May 24, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1113

MEDICARE BENEFICIARY

PROTECTION AMENDMENTS OF 1995

HON. FORTNEY PETE STARK OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 24, 1995

Mr. STARK. Mr. Speaker, I am pleased to

introduce the Medicare Beneficiary Protection

Amendments of 1995. I am joined by Mr.

WAXMAN, Mr. ACKERMAN, Mr. COYNE, Mr. DELLUMS, Mr. FOGLIETTA, Mr. GONZALEZ, Mr. KENNEDY of Rhode Island, Mr. MCDERMOTT, Mr.

OLVER, Mr. PALONE, Ms. PELOSI, Mr. RANGEL,

and Ms. WOOLSEY.

This legislation is designed to achieve what

its title implies—to improve the protections

provided to Medicare beneficiaries. This legislation is urgently and increasingly needed, for

two chief reasons.

First, proposals are appearing that have as

their focus the movement of more and more

Medicare beneficiaries into managed care insurance products. Some proposals would

push beneficiaries into health maintenance organizations. I support a less coercive approach, one that allows beneficiaries to determine the pace at which they move into

HMO’s. But either way, HMO’s will continue to

play a growing role in Medicare.

Second, an extensive survey of Medicare

HMO enrollees and former enrollees, recently

completed by the inspector general of the Department of Health and Human Services, documents several problem areas with Medicare

HMO’s. The inspector general’s findings substantiate numerous complaints I have received

from individual beneficiaries over the past few

years.

It is clear that before Congress flings the

Medicare doors wide open to managed care

plans, we ought to act to prohibit managed

care practices that are known to jeopardize

beneficiary care. And we ought to act swiftly,

because this is an area where an ounce of

prevention is worth more than a pound of the

cure.

The summary finding of the inspector general’s report, I believe, captures very well the

overall experience we are having with the

service delivery of Medicare HMO’s:

Generally, beneficiary responses indicated

Medicare risk HMOs provide adequate service access for most beneficiaries who have

joined. However, our survey results also indicated some problem areas: beneficiaries’

knowledge of appeal rights, access and service to [end stage renal disease]/disabled beneficiaries, and inappropriate screening of

beneficiaries health status at application.

Overall, Medicare beneficiaries are receiving

adequate services, but serious problems exist

with a significant number of enrollees, particularly among those enrollees who have the

greatest health care needs. Some of the specific findings of the inspector general are:

[C]ompliance with Federal enrollment

standards for health screening and informing

beneficiaries of their rights appeared to be

problematic.

Most beneficiaries reported timely doctor

appointments for primary and specialty care,

but some enrollees and disenrollees experienced noteworthy delays.

Perceived, unmet service needs and lock-in

problems led 22% of disenrollees and 7% of

enrollees to seek out-of-plan care.

Disabled/ESRD [end stage renal disease]

disenrollees . . . reported access problems in

several crucial areas of their HMO care.

In addition, the inspector general’s survey

found that:

16% [of enrollees] either planned to leave

or wanted to leave [their HMO], but felt they

could not, primarily for reasons of affordability.

The most troubling of the inspector general’s findings is that:

66% of disabled/ESRD enrollees wanted to

leave their HMOs.

I have no illusions that the ‘‘Medicare Beneficiary Protection Amendments of 1995’’ will

completely alleviate all of these problems. In

fact, I am hopeful that consumers, providers,

and others will continue to offer suggestions

as to how we can continue to improve the

quality of care received by Medicare beneficiaries. Nonetheless, the remedies I am proposing today will take us a long way toward

that goal.

In addition to providing specific responses to

managed care practices that have created

beneficiary access problems, this legislation

provides a framework through which Medicare

beneficiaries can make informed choices

about their Medicare coverage options.

Too often today, while a beneficiary has the

legal right to exit an HMO and return to traditional Medicare coverage, the inability to secure an affordable Medicare supplemental policy—a medigap plan—makes this a hollow option. As proposed in this legislation, the institution of a coordinated open enrollment process

for Medicare beneficiaries will guarantee that

the options we claim to provide to beneficiaries are actually open to them.

