[Congressional Record Volume 148, Number 14 (Thursday, February 14, 2002)]
[Senate]
[Pages S860-S862]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself, Ms. Collins, Mr. Kohl, and Mr. 
        Dayton):
  S. 1955. A bill to amend title XVIII of the Social Security Act to 
require that the area wage adjustment under the prospective payment 
system for skilled nursing facility services be based on the wages of 
individual's employed at skilled nursing facilities; to the Committee 
on Finance.
  Mr. FEINGOLD. Mr. President, I rise today to join with my colleague 
from Maine to introduce legislation to restore fairness to the Medicare 
program. This package of legislation will reduce regional inequalities 
in Medicare spending and support providers of high-quality, low-cost 
Medicare services.
  Just about a month ago, I met with representatives of Wisconsin's 
hospitals, doctors, and seniors, who spoke passionately about how 
Medicare inequities have a real and serious impact on the lives of 
Wisconsin seniors, and on health care providers in my State. Wisconsin 
seniors and providers came to me with these concerns, and this 
legislation is a direct result of their advocacy. I thank them for 
their efforts.
  I also want to thank my colleague from Maine, who has joined me on a 
number of health care initiatives that address the mutual concerns of 
our constituents. I am grateful for her efforts on health care issues 
that concern both of our States, such as home health care, access to 
emergency services, and this legislation on Medicare fairness.
  The Medicare program should encourage the kind of high-quality, cost-
effective Medicare services that we have in Wisconsin and Maine. But 
unfortunately, that's not the case.
  To give an idea of how inequitable the distribution of Medicare 
dollars is, imagine identical twins over the age of 65. Both twins 
worked at the same company all their lives, at the same salary, and 
paid the same amount to the Federal Government in payroll taxes, the 
tax that goes into the Medicare Trust Fund. But if one twin retired to 
another part of the country and the other retired in Wisconsin, they 
would have vastly different health care options under the Medicare 
system.
  The high Medicare payments in some areas allow Medicare beneficiaries 
a wide array of options, they can choose between an HMO or traditional 
fee-for-service plan, and, because area health care providers are 
reimbursed at such a high rate, those providers can afford to offer 
seniors a broad range of health care services. The twin in Wisconsin, 
however, would not have the same access to care, there is no option to 
choose an HMO, and there are fewer health care agencies that can afford 
to provide care under the traditional fee-for-service plan.
  How can two people with identical backgrounds, who paid the same 
amount in payroll taxes, have such different options under Medicare?
  They do, because the distribution of Medicare dollars among the 50 
States is grossly unfair to Wisconsin, and many other states around the 
country. Too many Americans in Wisconsin and other States like it pay 
just as much in taxes as everyone else, but the Medicare funds they get 
in return don't come close to matching the money they pay in to the 
program.

  Wisconsin has a lot of company in this predicament. More than 35 
States are below the national average in terms of per beneficiary 
Medicare spending. In some States, such as Wyoming and Idaho, Medicare 
spends almost $2,000 less per beneficiary than the national average.
  While there are different reasons for this wide range in Medicare 
payments, their result is often the same, higher private sector 
insurance costs and a loss of access to care. In Milwaukee WI, there 
are reports that lower Medicare reimbursement rates often causes costs 
to shift to the private sector. In rural parts of Wisconsin, these low 
reimbursement rates jeopardize access to health care services.
  In the case of my home State of Wisconsin, low payment rates are in 
large part a result of health care proviers' historically high-quality, 
cost-effective health care. In the early 1980s, Wisconsin's lower-than-
average cost were used

