[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[Senate]
[Pages 23531-23545]
[From the U.S. Government Publishing Office, www.gpo.gov]



            MEDICARE BENEFICIARY ACCESS TO CARE ACT OF 1999

  Mr. DASCHLE. Mr. President, 2 years ago, we passed the Balanced 
Budget Act. It was a monumental example of what Congress can achieve 
when we work together.
  Not only did we end 30 years of deficit spending with the Balanced 
Budget Act, we also extended the life of the Medicare Part A Trust Fund 
by 13 years. And we added important new preventive benefits, including 
mammograms and Pap smears, for Medicare beneficiaries.
  We made many changes that achieved a lot of good.
  We also know now that we made some miscalculations.
  Frankly, that is to be expected. Very often, when you make a lot of 
changes, you don't get everything right the first time.
  But the miscalculations we made about Medicare in the Balanced Budget 
Act are causing real hardships for some of our most vulnerable 
citizens--hardships that cannot be justified on either financial or 
medical grounds. We did not anticipate these consequences when we 
passed the Balanced Budget Act. But now that we know about them, we 
have a responsibility to address them.
  Today I am introducing the Medicare Beneficiary Access to Care Act of 
1999.
  This bill is not a comprehensive Medicare reform plan. Nor is it a 
wholesale revision of the Balanced Budget Act. Instead, it is a 
reasonable, targeted solution to certain specific problems with 
Medicare that Congress created inadvertently as part of the Balanced 
Budget Act.
  Before I outline the specific remedies in my bill, I want to tell you 
about the real-life consequences of one of the changes we made to 
Medicare under the Balanced Budget Act.
  Two years ago, Congress decided to limit how much Medicare would pay 
for rehabilitation therapy. The new limits are $1,500 a year per 
patient for physical and speech therapy combined, and another $1,500 
for occupational therapy.
  For some Medicare patients who need rehabilitation therapy, the new 
limits on payments are not a problem. But for Ruth Irwin, they are a 
nightmare.
  A while back, Mrs. Irwin had to have one of her legs amputated 
because of complications of diabetes. With an incredible amount of 
effort and the help of regular physical therapy, Mrs. Irwin was 
learning how to walk with a prosthetic leg and two canes.
  Her goal was to learn to walk with one cane, so she would have one 
hand free. She was on the verge of reaching that goal--when she hit the 
$1,500 physical-therapy limit. She couldn't afford to pay out-of-
pocket, so she stopped seeing her physical therapist. Her condition 
deteriorated. A few months later, she tripped on a curb and broke three 
ribs. Ruth Irwin is not alone.
  It is estimated that 1 in 7 Medicare recipients who need physical 
therapy--about 200,000 Americans--will hit the caps this year. These 
are mostly patients who are recuperating from amputations, strokes, and 
head trauma, and people who suffer from serious degenerative diseases 
such as multiple sclerosis, Alzheimer's, and Parkinson's disease.
  Mr. President, between 1990 and 1996, Medicare spending on 
rehabilitation therapy grew 18 percent a year, to $1 billion. We had 
good reason to try to curb that growth. But we now know, we chose the 
wrong way to accomplish our goal. It's wrong to force stroke victims in 
nursing homes to decide whether they want to learn how to walk or talk. 
The Medicare Beneficiary Access to Care Act repeals the current, 
arbitrary caps rehabilitation therapy and replaces it with limits based 
on individual patients' specific needs.
  It also makes a number of other, targeted adjustments.
  First: It adjusts the new payment system for nursing homes and 
skilled nursing facilities to better reflect the increased costs of 
caring for very sick patients.
  Second: It postpones additional cuts in home health care payments for 
two years and addresses the more serious problems that have come to 
light while the current ``interim payment system'' has been in place.
  Third: It protects hospitals from crippling losses they might 
otherwise suffer as the result of a new Medicare payment system for 
outpatient medical services.
  This protection is especially important for people who depend on 
rural hospitals--like Mobridge Hospital, in Mobridge, South Dakota. 
Mobridge Hospital is the only source of inpatient hospital care for 100 
miles. If it were forced to drastically reduce its services, or close, 
that would have a devastating impact on scores of communities. Because 
they serve a population that is generally older and less wealthy than 
average, America's rural hospitals operate on lower profit margins, and 
they have virtually no margin for error. They need the relief that is 
in this bill.
  A fourth area addressed by the bill are the deep cuts made by the BBA 
in payments to teaching hospitals. Major teaching hospitals represent 
only 6% of all hospitals. But they account for 70% of the burn units in 
America, more than half of the pediatric intensive care units, and they 
provide 44% of the indigent care in this country. The bill moderates 
these cuts.
  When you combine other BBA cuts in payments with reductions in 
payments for indirect medical education, nearly half of America's major 
teaching hospitals are projected to lose money during the next few 
years. We cannot sacrifice the high-quality care, teaching, and 
research activities these hospitals provide. We must make this fix, and 
keep these hospitals whole. This bill does it.
  Fifth, Mr. President, the Medicare Beneficiary Access to Care Act 
provides new protections for seniors enrolled in Medicare+Choice, when 
their plan pulls out of their community.
  Finally, the bill includes additional provisions to protect access to 
rural hospitals, hospice care, community health centers, and rural 
health clinics.
  As I said, this is not a comprehensive solution to Medicare. There 
are still many questions we must work together to answer. How can we 
add the prescription drug plan both our parties--and the vast majority 
of Americans--say we support? How can we make sure Medicare remains 
solvent when the Baby Boomers retire--and beyond?
  These are questions that must be answered. They are important and 
must be addressed in legislation that falls outside the purview of the 
bill we introduce today. But make no mistake, they are high priorities, 
and ones which will not go away, and will be addressed in future bills.
  For now, though, there is no question that we made some 
miscalculations in 1997, when we changed the way Medicare pays for 
certain services. There is no question that those miscalculations are 
causing real hardships today for

