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I would say also, that our Blue Cross policy, since the inception of this program,

has been to handle it on the same basis with the same safeguards and at the same level as we handle our own business.

Certainly to insure high quality of care in any of these programs it is necessary to verify that those persons admitted to institutions actually needed to be admitted.

And once they are admitted, we must determine that neither overutilization or underutilization of the institution's facilities, its tests or its treatments, were allowed.

And also we must check to see that the length of stay of the patient is commensurate with the severity of his illness.

I think if we are going to get the fullest economic use of the facilities we have in our community here, it is absolutely imperative that we get people out of the acute beds and into nursing homes and to home health agencies, home care programs or outpatient care, just as soon as we possibly can.


Now again, in the interest of brevity, let me just comment that as far as I can see there are really about three major functions in this intermediary role which I think we are carrying out very vigorously.

The first is to receive and process and pay institutional claims in an efficient manner.

The second is to provide assistance and counseling to providers in the field and to conduct utilization review and medical audit activities in the field to prevent abuses of the program.

And the third, of course, is to perform fiscal audits to verify that costs and charges are compatible for the services rendered.

Each of these functions which is carried out by us can be carried out on our Blue Cross business, on our medicare and our Medi-Cal programs at the same time, and with the same personnel with an appropriate sharing of the costs.

And this, of course, results in considerable economy for each of the participants in these programs.

For example, in the area of claims processing, we receive approximately 40,000 claims a month which involve both medicare and MediCal benefits.

As has been previously mentioned on the basis of the patients entitlement to medicare, many times he can't pay his coinsurance or deductible. Now, if he is eligible for medicare, then Medi-Cal pays these for him.

Because in almost all of the cases we serve as the intermediary for both medicare and Medi-Cal, we can process the claims and make payments under both programs from a single medicare form.

This, of course, is a real saving of time and paperwork—not only for us, but for hospitals and other institutions as well.

In the functions of assisting and counseling and utilization review and medical audit, we have 76 full-time field representatives. And on each visit made by these people, all three of these programs are covered.


So each program really only pays about one-third the cost of each visit that is made.


And similarly, in the performance of our fiscal audit, compatible cost reporting forms have been developed so that one audit of the institution's books will suffice for all three programs—again with appropriate sharing of costs.

In this joint administration of medicare and Medi-Cal and Blue Cross, too, I believe we have an excellent mechanism for assisting in the maintenance of high quality care and in an economical manner.

For example, our administrative costs and claims processing, to date, under the Medi-Cal program, is just 771/2 cents per claim. This amounts to one-half of 1 percent of the amount paid for institutional services rendered.

I think you will agree this is a mighty low administrative cost. As the charts that have been filed with your committee will show, the volume of patient care in medicare-in Medi-Cal, rather-is increasing rather dramatically.

More and more eligible people seem to be availing themselves of the Medi-Cal benefits, and each has been seen by a doctor who has determined that the patient needed institutional care.

So I think this way we can see that the program is bringing care to a great many people who apparently needed it before, but for one reason or another had not been getting it.

I think, just in summary, if I may, Senator Williams, I would say that we had many problems at the outset of this program, as can be expected, but there have been a great many improvements in the program since its beginning. A lot are in the mill right now, and coming to fruition.

I am sure we can look forward to a great many more in the very near future.

And with the pros and cons we have heard here this morning, I am pleased to tell you that, all in all, we of Blue Cross can say that we are very proud to have been a part of what we feel is a great program and which is bringing a great deal of good to a lot of people.

If you have any questions, sir, I will be glad to try and answer them.

Senator WILLIAMs. I think you have answered all of the questions that I had prepared to ask.

How many States are included in medicaid, which is your nomenclature—is Medi-Cal?

Mr. THOMAS. I don't know. I can speak for this State—well, up around 40, I believe.

Senator WILLIAMS. Is that right? Blue Cross is the agent intermediary in many of these States ?

Mr. THOMAS. A great many. This is the case, as you well know, it is up to the individual States to decide in their programs as to which way they will be administered.

Ä majority have chosen to go the route of the intermediary.

Senator WILLIAMs. Mr. Thomas, I know we have to adjourn—people have been sitting here for a long time, and you are entitled to a little luncheon—we will recess now. It is 20 minutes till 2.

Senator Randolph has a schedule problem. We will be due back at 2:15. That will give you a chance to have a long, leisurely 20-minute lunch.

(Whereupon, at 1:40 p.m., the subcommittee recessed, to reconvene at 2:15 p.m., the same day.)


Senator RANDOLPH. Our hearing will resume.
Will the witnesses now please identify themselves for the record.



Mrs. DUDLEY. Thank you. I am Juanita C. Dudley,* assistant regional director, western regional office, National Urban League.

I am particularly concerned with health in the western regionwhich encompasses six States in which we presently have affiliates.

I have many concerns regarding the delivering of health care to the aged.

Accompanying me today is Dr. Clarence Littlejohn, health chairman of the Los Angeles Urban League.

He will try to answer some of the five questions—along with methat we were requested to answer.

