[Congressional Record Volume 155, Number 13 (Thursday, January 22, 2009)]
[Senate]
[Pages S787-S792]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GRASSLEY (for himself, Mr. Kohl, and Ms. Klobuchar):
  S. 301. A bill to amend title XI of the Social Security Act to 
provide for transparency in the relationship between physicians and 
manufacturers of drugs, devices, biologicals, or medical supplies for 
which payment is made under Medicare, Medicaid, or SCHIP; to the 
Committee on Finance.
  Mr. GRASSLEY. Mr. President, I rise to introduce a bill today. Over 
the past several years, I have worked to establish greater transparency 
in the financial relationships and financial disclosure requirements 
between physicians and manufacturers of drugs, of biologics, and 
medical devices.
  In the last Congress, the 110th, Senator Herb Kohl of Wisconsin and I 
introduced what is entitled the Physician Payments Sunshine Act, which 
is intended to bring some much-needed transparency to these 
relationships between physicians and manufacturers.
  To explain why this bill is so important, let me point to a number of 
investigations I have conducted in the depth and scope of these 
relationships between physicians on the one hand, and manufacturers of 
drugs, biologics, and medical devices on the other hand.
  My findings to date are troubling and reveal significant undisclosed 
financial ties between physicians and industry. Some examples: These 
relationships, at times, resulted in annual incomes of over $1 million 
to individual physicians from just one company.

[[Page S788]]

  Another example. My investigations determined that several prominent 
physicians at major universities had failed to disclose large sums of 
money to their research institutions. That was despite institutional as 
well as Federal requirements that these reportings take place.
  This was also despite these physicians' involvement with Federal 
research study products made by the various drugmakers with whom they 
have financial relationships.
  This Federal research has involved billions of dollars in taxpayers' 
money to fund this research.
  My oversight has confirmed the need for a consistent, easy-to-
understand national system of disclosure, as opposed to a patchwork of 
disclosure requirements at State and institutional levels, although I 
compliment States that have such laws on the books.
  Today I am here to introduce, along with Senator Kohl, the Physician 
Payment Sunshine Act of 2009. The Physician Payment Sunshine Act would 
require that manufacturers of drugs, biologics, and medical devices 
disclose, on an annual basis, any financial relationships that they 
have with physicians. That information would be posted online by the 
Secretary of Health and Human Services in a format that is searchable, 
that would be clear and easy for the public to understand.
  Whether the relationship is as simple as buying a doctor's dinner or 
as complex as a multimillion-dollar consulting arrangement, these 
relationships may affect prescribing practices and may influence 
research.
  More importantly, they can obscure the most important issue existing 
between doctors and patients, and that is a question every doctor and 
patient has to consider: What is best for the patient?
  This legislation Senator Kohl and I are introducing today closely 
parallels the version I circulated last year and follows some recent 
MedPAC recommendations.
  MedPAC recommended a lower annual reporting threshold of $100--in the 
previous bill, it was higher--no de minimis exceptions for payments and 
a tighter preemption provision.
  MedPAC will publish their final recommendations in their March report 
to Congress. I will take those recommendations into consideration and 
intend to continue pursuing policies that go beyond the transparency in 
health care than even the existing bill does.
  There is a greater need for this legislation, and that greater need 
is demonstrated by a witness testifying at the Finance Committee 
hearing on health reform last year that industry and physician 
relationships are pervasive.
  Drug and device companies spend billions and billions every year on 
marketing, product development, and research, and much of this money 
goes directly to doctors.
  Last year, the Des Moines Register wrote:

       Your doctor's hand may be in the till of a drug company. So 
     how can you know whether the prescription he or she writes is 
     in your interest or the best interest of a drug company?