[[Page 23532]]

some of America's sickest and frailest citizens, and for the 
institutions that care for them. And there should be no delay in 
correcting those miscalculations.
  We should make these changes not just because of the human suffering 
they are causing. There are compelling economic reasons to make them as 
well. That is the other part of Ruth Irwin's story. As a result of her 
three broken ribs, Mrs. Irwin received regular visits by a registered 
nurse and a home health aide--all paid for by Medicare. She also 
received physical therapy three times a week.
  The bottom line: Her recovery was far longer, more painful--and more 
costly--than it needed to be. We did a lot of good in 1997. We made 
some tough decisions that added years of solvency to Medicare, and 
enabled us to add life-saving new preventive benefits. But we also made 
some miscalculations.
  We didn't know at the time the harsh consequences some of these 
miscalculations would have.
  Now that we do, we need to correct them--the sooner, the better. So I 
urge all my colleagues to support this bill and to work with us to 
ensure its prompt consideration and passage.
  This legislation was the result of a tremendous amount of work by a 
number of our colleagues. This is clearly a team effort. I thank in 
particular Senator Moynihan for his extensive efforts to help us draft 
and craft this legislation. His expertise was invaluable in making very 
important decisions. I thank Senators Mikulski and Durbin and Kerrey 
for their commitment to solving the problem. I thank Senator Jack Reed 
for his help on home health and Senators Baucus and Conrad for their 
efforts on rural health. I thank especially Senator Rockefeller and the 
distinguished senior Senator from Massachusetts for their commitment to 
access to health care, to education, and to the array of issues they 
have raised throughout the work we have done on this bill to this date.
  Mr. President, I now yield the floor and again thank Senator Kennedy 
and others for their efforts on the floor this morning.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record.

                                S. 1678

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

     SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; 
                   TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Beneficiary Access to Care Act of 1999''.
       (b) Amendments to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to or repeal of a section 
     or other provision, the reference shall be considered to be 
     made to that section or other provision of the Social 
     Security Act.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
              contents.

                           TITLE I--HOSPITALS

Sec. 101. Multiyear transition to prospective payment system for 
              hospital outpatient department services.
Sec. 102. Limitation in reduction of payments to disproportionate share 
              hospitals.
Sec. 103. Changes to DSH allotments and transition rule.
Sec. 104. Revision of criteria for designation as a critical access 
              hospital.
Sec. 105. Sole community hospitals and medicare dependent hospitals.

                  TITLE II--GRADUATE MEDICAL EDUCATION

Sec. 201. Revision of multiyear reduction of indirect graduate medical 
              education payments.
Sec. 202. Acceleration of GME phase-in.
Sec. 203. Exclusion of nursing and allied health education costs in 
              calculating Medicare+Choice payment rate.
Sec. 204. Adjustments to limitations on number of interns and 
              residents.

                        TITLE III--HOSPICE CARE

Sec. 301. Increase in payments for hospice care.

                  TITLE IV--SKILLED NURSING FACILITIES

Sec. 401. Modification of case mix categories for certain conditions.
Sec. 402. Exclusion of clinical social worker services and services 
              performed under a contract with a rural health clinic or 
              Federally qualified health center from the PPS for SNFs.
Sec. 403. Exclusion of certain services from the PPS for SNFs.
Sec. 404. Exclusion of swing beds in critical access hospitals from the 
              PPS for SNFs.

              TITLE V--OUTPATIENT REHABILITATION SERVICES

Sec. 501. Modification of financial limitation on rehabilitation 
              services.

                     TITLE VI--PHYSICIANS' SERVICES

Sec. 601. Technical amendment to update adjustment factor and physician 
              sustainable growth rate.
Sec. 602. Publication of estimate of conversion factor and MedPAC 
              review.

                         TITLE VII--HOME HEALTH

Sec. 701. Delay in the 15 percent reduction in payments under the PPS 
              for home health services.
Sec. 702. Increase in per visit limit.
Sec. 703. Treatment of Outliers.
Sec. 704. Elimination of 15-minute billing requirement.
Sec. 705. Recoupment of overpayments.
Sec. 706. Refinement of home health agency consolidated billing.

                      TITLE VIII--MEDICARE+CHOICE

Sec. 801. Delay in ACR deadline under the Medicare+Choice program.
Sec. 802. Change in time period for exclusion of Medicare+Choice 
              organizations that have had a contract terminated.
Sec. 803. Enrollment of medicare beneficiaries in alternative 
              Medicare+Choice plans and medigap coverage in case of 
              involuntary termination of Medicare+Choice enrollment.
Sec. 804. Applying medigap and Medicare+Choice protections to disabled 
              and ESRD medicare beneficiaries.
Sec. 805. Extended Medicare+Choice disenrollment window for certain 
              involuntarily terminated enrollees.
Sec. 806. Nonpreemption of State prescription drug coverage mandates in 
              case of approved State medigap waivers.
Sec. 807. Modification of payment rules for certain frail elderly 
              medicare beneficiaries.
Sec. 808. Extension of medicare community nursing organization 
              demonstration projects.

                           TITLE IX--CLINICS

Sec. 901. New prospective payment system for Federally-qualified health 
              centers and rural health clinics under the medicaid 
              program.

