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Mr. Chairman, there are many other examples of regulations and rules issued in direct contradiction to congressional statute and intent, examples where an agency has used its regulatory power to broaden legislative language or ignore a statute's mandate.

The time has come to place closer control over regulations and those who would issue them. Many times we have seen that an agency avoids the rule making procedure by the nebulous terminology that it is “impracticable, unnecessary or contrary to the public interest.” I submit to you that rules and regulations that impact on the health care of Americans are most necessary, and certainly not contrary to public interest.

We think agencies should give full statements when they choose not to submit regulations to full rulemaking procedures. Presently, only a brief statement is required for not doing so.

Extending the comment period to 60 days is more realistic than the current policy of 30 days. Additionally, we think that interested parties should have the right to request and be granted a public hearing on matters of significant interest to the public.

Mr. Chairman, we cannot begin to relate many of the changes that could or probably should be made. Time does not permit. It is most important to us that we have been allowed to participate in these hearings today. We thank you for the opportunity and I would be pleased to answer any questions if the committee desires.

[Additional information supplied for the record by Dr. Rogers follows:]


Atlanta, Ga., February 26, 1976. Hon. Sam Nunn, U.S. Senate, Washington, D.O.

SIR: I did appreciate the opportunity of presenting the Medical Association of Georgia's testimony to the Senate Subcommittee on 2/12/76 here in Atlanta. Organized medicine in the state and across the nation owe both you and Representative Levitas a debt of gratitude for your efforts on behalf of the American public, our patients. I received today the AMA Newsletter dated 2/23/76 which included a notice of HEW's plans requiring the Social Security number of patients and their attending physicians on forms for the “Uniform Hospital Data Set” used in Medicare, Medicaid, and other federal programs. It has been the policy of AMA as well as the Medical Association of Georgia to hold inviolate the right of a patient to confidentiality of his medical records, and in one great edict HEW has ordered this confidentiality surrendered !

This is simply another example of the misuse of the Federal Register in the rule making process which I thought should be brought to the attention of your committee. Thank you once again for your kindness and courtesy. Sincerely,

Chairman, National Legislative Committee,

Medical Association of Georgia.


A Federal plan to identify patients and physicians in data collected by hospitals is not authorized by law, the AMA told HEW last week. The plan, which was published as a "notice" of implementation in the Jan. 16 Federal Register, requires the Social Security number of patients, attending physicians on forms for the Uniform Hospital Data Set used in such programs as Medicare, Melicaid and PSRO. HEW urged hospitals to adopt the form as soon as possible. The AMA said such a plan should have been promulgated through formal rulemaking procedures.

In its comments to HEW, the AMA said it was "shocked” by the government's proposal for a Uniform Hospital Discharge Abstract, which would allow patients and physicians to be "clasified, identified, matched, compared, reviewed, and computerized with the impersonal ease of electronic machines."

The AMA pointed out that HEW's own advisory group on data collecting had recommended that the government collect no information that would, by itself, permit identification of individuals. The HEW plan may be in violation of the 1974 Privacy Act, the AMA said. At the 1975 Clinical Convention the AMA House of Delegates voted to protest HEW's action setting up procedures involving Social Security numbers in violation of confidentiality.


Senator Nunn. Thank you very much, Dr. Rogers.
Mr. Bishop?



Mr. BISHOP. My name is Gene Bishop and I am speaking on behalf of the Georgia Health Care Association, formerly the Georgia Nursing Home Association, which is a nonprofit trade association representing approximately 273 proprietary and nonproprietary nursing homes in Georgia My remarks address the subject of the impact of Federal regulations on long-term health care.

Currently in Georgia, more than 70 percent of the patients cared for in nursing homes receive reimbursement assistance from public health care programs such as medicaid, medicare, or veterans benefits. Of the 300 nursing homes licensed in Georgia, only three or four do not participate in any Federal program. The vast majority of nursing homes provide services and are reimbursed under the title XIX medicaid program. To participate in the skilled nursing program under medicaid, a facility must meet and maintain more than 526 Federal standards and conditions of participation. The facility must also meet the 1967 Life Safety Code as well as numerous other regulations which affect all businesses such as OSHA, wage and hour, et cetera.

