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I think the law, the way it is now, which disallows any reimbursement of physician extenders for care they may render to patients under the medicare area is discriminatory to the patient, and not to the physician, and not to the physician extender.

These are the people that are actually suffering. In my own State, there has been set up-this is North Carolina-there has been set up a system of rural health clinics. They are services in areas which are physician-poor. These are areas which have rot been able to attract a full-time physician, and consequently they have to rely on the physician extender or satellite clinic in order to attain care.

They are staffed by physician extenders or family nurse practitioners or physician assistants. Any work done for medicare patients by these persons is not paid for. The patients realize this, and either covertly or overtly they are being discouraged from attending these clinics to seek health care. This is becoming a problem with these clinics, because it is this margin of difficulty in reimbursement, or lack of reimbursement, that may sink some of these clinics.

In North Carolina they are being funded for 3 years, and when the 3-year grants run out, then some of them feel they will have difficulty being able to carry on their functions.

This I understand from Mr. Bernstein, who is head of the rural clinics in North Carolina. So reimbursement would be a great deal of help to these clinics in being able to stay afloat, and also to be able to continue to provide services for other members in their communities. I would also like to point out that having a physician assistant in your office, or in a clinic setting, does not reduce the workload which this physician bears.

I employed one some 6 years ago and continue to employ him, and I am working harder now than I did 6 years ago. This is because the type of work that he does, he takes care of the routine kinds of uncomplicated illnesses and problems. What is left for me are the very complicated medical cases. As I grow older, my patients grow older, and they develop more chronic illnesses and chronic problems, and it is necessary for me to spend more time with them. Using a physician extender allows me to do this and deliver a higher quality of health care than I would ever be able to do without it.

Also, I would like to point out in regard to cost. I think there would be some increase in cost to the Federal Government if this legislation were enacted. It is not a cost-saving measure. Rather, it is one that would allow people who are not now getting care to receive medical care. They are getting so sick now, they have to go to the hospital before they are treated. By using physician extenders and satellite clinics, we would be able to see them earlier, and hopefully to receive outpatient treatment before a condition became so complicated that it would require costly inpatient care.

Finally, the cost of service should be the same no matter who renders that service, whether the rhysician or the physician extender. At times, it is necessary in my own office for me to do a chest X-ray, or a white count, or render some other technical service to a patient. I do not charge more than when my technician does it. The service has been rendered, the results are the same, and therefore the costs should be the

same.

So it is with the physician extenders. They have been well trained to take care of specific kinds of problems. They know their limitations. When they have taken care of the problem, they have made an adequate disposition of it, and they have treated the patients as they should be treated, and the cost of that treatment should be reimbursed as if a physician rendered that treatment.

So I feel that the people who are suffering by the lack of reimbursement are really a great portion of our population in the medicare age group who need treatment and for one reason or another are being denied it. It does increase the workload of the physician and the cost of the service should be the same regardless of who renders that service. I hope that you will look very favorably on the Broyhill bill, H.R. 7218. Thank you.

STATEMENT OF DOROTHY A. STARR, M.D.

Dr. STARR. I am Dr. Dorothy Starr. I am a psychiatrist in practice in Washington, D.C., here for the American Psychiatric Association. We greaty appreciate a chance to be heard. I recognize that this committee has already listened to many read statements and would ask that the American Psychiatric Association statement be entered into the record as presented, and that rather than read it, I comment and summarize the highlights of our position.

We are here talking in terms of reimbursement for physicians, but really to plead for the rights of the mentally ill, and to ask for equal coverage under medicare for this particular population.

We wish, also, to plead that this is a very treatable population currently being discouraged from using outpatient service due to the rigid regulations under medicare, which limit a patent to $500 a year in psychiatric services as an outpatient, of which medicare only reimburses $250.

If that is not enough to discourage the patient, the formula by which these figures are calculated should finish the job. Imagine explaining to an elderly person slightly hard of hearing that he can only collect up to $250, and that that has to be half of the allowable charge, that the allowable charge is the least of the three following, which is: (1) the usual fee of the physician in 1974, the prevailing customary fee for the psychiatrists in this area, or the 1971 fees prevailing charge plus 17 percent, of which he will get reimbursed on the rate of 6212 percent of the allowable charge, 80 percent of the allowable charge.

We believe that it is desirable and necessary to treat patients in the community, and that there should be more adequate coverage and less stringent limitations on the total care allowed for the outpatient for psychiatric services.

We also would like to call to the committee's attention the current limitations by service, for care in a general hospital, which is more expensive, and frequently has fewer beds for the elderly persons.

