[Congressional Record Volume 146, Number 75 (Thursday, June 15, 2000)]
[Senate]
[Pages S5254-S5255]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CONRAD (for himself, Mr. Grassley, Mr. Daschle, Mr. 
        Baucus, Mr. Kerrey, Mr. Jeffords, Mr. Rockefeller, Mr. Thomas, 
        Mr. Harkin, Mr. Roberts, Mr. Johnson, Mr. Cochran, and Mrs. 
        Lincoln):
  S. 2735. A bill to promote access to health care services in rural 
areas; to the Committee on Finance.


           health care access and rural equality act of 2000

  Mr. CONRAD. Mr. President, today, I rise to introduce the Health Care 
Access and Rural Equality Act of 2000 (H-CARE).
  This proposal is the result of a bipartisan and bicameral effort. I 
am proud to be joined by several cosponsors, including Senators 
Grassley, Daschle, Thomas, Harkin, Baucus, Kerrey, Jeffords, 
Rockefeller, Roberts, Johnson, Lincoln, and Cochran. I would also like 
to thank our House companions for joining me as supporters of this 
proposal. In particular, would like to recognize Representatives Foley, 
Pomeroy, Tanner, Nussle, McIntyre, Stenholm, Berry, and Lucas for their 
efforts. Working together, I believe we are taking important steps 
toward improving health care access in our rural communities.
  Also, I would like to thank the National Rural Health Association, 
the Federation of American Health Systems, and the College of American 
Pathologists for their support of this effort.
  Last year, we received information that 12 of my State's 35 rural 
hospitals were in jeopardy of closing. In North Dakota, many areas do 
not have hospitals within their county borders. This means that in some 
areas of my State, many communities depend on having access to one 
specific rural health care facility. If this facility were to close, 
this would leave residents in these areas without access to vital 
health care services.
  We know that in many rural communities, Medicare patients make up the 
majority of the typical rural hospitals' caseloads--in N.D., more than 
70 percent of most rural hospitals' patients are covered by Medicare. 
This means that Medicare funding and changes to the program greatly 
impact our small, rural providers.
  Unfortunately, while our rural facilities may serve a 
disproportionate number of Medicare patients, they are often forced to 
operate with merely half the reimbursement of their urban counterparts. 
For example, Mercy Hospital in Devils Lake receives on average about 
$4,200 for treating a patient with pneumonia. In New York City, we know 
that some hospitals receive more than $8,500 for treating the same 
illness. This disparity places our providers at a clear disadvantage.
  Against the backdrop of this funding disparity, we know that rural 
providers

[[Page S5255]]

were particularly hard hit by reductions in the Balanced Budget Act of 
1997. Last year, N.D. hospitals were losing at minimum 7 percent on 
every Medicare patient they serve. In some of our smaller communities, 
hospital margins fell as low as negative 21 percent. How can our 
hospitals be expected to survive at a 20 percent loss?
  Recognizing the challenges that our communities were facing, I fought 
hard last year to offer relief to our rural providers. I am happy to 
say that the Balanced Budget Refinement Act of 1999 (BBRA) brought more 
than $100 million to our ND providers--but we must do more.

