[Congressional Record Volume 143, Number 21 (Tuesday, February 25, 1997)]
[Extensions of Remarks]
[Page E302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




LEGISLATION TO FIX HOSPITAL OUTPATIENT DEPARTMENT OVERCHARGES: SUPPORT 
    FROM NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, February 25, 1997

  Mr. STARK. Mr. Speaker, Representative Bill Coyne and I have 
introduced legislation (H.R. 582) to stop immediately the overcharging 
of Medicare beneficiaries in hospital outpatient departments [HOPD's]
  I am pleased to report that the President's fiscal year 1998 Medicare 
budget also proposes to fix this gross overcharging of beneficiaries 
through a 10-year return to the 80-20 percent split that prevails in 
the rest of Medicare Part B.
  It is way past time that we fixed this problem. Four and a half years 
ago the National Committee to Preserve Social Security and Medicare 
wrote about it in their July/August issue of Secure Retirement. It is a 
good explanation of the problem--and why we should fix the problem this 
year, before it gets even worse.

                [From Secure Retirement, July/Aug. 1992]

   Why Medicare Outpatient and Inpatient Fees can be as Different as 
                           Apples and Oranges

                            (By Jeff Archer)

       If you need surgery and your doctor recommends outpatient 
     treatment, check the price first.
       While both physician fees and hospital inpatient charges 
     are strictly controlled by Medicare, no similar limits are 
     imposed on what an outpatient center may charge.
       As a result, Medicare beneficiaries are not protected from 
     excessive charges by outpatient services, says a recent 
     report by the Prospective Payment Assessment Commission, the 
     non-partisan body created by Congress to study Medicare's 
     payment systems.
       Seniors who don't have the most recent version of the 
     Medicare Handbook might not realize this. Last year's 
     handbook contained a chart of covered benefits for outpatient 
     hospital treatment, which said: ``You pay . . . subject to 
     deductible plus 20 percent of approved amount.''
       But in reality, seniors may wind up having to pay more, 
     possibly 30 percent or higher than Medicare's approved amount 
     for the procedure.
       That's because Medicare actually has no direct control over 
     the outpatient service fee. No matter how much is charged, 
     Medicare tells beneficiaries they must pay 20 percent of the 
     bill.
       Medicare does have approved amounts for these procedures, 
     but they are used only to determine how much the health 
     agency pays--not how much the beneficiary owes.
       So while the health care agency and health care providers 
     talk apples and oranges, the beneficiary is left completely 
     unprotected from excessive outpatient charges.
       The situation has been going on for years.
       In fact, Medicare itself has pointed out the problem and 
     the need to control outpatient fees in the same way that 
     hospital inpatient charges are regulated.
       ``Currently, the beneficiary pays 20 percent of whatever 
     the [outpatient] hospital charges for a procedure, while 
     Medicare pays 80 percent of a payment that is at least based 
     on costs,'' former Medicare Administrator Gail Wilensky told 
     Congress in 1991. ``Payment should be the same regardless of 
     whether the procedure is performed in an outpatient 
     department, an ambulatory surgical center or other center.''
       Medicare beneficiaries also have realized the error.
       Kenneth Lee, of Everett, Wash., noticed the problem after 
     his wife, Barbara, sought treatment as a hospital outpatient 
     about two years ago. The Medicare form they received showed 
     them having to pay 20 percent of the bill from the outpatient 
     center.
       But when Mr. Lee called his Medicare representative, he 
     found the health care agency paid the facility much less than 
     80 percent of the total bill. That meant the Lees actually 
     had to pay more than 20 percent of Medicare's approved 
     amount.
       ``They're saying there are two reasonable amounts, one for 
     Medicare and one for you,'' says Mr. Lee, calling the 
     practice double bookkeeping. ``It's misleading and false--
     they don't cover 80 percent of the bill.''
       The 1992 Medicare Handbook has been changed to indicate 
     beneficiaries are responsible for 20 percent of the billed--
     rather than the approved--amount. But outpatient service fees 
     still are not controlled by Medicare.
       In its recent report to Congress, the Prospective Payment 
     Assessment Commission called for controls on outpatient 
     service fees, stating the current practice ``unfairly 
     penalizes beneficiaries who receive care in the outpatient 
     setting.''

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