[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Senate]
[Pages S10392-S10394]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Domenici, Mr. Daschle, Mr. Kerrey, 
        Mr. Inouye, Mr. Bingaman, Mr. Cochran, Ms. Mikulski, Mr. Burns, 
        Mrs. Boxer, Mr. McConnell, Mr. Bunning, Mr. Jeffords, Mr. Robb, 
        Mr. Santorum, and Mr. Dodd):
  S. 1500. A bill to amend title XVIII of the Social Security Act to 
provide for an additional payment for services provided to certain 
high-cost individuals under the prospective payment system for skilled 
nursing facility service, and for other purposes; to the Committee on 
Finance.


  Medicare Beneficiary Access To Quality Nursing Home Care Act of 1999

  Mr. HATCH. Mr. President, I rise today along with the distinguished 
Chairman of the Budget Committee, Senator Domenici, and other 
colleagues in introducing the ``Medicare Beneficiary Access to Quality 
Nursing Home Care Act of 1999.'' This bill will help ensure that 
Medicare beneficiaries will continue to have access to vitally needed 
nursing home care services.
  When Congress passed the Balanced Budget Act of 1997, the BBA, we 
created a new prospective payment system (PPS) for skilled nursing 
facilities (SNF). While the industry generally supported the SNF PPS, 
there clearly have been some unintended consequences as a result of the 
implementation the new payment system which is now beginning to affect 
patient care.
  We have an obligation to Medicare beneficiaries, and particularly 
those in nursing homes as well as those who need to gain admission to 
nursing homes, to correct this problem. This legislation is designed 
specifically to address the problem with patient access to nursing home 
care.
  The measure we are introducing today is designed to address two 
significant problems that have occurred as a result of the 
implementation of the PPS.
  First, the bill provides additional monies to care for the so-called 
high-acuity SNF patients who require non-therapy ancillary services for 
conditions such as cancer, hip fracture, and stroke.
  Second, with respect to the market basket update, the bill closes the 
gap between the inaccurate inflation market basket estimate and the 
actual cost increases between fiscal years 1995 and 1998.
  It is my understanding that both solutions could be easily 
implemented by HCFA.
  Mr. President, let me focus more specifically on each of the two 
provisions.
  With respect to non-therapy ancillary care, the bill proposes to add-
on additional monies under the federal per diem rate for 15 categories 
of care. We are now finding that high-acuity and medically complex 
patients are being shortchanged because the current case-mix system 
does not accurately measure or account for patients with high medical 
complexities which utilize greater ancillary services.
  HCFA has even acknowledged that they do not have accurate data to 
properly compensate for such non-therapy ancillary care. According to 
HCFA, they believe that more accurate data reflecting the case-mix for 
sicker patients should be available in 2001.
  Unfortunately, we now know that beneficiaries are having difficulty 
receiving non-therapy ancillary care today. For some, waiting 2 years 
for the HCFA data is simply not an option.
  Accordingly, the ``Medicare Beneficiary Access to Quality Nursing 
Home Care Act'' will provide interim relief until HCFA has developed 
more complete and accurate data. The bill provides additional funds for 