[[Page S861]]

to justify lower payment rates. Since that time, Medicare's payment 
policies have only widened the gap between low- and high-cost States.
  This package of legislation will take us a step in the right 
direction by reducing the inequities in Medicare payments to hospitals, 
physicians, and skilled nursing facilities that the majority of States 
across the country now face.
  At the same time, our proposal would establish pilot programs to 
encourage high-quality, cost-effective Medicare practices. Our proposal 
would reward providers who deliver higher quality at lower cost. It 
would also require that the pilot States create a plan to increase the 
amount of providers providing high quality, cost-effective care to 
Medicare beneficiaries.
  This legislation would also help to address the unique workforce 
needs of urban and very rural areas by encouraging clinical rotations 
in those areas. These rotations could help focus a workforce on the 
specific challenges facing these areas, so that they can deliver care 
that serves the unique needs that they have.
  Congress must modernize Medicare. But it must also restore basic 
fairness to the Medicare program.
  My legislation demands Medicare fairness for Wisconsin and other 
affected States, plain and simple. Medicare shouldn't penalize high-
quality providers of Medicare services, and most of all Medicare should 
stop penalizing seniors who depend on the program for their health 
care. They have worked hard and paid into the program all their lives, 
and in return they deserve full access to the wide range of benefits 
that Medicare has to offer.
  I look forward to working with my colleagues to move this legislation 
forward. I believe that we can rebalance the budget, while at the same 
time encouraging efficient, quality enhancing services, and that's what 
my legislation sets out to do.
  Mr. KOHL. Mr. President, I rise today in strong support of the 
Medicare Value and Quality Demonstration Act, the Physician Wage 
Fairness Act, the Graduate Medical Education Demonstration Act, and the 
Skilled Nursing Facility Wage Information Improvement Act. I am proud 
to cosponsor this package of legislation that will finally begin to 
address the grossly distorted Medicare reimbursement system, which 
penalizes health care providers in States like Wisconsin for being 
efficient as they provide high-quality care, and penalizes seniors in 
Wisconsin by delivering fewer benefits than seniors in other States 
receive. I want to commend Senator Feingold and Senator Collins for 
their hard work and commitment to fixing this problem, and I am proud 
to join them as an original cosponsor in this effort.
  This issue points to a basic question of fairness. The current 
Medicare reimbursement system is extremely unfair for Wisconsin. 
Because Wisconsin has been successful in holding down health care 
costs, current Medicare payment rates are very low in comparison to 
higher cost States, like Florida and California. In other words, the 
current system effectively punishes Wisconsin providers for being more 
efficient, and puts Medicare beneficiaries in Wisconsin at an unfair 
disadvantage compared to beneficiaries in other States.
  This system has to change. My constituents in Wisconsin pay the same 
Medicare payroll tax as people in other States. They suffer from the 
same illnesses; they need the same treatments; they see the same types 
of health providers. Yet Wisconsin Medicare beneficiaries receive on 
average $3,795 in Medicare benefits per year, the eighth lowest in the 
country. That's 25 percent below the national average of $5,034. A 
study conducted by the Rural Wisconsin Health Cooperative found that 
this costs Wisconsin nearly a billion dollars each year in Medicare 
dollars lost.
  There is simply no logical reason why Wisconsin doctors, hospitals, 
nursing homes, and ultimately, Wisconsin beneficiaries, should receive 
less reimbursement and fewer Medicare benefits than other States 
receive. And there is no logical reason why Medicare tax dollars paid 
by Wisconsinites should instead be used to pay higher rates to 
providers and greater benefits to beneficiaries in other States.
  And this system isn't just bad for seniors on Medicare. The current 
system also has major consequences for businesses and non-Medicare 
patients in Wisconsin. When Medicare reimbursement to hospitals or 
nursing homes or doctors is inadequate, somebody has to make up the 
difference in order for these providers to stay afloat. This means that 
Wisconsin employers who provide health insurance for their employees, 
and patients who pay all or part of their health care bills, must pay 
higher prices and premiums to make up the shortfall. This is unfair to 
all of Wisconsin's citizens and exacerbates the problem of rising 
health care costs.
  We should all be outraged by a system that treats seniors in some 
States like second-class citizens. Congress must stop sanctioning the 