                           TITLE I--HOSPITALS

     SEC. 101. MULTIYEAR TRANSITION TO PROSPECTIVE PAYMENT SYSTEM 
                   FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

       (a) In General.--Section 1833(t) (42 U.S.C. 1395(t)) is 
     amended by adding at the end the following:
       ``(10) Multiyear transition.--
       ``(A) In general.--In the case of covered OPD services 
     furnished by a hospital during a transition year, the 
     Secretary shall increase the payments for such services under 
     the prospective payment system established under this 
     subsection by the amount (if any) that the Secretary 
     determines is necessary to ensure that the payment to cost 
     ratio of the hospital for the transition year equals the 
     applicable percentage of the payment to cost ratio of the 
     hospital for 1996.
       ``(B) Payment to cost ratio.--
       ``(i) In general.--The payment to cost ratio of a hospital 
     for any year is the ratio which--

       ``(I) the hospital's reimbursement under this part for 
     covered OPD services furnished during the year, including 
     through cost-sharing described in subparagraph (D)(ii), bears 
     to
       ``(II) the cost of such services.

       ``(ii) Calculation of 1996 payment to cost ratio.--The 
     Secretary shall determine each hospital's payment to cost 
     ratio for 1996 as if the amendments to this title by the 
     provisions of section 4521 of the Balanced Budget Act of 1997 
     were in effect in 1996.
       ``(iii) Transition years.--The Secretary shall estimate 
     each payment to cost ratio of a hospital for any transition 
     year before the beginning of such year.
       ``(C) Interim payments.--
       ``(i) In general.--The Secretary shall make interim 
     payments to a hospital during any transition year for which 
     the Secretary estimates a payment is required under 
     subparagraph (A).
       ``(ii) Adjustments.--If the Secretary makes payments under 
     clause (i) for any transition year, the Secretary shall make 
     retrospective adjustments to each hospital based on its 
     settled cost report so that the amount of any additional 
     payment to a hospital for such year equals the amount 
     described in subparagraph (A).
       ``(D) Definitions.--In this paragraph:

[[Page 23533]]

       ``(i) Applicable percentage.--The term `applicable 
     percentage' means, with respect to covered OPD services 
     furnished during--

       ``(I) the first full year (and any portion of the 
     immediately preceding year) for which the prospective payment 
     system under this subsection is in effect, 95 percent;
       ``(II) the second full calendar year for which such system 
     is in effect, 90 percent; and
       ``(III) the third full calendar year for which such system 
     is in effect, 85 percent.

       ``(ii) Cost-sharing.--The term `cost-sharing' includes--

       ``(I) copayment amounts described in paragraph (5);
       ``(II) coinsurance described in section 1866(a)(2)(A)(ii); 
     and
       ``(III) the deductible described under section 1833(b).

       ``(iii) Transition year.--The term `transition year' means 
     any year (or portion thereof) described in clause (i).
       ``(E) Effect on copayments.--Nothing in this paragraph 
     shall be construed as affecting the unadjusted copayment 
     amount described in paragraph (3)(B).
       ``(F) Application without regard to budget neutrality.--The 
     transitional payments made under this paragraph--
       ``(i) shall not be considered an adjustment under paragraph 
     (2)(E); and
       ``(ii) shall not be implemented in a budget neutral 
     manner.''.
       (b) Special Rule for Rural and Cancer Hospitals.--Section 
     1833(t) (42 U.S.C. 1395(t)), as amended by subsection (a), is 
     amended by adding at the end the following:
       ``(11) Special rule for rural and cancer hospitals.--
       ``(A) In general.--For each year (or portion thereof), 
     beginning in 2000, in the case of covered OPD services 
     furnished by a medicare-dependent, small rural hospital (as 
     defined in section 1886(d)(5)(G)(iv)), a sole community 
     hospital (as defined in section 1886(d)(5)(D)(iii)), or in a 
     hospital described in section 1886(d)(1)(B)(v), the Secretary 
     shall increase the payments for such services under the 
     prospective payment system established under this subsection 
     by the amount (if any) that the Secretary determines is 
     necessary to ensure that the payment to cost ratio of the 
     hospital (as determined pursuant to paragraph (10)(B)) for 
     the year equals the payment to cost ratio of the hospital for 
     1996 (as calculated under clause (ii) of such paragraph).
       ``(B) Interim payments.--
       ``(i) In general.--The Secretary shall make interim 
     payments to a hospital during any year for which the 
     Secretary estimates a payment is required under subparagraph 
     (A).
       ``(ii) Adjustments.--If the Secretary makes payments under 
     clause (i) for any year, the Secretary shall make 
     retrospective adjustments to each hospital based on its 
     settled cost report so that the amount of any additional 
     payment to a hospital for such year equals the amount 
     described in subparagraph (A).
       ``(C) Effect on copayments.--Nothing in this paragraph 
     shall be construed as affecting the unadjusted copayment 
     amount described in paragraph (3)(B).
       ``(D) Application without regard to budget neutrality.--The 
     payments made under this paragraph--
       ``(i) shall not be considered an adjustment under paragraph 
     (2)(E); and
       ``(ii) shall not be implemented in a budget neutral 
     manner.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 4523 of the Balanced Budget Act of 1997 (Public Law 
     105-33; 111 Stat. 445).

     SEC. 102. LIMITATION IN REDUCTION OF PAYMENTS TO 
                   DISPROPORTIONATE SHARE HOSPITALS.

