[Congressional Record Volume 151, Number 61 (Wednesday, May 11, 2005)]
[Senate]
[Pages S4946-S4950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Baucus):
  S. 1002. A bill to amend title XVIII of the Social Security Act to 
make improvements in payments to hospitals under the medicare program, 
and for other purposes; to the Committee on Finance.
  MR. GRASSLEY. Mr. President, physician-owned specialty hospitals 
continue to raise a number of troubling issues, and I feel strongly 
that additional action to address these issues is needed from Congress. 
Today, I am pleased to join Senator Max Baucus, the ranking Democrat on 
the Senate Finance Committee, in introducing the Hospital Fair 
Competition Act of 2005. This bill has an effective date of June 8, 
2005, regardless of when it may be enacted as this is the date the 
current moratorium on specialty hospitals expires.
  Now, specialty hospitals have existed for quite some time. There are 
other types of hospitals with a special focus, such as children's 
hospitals and psychiatric facilities. But these are not really what we 
are talking about. We are talking about the emergence of a new type of 
hospital. These new facilities are mostly for-profit. They are mainly 
owned by the physicians who refer their patients to these hospitals. 
And, they provide treatment in very specific areas such as cardiac, 
orthopedic or surgical care.
  The number of these specialty hospitals has more than tripled in the 
past 10 years. While they are still relatively small in number--about 
100--they are increasing quickly. They are mainly located in certain 
pockets of the country, concentrated in those States without a 
``certificate of need'' requirement. That means they are mainly located 
in States where hospitals are permitted to add beds or build new 
facilities without first obtaining approval by the State. This approval 
process helps ensure that there is an actual public health need for 
additional health resources in the community.
  Congress, in the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA), placed a moratorium on the development 
of new physician-owned specialty hospital hospitals until June 8, 2005. 
First, there were concerns about the conflict of interest inherit in 
physician self-referral. Second, it was thought that specialty 
hospitals might be an unfair form of competition. And third, in all of 
this, was a concern about the impact these hospitals may be having on 
the health care system as a whole.
  The Medicare Payment Advisory Commission (MedPAC) and the Centers for 
Medicare and Medicaid Services (CMS) were directed by the MMA to study 
and report on a number of issues related to specialty hospitals. 
Today's Hospital Fair Competition Act draws heavily from MedPAC's non-
partisan recommendations in its March 8, 2005, report to Congress.
  Three separate government studies have found that physician-owned 
specialty hospitals treat the most profitable patients and services, 
leaving community hospitals to treat a disproportionate share of less 
profitable cases, Medicaid cases and the uninsured.
  An April 2003 report by the Government Accountability Office (GAO) 
found that patients at specialty hospitals tended to be less sick than 
patients with the same diagnoses at general hospitals. The Centers for 
Medicare and Medicaid Services (CMS) reported in March its preliminary 
findings that specialty hospitals generally treat less severe cases 
than community hospitals. And, MedPAC reported that physician-owned 
specialty hospitals treat patients who are less sick, and thus more 
profitable, and concentrate on certain diagnosis-related groups (DRGs) 
that are more profitable.
  In addition, approximately 93 percent of community hospitals operate 
emergency rooms, compared to less than half of specialty hospitals, 
thus treating any and all patients who walk

[[Page S4947]]