  Even though the BBRA improved the outlook for our hospitals, N.D. 
facilities are still in financial trouble--they are still projected to 
have negative 4.9 percent margins by 2002. Continued funding shortfalls 
have made it, and will continue to make it, impossible for our smallest 
rural hospitals to make needed building improvements; impossible for 
them to provide patients access to updated technologies; and difficult 
for them to competitively recruit and retain health care providers, 
particularly to the most isolated, frontier areas.
  For this reason, I rise to introduce H-CARE. This legislation offers 
targeted relief to our most vulnerable rural providers, including: our 
sole community, critical access, and Medicare dependent hospitals.
  In particular, H-CARE would offer a full inflation update to all 
rural hospitals. The BBA limited hospitals' inflation updates through 
2002. This has meant that our providers have not been allowed to 
receive payments that are in line with the costs they incur for serving 
Medicare patients. H-CARE would close the gap on this funding 
shortfall.
  Also, H-CARE permanently extends the important Medicare dependent 
hospital program, which is due to expire in 2006, and would offer these 
providers more up-to-date funding. Currently, they are reimbursed based 
on 1988 costs. As providers that serve at least a 60 percent Medicare 
caseload, it is important that they receive appropriate Medicare 
payments.
  In addition, H-CARE addresses several flaws in last year's Medicare 
add-back bill that have adversely impacted our rural providers. For 
example, many rural hospitals entered the Critical Access Hospital 
(CAH) program under the promise that they would receive adequate 
resources to keep their doors open. The BBRA inadvertently limited 
these hospitals' ability to receive funding for providing lab services 
to their patients. H-CARE fixes this problem by ensuring CAHs once 
again receive the funding they need to provide lab services.
  For our sole community hospitals, H-CARE corrects an error in the 
BBRA which excluded some of these hospitals from receiving higher 
reimbursement rates based on more recent costs. H-CARE fixes this 
mistake by letting all sole community hospitals receive more up-to-date 
payments based on 1996 costs. This is particularly important for N.D. 
since 29 of my state's 36 rural facilities are sole community 
hospitals.
  Lastly, H-CARE would establish a loan fund that rural facilities 
could access to repair crumbling buildings or update their equipment--
eligible facilities could receive up to $5m to make repairs and an 
extra $50,000 to help develop a capital improvement plan. H-CARE also 
includes grants, in the amount of $50,000 per facility, that hospitals 
could use to purchase new technology and train staff on using this 
technology.
  In summary, this year, I will fight to enact these and other measures 
that are vital to improving our rural health care system. I urge my 
colleagues to support this important effort.
 Mr. JOHNSON. Mr. President, I am pleased to join my colleagues 
today to support introduction of the Health Care Access and Rural 
Equality Act of 2000, known as H-CARE.
  I especially want to commend Senators Conrad and Grassley, and 
Representative Foley for the tremendous amount of effort they put forth 
in drafting this key legislation. As well, I commend a number of my 
other colleagues who have contributed immensely to the crafting of this 
bill, including Senators Daschle, Harkin, Roberts, Thomas, Kerrey, 
Rockefeller, and Representatives Pomeroy, Tanner, Nussle, and McIntyre.
  The bipartisan and bicameral support for this legislation signifies 
the critical and often times desperate condition, that our rural 
hospitals are in due in large part to the unforeseen impact of the 
Balanced Budget Act (BBA) of 1997 and disparities in Medicare 
reimbursements for rural facilities.
  Impact estimates and preliminary data suggest that the BBA cuts have 
fallen squarely on the shoulders of our rural hospitals who do not have 
the operating margins to shoulder consecutive years of budgetary 
deficits. Unfortunately, rural hospitals do not have the luxury of 
trimming spending in one area to meet the needs in another. Recent cuts 
have forced hospitals to eliminate important programs such as home 
health care or therapy services in order to operate within these tight 
budget restraints.
  Rural hospitals are charged with the responsibility to provide high-
quality, compassionate care to individuals in times of need, especially 
our senior and disabled Medicare populations. However, it also seems 
evident to me that we have asked hospitals to do a day's work for an 
hour's pay.
  The H-CARE Act works to restore some of the funding disparities that 
exist for rural hospitals and provides resources to ensure their 
survival.
  Hospitals in my home state of South Dakota face a potential loss in 
Medicare revenues of nearly $171 million over five years if something 
is not done to help them.
  Provisions in H-CARE including inflation updates for rural hospitals, 
protection for Medicare Dependent Hospitals, support for the Critical 
Access Hospitals Programs, creation of a capital infrastructure loan 
program, assistance to update technology, and increased reimbursement 
for Sole Community Hospitals will allow rural facilities the necessary 
resources to keep their doors open.
  We are talking about rural facilities such as the Medical Center in 
Huron, SD, which was forced to eliminate 24 full time positions to 
compensate for Medicare cuts in their FY 2001 budget, or the hospital 
in Burke, SD, which had to cut $124,000 from their hospital this year 
to ensure their survival. These are just a few examples of the many 
stories that I've heard from hospitals administrators throughout my 
home state of South Dakota.
  Once again, I am please to join my colleagues today as an original 
cosponsor of the H-CARE Act and look forward to working with the full 
Senate to ensure quick and immediate action on this critically 
important legislation.
                                 ______