the Secretary of Health, Education, and Welfare on the basis of appropriate economic data would influence physicians to become cost conscious. It would appear from the information which we have gathered from member mail that many within the profession neither felt the social pressure to be reasonable in their billing practices nor the ethical pressure that their unreasonable fee schedules were creating a continuing financial hardship for countless Medicare recipients.

The reaction of the health sector to the cost restraints imposed under the 1972 amendments clearly indicates that without increased government controls over that sector, the market mechanism will be abused to excess. We as a nation can ill afford a health system that is predicated on delivery to the rich while the public is ignored. We commend to the committee the provisions of the Comprehensive Medicare Reform Act of 1975 as a model for a more responsive reimbursement system.

Recognizing that the needed reforms in the reimbursement system will not be forthcoming in the time frame needed to prevent a further erosion of the Part B physician reimbursement, our Associations urge the committee to suspend the Section 224 economic index in those instances where a rollback in fees would force additional physicians to deny patients the option of Medicare assignment. Out-of-pocket costs to the recipients of Medicare have been skyrocketing in recent years, and the Congress must act affirmatively to alleviate this trend.

While on the subject of Part B reimbursement for physician services, our Associations would further request that the committee explore the rationale for a continuing trend which we have witnessed, namely the tendency to adjust upward when a patient appeals the preliminary decision of Medicare allowable charges. To us, this trend indicates that the fiscal intermediaries are scaling down preliminary decisions on allowable charges leaving it up to the patient to appeal the intermediaries' decision. Given the restricted appeal process under Part B, we can only wonder how much extra burden is shifted to the elderly consumer of health services by this practice.

The oral statement of Dr. Giddings clearly puts our Associations on record in support of an extension of the hearing and judicial review procedures of Part A to claims that arise under the Supplementary Medicare Insurance Program of Part B.

In addition to our concerns regarding the implementation of Section 224 of the Social Security Act of 1972, we have equal concern regarding the implementation of Section 228 of that law. As this committee is aware, our Associations supported the concept of presumed coverage identified in P.L. 92-603 and recognized the necessity for establishing norms for this certification process. However, we have serious concerns regarding the proposed regulations issued by the Department of Health, Education, and Welfare for implementing this provision.

Our foremost concern is that the norms, as proposed, could soon become maximums unless the regulations clearly indicate that they are minimums and clearly delineate the process and required documentation for obtaining additional time. Furthermore, we detect a distinct institutional bias in the proposed regulations which facilitates patient movement from hospital to skilled nursing facility, but which does not address the needs of the patients that move directly from hospital to home care. Likewise, the proposed presumed coverage norms appear to overemphasize institutional care while denying similar treatment for inhome services.

While our Associations have carefully outlined in our oral statement our position relative to the premium payment under Part B Medicare, we must reiterate the necessity of preventing the transfer of the cost for healh sector inflation to the elderly. The present situation has an important side benefit-an increase in general revenue financing for Medicare. As we move toward a national health insurance program, the precedent of using general revenues is an important first

step. We maintain that the cost of health sector inflation must be borne by the general public until such time as the Congress acts to curb that inflation.

Likewise, we call to the attention of the subcommittee the recently announced increase in the Part A deductible and coinsurance rates. The proposed increase constitutes a 13 percent increase over the present excessive rates. Such deductibles are a deterrent to the patient's early entry into the health sector and constitute an economic obstruction to good health for older persons. We view this as a serious contradiction of the Medicare program's purpose. Congress should act now to freeze these deductible and coinsurance rates.

We are witnessing a ballooning of health costs created by public policy failures. Cost controls under the economic stabilization program have been abandoned while the rhetoric of a system of health care reimbursement has fostered ominous signs of exploitation. Our toleration of the market mechanism in health care has given providers a license to take all they can until abuse is so rampant that Congress is forced once again to curb providers by instituting strong controls. In the meantime, older and disabled Americans are being forced to shoulder the excessive costs resulting from such unchecked abuse. Public policy must be made responsive to this situation.

(2) IMPROVED BENEFIT RESPONSIVENESS

As Dr. Giddings points out in his oral statement, the American Association of Retired Persons and the National Retired Teachers Association urge enactment of the National Home Health Care Act of 1975 as a constructive step toward improving alternatives to institutional care.

The basic reservations which we have with the National Home Health Care Act of 1975 are as follows: (a) Several sections of the legislation are predicated on the assumption that in all instances home health services will be the least costly alternative to institutional services. While in general this assumption may be true, our Associations, speaking on behalf of consumers of health services, would prefer that public policy be predicated on the proper care regimen rather than on issues of cost containment. A strong argument can be documented, especially through the developing practices of patient assessment, that home care better facilitates health maintenance and rehabilitative potential. This focus indicates that while fiscal decisions must be considered, the fundamental decision is the patient's health potential.