Central to the functioning of the coordinated

open enrollment process—and to guaranteeing true choice for beneficiaries—is the beginning of attained-age pricing of medigap premiums. Attained-age pricing is the policy of

raising medigap premiums as an enrollee gets

older. In their report on medigap plans,

Consumer Reports magazine described attained-age priced plans as hazardous to policyholders. I agree.

A comparison of the least expensive attained-age rated medigap plan versus the only

community-rated medigap plan in California—

using plan E for the comparison—showed that

a typical Medicare beneficiary will pay $3,360

more for the attained-age plan than the community-rated plan over his or her life. On top

of being more expensive, this attained-age

rated plan restricted access to a limited number of health care providers. The reason for

the higher lifetime premium is that while the

attained-age plan starts with a lower premium,

the premium quickly rises as the beneficiary

ages to well above the non-age-adjusted community rate.

The premium comparison follows:

MEDICARE SUPPLEMENTAL PLAN E

(Premiums as of May, 1994 for the California

counties of San Diego, Orange, Los Angeles,

San Bernardino, Imperial, and Riverside)

COMPARISON OF PREMIUMS OF ATTAINED-AGE MEDIGAP

PLAN VERSUS STANDARD MEDIGAP COMMUNITY-RATED

PLAN

Insurer and type of plan

Age of beneficiaries—

65–69

yrs. old

70–74

yrs. old

75–79

yrs. old

80+ yrs.

old

Community-Rated Plan ............. $957 $957 $957 $957

AARP/Prudential plan

Standard ‘‘Medigap’’

No restrictions on accessing

beneficiaries’ providers of

choice Attained-Age Plan ..................... 780 1,080 1,260 1,380

COMPARISON OF PREMIUMS OF ATTAINED-AGE MEDIGAP

PLAN VERSUS STANDARD MEDIGAP COMMUNITY-RATED

PLAN—Continued

Insurer and type of plan

Age of beneficiaries—

65–69

yrs. old

70–74

yrs. old

75–79

yrs. old

80+ yrs.

old

Blue Cross plan

Medicare Select type

Limited network of providers

and restricted access to

the limited network

Cumulative difference in premiums of attained-age supplemental plan to community rated plan ..................... ¥$177 +$123 +$303 +423

X 5 yrs X 5 yrs X 5 yrs X 5 yrs

¥885 +615 +1,515 +2,115

Additional cost for a person

living to the age of 85 who

enrolls in an attained-age

plan ...................................... ............. ............. ............. +3,360

Source: Senior World Newsmagazine, San Diego Edition, May, 1994, analysis conducted by the Office of Congressman Stark.

Because this legislation would accomplish

the central goal of providing greater protections to Medicare beneficiaries, it has the endorsement of consumer and senior organizations. Two of the largest senior and consumer

organizations made the following comments:

Congressman Stark’s proposed Medicare

Beneficiary Protection Amendments of 1995

will institute needed protections in the Medicare Select program * * * it also strengthens protections for Medicare beneficiaries in

other managed care options.—Testimony of

the National Committee to Preserve Social

Security and Medicare before the Committee

on Ways and Means Subcommittee on

Health, February 10, 1995.

Consumers Union strongly supports the

Medicare Beneficiary Protections Amendments of 1995. This Act would provide important protections for the Medicare beneficiaries who enroll in managed care plans,

purchase Medicare Select policies, or purchase a medigap policy * * * [T]he protections will benefit tens of millions of senior

citizens.—Consumers Union, May 8, 1995

I would like to complement my colleagues

who are joining me today in introducing this

bill. They have responded to the needs of their

senior and disabled constituents—those who

rely upon Medicare for their health insurance

coverage. They have responded to the challenge to balance the goals of providing a

broad range of coverage choices for Medicare

beneficiaries while at the same time making

sure that these choices do not place Medicare

beneficiaries at risk.

I look forward to working with all my colleagues to move the Medicare Beneficiary

Protection Amendments of 1995 forward. Due

to the urgency of this issue, I hope we will not

delay in taking up consideration of this legislation.

A summary of the bill follows.

