[Congressional Record Volume 146, Number 35 (Monday, March 27, 2000)]
[Senate]
[Pages S1748-S1749]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. L. CHAFEE (for himself and Ms. Snowe):
  S. 2299. A bill to amend title XIX of the Social Security Act to 
continue State Medicaid disproportionate share hospital (DSH) 
allotments for fiscal year 2001 at the levels for fiscal year 2000; to 
the Committee on Finance.


               The Medicaid DSH Preservation Act of 2000

  Mr. L. CHAFEE. Mr. President, I am pleased to be joined today by 
Senator Snowe in introducing the Medicaid DSH Preservation Act of 2000. 
This legislation will freeze Medicaid disproportionate share hospital 
(DSH) reductions at Fiscal Year 2000 levels, thereby mitigating the 
forthcoming reductions in Fiscal Years 2001 and 2002. This bill will 
also provide a growth rate adjustment to help compensate for the 
increases in the cost of providing care to the most needy and indigent 
patients.
  In addition to the Medicare payment reductions in the Balanced Budget 
Act of 1997 (BBA), federal payments to the Medicaid DSH program were 
also reduced by $10.4 billion over 5 years, with these reductions being 
absorbed by States and our Nation's vulnerable safety net hospitals. 
Medicaid DSH payments help reimburse hospitals' costs of treating 
Medicaid patients, particularly those with complex medical needs. These 
payments also make it possible for communities to care for the 
uninsured--a population that is projected to increase considerably 
during the next few years.

[[Page S1749]]

  The impact of these financial pressures was not fully anticipated at 
the time the BBA was enacted. Other Financial pressures such as 
declining Medicaid enrollment have had a significant impact on these 
safety net hospitals, thereby adding to the rapidly rising number of 
Americans without health insurance. At a time when our Nation's 
uninsured rate continues to climb above 44 million, it makes little 
sense to be reducing much-needed Medicaid DSH payments to our nation's 
safety net hospitals.
  Hospitals in Rhode Island will absorb $400 million in reductions as a 
result of changes made to the Medicare and Medicaid programs in the 
BBA. Ten out of fourteen hospitals in my State had operating losses in 
1999. After the BBA was enacted, it was predicted that cuts in federal 
Medicare and Medicaid payments would cost hospitals in Rhode Island 
$220 million over 5 years; however, this estimate has proven to be 
about $180 million off the mark. Every other State is experiencing 
similar problems. Since the BBA was signed into law, the American 
Hospital Association commissioned a study by the Lewin Group, which 
estimated that there would be $71 billion less paid to hospitals 
nationwide over 5 years. The original estimate of the impact of the BBA 
was $18 billion. While the Balanced Budget Refinement Act of 1999 
provided some relief to our Nation's financially strapped hospitals, 
that relief was targeted to the Medicare program. Clearly, more needs 
to be done to keep our vulnerable safety net hospitals from continuing 
on this downward spiral.
  This legislation we are introducing today represents a commonsense 
compromise that will help prevent the further erosion of our Nation's 
safety net hospitals and the long-term viability of our country's 
health care system.
  I urge my colleagues to join me in supporting this important 
legislation and I ask unanimous consent that the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2299

       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 ``Medicaid DSH Preservation 
     Act of 2000''.

     SEC. 2. CONTINUATION OF MEDICAID DSH ALLOTMENTS AT FISCAL 
                   YEAR 2000 LEVELS FOR FISCAL YEAR 2001.

       Section 1923(f) of the Social Security Act (42 U.S.C. 
     1396r-4(f)), as amended by section 601 of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, 
     as enacted into law by section 1000(a)(6) of Public Law 106-
     113 (113 Stat. 1501A-394), is amended--
       (1) in paragraph (2)--
       (A) in the heading, by striking ``2002'' and inserting 
     ``2001'';
       (B) in the matter preceding the table, by striking ``2002'' 
     and inserting ``2001''; and
       (C) in the table in such paragraph, by striking the column 
     labeled ``FY 02'' relating to fiscal year 2002; and
       (2) in paragraph (3)--
       (A) in the heading, by striking ``2003'' and inserting 
     ``2002''; and
       (B) in subparagraph (A), by striking ``2003'' and inserting 
     ``2002''.

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