(b) Several provisions of the National Home Health Care Act of 1975 spell out a detailed requirement for patient assessment. While we wholeheartedly support the development of such patient assessment procedures, we would caution against specifying in the statute those items which the Secretary should interpret in regulations. We would urge that the language of those provisions be simplified to require patient assessment in order to assure referral to the appropriate level of care, leaving the details to the practices being developed by the Department. (c) Reference to rehabilitative potential is made in several places in the National Home Health Care Act of 1975. We would urge committee attention to the need for equal attention to health maintenance. The role of home health services, especially with respect to the chronically ill reimbursed through Medicaid, shows great promise in preventing further deterioration of an already serious condition.

(d) Our Associations question the assumptions underlying the relative responsibility section of the National Home Health Care Act of 1975 which would require children to meet health expenses under the Medicaid Program. Members of this committee are certainly familiar with the struggles of relative responsibility in our public income transfer program, and, therefore, we trust the wisdom of such provisions will be questioned.

These reservations aside, we see the National Home Health Care Act of 1975 as a serious attempt to present a constructive program for improved home health care. Our Associations view the legislation as responsive to the recommendations of the 1974 GAO Report to Congress on "Home Health Care Benefits Under Medicare and Medicaid", and we urge attentive consideration of its provision.

DOCTOR'S CLINIC.

Vero Beach, Fla., August 15, 1975.

DEAR PATIENT, Medicare through its intermediary, Blue Cross and Blue Shield of Florida, will make drastic reductions in allowances for medical services effective August 4, 1975.

This means when you, as a patient, are reimbursed by Blue Shield for the money you have paid for medical services, that this reimbursement will be much less than it has been in the past. On a national level medicare paid only 52 percent of medical services billed last year. With this yet, another reduction, this percentage will drop to probably 45 percent to 48 percent.

Most allowable charges for medical services will be based on 1971 charges and then a 17.9 percent increase added on from that day. However, in the area of laboratory services, there will be a flat schedule of allowable charges, which in many cases is less than 50 percent of what has been allowed to this time. The members of the medical profession strongly oppose this action by Medicare and will seek recourse through our county, state and American Medical Association. We urge all interested patients affected by this to seek recourse through either the Social Security Administration or your local Congressmen.

If there is a joint outery from the medical profession and the citizens of this country opposing this, maybe we can receive some reconsideration by Medicare. If I can answer any questions for any of you or clarify any of these points, please contact me here at the clinic.

Sincerely yours,

JAMES C. PERRY, Administrator.

IMPORTANT MEDICARE NOTICE

Your Medicare reimbursement is being cut drastically! This reduction in Medicare benefits is being brought about by application of a 1972 federal law, instructing the Social Security Administration to roll back Medicare payments toward doctor bills to the amounts physicians were charging in 1971, plus a small yearly increase as set by the Department of Health, Education, and Welfare. The Secretary has now ruled that the maximum reimbursement to you will be 1971 prices, plus 17.9%. This is for a period when the cost of living has gone up 43%, housing costs are up 46%, food has increased 57%, etc.

Because of this, you will begin to see the phrase "more than the allowable charge" appear more often on your Medicare benefit explanation form. Please understand that the "allowable charge" referred to is the reduced amount that Medicare has decided it will pay for your medical care.

In announcing the reimbursement rollback, the Secretary of HEW stated that it will save the federal government over $26 million in 1976. What he failed to point out is that this $26 million will have to be paid out of the pockets of the persons on Medicare, the very persons that the program was designed to help, many of whom are living on a limited, fixed income.

Please understand that, if you receive less reimbursement from Medicare, this is due to a cut in the amount that the government is paying, and not to a price increase by the doctors.

If you are concerned, we suggest that you write to your Congressman, U.S. Senator, or the President. Our insurance department will be glad to assist you in filing for a "fair Hearing" with Blue Shield of Florida if you feel that your reimbursement has been unjustly reduced, and the reduction is for $100 or more. RIVERSIDE CLINIC.

TO MY MEDICARE PATIENTS-YOUR MEDICARE BENEFITS ARE BEING CUT

Your Medicare reimbursement is now being cut drastically! This reduction in Medicare benefits was brought about by the recent application of a 1972 federal

law.

Public Law 92-603 instructed the Secretary of Health, Education, and Welfare to roll back Medicare payments toward doctor bills to the amounts physicians were charging in 1969 and 1970, plus a small yearly increase to be set by the Secretary.

The Secretary has now ruled that the maximum increase in the Medicare reimbursement for physicians, fees will be only 17.9% over 1970 levels. This unfair reduction in your Medicare benefits is made all the more obvious when you consider that in the same time period the cost of living has increased more than 43%, housing costs have gone up more than 46%, the cost of transportation has increased 34% and food has increased 57% !

Because of this benefit reduction you will begin to see the phrase "more than the allowable charge" appear more often on your Medicare benefit explana

tion form. Please understand that the "allowable charge" referred to is the reduced amount that Medicare has decided it will pay for your medical care. In announcing the reimbursement rollback the Secretary of HEW stated that it will save the federal government approximately $26 million in 1976. What he failed to point out was that this $26 million will have to be paid out of the pockets of persons on Medicare, the very persons that the program was designed to help.