MEDICARE BENEFICIARY PROTECTION

AMENDMENTS OF 1995—SUMMARY (5/19/95)

I. MEDICARE MANAGED CARE BENEFICIARY

PROTECTION PROVISIONS

A. Marketing standards

1. Plans could not market to beneficiaries

on a door-to-door basis.

2. Plans could not require beneficiaries to

attend an enrollment seminar and would be

required to permit enrollment through the

mail.

3. Commissions may not constitute the

predominant source of compensation for

agents.

4. To the extent an agent is compensated

based upon a commission, the plan would be

required to recover the commission if the

E 1114 CONGRESSIONAL RECORD — Extensions of Remarks May 24, 1995

beneficiary disenrolled within 90 days after

initial enrollment.

B. Due process requirements for providers in

networks

1. Public notice would be required as to

when applications by participating providers

are to be accepted.

2. Descriptive information regarding the

plan standards for contracting with participating providers would be required to be disclosed.

3. Notification of a participating provider

of a decision to terminate or not renew a

contract would be required not later than 45

days before the decision would take effect,

unless the failure to terminate the contract

would adversely affect the health or safety of

a patient.

4. Notices would be required to include reasons for termination or non-renewal. Carriers would be required to offer providers receiving notification of termination or nonrenewal an opportunity for review of the reasons, with a majority of those conducting

the review to be peers of the provider that

have contracts with the managed care plan.

5. The findings of such a review would be

advisory and non-binding. Federal or State

laws pertaining to the right of involved parties to appeal or seek recourse would not be

superseded.

C. Standards for utilization review would be established by the Secretary

1. Individuals performing utilization review could not receive financial compensation based upon the number of certification

denials made;

2. Negative determinations about the medical necessity or appropriateness of services

or the site of services would be required to be

made by clinically-qualified personnel;

3. Utilization review procedures would be

required to be based on reasonable, current

medical evidence and applied consistently

across reviewers and developed in consultation with participating providers;

4. Plans would be required to provide to enrollees a written description of the utilization review requirements of the plan.

D. Centers of excellence: Plans would be required to demonstrate that enrollees have

access to designated centers of excellence

1. According to standards developed by the

Secretary, plans would demonstrate that enrollees with chronic diseases or who otherwise require specialized services would have

access to designated centers;

2. The Secretary would designate centers

that provide specialty care, deliver care for

individuals with chronic diseases or other

complex cases requiring specialized treatment. Such centers must meet standards established by the Secretary pertaining to specialized education and training, participation in peer-reviewed research, and treatment of patients from outside the facility’s

geographic area.

3. Recognition of trauma centers: The existing requirements that plans provide for

reimbursement of services outside the plan’s

provider network where medically necessary

and immediately required because of an unforeseen illness, injury, or condition would

be clarified to include services provided by

designated trauma centers.

4. Ob-Gyn Referral: Plans would be prohibited from requiring enrollees to obtain a

physician referral for obstetric and

gynecologic services.

E. Access to emergency medical care

1. Plans could not require pre-authorization for emergency medical care.

2. A definition of emergency medical condition based upon a prudent layperson definition would be established to protect beneficiaries from retrospective denials of legitimate claims for payment for out-of-plan

services.

3. Plans could not deny any claim for a

beneficiary using the ‘‘911’’ system to summon emergency care.

4. Plans would be required to provide timely authorization for coverage of emergency

services.

5. Plans would be required to reimburse

fully emergency physicians for any services

provided to beneficiaries in order to fulfill

the requirements of the anti-dumping statute.

F. Deadline for responding to requests for coverage of services

1. Plans would be required to make a final

determination within 24 hours;

2. Secretary would be required to establish

an expedited process to review appeals of

plan denials.

G. Nondiscriminatory service area requirements

1. In general the service area of a plan

serving an urban area would be an entire

Metropolitan Statistical Area (MSA). The

Secretary could waive this requirement if

the plan demonstrated that it could not develop capacity to expand to the entire MSA

and that the plan’s proposed service area

boundaries to not result in favorable risk selection. The Secretary could not waive the

requirement that the plan serve the central

county of an MSA.

