Through these sources of information, intermediary paramedical personnel usually are able to determine whether to allow or deny. In exceptional cases, the claim may be referred to the intermediary's medical staff for consultation before final action is taken by the claims staff.

6. What professional or educational requirements are established for people who review and pass on claims, i.e., must they be nurses with nursing experience, physicians, college graduates, etc.?

SSA has not established any mandatory professional or educational requirements for carrier and intermediary personnel who review and pass on claims. Instead, we have emphasized that claims reviewers must have proper training and supervision and that each intermediary and carrier have medical personnel to give consultation and advice on questionable claims.

Generally, claims examiners are lay personnel. They usually undergo a training period before contractors allow them to process Medicare cases. Written guidelines are used by the examiners to enable them to uniformly review and pass on claims. If the claim falls outside of the guidelines, the examiners usually refer the cases to a medical technician or professional nurse for review. If, after this review the claim is to be denied, the case is usually referred to a physician or a physician advisory group to make a final determination of denial.

The surveillance of contractor performance in this area by the Social Security Administration indicates that while all contractors understand their responsibility and are taking steps to assure proper program reimbursement, their performance varies somewhat. Although we have full awareness of the difficulty involved in this aspect of carrier performance, nevertheless, we will continue to require whatever improvements are necessary in the claims process of contractors to assure quality claims review.

You also requested copies of all pertinent intermediary instructions, memorandums and rulings regarding denial of ECF claims. These materials are enclosed in the attached folder.

Please contact me or my staff if we can be of further assistance.

Sincerely yours,

THOMAS M. TIERNEY, Director, Bureau of Health Insurance.

Senator Moss. We will ask Dr. Offenkrantz if he will come forward

now.

Unfortunately I will have to leave, Doctor, before you complete your statement because the time has gone much faster than I expected and I have a commitment I must keep. Mr. Oriol and Mr. Halamandaris, the professional staff members will remain, will continue the hearing and will make the record on which the subcommittee and the full committee depend.

I apologize to you that I will have to leave before you have completed your testimony but we would like to have you come forward

now.

Dr. Offenkrantz is the medical director of the Cranford Health and Extended Care Center, Cranford, N.J., and as such he has first-hand knowledge of the problems that we have been talking about here about rehabilitation and care of the elderly in the nursing homes of long-term care facilities.

Proceed, Dr. Offenkrantz.

STATEMENT OF FREDERICK OFFENKRANTZ, M.D., MEDICAL DIRECTOR, CRANFORD HEALTH AND EXTENDED CARE CENTER, CRANFORD, N.J.

Dr. OFFENKRANTZ. Thank you, Senator Moss, for the invitation to speak here.

My name is Frederick Offenkrantz. I am a physician, the medical director of the Cranford Health and Extended Care Center in Cran

ford, N.J. This is a facility operated by the nonprofit New Jersey Rehabilitation Care Foundation as one of a number of projects designed to give the most advanced long-term care possible in areas of New Jersey, extending from Princeton to the inner-city ghetto of Newark. The foundation's basic purpose is to serve people who might not otherwise be able to afford or obtain such long-term care.

I wanted to say that Commissioner Newman made an interesting statement. He said he regarded his Bureau as the patient's protagonist. I am very happy to here this because in my dealings with subgroups of the SSA they act more like the devil's advocate in this type of thing. As I am sure the committee knows, extended care is post acute general hospital institutional care, designed to cut down on the days required in an acute hospital. The ECF patient needs both medical and skilled nursing care beyond that of simple custodial care.

My purpose in coming here is to, on behalf of our patients protest the number and method of Medicare cutoffs at our facility through our fiscal intermediary, New Jersey Blue Cross. Within the past year there have been over 50 such cutoffs and only recently we were notified of 18 such terminations in one day. The tempo appears to be increasing, apparently by design, and I am here to protest these actions on the following bases.

With regard to Mr. Oriol's statement I would like to repeat that during the first 18 months of operation we had less than 12 retroactive cutoffs and in the period from March through today we had over 50 such cutoffs. During this time we admitted less than 200 patients which means for statistical purposes as I see it 50 out of 200.

Now I would like to protest these actions on the following bases: 1. Every cutoff was made despite referrals from general hospitals whose utilization review procedures embody referrals to ECF's. Further, in every instance a referring physician from a general hospital certified to the need for ECF care. These patients are sent to us from their hospitals in accordance with the Medicare rules.

