a direct provider; or (d) issues health insurance.

-

-

The voluntary associations we are concerned with are those created in response to needs for research, education, and in a few cases treatment for illnesses and diseases which disable, cripple and otherwise impair. These organizations are classified under the tax code as public charities and receive almost all their funds from public donations. Members of boards of directors of these groups are volunteers, and many are parents or relatives of persons who have been stricken with the particular disease or illness with which the respective organization is concerned. They serve with special commitment and knowledge. The provision referring to fiduciary relationships is relied on by DHEW to reach a conclusion that members of the boards of directors of these types of associations cannot serve on local HSA boards as consumers (serving as providers is politically impossible) because these persons are "indirect providers". We believe that, with certain severe exceptions, such a conclusion is ill-advised, even if it can ultimately be supported by a technical reading of the statutory language. The exceptions ought to be where the individuals themselves are otherwise covered by the provider clauses; where the local chapter of the association itself is primarily engaged in the direct provision of health services and receives compensation therefor (although even here a reasonable argument can be made that persons on boards are still volunteers acting in the interest of the clients served by the association); and where the person is a paid officer or staff member of the association. We make no claim that a paid employee of a voluntary organization be

considered as a consumer.

-

The fiduciary interest clause applies where the entity is "engaged in the provision of health care or in such research or instruction;" or is "engaged in producing drugs or such other articles". It seems inconsistent with Congressional concern about undue financial dominance in the planning process to restrict the participation of volunteers from associations who support, through the distribution of publicly-donated funds, medical research by other parties. A reading that a volunteer director of such an association is a provider of health care with a financial stake in the system assumes conspiracy beyond the bounds of common sense. It ridicules the sincere and sometimes passionate interest that many volunteers bring to the cause with which they associate themselves on behalf of the patient suffering from the disability in question. To limit such persons in active participation stifles the enthusiasm, commitment, help, advice and involvement our health care system desperately needs. To define them as providers severely restricts the actual possibility of their serving since providers' positions are generally restricted to the typical health care provider: health professional, insuror, facility administrator. In addition, these volunteers who do not otherwise qualify as providers, the lay people who do not provider care or receive financial payment directly from its provision, are consumers and should function in that role. They are viewed as consumers locally and therefore cannot achieve provider positions.

We believe that a resolution of the problem should seek

to do the following:

*Clarify that private citizens serving on boards of
voluntary associations classified under the tax code
as public charities, except where a primary purpose
of the health charity is to provide health services
in the health systems area, should be permitted to
participate as consumers on local HSA boards;

*Clarify that these types of associations which dis-
tribute funds for biological medical and health ser-
vices research, at both the national and local level,
and do not primarily engage in research themselves,
are not considered indirect providers under the
applicable clause;

*Clarify that for these charitable health associations
the term "instruction" as used in defining "provider"
does not include education of the general public or
the association's members;

*Clarify that private citizens serving as unpaid
volunteers on boards of directors of these types of
associations who otherwise would not be classified
as direct or indirect providers should not be so
classified solely because of their board membership
status; and finally,

*Clarify that the policies adopted should be applied
uniformly across the nation.

Section 140 of S. 2410 would remedy this problem. A similar provision in House legislation would be welcome. We appreciate your consideration of this question.

Richard & Ugeville

Richard E. Verville, Counsel
American Diabetes Association

Burney Sellers

Barney Sellers

Grad

National Health Council, Inc.

Having read with great encouragement and reassurance your remarks made when you introduced H.R. 10460 January 19, 1978, I respectfully request that this letter and its attachments be made a part of the record of the current hearings pertaining to that legislation.

The Ohio State Medical Association is a willing supporter of the position stated
in your introductory remarks concerning what you so aptly describe as .
"the need to strengthen local decision-making about new facilities and services,"
and your emphasis on the role of the States in developing . . . "programs which
would assure that inappropriate services are not provided."

Those of us who have followed your development of local planning and resources development concepts through your original legislation, (the National Health Planning and Resources Development Act of 1974) know full well that your statements once again are a strong reiteration of the purpose and intent of the original Act, Public Law 93-641.

I remember being so heartened, when I heard you subsequently address the American Medical Association Leadership Conference, by your forthright explanation of the purpose and intent of your legislation. I was particularly pleased when you then explained, quoting from your address:

"Contrary to what some may think, it (the Rogers Act) doesn't place all the power in the Secretary because we wrote it where it wouldn't. We've put it in that local planning area, and we said we want direct providers on it, and we've protected the direct providers of health.

"And we give the basic decision to the local planning groups-people at home--people who are there with the problem, who know what's to be done. We don't sift it up to the Secretary. It's to be done there."

You again reiterated the necessity for local decision-making authority by your statement January 30 in convening hearings on H.R. 10460, particularly in your reference to the revised guidelines announced January 18.

We share your clearly expressed dedication to preserving the independence of the local planning groups and the state agencies in carrying out the intent of Congress. I urge you to read the enclosed correspondence. It clearly illustrates the power-hungry attitude of HEW toward health planning.

We have reviewed your proposal (H.R. 10460) to strengthen your legislation. The need for it is clearly demonstrated by the fiasco of the regulations published in the Federal Register September 23, 1977, and the attitude and tactics of HEW as demonstrated in the enclosed correspondence.

Also, we have reviewed the amendments proposed by the American Medical Association before your subcommittee January 31, and we urge the adoption of those recommended amendments.

Thank you for your courteous attention. Please let me know if you have any questions or would like additional information.

enclosures: Letter of January 17, 1978, from Health Resources Administration
Administrator to Ohio Director of Health

Letter of January 30, 1978, from Ohio Director of Health
to Secretary of Health, Education and Welfare

Letter of February 2, 1978, from President, Ohio State Medical
Association to Secretary of Health, Education and Welfare