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HEALTH SERVICES FOR THE AGED UNDER THE SOCIAL

SECURITY INSURANCE SYSTEM

MONDAY, JULY 24, 1961

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D.C.

The committee met at 10 a.m., pursuant to call, in the committee room, New House Office Building, Hon. Wilbur D. Mills (chairman of the committee) presiding.

The CHAIRMAN. The committee will please be in order.

Today the committee begins 2 weeks of public hearings on the President's proposal for hospital and other services for aged individuals under the Social Security Act. This proposal is in bill form, having been introduced by our colleague on the committee, the Honorable Cecil R. King, and also several other Members.

Without objection, a copy of H.R. 4222, the King bill, will be inserted in the hearings immediately following this statement; without objection, a copy of the press release announcing these hearings will be included.

(H.R. 4222 and the press release referred to follow :)

[H.R. 4222, 87th Cong., 1st sess.]

A BILL To provide for payment for hospital services, skilled nursing home services, and home health services furnished to aged beneficiaries under the old-age, survivors, and disability insurance program, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Health Insurance Benefits Act of 1961".

Sec. 1. Short title.

TABLE OF CONTENTS

Sec. 2. Findings and declaration of purpose.

TITLE I-HEALTH INSURANCE BENEFIT PROVISIONS

Sec. 101. Health insurance benefits for the aged.

Sec. 1601. Prohibition against interference.
Sec. 1602. Free choice by patient.

Sec. 1603. Description of services.

(a) Inpatient hospital services.

(b) Skilled nursing home services.

(c) Home health services.

(d) Outpatient hospital diagnostic services.
(e) Drugs and biologicals.

Sec. 1604. Deductible; duration of services.

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Sec. 1607. Use of State agencies and other organizations to develop conditions participation for providers of services.

of

Sec. 1608. Use of State agencies and other organizations to determine compliance by providers of service with conditions of participation.

Sec. 1609.

Sec. 1610.

Conditions of and limitations on payment of services.
(a) Requirement of requests and certifications.
(b) Determination of costs of services.

(c) Amount of payment for more expense services.

(d) Amount of payment where less expensive services furnished.

(e) No payment to Federal hospitals.

(f) Payment for emergency inpatient hospital services.

Agreements with providers of services.

Sec. 1611. Payment to providers of services.

Sec. 1612. Health Insurance Benefits Advisory Council.
Sec. 1613. Review of determinations.

Sec. 1614. Overpayments to providers of services.

Sec. 1615. Regulations.

Sec. 1616. Application of certain provisions of title II. Sec. 102. Federal Social Insurance Trust Fund.

Sec. 103. Increase in earnings base.

(a) Definition of wages.

(b) Definition of self-employment income.

(c) Definitions of quarter and quarter of coverage.
(d) Table for determining primary insurance amount.
(e) Average monthly wage.

Sec. 104. Technical amendments.

(a) Suspension in case of aliens.

(b) Persons convicted of subversive activities.

(c) Advisory Council on Social Security Financing.

TITLE II-AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954

Sec. 201. Changes in tax schedules.

(a) Self-employment income tax.

(b) Tax on employees.

(c) Tax on employers.

(d) Effective dates.

Sec. 202. Increase in tax base.

(a) Definition of self-employment income.

(b) Definition of wages.

(c) Federal service.

(d) Returns in the case of governmental employees in Guam and American Samoa.

(e) Special refunds of employment taxes.

(f) Effective date.

Sec. 203. Technical amendment.

TITLE III-RAILROAD RETIREMENT AME DMENTS

PART A-HEALTH INSURANCE BENEFITS FOR AGED UNDER THE RAILROAD RETIREMENT ACT Sec. 301.

Sec. 320.

(a) Health insurance zenefits for the aged.

(b) Amendment preserving relationship between railroad retirement and old-age, survivors, disability, and health insurance systems.

(c) Financial interchange between railroad account and federal social insurance trust fund.

PART B-AMENDMENTS TO RAILROAD RETIREMENT TAX ACT

(a) Tax on employees.

(b) Tax on employee representatives.

(c) Tax on employers.

TITLE IV-MISCELLANEOUS PROVISIONS

Sec. 301. Meaning of term "Secretary".
Sec. 302. Studies and recommendations.

