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HOSPITAL, NURSING HOME, AND SURGICAL BENEFITS

FOR OASI BENEFICIARIES

MONDAY, JULY 13, 1959

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D.C. The committee met at 10 a.m., pursuant to notice, in the committee hearing room, New House Office Building, Hon. Wilbur D. Mills (chairman of the committee) presiding.

The CHAIRMAN. The committee will please be in order.

In accordance with prior notice, the committee this morning is beginning 5 days of hearings on the bill introduced by our colleague on the committee from Rhode Island, Hon. Aime J. Forand, H.R. 4700, to amend the Social Security Act to provide insurance for the cost of hospital, nursing home and surgical service for persons eligible for old-age and survivors insurance benefits.

The Chair is also aware that our colleague on the committee from Montana, Hon. Lee Metcalf, has a similar bill pending before the committee, as is true also of certain other Members of the House.

The Chair is aware that a very large number of individuals and organizations requested to be heard on this legislation, and the Chair observes that the committee has a very heavy schedule and that a limited time was available to be set aside for these particular hearings. Consequently, it was necessary that the time of the witnesses be divided in accordance with the total time available and the number of witnesses requesting to be heard. Allocations of time were made on an impartial basis as between the proponents and opponents and assigned accordingly.

While only 1 week was available at this time for these hearings, the Chair observes that just 1 year ago social security hearings were conducted by the committee, at which some 190 witnesses appeared and presented to the committee over 1,200 printed pages of testimony, much of which was on the Forand bill of the last Congress.

The hospitalization provisions of that bill were almost identical with H.R. 4700, the bill now pending before the committee. That prior testimony of a year ago will also be available to the committee.

The Chair further notes that the report of the Department of Health, Education, and Welfare on the feasibility of use of the social security system for payment of hospital benefits has been submitted. The information in this report is therefore also available to the committee.

The Chair wishes to express appreciation to all of the witnesses for their cooperation with regard to the orderly scheduling of the hearings.

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Without objection, following this statement, a copy of the bill on which the hearings are being conducted will be placed in the record, along with the press release announcing the hearings.

[H.R. 4700, 86th Cong., 1st sess. ] A BILL To amend the Social Security Act and the Internal Revenue Code so as to provide

insurance against the costs of hospital, nursing home, and surgical service for persons eligible for old-age and survivors insurance benefits, and for other purposes

Be it enacted by the Senate and House of Representatives of the Untied States of America in Congress assembled, That this Act may be cited as the "Social Security Amendments of 1959".

TITLE I-AMENDMENTS TO TITLE II OF THE SOCIAL SECURITY ACT

Sec. 101. (a) Title II of the Social Security Act is amended by adding after section 225 the following new section :

"HOSPITALIZATION, NURSING AND SURGICAL INSURANCE

"Eligibility for Insurance SEC. 226. (a) (1) The cost of hospital or nursing home services furnished to any individual during any month for which he is entitled to monthly benefits under section 202 (whether or not such benefits are actually paid to him) or is deemed entitled to such benefits under the provisions of paragraph 2, or the cost of such services furnished to him during the month of his death where he ceases to be entitled by reason of his death, and the cost of surgical services which are not of an elective nature, shall, subject to the provisions of this section, be paid from the Federal Old-Age and Survivors Insurance Trust Fund to the hospital, physician, and nursing home which furnished him the services. Services to be paid for in accordance with the provisions of this section include only services provided in the United States.

(2) For purposes of this section, (A) any individual who would upon filing application therefor be entitled to monthly benefits for any month under section 202 shall, if he files application under this section within the time limits prescribed in section 202(j), be deemed, for purposes of this section only, to be entitled to benefits for such month, (B) such individual shall, whether or not he files application under this section, be deemed to be entitled to benefits under section 202 for such month for purposes of determining whether the wife, husband, or child of such individual comes within the provisions of clause (A) hereof, and (C) any individual shall, for purposes of this section, be deemed entitled to benefits under section 202 if such individual could have been deemed under clauses (A) or (B) of this paragraph to have been so entitled had he not died during such month.