through their doors. They also serve a much greater share of poor 
patients, averaging 15 percent versus four percent for specialty heart 
hospitals and one percent for specialty orthopedic hospitals. When 
community hospitals lose their profitable services, they must shift 
costs to private patients to make up the difference. This then means 
private employers may pay higher premiums--all so physician-owned 
specialty hospitals can profit.
  Specialty hospitals are able to take advantage of an outdated payment 
system. The current inpatient payment rates have not been recalibrated 
in over 20 years. This has resulted in certain patients and certain 
case types being significantly more profitable to treat than others. In 
fact, specialty heart hospitals have been found by MedPAC to treat 
Medicare patients who are 13 percent more profitable than the average 
mix of patients. And at specialty surgical hospitals this number is 14 
percent.
  This bill would make corrections to the payment system so that 
certain cases and patients are not significantly more profitable or 
less profitable to treat than others. While we believe the secretary 
has the authority to make these payment changes, this bill will direct 
CMS to do so beginning in 2007. This will improve payment accuracy for 
all hospitals, and will better reflect the actual cost of delivering 
care.
  But Medicare payment changes are not enough.
  I also have great concerns about the inherent conflict of interest in 
physician ownership. This interest in gaming the system may not be in 
the best interest of the patient, and this is troubling. Physicians are 
paid by Medicare to treat the patient. In addition, because they are 
owners of the hospital, physician owners get a payment from Medicare 
for use of the facility. And, because they are also investors in the 
hospital, these physician owners also get dividends on their 
investment. MedPAC found these annual dividends for older facilities 
are frequently in excess of 20 percent.
  I am concerned that this focus on profit may unduly influence 
physician decision-making on the part of some physicians. This is not 
good for unsuspecting patients, the Medicare program or taxpayers. Some 
physicians may choose where to send a patient based on whether or not 
they think that patient will profit their hospital. In addition, 
changes to the payment system don't prevent some physician-owners from 
selecting patients based on their insurance. Specialty hospitals would 
likely continue to treat few--if any--poor or uninsured patients.
  MedPAC has found that specialty hospital hospitals treat far fewer 
Medicaid recipients than community hospitals in the same market--75 
percent fewer for specialty heart hospitals, and 94 percent fewer for 
specialty orthopedic hospitals. In addition, CMS found that specialty 
hospitals provided only about 40 percent of the share of uncompensated 
care that the local community hospitals provided. We now have 45 
million uninsured Americans in our country, and I continue to be very 
concerned about their health care.
  Congress has passed laws that, with very few exceptions, prevent 
physician physicians from referring Medicare and Medicaid patients to 
facilities in which they are owners. This was adopted in response to a 
number of studies that found that physician-owners tended to make more 
referrals to their facilities and order substantially more services at 
higher cost.
  One exception, however, is the ``whole hospital'' exception. The law 
allows physicians to invest in a ``whole hospital'' because it is 
believed that no particular referral would economically advantage a 
specific physician owner. Because the referrals would be diluted across 
multiple services, there would not be a direct link to any one 
physician's income. But specialty hospitals are not really whole 
hospitals. In fact, they are more like a hospital department such as a 
cardiac unit or an orthopedic unit. Under current law, we believe that 
the secretary has the authority to define what constitutes a whole 
hospital, and we encourage CMS to determine whether specialty hospitals 
meet this definition. The law clearly states that it is illegal for 
physicians to invest in hospital departments.