  That is a pretty good question that we all ought to be looking at.
  Many of these relationships are beneficial and appropriate. That is 
why we don't outlaw any of these relationships. What we do is make them 
be reported. And some of these should be reported on a more regular 
basis than they are even without this legislation.
  Physicians play important roles in inventing and refining new devices 
or in conducting medical research. They are hired to educate other 
doctors. We don't do anything in this legislation to end those 
professional relationships.
  But as is often the case, a few bad apples can spoil the whole 
barrel. It is clear Congress needs to act now to pass disclosure 
legislation.
  Currently, drug and device makers have to comply with a number of 
State requirements, each State giving its own definition and own rules.
  Patients as well as other doctors have no way to learn about these 
important relationships. This information should not only be available 
to those few Americans lucky enough to live in a State already 
requiring some level of disclosure.
  Even in the States currently requiring disclosure, most do not apply 
that law to medical device companies. Some States do not even make 
public the information they collect, which is of little value to 
patients who might want to know if their doctors have a relationship 
with a drug company or a medical device company about which they ought 
to know.
  Now, this bill isn't adding new burdens to the industry. By creating 
a central reporting system, the legislation actually relieves burdens. 
In addition, I am hopeful that this bill will enjoy the same wide-
ranging support as the prior legislation that Senator Kohl and I put in 
during the 110th Congress.
  I want to be clear--and this is the second time I am being clear on 
this point--this legislation does not regulate the business of drug and 
device companies. Let the people in industry do their business since 
they have the training and the skills to get the job done. But keep the 
American people apprised of the business you are doing and how you are 
doing it. After all, what is at risk isn't merely private interest but 
the health and well-being of all Americans who depend upon the drugs 
and medical devices to sustain and to improve their lives.
  In this process of what we call transparency, in this process that we 
call sunshine legislation, I often quote from an opinion of Justice 
Brandeis, I think in 1914, where he said: ``Sunlight is the best 
disinfectant.'' And that is what Senator Kohl and I are aiming to 
accomplish with this Physician Payment Sunshine Act, just a little 
sunlight so the public is better informed.
  Mr. KOHL. Mr. President, I rise today to reintroduce the Physician 
Payments Sunshine Act, along with my colleague Senator Grassley. This 
legislation will be a great step forward in increasing transparency of 
the relationships between pharmaceutical and medical device companies 
and our Nation's physicians, for the benefit of their patients.
  I want to begin by underscoring the fact that industry payments to 
physicians for research purposes or products they have helped develop 
are completely legitimate. Medical breakthroughs as a result of 
research have saved countless lives and could not have been achieved 
without the diligence of these me cal professionals. We must 
acknowledge, however, that conflicts of interest do exist in some 
cases. Transparency will help to illuminate the difference between 
legitimate and questionable relationships.
  It has been estimated that the drug industry spends $19 billion 
annually on marketing to physicians in the form of gifts, lunches, drug 
samples and sponsorship of education programs. Americans pay the price 
as through unnecessarily high drug costs and skyrocketing health 
insurance premiums. Rising drug prices hurt us all by undermining our 
private and public health systems, including Medicare and Medicaid.
  Even more alarming is the notion that these gifts and payments can 
compromise physicians' medical judgment by putting their financial 
interest ahead of the welfare of their patients. Recent studies show 
that the more doctors interact with drug marketers, the more likely 
doctors are to prescribe the expensive new drug that is being marketed 
to them.
  As a businessman, I understand that companies have the right to spend 
as much as they choose to promote their products. But as the largest 
payer of prescription drug costs, the Federal Government has an 
obligation to examine and take action when companies attempt to 
manipulate the market.
  I believe the Physician Payments Sunshine Act presents a long overdue 
solution to combat this potentially harmful influence. The legislation 
would require manufacturers of pharmaceutical drugs, devices and 
biologics to disclose the amount of money they give to doctors through 
payments, gifts, honoraria, travel and other means. These disclosures 
would be registered in a national, publicly accessible online database, 
managed by the U.S. Department of Health and Human Services. Those 
companies who fail to report will be subject to financial penalty.
  In the year and a half since the Sunshine bill was first introduced, 
several States have passed their own laws forcing disclosure, and 
several leading pharmaceutical companies have voluntarily implemented 
disclosure guidelines. A comprehensive national bill would create a 
one-stop information