current system, which penalizes Medicare beneficiaries based on where 
they live, penalizes providers for being efficient, and rewards 
providers that do not do their part to hold the line on costs. This 
backward system simply makes no sense.
  The package of bills introduced today will finally begin to turn this 
system around and ensure that health care providers in Wisconsin and 
similarly affected States are adequately reimbursed and rewarded for 
providing high quality, cost-effective care. It will eliminate outdated 
and inaccurate data that is currently used to determine Medicare's 
flawed payment rates. And most importantly, it will help level the 
playing field for seniors in Wisconsin by helping to ensure that they 
have access to the same benefits as seniors in other States.
  First, the Skilled Nursing Facility Wage Information Improvement Act 
will create a reimbursement system for nursing homes that is actually 
based on accurate nursing home data. This would seem to be common 
sense; yet the current formula for determining Medicare nursing home 
payments is based on hospital wage data that is inaccurate and 
discriminates against many States like Wisconsin. The Centers for 
Medicare and Medicaid Services, CMS, is now compiling nursing home wage 
data but as of yet has not finalized a plan to utilize it. This bill 
would set October 1, 2002 as the date for which CMS must incorporate 
the nursing home data.
  Second, the Medicare Value and Quality Demonstration Act would begin 
to reverse the backward incentive structure in today's Medicare system. 
Medicare currently penalizes low-cost, high-quality States and health 
care providers by delivering inadequate reimbursement for their 
services. It just makes no sense to penalize providers who are working 
hard to be cost-effective and provide high-quality care at the same 
time. This second bill would create 4 demonstration projects to provide 
bonus incentive payments to high-quality, low-cost hospitals and 
doctors in the demonstration States. These States would also have to 
implement a plan to encourage more of their providers to deliver low-
cost, high-quality care.
  Third, the Physician Wage Fairness Act would correct a flaw in the 
payment system for physicians. The current physician payment formula 
includes a geographic adjustor that is outdated. Many studies now point 
to the fact that the labor market for health professionals is actually 
a national labor market and therefore, a geographic adjustor simply 
does not match today's reality. This bill would eliminate the 
geographic adjustor and bring the physician payment formula up to date. 
Wisconsin's physicians stand to gain $8 million more in Medicare 
reimbursement with passage of this legislation.
  Finally, the Graduate Medical Education Demonstration Act would help 
address the issue of shortages of health professionals in underserved 
areas. It allows the HHS Secretary to use Medicare Graduate Medical 
Education funds to create a program to give providers in underserved 
areas financial incentives to attract educators and clinical 
practitioners.
  This package of legislation is not the end of the story when it comes 
to fixing Medicare's current flawed payment system. In addition to this 
package, for the past 2 years I have been a cosponsor of the Medicare 
Fairness in Reimbursement Act, introduced by Senators Harkin and Craig. 
This bill also works to level the playing field between high payment 
States and low payment

[[Page S862]]

States, with a particular emphasis on improving reimbursement rates for 
rural areas. And I look forward to continuing to work with Senator 
Feingold and Senator Collins on additional legislation that will deal 
with the complicated problems of hospital reimbursement and Medicare + 
Choice.
  But these bills are an important first step toward fixing a system 
that is not just unfair to my State; it is inaccurate, outdated, and 
creates perverse incentives for inefficient providers.
  Many of us in the Congress are working to update Medicare and 
modernize its structure to fit today's health care system. It is 
critical that we add a prescription drug benefit for seniors so they 
don't have to choose between taking their medicine and eating their 
next meal. It makes sense to add more preventive benefits to keep 
seniors healthy at the start rather than only treating illnesses when 
they become more serious. I strongly support these efforts and hope 
that Congress will act this year. But if we don't also fix the 
inequities in Medicare's payment system, these new benefits could also 
turn out to be inequitable for Wisconsin's seniors. This is an issue 
that must be addressed if Congress is serious about passing real 
Medicare reform.
  Again, I want to commend Senators Feingold and Collins for their hard 
work on this package. I look forward to working with them as Medicare 
reform moves forward.
                                 ______