[Congressional Record Volume 142, Number 137 (Saturday, September 28, 1996)]
[Extensions of Remarks]
[Page E1797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 INCREASING ACCESS TO MEDICARE SERVICES

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                         HON. RICHARD J. DURBIN

                              of illinois

                    in the house of representatives

                       Friday, September 27, 1996

  Mr. DURBIN. Mr. Speaker, I am introducing legislation today, along 
with Congressman John Ensign, to create a demonstration program to 
waive, for selected diagnoses, the Medicare rule requiring a 3-day 
hospital stay before Medicare will cover services in a skilled nursing 
facility. There is growing evidence that, for selected diagnosis-
related groups or [DRG's], a waiver could save money by allowing care 
in a less expensive setting.
  The legislation would require the Secretary of Health and Human 
Services to cover services in skilled nursing facilities for at least 
five DRG's that involve medical conditions that do not need inpatient 
care and that are not likely or are least likely to result in any net 
increase in Medicare expenditures. Over the course of time, the 
Secretary would be able to add to the list of DRG's for which the 3-day 
stay rule is waived.
  The Secretary would monitor this demonstration program to determine 
the impact of the program on overall Medicare expenditures. If this 
experiment is successful, it will increase access to Medicare-covered 
services without an increase in costs.
  I expect that, if the DRG's are carefully selected based on evidence 
of which medical conditions could be treated less expensively in 
skilled nursing facilities, there will be no increase in total Medicare 
expenditures and there might even be budget savings. However, in case 
that expectation is not met, the legislation includes explicit language 
to ensure budget neutrality.
  If this demonstration program, as a whole, causes an increase in 
overall Medicare spending, payments to skilled nursing facilities will 
be reduced by a corresponding amount in the following year to make up 
for the losses. This provides a fail-safe mechanism, supported by the 
skilled nursing facility industry itself, to ensure that the measure 
does not cause new Federal outlays. Moreover, the Secretary would be 
authorized to remove DRG's from the waived list that result in an 
increase in overall Medicare spending.
  If, as I hope, this demonstration program is successful and overall 
Medicare costs do not rise as a result of the 3-day stay waivers, the 
legislation directs the Secretary to actively consider adding other 
DRG's to the waiver list that could be added without increasing total 
Medicare costs.
  While I do not expect Congress to move forward on this measure in the 
waning days of this legislative year, I believe this idea deserves 
careful consideration. I am introducing it now in the hope that we can 
lay the groundwork for this type of budget-neutral reform in the next 
Congress.

                               H.R. 4244

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. WAIVER OF 3-DAY PRIOR HOSPITALIZATION REQUIREMENT 
                   FOR COVERAGE OF SKILLED NURSING FACILITY 
                   SERVICES FOR CERTAIN DRGS.

       (a) In General.--By not later than October 1, 1997, the 
     Secretary of Health and Human Services shall provide for 
     coverage, under section 1812(f) of the Social Security Act, 
     of extended care services for individuals with a condition 
     that is classifiable within a diagnosis-related group 
     selected under subsection (b).
       (b) Selection of Diagnosis-Related Groups.--For purposes of 
     subsection (a) and subject to subsections (c) and (d), the 
     Secretary--
       (1) beginning with fiscal year 1998, shall select at least 
     5 diagnosis-related groups (as established for purposes of 
     section 1886(d)(4)(A) of the Social Security Act that--
       (A) relate to conditions that do not require treatment 
     through receipt of inpatient hospital services, and
       (B) are not likely (or are least likely) to result in any 
     net increased expenditures under title XVIII of such Act; and
       (2) for subsequent fiscal years may select additional 
     diagnosis-related groups that meet the requirements of 
     subparagraphs (A) and (B) of paragraph (1).
       (c) Recovery of Excess Expenditures.--If the Secretary 
     determines that the application of this section in a fiscal 
     year has resulted in any increase in aggregate expenditures 
     under such title for the fiscal year above the amount of such 
     expenditures that would have occurred in the fiscal year if 
     this section did not apply (taking into account any 
     reductions in expenditures resulting from the elimination of 
     or a reduction in the length of hospitalization), the 
     Secretary--
       (1) shall, notwithstanding any other provision of law, 
     provide for a reduction in the amounts otherwise payable 
     under part A of such title for post-hospital extended care 
     services in the following fiscal year by such proportion as 
     will reduce aggregate Federal expenditures in such fiscal 
     year under such part by the aggregate amount of such a 
     increase in the previous fiscal year, and
       (2) may rescind the selection of any diagnosis-related 
     group if the application of this section with respect to such 
     group has resulted in such an increase in expenditures under 
     such title.
       (d) Consideration of Additional Selections.--The Secretary 
     shall actively consider the selection of additional groups 
     under subsection (b)(2) if the Secretary determines that the 
     application of this section has resulted in a net reduction 
     in expenditures under such title.

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