[Congressional Record Volume 150, Number 16 (Tuesday, February 10, 2004)]
[Extensions of Remarks]
[Pages E135-E136]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF THE LONG TERM CARE HOSPITAL MORATORIUM ACT

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, February 10, 2004

  Mr. STARK. Mr. Speaker, I rise today to introduce the Long Term Care 
Hospital Moratorium Act. This bill places a moratorium on the

[[Page E136]]

growth of costly Medicare Long Term Care Hospital (LTCH) beds until 
enough information is available to determine whether continued growth 
is required to meet the needs of our seniors and people with 
disabilities.
  The number of these facilities has increased substantially from 109 
to 300 in the past decade and Medicare expenditures directed to these 
facilities have grown from $398 million in 1993 to an anticipated $2.3 
billion in 2005. The recent 275% increase in facilities and over 500% 
increase in Medicare expenditures are dramatic. It is time for Congress 
to question whether this rapid growth reflects a true increase in 
clinical need or just a means to game robust profits from Medicare.
  LTCHs are one of four types of post-acute settings that are 
reimbursed under Medicare. Patients in these facilities have medically 
complex conditions that include ventilator dependency, multiple medical 
system failures, complicated infectious conditions, wound care and 
post-surgical recuperation. These patients generally have stays in 
these facilities of 25 days or more. Currently, only 1 percent of 
Medicare beneficiaries discharged from acute hospitals are transferred 
to LTCHs. These facilities are the most expensive on average of all the 
post-acute alternatives with a base rate cost per patient episode being 
$35,700.
  The growth in the long term care hospital sector is being fueled by 
large for-profit companies that are reporting significant revenue 
increases and robust profit margins. Their margins are significantly 
higher than those for acute hospitals and skilled nursing facilities. 
Wall Street recognition of the industry's positive financial outlook is 
likely related to the 300 percent increase that has been posted this 
year in the stocks of these publicly-traded companies.
  Recent data from the non-partisan Medicare Payment Advisory 
Commission (MedPAC) suggests that there may also be substantial overlap 
between the types of patients being treated in LTCHs and skilled 
nursing facilities; despite LTCHs costing 4-5 times more. The potential 
for LTCHs to substitute for less costly skilled nursing facilities is 
exacerbated by the fact that there is currently no clinical patient 
admission criteria under Medicare for LTCHs.
  A review of the LTCH Medicare provider network raises a number 
important public policy questions. These questions include:
  Is there evidence of clinical need to support the rapid growth in 
LTCH facilities?
  Is the current Medicare payment system inappropriate or is the 
reimbursement amount excessive for LTCH services?
  Are LTCHs and skilled nursing facilities clinical substitutes? If so, 
are there clinical criteria that can be developed to determine which 
patients require LTCHs vs. skilled nursing facilities?
  This legislation simply places a moratorium on the future growth of 
this provider network category until these questions are answered. The 
Secretary of Health and Human Services may terminate this moratorium 
upon obtaining adequate information to address these questions and 
implementing any required changes to the Medicare payment system for 
these services. The Secretary is also required to submit a report to 
Congress at least one month prior to terminating the moratorium 
specifying the rationale and evidence supporting the termination.
  It is appropriate for Congress, who is responsible for providing 
fiscal oversight of Medicare, to enact this legislation. Both MedPAC 
and the Health and Human Services' Office of the Inspector General are 
already investigating aspects of these issues. The LTCH and skilled 
nursing home industries, patient advocacy groups and other relevant 
sources can offer additional data. Using the data obtained during this 
moratorium, the Center for Medicare and Medicaid Services and the 
Congress can make an informed decision on what interventions are 
necessary within the LTCH industry to both ensure beneficiaries are 
receiving the treatment they require and that Medicare funds are being 
prudently spent.

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