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MEDICARE-MEDICAID ADMINISTRATIVE AND REIMBURSEMENT REFORM ACT

HEARINGS

BEFORE THE

SUBCOMMITTEE ON HEALTH

OF THE

COMMITTEE ON FINANCE
UNITED STATES SENATE

NINETY-FIFTH CONGRESS

FIRST SESSION

ON

S. 1470

TO PROVIDE FOR THE REFORM OF THE ADMINISTRATIVE AND REIMBURSEMENT PROCEDURES CURRENTLY EMPLOYED UNDER THE MEDICARE AND MEDICAID PRO

GRAMS, AND FOR OTHER PURPOSES

JUNE 7, 8, 9, AND 10, 1977

Printed for the use of the Committee on Finance

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1977

92-2020

For sale by the Superintendent of Documents, U.S. Government Printing Office

Washington, D.C. 20402

KF26 F5538 1971

COMMITTEE ON FINANCE

RUSSELL B. LONG, Louisiana, Chairman HERMAN E. TALMADGE, Georgia

CARL T. CURTIS, Nebraska ABRAHAM RIBICOFF, Connecticut

CLIFFORD P. HANSEN, Wyoming HARRY F. BYRD, JR., Virginia

ROBERT DOLE, Kansas GAYLORD NELSON, Wisconsin

BOB PACKWOOD, Oregon MIKE GRAVEL, Alaska

WILLIAM V. ROTH, JR., Delaware LLOYD BENTSEN, Texas

PAUL LAXALT, Nevada
WILLIAM D. HATHAWAY, Maine

JOHN C. DANFORTH, Missouri
FLOYD K. HASKELL, Colorado
SPARK M. MATSUNAGA, Hawaii
DANIEL PATRICK MOYNIHAN, New York

MICHAEL STERN, Staff Director
GEORGE W. PRITTS, Jr., Minority Counsel

SUBCOMMITTEE ON HEALTH

HERMAN E. TALMADGE, Georgia, Chairman ABRAHAM RIBICOFF, Connecticut

ROBERT DOLE, Kansas GAYLORD NELSON, Wisconsin

PAUL LAXALT, Nevada LLOYD BENTSEN, Texas

JOHN C. DANFORTH, Missouri SPARK M. MATSUNAGA, Hawaii

(II)

CONTENTS

ADMINISTRATION WITNESS
Califano, Hon. Joseph A., Jr., Secretary, Department of Health, Education, Page
and Welfare-----

78

213
372

132

293

358

432

401

332

200

PUBLIC WITNESSES
AFL-OIO, Bert Seidman, director, social security department, accompanied

by Robert McGlotten, legislative department, and Richard Shoemaker,

social security department ---
Ament, Richard, M.D., president, American Society of Anesthesiologists -
American Association for Comprehensive Health Planning, Anthony Mott,

chairman, legislative committee -
American Association of Neurological Surgeons, Donald H. Stewart, Jr.,

M.D
American Association of Nurse Anesthetists, Ruth E. Ecklund, president,

accompanied by Ronald F. Caulk, president-elect; J. Martin Stone, execu-

tive director; and Kenneth Williamson, Washington consultant.
American Association of Retired Persons, James M. Hacking, assistant leg.

islative counsel-----
American College of Nuclear Physicians, Richard C. Reba, M.D., presi-

dent, accompanied by John Dring and Kenneth L. Nicolas, executive
staff
American College of Radiology, Harold N. Schwinger, M.D., chairman,

board of chancellors, accompanied by Frederic D. Lake, M.D., president;
J. T. Rutherford, legislative counsel; and Otha W. Linton, director,

governmental affairs -
American Health Care Association, Bruce D. Thevenot, administrator, gov-,

ernment services division..
American Hospital Association, John Alexander McMahon, president, ac-

companied by Alan Manzano, vice president and Leo J. Gehrig, M.D.,

senior vice president--
American Medical Association, Raymond T. Holden, M.D., chairman, board

of trustees, accompanied by Edgar T. Beddingfield, Jr., M.D., chairman,

council on legislation --
American Protestant Hospital Association, Charles D. Phillips, Ed. D.,

president
American Psychiatric Association, Dave M. Davis, M.D., immediate past

president, Georgia Psychiatric Association, director of psychiatric serv-
ices, Peachtree-Parkwood Mental Health Center and Hospitals, Atlanta,