       (a) In General.--Section 1886(d)(5)(F)(ix) (42 U.S.C. 
     1395ww(d)(5)(F)(ix)) is amended--
       (1) in subclause (II)--
       (A) by striking ``fiscal year 1999,'' and inserting ``each 
     of fiscal years 1999, 2000, 2001, and 2002,''; and
       (B) by inserting ``and'' after the semicolon;
       (2) by striking subclauses (III), (IV), and (V); and
       (3) by redesignating subclause (VI) as subclause (III).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the amendments made by 
     section 4403 of the Balanced Budget Act of 1997 (Public Law 
     105-33; 111 Stat. 398).

     SEC. 103. CHANGES TO DSH ALLOTMENTS AND TRANSITION RULE.

       (a) Change in Disproportionate Share Hospital Allotments.--
     Section 1923(f)(2) (42 U.S.C. 1396r-4(f)(2)) is amended, in 
     the table contained in such section and in the DSH Allotments 
     for fiscal years 2000, 2001, and 2002--
       (1) for Minnesota, by striking ``16'' and inserting ``33'';
       (2) for New Mexico, by striking ``5'' and inserting ``9''; 
     and
       (3) for Wyoming, by striking ``0'' and inserting ``0.1''.
       (b) Making Medicaid DSH Transition Rule Permanent.--Section 
     4721(e) of the Balanced Budget Act of 1997 is amended--
       (1) in the matter before paragraph (1), by striking 
     ``1923(g)(2)(A)'' and ``1396r-4(g)(2)(A)'' and inserting 
     ``1923(g)(2)'' and ``1396r-4(g)(2)'', respectively;
       (2) in paragraphs (1) and (2)--
       (A) by striking ``, and before July 1, 1999''; and
       (B) by striking ``in such section'' and inserting ``in 
     subparagraph (A) of such section''; and
       (3) by striking ``and'' at the end of paragraph (1), by 
     striking the period at the end of paragraph (2) and inserting 
     ``; and'', and by adding at the end the following:
       ``(3) effective for State fiscal years that begin on or 
     after July 1, 1999, `or (b)(1)(B)' were inserted in 
     1923(g)(2)(B)(ii)(I) after `(b)(1)(A)'.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
     251).

     SEC. 104. REVISION OF CRITERIA FOR DESIGNATION AS A CRITICAL 
                   ACCESS HOSPITAL.

       (a) Criteria for Designation.--Section 1820(c)(2)(B)(iii) 
     (42 U.S.C. 1395i-4(c)(2)(B)(iii)) is amended by striking ``to 
     exceed 96 hours'' and all that follows before the semicolon 
     and inserting ``to exceed, on average, 96 hours per 
     patient''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect 60 days after the date of enactment of this 
     Act.

     SEC. 105. SOLE COMMUNITY HOSPITALS AND MEDICARE DEPENDENT 
                   HOSPITALS.

       (a) In General.--Section 1886(b)(3)(B)(iv) (42 U.S.C. 
     1395ww(b)(3)(B)(iv)) is amended--
       (1) in subclause (III), by striking ``and'' at the end;
       (2) in subclause (IV)--
       (A) by striking ``fiscal year 1996 and each subsequent 
     fiscal year'' and inserting ``fiscal years 1996 through 
     1999''; and
       (B) by striking the period at the end and inserting ``, 
     and''; and
       (3) by adding at the end the following:
       ``(V) for fiscal year 2000 and each subsequent fiscal year, 
     the market basket percentage increase.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of enactment of this Act.

                  TITLE II--GRADUATE MEDICAL EDUCATION

     SEC. 201. REVISION OF MULTIYEAR REDUCTION OF INDIRECT 
                   GRADUATE MEDICAL EDUCATION PAYMENTS.

       (a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 
     1395ww(d)(5)(B)(ii)) is amended by striking subclauses (III), 
     (IV), and (V) and inserting the following:

       ``(III) during each of fiscal years 1999, 2000, and 2001, 
     `c' is equal to 1.6; and
       ``(IV) on or after October 1, 2001, `c' is equal to 
     1.35.''.

       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in section 4621 of the 
     Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
     475).

     SEC. 202. ACCELERATION OF GME PHASE-IN.

       (a) Acceleration of Payment to Hospitals of Indirect and 
     Direct Medical Education Costs for Medicare+Choice 
     Enrollees.--
       (1) In general.--Section 1886(h)(3)(D)(ii) (42 U.S.C. 
     1395ww(h)(3)(D)(ii)) is amended by striking subclauses (IV) 
     and (V) and inserting the following:

       ``(IV) 100 percent in 2001 and subsequent years.''.

       (2) Acceleration of carve-out.--Section 1853(c)(3)(B)(ii) 
     (42 U.S.C. 1395w-23(c)(3)(B)(ii)) is amended--
       (A) in subclause (III), by inserting ``and'' at the end;
       (B) by striking subclause (IV); and
       (C) by redesignating subclause (V) as subclause (IV).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the enactment of the 
     Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
     251).

     SEC. 203. EXCLUSION OF NURSING AND ALLIED HEALTH EDUCATION 
                   COSTS IN CALCULATING MEDICARE+CHOICE PAYMENT 
                   RATE.

       (a) Excluding Costs in Calculating Payment Rate.--
       (1) In general.--Section 1853(c)(3)(C)(i) (42 U.S.C. 1395w-
     23(c)(3)(C)(i)) is amended--
       (A) in subclause (I), by striking ``and'' at the end;
       (B) in subclause (II), by striking the period at the end 
     and inserting ``, and''; and
       (C) by adding at the end the following:

       ``(III) for costs attributable to approved nursing and 
     allied health education programs under section 1861(v).''.

