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not have that data, in that kind of a format, we are not required to collect it specifically for that purpose.

Again, I go back to the fact that because it is on a claim-by-claim basis, it is difficult to identify.

Mr. RINALDO. In other words, what you probably have to do is write a special computer program, and you are not willing to do that because of the cost involved, I assume?

Dr. Davis. That is a part of that, yes.

Mr. RINALDO. Can you give me any other reasons why you are not willing to do that or why you do not think it is a good idea?

Dr. Davis. Frankly, I stopped at that point, when it was a cost factor. But you are asking me to make a policy decision in the abstract and I would want to take a look at it again before I made such a decision. That is why I am hesitating. I would be happy to reconsider the issue.

Mr. RINALDO. I would appreciate it if you would, particularly in view of the fact that the cost may be outweighed by the savings. And if that is so, that would be one way to effectuate just a small savings.

Dr. Davis. I will look at it again, but I would like to reserve judgment on what my final decision would be. [The material referred to by Mr. Rinaldo follows:]

[Memorandum)
DEPARTMENT OF HEALTH AND HUMAN SERVICES,

Washington, D.C., January 29, 1982.
From: Carolyne K. Davis, Administrator, by Paul Willging.
Subject: Policy decision on Gray Panther fee waiver requests under FOIA.
To: Regional administrators.

In recent months the Gray Panthers have made requests under the Freedom of Information Act (FOIA) for lists of physicians in certain areas accepting or not accepting assignment under Medicare. In addition, they have requested waiver of fees normally charged of FOI requestors. Regions II and III have granted waivers. Costs—for retrieval of the requested data from our contractors' computers—have been substantial.

I have now been advised that information which can only be retrieved from a computer through special programming does not constitute a “record” under the Act. Any such request can be refused without constituting a formal denial under FOIA, since no "record” or document is being denied. Based on that advice from the Department FOIA Officer and the Office of General Counsel, I have just ruled against a Gray Panther appeal in Region V. A copy of my decision letter is attached. Noted that past FOIA decisions on this matter do not set a binding precedent.

As a matter of policy, I ask that any similar FOIA requests by the Gray Panthers (or any other person or organization) be diplomatically refused, so long as retrieval of the requested information requires special computer programming, since the FOIA pertains only to existing records. Regional Public Affairs Directors also will be so advised by the Department's Freedom of Information Officer. Attachment.

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVE,

Washington, D.C., March 22, 1982. Hon. MARGARET M. HECKLER, Secretary, Department of Health and Human Services, Washington, D.C.

DEAR MADAME SECRETARY: We are writing to ask you to improve the information available to Medicare beneficiaries about physicians in their communities who accept assignment. As you know, when a physician agrees to take Medicare assignment, he or she agrees to accept the Medicare reasonable charge as payment in full

and agrees not to charge the beneficiary any additional amounts above the statutory 20 percent coninsurance.

The problem is that beneficiaries have difficulty determining which physicians in their communities usually, or even sometimes, accept Medicare assignment. If beneficiaries had this information, they would be in a position to decide whether a change of physicians would enable them to protect themselves against excess charges.

In order to better inform beneficiaries, a number of organizations have attempted to assemble directories listing physicians who are willing to accept assignment. These directories have generally been based upon surveys of individual physicians. However, the results have been less than satisfactory, since there is little incentive for physicians to respond to the surveys and there is no way of readily varifying the responses received.

The Part B carriers, in carrying out their claims processing responsibilities, routinely collect and maintain this information. In the past, the Department has honored Freedom of Information Act requests for such information and waived fees for nonprofit organizations representing the elderly seeking this information. This has permitted the dissemination of a highly successful directory on physician assignment practices in the Washington, D.C., metropolitan area.

It has come to our attention that the Department has recently reversed itself and begun denying Freedom of Information Act requests for information listing which physicians participating in Medicare always accept assignment, sometimes accept assignment, and never accept assignment. Several organizations representing the elderly, and at least one local public official, have already been denied access to this information, either formally or informally,

We do not believe that the Department's new policy is in the best interest of the Medicare program or its beneficiaries, and we do not believe that it is consistent with the Freedom of Information Act.

We urge you to comply with requests for this information and to continue to waive fees in the case of nonprofit organizations representing the elderly.

