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To answer another one of your questions we would like to say we believe much has been done on a geographical basis to provide health care institutions under the program. However, we are concerned that in many cases there has been a relaxation of the conditions of participation in some institutions. Introduction of the highly elastic concept of "substantial compliance" with conditions of participation gives cause for apprehension that the quality of care may be eroded in substandard and marginal facilities. I notice, sir, your colleague who was here earlier this morning, Senator Moss, has been doing extensive work in this field.
Before other committees of Congress the National Council of Senior Citizens has highlighted what it believes are much needed improvements in the medicare program so as to be able to deliver adequate health services to all older Americans. One of our major complaints is that while medicare takes good care of the aged suffering from acute illness and requiring hospitalization, there is little help available for millions of older Americans suffering from chronic diseases. We heard Mr. Alvin David say this morning that medicare covers only 40 percent of the health care costs of the elderly.
One of our complaints is that on the question of drugs, in this segment of our population among chronic diseases the drug industry
Senator SMATHERS. Excuse me. The first witness we had, Mr. David, stated—and this was interesting to me; I had not heard it previouslythat while doctors' fees had gone up 7.5 percent and hospital charges went up 16.4 percent, drug prices have not gone up.
Mr. HUTTON. Yes, sir. As a matter of fact, I would like to draw the attention of this committee to another subcommittee which has been conducting hearings chaired by Sen. Gaylord Nelson in which the National Council of Senior Citizens drew strong attention to the Bureau of Labor Statistics which conducted the gathering of statistics on the drug prices and brought out they had been using archaic examples of drugs which are not now in popular use. Consequently, the whole theory that drug prices had not gone up was shot to bits by the fact that today most of the prescriptions are compounded of new drugs, and Mr. Arthur Ross, the Commissioner, agreed that this was so. We took as our basis for these statements the claims made by the drug industry itself and this we will be very glad to submit to you, sir, should you require it.
Elderly people suffering from chronic ailments in a very real sense are captive to the drug industry because day in and day out they must take maintenance drugs for the treatment of chronic conditions which are an inevitable accompaniment to advancing age.
The high prices of prescription drugs constitute a problem of gigan. tic proportions. Frequently older people have to make a choice between reeded drugs or food. At the present time there is no other country in the world whose prescription drug prices are as high as those in the United States. Congress must find a way to provide the cost of prescription drugs—at least on a generic basis—under the part B program dealing with supplemental insurance.
Senator SMATHERS. Let me ask you this. Could you supply us the charts and statistical information to support that statement that no
other country in the world has drug prices as high as those in the United States? I would like to have that.
Mr. HUTTON. I'll be very glad to, sir.
We believe, sir, that medicare will not adequately cover our older people until its provisions include wheelchairs; eyeglasses; hearing aids; all surgical and orthopedic appliances; and all eye, dental, and drug needs as prescribed by a physician.
There are shortages of trained personnel in the medical and medicalrelated professions in all fields and particularly severe in fields that serve the elderly. Our population is showing marked increases at both ends—as I said before, the very young and the very old. But after 50 years of struggle, baby care became a medical specialty and, in
proportion, large numbers of each year's graduating crop of new doctors become pediatricians. At the beginning of this century there were only 3.1 million Americans age 65 or over. By 1980 we will have more than 25 million over 65. Not only is their number zooming but so is their proportion to the rest of the population. We believe it is high time that geriatrics also became a specialty of the medical profession.
One of the greatest hardships under the current medicare program arises from a doctor's refusal to accept an assignment of his medical bill. Social Security Commissioner Ball—and this was also mentioned this morning by Mr. David-estimates 57 percent of the doctors across the Nation accept assignments at least part of the time. In some Ştates less than one in three doctors do.
It is often all a low-income senior can do to pay the entire amount of his doctor bill in cash so he can get a receipted itemized statement of services performed by the doctors. For the elderly, the majority living on shamefully inadequate incomes, it is a hardship to pay for major operations and treatment out of pocket and then wait weeks or months for medicare reimbursement.
Even though that delay is now being reduced, there are areas of the country-for example, in my State of Maryland it takes 35 days for reimbursement.
Senator SMATHERS. Is that an average figure?
Mr. HUTTON. No. An average today is about 21 days now as claimed by the Department of HEW. In certain States, I think the most outstanding is Iowa, where it is 50 days. In Maryland I know it is 35.
The National Council of Senior Citizens has asked Congress to simplify collection of medicare claims.