       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply in determining the annual per capita rate of 
     payment for years beginning with 2001.
       (b) Payment to Hospitals of Nursing and Allied Health 
     Education Program Costs for Medicare+Choice Enrollees.--
     Section 1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by 
     adding at the end the following:
       ``(V)(i) In determining the amount of payment to a hospital 
     for portions of cost reporting periods occurring on or after 
     January 1, 2001, with respect to the reasonable costs for 
     approved nursing and allied health education programs, 
     individuals who are enrolled with a Medicare+Choice 
     organization under part C shall be treated as if they were 
     not so enrolled.
       ``(ii) The Secretary shall establish rules for applying 
     clause (i) to a hospital reimbursed

[[Page 23534]]

     under a reimbursement system authorized under section 
     1814(b)(3) in the same manner as it would apply to the 
     hospital if it were not reimbursed under such section.''.

     SEC. 204. ADJUSTMENTS TO LIMITATIONS ON NUMBER OF INTERNS AND 
                   RESIDENTS.

       (a) Indirect Graduate Medical Education Adjustment.--
     Section 1886(d)(5)(B)(v) (42 U.S.C. 1395ww(d)(5)(B)(v)) is 
     amended--
       (1) by striking ``(v) In determining'' and inserting 
     ``(v)(I) Subject to subclause (II), in determining'';
       (2) by striking ``in the hospital with respect to the 
     hospital's most recent cost reporting period ending on or 
     before December 31, 1996'' and inserting ``who were appointed 
     by the hospital's approved medical residency training 
     programs for the hospital's most recent cost reporting period 
     ending on or before December 31, 1996''; and
       (3) by adding at the end the following:
       ``(II) Beginning on or after January 1, 1997, in the case 
     of a hospital that sponsors only 1 allopathic or osteopathic 
     residency program, the limit determined for such hospital 
     under subclause (I) may, at the hospital's discretion, be 
     increased by 1 for each calendar year but shall not exceed a 
     total of 3 more than the limit determined for the hospital 
     under subclause (I).''.
       (b) Direct Graduate Medical Education Adjustment.--
       (1) Limitation on number of residents.--Section 
     1886(h)(4)(F) (42 U.S.C. 1395ww(h)(4)(F)) is amended by 
     inserting ``who were appointed by the hospital's approved 
     medical residency training programs'' after ``may not exceed 
     the number of such full-time equivalent residents''.
       (2) Funding for programs.--Section 1886(h)(4)(H)(i) (42 
     U.S.C. 1395ww(h)(4)(H)(i)) is amended in the second sentence, 
     by inserting ``, including facilities that are not located in 
     an underserved rural area but have established separately 
     accredited rural training tracks'' before the period.
       (c) GME Payments for Certain Interns and Residents.--
       (1) Indirect and direct medical education.--Each limitation 
     regarding the number of residents or interns for which 
     payment may be made under section 1886 of the Social Security 
     Act (42 U.S.C. 1395ww) is increased by the number of 
     applicable residents (as defined in paragraph (2)).
       (2) Applicable resident defined.--In this subsection, the 
     term ``applicable resident'' means a resident or intern 
     that--
       (A) participated in graduate medical education at a 
     facility of the Department of Veterans Affairs;
       (B) was subsequently transferred on or after January 1, 
     1997, and before July 31, 1998, to a hospital and the 
     hospital was not a Department of Veterans Affairs facility; 
     and
       (C) was transferred because the approved medical residency 
     program in which the resident or intern participated would 
     lose accreditation by the Accreditation Council on Graduate 
     Medical Education if such program continued to train 
     residents at the Department of Veterans Affairs facility.
       (d) Effective Date.--This section shall take effect as if 
     included in the enactment of the Balanced Budget Act of 1997 
     (Public Law 105-33; 111 Stat. 251).

                        TITLE III--HOSPICE CARE

     SEC. 301. INCREASE IN PAYMENTS FOR HOSPICE CARE.

       (a) In General.--Section 1814(i)(1)(C)(ii)(VI) (42 U.S.C. 
     1395f(i)(1)(C)(ii)(VI)) is amended by striking ``through 
     2002'' and inserting ``and 1999''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 4441 of the Balanced Budget Act of 1997 (Public Law 
     105-33; 111 Stat. 422).

                  TITLE IV--SKILLED NURSING FACILITIES

     SEC. 401. MODIFICATION OF CASE MIX CATEGORIES FOR CERTAIN 
                   CONDITIONS.

       (a) In General.--For purposes of applying any formula under 
     paragraph (1) of section 1888(e) of the Social Security Act 
     (42 U.S.C. 1395yy(e)), for services provided on or after 
     April 1, 2000, and before the earlier of October 1, 2001, or 
     the date described in subsection (d), the Secretary of Health 
     and Human Services shall increase the adjusted Federal per 
     diem rate otherwise determined under paragraph (4) of such 
     section for services provided to any individual during the 
     period in which such individual is in a RUG III category by 
     the applicable payment add-on as determined in accordance 
     with the following table:

RUG III category                              Applicable payment add-on
  RUB.......................................................$23.06 ....

  RVC.......................................................$76.25 ....

  RVB.......................................................$30.36 ....

  RHC.......................................................$54.07 ....

  RHB.......................................................$27.28 ....

  RMC.......................................................$69.98 ....

  RMB.......................................................$30.09 ....

  SE3.......................................................$98.41 ....

  SE2.......................................................$89.05 ....

  SSC.......................................................$46.80 ....

  SSB.......................................................$55.56 ....

  SSA.......................................................$59.94.....

