[Congressional Record Volume 143, Number 49 (Wednesday, April 23, 1997)]
[Extensions of Remarks]
[Page E723]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   HOSPITAL OUTPATIENT OVERCHARGES: WHY WE NEED TO REFORM MEDICARE'S 
                             PAYMENT SYSTEM

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Wednesday, April 23, 1997

  Mr. STARK. Mr. Speaker, the President's budget proposes to reform a 
major defect in Medicare--the ability of hospital outpatient 
departments [HOPDs] to overcharge beneficiaries. Due to the way the law 
is worded, patients today pay--on average--about 45 percent of the 
allowable cost of a hospital outpatient procedure. They should be 
paying 20 percent. Unless fixed, the problem will just get worse and 
worse, with seniors and the disabled paying more and more. 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.
  On February 4, Representative Coyne and myself introduced a bill, 
H.R. 582, to provide for an immediate correction of this serious 
Medicare beneficiary problem. I urge the Budget Committee, as it 
considers the size of the Medicare budget cuts, to make an allowance 
for the fixing of this problems.
  In the meantime, the public should be advised to shop around for a 
better price than the HOPDs offer. Of the roughly 7,000 procedures that 
are done in HOPDs, 2,700 are also done safely and competently in 
ambulatory surgical centers [ASCs], where the price is usually much 
lower--and where the beneficiaries copay is limited to 20 percent.
  Following are some examples of the difference to a patient in using 
an ASC instead of an HOPD. Newspapers, the electronic media, and 
consumer groups could do a great service to the Nation's seniors and 
disabled by checking on these prices in their local market and 
advertising the difference to seniors. Caveat emptor--big time.

                  Comparison of Hospital and ASC Fees


                       illustrative example No. 1

     Description:
       Procedure: Inguinal Hernia Repair.
       Location: Milwaukee, Wisconsin.
       CPT Code: 49505.
       Date: June 18, 1996.

------------------------------------------------------------------------
                                                          Comparative   
                                                          payments--    
                                                     -------------------
                                                                 Local  
                                                        ASC     hospital
------------------------------------------------------------------------
Retail Charge.......................................   $1,816     $3,171
HCFA Approved.......................................  .......      3,171
HCFA Payment........................................      587      2,537
Patient Co-payment..................................      117        634
------------------------------------------------------------------------

                  Comparison of Hospital and ASC Fees


                       Illustrative Example No. 2

     Description:
       Procedure: Breast Biopsy.
       Location: Milwaukee, Wisconsin.
       CPT Code: 19120.
       Date: July 29, 1996.

------------------------------------------------------------------------
                                                          Comparative   
                                                          payments--    
                                                     -------------------
                                                                 Local  
                                                        ASC     hospital
------------------------------------------------------------------------
Retail Charge.......................................     $899     $1,237
HCFA Approved.......................................  .......      1,237
HCFA Payment........................................      473        989
Patient Co-payment..................................       95        247
------------------------------------------------------------------------

                  Comparison of Hospital and ASC Fees


                       Illustrative Example No. 3

     Description:
       Procedure: Cataract w/IOL.
       Location: Milwaukee, Wisconsin.
       CPT Code: 66984.
       Date: August 15, 1996.

------------------------------------------------------------------------
                                                          Comparative   
                                                          payments--    
                                                     -------------------
                                                                 Local  
                                                        ASC     hospital
------------------------------------------------------------------------
Retail Charge.......................................   $1,419     $4,417
HCFA Approved.......................................  .......      1,617
HCFA Payment........................................      914      1,294
Patient Co-payment..................................      183        323
------------------------------------------------------------------------

                  Comparison of Hospital and ASC Fees


                       Illustrative Example No. 4

     Description:
       Procedure: Colonoscopy w/Tumor Removal.
       Location: Pasadena, California.
       CPT Code: 45385.
       Date: January 23, 1996.

------------------------------------------------------------------------
                                                          Comparative   
                                                          payments--    
                                                     -------------------
                                                                 Local  
                                                        ASC     hospital
------------------------------------------------------------------------
Retail Charge.......................................  .......     $1,583
HCFA Approved.......................................  .......      1,186
HCFA Payment........................................     $442      1,186
Patient Co-payment..................................       88        396
------------------------------------------------------------------------

                                                               

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