2. Cutoffs were made with total disregard to the certification by the attending physician at the Cranford facility as to need for ECF care, plus a preadmission review by the administrator, the very capable and experienced director of nursing, and by the medical director.

3. The utilization review committee of this nonprofit community facility is comprised of, among others, a physiatrist-this is a physician trained in physical therapy-the medical director and a practitioner of many years standing in admitting patients to this facility. In each instance of retroactive cutoffs, this committee had certified to the necessity of additional ECF care, within the guidelines from the Social Security Administration as best we can interpret them, plus our mutual judgment.

4. In many cases no portion of the patient's chart, except for an initial checklist, was requested or reviewed by the individual making these cutoffs, which, of course, should be medical judgments.

By the way, on that last statement, No. 4, since we started raising heck about this-and the cutoffs have been in effect for over a monthwe have had requests, and I have them here, from the intermediary asking for these charts that they had already cutoff without the benefit of the charts.

5. In every instance the cutoff was made retroactive up to as much as 7 weeks from the date of our notification, sometimes this was to the date of the patient's admission to this facility. In several instances the date of cutoff was actually after the death of the patient. Unheard of. 6. In many instances the attending physician has flatly refused to order discharge of patients following these cutoffs. Because of the severity of the patients' illnesses, these physicians felt strongly that discharge would constitute malpractice. I must call your attention to the fact that if this constitutes malpractice on the part of the attending physician, it constitutes malpractice on the part of the intermediary in so ordering, contrary to our combined medical judgment. Since many of these victims come from poor areas, many being inner-city ghetto residents from Newark and Elizabeth, N.J., they cannot afford the charges; and as a nonprofit facility, we are deeply in debt because of those denials which are made long after we, in all good faith and honesty, have rendered the service.

As Dr. Miller pointed out, we cut off most of the people applying for admission long before they ever get to us.

7. Despite repeated efforts, no appeal to reason, no appeal for review and no appeal to professional judgment or humanitarian_need has been entertained by the New Jersey Blue Cross plan or the Social Security Administration.

I have to modify that. In the last couple weeks we received the one review and acceptance of further hospitalization on the part of the patient who had complained to us.

8. In no instance during my almost 2 years of tenure as the medical director has a physician from the intermediary or the SSA contacted me regarding a cut-off. This, in my opinion, constitutes a serious defect in the entire program. It permits unnamed persons to effect virtually a life and death decision on these patients whose requirement for additional care is certified to by referring physicians, treating physicians, consultants and utilization review physicians at this extended care facility.

May I beg the indulgence of this committee in reviewing my background, to explain what I think are my qualifications for appearing before you with this appeal. I am by training a pathologist, graduated from Bucknell University and the Columbia College of Physicians and Surgeons. In addition, I hold a master's degree in public health administration from Columbia University. My attention to the problems of pathology which are inherently those of diagnosis and the course of disease has given me interest in several associated activities. The one in which I appear before you is that of the admission, treatment, supervision and discharge of the geriatric patient under Medicare.

In the opinion of the Foundation leadership, which comprises trained educators and administrators in the health field, a pathologist so interested, constitutes a proper and valuable medical person to objectively evaluate the sick and afflicted geriatric patients being admitted for ECF care. It was felt that having someone trained exclusively in the evaluation of illness rather than subjectively in the treatment of patients was a step towards fully scientific, objective procedure. This was intended to assist the treating physician along

the path of every scientific requirement on behalf of the Medicare statutes. We attempted to avoid, by such guidance, the possibility of subjective overinvolvement of a treating physician with his patient. Appearing before you as I do now, I find that my more than 20 years of relationship with scientists within and outside of government gives me an interesting basis for comparison with medical supervision for ECF's under Medicare. As I have indicated to this committee, there is a remarkable lack of scientific approach, medical control, and generally accepted medical attitude on the part of our intermediary and/or SSA, towards the admission, care and discharge of patients in ECF's. I will be pleased to discuss this to whatever extent this interests the committee. However, I can only conclude that judgments on the part of the government and its agent are being made by incompetent, unskilled, disinterested, uninformed or misguided personnel.

Further, the custom in most large organizations, either government or private, is to open avenues of appeal and discussion to those who might question, on a scientific basis, the original medical phenomena described. Such avenues appear closed in the administration of this program. If they are open, we have been unable to find them.