  This loophole in the law, the ``whole hospital'' exception, is being 
exploited. The Hospital Fair Competition Act will close this loophole. 
New specialty hospitals will not qualify for the ``whole hospital'' 
exception as of June 8, 2005--the date the moratorium expires.
  Existing specialty hospitals, those in operation or under development 
before November 18, 2003, will be able to continue operating under 
certain restrictions. These ``grandfathered'' specialty hospitals will 
be prohibited from increasing their total number of physician owners. 
Also, the bill caps each individual physician's investment and the 
aggregate physician investment in the facility as of June 8, 2005. 
Grandfathered specialty hospitals will not be allowed to expand their 
scope of services. And finally, they will be prohibited from increasing 
their number of beds or operating rooms. I believe that halting the 
growth in physician ownership at existing specialty hospitals is the 
only way to prevent the inherent conflict of interest associated with 
self-referral, and ensure that patients' interests are not compromised.
  Now, I have heard from a number of physician-owners on this issue and 
they have said to me that they invest in these hospitals because it 
allows them to have greater control over their workplace. It gives them 
a say in operations, and more control over the quality and cost of 
patient care. I believe that certain coordinated care incentive 
arrangements have the potential to assist physicians in doing just 
that.
  So this bill would provide an opportunity to better align physician 
and hospital financial incentives. It would allow physicians to share 
in hospital savings achieved by re-engineering clinical care in the 
hospitals. These well-designed and approved arrangements might include 
agreed-upon use of certain medical devices or implants for certain type 
of surgeries. Or perhaps they would include improving operating room 
efficiency and scheduling. Or they might include the adoption of 
clinical protocols or evidence-based medicine to standardize certain 
aspects of the practice of medicine.
  While these arrangements have the potential to improve patient care 
while reducing hospital costs, I want to make sure the patient--the 
Medicare beneficiary--is protected. So, this bill would require the 
secretary to develop safeguards and monitor these coordinated care 
arrangements to make sure that physicians are not profiting for 
increased referrals or for reducing quality care.
  In summary, The Hospital Fair Competition Act would:
  Improve the accuracy of Medicare inpatient payments by directing the 
secretary to level the playing field by using estimated costs rather 
than charges in setting the DRG weights; calculating DRG weights at the 
hospital level before aggregating them to a national level; adjusting 
the DRG weights to account for high cost outlier payments, and ensuring 
that the DRGs appropriately capture differences in the severity of 
illness of patients.
  Allow existing specialty hospitals to continue operation under 
certain restrictions, especially regarding physician investment.
  Close the ``whole hospital'' loophole by prohibiting new specialty 
hospitals from having ownership or investment interest from physicians 
who refer Medicare or Medicaid patients to the hospital, effective June 
8, 2005.
  Allow physicians and hospitals to enter into certain coordinated care 
arrangements where physicians could share in savings experienced by a 
hospital by implementing certain cost-reduction efforts.
  Establish safeguards to ensure that coordinated care arrangements 
protect quality of care and minimize any impact on physician referrals.
  I urge all my colleagues to join Senator Baucus and me in support of 
this very important bill.
  Mr. BAUCUS. Mr. President, I rise today to join Chairman Grassley in 
introducing the Hospital Fair Competition Act of 2005.
  This bill, based primarily on recommendations of the Medicare Payment 
Advisory Commission (MedPAC), will improve the accuracy of Medicare's 
inpatient hospital prospective payment system (PPS); prevent the 
establishment of new specialty hospitals to which physician-owners can 
self-