2. The Secretary could require a plan to

contract with Federally-qualified health centers (FQHCs), rural health clinics, migrant

health centers, or other essential community

providers located in the service area if the

Secretary determined that such contracts

are needed in order to provide reasonable access to enrollees throughout the service

area.

H. Contractors would be required to disclose information about physician payment

1. Information would be provided under the

terms of the contract with the Health Care

Financing Administration (HCFA).

2. Information would be made available to

plan enrollees, or potential enrollees, upon

request.

I. Intermediate sanctions on HMOs

1. Civil money penalties of up to $25,000 for

each violation that directly or indirectly adversely affects an individual enrolled in the

plan.

2. Civil money penalties of up to $10,000 for

each week after the Secretary begins proceeding to terminate a contract.

3. A new formal process would be adopted

through which HMOs could submit a corrective action plan for violations of the requirements. More severe penalties could be imposed on HMOs with previous deficiencies.

4. HMOs which fail to cooperate with PRO

quality review and which fail to meet standards for appeals would be subject to existing

intermediate sanctions and civil money penalties.

J. Amendments to Health Care Prepayment Plan

under section 1833 (HCPPs)

1. The HCPP option would be restricted to

organizations that could not qualify under

section 1876 as an HMO such as the UMW and

other union plans.

2. New requirements would be imposed on

HCPPs: Solvency and marketing standards

would be imposed; HCPPs would be required

to meet the section 1876 standards for grievance procedures and physician incentive plan

requirements, and would be subject to the

section 1876 intermediate sanctions and civil

money penalties.

3. The provision of the Social Security

Amendments of 1994 which subjects HCPPs

to the MediGap standards effective January

1, 1996 would be repealed.

4. A transition rule would be provided for

beneficiaries enrolled in HCPPs which would

not continue as a result of this provision.

K. Other beneficiary protections

1. An enrollee of an HMO receiving unauthorized out-of-plan treatment could not be

charged more than what Medicare would

have paid under fee-for-service rules.

2. Plans would be required to make arrangements for dialysis services for beneficiaries traveling outside the plan’s service

area.

L. Benefit package for section 1876 HMO plans

1. In addition to regular Medicare benefits,

plans would be required to provide hospitalization and SNF coverage without the

three-day stay requirement.

2. For Medicare covered services, plans

may not impose cost-sharing other than

nominal co-payments.

3. Limits on additional benefits (if any)

must be fully explained and enrollees given

reasonable notice that benefits are expiring.

4. Requirements to provide additional benefits to the extent that the plan’s adjusted

community rate is exceeded by the AAPCC

payment would not change.

M. Plans would be required to provide information on provider credentials to enrollees and

patient enrollees

N. A demonstration project on competitive ratesetting for Medicare risk contractors would

be conducted

O. HMO outlier pool

An outlier pool would be created for HMOs

with risk contracts to provide reinsurance

for high-cost cases. The pool would be created by withholding a percentage of current

payments.

P. PRO review

All section 1876 and section 1833 plans

would be subject to PRO review.

II. MEDICARE SELECT PROVISIONS

The Medicare Select demonstration program would be amended:

A. Establish Federal oversight of Medicare Select

1. Secretary would establish standards for

Medicare Select in regulation.

To the extent practicable the standards

would be the same as the standards developed by the NAIC for Medicare Select plans.

Any additional standards would be developed

in consultation with the NAIC.

2. Medicare Select plans would generally

be required to meet the same requirements

in effect for Medicare risk contractors under

section 1876: Community rating; prior approval of marketing materials; intermediate

sanctions and civil money penalties; additional requirements added by this bill as described below.

3. If the Secretary has determined that a

State has an effective program to enforce the

standards for Medicare Select plans established by the Secretary, the State would certify Medicare Select plans. If the Secretary

does not make such a finding with respect to

a State, the Secretary would certify Medicare Select plans in that State.

4. Existing requirements for State-based

standards and fifteen-State restriction would

be repealed.