15 RUS III categories, or the so-called resource utilization groups.
  These RUGS were chosen because they represent categories of services 
that closely match the diagnoses for high-acuity patients. Such 
additional funds would only be provided for a two-year period, or less, 
until the Secretary of Health and Human Services has corrected the data 
to properly reflect the costs of non-therapy ancillary care.
  It is my understanding that HCFA believes they can implement a new 
case mix methodology within this time frame.
  In response to concerns expressed to me by HCFA over Y2K problems and 
the difficulty of any systems' changes at this point in the PPS 
implementation, my bill provides for a simple, temporary add-on federal 
dollars to the federal per diem component.
  Based on informal comments from HCFA officials, the bill should be 
easy for the agency to implement in time to have an immediate positive 
impact on patient care.
  The second feature in our bill attempts to close the gap between the 
inflation adjuster--the market basket update--and the actual cost 
increases. Recent data are now showing that HCFA's market basket 
increase is well below actual inflation costs for nursing home care.
  When Congress passed the BBA, the year 1995 was chosen as the base 
year for future inflation adjustments because it provided the most 
recent set of complete cost reporting data for PPS implementation.
  HCFA was charged with developing a market basket of nursing home 
goods and services to trend forward to 1998, which was when PPS was 
implemented. Unfortunately, it appears that HCFA has underestimated the 
market basket index by not considering the cost of nursing home 
services. In addition, the statute requires the inflation adjuster to 
be market basket minus one, which only makes the estimate worse.
  Evidence is now available to illustrate that the market basket 
estimate is inadequate to properly compensate for nursing home care.
  In 1996, HCFA's market basket increase was approximately 2.7 percent, 
while data now indicates that the actual cost increase was 
approximately 10.5 percent. Preliminary 1997 cost data reflect similar 
differences between the HCFA market basket index and the actual change 
in costs experienced by nursing facilities.
  My legislation provides easily implemented relief to nursing homes 
which are being short changed by inadequate market basket estimates. 
The bill eliminates the ``minus one'' from the inflation adjuster for 
1996, 1997, and 1998, thereby providing a one-percent increase of the 
index over three years, compounded.
  While there may need to be further modification to the actual market 
basket, this straightforward legislative solution enables HCFA to 
implement this provision immediately. This solution will provide 
meaningful and practical relief to nursing homes so they can continue 
to provide quality care for the more medically complex Medicare 
beneficiaries.
  Mr. President, many nursing homes are on the verge of filing for 
bankruptcy and others may be closing their doors due to various PPS 
implementation problems. As a result, Medicare beneficiaries are 
finding themselves on long waiting lists to be admitted to a skilled 
nursing facility. Others are remaining in hospitals for extended stays, 
while they wait for nursing home availability.
  The ``Medicare Beneficiary Access to Quality Nursing Home Care Act'' 
is a common sense solution to address these very real problems. It 
provides

