[Congressional Record Volume 141, Number 156 (Tuesday, October 10, 1995)]
[House]
[Pages H9765-H9766]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      NEW REPUBLICAN MEDICARE PLAN

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Pallone] is recognized for 5 minutes.
  Mr. PALLONE. Mr. Speaker, I would like to continue with part of what 
I was talking about earlier today, and, that is, the new Republican 
leadership Medicare plan which I say new because as a member of the 
House Committee on Commerce, I first received the actual legislation 
not yesterday, but a week ago Monday on the day when the Committee on 
Commerce was expected to mark up the bill without any opportunity for a 
hearing. As a consequence, the Commerce Democrats decided to have their 
own hearings a week ago last Tuesday, on October 3, and there were a 
number of things that came out of that hearing that were very 
interesting in terms of where this Republican Medicare plan is taking 
us.
  The concern that I have or one of the major concerns that I have is 
that this bill seeks to lure seniors into HMO's or other managed care 
programs with no choice of doctors in order to try to achieve the $270 
billion in savings that are proposed. If seniors do not move into 
managed care plans, budgetary gimmicks would kick in to take even more 
money out of the Medicare system. So I consider this plan a very 
unhealthy plan for the future of Medicare.
  Let me talk a little bit about the concerns I have and why I say that 
it will force essentially seniors into HMO's or managed care systems. 
One of the concerns that I had a few months ago was that the Republican 
plan was going to basically put forward a voucher system whereby the 
Federal Government would give the senior a certain amount of money in a 
voucher or coupon and that if that was not enough to pay for a good 
quality health care plan, the senior would have to make up the 
difference by putting out more money.

[[Page H 9766]]


                              {time}  1545

  Mr. PALLONE. One of the things we found in this bill is that only a 
set amount of money would be directed to pay for the HMO or the managed 
care plan and that seniors, if they wanted a better plan or if they 
felt that HMO did not provide adequate coverage, would, in fact, be 
asked or could, in fact, be asked by the HMO or managed care system to 
pay more out of pocket. That is the reality.
  That is what we have before us when we look at this, when we look at 
this GOP Medicare plan that is before the Committee on Commerce. It is 
essentially a voucher system. But worse than that is that there is a 
proposal, if enough savings are not achieved, in other words, if enough 
seniors do not opt to go into a managed care HMO system, then cuts 
would automatically occur a few years down the line.
  But the cuts, again, would be not to those people who go into the HMO 
or to the managed care system but rather for those seniors who opt to 
stay in a traditional fee-for-service system where they choose their 
own doctor or own hospital. All of the cuts that would come into play, 
if enough people do not go into HMO's or managed care, all of the cuts 
in the reimbursement rates to the hospitals or physicians or to other 
health care providers would come on the fee-for-service side.
  What that would mean is that eventually those hospitals and doctors 
that continue in the fee-for-service system, where you can choose your 
own doctor and you do not have to go into managed care, they would find 
less and less money coming to them from the Federal Government, and 
they ultimately would have to, again, move into an HMO or managed care 
system because it would not pay for them to stay in the traditional 
fee-for-service system.
  So what we have here is a program that essentially forces all of our 
senior citizens ultimately into an HMO or fee-for-service where they do 
not have choice of doctors.
  The other thing that came to light in the document that was given to 
the Committee on Commerce last week is that the whole discussion on the 
part of the Republican leadership about how they were trying to go 
after fraud and abuse in Medicare, well, essentially that is a hoax. 
Because if you look at the actual bill, it makes it more and more 
difficult for the Federal Government to weed out fraud and abuse in the 
Medicare system. We estimate that over a course of 7 years, $126 
billion could be saved by reducing fraud and abuse.
  But the GOP bill makes the existing civil monetary penalties and 
anti-kickback laws considerably more lenient. According to the 
inspector general of the Department of Health and Human Services, who 
testified before our alternative Commerce Democrats' meeting, hearing 
last week, the Medicare restructuring legislation would substantially 
increase the Government's burden of proof in cases under the Medicare-
Medicaid anti-kickback statute. Although a fund would be created to 
direct funds recovered from wrongdoers, this fund would not go to 
further law enforcement efforts. What that means is it is going to be 
harder for the Government to prove fraud and abuse because the 
Government would have a higher burden of proof.
  If we do recover monies, because we do find fraud and abuse, find 
these kickback schemes that have existed, that money will not go back 
to law enforcement. There will be less and less, and it will be more 
and more difficult for the Government to go after fraud and abuse.

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