[Congressional Record Volume 143, Number 41 (Wednesday, April 9, 1997)]
[Extensions of Remarks]
[Pages E618-E619]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




IN SUPPORT OF H.R. 582: THE MEDICARE HOSPITAL OUTPATIENT REFORM ACT OF 
                                  1997

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, April 9, 1997

  Mr. STARK. Mr. Speaker, on February 4, Representative Coyne and 
myself introduced a bill to provide for an immediate correction of a 
serious Medicare beneficiary problem: the overcharging of seniors and 
the disabled by hospital outpatient departments [HOPD].
  The President's budget also calls for a correction of this problem, 
but phases in the correction over a 10-year period.
  In Medicare, the program generally pays 80 percent of part B bills 
and the patient pays 20 percent. But because of the way the HOPD 
benefit was drafted, currently beneficiaries are paying about 45 
percent and Medicare 55 percent. Simply put, the problem arises because 
Medicare pays the hospital on the basis of reasonable cost, while the 
beneficiary is stuck with 20 percent of charges--and charges can be 
anything the hospital wants to say they are.
  Recently, the American Association of Retired Persons asked its 
members for examples of problems they had had with HOPD billings. They 
received an overwhelming response, and over the coming weeks, I would 
like to enter some of these letters in the Record.
  These examples are the proof of why we need to fix this problem ASAP.
  The first is from Mrs. Patterson of Chico, CA, who was in the 
hospital 5 hours, and Medicare paid the full bill--less than 20 
percent--of over $4,000, including $900 of pharmacy.

       Curious to me on the hospital bill is the box at bottom 
     right, showing expected payment of Medicare $327.52, 
     estimated amount not paid by Medicare $3016.18. In 
     questioning the hospital bookkeeping office, I was told that 
     Medicare actually pays only the small amount and the hospital 
     absorbs the rest.

  Mrs. Patterson, or her medigap policy if she had one, paid $818.80 on 
total charges of $4094--20 percent of charges. Medicare then determined 
that the fair cost of the procedure was $1146.32, but since Mrs. 
Patterson had already paid $818.80, Medicare only paid the rest of the 
fair cost--or $327.52. What the bookkeeper didn't tell Mrs. Patterson 
was that what the hospital ``absorbed'' was an outrageous and 
unjustified charge that no one should have paid--sort of like the 
sticker price on an auto at a used car dealership. Yet in this case, 
the beneficiary paid 71.5 percent of the fair cost and Medicare 28.5 
percent--a far cry from Medicare's ``promise'' of a 20-80 percent 
split.
  The second letter printed below is from the Robertson family of 
Alhambra, CA, for cataract

[[Page E619]]

surgery. In this case, the total Medicare allowed cost of the procedure 
was $2114.80, but Medicare didn't pay 80 percent--it only paid 47 
percent and the patient paid 53 percent.
  The last letter is also printed below, from a man in north central 
California. It reflects the absolute nonsense hospitals are telling 
patients when they question these bills. When you examine the bills--
not reprinted below--it is clear that on a bill showing charges of 
$2522.50, the patient paid 20 percent of the charges or $504.50. 
Medicare determined that the cost of the procedure was worth $933.33, 
but since the beneficiary had already paid $504.50, Medicare only owed 
another $428.83. In this case, the beneficiary paid 54 percent of the 
fair cost, while Medicare escaped with only paying 46 percent.
  These letters are a testament to the need to pass H.R. 582.


                                                    Robertson,

                                 Alhambra, CA, September 17, 1996.
     AARP, Outpatient Stories,
     Dept. 601 E St. NW,
     Washington, DC.
       The enclosed Medicare EOMB copy is for cataract surgery 
     services, surgeons fee not included.
       Medicare paid the hospital $988.45. This payment is not 
     disclosed on the EOMB.
       As shown on the EOMB, the patient is responsible for 
     $1,126.35.

       Gentlemen: I am glad to see that you are concerned about 
     the Medicare outpatient matter. At the time of my cataract 
     surgery (see dates) I could not get anybody interested.
       As you say in your article and also in the latest Medicare 
     Handbook (Page 15 under heading ``What You Pay'') the patient 
     pays 20% of the charges not of the amount that Medicare 
     approves of, as is usually the case with part B of Medicare. 
     It does not say that Medicare is responsible for 80% of the 
     charges and indeed, in my case it only paid 17% of the 
     charges (see copy of the bill) although I paid my 20%. As you 
     can see, the remaining 63% was written off and no one paid 
     it.
       At the time, I called the hospital on the phone and the 
     representative said that the hospital has a special contract 
     with Medicare allowing them to pay the tiny fraction of the 
     charges (17%). She claimed that the $1,589.17 write-off was a 
     ``loss'' to the hospital.
       As I said in the beginning, I am glad that someone with 
     clout is interested in this unfairness.

                          ____________________