[Congressional Record Volume 148, Number 137 (Thursday, October 17, 2002)]
[Senate]
[Page S10659]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SKILLED NURSING FACILITIES

  Mr. SMITH of Oregon. Mr. President, I would like to raise another 
issue today which has a major impact on older and disabled Americans 
and their families, nursing homes. Under current law, Medicare rates 
for seniors in nursing homes were reduced by ten percent as of October 
1, because a series of previously-enacted add-on provisions expired. 
Let me be clear. On October 1, the average per diem payment to a 
nursing home to care for a Medicare patient was cut to a level ten 
percent lower than it was on September 30. The average rate fell from 
$337/day to slightly more than $300/day. This is a real cut.
  This negative quirk results from the fact the Clinton Administration 
poorly implemented the Balanced Budget Act, BBA, of 1997, and in the 
process, set Medicare rates for seniors in nursing homes far below the 
levels Congress set out in the BBA of 1997. Recognizing that the new 
system was paying much less for nursing home care for Medicare patients 
than it had intended, Congress passed the Balanced Budget Refinement 
Act of 1999 and then the Beneficiary Improvement Protection Act of 
2000, which provided limited fixes to the payment structure for skilled 
nursing care through add-on payments. But, because it was expected 
HCFA, now CMS, would ``refine'' the rates and fix the problem, these 
add-ons were temporary. However, CMS has not yet acted, and the ``add-
on'' provisions have now expired.
  Recognizing the pending cuts needed to be prevented, in June, I, 
along with several of my Senate colleagues, introduced the Medicare 
Skilled Nursing Beneficiary Protection Act of 2002. Because I felt 
Congress must ensure beneficiary access to quality care, my bill would 
protect funding levels for Medicare skilled nursing patients by 
maintaining payments at 2002 levels going forward.
  During the last few years, five of the nation's largest providers of 
long-term care have filed for Chapter 11 bankruptcy protection. Some of 
those companies are just now emerging from that wrenching process. 
Moreover, 353 skilled nursing homes have closed. In my home State of 
Oregon alone, 23 skilled nursing facilities, SNFs, have closed--a loss 
of almost 1,500 beds. For a small state like Oregon, this is a 
significant loss. With the cuts in Medicare funding, a vital segment of 
our country's health care system is beginning to be thrown, once again, 
into crisis. More facilities will close. Patients, especially those in 
rural areas, will find it more difficult to obtain the long-term care 
services they need.
  The instability of skilled nursing facilities is expected to worsen 
as states reduce Medicaid expenditures in the face of significant 
budget shortfalls and as private market capital continues to withdraw 
from the sector. If Congress goes home before re-instating the Medicare 
payment add-ons, it will result in failures in the sector that will 
translate to unparalleled access problems for Medicare patients needing 
care in our nation's skilled nursing facilities. I will do everything I 
can to ensure quality care for our nation's seniors is not threatened.

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