B. Benefit Requirements

1. Fee-for-service Medicare Select plans

would offer either the MediGap ‘‘E’’ plan

with payment for extra billing added or the

MediGap ‘‘J’’ plan. Both have preventive

benefits and adding extra billing benefits to

‘‘E’’ should not add cost given that network

doctors should all accept assignment.

2. If an HMO or competitive medical plan

(CMP) as defined under section 1876 offers

Medicare Select, then the benefits would be

May 24, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1115

required to be offered under the same rules

as set forth in Title III below. Such plans

would therefore have different benefits than

traditional MediGap plans.

III. MEDIGAP PROVISIONS

A. All MediGap policies would be required

to be community rated.

B. MediGap plans would be required to participate in coordinated open enrollment.

C. The loss ratio requirement for all plans

would be increased to 85 percent.

IV. COORDINATED OPEN ENROLLMENT

A. The Secretary would conduct an annual

open enrollment period during which Medicare beneficiaries could enroll in any

MediGap plan, Medicare Select, or an HMO

contracting with Medicare.

1. Each Medigap plan, Medicare Select

plan, and HMO contractor would be required

to participate in the open enrollment system.

2. The Secretary would make available to

beneficiaries information on Medigap and

Medicare-contracting HMO plans.

B. Generally, except for cause, an enrollee

could enroll, disenroll, or switch plans only

during the annual open enrollment period,

with the following exceptions:

During the first year of enrollment with a

limited access plan (including HMOs and

Medicare Select) the beneficiary could

disenroll at the end of any calendar quarter

and return to fee-for-service. During the second year, disenrollment could only occur

mid-year at the end of the second calendar

quarter. After the first two years,

disenrollment could only occur during the

open enrollment period;

There would be an exception for HMOs

which the Secretary determines has reached

capacity;

There would be an exception to individuals

newly eligible for Medicare or who are new

residents of the service area of a plan who

could enroll on an open enrollment basis during the sixty-day period that begins thirty

days before they become eligible or before

they become a resident of the service area.

COMPREHENSIVE FETAL ALCOHOL

SYNDROME PREVENTION ACT

f

HON. BILL RICHARDSON OF NEW MEXICO

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 24, 1995

Mr. RICHARDSON. Mr. Speaker, I am

pleased to introduce the Comprehensive Fetal

Alcohol Syndrome Prevention Act. Fetal Alcohol Syndrome [FAS] is the leading cause of

mental retardation in the United States and is

one of the most common birth defects to occur

in our country. Diagnosis is rare prior to birth

and there is no cure for FAS or Fetal Alcohol

Effects [FAE], its less severe counterpart.

This disease is completely preventable, by

simply avoiding alcohol during pregnancy, but

the number of affected children is rising sharply. Recent studies indicate that the percentage

of babies stricken by FAS has increased sixfold in the last 15 years.

The statistics are appalling: the disease affects 1 in 250 live births; 5,000 infants are

born each year with the recognizable facial,

physical and mental abnormalities caused by

FAS; 50,000 babies are born annually with

FAE, and suffer from learning disabilities,

central nervous system damage, and physical

disorders.

Not only are the emotional impacts of these

diseases devastating, the costs associated

with treatment are very high: health care costs

for one child stricken with FAS total $44,000.

FAS and FAE strike without regard to race

or economic status, but the rate of incidence

is higher among certain groups; for instance,

the rate is 30 times higher among Native

Americans. This disease threatens to destroy

whole generations on some reservations if

stronger federal action is not initiated.

Surprisingly, much of the public is still unaware of the dangers of drinking during pregnancy. The medical community does not uniformly caution against alcohol consumption for

pregnant women, and most medical schools

do not provide curriculum on FAS prevention

and detection.

This bill seeks to address each of these issues comprehensively. It requires the Department of Health and Human Services to close

the gaps in our current efforts to prevent FAS

and FAE by establishing a coordinating committee to streamline program development and

eliminate duplicative research programs. The

committee will develop professional practice

standards and curriculum for health care providers, and will initiate a national public awareness program to outline the dangers of alcohol

consumption during pregnancy. Finally, additional research will be conducted to aid detection and a cure for FAS so that future generations will not suffer from this debilitating disease.