[[Page S789]]

vault, here patients could easily gain access to data about these 
relationships. It is my hope that this online database will encourage 
patients to discuss any concerns they may have with their doctors.
  A great deal of money changes hands in the health care field, and a 
good percentage of it is helping Americans live healthier lives. The 
Physician Payments Sunshine Act will provide the transparency necessary 
to raise that percentage. We deserve nothing less.
                                 ______
                                 
      By Mr. VOINOVICH (for himself, Mr. Lieberman, and Mr. Carper):
  S. 303. A bill to reauthorize and improve the Federal Financial 
Assistance Management Improvement Act of 1999; to the Committee on 
Homeland Security and Governmental Affairs.
  Mr. VOINOVICH. Mr. President, I rise today to introduce the Federal 
Financial Assistance Management Improvement Act of 2009 with Senator 
Lieberman and Senator Carper.
  When I came to the Senate in 1999, I introduced the Federal Financial 
Assistance Management Improvement Act of 1999 with Senators Lieberman, 
Thompson and Durbin because as a former mayor and governor, I had seen 
first-hand the problems and complications that existed in the federal 
grant making process.
  Congress enacted our legislation to improve the effectiveness and 
performance of Federal financial assistance programs, simplify Federal 
financial assistance application and reporting requirements, improve 
the delivery of services to the public and coordinate the delivery of 
those services, and progress was made under the law, which is commonly 
known as ``P.L. 106-107.'' A 2005 Government Accountability Office, 
GAO, report noted that ``[m]ore than 5 years after passage of P.L. 106-
107, cross-agency work groups have made some progress in streamlining 
aspects of the early phases of the grants life cycle and in some 
specific 
aspects of overall grants management . . . .'' However, GAO also noted 
that work remained to be done and in 2006 suggested that Congress 
consider reauthorizing the Federal Financial Assistance Management 
Improvement Act of 1999, which expired in 2007.
  I believe that Congress should heed GAO's advice and reauthorize this 
important law, so last year I introduced S. 3341 with Senator Lieberman 
to reauthorize the Federal Financial Assistance Management Improvement 
Act and make improvements to that Act based on the 2005 and 2006 
recommendations of GAO. The bill passed the Senate in September 2008.
  Today we are reintroducing that legislation, which requires the 
Director of the Office of Management and Budget, OMB, to improve the 
grants.gov website or develop another public website that allows grant 
applicants to search and apply for grants, report on the use of grants, 
and provide required certifications and assurances for grants. I 
believe such a website will enhance the transparency required by the 
Federal Funding Accountability and Transparency Act that Congress 
enacted in 2007.
  The bill also requires the Director of OMB to develop a strategic 
plan for an end-to-end electronic capability for non-Federal entities 
to manage the Federal financial assistance they receive and requires 
each Federal agency to plan actions to implement that strategic plan. 
Each federal agency would be required to report to OMB on progress made 
in achieving its objectives under the OMB strategic plan, and the 
Director of OMB would be required to report to Congress biennially on 
progress made in implementing the Federal Financial Assistance 
Management Improvement Act.
  In 1999 I said the Federal Financial Assistance Management 
Improvement Act was an important step toward detangling the web of 
duplicative Federal grants available to States, localities and 
community organizations. Last year I said that while some progress was 
made under that law to detangle the web, work remained to be done. I 
hope that Congress will quickly reauthorize this law so that OMB and 
Federal agencies continue their efforts to simplify and streamline the 
Federal grant process.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 303

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Financial Assistance 
     Management Improvement Act of 2009''.

     SEC. 2. REAUTHORIZATION.

       Section 11 of the Federal Financial Assistance Management 
     Improvement Act of 1999 (31 U.S.C. 6101 note) is amended--
       (1) in the section heading, by striking ``and sunset''; and
       (2) by striking ``and shall cease to be effective 8 years 
     after such date of enactment''.

     SEC. 3. WEBSITE RELATING TO FEDERAL GRANTS.