       (b) Update.--The Secretary shall update the applicable 
     payment add-on under subsection (a) for fiscal year 2001 by 
     the skilled nursing facility market basket percentage change 
     (as defined under section 1888(e)(5)(B) of the Social 
     Security Act (42 U.S.C. 1395yy(e)(5)(B))) applicable to such 
     fiscal year.
       (c) Rule of Construction.--Nothing in this section shall be 
     construed as permitting the Secretary of Health and Human 
     Services to include any applicable payment add-on determined 
     under subsection (a) in updating the Federal per diem rate 
     under section 1888(e)(4) of the Social Security Act (42 
     U.S.C. 1395yy(e)(4)).
       (d) Date Described.--The date described in this subsection 
     is the date that the Secretary of Health and Human Services--
       (1) refines the case mix classification system under 
     section 1888(e)(4)(G)(i) of the Social Security Act (42 
     U.S.C. 1395yy(e)(4)(G)(i)) to better account for medically 
     complex patients; and
       (2) implements such refined system.

     SEC. 402. EXCLUSION OF CLINICAL SOCIAL WORKER SERVICES AND 
                   SERVICES PERFORMED UNDER A CONTRACT WITH A 
                   RURAL HEALTH CLINIC OR FEDERALLY QUALIFIED 
                   HEALTH CENTER FROM THE PPS FOR SNFS.

       (a) In General.--Section 1888(e)(2)(A)(ii) (42 U.S.C. 
     1395yy(e)(2)(A)(ii)) is amended--
       (1) in the first sentence, by inserting ``clinical social 
     worker services,'' after ``qualified psychologist 
     services,''; and
       (2) by inserting after the first sentence the following: 
     ``Services described in this clause also include services 
     that are provided by a physician, a physician assistant, a 
     nurse practitioner, a qualified psychologist, or a clinical 
     social worker who is employed, or otherwise under contract, 
     with a rural health clinic or a Federally qualified health 
     center.''.
       (b) Conforming Amendment.--Section 1861(hh)(2) (42 U.S.C. 
     1395x(hh)(2)) is amended by striking ``and other than 
     services furnished to an inpatient of a skilled nursing 
     facility which the facility is required to provide as a 
     requirement for participation''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services provided on or after the date which 
     is 60 days after the date of enactment of this Act.

     SEC. 403. EXCLUSION OF CERTAIN SERVICES FROM THE PPS FOR 
                   SNFS.

       (a) In General.--Section 1888(e)(2)(A)(ii) (42 U.S.C. 
     1395yy(e)(2)(A)(ii)), as amended by section 402, is amended--
       (1) in the first sentence, by inserting ``ambulance 
     services, services identified by HCPCS code in Program 
     Memorandum Transmittal No. A-98-37 issued in November 1998 
     (but without regard to the setting in which such services are 
     furnished),'' after ``subparagraphs (F) and (O) of section 
     1861(s)(2),''; and
       (2) by inserting after the second sentence the following: 
     ``In addition to the services described in the previous 
     sentences, services described in this clause include 
     chemotherapy items (identified as of July 1, 1999, by HCPCS 
     codes J9000-J9020, J9040-J9151, J9170-J9185, J9200-J9201, 
     J9206-J9208, J9211, J9230-J9245, and J9265-J9600), 
     chemotherapy administration services (identified as of July 
     1, 1999, by HCPCS codes 36260-36262, 36489, 36530-36535, 
     36640, 36823, and 96405-96542), radioisotope services 
     (identified as of July 1, 1999, by HCPCS codes 79030-79440), 
     and customized prosthetic devices (identified as of July 1, 
     1999, by HCPCS codes L5050-L5340, L5500-L5610, L5613-L5986, 
     L5988, L6050-L6370, L6400-L6880, L6920-L7274, and L7362-
     L7366).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after the date which 
     is 60 days after the date of enactment of this Act.

     SEC. 404. EXCLUSION OF SWING BEDS IN CRITICAL ACCESS 
                   HOSPITALS FROM THE PPS FOR SNFS.

       (a) In General.--Section 1888(e)(7) of the Social Security 
     Act (42 U.S.C. 1395yy(e)(7)) is amended--
       (1) in the heading, by striking ``Transition'' and 
     inserting ``Special Rules'';
       (2) in subparagraph (A), by striking ``In general.--The'' 
     and inserting ``Transition.--Except as provided in 
     subparagraph (C), the''; and
       (3) by adding at the end the following:
       ``(C) Exemption of swing beds in critical access hospitals 
     from PPS.--The prospective payment system under this 
     subsection shall not apply (and section 1834(g) shall apply) 
     to services provided by a critical access hospital under an 
     agreement described in subparagraph (B).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to services provided on or after October 1, 1999.

              TITLE V--OUTPATIENT REHABILITATION SERVICES

     SEC. 501. MODIFICATION OF FINANCIAL LIMITATION ON 
                   REHABILITATION SERVICES.

