[Congressional Record Volume 154, Number 120 (Tuesday, July 22, 2008)]
[Senate]
[Page S7075]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 3300. A bill to amend title XVIII of the Social Security Act to 
provide for temporary improvements to the Medicare inpatient hospital 
payment adjustment for low-volume hospitals and to provide for the use 
of the non-wage adjusted PPS rate under the Medicare-dependent hospital 
(MDH) program, and for other purposes; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I am pleased to introduce the Rural 
Hospital Act of 2008. Back in December, I stood before this body 
explaining that we were only passing a 6-month Medicare bill in order 
to provide the opportunity for us to address a number of priorities. 
One of the biggest priorities I identified was the need to ensure 
access to rural hospital services.
  The type of rural hospitals that top the priority list are what are 
known as ``tweeners.'' These hospitals are too large to be critical 
access hospitals, but too small to be financially viable under the 
Medicare hospital prospective payment systems. It is absolutely 
imperative that these tweener hospitals get the assistance they need in 
order to keep their doors open. They are often not only the sole 
provider of health care in rural areas but are also significant 
employers and purchasers in the community. Also, the presence of a 
hospital is essential for purposes of economic development because 
businesses check to see if a hospital is in the community in which they 
might set up shop.
  While the Medicare bill that Congress just enacted improves the 
situation for some tweeners, many more are left in financial peril. It 
is unfortunate that comprehensive payment reforms for tweener hospitals 
were not included in the bill that just passed. As you know, I have 
long proposed a number of tweener payment improvements in previous 
bills this Congress and they were included in the agreement that 
Senator Baucus and I reached for this year's Medicare bill. 
Unfortunately, the core tweener hospital payment improvements were 
dropped from the bill once the process became partisan.
  It is for this reason that I am introducing this bill. We must 
improve the financial health of tweener hospitals and ensure that 
people have access to health care.
  Most tweener hospitals are currently designated as Medicare Dependent 
Hospitals and Sole Community Hospitals under the Medicare program. 
While the bill that recently passed Congress improves payments for Sole 
Community Hospitals, there are no provisions that benefit Medicare 
Dependent Hospitals. This bill would benefit Medicare Dependent 
Hospitals by not adjusting their payments for area wages unless it 
would result in improved payments.
  Also, a major driver of the financial difficulties that tweener 
hospitals face is the fact that many have relatively low volumes of 
inpatient admissions. Back when we passed the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003, I made sure that this 
law included an add-on payment for low volume rural hospitals. This 
bill would improve the existing low-volume add-on payment for hospitals 
so that more rural facilities, both Medicare Dependent Hospitals and 
Sole Community Hospitals, with low volumes would receive the assistance 
they desperately need.
  To offset the increases in spending from these tweener hospital 
payment improvements, this bill would address another priority that we 
wanted to include in a more comprehensive Medicare bill. Many know my 
position regarding physician owned hospitals and my concern about the 
effect these facilities have on health care access and costs as well as 
patient safety. There has been much debate regarding these facilities 
over the years, especially with physician owned limited service 
hospitals. This bill would eliminate the exceptions under the physician 
self-referral laws for physician-owned hospitals and provide a limited 
exception for existing facilities.
  As you can see, we still have much to do when it comes to ensuring 
access to health care in rural America. I look forward to working with 
my colleagues on this urgent matter.
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