       Section 6 of the Federal Financial Assistance Management 
     Improvement Act of 1999 (31 U.S.C. 6101 note) is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively;
       (2) by inserting after subsection (d) the following:
       ``(e) Website Relating to Federal Grants.--
       ``(1) In general.--The Director shall establish and 
     maintain a public website that serves as a central point of 
     information and access for applicants for Federal grants.
       ``(2) Contents.--To the maximum extent possible, the 
     website established under this subsection shall include, at a 
     minimum, for each Federal grant--
       ``(A) the grant announcement;
       ``(B) the statement of eligibility relating to the grant;
       ``(C) the application requirements for the grant;
       ``(D) the purposes of the grant;
       ``(E) the Federal agency funding the grant; and
       ``(F) the deadlines for applying for and awarding of the 
     grant.
       ``(3) Use by applicants.--The website established under 
     this subsection shall, to the greatest extent practical, 
     allow grant applicants to--
       ``(A) search the website for all Federal grants by type, 
     purpose, funding agency, program source, and other relevant 
     criteria;
       ``(B) apply for a Federal grant using the website;
       ``(C) manage, track, and report on the use of Federal 
     grants using the website; and
       ``(D) provide all required certifications and assurances 
     for a Federal grant using the website.''; and
       (3) in subsection (g), as so redesignated, by striking 
     ``All actions'' and inserting ``Except for actions relating 
     to establishing the website required under subsection (e), 
     all actions''.

     SEC. 4. REPORT ON IMPLEMENTATION.

       The Federal Financial Assistance Management Improvement Act 
     of 1999 (31 U.S.C. 6101 note) is amended by striking section 
     7 and inserting the following:

     ``SEC. 7. EVALUATION OF IMPLEMENTATION.

       ``(a) In General.--Not later than 9 months after the date 
     of enactment of the Federal Financial Assistance Management 
     Improvement Act of 2009, and every 2 years thereafter until 
     the date that is 15 years after the date of enactment of the 
     Federal Financial Assistance Management Improvement Act of 
     2009, the Director shall submit to Congress a report 
     regarding the implementation of this Act.
       ``(b) Contents.--
       ``(1) In general.--Each report under subsection (a) shall 
     include, for the applicable period--
       ``(A) a list of all grants for which an applicant may 
     submit an application using the website established under 
     section 6(e);
       ``(B) a list of all Federal agencies that provide Federal 
     financial assistance to non-Federal entities;
       ``(C) a list of each Federal agency that has complied, in 
     whole or in part, with the requirements of this Act;
       ``(D) for each Federal agency listed under subparagraph 
     (C), a description of the extent of the compliance with this 
     Act by the Federal agency;
       ``(E) a list of all Federal agencies exempted under section 
     6(d);
       ``(F) for each Federal agency listed under subparagraph 
     (E)--
       ``(i) an explanation of why the Federal agency was 
     exempted; and
       ``(ii) a certification that the basis for the exemption of 
     the Federal agency is still applicable;
       ``(G) a list of all common application forms that have been 
     developed that allow non-Federal entities to apply, in whole 
     or in part, for multiple Federal financial assistance 
     programs (including Federal financial assistance programs 
     administered by different Federal agencies) through a single 
     common application;
       ``(H) a list of all common forms and requirements that have 
     been developed that allow non-Federal entities to report, in 
     whole or in part, on the use of funding from multiple Federal 
     financial assistance programs (including Federal financial 
     assistance programs administered by different Federal 
     agencies);
       ``(I) a description of the efforts made by the Director and 
     Federal agencies to communicate and collaborate with 
     representatives