[[Page S10393]]

two solutions that HCFA can implement today without being mired in Year 
2000 compliance efforts.
  I would add that I am pleased that the Chairman of the Finance 
Committee, Senator Roth, has indicated his interest in moving a 
bipartisan BBA technical bill following the August recess.
  I have written to Senator Roth asking him to carefully review our 
skilled nursing facility bill as he develops a BBA technical 
corrections bill over the next several weeks. I strongly believe this 
bill serves as a viable option on which to address the PPS problem that 
so many nursing homes are facing today.
  I ask unanimous consent that the complete text of the bill be printed 
in the Record.
  Mr. President, I want to express my thanks to my colleague and good 
friend, Senator Domenici, for his valued help in developing the bill 
with me as well as to the many others Senators who have joined us today 
as cosponsors.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1500

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Beneficiary Access 
     to Quality Nursing Home Care Act of 1999''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Beneficiaries under the medicare program under title 
     XVIII of the Social Security Act are experiencing decreased 
     access to skilled nursing facility services due to inadequate 
     reimbursement under the prospective payment system for such 
     services under section 1888(e) of such Act.
       (2) Such inadequate reimbursement may force skilled nursing 
     facilities to file for bankruptcy and close their doors, 
     resulting in reduced access to skilled nursing facility 
     services for medicare beneficiaries.
       (3) The methodology under the prospective payment system 
     for skilled nursing facility services has made it more 
     difficult for medicare beneficiaries to find nursing home 
     care. Some beneficiaries are remaining in hospitals for 
     extended stays due to reduced access to nursing homes. Others 
     are placed in nursing homes that are hours away from family 
     and friends.
       (4) The Health Care Financing Administration has indicated 
     that the prospective payment system for skilled nursing 
     facility services does not accurately account for the costs 
     associated with providing medically complex care (non-therapy 
     ancillary services and supplies). Due to Year 2000 problems, 
     the Health Care Financing Administration claims that it will 
     be unable to properly account for such costs under such 
     system.
       (5) The Medicare Payment Advisory Commission (MedPAC) has 
     indicated that payments to skilled nursing facilities under 
     the medicare program may not be adequate for beneficiaries 
     who need relatively high levels of non-therapy ancillary 
     services and supplies. According to MedPAC, such inadequate 
     funding could result in access problems for beneficiaries 
     with medically complex conditions.
       (6) In order to provide adequate payment under the 
     prospective payment system for skilled nursing facility 
     services, such system must take into account the costs 
     associated with providing 1 or more of the following 
     services:
       (A) Ventilator care.
       (B) Tracheostomy care.
       (C) Care for pressure ulcers.
       (D) Care associated with individuals that have experienced 
     a stroke or a hip fracture.
       (E) Care for non-vent, non-trach pneumonia.
       (F) Dialysis.
       (G) Infusion therapy.
       (H) Deep vein thrombosis.
       (I) Care associated with individuals with transient 
     peripheral neuropathy, a chronic obstructive pulmonary 
     disease, congestive heart failure, diabetes, a wound 
     infection, a respiratory infection, sepsis, tuberculosis, 
     HIV, or cancer.
       (7) A temporary legislative solution is necessary in order 
     to ensure that medicare beneficiaries with complex conditions 
     continue to receive access to appropriate skilled nursing 
     facility services.
       (8) The skilled nursing facility market basket increase 
     over the last 3 years evidences a critical payment gap that 
     exists between the actual cost of providing services to 
     medicare beneficiaries residing in a skilled nursing facility 
     and the reimbursement levels for such services under the 
     prospective payment system. In addition, the Health Care 
     Financing Administration, in establishing the skilled nursing 
     facility market basket index under section 1888(e)(5)(A) of 
     the Social Security Act only accounted for the cost of goods, 
     but not for the cost of services, as such section requires.

     SEC. 3. MODIFICATION OF CASE MIX CATEGORIES FOR CERTAIN 
                   CONDITIONS.

       (a) In General.--For purposes of applying any formula under 
     paragraph (1) of section 1888(e) of the Social Security Act 
     (42 U.S.C. 1395yy(e)), for services provided on or after 
     October 1, 1999, and before the earlier of October 1, 2001, 
     or the date described in subsection (c), the Secretary of 
     Health and Human Services shall increase the adjusted Federal 
     per diem rate otherwise determined under paragraph (4) of 
     such section for services provided to any individual during 
     the period in which such individual is in a RUGS III category 
     by the applicable payment add-on as determined in accordance 
     with the following table:

RUGS III Category                             Applicable Payment Add-On
  RUC........................................................$73.57....

  RUB........................................................$23.06....

  RUA........................................................$17.04....

  RVC........................................................$76.25....

  RVB........................................................$30.36....

  RVA........................................................$20.93....

  RHC........................................................$54.07....

  RHB........................................................$27.28....

  RHA........................................................$25.07....

  RMC........................................................$69.98....

  RMB........................................................$30.09....

  RMA........................................................$24.24....

  SE3........................................................$98.41....

  SE2........................................................$89.05....

  CA1.......................................................$27.02.....

       (b) Update.--The Secretary shall update the applicable 
     payment add-on under subsection (a) for fiscal year 2001 by 
     the skilled nursing facility market basket percentage change 
     (as defined under section 1888(e)(5)(B) of the Social 
     Security Act (42 U.S.C. 1395yy(e)(5)(B)) applicable to such 
     fiscal year.
       (c) Date Described.--The date described in this subsection 
     is the date that the Secretary of Health and Human Services 
     implements a case mix methodology under section 
     1888(e)(4)(G)(i) of the Social Security Act (42 U.S.C. 
     1395yy(e)(4)(G)(i)) that takes into account adjustments for 
     the provision of non-therapy ancillary services and supplies 
     such as drugs and respiratory therapy.

