[Congressional Record Volume 150, Number 121 (Thursday, September 30, 2004)]
[Senate]
[Page S10071]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. HUTCHISON (for herself, Mr. Bayh, and Mr. Kennedy):
  S. 2876. A bill to amend title XVIII of the Social Security Act to 
eliminate reductions in payments to hospitals for the indirect costs of 
medical education; to the Committee on Finance.
  Mrs. HUTCHISON. Mr. President, I am pleased to introduce legislation 
today to restore Medicare reimbursement to hospitals. I introduce the 
American Hospital Preservation Act with my colleague, Senator Bayh, to 
restore reimbursement for indirect medical education (IME) payments to 
teaching hospitals. IME payments give teaching hospitals an additional 
Medicare reimbursement due to their higher costs of inpatient care. The 
Medicare Modernization Act restored the reimbursement rate to 6 percent 
for fiscal year 2004. However this payment update expires today. Over 
the next 3 years, reimbursements to teaching hospitals will decrease, 
making it more difficult to care for our sick and to train our future 
health care providers. The American Hospital Preservation Act would fix 
the reimbursement rate at 6.0 and will ensure our hospitals are 
compensated for the invaluable care they provide to our patients.
  Hospital admissions have risen from 31 million patients in 1990 to 33 
million in 2000, and the number of days in the hospital is rising as 
well. Increased admissions, rising liability premiums, and the cost of 
advanced technology have forced hospitals to cut back on services. The 
cost of a pint of blood increased 31 percent in 2001, an additional 
$920 million burden to hospitals. Such costs are continuing to rise, 
yet Medicare reimbursements to hospitals are not keeping pace with 
inflation and their margins are slowly shrinking. Fifty-eight percent 
of hospitals are losing money on the Medicare patients they treat.
  Teaching hospitals have higher costs due to their critical role in 
educating tomorrow's physicians. They run more tests, utilize newer 
technology and require more staff because they are training our future 
health professionals. Preserving this reimbursement rate is vital to 
continuing this training. Although only 23 percent of all hospitals are 
teaching hospitals, they deliver over two-thirds of charity care. Many 
patients rely on these hospitals for their health, which make-up 78 
percent of all trauma centers and 80 percent of all burn beds. Further, 
a disproportionate percentage of the most seriously ill and injured 
patients are treated and convalesce in teaching hospitals. Emergency 
rooms are increasingly used as a primary care clinic because patients 
cannot find a physician who accepts Medicare, and they treat more 
individuals who are uninsured. In 2000, hospitals provided $21.6 
billion in uncompensated care.
  Lower reimbursement rates coupled with bioterrorism risks and a 
workforce shortage make our hospitals a time bomb waiting to go off. It 
is our responsibility to ensure they have adequate resources.
  I look forward to working with my colleagues to pass the American 
Hospital Preservation Act.
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