[Congressional Record Volume 143, Number 91 (Wednesday, June 25, 1997)]
[Senate]
[Pages S6383-S6384]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           SENIOR CITIZENS' MEDICARE FREEDOM TO CONTRACT ACT

 Mr. KYL. Mr. President, I rise as the sponsor of the Senior 
Citizens Medicare Freedom to Contract Act. The act would provide a 
technical correction in the Medicare Technical Corrections Act of 1994 
(42 USCS section 1395, et. seq.), which was signed into law in November 
1995.
  The Medicare Technical Corrections Act of 1994 contained a subtle--
and, based on the Congressional Record, clearly unintended--change in 
statutory language.
  The Health Care Financing Administration [HCFA] interprets this 
change as expanding existing restrictions on private payments in 
Medicare cases in which claims are filed, to all cases involving 
Medicare enrolled individuals, regardless of whether a claim is filed.

[[Page S6384]]

  If HCFA imposes this interpretation through regulations reportedly 
now being drafted, HCFA would have the authority to completely prohibit 
Medicare enrolled who do not submit reimbursement claims to HCFA, and 
who do not have claims submitted on their behalf, and who are willing 
to pay their own bills in full--from paying non-Medicare physicians out 
of pocket for needed Medicare-covered services.
  Even without the regulations, the view of HCFA is clear.
  HCFA Administrator Bruce Vladek states that the ``law requires that 
physicians submit claims on behalf of beneficiaries. Violations of 
these requirements are subject to sanctions such as civil monetary 
penalties and exclusion from Medicare.''
  Tom Ault, HCFA Director of Policy Development, has said that ``for 
doctors to implement private contracts is illegal.''
  HCFA's Director of the Bureau of Policy, Kathleen Buto, states that: 
A physician can choose not to treat Medicare beneficiaries. However, 
once a physician renders services to a Medicare beneficiary, he or she 
is subject to Medicare's requirements and regulations, regardless of 
the physician's participation as a Medicare provider. A physician's 
failure to comply with the claim filing requirement violates Medicare 
law and subjects him or her to possible monetary penalties.
  Clearly, this change does not reflect the intent of the Congress.
  If HCFA's interpretation is imposed by regulation, the result will be 
that seniors not have the right to choose treatments for which they can 
afford to pay in full to a non-Medicare participating physician.
  This will occur due to the fact that many physicians and other 
providers are unwilling to participate in Medicare since Medicare 
reimbursement frequently covers only 70 to 75 percent of the actual 
cost of care.
  Under HCFA's proposed regulations, physicians and other providers, 
who do not participate in Medicare, would be prohibited from accepting 
private payments for their services.
  Congress clearly never intended this result.
  Nor does this change reflect the will of the American people.
  In a November 5, 1996, Wirthlin Worldwide Poll, 60 percent believe 
that Americans should be able to add their own money to Government 
payments in order to get unrationed health services.
  Surely, a law that made it illegal to supplement with private funds 
the amount received from Social Security would be met with disbelief 
and derision.
  But this is exactly what HCFA has threatened to do, thereby 
restricting health care choice for seniors.
  HCFA's policy would also end the practice of cost shifting, whereby 
doctors have an incentive to treat more Medicare patients who can't 
afford to supplement Medicare's low-reimbursement rate with funds from 
those who choose to pay out of pocket.
  To address this problem, senior citizens' medicare freedom to 
contract amendment simply states: ``[n]othing * * * shall prohibit a 
physician or other provider who does not provide items or services 
under the Medicare Program from entering into a private contract with a 
Medicare beneficiary for health services for which no claim for payment 
is submitted * * * section 1805(a)].''
  Because the strategy for enactment has changed, the bill was not 
introduced in the 105th Congress.
  However, in the 104th Congress, this legislation was cosponsored by 
Senators Lott, Craig, Gregg, Cochran, Nunn, Helms, Faircloth, Bennett, 
Kempthorne, Mack, Murkowski, and Inhofe.
  This legislation is strongly supported by the American Medical 
Association, the Seniors Coalition, the National Right to Life 
Committee, and several other national health care organizations.
  Although this legislation has not yet been scored by the CBO, 
allowing seniors to pay for services rather than submitting claims to 
HCFA would plausibly be viewed by the CBO as a budgetary savings for 
purposes of the Byrd rule.
  Furthermore, this legislation calls for HCFA to report to Congress in 
2002 regarding the impact of this legislation on Medicare.
  Mr. President, I urge my colleagues to support this technical 
clarification to the Medicare statute.

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