We understand that the Department, as a general matter, strongly supports competition in the health care system. By enabling Medicare beneficiaries to make an informed choice among physicians in the community, the dissemination of this data would, we believe, promote more cost-conscious behavior on the part of physicians and beneficiaries alike.

Thank you for your consideration of this matter. We look forward to hearing from you at your earliest possible convenience.

ANDY JACOBS, Jr., Chairman, Subcommittee on Health, Committee on Ways and Means.

CLAUDE PEPPER, Chairman, Subcommittee on Health

and Long-Term Care, Select Committee on Aging.

HENRY A. WAXMAN, Chairman, Subcommittee on Health

and Environment, Committee on Energy and Commerce.

GLENN ENGLISH, Chairman, Subcommittee on Govern

ment Information and Individual Rights, Committee on Government

Operations. Mr. RINALDO.

Congressman Smith. Mr. SMITH. Thank you, Doctor, for your testimony and also for your questions to the chairman. I do have a few questions.

You were talking about the 1-year freeze on physical reimbursement under part B. I was wondering if such a freeze were enacted, do you believe that these costs would be shifted to the beneficiaries?

Dr. Davis. I would hope not. Physicians make, on the average, between $82,000 and $89,000 a year. What we are suggesting by the 1-year freeze would be to not allow physician fees to rise 8 or 9 percent as they normally do under our current program. That would

be difference of about $1.50 in an office visit. It seems to me that that would be a small sacrifice on the part of physicians. And since all other segments of the health care industry are being asked to develop a plan, we would hope that they would do likewise.

Mr. SMITH. Since we were having a problem with assignment, and my understanding is something like 50 percent of physicians operate under the assignment program, how do you think would affect that? Do you see more physicians declining assignments as a result of the freeze on reimbursement?

Dr. DAVIS. Actually no, because the number of physicians that are coming into practice is increasing every year, and if you look at our trend over the last 4 or 5 years, we have had more physicians accepting assignment each year.

Again, the 50-percent figure means that 50 percent of all claims are accepted for assignment. I think that the assignment rate itself in 1982 stands at 53 percent.

Mr. SMITH. And more physicians have been?

Dr. Davis. Yes. More physicians have been. It was at a low in 1977 of 50 percent. So it is gradually increasing.

Mr. SMITH. Has there ever been a study or an analysis as to why? It is good news to hear that more physicians are participating.

Dr. Davis. I think that, frankly speaking, as there are more physicians out there, they are becoming more competitive with each other. And, for example, I know some communities around the country where physicians are now advertising that they are accepting assignment. Recently in New York City, there was a group formed that went on the radio and indicated that they were a group of physicians who were specializing in geriatric care and were willing to take assignment. I think we are finding more of those groups around the country now. And I suspect that if you look ahead, and we recognize the fact that there will be increasing numbers of physicians over the next decade, that we will continue to see more individuals interested in assignment.

Mr. SMITH. A few more questions. The Department has suggested that over the next 5 years we gradually increase the part B premiums so that it covers 35 percent of part B program costs. Now, it is my understanding currently it is about 25 percent. How was the 35-percent figure arrived at?

Dr. Davis. Because we currently are at the rate of approximately 24 percent, and initially it was 50 percent. The decision was made to move that closer to the initial 50 percent, and yet not all of the way there.

Mr. SMITH. Would that be an immediate or phased in?

Dr. DAVIS. No, it is a phase in, about 2.5 percent increase each year over the next 5 years until 1988 it would be at the 35 percent level.

Mr. SMITH. Do you see any need on the further out years to raise it even higher to get closer to the 50 percent?

Dr. Davis. Our assumption was that if we moved it back to the 35-percent that we would hold it that level in 1988.

Again, reflecting back on the fact that the initial intent when medicare was developed under the medical insurance program was

to have it shared 50/50. Over the years the premium simply has not kept pace.

But we have also said we would institute a “hold harmless” clause so if the individual does not get a social security increase that is sufficient to cover that increase, then they would not pay more than the social security increase. If there was a social security increase, then the part B premium would increase along with it.

Mr. SMITH. Preventive health care services enable medical people to detect chronic disease, treat it early, and thereby insure a healthier patient for lesser cost.

Can you detail for the committee some of the specific preventive care services that offer the greatest hope for more illness-free senior citizens while reducing the burden on medicare's trust fund?