Ga ---
American Society of Anesthesiologists, Richard Ament, M.D., president..
Asmus, Harry, president, National Council of Health Care Services, accom-

panied by Jack MacDonald, executive vice president.
Association of American Medical Colleges, John A. D. Cooper, M.D., presi-

dent, accompanied by David D. Thompson, M.D., director, New York Hos-
pital, and chairman, Council of Teaching Hospitals, and James D. Bent-

ley, Ph. D., assistant director, Department of Teaching Hospitals.-----
Association of American Physicians and Surgeons, Thomas G. Dorrity,

M.D., director, accompanied by Maurice A. Kramer, assistant executive

director, Washington office.-
Association of State and Territorial Health Officials, Dr. Robert P.
Whalen

(III)

139

228

197

409

372

205

156

403

126

Lido

Page 252

170

341 293

156

264

409

Blue Cross Association, Neil Hollander, vice president for health care serv

ices
Bromberg, Michael D., director, national offices, Federation of American

Hospitals, accompanied by Robert J. Samsel, president...
College of American Pathologists, Tyra Hutchens, M.D., president-elect and

chairman, Department of Clinical Pathology, University of Oregon Medi-
cal School, accompanied by Dr. Jerald R. Schenken, Nebraska Methodist

Hospital
Congress of Neurological Surgeons, Donald H. Stewart, Jr., M.D.
Cooper, John A. D., M.D., president, Association of American Medical Col-

leges, accompanied by David D. Thompson, M.D., director, New York Hos-
pital, and chairman, Council of Teaching Hospitals and James D. Bent-

ley, Ph. D., Assistant Director, Department of Teaching Hospitals--Davis, A. B., Jr., executive vice president and chairman, Board of Directors,

Kansas Hospital Association, accompanied by Frank L. Gentry, execu

tive director, Kansas Hospital Association---Davis, Dave M., M.D., immediate past president, Georgia Psychiatric Asso

ciation, director of Psychiatric Services, Peachtree-Parkwood Mental Health Center and Hospitals, Atlanta, Ga., on behalf of the American Psychiatric Association and the National Association of Private Psychi

atric Hospitals.-Dorrity, Thomas G., M.D., director, Association of American Physicians and

Surgeons, accompanied by Maurice A. Kramer, assistant executive director, Washington office_ Ecklund, Ruth E., president, American Association of Nurse Anesthetists,

accompanied by Ronald F. Caulk, president-elect; J. Martin Stone, execu

tive director; and Kenneth Williamson, Washington consultant----Federation of American Hospitals, Michael D. Bromberg, director, Na

tional Offices, accompanied by Robert J. Samsel, presidentFiler, John H., chairman and chief executive officer, Aetna Life and Cas

ualty, on behalf of the Insurance Association of Connecticut, accom-
panied by Burton E. Burton, senior vice president, group division,

Aetna
Finger Lakes Health Systems Agency, Anthony Mott, executive director.-
Greene, Tom E., III, vice president, Paine, Webber, Jackson & Curtis, Inc.,

on behalf of Hospital Financing Study Group---
Hacking, James M., assistant legislative counsel, National Retired Teach-

ers Association and American Association of Retired Persons.-
Hansen, Jacqueline, board chairman, Health Systems Agency, Kansas

City
Health Insurance Association of America, Morton D. Miller, vice chairman,

Equitable Life Assurance Society of the United States, accompanied by
William C. White, Jr., vice president, Prudential Insurance Co. of

America
Health Systems Agency, Kansas City, Jacqueline Hansen, board chair-

403

358

170

398 132

289

432

132

280

man

132

228

252

115

Holden, Raymond T., M.D., chairman, Board of Trustees, American Medi

cal Association, accompanied by Edgar T. Beddingfield, Jr., M.D., chair

man, council on legislation --
Hollander, Neil, vice president for Health Care Services, the Blue Cross

