[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[Senate]
[Pages S4315-S4316]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN (for himself, Mr. Thomas, Mr. Craig, and Mr. 
        Feingold):
  S. 2610. A bill to amend title XVIII of the Social Security Act to 
improve the provision of items and services provided to Medicare 
beneficiaries residing in rural areas; to the Committee on Finance.


           the medicare fairness in reimbursement act of 2000

 Mr. HARKIN. Mr. President, I am pleased to be joined today by 
my colleagues, Senator Thomas, Senator Craig and Senator Feingold, to 
introduce the ``Medicare Fairness in Reimbursement Act of 2000.'' This 
legislation addresses the terrible unfairness that exists today in 
Medicare payment policy.
  According to the latest Medicare figures, Medicare payments per 
beneficiary by state of residence ranged from slightly more than $3000 
to well in excess of $6500. For example, in Iowa, the average Medicare 
payment was $3456, nearly a third less than the national average of 
$5,034. In Wyoming the situation is worse, with an average payment of 
approximately $3200.
  This payment inequity is unfair to seniors in Iowa and Wyoming, and 
it is unfair to rural beneficiaries everywhere. The citizens of my home 
state pay the same Medicare payroll taxes required of every American 
taxpayer. Yet they get dramatically less in return.
  Ironically, rural citizens are not penalized by the Medicare program 
because they practice inefficient, high cost medicine. The opposite is 
true. The low payment rates received in rural areas are in large part a 
result of their historic conservative practice of health care. In the 
early 1980's rural states' lower-than-average costs were used to 
justify lower payment rates, and Medicare's payment policies since that 
time have only widened the gap between low- and high-cost states.
  Mr. President, late last year I wrote to the Health Care Financing 
Administration (HCFA) and I asked them a simple question. I asked their 
actuaries to estimate for me the impact on Medicare's Trust Funds, 
which at that time were scheduled to go bankrupt in 2015, if average 
Medicare payments to all states were the same as Iowa's.
  I've always thought Iowa's reimbursement level was low. But HCFA's 
answer suprised even me. The actuaries found that if all states were 
reimbursed at the same rate as Iowa, Medicare would be solvent for at 
least 75 years, 60 years beyond their projections.
  I'm not suggesting that all states should be brought down to Iowa's 
level. But there is no question that the long-term solvency of the 
Medicare program is of serious national concern. And as Congress 
considers ways to strengthen and modernize the Medicare program, the 
issue of unfair payment rates needs to be on the table.
  The bill we are introducing today, the ``Medicare Fairness in 
Reimbursement Act of 2000'' sends a clear signal. These historic wrongs 
must be righted. Before any Medicare reform bill passes Congress, I 
intend to make sure that rural beneficiaries are guaranteed access to 
the same quality health care services of their urban counterparts.
  Mr. President, our legislation does the following:
  Requires HCFA to improve the fairness of payments under the original 
Medicare fee-for-services system by adjusting payments for items and 
services so that no state is greater than 105% above the national 
average, and no state is below 95% of the national average. An 
estimated 30 states would benefit under these adjustments, based on 
1998 data from the Ways and Means Green Book.
  Requires improvements in the collection and use of hospital wage data 
by occupational category. Experts agree the current system of 
collecting hospital data ``lowballs'' the payment received by rural 
hospitals. Large urban hospitals are overcompensated today because they 
have a much higher number of highly-paid specialists and sub-
specialists on their staff, while small rural hospitals tend to have 
more generalists, who aren't as highly paid.
  Ensures that beneficiaries are held harmless in both payments and 
services.
  Ensures budget neutrality.
  Automatically results in adjustment of Medicare managed care payments 
to reflect increased equity between rural and urban areas.

[[Page S4316]]

  This legislation simply ensures basic fairness in our Medicare 
payment policy. I urge my Senate colleagues, no matter what state 
you're from, to consider our bill and join us in supporting this common 
sense Medicare reform. Thank you.
  Mr. President, I ask unanimous consent that the text of our bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2610

       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 Fairness in 
     Reimbursement Act of 2000''.

     SEC. 2. IMPROVING FAIRNESS OF PAYMENTS UNDER THE MEDICARE 
                   FEE-FOR-SERVICE PROGRAM.

       (a) Title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.) is amended by adding at the end the following new 
     sections:


 ``improving fairness of payments under the original medicare fee-for-
                            service program