This bill, as evidence by our bipartisan list of

cosponsors, deserves the support of all Members, and I look forward to working toward its

passage.

VIRGINIA R. SAUNDERS, 50 YEARS

OF FEDERAL SERVICE

f

HON. STENY H. HOYER OF MARYLAND

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 24, 1995

Mr. HOYER. Mr. Speaker, I rise today to

recognize Ms. Virginia Saunders, congressional document specialist at the Government

Printing Office, for reaching 50 years of dedicated and enthusiastic Federal service on Friday, May 26, 1995.

Ms. Saunders was born Virginia R. Frisbie

in Darlington, MD, on October 11, 1926. After

working briefly at the Federal Bureau of Investigation, she came to the Government Printing

Office on February 4, 1946, as a war service

junior clerk typist in the division of public documents, stock section. Two years later, she

was promoted to the division of public documents reference section. In February 1951,

Ms. Saunders was promoted to indexing clerk

and earned subsequent promotions in the

same classification. In July 1958, she was promoted to library technician. Becoming a congressional documents specialist in April 1970,

she was then promoted to supervisor of the

congressional documents section in July 1974.

In October 1983, Ms. Saunders assumed her

current position of congressional documents

specialist in the congressional printing management division, customer services.

Although one may not yet recognize the

name of this outstanding GPO employee, the

end product of her dedicated efforts is certainly familiar. Ms. Saunders has primary responsibility for the Congressional Serial Set,

which is a compilation of all the House and

Senate documents and reports issued for

each session of Congress. Dummy volumes

establishing the format for each edition are

prepared and assigned a serial number following each session of Congress. The actual

books are produced by GPO’s binding division, often as many as 100 volumes per set

for each session of Congress. As a chronicle

of events of the U.S. Congress over the years,

the Congressional Serial Set is rivaled only by

the CONGRESSIONAL RECORD. While the Serial

Set records behind-the-scenes legislative activities for the United States, the CONGRESSIONAL RECORD reflects the ‘‘in session’’ proceedings. Distributed to the House and Senate

libraries, the Archives, the Library of Congress, and depository libraries, the Congressional Serial Set joins the CONGRESSIONAL

RECORD in offering students and historians a

rich insight into the American system of government.

In late 1989, Ms. Saunders drew upon her

indepth knowledge of depository library program responsibilities in informing the Nation,

and her then-43 years of GPO experience, to

submit an employee suggestion regarding the

appendix to the Iran Contra Report to Congress. She suggested that this 40-volume publication, which was printed as both a Senate

and House report, be bound only once for the

serial set volumes of House and Senate reports that are sent to depository libraries. She

further suggested that the Schedule of Volumes, which is a listing of the bound volumes,

contain a notation explaining the mission serial

number voluments. The implementation of this

suggestion resulted in a reduction of 13,740

book volumes to be bound, saving the Federal

Government over $600,000. In recognition of

these efforts, she received GPO’s top monetary Suggestion Award for that year. In ceremonies held on January 9, 1991, Ms. Saunders was awarded a Presidential letter of commendation under the Presidential Quality and

Management Improvement Award Program. In

his letter to Ms. Saunders, President Bush

noted, ‘‘You have demonstrated to an exceptional degree my belief that Federal employees have the knowledge, ability, and desire to

make a difference.’’

I know my colleagues and Ms. Saunders’

family, friends, and coworkers join me in congratulating her on 50 years of exemplary Federal service.

CONGRATULATIONS TO THE SHELTER ISLAND HEIGHTS POST OFfFICE

HON. MICHAEL P. FORBES OF NEW YORK

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 24, 1995

Mr. FORBES. Mr. Speaker, I rise today to

praise the exceptional service provided by the

Shelter Island Heights Post Office. For the

past 115 years, the Shelter Island Heights

Post Office has served the community with extreme dedication. I would also like to commend the Shelter Island ferry service which

has provided the vital link between the mainland and Shelter Island. This ferry service has

been at the heart of the Postal Service for the

Shelter Island Heights community. With the

help of this ferry service, the Shelter Island

Post Office has been able to deliver over 1.5