November 12, 1997

The Honorable Donna Shalala
U.S. Department of Health and Human Services
200 Independence Ave., SW
Washington, DC 20201

Dear Secretary Shalala:

Congress recently passed Section 4507 of the Budget Reconciliation Act of 1997, entitled "Use of Private Contracts by Medicare Beneficiaries." This new Section raises more concerns than it answers, and HHS has not yet published any clarification even though the effective date of the Section is January 1, 1998.

On behalf of our thousands of physician members, we request clarifications to the following:

1. Does HHS interpret this new Section as applying to any services that are not covered by Medicare?

2. Has HHS changed its policy toward private contracting by Medicare beneficiaries, as expressly adopted by the United States District Court in Stewart vs. Sullivan, 816 F. Supp. 281 (D.N.J.1992), by virtue of this new Section (or otherwise)?

3. Does HHS interpret this new Section as applying to any private contrcts entered into prior to its effective date?

4. Does HHS impose any reporting requirements, prior to or after the effective date of this Section (please address both time periods), for services provided in which the patient and physician expressly waive any reimbursement under Medicare or other governmental programs?

5. Does HHS interpret this Section as applying a penalty to any physician who does not file an affidavit and yet provides a potentially covered service to a Medicare-eligible person, and, if so, what is the penalty?

6. Will HHS issue any regulations clarifying application of this new Section and, if so, when can Medicare beneficiaries and physicians expect promulgation of these regulations?

7. With respect to physicians who file an affidavit pursuant to this Section, may they seek reimbursement from the government for services rendered outside the scope of this Section due to an emergency situation?

Medicare beneficiaries, and their physicians, have a constitutional due process right to obtain plain and clear notice of applicable law. We look forward to obtaining a prompt response from HHS to the narrow and important questions raised above.

Sincerely,

Jane M. Orient, MD
Executive Director