[Congressional Record Volume 143, Number 23 (Thursday, February 27, 1997)]
[Senate]
[Page S1738]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 372. A bill to amend title XVIII of the Social Security Act to 
provide for a 5-year reinstatement of the Medicare-dependent, small, 
rural hospital payment provisions, and for other purposes; to the 
Committee on Finance.


       THE MEDICARE DEPENDENT HOSPITALS PROGRAM REINSTATEMENT ACT

 Mr. GRASSLEY. Mr. President, I introduce a bill which would 
reinstate the Medicare-Dependent Hospital Program.
  This program expired in October 1994. As its title implied, the 
hospitals it helped were those which were very dependent on Medicare 
reimbursement. These were small--100 beds or less--rural hospitals with 
not less than 60 percent of total discharges or with 60 percent of 
total inpatient days attributable to Medicare beneficiaries. The 
program enabled the hospitals in question to choose the most favorable 
of three reimbursement methods.
  The program was extended, and phased out down to October 1994, in the 
Omnibus Budget Reconciliation Act of 1993. That act retained the choice 
of the three original reimbursement methods. But it reduced the 
reimbursement available from those original computation methods by 50 
percent.
  My legislation would not extend the program as it was originally 
enacted by the Omnibus Budget Reconciliation Act of 1989. Rather, it 
would reinstate for 5 years the provisions contained in the Omnibus 
Budget Reconciliation Act of 1993. It would not have retroactive 
effect, however. The program would be revived for fiscal year 1998, and 
would terminate at the end of fiscal year 2002.
  As I noted above, the hospitals which would benefit from this program 
are small, rural hospitals providing an essential point of access to 
hospital and hospital-based services in rural areas and small towns. 
Obviously, if we lose these hospitals, we will also have a hard time 
keeping physicians in those communities.
  Mr. President, 44, or 36 percent, of Iowa's 122 community hospitals 
qualified to participate in this program in 1994, and 29, or 24 
percent, chose to participate. I believe that this was the largest 
number of such hospitals of any State.
  For these hospitals, the percentage of all inpatient days 
attributable to Medicare patients was 77.4 percent in 1994, and 
Medicare discharges represented 65.5 percent of total discharges. 
Across all Iowa hospitals, the Association of Iowa Hospitals and Health 
Systems indicates that the Medicare share of inpatient days and 
discharges has increased in recent years, as non-Medicare admissions 
have dropped. As a result, it is likely that the program will provide a 
lifeline for even more Iowa hospitals now than in 1994.
  The expiration of the program has had a devastating effect on many of 
these hospitals, including a number with negative operating margins. 
The bottom line is that many of these hospitals have had, and will 
have, a very difficult time continuing to exist without the Medicare-
Dependent Hospital Program.
  Mr. President, I am also going to continue to work for a limited 
service rural hospital bill. This bill will essentially extend the 
EACH/RPCH Program--the Essential Access Community Hospital and Rural 
Primary Care Hospital Program--to all the States.
  Taken together, these two pieces of legislation will allow the 
smaller hospitals in Iowa--and throughout America--to modify their 
missions in a deliberate and nondisruptive way, and to continue to 
provide the health care services essential to their 
communities.
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