The nursing home of the 1970's would have to be considered one of the most highly regulated entities in America today, bordering on being considered a public utility. I would be remiss if I did not say that Federal programs in long-term health care have resulted in an improved quality of life for many Americans in need of nursing home care. But the myriad of regulations and requirements are beginning to reach a point of diminishing return and the system is breaking down.

Georgia is in the throes of a medicaid crisis and more than $1 million per month in nursing home payments has been cut beginning December 1, 1975, in order to continue a viable program. Federal medical assistance percentages which match State funds for medicaid have decreased from 81.7 percent in 1968 to 66.1 percent in 1976, while at the same time, program costs have escalated out of sight. This places a tremendous burden on the State.

The Social Security Amendments of 1972 are having a significant effect on long-term health but the regulations which interpret the statutes fail to evaluate economic impact of increased regulations. During 1972 and 1973, more than 160 Georgia nursing homes installed sprinkler systems and fire safety devices in accordance with the 1967 life safety code. There was no economic impact assessment. In 1974, new regulations for participation in the skilled nursing and intermediate care program for medicaid were implemented. There was no economic impact assessment. On January 1 of this year, a regulation calling for a part-time or full-time physician medical director in skilled nursing home. Again, no assessment of economic impact and the industry cannot estimate the total cost of meeting this requirement based on the regulations set forth.

In summary, the problems of Federal regulations in nursing homes in Georgia boil down to the following: (1) Federal regulations fail to consider the practicality of implementation and economic evaluation in proportion to the measured benefits. (2) Little coordination between regulatory agencies and reimbursement agencies. (3) Regulations are proposed based on reactions relating to problems in a geographical area, then applied nationwide when a need may not exist.


An economic evaluation should be completed on all new regulations affecting nursing homes.

State agencies should have more fiflexibility in considering implementation of new regulations in direct relation to the State's ability to reimburse for nursing home services under public health care programs.

Senator Nunn. Thank you, Mr. Bishop, Mr. Fechtel, and Dr. Rogers.

I have a brief observation about the ordinary situation of Federal bureaucracy. In October 1974, the President of the United States, Gerald Ford, who had recently taken office, got on national television and made the statement that economic impact statements would be required for every Federal agency on all rules and regulations. I was conscious of that because I had a similar requirement in a pending bill that would have made that requirement law. It was a productivity bill which has since become law but the Federal administration vigorously opposed the requirement in that law of an economic impact statement, saying they had already done that by Executive order.

A'bout a year ago, in May of 1975, which was 7 months after the President of the United States, who is supposedly in charge of the executive branch, issued that directive, I had hearings to ask the agencies how many impact statements had been issued, pursuant to the order of the President and I found, lo and behold, 7 months later, not a single Federal agency. You have to ask the question if the President of the United States gives a direct order and no one in the bureaucracy has carried it out 7 months later, what kind of government do we have! Since then, I have not checked, but I have the feeling, as you point out today-all of you have touched on it—there have been very few economic impact statements issued. I will ask Bill, Goodwin to check on this.

We may want to have another hearing specifically on this subject regarding what the bureaucracy is doing to carry out the orders of the U.S. President. I am afraid it is not being done.

Thank you all for coming.

Our next witness is Mr. Herbert C. Mabry, president of the Georgia State AFL-CIO.

Mr. Mabry, we are relighted to have you with us today. I know you have been sitting there quite a while and we apologize for the time delay.



Mr. MABRY. I appreciate the opportunity to appear here today. You are aware of the role of organized labor and that the national policies are made from a national level.