[[Page S790]]

     of non-Federal entities during the implementation of the 
     requirements under this Act;
       ``(J) a description of the efforts made by the Director to 
     work with Federal agencies to meet the goals of this Act, 
     including a description of working groups or other structures 
     used to coordinate Federal efforts to meet the goals of this 
     Act; and
       ``(K) identification and description of all systems being 
     used to disburse Federal financial assistance to non-Federal 
     entities.
       ``(2) Subsequent reports.--The second report submitted 
     under subsection (a), and each subsequent report submitted 
     under subsection (a), shall include--
       ``(A) a discussion of the progress made by the Federal 
     Government in meeting the goals of this Act, including the 
     amendments made by the Federal Financial Assistance 
     Management Improvement Act of 2009, and in implementing the 
     strategic plan submitted under section 8, including an 
     evaluation of the progress of each Federal agency that has 
     not received an exemption under section 6(d) towards 
     implementing the strategic plan; and
       ``(B) a compilation of the reports submitted under section 
     8(c)(3) during the applicable period.
       ``(c) Definition of Applicable Period.--In this section, 
     the term `applicable period' means--
       ``(1) for the first report submitted under subsection (a), 
     the most recent full fiscal year before the date of the 
     report; and
       ``(2) for the second report submitted under subsection (a), 
     and each subsequent report submitted under subsection (a), 
     the period beginning on the date on which the most recent 
     report under subsection (a) was submitted and ending on the 
     date of the report.''.

     SEC. 5. STRATEGIC PLAN.

       (a) In General.--The Federal Financial Assistance 
     Management Improvement Act of 1999 (31 U.S.C. 6101 note) is 
     amended--
       (1) by redesignating sections 8, 9, 10, and 11 as sections 
     9, 10, 11, and 12, respectively; and
       (2) by inserting after section 7, as amended by this Act, 
     the following:

     ``SEC. 8. STRATEGIC PLAN.

       ``(a) In General.--Not later than 18 months after the date 
     of enactment of the Federal Financial Assistance Management 
     Improvement Act of 2009, the Director shall submit to 
     Congress a strategic plan that--
       ``(1) identifies Federal financial assistance programs that 
     are suitable for common applications based on the common or 
     similar purposes of the Federal financial assistance;
       ``(2) identifies Federal financial assistance programs that 
     are suitable for common reporting forms or requirements based 
     on the common or similar purposes of the Federal financial 
     assistance;
       ``(3) identifies common aspects of multiple Federal 
     financial assistance programs that are suitable for common 
     application or reporting forms or requirements;
       ``(4) identifies changes in law, if any, needed to achieve 
     the goals of this Act; and
       ``(5) provides plans, timelines, and cost estimates for--
       ``(A) developing an entirely electronic, web-based process 
     for managing Federal financial assistance, including the 
     ability to--
       ``(i) apply for Federal financial assistance;
       ``(ii) track the status of applications for and payments of 
     Federal financial assistance;
       ``(iii) report on the use of Federal financial assistance, 
     including how such use has been in furtherance of the 
     objectives or purposes of the Federal financial assistance; 
     and
       ``(iv) provide required certifications and assurances;
       ``(B) ensuring full compliance by Federal agencies with the 
     requirements of this Act, including the amendments made by 
     the Federal Financial Assistance Management Improvement Act 
     of 2009;
       ``(C) creating common applications for the Federal 
     financial assistance programs identified under paragraph (1), 
     regardless of whether the Federal financial assistance 
     programs are administered by different Federal agencies;
       ``(D) establishing common financial and performance 
     reporting forms and requirements for the Federal financial 
     assistance programs identified under paragraph (2), 
     regardless of whether the Federal financial assistance 
     programs are administered by different Federal agencies;
       ``(E) establishing common applications and financial and 
     performance reporting forms and requirements for aspects of 
     the Federal financial assistance programs identified under 
     paragraph (3), regardless of whether the Federal financial 
     assistance programs are administered by different Federal 
     agencies;
       ``(F) developing mechanisms to ensure compatibility between 
     Federal financial assistance administration systems and State 
     systems to facilitate the importing and exporting of data;
       ``(G) developing common certifications and assurances, as 
     appropriate, for all Federal financial assistance programs 
     that have common or similar purposes, regardless of whether 
     the Federal financial assistance programs are administered by 
     different Federal agencies; and
       ``(H) minimizing the number of different systems used to 
     disburse Federal financial assistance.
       ``(b) Consultation.--In developing and implementing the 
     strategic plan under subsection (a), the Director shall 
     consult with representatives of non-Federal entities and 
     Federal agencies that have not received an exemption under 
     section 6(d).
       ``(c) Federal Agencies.--
       ``(1) In general.--Not later than 6 months after the date 
     on which the Director submits the strategic plan under 
     subsection (a), the head of each Federal agency that has not 
     received an exemption under section 6(d) shall develop a plan 
     that describes how the Federal agency will carry out the 
     responsibilities of the Federal agency under the strategic 
     plan, which shall include--
       ``(A) clear performance objectives and timelines for action 
     by the Federal agency in furtherance of the strategic plan; 
     and
       ``(B) the identification of measures to improve 
     communication and collaboration with representatives of non-
     Federal entities on an on-going basis during the 
     implementation of this Act.
       ``(2) Consultation.--The head of each Federal agency that 
     has not received an exemption under section 6(d) shall 
     consult with representatives of non-Federal entities during 
     the development and implementation of the plan of the Federal 
     agency developed under paragraph (1).
       ``(3) Reporting.--Not later than 2 years after the date on 
     which the head of a Federal agency that has not received an 
     exemption under section 6(d) develops the plan under 
     paragraph (1), and every 2 years thereafter until the date 
     that is 15 years after the date of enactment of the Federal 
     Financial Assistance Management Improvement Act of 2009, the 
     head of the Federal agency shall submit to the Director a 
     report regarding the progress of the Federal agency in 
     achieving the objectives of the plan of the Federal agency 
     developed under paragraph (1).''.
       (b) Technical and Conforming Amendment.--Section 5(d) of 
     the Federal Financial Assistance Management Improvement Act 
     of 1999 (31 U.S.C. 6101 note) is amended by inserting ``, 
     until the date on which the Federal agency submits the first 
     report by the Federal agency required under section 8(c)(3)'' 
     after ``subsection (a)(7)''.
                                 ______
                                 