The Secretary apparently ignored the fact that the Medicare eligible population of this country, those 65 years of age or over, are the ones traditionally living on a limited or fixed income.

If you are concerned, write your Congressman, U.S. Senators and the President of the United States in care of Washington, D.C., to protect your interests. Mr. ROSTENKOWSKI. Are there any questions?

Thank you, Mr. Giddings.

Mr. Cornish, if you will identify yourself and proceed with your testimony.

STATEMENT OF LARRY B. CORNISH, ESQ., DIRECTOR, FEDERAL AFFAIRS DIVISION, AMERICAN SPEECH AND HEARING ASSOCITION, ACCOMPANIED BY RICHARD E. VERVILLE, WASHINGTON COUNSEL FOR THE AMERICAN CONGRESS OF REHABILITATION MEDICINE

Mr. CORNISH. Thank you, Mr. Chairman.

Mr. Chairman and distinguished members of the committee, I wish to express our appreciation to the committee for allowing the American Speech and Hearing Association, on its behalf and that of the American Congress of Rehabilitation Medicine, to present its views on possible reforms to title XVIII of the Social Security Act, more commonly known as medicare.

My name is Larry B. Cornish. I am an attorney and serve as the director of the American Speech and Hearing Association's Federal Affairs Division. Seated beside me is Richard E. Verville, Washington counsel for the American Congress of Rehabilitation Medicine.

The American Speech and Hearing Association is a voluntary national membership association of some 22,000 audiologists and speech pathologists, who together with nearly 2,500 members of the American Congress of Rehabilitation Medicine, comprised of physicians and other health professionals directly concerned with rehabilitative health care, have a long involvement in the delivery of quality health care services to Americans.

We have found, however, that the Federal medicare program has either frustrated or failed to provide quality health care services to the Nation's aged, blind and disabled who are suffering from communicative disorders or could benefit from multidisciplinary rehabilitative services. I would very briefly like to address seven areas where medicare could be improved.

The establishment of Professional Standards Review Organizations by the 1972 amendments was a necessary program utilization review procedure and, in theory, has the full support of the American Speech and Hearing Association. The review structure, however, failed to address the involvement of nonphysician health professionals.

What the 1972 amendments did was to exclude all health care providers from participation in PSRO's, except doctors of medicine and osteopathy. To achieve the goal of assuring that medicare health serv

ices meet professionally recognized standards of health care, PSRO's should require participation of other health professionals, especially when the doctor of medicine or osteopathy is not the primary provider of the services being reviewed.

We recommend that the committee give serious consideration to amending section 1155 of the act to require that whenever another health professional other than a doctor of medicine or osteopathy renders services cognizable under title XI, that the Professional Standard Review Organization have at least one or more members of the health profession being reviewed as members of the review committee. Presently, Congress has created a double standard which we believe is inherently unfair to the health system and to utilization review. Section 1155 (c) guarantees to doctors of medicine and osteopathy judgment by one's peers, yet states that unless the members of the PSRO-the doctors of medicine or osteopathy-wish to ask the advice of a speech pathologist, audiologist, physical therapist, laboratory specialist, or others, and they usually do not, these health professionals will not have their services judged by their peers.

It is time that the Congress recognize that health care is no longer the exclusive and unique prerogative of the physician, but has grown to include independent health professionals of numerous specialities.

We have been told time and time again by the Bureau of Quality Assurance and the Office of Health Standards Review that although they recognize that other health professions should be required to participate, the Congress must change the law before they can accommodate true peer review and appropriate, necessary involvement by all qualified health care providers.

Issue No. 6 in the committee's list of topics, "Revisions in Home Health Care Provisions," has been the subject used by many groups in criticizing the failure of medicare to be cost-effective and to provide quality health care. Home health services have remained substantially underdeveloped as an effective alternative to institutionalization of a beneficiary in a hospital or extended care facility.

Primary focus can be directed to two issues: Coverage of services and reimbursement policies. The American Speech and Hearing Association wishes to take this opportunity to express its full and undivided support to the bills introduced by the distinguished ranking minority member of this committee, Mr. Duncan, and by Congresswoman Abzug, H.R. 7972 and 8518, respectively.

Passage of the basic concepts in these bills would help to make home health services a more effective health care resource to the 3.7 million Americans 65 years of age and older suffering some degree of communicative disorder.

The coverage of health care services must be expanded to fully address the rehabilitative potential of the individual. No matter how reasonable reimbursement may be, if the necessary services, such as nursing, nutritional, speech and hearing services, and others, are not covered, the home health agency will continue to be an impotent alternative to more intensive institutionalization.

The General Accounting Office, in a study released July 9, 1974, detailed many irregularities in the home health providers system, many caused by lack of uniformity and guidance by the Department of