Congressman Al Ullman of Oregon, a member of the House Ways and Means Committee, has come up with a plan whereby the doctor would give his medicare patient an unreceipted statement of fees for service that conform to fees that are customary and reasonable. The medicare payment agency would be empowered to send a settlement to the patient for transmission to the doctor.
ALTERNATIVES ON BILLING
This would provide an alternative to the present billing options; namely, direct billing which allows the doctor to charge all the traffic
"See p. 225, app. 1.
will bear, and assignment which limits the doctor to customary and reasonable fees as determined by the payment agency. Now a third would be added in which the doctor would submit an itemized bill and the patients send that to the intermediaries and be reimbursed and pay the doctor. We think this is a great idea and will take care of any moral issues or fears which the doctors might have.
A resolution adopted at the National Council's recent convention calls for a system under which doctors send bills to medicare payment agencies as they presently do with Blue Shield plans or else allow the patient to collect on unreceipted bill as Congressman Ullman proposes. National Council members feel this will obviate the painful necessity of many seniors having to borrow to pay their doctor bills and then wait long weeks for reimbursement.
Apropos of that borrowing, Mr. Chairman, some of us were discussing last night an idea which might be worth while exploring and that is there apparently is about $4 million potentially available under the Economic Opportunity Act, section 206(b) on family emergency loans in which there is a 2 percent simple interest, although the person could not borrow more than $300 at any one time. It does seem to me that maybe we might explore that area to see if we can get that changed. Some of the people who really have not got the money to pay their doctor bills could borrow out of the Economic Opportunity Act at only 2 percent. That might be a help. It is very difficult for older people who are living on reduced income to be able to borrow money from other sources.
This in general concludes my statement. We do feel that there is a real need to take care of the holes in the medicare umbrella and we think there is a real need to take care of rising costs.
There were two other gentlemen who were to appear with us at this panel in addition to Mr. Wallick. They were unable to appear because of the change in schedule of this committee. If you wish, sir, I would highlight just one or two parts of the statements which these gentlemen have submitted and perhaps you will be good enough to include the entire statements in the record.
Senator SMATHERS. All right, sir. We will be happy to do it.
I want you to finish in 15 minutes, and I want to hear Mr. Wallick. The Dodd matter is being discussed on the Senate floor and I have to be over there.
Mr. HUTTON. I think it might perhaps be better if we heard Mr. Wallick's statement next.
Senator SMATHERS. Thank you, sir, for your statement. Good statement.
Mr. Wallick, you go ahead.
STATEMENT BY MR. FRANK WALLICK
Mr. WALLICK. Thank you very much, Mr. Chairman.
I want to express Mr. Brown's regret at not being able to appear. I am not an expert but I do want you to know the deep involvement of the impact of medicare upon older people.
We believe that medicare has been a tremendous boon to senior citizens. It has lifted much of the burden of health costs from them, and has greatly lessened their fear that a serious illness would reduce them to a pauper status. It has provided this protection with dignity, as a matter of right. However, I assume this committee is not so much interested in hearing how much of a gain medicare has brought, as in knowing what problems still need attention.
The opinions presented here stem from the actual experiences of older people. Members of our department have talked about medicare with tens of thousands of senior citizens, especially through a network of medicare counseling centers.
When we became aware of the great confusion and problems existing among medicare subscribers, our union as a public service decided to establish counseling centers. On a pilot basis, 30 such centers were established in 23 cities across the country. The general public was informed through press and radio that counseling on medicare problems was available to them at no charge. The centers were manned on a volunteer basis by specially selected UAW retirees who were intensively trained for their task.
The first centers started in February 1967, and the latest was opened in May. As of June 2, 1967, 10,900 cases have been handled in these centers. Mr. Francis R. Moore, a retired auto worker who is serving as a medicare counselor, will later tell you firsthand about some of the cases he has handled.
In addition, we have prepared a sampling of cases which illustrate the kinds of problems people are having. Mindful of time limitations I shall not present them orally, but ask you to make them a part of the record at this point.
Senator SMATHERS. Without objection. (The material referred to follows:)
CABES FROM THE FILES OF UAW MEDICARE COUNSELING CENTERS
1. A Chrysler retiree in California had a $1,159.49 medical bill for prostate and bladder surgery received in mid-July, 1966. Although the Medicare payment was made promptly, as of March 3, 1967, Blue Shield had not yet paid the 20% coinsurance amount. It was necessary for the Medicare Center to check with the complementary carrier responsible for this payment.