“(3) For purposes of paragraph (2), an individual's application under this section may, subject to regulations, be filed (whether such individual is legally competent or incompetent) by any relative or other person, including the hospital, physician, or nursing home furnishing the hospital, surgical, and nursing home services and, after such individual's death, his estate.

“(4) Payments may be made for hospital services furnished under this section to an individual during his first sixty days of hospitalization in a twelvemonth period that begins with the first day of the first month in which the individual received hospital services for which a payment is made under this section, and during his first sixty days of hospitalization in each succeeding twelve-month period; and for nursing home services furnished under this section to an individual if the individual is transferred to the nursing home from the hospital, and if the services are for an illness or condition associated with that for which he received hospital services: Provided, That the number of days of nursing home services for which payments may be made shall, in any twelve-month period as described above, not exceed one hundred and twenty less the number of days of hospital services (in the same twelve-month period) for which payments are made under this section.

“(5) The provisions of section 205 relating to the making and review of determinations shall be applicable to determinations as to whether the costs of hospital, nursing home, and surgical services furnished an individual may be paid for out of the Federal Old-Age and Survivors Insurance Trust Fund under this section, and the amount of such payment.

"Description of Hospital, Nursing Home, and Surgical Services "(b)(1) For purposes of this section, the term 'hospital services' means the following services, drugs, and appliances furnished by a hospital to any individual as a bed patient: bed and board and such nursing services, laboratory services, ambulance services, use of operating room, staff services, and other services, drugs, and appliances as are customarily furnished by such hospital to its bed patients either through its own employees or through persons with whom it has made arrangements for such services, drugs, or appliances; the term 'hospital services' includes such medical care as is generally furnished by hospitals as an essential part of hospital care for bed patients; such term shall include care in hospitals described in paragraph (1) of subsection (d); such term shall not include care in any tuberculosis or mental hospital.

"(2) The term 'nursing home services' means skilled nursing care, related medical and personal services, and accompanying bed and board furnished by a facility which is equipped to provide such services, and (A) which is operated in connection with a hospital, or (B) in which such skilled nursing care and medical services are prescribed by, or are performed under the general direction of, persons licensed to practice medicine or surgery in the State.

“(3) The term 'surgical services' means surgical procedures (other than elective surgery) provided in a hospital, or, in case of an emergency or for minor surgery, provided in the outpatient department of a hospital or in a doctor's office. Surgical services may include oral surgery when provided in a hospital. The term 'elective surgery' means surgery that is requested by the patient, but which in the opinion of cognizant medical authority is not medically required.

"Free Choice by Patient "(c) (1) Any individual referred to in paragraphs (1) and (2) of subsection (a) may obtain the hospital or nursing home services for which payment to the hospital or nursing home is provided by this section from any hospital or nursing home which has entered into an agreement under this section, which admits such individual and to which such individual has been referred by a physician or (in the case of hospital or nursing home services furnished in conjunction with oral surgery) dentist licensed by the State in which such individual resides or the hospital or nursing home is located, upon a determination by the physician or dentist that hospitalization or nursing home care for such individual is medically necessary; except that such referral shall not be required in an emergency situation which makes such a requirement impractical.

"(2) Any individual referred to in paragraph (1) and (2) of subsection (a) may, with respect to the surgical services for which payment is provided by this section, freely select the surgeon of his choice, provided that the surgeon is certified by the American Board of Surgery or by another of the American medical specialty boards in a surgical specialty field, or is a fellow of the American College of Surgeons or has been appointed to the attending surgical staff of a hospital accredited by the Joint Commission on Accreditation of Hospitals except that such specification shall not be required in cases of emergency where the life of the patient would be endangered by any delay or in such other classes of cases where these specifications are not deemed practicable by the Secretary after consultation with the Advisory Council, and except that, in the case of oral surgery, such individual may select a duly licensed dentist.

