the controls on possible abuses in subsection (2) through (7) of that section; to the right of personal appeal in section 163.08; and to the assurance of free choice of physician, dentist, pharmacist, hospital, or skilled nursing home in section 163.12 of the act.

Two features of the Wisconsin act call for special emphasis because they were designed in fulfillment of the underlying philosophy of the Kerr-Mills Act, which differs basically from ordinary public assistance legislation. The first is section 163.04 dealing with eligibility. This permits the determination of eligibility by the sworn statement of an applicant rather than through the use of local or State relief machinery. The State department of public welfare, as the fiscal agent for the U.S. Department of Health, Education, and Welfare, may make an additional investigation of eligibility when there is reasonable ground for belief that the applicant may not be eligible, that he may have received benefits to which he was not entitled, or at the request of the Secretary of the Department of Health, Education, and Welfare.

A second significant departure from the usual relief machinery, which is believed consistent with the underlying philosophy of the Kerr-Mills Act is the separation of the administration of benefits from fiscal administration. See sections 163.06 and 163.07 of exhibit B. The administration of benefits is to be handled by one of the Wisconsin Blue plans or by an insurance carrier licensed in Wisconsin. The contract for such administration is to be awarded the lowest qualified bidder.

To summarize, the Wisconsin Department of Public Welfare, acting as agent for the U.S. Department of Health, Education, and Welfare, and for the State of Wisconsin, will thus administer eligibility and finance, without employing general relief machinery except where indicated. Benefits, on the other hand, will be administered by a Blue plan or an insurance carrier. These two features readily distinguish this legislation from old-age assistance or general relief laws and should encourage the use of its provisions by those for whom it was designed.

The society will gladly develop any of the foregoing points in greater depth or endeavor to furnish answers to other questions, should the committee make such a request.

Respectfully submitted.

STATE MEDICAL SOCIETY OF WISCONSIN, By W. J. EGAN, M.D., President.

STATE MEDICAL SOCIETY OF WISCONSIN

EXHIBIT A

(Excerpt from Wisconsin Statutes, 1961)

49.40 Medical care: (1) The county agency administering aid to the blind, aid to dependent children, old-age assistance, and aid to totally and permanently disable persons may provide for medical care needed by recipients of such aids. A person shall be considered a recipient if at the time such care is authorized aid to the blind, aid to dependent children, old-age assistance, or aid to totally and permanently disabled persons is being granted to him. The provisions of section 49.11 shall not apply to this section. Medical care shall, as necessary, be authorized by such county agency and allowed within money payments to the recipients under sections 49.18(1) (a), 49.19 (5), 49.22, and 49.61 (6) (a), or paid by the county agency in addition to or in lieu of such money payments; provided that the method of payment for any medical service either by money payment or vendor payment shall be determined by the department for the purpose of obtaining maximum Federal participation. Medical care provided under this section includes hospitalization, home care when prescribed by a physician, and nursing home care; physicians', dentists', podiatrists', and nurses' services; drugs, medical supplies, and equipment: prosthetic appliances and other medical service as each is prescribed by a physician; optometrical services; transportation to obtain medical care; and prepayment of medical care.

27-166-64- pt. 2- -20

STATEMENT OF THE STATE MEDICAL SOCIETY OF WISCONSIN

EXHIBIT B

STATE OF WISCONSIN

No. 615, S- Published August 10, 1963

CHAPTER 224, LAWS OF 1963

AN ACT

AN ACT To amend and revise chapter 20 and to make divers other changes in the statutes and session laws, reiating to state finances and appropriations, constituting the general fund executive budget of the 1963 legislature, levying taxes to provide additional revenue and to relieve the property tax, providing for salary increases granting rule making authority, providing penalties, and making appropriations

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

CHAPTER 163. HEALTH ASSISTANCE PAYMENTS

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

163.02 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 resouces 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 public, through general taxation, should join in a co-operative effort to alleviate such problems. It is the intent to encourage the sense of family responsibility which has always been a bulwark of American life. It is the further intent that the public, through general taxation, supply all or most of the funds required to insure, as far as practicable, the health needs of this important segment of the population through contracts betwen the state and one or more of the nonprofit organizations incorporated or existing under or by virtue of ss. 148.03, 152.53, and 182.032, or one or more insurance companies licensed to do business in this state. It is also the intent to help keep as many older citizens as possible on a self-sustaining basis by protecting them against major health costs.

163.03 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.

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

(8) "Personal assets" mean 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 $5,500 in value, if single, or $9,000, 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 written order or an oral order later reduced to writing by a licensed physician or dentist for a product or service.

(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 and which employs sufficient registered nursing practitioners for supervision of those giving nursing care to patients.

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

(13) "Visiting nurse" means a registered nurse or a trained practical nurse employed by an organized, voluntary home nursing agency or by an official agency established under s. 141.10, and rendering home nursing services to patients who are under the care of a physician.

163.04 ELIGIBILITY. (1) Any resident of this state is eligible for benefits under this chapter who shows by a sworn statement on a form prescribed by the department that he

(a) Has attained the age of 65; and

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

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

(d) Does not have personal assets in excess of the amounts specified in s. 163.03 (8), and that his annual income does not exceed $1,800, if single, or $2,700, if married; except that any applicant shall be eligible when he has expended all of his income in excess of the above applicable limits for health services of the type available under this chapter, or for personal health insurance premiums, or both; and

(e) Has not, within one year of the date of making application hereunder, conveyed, transferred or disposed of property so as to make himself eligible for benefits under this chapter.