For brevity, and because of the time, we will move very quickly through all of our questions without stopping.

Now it has been clearly established that payments under Medi-Cal to practitioners in the black and brown communities have been less than prompt and equitable. The fiscal agents, Blue Cross and Blue Shield explained that this county is divided into 16 regions and the payment scale varies in most of these regions.

The fiscal agents said that payments are rendered within a 3- to 4week period after submission and suggested that any problems that are existent are due to negligence and irresponsibility on the part of the submitting practitioner.

My office requested Blue Shield to run a check on a specific physician's file, and it was determined that none of the problems around payment were due to his errors. This physician had not received payment for any services rendered under the Medi-Cal program for the last 6 months.

Both Blue Cross and Blue Shield have stated that seminars are being held in the communities to help the practitioners correct deficiencies emanating from incorrectly filed forms, et cetera.

*See app. 1, p. 724.

SPEEDIER PROCESSING REQUESTED We have asked both the State department of welfare and the fiscal agents to insure a more speedy method of processing claims as it appears that the bogging down occurs equally as much in both areas.

We would like to request that a standardized set of procedures for all medical services under both title 18 and 19 be quickly implemented in line with the procedures that are followed with respect to 18 at present.

In answer to the second question: Are medicare and Medi-Cal programs sufficient to provide the services to those people most in need of the services? If not, what suggestions do you have for improvement ?

Medicare is the most significant innovation in the American Social Security system since 1935. It works especially well for most, though its major problem may be that it is contributing to a higher medical cost for the nonaged as well as the aged.

Ten percent of the aged are not eligible for social security pensions: After 1969, what happens to medical care for this percentage, which includes State and Federal Government retirees?

We would like to recommend that all 65-year-olds be included under the Medi-Cal insurance provisions of medicare, irrespective of their lack of coverage by social security.

In southern California 400,000 claims per year are made for medical care of the aged. This approximates a population of 32,000 persons per month. Blue Shield, the fiscal agent for title 19, states that they are receiving from 110,000 to 115,000 claims per day with 85,000 to 90,000 under Medi-Cal for the aged.

It would appear that Medi-Cal is being used as a secondary insurance plan for the elderly poor when medicare title 18 provisions have been exhausted. Compulsory hospitalization prior to a patient's movement into an extended care facility has filled existing hospital beds. It would appear that most of the aged poor are in need of lengthy institutional care due to inadequate home health care.

CUSTODIAL NURSING HOMES We recommend that custodial nursing homes may be the answer to costly care, relieving hospitals for immediate needs. Frequently, the aged poor are unable to pay the first day's deductible and, consequently, continue to use the emergency room of public hospitals for regular medical needs.

It has been projected that a patient entering a custodial nursing home would remain there for his life expectancy, or about 41/2 years, since he would probably enter about age 82. We are urging title 18 and 19 coverage of custodial nursing care and there are obvious reasons why nursing home and extended care facilities are often unable to accept Medi-Cal (title 19) patients who are aged and poor. They are described as being less intelligent, less sophisticated, and more difficult to care for.

We would wonder if this is not based on the differential in terms of revenue between the two programs per patient. Once again, we emphasize the need for standardizing in all States payments for care under title 18 and 19.

In answer to question No. 4: "What suggestions do you have for increasing health services manpower in a densely populated, essentially urban area, or are there now such shortages of manpower?"

Health services manpower in Los Angeles County is taken from the Los Angeles County Medical Society figures which include a total of 11,964 practitioners. Attached is a chart showing the actual breakdown

a in numbers and the ratio per 1,000 to the population.


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Note: Total includes all non-Federal physicians. Private practice includes solo, partnership, group, or physician employed by another physician in practice involving patient care. Hospital practice includes interns, residents, fellows, and full-time physician staff.

Source: California Medical Association, Bureau of Research and Planning: Reference Book on Selected Health Manpower Data, tables 1 and 2, containing previously unpublished data provided by American Medical Association.

We estimate that there are approximately 450 Negro practitioners in Los Angeles County with a large percentage working in public health or other clinical and group settings.

Senator RANDOLPH. Just a moment, Mrs. Dudley. According to your written statement it is 350. Was there an error?

Mrs. DUDLEY. I am sorry; yes. It is 450.

We are also aware of the very small number of minorities now in attendance at the major medical schools in this county, realizing that the decrease in medical manpower will be more keenly noted within the next 3 to 5 years.


We urge an expansion of paramedical training in the areas of home health aides, nursing and other allied fields. We have launched a program to help secure training for returning Vietnam veterans who served ably on the battlefield as medics. We hope that Hill-Burton funds could be extended to update and reclaim many of the existing medical facilities which are being phased out of use.

Comprehensive health planning coupled with regional medical programs for heart, cancer, and stroke must look carefully at the use of an incorporation of the paramedic in their plans for extending better health care to disabled and aged at the lowest level.

Preventive multiphasic health screening at the community level appears to be an obvious solution to high medical costs as so clearly evidenced by group programs such as Kaiser Permanente Foundation of California and the HIP plan in New York. Effective delivery of

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