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The Medicare Part B, program has been and still is, a vital part of the daily livelihood of millions of elderly Americans. The unique manner in which the Federal Government has worked with private carriers to aid beneficiaries, projects the carriers as “representatives" of the Government.

The legislation (Public Law 92–603) which spelled out the Government's concern involved with efficiency in the system is stated thusly :

(b) (1) Section 402(a) of the Social Security Amendments of 1967 is amended to read as follows:

"(a)(1) The Secretary of Health, Education, and Welfare is authorized, either directly or through grants to public or nonprofit private agencies, institutions, and organizations or contracts with public or private agencies, institutions, and organizations, to develop and engage in experiments and demonstration projects for the following purposes :

"(A) to determine whether, and if so which, changes in methods of payment or reimbursement (other than those dealt with in section 222(a) of the Social Security Amendments of 1972) for health care and services under health programs established by the Social Security Act, including a change to methods based on negotiated rates, would have the effect of increasing the efficiency and economy of health services under such programs through the creation of additional incentives to these ends without adversely affecting the quality of such services;

"(B) to determine whether payments for services other than those for which payments may be made under such programs (and which are incidental to services for which payment may be made under such programs) would, in the judgment of the Secretary, result in more economical provision and more effective utilization of services for which payment may be made under such program, where such services are furnished by organizations and institutions which have the capability of providing

"(i) comprehensive health care services,

"(ii) mental health care services (as defined by section 401(c) of the mental Retardation Facilities and Community Health Centers Construction Act of 1963),

"(ili) ambulatory health care services (including surgical services provided on an outpatient basis), or

"(iv) institutional services which may substitute, a lower cost for hospital care;

The investigation by the Government Operations Subcommittee on Federal Spending Practices was initiated in response to the abnormal number of complaints received in Florida because of delays by the Blue Shield organization, the Florida Carrier.

Senator Lawton Chiles requested an investigation by the General Accounting Office to discover the reasons for the delays and to determine whether or not they were avoidable. This type of information could be of general importance because the Senator indicated that the incidents in Florida were representative of many from throughout the country.

In his opening statement Senator Chiles said: The aim of this committee is to improve the efficiency of the system. By using Florida as a focal point, it is our hope that reforms will be instituted that will eliminate costly and cruel delays that are too often purely unnecessary.

This is one system, one program where every error, every delay, every inefficient action is immediately translated into human misery.

In requesting the General Accounting Office investigation of Florida's carrier problems, I carefully considered the timeliness of the request.

It is time to demand an investigation when less than 40 percent of the doctors in a state accept "assignment" for Medicare benefits.

It is time to demand an investigation when a state that's in the top eight in population is in the bottom two of average claim processing time.

It is past time for demanding an investigation when your office staff spends three times as much time on claims benefits as any other single item.

The many reasons for unreasonable delays cannot erase the justifiable concern of those who suffer the hardships that are caused by such delays.

Nine months is an uncommon delay to be informed that insufficient information has been provided on the form for a legitimate reimbursable item.

Seven and a half months is an uncommon delay to wait in suspense because a check has been lying on someone's desk forgotten or misplaced.

These occurrences are far too many in number to be lightly brushed aside. But because they involve the elderly who are often living on fixed incomes during these inflation-ridden times, the tragedy is unduly compounded.

The subcommittee's investigation will continue in the desirable avenue of providing information which will lead to ultimate efficiency of the Medicare program.

The prospects that the Senate Finance Committee and the House Ways and Means Committee will spur reform legislation are very good. The two Committees have instituted hearings and are actively investigating allegations by clients that delays and errors are abnormally high.

A STATEMENT OF CONDITIONS

GENERAL ACCOUNTING OFFICE REPORT

(From the hearings held on June 13, 1975) Significant factors brought out by Senator Chiles' questions on the General Accounting Office's investigation:

The average cost per case for processing claims was higher in Florida than the national average;

The high turnover rate in the Medicare, Part B section led in part to the inefficiency of claim payments;

Previous lack of management interest and supervision also played an important part in contributing to the uncommonly high errors rate;

There was no definitive correlation between the volume of claims and the average length of processing time;

Seasonal variation had no direct correlation on average processing time; and

Inadequate management attention to claim processing lead to improper delays. Mr. Gregory Ahart, Director, Manpower and Welfare Division, U.S. Accounting Office stated :

In addition to the problems caused by a rapidly expanding workload and high seasonal fluctuations in workload, Blue Shield of Florida has been plagued with a high personnel turnover rate. During calendar year 1974, Blue Cross and Blue Shield of Florida experienced a corporate annualized turnover rate of 48.4 percent, while the organizational units directly associated with Medicare Part B experienced a turnover rate of 65.1 percent. Even more disturbing, the turnover rate for Medicare Part B claims examining sections was 77 percent.

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