[Congressional Record Volume 149, Number 62 (Tuesday, April 29, 2003)]
[Senate]
[Pages S5490-S5491]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BROWNBACK (for himself and Mr. Nelson of Nebraska):
  S. 942. A bill to amend title XVIII of the Social Security Act to 
provide for improvements in access to services in rural hospitals and 
critical access hospitals; to the Committee on Finance.
  Mr. BROWNBACK. Mr. President, rural America has been depopulating at 
an alarming rate. The same is true for the rural counties in Kansas. In 
fact, over half of the counties in the State are losing population.
  We are going to stop that trend.
  Senators, like Ben Nelson and I, who grew up in small towns know a 
little secret. Rural America is a great place to live. However, for 
rural towns to compete with urban areas for talented young people, they 
have to be able to provide the basics--like high quality health care.
  For the hospitals represented here today to be able to provide high 
quality health care for rural America, they have to be able to count on 
Medicare for fair reimbursement. For quite a few hospitals in Kansas, 
70 and 80 percent of their caseload is paid for by Medicare. For the 
communities these hospitals serve, fair Medicare reimbursement is 
vitally important.
  Unfortunately, much of the regulation that comes out of CMS is based 
on economics of scale. The actuaries and accountants in Baltimore 
produce payment systems and formulas for reimbursement. The assumption 
is that the hospitals that are the most efficient will be the most 
successful. Unfortunately, efficiency is often a product of volume. If 
you treat 5,000 stroke patients in a year, you are probably going to be 
more efficient than if you treat only 5.
  Efficiency is a laudable goal, but it shouldn't be the only goal of 
Medicare. Particularly, when it comes to providing health care in a 
hospital with fewer than 50 beds.
  That is why Senator Nelson and I are introducing the ``Rural 
Community Hospital Assistance Act of 2003.'' Rather than rely on 
formulas calculated by CMS bureaucrats in Baltimore, the hospitals 
covered under our bill will rely on cost-based reimbursement. In 
addition, the bill recognizes that these hospitals don't have the 
volume to cover bad debt from patients and to keep up with growing 
demands for new technology and infrastructure.
  This bill will create a new Rural Community Hospital designation 
within Medicare for rural hospitals with fewer than 50 beds.
  These hospitals will be eligible for cost-based reimbursement for 
impatient and outpatient services; a technology and infrastructure add 
on; cost based reimbursement for home health services where the 
provider is isolated; cost based reimbursement for ambulance services; 
and the restoration of Medicare bad debt payments at 100 percent.
  And the cost of the bill, which we believe with stabilize health care 
in rural America, is less than \1/2\ of 1 percent of annual Medicare 
expenditures.
  This is an important bill for rural hospitals; and I don't think you 
can overestimate the importance of rural hospitals to the communities 
they serve.
  Mr. NELSON of Nebraska. Mr. President, today I join Senator Brownback 
in introducing the Rural Community Hospital Assistance Act. This 
legislation is intended to ensure the future of small rural hospitals 
by restructuring the way they are reimbursed for Medicare services by 
basing the reimbursements on actual costs instead of the current pre-
set cost structure.
  Current law allows for very small hospitals--designated Critical 
Access Hospitals, CAH, to receive cost-based Medicare reimbursements. 
To qualify as a CAH the facility must have no more than 15 acute care 
beds.
  In rural communities, hospital facilities that are slightly larger 
than the 15 bed limit share with Critical Access Hospitals the same 
economic conditions, the same treatment challenges, the same disparity 
in coverage area but do not share the same reimbursement arrangement. 
These rural hospitals have to compete with larger urban-based hospitals 
that can perform the same services at drastically reduced costs. They 
are also discouraged from investing in technology and other methods to 
improve the quality of care in their communities because those 
investments are not supported by Medicare reimbursement procedures.
  The legislation would provide cost-based Medicare reimbursement by 
creating a new ``rural'' designation under the Medicare reimbursement 
system. This new designation would benefit seven Nebraska hospitals. 
Hospitals in McCook, Alliance, Broken Bow, Beatrice, Columbus, Holdrege 
and Lexington would fall under this new designation, and would have 
similar benefits provided to nearly sixty other Nebraska hospitals 
classified under the CAH system.
  The legislation would also improve the hospitals with critical access 
status. Nearly sixty existing CAH facilities in Nebraska already 
receive cost-based reimbursements for inpatient and outpatient 
services. The legislation would further assist these existing CAH 
facilities by allowing them a return on equity for technology and 
infrastructure investments and by extending the cost-based 
reimbursement to certain post-acute services.
  Rural hospitals cannot continue to provide these services without 
having Medicare cover the costs. If something

[[Page S5491]]

is not done, the larger hospitals may be forced to cut back on the 
number of beds they keep--and the number of people they care for, and 
others may be forced to close their doors. These hospitals provide 
jobs, good wages, health care and economic development opportunity for 
these communities. Without access to these hospitals, these communities 
would not survive. The Rural Community Hospital Assistance Act will 
ensure that the community has access to high quality health care that 
is affordable to the patient and the provider.
                                 ______