[Congressional Record Volume 148, Number 14 (Thursday, February 14, 2002)]
[Senate]
[Pages S856-S857]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself, Mr. Feingold, Mr. Kohl, and Mr. 
        Dayton):
  S. 1948. A bill to establish demonstration projects under the 
Medicare program under title XVIII of the Social Security Act to reward 
and expand the number of health care providers delivering high-quality, 
cost-effective health care to Medicare beneficiaries; to the Committee 
on Finance.
  Ms. COLLINS. Mr. President, I am pleased to join my colleague and 
dear friend from Wisconsin, Senator Feingold, in introducing a 
``Medicare Fairness'' package of bills that will ensure that the 
Medicare system rewards rather than punishes states like Maine and 
Wisconsin that deliver high-quality, cost-effective Medicare services 
to our elderly and disabled citizens.
  The good people of Maine pay the same payroll taxes to Medicare, and 
our seniors pay the same premiums, deductibles and copayments as 
Medicare beneficiaries in other parts of the country. Yet Maine's 
patients, physicians, hospitals and other providers receive far less 
from the program in return when it comes to Medicare payments.
  According to a recent study published in the Journal of the American 
Medical Association, Maine ranks third in the Nation when it comes to 
the quality of care delivered to our Medicare beneficiaries. Yet we are 
11th from the bottom when it comes to per-beneficiary Medicare 
spending.
  The fact is that Maine's Medicare dollars are being used to subsidize 
higher reimbursements in other parts of the country. Maine's Medicare 
patients receive, on average, $3,856 worth of Medicare services per 
year, far below the national average of $5,034. By way of contrast, in 
the District of Columbia, Medicare patients receive about $15,620 in 
Medicare payments a year. Moreover, these dramatically higher payments 
have not bought any better

[[Page S857]]

care for the District's Medicare beneficiaries. According to the 
Journal of the American Medical Association, the District is ranked 
34th out of 52, in the bottom third, when it comes to quality.
  This simply is not fair. Medicare's reimbursement systems have 
historically tended to favor urban areas and failed to take the 
special needs of rural States into account. Ironically, Maine's low 
payment rates are also the result of its long history of providing 
high-quality, cost-effective care. In the early 1980s, Maine's lower 
than average costs were used to justify lower payment rates. Since 
then, Medicare's payment policies have only served to widen the gap 
between low and high-cost states.

  As a consequence, Maine's hospitals, physicians and other providers 
have experienced a serious Medicare shortfall, which has forced them to 
shift costs on to other payers in the form of higher charges. This 
Medicare shortfall is one of the reasons that Maine has among the 
highest health insurance premiums in the nation. Small businesses, for 
example, are facing increases of 20 to 30 percent, jeopardizing their 
ability to provide coverage for their employees.
  Moreover, the fact that Medicare underpays our hospitals and nursing 
facilities has significantly handicapped Maine's providers as they 
compete for nurses and other health care professionals in an 
increasingly tight labor market.
  As a recent study by Dr. John Wennberg of the Dartmouth Medical 
School points out, more Medicare spending does not necessarily buy 
better quality health care. According to the Dartmouth study, Medicare 
beneficiaries in high-cost states don't live any longer or enjoy better 
quality care. High cost states simply provide more care. They rely on 
inpatient and specialist care more than outpatient and primary care, 
and they tend to treat the chronically ill and those near death much 
more aggressively, with possible adverse effects on their quality of 
life. According to the Dartmouth study, this pattern of practice is 
driven not by medical evidence, but instead by community practice 
patterns and the availability of hospital beds.
  The legislative package we are introducing today will reform the 
current Medicare reimbursement system by reducing regional inequities 
in Medicare spending and providing incentives to hospitals and 
physicians to encourage the delivery of high-quality, cost-effective 
care.
  The first bill, the Physician Wage Fairness Act of 2001, will promote 
fairness in Medicare payments to physicians and other health 
professionals by eliminating the outdated geographic physician work 
adjustor in the physician fee schedule that has resulted in a 
significant differential in payment levels to urban and rural health 
care providers.
  We are concerned that the current formula does not accurately measure 
the cost of providing services. As a consequence, Medicare pays rural 
providers far less than it should for equal work. We also don't think 
that it makes sense to pay physicians more for their work in areas like 
New York City, which tend to have an oversupply of physicians, and pay 
physicians less for the same services in areas that are more likely to 
experience shortages. Eliminating the georgraphic physician work 
adjustor will bring an estimated $1 million a year in Medicare payments 
to physicians and other providers in Southern Maine and $3 million more 
to providers in the rest of Maine.

  The second bill, the Medicare Value and Quality Demonstration Act of 
2002, will authorize a series of demonstration programs to encourage 
high-quality, low-cost health care to Medicare beneficiaries. These 
programs would reward hospitals and physicians who deliver high quality 
care at a lower cost. It would also require that the states chosen for 
the pilot projects create a plan to increase the number of providers 
who deliver high-quality, cost-effective care to Medicare 
beneficiaries.
  A third bill, the Graduate Medical Education Demonstration Act, will 
allow the Secretary of Health and Human Services to use existing 
Graduate Medical Education funds to create a program to encourage 
hospitals in underserved areas to host clinical rotations to encourage 
more medical students to practice in these areas when they graduate.
  And finally, the Skilled Nursing Facility Wage Information 
Improvement Act will promote fairness in Medicare payments to nursing 
homes by collecting and using accurate nursing home wage data rather 
than, as is the current practice, using the inaccurate hospital wage 
data that discriminates against States like Maine.
  As Congress works to modernize Medicare, we must also restore basic 
fairness to the program and find ways to reward, rather than penalize, 
providers of high-quality, cost-effective care. This is what our 
legislation will do, and I encourage all of our colleagues to join us 
as cosponsors.
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