[[Page S4948]]

refer, while allowing existing physician-owned specialty hospitals to 
continue with restrictions; and allow ``gainsharing'' arrangements to 
foster improved physician-hospital efficiency. This legislation is 
important for patients, taxpayers, and the Medicare program, and I urge 
my colleagues to support it.
  About 17 months ago, Congress passed the Medicare Modernization Act--
the MMA. This 400-page bill included many important provisions, 
including long-awaited outpatient drug benefits under Medicare.
  The MMA also included a small provision--Section 507--related to the 
construction of physician-owned specialty hospitals. These facilities 
specialize in cardiac, orthopedic or general surgical care, and are 
partly- or wholly-owned by physicians. The provision was a response to 
growing concerns over physician self-referral, and placed a moratorium 
on the construction of new, physician-owned specialty hospitals, while 
``grandfathering'' existing facilities and those in development.
  Having reviewed several independent analyses on this issue, I believe 
Congress was right to place a moratorium on specialty hospital 
construction. And I also believe that moratorium should effectively be 
extended permanently, while allowing existing facilities to continue 
operating in their current capacity.
  Some view specialty hospitals as innovative, focused factories for 
high-quality, specialized care. Advocates for these facilities say that 
by focusing on a limited number of services, specialty hospitals 
provide excellent care at a good price, while adding competition to the 
health care marketplace.
  Others say specialty hospitals flourish because they exploit a 
Medicare loophole allowing physician-owners to select patients who are 
healthier and, therefore, more profitable.
  For my part, I don't want to stand in the way of innovation or 
competition. For example, I'm glad that Congress brought innovation to 
Medicare in the form of outpatient drug benefits. That was long 
overdue.
  And hospitals and physicians should work together in innovative ways 
to improve efficiency in health care. The U.S. spends twice as much--or 
more--per-person on health care compared to any other developed 
country. And yet, our health outcomes are worse than theirs. We should 
get a better bang for our health-care buck, and we can take steps to 
that end by encouraging quality and accountability in health care.
  That's why I am pushing to advance incentives for quality improvement 
in Medicare, so patients--and taxpayers--get the most for their money. 
I introduced legislation last year to require that Medicare pay 
dialysis providers and Medicare managed care plans based on the quality 
of care they provide. And I am working on legislation to extend these 
principles of paying for quality to other parts of Medicare.
  As for competition, I'm all for it--as long as it's carried out on a 
level playing field. But when it comes to physician ownership of 
specialty hospitals, I'm not convinced the playing field is level. 
That's because physicians alone choose where patients go on the playing 
field--either to community hospitals or specialty hospitals. Some liken 
physician-owners of specialty hospitals to coaches who choose the 
starting lineup for both teams--in this case, the specialty hospital 
team and the community hospital team.
  And for the third time, a Federal agency has told us that the 
healthiest teams, that is, the most profitable patients, end up at 
physician-owned specialty hospitals.
  In 2003, the non-partisan Government Accountability Office (GAO) 
reported that, by and large, specialty hospitals care for relatively 
healthier patients than their community hospital counterparts. GAO 
surveyed 25 specialty hospitals, and found that 21 of the 25 had a less 
acute mix patients than community hospitals. GAO determined that of the 
hospitals studied, 17 percent cardiac patients seen by specialty 
hospitals could be classified as severe cases, compared with 22 percent 
in general hospitals. And about 5 percent of orthopedic cases in 
specialty hospitals were severe, compared with 8 percent in community 
hospitals.
  Earlier this year, on March 8, MedPAC issued its MMA-mandated report 
on specialty hospitals, and arrived at findings similar to those of the 
GAO. MedPAC found that despite shorter lengths of stay, physician-owned 
specialty hospitals are not more cost efficient than community 
hospitals. MedPAC found that specialty hospitals tend to treat lower 
shares of Medicaid patients than community hospitals. And, just as GAO 
did, MedPAC found that specialty hospitals treat patients who are 
generally less sick--and therefore, more profitable--compared to 
community hospitals.
  And while the Department of Health and Human Services has not 
officially issued its MMA-mandated report on the topic--but is expected 
to shortly--HHS reported on March 8 that, based on the small number of 
facilities it studied, specialty hospitals tend to care for a healthier 
patient population than their community hospital counterparts.
  I believe the phenomenon of specialty hospitals treating healthier 
patients is the result of a loophole in the Stark self-referral law. 
This loophole--related to the ``whole hospital exception''--is one that 
should be closed. If it is not closed, Congress will effectively 
sanction the practice of physician self-referral that has been 
prohibited for years.
  In 1989, the HHS Inspector General reported that patients of 
referring physicians who owned or invested in independent clinical labs 
received 45% more lab services than Medicare patients in general.
  In 1992, a study found that physical therapy visits per patient were 
39% to 45% higher in facilities with physician ownership compared to 
those without. In short, the authors of the study found that 
utilization and charges per-patient were higher when facilities were 
owned by physicians with an ownership interest.
  In response to these studies and others like them, Congress passed 
the Stark laws, to prevent physician self-referral, first in the area 
of clinical labs, and subsequently in 10 other areas, including 
physical therapy and certain imaging procedures.
  But the Stark laws did not address the issue of physician self-
referral to specialty hospitals. In part, that's because there weren't 
many specialty hospitals at the time. As the GAO pointed out in its 
2003 report, the vast majority of specialty hospitals were built in 
1992 or later.
  Instead, the Stark law included a provision that has come to be known 
as the ``whole hospital exception.'' While the Stark law prohibits 
physicians with ownership interest in only a hospital department from 
referring patients to that department, the law does allow physicians to 
refer to a facility they partially own, under two conditions. First, 
the physician must have admitting privileges in that hospital. Second, 
the physician must have a financial interest in the ``whole hospital,'' 
not just a department of the hospital.
  As the GAO explained in 2003:

     ``The premise [of the whole hospital exception] is that any 
     referral or decision made by a physician who has a stake in 
     an entire hospital would produce little personal economic 
     gain because hospitals tend to provide a diverse and large 
     group of services. However, the Stark law does prohibit 
     physicians who have ownership interest only in a hospital 
     subdivision from referring patients to that subdivision. With 
     respect to specialty hospitals, the concern exists that, as 
     these hospitals are usually much smaller in size and scope 
     than general hospitals and closer in size to hospital 
     departments, the exception to Stark could allow physician 
     owners to influence their hospitals'--and therefore their own 
     financial gain through practice patterns and referrals.''

  The problem with the ``whole hospital'' loophole is that it treats a 
10-bed surgical facility the same as a 500-bed community hospital, even 
though that 10-bed facility more resembles a department of the 500-bed 
hospital than it does the hospital itself. This loophole is unfair, and 
our bill closes it, by preventing the establishment of new specialty 
hospitals to which physician-owners can self-refer.