Mr. ORIOL. Dr. Offenkrantz, Mr. Levy told us a few minutes ago that the appeal procedure is open only to the patient.

Dr. OFFENKRANTZ. Yes.

Mr. ORIOL. But you are attempting to make an appeal because of the need which you have to find a way to express?

Dr. OFFENKRANTZ. On behalf of the patient, Mr. Oriol.

Mr. ORIOL. On behalf of the patient.

Dr. OFFENKRANTZ. Yes.

Mr. ORIOL. Are most of your patients in a position to take advantage of the appeal procedure?

Dr. OFFENKRANTZ. Very few of them are.

Mr. ORIOL. What stops them?

Dr. OFFENKRANTZ. Money.

Mr. ORIOL. Why is money needed?

Dr. OFFENKRANTZ. Well, it is my experience with the poor, Mr. Oriol, that they learn early in life that it is very difficult to fight

city hall.

Mr ORIOL Are the services of an attorney needed to make an appeal?

Dr. OFFENKRANTZ. Not actually. Some of the poor old people have families who are little versed in methods of dealing with these things, and they make appeals, but most of them do not, they just fall back into their home environments.

Mr. ORIOL. And you feel the only way for them to make an effective appeal is through you?

Dr. OFFENKRANTZ. Yes.

Mr. ORIOL. Mr. Miller.

Dr. OFFENKRANTZ. Excuse me. We have made the appeals directly, we think, to the individuals passing the judgments rather than to an administrative supervisor in the intermediary area. These appeals in all cases where they have been made, even doctor to doctor, doctor to nurse, have been turned down.

Mr. MILLER. A question with reference to this matter of appeal. The appeal is made to whom, the intermediary?

Dr. OFFENKRANTZ. Yes, Mr. Miller.

Mr. MILLER. Is there any appeal process available-and I direct this question also to Mr. Levy-beyond the intermediary?

Mr. LEVY. Yes. The way it works is that the patient has a right, first of all, to ask for a reconsideration of his case. If on reconsideration the case is still turned down or processed to his dissatisfaction, he has a right, if the amount of the bill at issue is $137 or more, to ask for a hearing and it is by a separate entity of the Social Security Administration and the Bureau of Hearings and Appeals. They have a number of hearing examiners on their staff that review these requests for hearing. If the amount at issue is $1,000 or more, the patient has a right to seek judicial redress. This, I might add, is set forth in the Medicare statute.

Dr. OFFENKRANTZ. Mr. Levy is correct.

Mr. MILLER. This appeal process is applicable to all types of appeal for all kinds of services under Medicare?

Mr. LEVY. No, I am only referring to cases under so-called part A of Medicare patients either in a hospital or extended care facility or receiving home health services, not who are dissatisfied with their decision. It works a little differently under part B.

Mr. MILLER. How does it work differently?

Mr. LEVY. Under part B we are talking about a patient who receives primarily physician services. There the individual has a right to a hearing before the carrier, the paying agent. In other words, if he is dissatisfied with the way his bill is handled, he must seek redress from the carrier such as Prudential, whoever is handling his case.

Mr. MILLER. Of course, they are the ones who have made the initial decision.

Mr. LEVY. That is correct.

Mr. MILLER. Does he have any appeal available beyond the carrier? Mr. LEVY. I don't believe so, under statute.

Dr. OFFENKRANTZ. Mr. Levy, not to correct you, but we have had a couple of appeals carried back to Baltimore, where the patient had appealed to the intermediary, was turned down, and then retained counsel and did carry the appeal forward.

Mr. LEVY. We of course would always be glad to look at the case involved.

Mr. MILLER. I would like to make the observation that it has come to our attention in a number of instances that there is considerable dissatisfaction with the lack of appeal beyond the carrier which makes the decision in the first place, and this prompts my question. The impression has been conveyed-that the judge is the one who is being accused of having made the error in the first place when the carrier does it.

Dr. OFFENKRANTZ. In most cases, Mr. Miller, this is what does happen. The patient or his family will not carry it beyond a simple letter or a telephone call to the intermediary.

Mr. MILLER. I might say that a very distinguished and highly competent journalist, now retired, has corresponded extensively with the Commissioner of Social Security on this problem. It is something that is, I think, of concern to many people. I am particularly concerned about part B, the lack of an appeal process beyond the carrier. Mr. ORIOL. Dr. Offenkrantz.