Dr. Davis. We, frankly, do not have a good analysis of the kinds of preventive services medicare ought to pay for. Right at the moment, medicare pays for the innoculations against pneumoccal influenza and that is the only preventive service for which we pay per se. Recognizing last year that we did not have a good data base on which to move, and, yet believing firmly in preventive care, we instituted a 3-year series of studies in our research component to look at such activities as high blood pressure checks and a series of other things.

We have recently gone forth with a request for proposals in the area of prevention. And in fact just this weekend, I was reviewing a number of them, so we probably will be awarding research amounting to a million dollars or so in the area of prevention. It will take us several years, however, to get the data base.

Mr. SMITH. That was going to be my next question. How long are we talking?

Dr. Davis. Generally speaking, those take about 3 years.

Mr. SMITH. Are there any existing studies that we could adopted now, based, upon preventive medicine that has been around for a long time?

Dr. Davis. Preventive medicine has been around for a long time. Unfortunately, they have not kept very good cost and data analyses, so it is difficult to assess. If you increase the payment level, we want to at least assure ourselves that in the outyears it is going to be cost beneficial. And it is that kind of data that has not been kept.

Mr. SMITH. Doctor, medicare provides preferential reimbursement currently for outpatient, preadmission diagnostic testing, and ambulatory surgery. Can you tell me how that has reduced costs both for testing and that surgery? And are there any plans to elaborate on that and to build upon that?

Dr. Davis. I cannot give you the dollar figures. That by paying for these services in the outpatient, ambulatory setting, one then does not see the additional days of care. Since that reimbursement policy was initiated, we know that we have cut down on the number of days in the hospital. We think that is significant.

Clearly, we will continue to look at ways where we can make coverage decisions that would enhance our ability to pay for the beneficiary's care wherever it is needed, perhaps in an outpatient clinic or otherwise, that would allow us to not have to institutionalize him in an acute care hospital.

Again, that is one of the major things we will be looking at this next year, looking at alternatives to than hospitalization. For example, there are occasions when an individual is hospitalized only because the kind of therapy he is getting is so expensive, and yet that same therapy perhaps could be provided more cheaply elsewhere if we covered it.

Mr. SMITH. No further questions.

Mr. RINALDO. Thank you very much, Mr. Smith. Dr. Davis, you have been very helpful so far. I want to ask one final question, and then I would like to, in the interest of time, submit additional questions in writing, and we would appreciate receiving your response for the record.

Would you support a bipartisan panel to study medicare, similar to one that recently reported its recommendations on social security in an effort to at least coalesce the Congress into some form of action prior to the crisis that we see forthcoming?

Dr. Davis. That is an interesting proposal, Mr. Chairman. I think what I would like to do first is to delay until we get our report from the social security council to see in what direction they go, but obviously I am sure Congress is concerned about this problem. I for one am grateful that Congress is becoming aware of it and concerned about it. I have been aware and concerned for the last year's time, since it has become evident that we were facing some serious problems by the end of this decade. And I would welcome all the help that I can get, others worrying along with me on this particular program. I think it is important for us to guarantee to the beneficiaries that they will have access and that we will do what we need to do to provide that access for them come the end of this decade. And that is what I am determined to do, and we would welcome that.

Mr. RINALDO. If the social security package, in addition to solving the problem for a few years, did nothing else, I think it did highlight the problem with medicare and the fiscal crisis that is upon us. And it is probably the single biggest problem facing the Congress in programs that are designed to benefit the people, and particularly the aged in this country.

Dr. Davis, once again, thank you very, very much for your testimony and I am sure we will be hearing from you on other occasions as we move along with this problem.

Dr. Davis. Thank you, Mr. Chairman.

[Written questions were submitted to the witness by Mr. Rinaldo and the answers subsequently received from Dr. Davis follows:)

Question 1. An article in the Star-Ledger of March 27 contained reports that, under the state's DRG system, patients were being discharged prematurely from hospitals. The article quoted Dr. Howard Slobodien, President of the New Jersey Medical Society, as saying that doctors are being pressured by hospitals to get their patients out.

(a) In studying the New Jersey DRG system prior to the December 1982 proposal, did HHS or HCFA study the question of premature discharge?

(b) Has the matter of premature discharge of patients been discussed by Yale University, or the team of researchers who developed the DRG plan?

(c) What safeguards are built into the DRG plan proposed by Secretary Schweiker to prevent premature discharge of patients under the prospective payment system?

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