[Congressional Record Volume 143, Number 29 (Monday, March 10, 1997)]
[Senate]
[Pages S2084-S2086]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Grassley, Mr. Rockefeller, and 
        Mr. Thomas):

  S. 415. A bill to amend the Medicare program under title XVIII of the 
Social Security Act to improve rural health services, and for other 
purposes; to the Committee on Finance.


                THE RURAL HEALTH IMPROVEMENT ACT OF 1997

  Mr. BAUCUS. Mr. President, I rise today to introduce the Rural Health 
Improvement Act of 1997. This bill makes rural health care more 
convenient, more effective, and more responsive.
  The cornerstone of this bill is an extension of the successful 
medical assistance facility program, known as MAF's. Without the Rural 
Health Improvement Act, MAF will remain only a test program which could 
be discontinued in the future. Passing this legislation will make MAF's 
permanent and nationwide.
  Big Timber, MT, is a good example of how MAF could help out a 
community. It is a small ranching and farming town on the edge of the 
Absaroka mountain range. People in that town of Big Timber say hi and 
chat when they see each other on the street. They are very friendly, 
very down to Earth, very basic. Every year, the town puts on the Big 
Timber rodeo and black powder shoot. Big Timber is a town like many in 
rural Montana.
  A few years back, the hospital in Big Timber had to shut down, as is 
the case with many hospitals in our country. They could not make ends 
meet with the regulations of the current system. But instead of 
watching their health care services leave town, the people of Big 
Timber got together and applied for a MAF waiver.
  I was fortunate enough to be in Big Timber last summer for the grand 
opening of their new MAF building. It was a pretty typical July day in 
Montana, which means it was very hot. But that did not stop the whole 
town from turning out for the dedication ceremony. The MAF Program not 
only saved Big Timber's hospital, but it renewed their sense of 
community spirit. It was wonderful to watch, wonderful to see. Big 
Timber faced the same situation many rural communities face every day. 
They found the solution.
  Rural life has qualities you cannot find in big cities: The crime 
rate is low;

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people go out of their way to help a friend in need; and folks take the 
time to know their neighbors, even if that neighbor happens to live 5 
miles down the road.
  But challenges come with living in such remote surroundings. One of 
the biggest is access to quality health care. Randy Dixon, a 
physician's assistance at Philipsburg MAF, really hit the nail on the 
head when he wrote to me:

       Having arrived in your home State, I am greatly impressed 
     with its magnitude and expanse. However, those same 
     attributes turn into detriments when you are considering 
     access to primary health care. My history and recent 
     acquaintances have taught me that the people of Montana are a 
     tough, resilient people. But those acquaintances also tell me 
     that they have not had consistent, reliable primary care 
     available when that ``toughness'' had a dent or two in it.

