[Congressional Record Volume 146, Number 123 (Thursday, October 5, 2000)]
[Senate]
[Pages S9945-S9948]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROTH (for himself, Mr. Moynihan, Mr. Jeffords, Mr. 
        Murkowski, Mr. Hatch, and Mr. Kerrey):
  S. 3165. A bill to amend the Social Security Act to make corrections 
and refinements in the Medicare, Medicaid, and SCHIP health insurance 
programs, as revised by the Balanced Budget Act of 1997 and the 
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, 
and for other purposes; read the first time.


         Medicare, Medicaid and SCHIP Improvements Act of 2000

  Mr. ROTH. Mr. President, I am very pleased today to join Senator 
Moynihan and my other colleagues on the Senate Finance Committee in 
introducing the Medicare, Medicaid and SCHIP Improvements Act of 2000. 
This is important, bipartisan legislation intended to address needed 
health care funding and other improvements in these programs that are 
so important to millions of Americans. Every year on the Finance 
Committee we maintain watchful oversight of these critical programs to 
make sure that beneficiary access to services is maintained, and that 
payments and benefits are adjusted to meet beneficiaries' needs. This 
bill would add about $28 billion in funds to these programs over the 
next five years. Following are some of the highlights of this 
legislation.
  (1) Medicare beneficiary assistance provisions would reduce 
coinsurance liability for hospital outpatient services; improve access 
to Medigap coverage; permit Medicare+Choice plans to give beneficiaries 
cash rebates of Part B premiums; protect access to immunosuppressive, 
cancer, hemophilia and other drugs, and extend Part B premium 
assistance for lower-income beneficiaries.
  (2) Preventive health benefits would expand existing or add new 
coverage for pap smears, colorectal cancer screening, and nutrition 
therapy, and request further work on effective preventive benefits for 
later consideration in Medicare.
  (3) Rural health care improvements address service capacity and 
access to services through increased payments for critical access, 
sole-community and Medicare-dependent hospitals. The package also 
includes provisions for rural health clinics, ambulance services, and 
telemedicine. Rural hospitals, skilled nursing facilities and home 
health agencies also benefit from general financing improvements 
detailed in other sections.
  (4) Medicare+Choice provisions stabilize and improve funding for 
beneficiaries electing to enroll in privately-offered Medicare+Choice 
plans, with special attention to rural communities; restore funding for 
beneficiary education campaigns; and provide additional assistance for 
frail, disabled and rural beneficiaries.
  (5) Hospital funding improvements increase annual payment updates; 
improve disproportionate share hospital (DSH) payments under Medicare 
and Medicaid for providing uncompensated care to uninsured patients; 
reform Medicare's DSH program to reduce disparities in the treatment of 
rural and urban hospitals; add funding for rehabilition hospitals; and 
protect payments for teaching hospitals.
  (6) Skilled nursing facility (SNF) provisions improve funding, 
maintain access to therapy services, and reduce regulatory burdens by 
delaying implementation of consolidated billing.
  (7) Home health and hospice provisions protect funding for home 
health services by delaying a scheduled 15% cut in payments; increasing 
funding for high-cost outlier cases, and making special temporary 
payments to rural agencies. Hospice provisions improve funding, require 
research on issues related to eligibility for the benefit and