       ``Sec. 1897. (a) Establishment of System.--Notwithstanding 
     any other provision of law, the Secretary shall establish a 
     system for making adjustments to the amount of payment made 
     to entities and individuals for items and services provided 
     under the original medicare fee-for-service program under 
     parts A and B.
       ``(b) System Requirements.--
       ``(1) Adjustments.--Under the system described in 
     subsection (a), the Secretary (beginning in 2001) shall make 
     the following adjustments:
       ``(A) Certain states above national average.--If a State 
     average per beneficiary amount for a year is greater than 105 
     percent (or 110 percent in the case of the determination made 
     in 2000) of the national average per beneficiary amount for 
     such year, then the Secretary shall reduce the amount of 
     applicable payments in such a manner as will result (as 
     estimated by the Secretary) in the State average per 
     beneficiary amount for the subsequent year being at 105 
     percent (or 110 percent in the case of payments made in 2001) 
     of the national average per beneficiary amount for such 
     subsequent year.
       ``(B) Certain states below national average.--If a State 
     average per beneficiary amount for a year is less than 95 
     percent (or 90 percent in the case of the determination made 
     in 2000) of the national average per beneficiary amount for 
     such year, then the Secretary shall increase the amount of 
     applicable payments in such a manner as will result (as 
     estimated by the Secretary) in the State average per 
     beneficiary amount for the subsequent year being at 95 
     percent (or 90 percent in the case of payments made in 2001) 
     of the national average per beneficiary amount for such 
     subsequent year.
       ``(2) Determination of averages.--
       ``(A) State average per beneficiary amount.--Each year 
     (beginning in 2000), the Secretary shall determine a State 
     average per beneficiary amount for each State which shall be 
     equal to the Secretary's estimate of the average amount of 
     expenditures under the original medicare fee-for-service 
     program under parts A and B for the year for a beneficiary 
     enrolled under such parts that resides in the State
       ``(B) National average per beneficiary amount.--Each year 
     (beginning in 2000), the Secretary shall determine the 
     national average per beneficiary amount which shall be equal 
     to the average of the State average per beneficiary amounts 
     determined under subparagraph (B) for the year.
       ``(3) Definitions.--In this section:
       ``(A) Applicable payments.--The term `applicable payments' 
     means payments made to entities and individuals for items and 
     services provided under the original medicare fee-for-service 
     program under parts A and B to beneficiaries enrolled under 
     such parts that reside in the State.
       ``(B) State.--The term `State' has the meaning given such 
     term in section 210(h).
       ``(c) Beneficiaries Held Harmless.--The provisions of this 
     section shall not effect--
       ``(1) the entitlement to items and services of a 
     beneficiary under this title, including the scope of such 
     items and services; or
       ``(2) any liability of the beneficiary with respect to such 
     items and services.
       ``(d) Regulations.--
       ``(1) In general.--The Secretary, in consultation with the 
     Medicare Payment Advisory Commission, shall promulgate 
     regulations to carry out this section.
       ``(2) Protecting rural communities.--In promulgating the 
     regulations pursuant to paragraph (1), the Secretary shall 
     give special consideration to rural areas.
       ``(e) Budget Neutrality.--The Secretary shall ensure that 
     the provisions contained in this section do not cause the 
     estimated amount of expenditures under this title for a year 
     to increase or decrease from the estimated amount of 
     expenditures under this title that would have been made in 
     such year if this section had not been enacted.


       ``improvements in collection and use of hospital wage data

       ``Sec. 1898. (a) Collection of Data.--
       ``(1) In general.--The Secretary shall establish procedures 
     for improving the methods used by the Secretary to collect 
     data on employee compensation and paid hours of employment 
     for hospital employees by occupational category.
       ``(2) Timeframe.--The Secretary shall implement the 
     procedures described in paragraph (1) by not later than 180 
     days after the date of enactment of the Rural Health 
     Protection and Improvement Act of 2000.
       ``(b) Adjustment to Hospital Wage Level.--By not later than 
     1 year after the date of enactment of the Rural Health 
     Protection and Improvement Act of 2000, the Secretary shall 
     make necessary revisions to the methods used to adjust 
     payments to hospitals for different area wage levels under 
     section 1886(d)(3)(E) to ensure that such methods take into 
     account the data described in subsection (a)(1).
       ``(c) Limitation.--To the extent possible, in making the 
     revisions described in subsection (b), the Secretary shall 
     ensure that current rules regarding which hospital employees 
     are included in, or excluded from, the determination of the 
     hospital wage levels are not effected by such revisions.
       ``(d) Budget Neutrality.--The Secretary shall ensure that 
     any revisions made under subsection (b) do not cause the 
     estimated amount of expenditures under this title for a year 
     to increase or decrease from the estimated amount of 
     expenditures under this title that would have been made in 
     such year if the Secretary had not made such 
     revisions.''.

 Mr. THOMAS. Mr. President, I rise today to join my colleagues 
in introducing the ``Medicare Fairness in Reimbursement Act of 2000,'' 
which specifically addresses the current payment inequities of the 
Medicare program. I am pleased to have worked with Mr. Harkin, Mr. 
Craig, and Mr. Feingold in crafting this bill for rural Medicare 
beneficiaries.
  This bill directs the Secretary of the Department of Health and Human 
Services to establish a payment system for Medicare's Part A and B fee-
for-service programs that guarantees each state's average per 
beneficiary amount is within 95 percent and 105 percent of the national 
average. The reason for this seemingly drastic action is because the 
current payment disparities between states is unacceptable. According 
to 1998 data, Wyoming's per beneficiary spending is 36 percent below 
the national average of $5,000 while some other states receive almost 
36 percent above the national average.
  Mr. President, I understand that there are some legitimate cost 
differences among states in providing health care services to our 
seniors, but I do not believe there is justification for an inequity of 
this size. Seniors in Wyoming and other rural states have paid the same 
Medicare tax over the years as beneficiaries residing in urban states. 
However, the current Medicare payment system does not reflect the equal 
contributions made by all seniors.
  The other section of this legislation requires the Secretary to make 
adjustments to the hospital wage index under the prospective payment 
system after developing and implementing improved methods for 
collecting the necessary hospital employee data.
  I believe this legislation is an important piece of the overall 
Medicare reform puzzle. I feel strongly that any final legislation 
approved by the Senate to ensure Medicare is financially stable for 
current and future generations must also ensure all beneficiaries are 
treated fairly and equitably. Mr. President, the current system is not 
only far from long-term solvency, it is far from fair, especially to 
seniors living in rural states such as Wyoming.''
                                 ______