  Randy sums up life in rural Montana pretty well, but what he really 
underscores is the importance of rural medical facilities. In Montana, 
vast distances and bad weather are about the only two things you can 
count on. Rural hospitals make up a network that blankets Montana and 
makes access to health care convenient for folks who are isolated by 
distance and weather. When one of these hospitals closes its doors, the 
network falls apart, and people can no longer depend on access to 
health care.
  Jordan, MT, is another example. Without an MAF, the nearest health 
facility would be Miles City, over 80 miles away. And whether you have 
a serious medical emergency or simply need a routine checkup, 80 miles 
is too far, often, to travel.
  Rural communities often don't have the patient base or the money to 
support a fully functional hospital. Yet, the care that these hospitals 
provide is irreplaceable.
  Essentially, Mr. President, there are a lot of communities like 
Jordan, like Big Timber, Ekalaka, and other small communities in 
Montana and other parts of our Nation. Under my bill, an MAF can 
provide emergency services during the day and have someone on call at 
night. In a small town, that means that the hospital can be opened at a 
moment's notice. Folks can still have immediate access to emergency 
care, and rural hospitals do not have some of the same burdens and 
overhead expenses and all the redtape and regulations that the big 
hospitals, unfortunately, often have.
  MAF makes exceptions to rules like that.
  The whole point of this legislation is to make the MAF waiver 
permanent, so that hospitals do not have to apply year after year for 
MAF status. Rather, once that status is determined, that status can be 
permanent and people in rural communities can rest a little more 
assured they are going to have pretty good health care.
  Mr. GRASSLEY. Mr. President, I rise in support of the Rural Health 
Improvement Act of 1997, which I joined in introducing today with 
Senators Baucus, Rockefeller, and Thomas.
  We've heard a lot lately, Mr. President, about how hospitals are 
doing better financially than they have in years. ProPAC's recent 
report to the Congress indicated that the average prospective payment 
margins for hospitals are becoming healthy again. In 1995, the average 
PPS margin was 7.9 percent; only 3 years before, the average PPS 
margins were negative.
  This has truly been a remarkable turnaround, and I applaud hospitals 
for their success at improving their efficiency. We must remember, 
however, that anytime we use average statistics, there are those which 
are below the average, as well as those are above it.
  In my State of Iowa, as in many areas of the United States, small 
rural hospitals are essential links in the chain of health care access. 
For these small hospitals, however, economic survival is a constant 
struggle.
  There are limits to what we here in Congress can do to help these 
hospitals survive. But I believe that we have an obligation to do our 
best to give rural Americans a fighting chance at access to health 
care. And at the very least, we must not hinder small rural hospitals 
as they try to serve their essential role.
  Unfortunately, our Medicare policies have often been an obstacle, 
rather than a help. Our inflexible rules and reimbursement policies 
have made it even harder for small, rural hospitals to survive. I am 
pleased to report that the legislation we have introduced today is an 
important step toward making the Medicare Program a true partner with 
these hospitals.
  This bill expands two successful demonstration projects: the Montana 
Medical Assistance Facility project, and the Essential Access Community 
Hospital, and Rural Primary Care Hospital projects. These projects have 
been limited to eight States, with Iowa not among them. Mr. President, 
I believe that the purpose of demonstration projects is to see what 
works. Well, the results from the eight States have been very good. It 
is high time to make the same help available to hospitals in all 50 
States. That is what this bill will do.
  This legislation allows the designation of certain hospitals as 
critical access hospitals. To qualify, hospitals must have average 
lengths of stay of not more than 96 hours, referral relationships with 
larger hospitals, and 15 or fewer beds, which may be used either for 
inpatient care or as swing beds. The bill also imposes a general 
distance requirement of 35 miles from another hospital, but this 
requirement need not be met if the State certifies that the hospital is 
a necessary provider of services to residents in the area. The ability 
of States to waive the 35-mile rule is crucial to hospitals in Iowa, 
where the distances between communities are not as vast as in some 
Western states.
  Critical access hospitals will be given greater flexibility in 
meeting Medicare regulations that were designed for larger hospitals. 
Most important, the legislation will help these hospitals to make their 
transition from acute care to less expensive primary care. This is why 
the General Accounting Office has found that the demonstration project 
has not only assisted the hospitals, and the rural Americans they 
serve, but that it has actually saved money for the Medicare Program.
  Mr. President, as you might expect, this bill will make a big 
difference in Iowa. In 1995, 43 Iowa hospitals had six or fewer 
inpatients per day. Of these 43, 15 had negative operating margins. 
Many of these are not county hospitals, and thus are not subsidized by 
county tax revenues. These hospitals are in a real bind, and many will 
benefit from this legislation. Some of the small towns which are likely 
to be helped are Hawarden, Primghar, Eldora, Rock Valley, Corning, and 
Rock Rapids. For these Iowa communities, and for many others across 
America, the Rural Health Improvement Act of 1997 could be a lifesaver. 
I urge my colleagues to support this bill.
  Mr. ROCKEFELLER Mr. President, I am pleased to join my colleagues 
from Montana, Iowa, and Wyoming, Senators Baucus, Grassley, and Thomas, 
in re-introducing a very important bill for rural communities. My 
colleague from Montana, Senator Baucus, has long been a strong advocate 
of rural health care issues and I am very pleased to be working with 
him on such an important issue to rural America. Since Medicare's 
enactment in 1965, the Medicare Program has played a vital role in 
making sure senior citizens living in rural areas have adequate access 
to health care services. A disproportionate number of the elderly live 
in rural areas. As a result, rural hospitals are heavily reliant on the 
Medicare Program.
  Our legislation will provide some basic assistance to help rural 
hospitals keep their doors open. The changes we are recommending are 
based on carefully studied pilot projects in West Virginia, Montana, 
and other States, and we think it is time to apply some very good ideas 
to the rest of the Nation. I am pleased that President Clinton's budget 
would also expand Essential Access Community Hospital [EACH] and the 
Rural Primary Care Hospital [RPCH] program. We are very interested in 
seeing the specific details of his proposal.
  Mr. President, most rural hospitals have only one choice when faced 
with shrinking occupancy rates, declining Medicare and Medicaid 
reimbursement rates, and intense market pressures to lower their costs: 
close their doors. That is where our bill steps in. When being a full-
service hospital is no longer viable, our bill gives them a way to 
become what we call a critical access hospital--a way to preserve 
essential primary care and emergency health care services for rural 
America.
  West Virginia is one of only seven States that is currently allowed 
to operate a EACH/RPCH Program. Since we