     SEC. 4. MODIFICATION TO THE SNF UPDATE TO FIRST COST 
                   REPORTING PERIOD.

       (a) In General.--Section 1888(e) of the Social Security Act 
     (42 U.S.C. 1395yy(e)) is amended--
       (1) in paragraph (3)(B)(i), by striking ``minus 1 
     percentage point''; and
       (2) in paragraph (4)(B), by striking ``reduced (on an 
     annualized basis) by 1 percentage point''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to services provided on or after October 1, 1999.

  Mr. DOMENICI. Mr. President, I rise today to join with Senator Hatch 
in introducing the ``Medicare Beneficiary Access to Quality Nursing 
Home Care Act of 1999.''
  I am convinced that this bill is urgently needed to assure our senior 
citizens have access to quality nursing home care through the Medicare 
program.
  We can all take a certain amount of pride in the bipartisan Balanced 
Budget Act of 1997, which contained the most sweeping reforms for 
Medicare since the program was enacted in 1965. These reforms have 
extended the solvency of the program to 2015 and brought new health 
coverage options to seniors throughout the country.
  However, it should come as no surprise that legislation as complex as 
the Balanced Budget Act (BBA), as well as its implementation by the 
Health Care Financing Administration, has produced some unintended 
consequences that need to be corrected.
  That is exactly the situation in the case of nursing homes. The 
transition to the Prospective Payment System (PPS) for Skilled Nursing 
Facilities (SNFs) that was contained in the BBA is seriously 
threatening access to needed care for seniors all across the country.
  In May, 63 Senators joined with me in sending a bipartisan appeal to 
the Secretary of Health and Human Services urging her to address the 
growing crisis in the nursing home industry through administrative 
action. To date, we have received no direct response from the Secretary 
on this matter, nor has the Health Care Financing Administration (HCFA) 
shown any willingness to address the problem.
  With time quickly running out on many nursing home operators, I 
believe Congress must act before it is too late to assure our seniors 
will continue to have access to quality nursing home care.
  Let me note that Congress is not alone in believing there is a 
problem here. Dr. Gail Wilensky, the Chair of the Medicare Payment 
Advisory Commission, recently testified before the Senate Finance 
Committee that some Medicare patients are having difficulty accessing 
care in skilled nursing facilities. Dr. Wilensky went on to say that 
the current reimbursement system adopted by HCFA does not adequately 
account for patients requiring high levels of nontherapy ancillary 
services and supplies.

[[Page S10394]]

  In New Mexico, there are currently 81 nursing homes in the state 
serving about 6,000 patients, and I am convinced that the current 
Medicare payment system, as implemented by HCFA, simply does not 
provide enough funds to cover the costs being incurred by these 
facilities when they care for our senior citizens.
  For rural states like New Mexico, corrective action is critically 
important. Many communities in my state are served by a single facility 
that is the only provider for many miles. If such a facility were to 
close, patients in that home would be forced to move to facilities much 
farther away from their families. Moreover, nursing homes in smaller, 
rural communities often operate on a razor thin bottom line, and, for 
them, the reductions in Medicare reimbursements have been especially 
devastating.
  The legislation we are introducing today would go a long way toward 
restoring stability in the nursing home industry. It would increase 
reimbursement rates through two provisions.
  First, a 2-year period, the bill modestly increases payments for 15 
high acuity conditions, like cancer, hip fracture, and stroke. At the 
end of 2 years, HCFA expects that they will have the data to more 
properly reflect the high costs of these cases in the payment system.
  Second, the bill eliminates the one percentage point reduction in the 
annual inflation update for all reimbursement rates for skilled nursing 
facilities.
  I look forward to working with Senator Hatch and the other cosponsors 
of this bill in pushing for passage of this critical legislation when 
we return in September.
                                 ______