      By Mr. DORGAN:
  S. 304. A bill to amend the Internal Revenue Code of 1986 to 
stimulate business investment, and for other purposes; to the Committee 
on Finance.
  Mr. DORGAN. Mr. President, today I am introducing legislation called 
the Main Street Recovery Act to boost business investment and help 
jumpstart the ailing U.S. economy. We are facing our most serious 
financial challenge since the Great Depression and we must respond 
aggressively. Our financial services sector is in shambles and other 
business sectors are suffering.
  Employers have been slashing jobs at an alarming rate--including 2.6 
million jobs last year--to reduce operating costs. Some economists are 
predicting that the unemployment rate could jump to 10-percent or more 
this year in many parts of the country.
  The manufacturing and construction sectors have been particularly 
hard hit during this downturn. The manufacturing sector laid off 
791,000 workers in 2008. The unemployment rate among construction 
workers in December was 15.3 percent, eight percentage points higher 
than for the economy as a whole. More than 1.4 million experienced 
construction workers are currently unemployed.
  I believe immediate action is needed to prevent our economy from 
sliding into a deeper recession that would lead to more bankrupt 
businesses and massive layoffs of workers across the country. That is 
why I will support a stimulus program that will create jobs by 
investing in infrastructure projects such as roads, bridges, water 
projects and more.
  But I also think we need to provide some targeted tax incentives to 
encourage the business community to consider making capital investments 
even during the economic slowdown. The legislation I am introducing 
today includes the following tax incentives that I believe can 
stimulate business investment: a temporary 15-percent investment tax 
credit. To encourage manufacturers and producers not to wait on making 
crucial equipment and machinery purchases, we should give them every 
incentive to make these purchases now or in the near future when these 
investments will most benefit the economy.
  We can accomplish this by offering a temporary, 15-percent tax credit 
through June 30, 2010 for businesses that purchase new equipment and 
machinery that is used as an integral part of manufacturing or 
production. Investment tax credits have been proven to work and will 
help generate growth and jobs in the nation's manufacturing and 
construction sectors.
  Enhanced 50-percent bonus depreciation. To promote business 
investment now, when the economy needs it most,