       (a) 3-Year Repeal.--Section 1833(g) (42 U.S.C. 1395l(g)) is 
     amended by adding at the end the following:
       ``(4) Subject to paragraph (6), the provisions of 
     paragraphs (1) through (3) shall not apply to outpatient 
     physical therapy services, outpatient occupational therapy 
     services, and outpatient speech-language pathology services 
     covered under this title and furnished on or after January 1, 
     2000.
       ``(5)(A) Notwithstanding the preceding provisions of this 
     subsection and subject to subparagraph (B), with respect to 
     services described in paragraph (4) that are furnished on

[[Page 23535]]

     or after January 1, 2003, the Secretary shall implement, by 
     not later than January 1, 2003, a payment system for such 
     services that takes into account the needs of beneficiaries 
     under this title for differing amounts of therapy based on 
     factors such as diagnosis, functional status, and prior use 
     of services.
       ``(B) The payment system established under subparagraph (A) 
     shall be designed so that the system shall not result in any 
     increase or decrease in the expenditures under this title on 
     a fiscal year basis, determined as if paragraph (4) had not 
     been enacted.
       ``(6) If the Secretary for any reason does not implement 
     the payment system described in paragraph (5) on or before 
     January 1, 2003, paragraph (4) shall not apply with respect 
     to services described in such paragraph that are furnished on 
     or after such date and before the date on which the Secretary 
     implements such payment system.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of the 
     Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
     251).

                     TITLE VI--PHYSICIANS' SERVICES

     SEC. 601. TECHNICAL AMENDMENT TO UPDATE ADJUSTMENT FACTOR AND 
                   PHYSICIAN SUSTAINABLE GROWTH RATE.

       (a) Update Adjustment Factor.--
       (1) Change to calendar year basis.--Section 1848(d) (42 
     U.S.C. 1395w-4(d)) is amended--
       (A) in paragraph (1), by striking subparagraph (E) and 
     inserting the following:
       ``(E) Publication.--The Secretary shall publish in the 
     Federal Register--
       ``(i) not later than November 1 of each year (beginning 
     with 1999), the conversion factor that will apply to 
     physicians' services for the succeeding year and the update 
     determined under paragraph (3) for such year; and
       ``(ii) not later than November 1 of 1999--

       ``(I) the special update for the year 2000 under paragraph 
     (3)(E)(i); and
       ``(II) the estimated special adjustments for years 2001 
     through 2006 under paragraph (3)(E)(ii).''; and

       (B) in paragraph (3)(C)--
       (i) in the matter preceding clause (i), by striking ``the 
     12-month period ending with March 31 of'';
       (ii) in clause (i)--

       (I) by striking ``1997'' and inserting ``1996,''; and
       (II) by striking ``such 12-month period'' and inserting 
     ``1996''; and

       (iii) in clause (ii)--

       (I) by inserting a comma after ``subsequent year''; and
       (II) by striking ``fiscal year which begins during such 12-
     month period'' and inserting ``year involved''.

       (2) Formula for determining the update adjustment factor.--
     Section 1848(d)(3) (42 U.S.C. 1395w-4(d)(3)) is amended--
       (A) in subparagraph (A)--
       (i) in clause (ii), by striking ``(divided by 100),'' and 
     inserting a period; and
       (ii) by striking the matter following clause (ii);
       (B) in subparagraph (B)--
       (i) in the matter preceding clause (i), by inserting ``the 
     sum of'' after ``Secretary) to''; and
       (ii) by striking clauses (i) and (ii) and inserting the 
     following:
       ``(i) the figure arrived at by--

       ``(I) determining the difference between the allowed 
     expenditures for physicians' services for the prior year (as 
     determined under subparagraph (C)) and the actual 
     expenditures for such services for that year;
       ``(II) dividing that difference by the actual expenditures 
     for such services in that year; and
       ``(III) multiplying that quotient by 0.75; and

       ``(ii) the figure arrived at by--

       ``(I) determining the difference between the allowed 
     expenditures for physicians' services (as determined under 
     subparagraph (C)) from 1996 through the prior year and the 
     actual expenditures for such services during that period, 
     corrected with the best available data;
       ``(II) dividing that difference by actual expenditures for 
     such services for the prior year as increased by the 
     sustainable growth rate under subsection (f) for the year 
     whose update adjustment factor is to be determined; and
       ``(III) multiplying that quotient by 0.33.''; and

       (C) by amending subparagraph (D) to read as follows:
       ``(D) Restriction on update adjustment factor.--The update 
     adjustment factor determined under subparagraph (B) for a 
     year may not be less than negative 0.07 or greater than 
     0.03.''.
       (3) Special provisions.--Section 1848(d)(3) (42 U.S.C. 
     1395w-4(d)(3)) is amended--
       (A) in subparagraph (A), in the matter preceding clause 
     (i), by striking ``subparagraph (D)'' and inserting 
     ``subparagraphs (D) and (E)''; and
       (B) by adding at the end the following:
       ``(E) Special update and adjustments.--
       ``(i) Year 2000.--For the year 2000, the update under this 
     paragraph shall be the percentage that the Secretary 
     estimates will, without regard to any otherwise applicable 
     restriction, result in expenditures equal to the expenditures 
     that would have occurred in that year in the absence of the 
     amendments made by section 601 of the Medicare Beneficiary 
     Access to Care Act of 1999.
       ``(ii) Years 2001-2006.--For each of the years 2001 through 
     2006, the Secretary shall make that adjustment to the update 
     for that year which the Secretary estimates will, without 
     regard to any otherwise applicable restriction, result in 
     expenditures equal to the expenditures that would have 
     occurred for that year in the absence of the amendments made 
     by section 601 of the Medicare Beneficiary Access to Care Act 
     of 1999.''.
       (b) Sustainable Growth Rate.--Section 1848(f) (42 U.S.C. 
     1395w-4(f)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Publication.--Not later than November 1 of each year 
     (beginning with 1999), the Secretary shall publish in the 
     Federal Register the sustainable growth rate as determined 
     under this subsection for the succeeding year, the current 
     year, and each of the preceding 2 years.''; and
       (2) in paragraph (2)--
       (A) by striking ``fiscal'' each place it appears; and
       (B) in the matter preceding subparagraph (A), by striking 
     ``year 1998'' and inserting ``1997''.
       (c) Data To Be Used in Determining the Sustainable Growth 
     Rate.--Section 1848(f) (42 U.S.C. 1395w-4(f)) is amended--
       (1) by redesignating paragraph (3) as paragraph (4); and
       (2) by inserting after paragraph (2) the following:
       ``(3) Methodology.--For purposes of determining the update 
     adjustment factor under subsection (d)(3)(B) and the allowed 
     expenditures under subsection (d)(3)(C) for a year, the 
     sustainable growth rate for each year taken into 
     consideration in the determination under paragraph (2) shall 
     be determined as follows:
       ``(A) For purposes of such calculations for the year 2000, 
     the sustainable growth rate shall be determined on the basis 
     of the best data available to the Secretary as of September 
     1, 1999.
       ``(B) For purposes of such calculations for each year after 
     the year 2000--
       ``(i) the sustainable growth rate for such year and each of 
     the 2 preceding years shall be determined on the basis of the 
     best data available to the Secretary as of September 1 of 
     such year; and
       ``(ii) the sustainable growth rate for each year preceding 
     the years specified in clause (i) shall be the rate used for 
     such year in such calculation for the immediately preceding 
     year.''.
       (d) Effective Date.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by this section shall take effect as if included in the 
     enactment of the Balanced Budget Act of 1997 (Public Law 105-
     33; 111 Stat. 251).
       (2) No effect on updates for 1998 and 1999.--The amendments 
     made by this section shall have no effect on the updates 
     established by the Secretary for 1998 and 1999, and such 
     established updates may not be changed.