In the psychiatric facility, which may be actually more suitable for the patient's needs, there is a lifetime maximum of 190 days.

Again, this is not only a treatable population, but this is a highly vulnerable population. In this population we have the highest rate of

suicide. White males in the elderly age group have the highest rate; 25 percent of the recorded suicides in the country occur in this 10 percent of the population. We feel that is sufficient indication that this is a very needful population not currently getting the services they need.

Thank you.

[The prepared statement follows:]

STATEMENT OF DOROTHY STARR, M.D., AMERICAN PSYCHIATRIC ASSOCIATION

Mr. Chairman and members of the committee, my name is Dorothy Starr, M.D. I am in the private practice of psychiatry, and am a member of the American Psychiatric Association, and of the Washington Psychiatric Society.

The American Psychiatric Association, which represents 22,000 psychiatrists in the United States, is honored to present testimony before this distinguished committee on the subject of medicare as it relates to the provision of services to the elderly who are suffering from mental and emotional illness.

Of paramount concern to this association are the limited benefits for mental and emotional illness in the present medicare program. The limitations on outpatient psychiatric benefits under medicare as now applied mean that a person seeking outpatient benefits must pay one-half the costs and can receive services up to a total cost of only $500 in any one calendar year (with $250 being paid by the medicare program and $250 being paid by the recipient of the care.) We strongly urge that the coinsurance required of the recipient of outpatient care for a mental illness be set at the same level as it is for other medical problems in which the patient pays 20% of the costs and the medicare program pays 80% of the costs. We further urge that the severe limitation in the total amount of benefits available be eliminated.

In 1970, the American Psychiatric Association testified on what later became the Social Security Amendments of 1972. At that time, we stated that based on claims paid under medicare in 1968, payments for psychiatric hospitalization represented only 0.7% of the total amount reimbursed and payments for inpatient mental health services in general hospitals represented 2% of the total amount. While there are no updated statistics at this time, we will be pleased to provide this committee with new data as they are developed by the Department of Health, Education, and Welfare. We are convinced that the provision of nondiscriminatory benefits to our aged mentally ill will not significantly add to the expenditures of the medicare program. On the other hand, we have reason to believe that certain economics will result through the elimination of discriminatory practices in medicare against the mentally ill.

For example, there is no limitation for treatment of mental illness in general hospitals, while the 190 day lifetime limit prevails in psychiatric hospitals. As we have stated, it makes no sense to force a patient to shift from one institution to another, and it is possible that by forcing patients into more expensive general hospital beds that this 190 day limitation is augmenting the cost to the program. Moreover, the very restricted outpatient psychiatric benefit will tend to place medicare patients into inpatient treatment. This is not only much more expensive, but runs counter to the present treatment philosophy of successful outpatient treatment within the community and the prevention of hospitalization whenever practicable. This is also consistent with the report of the Committee on Ways and Means on H.R. 17550 in 1970 "to create incentives to encourage outpatient services and disincentives for long stays in institutional settings."

We also recommend the participation in medicare of free standing community mental health centers not affiliated with hospitals. As we stated in 1970, we urge the enactment of legislation that would allow the participation under medicare of all qualified community mental health centers. This is consistent with the development of such centers throughout the country to provide more comprehensive treatment services, accessible to the population groups served.

Those over 65 years of age appear to be no less susceptible to mental illness, yet they appear to be the group that receive the least treatment. The rate of suicide is highest in elderly white men.

Older persons are quite amenable to effective psychiatric treatment through an entire range of services, from psychotherapy, group therapy, behavior modification, family counseling, and the like.

If we write off the aged mentally ill as productive and self-fulfilling citizens simply by providing tokenistic mental health benefits, and opt for their institutionalization rather than maintenance therapy within the community, we will not only add to our own economic burden, but we will be depriving thousands of elderly citizens afflicted with a real illness, of the right to continue their lives fruitfully. Surely, we must opt for the alternative that makes sense.

It gives us great pleasure to report to your Committee that there are already hopeful signs in Congress that there is thought about easing the mental health restrictions in medicare.

Regarding physician reimbursement, we must not provide so low a level as to discourage physicians from treating medicare patients. The present rate of reimbursement for physician services for mental health treatment is 80% of the reasonable charge. This low reimbursement level acts as a disincentive for the provision of outpatient medicare services for the mentally ill.

Concerning inpatient psychiatric reimbursement mechanisms, the National Association of Private Psychiatric Hospitals has stated that with the health care industry coming under severe attack for not holding the line on inflation, ole method of preserving and encouraging a pluralistic health care delivery syste would be to favor the use of multiple prospective payment methods similar to those proposed by the House Ways and Means Committee in August of 1974. The nation's hospitals can hold the line on inflation given the proper incentives for sound management. The present system of cost reimbursement, retroactive in nature, has been a major cause of inflation in hospital services because it penalizes efficiency and gives the hospital management incentive to increase cost and maximize reimbursement.