[[Page S791]]

we should extend the expiring 50-percent bonus depreciation for 
eligible assets placed in service over the next 18 months. This will 
help businesses make capital investments during the economic downturn 
by allowing businesses to write-off a larger share of their eligible 
business investments more quickly from their federal income taxes.
  Increased $250,000 small business expensing. To help small businesses 
buy the equipment and machinery they need to weather this economic 
storm and begin to grow again, we should extend the expiring expensing 
provision that allows small businesses to expense, i.e. immediately 
deduct, up to $250,000 of their equipment and machinery purchases over 
the next year and a half.
  In addition, there are many business owners that do not require new 
equipment or machinery but instead want to build a new business--maybe 
a restaurant, perhaps a retail shop or make interior and other 
improvements to such properties. Expanding the bonus depreciation and 
small business expensing provisions outlined above to cover investments 
in commercial real property will help provide business owners with the 
financial assistance they need to build that building or make long 
overdue improvements.
  I am very pleased to have the support of the U.S. Chamber of Commerce 
and the National Restaurant Association for my proposals as part of a 
robust economic stimulus package.
  The Senate is working on a large economic recovery package and I am 
optimistic that the package will include these important provisions. I 
am told that the Senate Finance Committee plans to mark up the tax 
portion of this package next week, and I am pleased that Chairman 
Baucus has recognized the need to help our Main Street businesses. In 
my judgment, including the tax incentives I have proposed will help 
stimulate much-needed economic activity and get our economy growing and 
creating jobs once again.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Crapo):
  S. 307. A bill to amend title XVIII of the Social Security Act to 
provide flexibility in the manner in which beds are counted for 
purposes of determining whether a hospital may be designated as a 
critical access hospital under the Medicare program and to exempt from 
the critical access hospital inpatient bed limitation the number of 
beds provided for certain veterans; to the Committee on Finance.
  Mr. WYDEN. Mr. President, I am pleased to be joined today by my 
colleague Senator Mike Crapo, to introduce this important piece of 
legislation for America's rural hospitals. I first introduced this 
legislation in 2007 with Senator Smith, and I am proud to continue our 
fight for rural hospitals in this Congress. Today, my fellow Oregonian, 
Representative Greg Walden, is introducing this same bill in the House 
of Representatives.
  The Medicare program is turning rural communities into ``health care 
sacrifice'' zones. Under current law, critical access hospitals either 
have to risk their financial viability or their patient's health if a 
26th patient walks in their door. Rural hospitals need greater 
flexibility from the Medicare program to fulfill their obligations to 
their communities--especially, but not limited to, their veterans--in 
times of public health emergencies.
  The Balanced Budget Act of 1997 merged a Montana initiative, the 
medical assistance facility demonstration, and the Rural Primary Care 
Hospital program into a new category of hospitals called critical 
access hospitals CAH. By design, the Critical Access Hospital program 
in Medicare ensures that rural communities have access to acute care 
and emergency services 24 hours a day, 7 days a week.
  In order to obtain this designation, hospitals must meet certain 
requirements, such as being located more than 35 miles from any other 
hospital, or receiving certification by the state to be a ``necessary 
provider.'' Critical access hospitals must also provide 24-hour 
emergency care services.
  As a designated critical access hospital, Medicare pays these 
hospitals based on its reported costs. Each critical access hospital 
receives 101 percent of its costs for outpatient, inpatient, 
laboratory, and therapy services. There are nearly 1,300 hospitals 
across the United States in 47 states that operate under a critical 
access hospital designation. Twenty-five of them are in Oregon.
  One requirement of this program is that there be no more than 25 beds 
occupied by patients at any one time. This requirement has proven to be 
too constricting for facilities during times of unexpected need, such 
as during an influenza outbreak or an influx of tourism to the 
community.
  Critical access hospital administrators in Oregon, especially Dennis 
Burke from Good Shepherd Medical Center in Hermiston and Jim Mattes at 
Grande Ronde Hospital in LaGrande, have expressed to me how this 
restriction has lead to unnecessary risks to patient safety and health. 
Hospital administrators have been forced to divert the 26th and 27th 
patient in their hospitals to a hospital much farther from their homes 
and families.
  This legislation makes two important changes to the Medicare Critical 
Access Hospital Program. First, this bill will provide the flexibility 
necessary for a critical access hospital to either choose to meet 
either the 25-bed-per-day limit or work with a limit of 20-beds-per-day 
averaged throughout the year. During times of spikes in public health 
need, these hospitals would be able to care for more patients even if 
the hospital would exceed the use of 25 beds.
  Second, this bill exempts beds used by veterans whose care is paid 
for or coordinated by the Department of Veterans Affairs, VA, from 
counting against the 25-bed limit or 20-bed yearly average. This change 
gives CAHs the flexibility they need to treat America's military 
veterans at a time when the VA has divested in hospital care for our 
rural veterans, forcing them into these already tightly restricted 
community hospitals.
  This bill also ensures that these hospitals are meeting the 
requirements under the law without breaking the bank. This new yearly 
average of 20 beds is set lower than the daily limit, 25 beds, to 
ensure that Medicare does not inappropriately expand this program. For 
example, Grande Ronde Hospital would save Medicare an average of 
$100,000 each year for ambulance transfers of Medicare/Medicaid 
patients, all of whom could be treated within their facility had it 
been able to be flexible on counting bed days.
  I believe that these simple changes in the current law are critically 
important to keeping our rural hospitals open and their communities' 
health care needs served. As we look to expand access to health 
coverage, this bill will ensure that the nearly 1,300 critical access 
hospitals in the country have the flexibility they need to remain open 
for the millions of Americans who depend on them.
  I hope my colleagues will join me in supporting this bill, and I look 
forward to working with Chairman Baucus and Ranking Member Grassley and 
other members of the Finance Committee to secure passage of this 
important bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 307

