[Congressional Record Volume 146, Number 6 (Tuesday, February 1, 2000)]
[Senate]
[Pages S213-S214]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. HUTCHISON (for herself, Mr. Abraham, and Ms. Snowe):
  S. 2018. A bill to amend title XVIII of the Social Security Act to 
revise the update factor used in making payments to PPS hospitals under 
the Medicare program; to the Committee on Finance.


                 the American Hospital Preservation Act

  Mrs. HUTCHISON. Mr. President, I rise today to introduce, along with 
my distinguished colleague from Michigan, Mr. Abraham, the American 
Hospital Preservation Act.
  This legislation builds upon legislation we introduced last year to 
preserve the ability of American hospitals to continue to provide the 
highest level of health care to be found anywhere in the world. The 
bill will fully restore scheduled cuts in annual inflation adjustments 
for in-patient services given to hospitals under the Medicare program.
  Mr. President, last year Congress passed legislation restoring almost 
$17 billion over five years in scheduled cuts and reductions in 
increases in provider reimbursement payments for various Medicare 
services. While some of these cuts were mandated by the 1997 Balanced 
Budget Act, or ``BBA,'' which laid the historic foundation for the 
balanced federal budget we enjoy today, many more of the cuts and the 
dramatic impact of some of the cuts came as a direct result of policies 
and practices of the Health Care Financing Administration. All told, 
Medicare providers faced an estimated $200 billion in reduced payments 
over the next five years, far in excess of the 1997 estimate of $116 
billion in savings. On top of this, in 1999 the Clinton Administration 
proposed an additional $9 billion in cuts from the Medicare program, on 
top of the BBA savings.
  All of this began to spell disaster for American hospitals, the 
backbone of our nation's health care delivery system and those health 
care providers most heavily dependent on, and sensitive to, the 
Medicare system. Last year, I and many of my colleagues in Congress 
began to hear from hospital administrators, trustees, and health 
professionals that they were struggling to maintain their quality and 
variety of health services in the face of mounting budgetary pressures. 
With the HCFA-imposed cuts they were seeing, many well-reputed and 
efficiently run hospitals even began for the first time to run deficits 
and to project closure in the next few years.
  For many of these hospitals, particularly those in the rural areas of 
our nation, to close would mean not only the loss of life-saving 
medical services to the residents of the area, but also the loss of one 
of the core components of the local community. Jobs would be lost, 
businesses would wither, and the sense of community and stability that 
a local hospital brings would suffer.
  The Balanced Budget Refinement Act Congress passed last year made the 
situation a little brighter for a number of these struggling hospitals. 
It eases the transition from cost-based reimbursement to prospective 
payment for hospital outpatient services, it restores some of the cuts 
to disproportionate share (``DiSh'') payments, and it provides targeted 
relief for teaching hospitals and cancer and rehabilitation hospitals.
  I was particularly pleased that the bill contained a portion of the 
legislation I introduced last year, an expanded version of which I am 
introducing today. While my bill proposed restoring in-patient 
inflation adjustments for all hospitals, the final legislative package 
included such relief only for fiscal year 2000 and only for

[[Page S214]]

designated ``sole community provider'' hospitals. While this was a step 
in the right direction, more must be done not only to ensure survival 
among our nation's hospitals, but also to ensure that they continue to 
be able to provide the highest level and quality of care that they can 
to their patients.
  Hospitals continue to struggle to meet the continued rise in 
personnel costs, prescription drugs, and blood supplies, just to name a 
few areas. And this is coming at a time when hospitals are being doubly 
squeezed by the pressures of flat or reduced government health care 
reimbursement rates and the rapid growth of cost-conscious managed care 
private insurance.
  The bill we are introducing today will make sure that hospitals are 
able to adjust to these changes by ensuring that their Medicare 
payments for their in-patient services actually keep up with the rate 
of hospital inflation. It will restore the full 1.1 percent in 
scheduled reductions from the annual inflation updates for in-patient 
services called for by the BBA. Moreover, rather than just applying to 
a small group of hospitals, this legislation would benefit every 
hospital in America, providing an estimated $6.9 billion in additional 
Medicare payments over the next five years.
  Mr. President, I realize that this bill will require some budgetary 
offset, and that the overall goal of maintaining a solvent and strong 
Medicare system for our nation's seniors is and will remain the 
overriding goal. I look forward to working with my colleagues on both 
sides of the aisle to ensure that this bill meets that objective and 
fits within our overall budget constraints.
  But I believe that, as we enter a new millennium and a new era of 
medical breakthroughs the likes of which we can only now dream about, 
we simply must continue to invest in the core infrastructure of our 
nation's health delivery system--our hospitals. Doing so will ensure 
the future health and longevity of all Americans. This bill will take a 
significant step in that direction, and I urge my colleagues to 
cosponsor and support it.
                                 ______