  Let me note that our bill does nothing to prevent the construction of 
new specialty hospitals--as long as self-referral is not part of the 
business model. Hospitals specializing in one type of care or another 
have existed in this country for years, and should be encouraged--as 
long as their owners and referrers are not one and the same.
  Opponents of this bill will likely make at least three claims. First, 
they

[[Page S4949]]

will state that preventing the construction of new, physician-owned 
specialty hospitals is anticompetitive. Second, they will suggest that 
since the average physician-owner's share in a specialty hospital is 
small, economic incentives to self-refer are minimal. Third, they will 
claim the bill thwarts health care quality. Let me take these claims in 
turn.
  As I stated previously, I am all for competition--as long as it's 
fair. But I don't think it's fair to further a system in which 
physician-owners can send healthier and more profitable patients to 
facilities they own, while sending sicker, less-profitable ones to 
hospitals they don't own. There's a reason Congress acted to mitigate 
the effects of physician self referral over 15 years ago, and I see no 
reason why that principle should not be extended to the specialty 
hospital setting.
  On the issue of economic incentives, some argue that physician self-
referral to specialty hospitals is a non-issue, since physicians 
typically own a very small share of a particular facility. In fact, 
MedPAC found that in about one-third of specialty hospitals they 
surveyed, the largest share owned by a single physician was just two 
percent. And as a group, physicians own just over a third of the 
typical heart hospital. But MedPAC also pointed out that about one-
third of orthopedic and surgical hospitals were owned almost entirely 
by their physicians. Perhaps more important, MedPAC showed that even a 
relatively small ownership interest can reap large profits for an 
individual physician investor. Page 21 of MedPAC's March report on 
specialty hospitals says:

     What is the order of magnitude of physicians financial 
     incentives to increase utilization when they own a hospital? 
     What follows is a hypothetical example of the marginal profit 
     associated with a group of cardiologists each referring just 
     one additional patient (above the current patient load) for 
     coronary artery bypass graft (CABG) surgery. In fiscal year 
     2002, the base payment for CABG surgery with cardiac 
     catheterization (DRG 107) was roughly $24,000. Our 
     examination of Medicare cost reports and hospital financial 
     statements suggests that variable costs equal approximately 
     60 percent of the DRG payment, roughly $14,400. Hence the 
     marginal profit--payments minus variable cost--would be 
     $9,600 per patient ($24,000-$14,400). If 10 cardiologists 
     owned a 3 percent interest each and they all induced one 
     additional surgery per year, each cardiologist's income would 
     increase by $2,880 ($9,600 3% 10).''

  In other words, even a small ownership share--just three percent--can 
provide a strong profit motive--and a strong incentive toward self-
referral.
  Finally, let me address the third claim that will likely be made 
against this bill--that it thwarts the provision of quality care. 
Specialty hospital advocates claim that due to the focused nature of 
their mission, physician-owned specialty hospitals provide better 
quality and outcomes than their community hospital counterparts. But 
recently the New England Journal of Medicine published a study showing 
that patients undergoing certain heart procedures in specialty 
hospitals were less likely to have coexisting conditions than those 
being treated at general hospitals. The authors of the study stated, 
``. . . given that we found no significant differences in outcomes 
between specialty and general hospitals with similar volumes or between 
specialty cardiac hospitals and specialized general hospitals, it could 
be argued that the specialty-hospital model itself does not yield 
better outcomes.'' They also said, ``. . . our study provides no 
definitive evidence that cardiac specialty hospitals provide better or 
more efficient care than general hospitals with similar procedural 
volumes.''
  In short, there is solid evidence that despite being less efficient, 
physician-owned specialty hospitals care for healthier, more-profitable 
patients, leaving community hospitals to care for sicker, less-
profitable ones. Economic incentives toward physician self-referral in 
specialty hospitals are significant. And there is slim evidence that 
specialty hospitals provide better care than community hospitals.
  Given this evidence, it's clear that Congress should not facilitate 
the construction of more physician-owned specialty hospitals. And while 
we support ``grandfathering'' existing facilities, let me make clear 
that we do not intend to create another grandfathering period if the 
legislation is not enacted before June 8, 2005. The intent of this 
bill, even if it passes after June 8, is to effectively make permanent 
the MMA-mandated moratorium.
  But this bill does more than simply prevent the establishment of new, 
physician-owned specialty hospitals. It also takes steps to mitigate 
ill incentives in the inpatient PPS, by making the PPS more accurate 
for all providers of hospital care--community hospitals and 
`grandfathered' specialty hospitals alike.
  Medicare spends about $100 billion per year on inpatient hospital 
services, and it's important that this system be accurate. Accordingly, 
MedPAC recommended a number of steps to improve the accuracy of the 
Medicare inpatient payment system. These recommendations should 
mitigate incentives for all hospitals to choose healthy patients over 
sick ones, and to focus on some diagnoses at the expense of others.
  Medicare pays hospitals for inpatient services based on roughly 500 
Diagnosis Related Groups (DRGs), which bundle services needed to treat 
a patient with a particular disease. DRGs cover most routine operating 
costs attributable to patient care, including routine nursing services, 
room and board, and diagnostic and ancillary services. Under current 
law, just over five percent of the base payment for all DRGs is set 
aside for inpatient outlier payments, even though some DRGs have almost 
no outlier cases. The Hospital Fair Competition Act directs the 
Secretary to adjust the DRG relative weights to account for differences 
in the prevalence of high-cost outlier cases, thereby removing their 
disproportionate impact on the payment system.