Prospectively determining rates would give the hospital economic rewards for those who are able to bring effective management techniques to an institution. The hospital administrator, under the present system, falls prey to the government's whims in rate setting and determining retroactively what costs they will reimburse long after the service has been administered.

However, before any prospective system could be established, built-in mechanisms allowing for rising costs of supplies, equipment, and cost of living increases would also have to be built into the formula.

The National Association of Private Psychiatric Hospitals has stated to us that it stands ready to assist in the development of any program which would stop the incessant battle with unnecessary government regulation which inevitably disrupts the patient, the institution, the ability to provide services, and the entire health care delivery system.

In summary, we strongly urge this Committee to end the discrimination against the mentally ill in medicare. To this end, we recommend the lifting of the 190 day lifetime limitation for treatment in psychiatric hospitals, and to eliminate the severe limitation in outpatient benefits.

We also propose the institution of sound reimbursement policies in inpatient and outpatient services to ensure sound fiscal management and to eliminate severe deterrents to treatment of medicare patients with mental illness.

Mr. ROSTENKOWSKI. Mr. Duncan will inquire.

Mr. DUNCAN. Thank you. Mr. Chairman.

Dr. Womer, how many teaching hospitals do we have in the United States?

Dr. WOMER. By the definitions used by the Association of Medical Colleges. approximately 400, and there are 7,000 general short-term hospitals in the country.

Mr. DUNCAN. Is it a fact that in teaching hospitals the per day rate for patients is much higher than it is in nonteaching hospitals?

Dr. WOMER. In general, that is a correct statement. The per-day cost per patient is higher. This is due to a number of factors, the most important of which is the sophistication of the services of the teaching hospital. Most of the teaching hospitals serve as regional referral centers for what are called in the field "tertiary care services."

Therefore, you will find a much higher proportion of intensive care units in teaching hospitals. You will find the transplant programs,

kidney transplant programs in teaching hospitals, open heart surgery programs in teaching hospitals, sophisticated cancer programs in teaching hospitals, whereas you will probably not find the broad range of those services or even, in some cases, any of those services in the majority of hospitals.

Mr. DUNCAN. I understand that in teaching hospitals connected with Veterans' Administration hospitals, rates are sometimes double what they are in the regular Veterans' Administration hospitals, and have the highest rates in the country.

Does that go back to the same thing, the sophistication you are talking about?

Dr. WOMER. I think although generalities are dangerous, and I am speaking on the basis of my observations, the proportion of the acutely ill patients in the teaching hospital, say the one that is affiliated with the medical school, is higher than it is in the affiliated Veterans' Administration hospital. The length of stay of patients in VA hospitals is much longer than it is in the primary teaching hospitals. If I were to use New Haven as an example, for instance, Yale-New Haven, and the West Haven hospital are both affiliated with the medical school there. The proportion of intensive care beds is much higher at YaleNew Haven than it is at the West Haven VA.

This is in no way to deprecate the services at the VA, but they are different kinds of services in a different proportion.

I also must point out that in the primary teaching hospitals, by and large, the cost of those hospitals includes their own capital financing of their facilities. These costs are not included in the cost of the VÄ hospitals, which finance their capital facilities through separate appropriations, and do not include them in their operating costs.

Mr. DUNCAN. It has been alleged in hearings before the Veterans' Committee in the House that actually in many instances the veterans receive inferior treatment in the teaching hospitals, and the reason the costs are so much greater is that you divert a lot of your general costs over to the Veterans' Administration. Would you care to comment on that allegation?

Dr. WOMER. I am not aware of the allegation, or the rationale behind it, so I won't.

The only things that I have read have been the allegations that the care in the veterans' hospital is inferior to the care in the teaching hospital, which is contrary to what you are saying.

Mr. DUNCAN. In my own State of Tennessee, we have a teaching hospital at Vanderbilt University, and we get more complaints from veterans who are treated in that one hospital than we do the other three, which are hospitals operated by the Veterans' Administration. That is the reason I was mentioning the testimony at the Veterans' Affairs Committee. True, this was a few years ago. It is a big subject which we can get into later, but I was just wondering what your views might be.

Dr. WOMER. Two things: I would not say that that is the general situation. Every primary teaching hospital that I know of treats veteran patients in the same way they treat all other patients.

I think the other thing that we have to be careful about when we talk about costs of the VA hospital as opposed to the cost of the nongovern

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