FINDINGS AND DECLARATION OF PURPOSE

SEC. 2. (a) The Congress hereby finds that (1) the heavy costs of hospital care and related health care are a grave threat to the security of aged beneficiaries, (2) most of them are not able to qualify for and to afford private insurance adequately protecting them against such costs, (3) many of them are accordingly forced to apply for private or public aid, accentuating the financial difficulties of hospitals and private or public welfare agencies and the burdens on the general revenues, and (4) it is in the interest of the general welfare for financial burdens resulting from hospital services and related services required by these individuals to be met through social insurance.

(b) The purposes of this Act are to provide aged individuals entitled to benefits under the old-age, survivors, and disability insurance system with basic protection against the cost of inpatient hospital services and skilled nursing

home services, and to provide, in addition, as an alternative to inpatient care, protection against the costs of home health services and outpatient hospital diagnostic services; to utilize social insurance for financing the protection so provided; to assure adequate and prompt payment on behalf of these individuals to the providers of these services; and to do these things in a manner consistent with the dignity and self-respect of each individual, without interfering in any way with the free choice of physicians or other health personnel or facilities by the individual, without the exercise of any Federal supervision or control over the practice of medicine by any doctor or over the manner in which medical services are provided by any hospital.

(c) It is hereby declared to be the policy of the Congress that skilled nursing home services for which payment may be made under this Act shall be utilized in lieu of inpatient hospital services where skilled nursing home services would suffice in meeting the medical needs of the patient, and that home health services for which payment may be made under this Act shall be utilized in lieu of inpatient hospital or skilled nursing home services where home health services would suffice.

TITLE I-HEALTH INSURANCE BENEFIT PROVISIONS

HEALTH INSURANCE BENEFITS FOR THE AGED

SEC. 101. The Social Security Act is amended by adding after title XV the following new title:

“TITLE XVI-HEALTH INSURANCE BENEFITS FOR THE AGED

PROHIBITION AGAINST INTERFERENCE

"SEC. 1601. Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any hospital, skilled nursing facility, or home health agency; or, except as otherwise specifically provided, to exercise any supervision or control over the administration or operation of any such hospital, facility, or agency.

FREE CHOICE BY PATIENT

"SEC. 1602. Any individual entitled to have payment made under this title for services furnished him may obtain inpatient hospital services, skilled nursing home services, home health services, or outpatient hospital diagnostic services from any provider of services with which an agreement is in effect under this title and which undertakes to provide him such services.

"DESCRIPTION OF SERVICES

"SEC. 1603. For purposes of this title

"Inpatient Hospital Services

"(a) The term 'inpatient hospital services' means the following items and services furnished to an inpatient in a hospital and (except as provided in paragraph (3)) by such hospital

"(1) bed and board (subject, however, to the limitations in section 1609 (c) and (d) on the amount which is payable with respect to certain accommodations),

"(2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are customarily furnished by such hospital for the care and treatment of inpatients, and such drugs, biologicals, supplies, appliances, and equipment, for use in such hospital, as are customarily furnished by such hospital for the care and treatment of inpatients, and

"(3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are customarily furnished to inpatients either by such hospital or by others under such arrangements;

excluding, however

"(4) medical or surgical services provided by a physician, resident, or intern, except in the field of pathology, radiology, physiatry, or anesthesiology, and except services rendered in the hospital by an intern or a resident-in-training under a teaching program approved by a recognized body approved for the purpose by the Secretary; and

"(5) the services of a private-duty nurse.

"Skilled Nursing Home Services

"(b) The term 'skilled nursing home services' means the following items and services furnished to an inpatient in a skilled nursing facility, after transfer from a hospital, by such skilled nursing facility—

"(1) nursing care provided by or under the supervision of a registered professional nurse or provided by or under the supervision of a licensed practical nurse,

"(2) bed and board in connection with the furnishing of such nursing care (subject, however, to the limitations in section 1609 (c) and (d) on the amount which is payable with respect to certain accommodations), "(3) physical, occupational, or speech therapy,

"(4) medical social services,

"(5) drugs, biologicals, supplies, appliances, and equipment which are furnished for use in such skilled nursing facility, and

"(6) such other services necessary to the health of the patient as are generally provided by skilled nursing facilities;

excluding, however, any item or service if it would not be included under subsection (a) if furnished by a hospital to an inpatient in such hospital.