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introduced our bill in the 104th Congress, the EACH/RCPH Program, once 
again, proved to be the salvation for a rural West Virginia county that 
was on the brink of losing its access to primary care and emergency 
care services. Because of the availability of the EACH/RCPH Program in 
West Virginia, the local residents of Calhoun County, WV were able to 
merge and reorganize two existing, but financially strapped, health 
care providers, the Minnie Hamilton Primary Care Center and Calhoun 
General Hospital. A neighboring hospital, Stonewall Jackson, stepped in 
and offered financial and administrative assistance during this very 
difficult period of time. As a result, Calhoun County now has a 
thriving and financially stable health care provider that is meeting 
the health care needs of its local residents. This is huge relief to 
the residents of Calhoun County.

  Mr. President, our bill is modeled on two separate, ongoing rural 
hospital demonstration projects, the EACH-RPCH Program, the other is 
the Montana Medical Assistance Facility [MAF] Program. The basic 
concept is to place limits on the number of licensed beds and patient 
length of stays in the participating rural hospitals, and in exchange, 
hospitals receive Medicare payment rates that will cover their patient 
care costs, along with badly needed relief from regulations that are 
intended for full-scale, acute care hospitals.
  We believe, based on work by the General Accounting Office, that our 
legislation will wind up saving the Medicare Program money. We are 
encouraging the development of rural health networks, to help small, 
rural hospitals save money and improve quality by working more closely 
with larger, full-service hospitals.
  I am very proud to note that West Virginia has been a leader in 
helping small, rural hospitals figure out how to adapt and cope with 
rapid changes in the economics of health care. Six hospitals in West 
Virginia are federally designated RPCH hospitals and six hospitals are 
federally designated EACH hospitals. I know that many other rural 
States and rural hospitals are anxious to enjoy the benefits of this 
program.
  Our legislation draws on the lessons learned from the pilot programs, 
improves on them, and expands them so that rural hospitals and patients 
all across America will have the same benefits. Our legislation will 
give other States the same opportunities already available in 
California, Colorado, Kansas, New York, North Carolina, South Dakota, 
and West Virginia through the EACH/RPCH Program and in Montana through 
the MAF Program.
  Our legislation is targeted at the 1,186 rural hospitals nationwide 
with fewer than 50 beds. While these hospitals are essential to 
assuring access to health care services in their local communities, 
these hospitals account for only 2 percent of total Medicare payments 
to hospitals. In return for certain limits, rural hospitals can count 
on Medicare payments and regulatory relief to fit their circumstances. 
They can form new relationships with health care providers in their 
community, and larger hospitals farther away, so patients have the kind 
of access to care where it is best to get it.
  Mr. President, as we move to adopt Medicare reforms in the Finance 
Committee later this year, I will be working to make sure that 
commonsense reforms to help rural hospitals are also adopted.
                                 ______