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establish a hospice demonstration program.
  (8) Dialysis and durable medical equipment (DME) provisions improve 
payments for DME for all Medicare beneficiaries, and for services 
received by individuals with end-stage renal disease, as well as 
enhancing their opportunities to participate in the Medicare+Choice 
program.
  (9) Additional provisions address physician, laboratory, ambulatory 
surgery center and other medical services. The package also creates a 
Joint Committee on Health Care Financing to provide professional 
support to the Congress in addressing the burgeoning cost and 
legislative complexity of the Medicare, Medicaid and State Children's 
Health Insurance programs and monitoring the viability of safety net 
providers.
  (10) Medicaid and SCHIP provisions improve the financing of and 
access to services provided by federally qualified health centers and 
rural health clinics; establish policies for the retention and 
redistribution of unspent SCHIP funds; increase authorization for the 
Maternal and Child Health Block Grant; and add funding for special 
diabetes programs for children and Native Americans.
  I would like to accomplish even more this year, especially in the 
Medicare program. For instance, I remain committed to securing 
comprehensive drug benefits for the aged and disabled beneficiaries in 
Medicare. I will continue to work towards that goal. However, I am 
pleased that we were able to achieve bipartisan support for these 
improvements and I will continue my efforts to build the bipartisan 
consensus needed to proceed on larger Medicare reforms in the near 
future.
  Mr. MOYNIHAN. Mr. President, I am pleased to join with Senator Roth, 
distinguished chairman of the Finance Committee, in sponsoring the 
Medicare, Medicaid, and SCHIP Improvement Act of 2000.
  As part of the effort to balance the Federal Budget, the Balanced 
Budget Act of 1997 (BBA) provided for reduction in Medicare payments 
for medical services. At the time of enactment, the Congressional 
Budget Office (CBO) estimated that these provisions would reduce 
Medicare outlays by $112 billion over 5 years. We now know that these 
BBA cuts have been much larger than originally anticipated--some argue 
twice as large, although it's difficult to determine this with any 
precision.
  Hospital industry representatives and other providers of health care 
services have asserted that the magnitude of the reductions are having 
unintended consequences which are seriously impacting the quantity and 
quality of health care services available to our citizens.
  Last year, the Congress addressed some of those unintended 
consequences, by enacting the Balanced Budget Refinement Act (BBRA), 
which added back $16 billion over 5 years in payments to various 
Medicare providers, including: Teaching Hospitals; Hospital Outpatient 
Departments; Medicare HMOs (Health Maintenance Organizations); Skilled 
Nursing Facilities; Rural Health Providers; and Home Health Agencies.
  However, Members of Congress are continuing to hear from providers 
who argue that the 1997 reductions are still having serious 
unanticipated consequences.
  To respond to these continuing problems, the President last June 
proposed additional BBA relief in the amount of $21 billion over the 
next 5 years. On September 20, Senator Daschle and I, along with 32 of 
our Democratic colleagues, introduced a similar, but more substantial, 
BBA relief package that would provide about $40 billion over 5 years in 
relief to health care providers and beneficiaries. Today, along with 
Senator Roth, I am pleased to be cosponsoring a bipartisan BBA relief 
bill to provider about $28 billion in relief over 5 years.
  I want, in particular, to highlight that this legislation would--for 
fiscal years 2001 and 2002--prevent further reductions in the special 
Medicare payments to our Nation's teaching hospitals. A little 
background is in order.
  Medicare provides support to our Nation's teaching hospitals by 
adjusting its payments upward to reflect Medicare's share of costs 
associated with care provided by medical residents. This is 
accomplished under two mechanisms: direct graduate medical education 
(direct GME) payments; and indirect medical education (IME) 
adjustments. Direct GME costs include items such as salaries of 
residents, interns, and faculty and overhead costs for classroom 
training. The separate IME adjustment was established in 1983 and 
pertains to residency training costs that are not directly attributable 
to medical education expenses, but are nevertheless associated with 
teaching activities and the teaching hospital's research mission--for 
example, extra demands placed on hospital staff, additional tests 
ordered by residents, and increased use of diagnostic testing and 
advanced technology. Prior to the BBA, the IME adjustment increased 
Medicare's hospital payments by approximately 7.7 percent for each 10 
percent increase in a hospital's ratio of interns and residents to 
hospital beds.
  The BBA included a reduction in the IME adjustment from the previous 
7.7 percent to 7.0 percent in FY 1998; to 6.5 percent in FY 1999; to 
6.0 percent in FY 2000; and to 5.5 percent in FY 2001 and subsequent 
years. In my judgment, these cuts would have seriously impaired the 
cutting edge research conducted by teaching hospitals, as well as 
impaired their ability to train doctors and to serve so many of our 
nation's indigent.
  Last year, in the BBRA, we mitigated the scheduled reduction in FY 
2000--freezing the IME adjustment at 6.5 percent; and the IME 
adjustment was set at 6.25 percent for FY 2001, and 5.5 percent 
thereafter. The package we are introducing today, would restore $600 
million in funds for FY 2001 and FY 2002 by setting the IME adjustment 
at 6.5 percent in both years. The IME adjustment would then fall to 5.5 
percent thereafter--a reduction which I had hoped to cancel this year, 
and sincerely hope the congress will cancel in future legislation.
  I have stood before my colleagues on countless occasions to bring 
attention to the financial plight of medical schools and teaching 
hospitals. Yet, I regret that the fate of the 144 accredited medical 
schools and 1416 graduate medical education teaching institutions still 
remains uncertain. The proposals in this bill will provide critically 
needed financing--at least in the short-run.
  In the long-run, however, we need to restructure the financing of 
graduate medical education along the lines I have proposed in the 
Graduate Medical Education Trust fund Act (S. 210). What is needed is 
explicit and dedicated funding for these institutions, which will 
ensure that the United States continues to lead the world in this era 
of medical discovery. The Graduate Medical Education Trust Fund Act 
would require that the public sector, through the Medicare and Medicaid 
programs, and the private sector through an assessment on health 
insurance premiums, provide broad-based financial support for graduate 
medical education. S. 210 would roughly double current funding levels 
for Graduate Medical Education and would establish a Medical Education 
Advisory Commission to make recommendations on the operation of the 
Medical Education Trust Fund, on alternative payment sources for 
funding graduate medical education and teaching hospitals, and on 
policies designed to maintain superior research and educational 
capacities.
  In addition to restoring much needed funding to our Nation's teaching 
hospitals for the next two years, this bill would add back funding in 
many vital areas of health care. Key provisions of the bill we are 
introducing today would: provide full market basket (inflation) 
adjustments to hospitals for 2001 and 2002; target additional relief to 
rural hospitals; reduce cuts in payments to hospitals for handling 
large numbers of low-income patients (referred to as ``disproportionate 
share (DSH) hospital payments''); delay the scheduled 15 percent cut in 
payments to home health agencies; improve funding for skilled nursing 
facilities; and assist beneficiaries through preventive benefits and 
smaller coinsurance payments.
  Let me close by again complimenting Senator Roth on developing this 
bill on a bipartisan basis and expressing my hope that the forthcoming 
information negotiations with committees of the House will be similarly 
conducted on a bipartisan basis.

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