"Home Health Services

"(c) The term 'home health services' means the following items and services which are furnished to an individual, who is under the care of a physician, by a home health agency or by others under arrangements with them made by such agency, under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician, which items and services are provided in a place of residence maintained as such individual's home"(1) part-time or intermittent nursing care provided by or under the supervision of a registered professional nurse,

"(2) physical, occupational, or speech therapy,

"(3) medical social services,

"(4) to the extent permitted in regulations, part-time or intermittent homemaker services,

"(5) medical supplies (other than drugs and biologicals) and appliances, and

"(6) such other services necessary to the health of the individual as may be permitted in regulations;

excluding, however, any item or service if it would not be included under subsection (a) if furnished by a hospital to an inpatient in such hospital.

"Outpatient Hospital Diagnostic Services

"(d) The term 'outpatient hospital diagnostic services' means diagnostic services

"(1) which are furnished to an individual as an outpatient by a hospital or by others under arrangements with them made by a hospital, and "(2) which are customarily furnished by such hospital (or by others under such arrangements) to its outpatients for the purpose of diagnostic study;

excluding, however, any item or service if it would not be included under subsection (a) if furnished by a hospital to an inpatient in such hospital.

"Drugs and Biologicals

"(e) The term 'drugs' and the term 'biologicals' include only such drugs and biologicals, respectively, as are included in the United States Pharmacopoeia, National Formulary, or New and Non-Official Remedies.

"DEDUCTIBLE; DURATION OF SERVICES

"Deductible

"SEC. 1604. (a) (1) Payment for impatient hospital services furnished an individual during any benefit period shall be reduced by a deduction equal to $20, or, if greater, $10 multiplied by the number of days, not exceeding nine, for which he received such services in such period.

"(2) Payment for outpatient hospital diagnostic services furnished an individual in connection with any one diagnostic study shall be reduced by a deduction equal to $20.

"Duration of Services

"(b) Payment under this title for services furnished any individual during a benefit period may not be made for

"(1) impatient hospital services furnished to him during such period after such services have been furnished to him for ninety days during such period; or

"(2) skilled nursing home services furnished to him during such period after such services have been furnished to him for one hundred and eighty days during such period.

Payment under this title for inpatient hospital services or skilled nursing home services furnished an individual during a benefit period may also not be made for any such services after one hundred and fifty units of services have been furnished to him in such period; and, for purposes of this sentence

"(3) a unit of service' shall be equal to one day of inpatient hospital services or two days of skilled nursing home services, and

"(4) there shall not be counted any inpatient hospital services furnished in a benefit period for any days in excess of ninety days or any skilled nursing home services furnished in a benefit period for any days in excess of one hundred and eighty.

Payment under this title for home health services furnished an individual during a calendar year may not be made for any such services after such services have been furnished him during two hundred and forty visits in such year.

"Benefit Period

"(c) For the purposes of this section, a 'benefit period' with respect to any individual means a period of consecutive days—

"(1) beginning with the first day (not included in a previous benefit period) (A) on which such individual is furnished inpatient hospital services and (B) which occurs in a month for which he is entitled to health insurance benefits under this title, and

"(2) ending with the last day of the first ninety-day period thereafter during each day of which he is neither an inpatient in a hospital nor an inpatient in a skilled nursing facility.

"ENTITLEMENT TO BENEFITS

"SEC. 1605. (a) Every individual who

"(1) has attained the age of sixty-five, and

"(2) is entitled to monthly insurance benefits under section 202, shall be entitled to health insurance benefits for each month for which he is entitled to such benefits under section 202, beginning with the first month with respect to which he meets the conditions specified in paragraphs (1) and (2). Notwithstanding the preceding provisions of this subsection, no payments may be made under this title for inpatient hospital services, outpatient hospital diagnostic services, or home health services furnished an individual prior to October 1, 1962, or for skilled nursing home services furnished him prior to July 1, 1963. "(b) For the purposes of this section

"(1) entitlement of an individual to health insurance benefits for a month shall consist of entitlement to have payment made under, and subject to the limitations in, this title on his behalf for inpatient hospital services, skilled nursing home services, home health services, and outpatient hospital diagnostic services furnished him in the United States (as defined in section 210 (i)) during such month; and

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