Association
Hollister, Hon. David, on behalf of the National Conference of State

Legislatures
Horty, John F., president, National Council of Community Hospitals, ac-

companied by John Huff, counsel..
Hospital Financing Study Group, Tom E. Greene III, vice president, Paine,

Webber, Jackson & Curtis.---
Hutchens, Tyra, M.D., president-elect, College of American Pathologists

and chairman, Department of Clinical Pathology, University of Oregon
Medical School, accompanied by Dr. Jerald R. Schenken, Nebraska
Methodist Hospital.-

186

289

341 Insurance Association of Connecticut, John H. Filer, chairman and chief

executive officer, Aetna Life and Casualty, accompanied by Burton E. Page Burton, senior vice president, group division, Aetna-

398 Kansas Hospital Association, A. B. Davis, Jr., executive vice president and

chairman, board of directors, accompanied by Frank L. Gentry, executive director.--

264 Levetan, Liane, commissioner, De Kalb County, Ga., and member, Health

and Education Policy Steering Committee of the National Association of Counties, accompanied by Mike Gennell, legislative representative---- 307 McMahon, John Alexander, president, American Hospital

Association, accompanied by Alan Manzano, vice president and Leo J. Gehrig, M.D., senior vice president --

139 Miller, Morton D., vice chairman, Equitable Life Assurance Society of the

United States, accompanied by William C. White, Jr., vice president,
Prudential Insurance Co. of America, on behalf of Health Insurance
Association of America -

280 Moran, M. Gail, staff director, Committee on Human Resources, National Governors' Conference-

317 Mott, Anthony, executive director, Finger Lakes Health Systems Agency,

and chairman, Legislative Committee, American Association for Comprehensive Health Planning--

132 Murphy, Richard E., legislative director, Service Employees International

Union, accompanied by Stanley Wisniewski, research director, Service
Employees International Union --

272 National Association of Counties, Liane Levetan, commissioner, De Kalb

County, Ga., and member, Health and Education Policy Steering Com

mittee, accompanied by Mike Gennell, legislative representative--- 307 National Association of Private Psychiatric Hospitals, Dave M. Davis,

M.D., immediate past president, Georgia Psychiatric Association, director of psychiatric services, Peachtree-Parkwood Mental Center and Hospitals, Atlanta, Ga.--

409 National Conference of State Legislatures, Hon. David Hollister-

115 National Council of Community Hospitals, John F. Horty, president, accompanied by John Huff, counsel

186 National Council of Health Care Services, Harry Asmus, president, accompanied by Jack MacDonald, executive vice president..

205 National Governors Conference, M. Gail Moran, staff director, committee on human resources.

317 National Retired Teachers Association, James M. Hacking, assistant legislative counsel --

432 Phillips, Charles D., Ed.D., president, American Protestant Hospital Association

197 Reba, Richard C., M.D., president, American College of Nuclear Physi

cians, accompanied by John Dring; and Kenneth L. Nicolas, executive staff

401 Schwinger, Harold N., M.D., chairman, Board of Chancellors, American

College of Radiology, accompanied by Fredric D. Lake, M.D., president ; J. T. Rutherford, legislative counsel; and Otha W. Linton, director, governmental relations

332 Seidman, Bert, director, Social Security Department, AFL-CIO, accom

panied by Robert McGlotten, Legislative Department, and Richard Shoemaker, Social Security Department

213 Service Employees International Union, Richard E. Murphy, legislative director; accompanied by Stanley Wisniewski, research director.

272 Stewart, Donald H., M.D., American Association of Neurological Surgeons. 293 Thevenot, Bruce D., administrator, Government Services Division, American Health Care Association.

200 Whalen, Dr. Robert P., on behalf of the Association of State and Territorial Health Officials

126

COMMUNICATIONS

American Association of Homes for the Aging, David C. Crowley, executive

vice president American College of Emergency Physicians. American Dental Association.

452 463 465

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