[Congressional Record Volume 155, Number 15 (Monday, January 26, 2009)]
[Senate]
[Pages S835-S836]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 318. A bill to amend title XVIII of the Social Security Act to 
improve access to health care under the Medicare program for 
beneficiaries residing in rural areas; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I am pleased to introduce the Medicare 
Rural Health Access Improvement Act of 2009.
  The purpose of this legislation is to continue ongoing efforts to 
ensure that Americans in rural areas have access to health care 
services. Much has been done in the past to improve access to rural 
providers such as hospitals and doctors. Much more still needs to be 
done. And it is even more important in light of the economic challenges 
we face.
  I hold town meetings in each of the 99 counties in the great state of 
Iowa every year. As many know, Iowa is largely a rural state, and a 
significant concern that I consistently hear during these meetings is 
the difficulty my constituents experience in accessing health care 
services. As the former Chairman and currently the Ranking Member of 
the Finance Committee, it has therefore been a priority for me to 
improve the availability of health care in rural areas.
  In Iowa, as in many rural areas across the country, hospitals are 
often not only the sole provider of health care in rural areas, but 
also employers and purchasers in the community. Moreover, 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. As you can see, it is vital that these institutions 
are able to keep their doors open.
  In previous legislation, Congress has been able to improve the 
financial viability of rural hospitals. For instance, the creation and 
subsequent improvements to the Critical Access Hospital designation 
have greatly improved the financial health of certain small rural 
hospitals and ensured that community residents have access to health 
care.
  However, there are still a group of rural hospitals that need help. I 
am referring to what are known as ``tweener'' hospitals, which are too 
large to be Critical Access Hospitals, but too small to be financially 
viable under the Medicare hospital prospective payment systems. These 
facilities are struggling to stay afloat despite their tireless 
efforts. Like in many communities in across the country, the staff of 
tweener hospitals and their community residents take great pride in the 
quality of care at these facilities. I have heard countless stories of 
the exemplary work tweener hospitals in Iowa perform not only as 
providers of essential health care, but also as responsible members of 
their communities. It is for this reason that many provisions in this 
bill are intended to 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. 
There are provisions, both temporary and permanent, included in this 
bill that would improve Medicare payments for both types of hospitals. 
This includes improvements to the payment methodologies so that 
inpatient payments to Medicare Dependent Hospitals would better reflect 
the costs they incur in providing care. Improvements are also proposed 
in this bill to Medicare hospital outpatient payments for both Medicare 
Dependent Hospitals and Sole Community Hospitals so they would both 
share the benefit of hold harmless payments and add-on 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. This bill would improve the existing low-volume 
add-on payment for hospitals so that more rural facilities with low 
volumes would receive the assistance they desperately need.
  Over the years, many have commented that it is simply unfair for many 
rural hospitals to receive only a limited amount of Medicare 
Disproportionate Share Hospital, or DSH, payments while many urban 
hospitals are not subject to such a cap. This bill would eliminate the 
cap for DSH payments for those rural hospitals for a two-year period.
  There are also other provisions that would continue to help rural 
hospitals. The rural flexibility program would be extended for an 
additional year. This essential program provides valuable resources for 
rural hospitals.
  This legislation also seeks to improve incentives for physicians 
located in rural areas and increase beneficiaries' access to rural 
health care providers. It includes provisions designed to reduce 
inequitable disparities in physician payment resulting from the 
Geographic Practice Cost Indices, or adjusters, known as GPCIs. 
Medicare payment for physician services varies from one area to another 
based on the geographic adjustments for a particular area. Geographic 
adjustments are intended to reflect cost differences in a given area 
compared to a national average of 1.0 so that an area with costs above 
the national average would have an index greater than 1.0, and an area 
below the national average would have an index less than 1.0. There are 
currently three geographic adjustments: for physician work, practice 
expense, and malpractice expense.
  Unfortunately, the existing geographic adjusters result in 
significant disparities in physician reimbursement which penalize, 
rather than equalize, physician payment in Iowa and other rural States. 
These geographic disparities in payment lead to rural states 
experiencing significant difficulties in recruiting and retaining 
physicians and other health care professionals due to their 
significantly lower reimbursement rates.
  These disparities have perverse effects when it comes to realigning 
Medicare payment to reward quality of care. Let me put that into 
context. Iowa is widely recognized as providing some of the highest 
quality health care in the country yet Iowa physicians receive some of 
the lowest Medicare reimbursement due to these inequitable geographic 
adjustments. Medicare reimbursement for some procedures is at least 30 
percent lower in Iowa than payment for those very procedures in other 
parts of the country. That is a significant disincentive for Iowa 
physicians who are providing some of the best quality care in the 
country, and it is fundamentally unfair. Congress needs to reduce these 
disparities in payment and focus on rewarding physicians who provide 
high quality care.
  The inequitable geographic payment formulas have also exacerbated the 
problems that rural areas face in terms of access to health care. Rural 
America today has far fewer physicians per capita than urban areas. The 
GPCI formulas are a dismal failure in promoting an adequate supply of 
physicians in states like Iowa, and more severe physician shortages in 
rural areas are predicted in the future.
  The legislation I am introducing today makes changes in the GPCI 
formulas for work and practice expense to reverse this trend. It 
recognizes the equality of physician work in all geographic areas and 
establishes a national value of 1.0 for the physician work adjustment. 
It establishes a practice expense floor of 1.0 floor and revises the 
calculation of the practice expense formula to reduce payment 
differences and more accurately compensate physicians in rural areas 
for

[[Page S836]]

their true practice costs. These changes are needed to help rural 
states recruit and retain more physicians so that beneficiaries will 
continue to have access to needed health care.
  Last year Congress enacted a number of other provisions to improve 
Medicare payment for health care professionals and providers in rural 
areas that will expire at the end of 2009. This bill extends the 
existing payment arrangements which allow independent laboratories to 
bill Medicare directly for certain physician pathology services through 
2010. It extends and improves the rural ambulance payments enacted in 
the Medicare Improvements for Providers and Patients Act of 2008 by 
increasing payments from three to five percent and extending them an 
additional year, through 2010. The bill also includes several new 
provisions to improve beneficiary access to health care services. It 
permanently increases the payment limits for rural health clinics. It 
also allows physician assistants to order post-hospital extended care 
services and to serve hospice patients.
  Finally, the bill would protect rural areas from being adversely 
affected by the new Medicare competitive bidding program for durable 
medical equipment. It would ensure that home medical equipment 
suppliers who provide equipment and services in rural areas and small 
metropolitan statistical areas, MSAs, with a population of 600,000 or 
less can continue to serve the Medicare program by exempting these 
areas from competitive bidding. We must ensure that rural areas 
continue to have medical equipment suppliers available to serve 
beneficiaries in these areas.
  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 important matter.
                                 ______