[Congressional Record Volume 145, Number 78 (Thursday, May 27, 1999)]
[Extensions of Remarks]
[Page E1118]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF THE MEDICARE COMMUNITY NURSING DEMONSTRATION EXTENSION 
                              ACT OF 1999

                                 ______
                                 

                            HON. JIM RAMSTAD

                              of minnesota

                    in the house of representatives

                         Thursday, May 27, 1999

  Mr. RAMSTAD. Mr. Speaker, as a strong supporter of home- and 
community-based services for the elderly and individuals with 
disabilities, I rise to re-introduce legislation similar to that which 
I sponsored in the 104th and 105th Congresses to extend the 
demonstration authority under the Medicare program for Community 
Nursing Organization (CNO) projects.
  CNO projects serve Medicare beneficiaries in home- and community-
based settings under contracts that provide a fixed, monthly capitation 
payment for each beneficiary who elects to enroll. The benefits include 
not only Medicare-covered home care and medical equipment and supplies, 
but other services not presently covered by traditional Medicare, 
including patient education, case management and health assessments. 
CNOs are able to offer extra benefits without increasing Medicare costs 
because of their emphasis on primary and preventative care and their 
coordinated management of the patient's care.
  The current CNO demonstration program, which was authorized by 
Congress in 1987 and extended for 2 years in the Balanced Budget Act of 
1997, involves more than 6,000 Medicare beneficiaries in Arizona, 
Illinois, Minnesota, and New York. It is designed to determine the 
practicality of prepaid community nursing as a means to improve home 
health care and reduce the need for costly institutional care for 
Medicare beneficiaries.
  To date, the projects have been effective in collecting valuable data 
to determine whether the combination of capitated payments and nurse-
case management will promote timely and appropriate use of community 
nursing and ambulatory care services and reduce the use of costly acute 
care services. Authority for these effective programs is now set to 
expire on December 31, 1999.
  Mr. Speaker, while I am glad Congress extended the demonstration 
authority for the CNO projects last session, I am disappointed that the 
Health Care Financing Administration is so anxious to terminate this 
important and effective program. In 1996, HCFA extended the 
demonstration for one year to allow them to better evaluate the costs 
or savings of the services available under the program, learn more 
about the benefits or barriers of a partially capitated program for 
post-acute care, review Medicare payments for out-of-plan services 
covered in a capitation rate, and provide greater opportunity for 
beneficiaries to participate in these programs.
  Frankly, in order to do all this analysis of the program, we need 
more time to evaluate the extensive data that has been collected. We 
should not let the program die as the data is reviewed. We need to act 
now to extend this demonstration authority for another three years.
  This experiment provides an important example of how coordinated care 
can provide additional benefits without increasing Medicare costs. For 
Medicare enrollees, extra benefits include expanded coverage for 
physical and occupational therapy, health education, routine 
assessments and case management services--all for an average monthly 
capitation rate of about $89. In my home State of Minnesota, the Health 
Seniors Project is a CNO serving over 1,600 enrollees in four sites, 
two of which are urban and two rural.
  These demonstrations should also be extended in order to ensure a 
full and fair test of the CNO managed care concept. These 
demonstrations are consistent with our efforts to introduce a wider 
range of managed care options for Medicare beneficiaries. I believe we 
need more time to evaluate the impact of CNOs on patient outcomes and 
to assess their capacity for operating under fixed budgets.
  Mr. Speaker, it is important to recognize that the extension of this 
demonstration will not increase Medicare expenditures for care. CNOs 
actually save Medicare dollars by providing better and more accessible 
care in home and community settings, allowing beneficiaries to avoid 
unnecessary hospitalizations and nursing home admissions. By 
demonstrating what a primary care oriented nursing practice can 
accomplish with enrollees who are elderly or disabled, CNOs are helping 
show us how to increase benefits, save scarce dollars and improve the 
quality of life for patients.
  Mr. Speaker, I urge my colleagues to consider this bill carefully and 
join me in seeking to extend these cost-savings and health care-
enhancing CNO demonstrations for another three years.

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