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Critical Access Hospital 
     Flexibility Act of 2009''.

     SEC. 2. FLEXIBILITY IN THE MANNER IN WHICH BEDS ARE COUNTED 
                   FOR PURPOSES OF DETERMINING WHETHER A HOSPITAL 
                   MAY BE DESIGNATED AS A CRITICAL ACCESS HOSPITAL 
                   UNDER THE MEDICARE PROGRAM.

       (a) In General.--Section 1820(c)(2)(B) of the Social 
     Security Act (42 U.S.C. 1395i-4(c)(2)(B)) is amended--
       (1) in clause (iii), by inserting ``(or 20, as determined 
     on an annual, average basis)'' after ``25''; and
       (2) by adding at the end the following flush sentence:
     ``In determining the number of beds for purposes of clause 
     (iii), only beds that are occupied shall be counted.''.
       (b) Effective Date.--The amendments made by this section 
     take effect on January 1, 2010.

     SEC. 3. CRITICAL ACCESS HOSPITAL INPATIENT BED LIMITATION 
                   EXEMPTION FOR BEDS PROVIDED TO CERTAIN 
                   VETERANS.

       (a) In General.--Section 1820(c) of the Social Security Act 
     (42 U.S.C. 1395i-4(c)) is amended by adding at the end the 
     following new paragraph:

[[Page S792]]

       ``(3) Exemption from bed limitation.--For purposes of this 
     section, no acute care inpatient bed shall be counted against 
     any numerical limitation specified under this section for 
     such a bed (or for inpatient bed days with respect to such a 
     bed) if the bed is provided for an individual who is a 
     veteran and the Department of Veterans Affairs referred the 
     individual for care in the hospital or is coordinating such 
     care with other care being provided by such Department.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to cost reporting periods beginning on or after 
     the date of the enactment of this Act.

                          ____________________