2. A G.M. retiree in LaGrange, Illinois paid his physician $200 for a hernia operation. He was reimbursed $120 by Medicare. Medicare Center had to advise the patient that his G.M.-paid health insurance paid the $80 complementary coverage. Retiree was unaware that he had this complementary coverage and had not filed for reimbursement from Metropolitan Life.
3. A Wisconsin retiree's (non-UAW) doctor refused assignment on a $410 bill for prostate surgery. The retiree (who has a monthly income of $240), asked that the Medicare Center attempt to persuade the doctor to assign the bill to the Medicare Agent, since the retiree would experience difficulty in paying this amount. The doctor was adamant in his refusal. The patient also produced a form he had received from his doctor stating that all contracts were between the patient and the Social Security Administration and that the doctor had no such contract with the federal government.
4. A (non-UAW) Milwaukee retiree with $92 per month income and Medicareonly coverage paid medical bills on November 12, 1966, following in-hospital prostate and heart treatment in October. The two bills totaled $556. As of February 21, 1967, the retiree had not been reimbursed by the Medicare Agent.
5. A Milwaukee housewife with a monthly income of $172, who was treated in a hospital for minor injury, was required to make a $20 deposit for in-hospital care, despite the fact she was covered by Medicare Part A. The hospital refused to refund the deposit until they received payment from Medicare. The hospitalization occurred in August, 1966; the hospital had not been paid by Medicare on February 23, 1967.
6 A "worried and harried old member" (Chrysler retiree) wrote from Hollywood, Florida to explain that he had not received payment from Blue Cross complementary coverage for the first $40 of his wife's in-hospital bill. Although his
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wife was hospitalized in September, Blue Cross had not made payment as of February 13th and the hospital had sent a fourth notice of payment which stated the bill would be turned over to an attorney for collection within 10 days.
7. A Newaygo, Michigan UAW retiree from Budd Company wrote to the UAW in May complaining of delay in Medicare and Complementary Coverage reimbursement. The retiree had borrowed $497 from a bank to meet medical expenses incurred in connection with a kidney operation in December 1966. Despite partial reimbursement, the retiree figures $63 is still due. He wrote both Social Security in Baltimore and the Medicare Agent, but received no reply to his several letters.
8. A Cincinnati physician who refused assignment nonetheless had his receptionist assist a patient in filing her Form 1490 for reimbursement. Paid bills between July and November 1966, totaled $565. Three months later, the patient complained to the Medicare Counselor that she had not yet been reimbursed. The Medicare Agent reported delay as being caused by going from a manual to a computer operation and promised a check within the next few days. Patient's anxiety was heightened by the fact that she had submitted two additional bills totaling $735 2 months previously and reimbursement had not yet been received. Total reimbursement outstanding: $1,300.
9. The son of a Chicago Park District retiree (deceased) came to the Medicare Center for assistance. Due to the refusal of three of his father's physicians to accept assignment of incurred bills totaling $716, the son required assistance in filing for reimbursement from Medicare.
10. A Grand Rapids retiree who had worked at Doehler Jarvis reported prompt reimbursement of his Medicare claim submitted in mid-October. However, on March 1, 1967, he had not as yet been reimbursed by his complementary carrier for the balance due him. The amount due is approximately $45.
FIVE TYPES OF PROBLEMS
Mr. WALLICK. One could group the 10,900 cases handled in our centers into five main types:
(1) Confusion about benefits. Many who came to see us did not fully and accurately understand the benefits under medicare. This is no reflection upon their mental ability because the law is extremely complicated. Deductibles and coinsurances are a major source of confusion. Another is the fact that hospital-based physicians are allowed to bill separately. For example, a medicare patient who has an X-ray while hospitalized could logically assume that it is a covered service since it is so stated in most publications. No wonder he is confused when subsequently he recieves a bill from a radiologist, especially since he never was introduced to the man and therefore the name means nothing to him. Understandably the patient assumes that an error has been made, or that some unknown physician is attempting to cheat both him and the Federal Government.
We know that the Social Security Administration has made a valiant effort to keep up with requests for information, both by individuals and senior-citizen organizations. Obviously, however, widespread confusion still exists. We have proposed simplifying amendments to the present law, which I will mention later. For now I suggest that it would be very helpful if the Social Security Administration could find the resources not only to answer requests, but to reach out to senior-citizen groups everywhere and also make greater use of the mass media.
Many medicare subscribers also have purchased complementary coverage, which gives them added protection but frequently leaves them even more confused about their benefits. Our observation is that the insurance companies could do a more effective job of educating their clients.