(2) The department may make additional investigation of eligibility when there is reasonable ground for belief that an applicant may not be eligible, or that a beneficiary may have received benefits hereunder to which he was not entitled, or upon the request of the secretary of the U.S. department of health, education and welfare.

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

(4) At any time that he believes himself eligible under this chapter any person may file an application with the department requesting a determination of his eligibility. Eligibility may be determined before the need for services arises and reapplication at the time of illness is not necessary. Every applicant shall receive notification in writing promptly as to the action taken on his application. Such notification, if approving eligibility, shall specify the period of eligibility.

163.05. BENEFITS; EXCLUSIONS. (1) The department shall determine the maximum allowances of a health plan to be administered to s. 163.06, which, subject to applicable deductible coinsurance and other provisions established by it, shall pay part or all of the charges to beneficiaries for the following: inpatient hospital care in a semiprivate room; 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 through a hospital or by a physician in a hospital; and the following additional services when prescribed by a physician: care by a visiting nurse, diagnostic services which require X-ray or laboratory procedures and pharmaceutical services.

(2) Benefits shall 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; or

(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; or

(d) That part of any services otherwise authorized under this section which are payable through insurance, third party liability, or any federal, state, county, municipal or private benefit systems to which the beneficiary may otherwise be entitled.

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

(a) An applicant must first expend 5 per cent of his annual allowable income for the health services provided in this section;

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

(c) The maximum combined liability for payment for care in a hospital and skilled nursing home under this section shall be 45 days per illness. (4) Payments shall not include care or services rendered earlier than the month preceding the month of the application, but in no event may payments be made for health services rendered during a period when the beneficiary would not have been eligible for benefits under this chapter.

(5) Payment for services provided by a plan established under this section shall be made directly to the hospital, skilled nursing home, other organization or individual providing such services pursuant to the provisions of any contract that may be entered into under s. 163.06.

(6) No source of service may bill the beneficiary of a plan established hereunder, except for or to the extent that benefits are not provided by it.

(7) If the funds appropriated become or are estimated to be insufficient to make full payment of benefits provided by a plan established under this section. all charges for services so authorized shall be prorated on the basis of the funds available, or by limiting the benefits provided.

163.06 ADMINISTRATION OF PLAN. The department shall promptly solicit bids from nonprofit organizations incorporated or existing under and by virtue of the provisions of s. 148.03 or 182.032, and from insurance companies licensed and authorized to do business in this state, to administer, for and on behalf of the state, the benefits provided for under s. 163.05. The department shall award the contract for such services to the lowest qualified bidder.

163.07 ADMINISTRATION, GENERAL. (1) The department shall exercise responsibility relating to fiscal matters, the eligibility of beneficiaries under the standards set forth in s. 163.04, and general supervision of the plan established under s. 163.05 (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) The department shall employ necessary personnel within the limitations of the sums appropriated by s. 20.670 (27), and under the classified service, 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.

(3) The department may audit all claims filed under s. 163.05 and make proper fiscal adjustments.

(4) No contractor under s. 163.06 shall be obligated to make any payment until the claimant has been certified by the department as a beneficiary. Such certification shall be accepted by the contractor as conclusive of its accuracy. The department shall reimburse the contractor for payments made mistakenly on the basis of an incorrect certification.

(5) 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.

(6) 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.

(7) The department shall certify all proper charges, or claims for administrative services, to the department of administration for payment, and the department of administration shall draw its warrant forthwith.

163.08 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).

163.09 RECOVERY OF PAYMENT.

(1) On the death of a person who has received medical assistance under this chapter, and his surviving spouse, the total amount of such assistance paid shall be filed by the department as a claim against his estate, but such claim shall not take precedence over the allowances under s. 313.15, or over any other claim for care or maintenance furnished by the state or its political subdivisions. The court may provide for the maintenance or support of a surviving minor or incapacitated adult children, and thereupon the claim shall be waived to the extent of the amount disallowed and that amount assigned to such children for maintenance or support.

(2) For benefits incorrectly paid recovery shall be made before the death of the recipient pursuant to the judgment of a court of record.

(3) All amounts received pursuant to this section shall be deposited in the state treasury, and out of the net amount recovered the federal government shall be paid the proportionate amount which it contributed.

163.10 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.

163.11 RULEMAKING POWERS. The department is authorized to make such rules as are consistent with its duties under this chapter, and shall be empowered to cooperate with the federal government in carrying out the purposes of Title VI, P.L. 86-778.

163.12 FREE CHOICE. Nothing contained in this chapter shall alter the right of each elegible person to the free choice of physician, dentists, pharmacist, 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.

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

The CHAIRMAN. Dr. Linford, will you please identify yourself by giving us your name, address, and capacity in which you appear?

STATEMENT OF DR. ALTON LINFORD, THE NATIONAL ASSOCIATION OF SOCIAL WORKERS; ACCOMPANIED BY RUDOLPH T. DANSTEDT, DIRECTOR, WASHINGTON OFFICE

Dr. LINFORD. I am Alton Linford, dean of the School of Social Service Administration, University of Chicago. I am testifying today for the National Association of Social Workers of which I am a member. I am accompanied by Mr. Rudolph T. Danstedt, director of our Washington office.

The National Association of Social Workers is an organization of 37,000 members who are professionally trained social workers employed in governmental and Catholic, Jewish, Protestant, and nonsectarian voluntary health, welfare, and recreation agencies.

Mr. Chairman, I would like the privilege of filing my full statement for the record and talking to it briefly.

The CHAIRMAN. Without objection, your statement will appear in full in the record.

Dr. LINFORD. If possible, I would like to have included a special issue of our Washington memorandum on this measure.