“(3) Regulations under this section shall provide for payments (in such amounts and upon such conditions as may be prescribed in such regulations) to (A) hospitals for hospital services rendered in emergency situations to individuals referred to in paragraphs (1) and (2) of subsection (a) by hospitals which have not entered into an agreement under this section, and (B) physicians for surgical services rendered by physicians not certified by the American Board of Surgery or not members of the American College of Surgery. “Agreements with Hospitals, Nursing Homes, and Providers of Surgical Services

"(d) (1) Any institution (other than a tuberculosis or mental hospital) shall be eligible to enter into an agreement for payment from the Federal Old-Age and Survivors Insurance Trust Fund of the cost of hospital or nursing home services furnished to individuals referred to in paragraphs (1) and (2) of subsection (a) if it is licensed as a hospital or nursing home pursuant to the law of the State in which it is located.

“(2) Each agreement with a hospital under this section shall cover all hospital - services included under subsection (b) (which services shall be listed in the agreement), shall provide that such services shall be furnished in semiprivate accommodations if available unless other accommodations are required for medical reasons, or are occupied at the request of the patient, shall be made upon such other terms and conditions as are consistent with the efficient and economical administration of this section, and shall continue in force for such period and be terminable upon such notice as may be agreed upon.

(3) An agreement with a hospital or nursing home under this section shall provide for payment, under the conditions and to the extent provided in this section, of the cost of hospital and nursing home services which are furnished individuals referred to in paragraphs (1) and (2) of subsection (a) provided that no such payment shall be made for services for which the hospital or nursing home has already been paid (excluding payments by such individuals for which reimbursement to them by the hospital has been assured) ; but no such agreement shall provide for payment with respect to hospital or nursing home services furnished to an individual unless the hospital or nursing home obtains written certification by the physician (if any) who referred him pursuant to subsection (c) that his hospitalization or care in the nursing home was medically necessary and, with respect to any period during which such services were furpished, written certification by such individual's attending physician during that period such services were medically necessary. The amount of the payments under any such agreement shall be determined on the basis of the reasonable cost incurred by the hospital or nursing home for all bed patients, or, when use of such a basis is impractical for the hospital or nursing home or inequitable to the institution or the Federal Old-Age and Survivors Insurance Trust Fund, on a reasonably equivalent basis which takes account of pertinent factors with respect to services furnished to individuals referred to in paragraphs (1) and (2) of subsection (a). Any such agreement shall preclude the hospital or nursing home with which the agreement is made from requiring payments from individuals for services, payment of the cost of which is provided by this section, after it has been notified that the cost of such services is payable from the Federal Old-Age and Survivors Insurance Trust Fund, except that it may require payments from such individuals for the additional cost of accommodations occupied by them at their request which are more expensive than semiprivate accommodations.

“(4) Except as provided by regulation, no agreement may provide for payments (A) to any Federal hospital, or to any other hospital for hospital services which is obligated by contract with the United States (other than an agreement under this section) to furnish at the expense of the United States, or (B) to any hospital for hospital services which it is required by law or obligated by contract with a State or subdivision thereof to furnish at public expense except where the eligibility of the individual for such services is determined by application of a means test.

“(5) No supervision or control over the details of administration or operation, or over the selection, tenure, or compensation of personnel, shall be evercised under the authority of this section over any hospital or nursing home which has entered into an agreement under this section.

“(6) Agreements under this subsection shall be made with the hospital or nursing home providing the services, but this paragraph shall not preclude representation of such institution by any individual, association, or organization authorized by the institution to act on its behalf.

“(7) The Secretary shall enter into agreements with qualified providers of surgical services as defined in paragraph (2) of subsection (c). Such agreements shall stipulate that the rates of payment agreed on shall constitute full payment for these services. Such agreements may be made with any qualified individual, or with any association or organization authorized by the surgeons, dentists, or physicians to act in their behalf.

“(8) Nothing in such agreements or in this Act shall be construed to give the Secretary supervision or control over the practice of medicine or the manner in which medical services are provided.

"(9) Except to the extent the Secretary has made provision pursuant to subsection (h) for the making of payments to hospitals and nursing homes by a private nonprofit organization or for the making of payments to physicians, dentists, and surgeons by their designated representatives, he shall from time to time determine the amount to be paid to such provider of service under an

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