[Congressional Record Volume 140, Number 21 (Wednesday, March 2, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               INTRODUCTION OF THE ETHICS IN BILLING ACT

  (Mr. SLATTERY asked and was given permission to address the House for 
1 minute and to revise and extend his remarks.)
  Mr. SLATTERY. Mr. Speaker, today I am introducing legislation, with 
the gentleman from North Carolina [Mr. McMillan] that will provide 
significant health care savings for our constituents. The Ethics in 
Billing Act would require that bills for ancillary health services, 
such as laboratory tests, be sent directly to the patient or an 
insurer, rather than through the physician who orders the services. 
Medicare already has a direct billing requirement for laboratory 
services. This bill would extend direct billing to private payers.
  The most striking example of the need for this legislation can be 
found in the laboratory testing industry. Under the present system, 
physicians can request that laboratories bill them for tests they order 
for their non-Medicare patients. In most States, it is a common 
practice for the physicians to request and receive discounts from the 
laboratory providing this testing. The physicians can then markup the 
cost of these tests when insurers and patients are billed. This gives 
the doctor a financial interest in the testing that is ordered. Studies 
have shown that these mark ups are often unjustified. One survey found 
an average markup of 139 percent of the price charged by the lab 
performing the tests. The current system creates incentives that can 
lead not only to unnecessary laboratory testing, but also to an 
intolerable level of cost shifting.
  Enactment of this bill will have an immediate and positive impact on 
taxpayers and health care consumers. Direct billing for ancillary 
services such as laboratory testing will eliminate physician markup and 
help curb unnecessary utilization and cost shifting.
  In the laboratory testing industry alone it is estimated that 
enactment of a national direct billing law could reduce health care 
expenditures by between $2.4 and $3.2 billion per year due to lower 
prices and reduced utilization of laboratory testing. The goal of 
reform must be to provide quality services as efficiently as possible. 
Direct billing achieves this goal by removing the financial incentive 
from the physician's selection of ancillary health service providers.
  I urge my colleagues to join me and the gentleman from North Carolina 
as cosponsors of the Ethics in Billing Act. This bill will help save an 
enormous amount of health care dollars. It deserves our support.

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