I want to mainly come here to congratulate you and Congressman Levitas on the foresight and the willingness that you have in attacking a cancer head that is eating away at the American people. It is something that is going to cause Americans to rebel against our Governments, if something is not done about the regulatory agencies that keep eating away at the everyday lives of the working people of this country.

We are faced daily with regulations that cause businesses and management people to concentrate daily, and all of the time they have with their employees, to meeting the regulations that have been imposed by the regulatory agencies on them. This does not leave the time they need to expand their businesses and to concentrate on expanding and meeting the need of this country, which is full employment today. So I question whether or not the legislation proposed in S.2716 is going far enough.

We talk about the legislation that would give 60 days that you would have an opportunity, and would see that this was not good. They would have a right then to veto the regulations.

I question whether or not before someone even employs regulations, or tries to, on the American people and businesses that they would have to submit to Congress their proposals on the regulations, and have them approved by you, before they could even as much as have a hearing. As I said, my remarks would be brief, but that is our feeling on them.

Mainly, I wanted to .congratulate you both on your foresight, in seeing what is happening to us in America and your willingness to do something about it.

Senator Nunn. Thank you, Herb. I think we heard a lot this morning, including your testimony, that indicates the final bill for a lot of this is being paid by the American consumer and that employees are facing loss of jobs.

We have heard of the textile industry that employs hundreds of thousands in the southeast. Unless there is some reasonableness in the OSHA regulations, there will be tens of thousands of jobs lost. We had testimony here by Mr. Albert Norman, international representative of the Granite Cutters—he did an excellent job_expressing his concern for the safety of the workers and for reasonableness on application of the OSHA regulations.

We appreciate very much your being here this morning and we appreciate your comments.

Mr. LEVITAS. Thank you. I would like to also join the chairman in complimenting you on your testimony and your forthright statement of this position.

There is a need, in our society, for balance between too much government and take OSHA, for example—I thought Mr. Norman's statement was particularly pertinent because he said we need OSHA, as did Mr. McGarity, the employer. He said what we do not need is, on the one hand, inconsistent, ineffective counterproductive enforcement, and on the other hand letting the real problems get by and nobody does anything about it.

I think what Mr. Norman was saying is—you have expressed this to me previously—that where there is a need, a big problem, OSHA seems to turn its back on it, and go after the easy pickings. Where the problem does not exist, they almost manufacture it and I think it is a credit, to the labor movement in America that it has seen where its interests lie as consumers, and as the people who produce the goods and services, that have made this country so great. I want to thank you very much for your testimony.

Mr. MABRY. Thank you very much.
Senator Nunn. Thank you, Herb. We appreciate your time.

Our next witnesses are associated with the automobile industry in various capacities, Mr. Carey B. Paul, chairman, public affairs committee of the Georgia Automobile Dealers Association from Decatur and Mr. William F. Morie, executive vice president of the Georgia Automobile Dealers Association, Atlanta.

We welcome you both.



Mr. Paul. Gentlemen, my name is Carey Paul and I have been a dealer in automobiles and trucks for the past 25 years. I am here today representing the Georgia automobile dealers. I am grateful for the opportunity of testifying today, for I am completely serious when I say that unless some of our Nation's leaders do reverse the trend of putting more and more governmental redtape and restrictions upon the shoulders of the American business, then our capitalistic system is doomed.

In the last 5 years more burdensome, unrealistic and unnecessary laws have been imposed upon my business than in the previous 20. I am referring to the Truth-in-Lending, the Odometer Law, OSHA, and now the Magnuson-Moss Warranty Act. It is to this act that I would like to address my remarks.

I think the most bothersome aspect of this law and others I have mentioned is that the average small businessman does not understand the language of the rules and regulations of these laws, and the average attorney has not devoted the necessary study to understand them-and if we, the small businessman, pay our attorneys to become (xperts in all of these laws so that he can properly advise us as to procedure, the price becomes prohibitive.

So we muddle through, hoping that we understand enough of the rules of many laws that we won't be criminally prosecuted or civilly

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