  The bill also improves accuracy of the DRG weights. Currently DRG 
weights are based on the national average of hospital charges for a 
particular DRG. The rate of growth for these charges may vary 
dramatically, depending on the service. For example, MedPAC has found 
that hospital markups for ancillary services (e.g., supplies, operating 
room time) tend to be higher than those of routine services (e.g., room 
and board, nursing care). As these ancillary and routine charges grow 
at different rates, the DRGs reflect that growth, gradually skewing the 
system away from the true costs of providing care. In short, a charge-
based system causes Medicare to pay too much for some services, not 
enough for others. The Hospital Fair Competition Act directs the 
Secretary to substitute the charge-based system with one based on 
hospitals' costs, as well as base the DRG weights on the national 
average of hospitals' relative values in each DRG.
  Mind you, we believe that the Secretary currently has the authority 
to make the payment changes outlined above. The Hospital Fair 
Competition Act simply directs the Secretary to do so. We also believe 
the Secretary has the authority to promulgate regulations defining what 
a ``whole hospital'' is. When Congress passed the ``whole hospital 
exception'', it did not intend to allow self-referral to facilities 
that are effectively the equivalent of a hospital wing or department. 
We believe the Secretary can and should exercise his authority to close 
the ``whole hospital'' loophole by regulation.
  Mr. President, some say that the proliferation of physician-owned 
specialty hospitals is a function of physicians' desire for control 
over their workplace. They argue that physicians typically have no say 
in day-to-day hospital operations, and thus little incentive to improve 
the quality or efficiency of the care they provide in the hospital. 
MedPAC's recommendations for ``gainsharing'' stand to alleviate some of 
that concern, by giving physicians more control over their workplace.
  Gainsharing arrangements allow physicians and hospitals to improve 
hospital efficiency without the undesirable effects of physician self-
referral. In a gainsharing arrangement, hospitals and physicians share 
cost-savings gained by means such as streamlining the purchase of 
medical devices, substituting less-costly items used in surgical 
procedures, and maximizing operating room efficiency. While gainsharing 
arrangements must be developed carefully so as not to compromise 
quality of patient care, gain sharing has the potential to align 
physician-hospital incentives so that care

[[Page S4950]]

can be delivered in the most cost-effective manner.
  I realize that gainsharing arrangements are not a panacea toward 
improving physician-hospital relations. We can and should do more to 
give providers of all types a better stake in improving their workplace 
and the quality of care they provide. That's why I am pushing 
initiatives to tie Medicare payment to quality, so that--unlike the 
current system--the best providers are not paid the same rates as 
mediocre ones. This system of paying for quality stands to improve 
accountability across the spectrum of Medicare provider types, and give 
both patients and the government more for their money.
  We all know that Medicare's long-term fiscal future is much in doubt. 
Hardly a day passes without a warning about Medicare's finances and the 
retirement of the Baby Boom generation that will complicate the long-
term financial picture of the program.
  Given these warnings, it's imperative that we make the most of the 
resources at hand, and--where possible--make Medicare a better more 
responsible buyer of health care. By leveling the playing field 
regarding patient referrals; improving the accuracy of Medicare's 
inpatient hospital payments; and giving physicians a larger stake in 
their hospital workplaces, this bill stands to do that.
  Chairman Grassley and I believe these changes will go a long way 
toward improving much of what ails hospital payment under Medicare, and 
we urge our colleagues' support for this important legislation.
                                 ______