     SEC. 602. PUBLICATION OF ESTIMATE OF CONVERSION FACTOR AND 
                   MEDPAC REVIEW.

       (a) Publication.--Not later than April 15 of each year 
     (beginning in 2000), the Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall publish in the Federal Register--
       (1) an estimate of the single conversion factor to be used 
     in the next calendar year for reimbursement of physicians 
     services under section 1848 of the Social Security Act (42 
     U.S.C. 1395w-4); and
       (2) the data on which such estimate is based.
       (b) MedPAC Review and Report.--
       (1) Review.--The Medicare Payment Advisory Commission (in 
     this section referred to as ``MedPAC'') shall annually review 
     the estimates and data published by the Secretary pursuant to 
     subsection (a).
       (2) Report.--Not later than June 30 of each year (beginning 
     in 2000), MedPAC shall submit a report to the Secretary and 
     to the committees of jurisdiction in Congress on the review 
     conducted pursuant to paragraph (1), together with any 
     recommendations as determined appropriate by MedPAC.

                         TITLE VII--HOME HEALTH

     SEC. 701. DELAY IN THE 15 PERCENT REDUCTION IN PAYMENTS UNDER 
                   THE PPS FOR HOME HEALTH SERVICES.

       (a) Contingency Reduction.--Section 4603(e) of the Balanced 
     Budget Act of 1997 (42 U.S.C. 1395fff note), as amended by 
     section 5101(c)(3) of the Tax and Trade Relief Extension Act 
     of 1998 (contained in division J of Public Law 105-277), is 
     amended by striking ``September 30, 2000'' and inserting 
     ``September 30, 2002''.
       (b) Prospective Payment System.--Section 1895(b)(3)(A) (42 
     U.S.C. 1395fff(b)(3)(A)), as amended by section 5101 of the 
     Tax and Trade Relief Extension Act of 1998 (contained in 
     division J of Public Law 105-277), is amended by striking 
     clause (i) and inserting the following:
       ``(i) In general.--Under such system the Secretary shall 
     provide for computation of a standard prospective payment 
     amount (or amounts). Such amount (or amounts) shall

[[Page 23536]]

     initially be based on the most current audited cost report 
     data available to the Secretary and shall be computed in a 
     manner so that the total amounts payable under the system--

       ``(I) for fiscal year 2001, shall be equal to the total 
     amount that would have been made if the system had not been 
     in effect;
       ``(II) for fiscal year 2002, shall be equal to the amount 
     determined under subclause (I), updated under subparagraph 
     (B); and
       ``(III) for fiscal year 2003, shall be equal to the total 
     amount that would have been made for fiscal year 2001 if the 
     system had not been in effect but if the reduction in limits 
     described in clause (ii) had been in effect, and updated 
     under subparagraph (B) for fiscal years 2001 and 2002.

     Each such amount shall be standardized in a manner that 
     eliminates the effect of variations in relative case mix and 
     wage levels among different home health agencies in a budget 
     neutral manner consistent with the case mix and wage level 
     adjustments provided under paragraph (4)(A). Under the 
     system, the Secretary may recognize regional differences or 
     differences based upon whether or not the services or agency 
     are in an urbanized area.''.

     SEC. 702. INCREASE IN PER VISIT LIMIT.

       (a) Interim Payment System.--Section 1861(v)(1)(L)(i) (42 
     U.S.C. 1395x(v)(1)(L)(i)), as amended by section 701(b), is 
     amended--
       (1) in subclause (IV), by striking ``or'';
       (2) in subclause (V)--
       (A) by inserting ``and before October 1, 1999,'' after 
     ``October 1, 1998,''; and
       (B) by striking the period and inserting ``, or''; and
       (3) by adding at the end the following:
       ``(VI) October 1, 1999, 112 percent of such median.''.
       (b) Ensuring the Increase in Per Visit Limit Has No Effect 
     on the Prospective Payment System.--The second sentence of 
     section 1895(b)(3)(A)(i) (42 U.S.C. 1395fff(b)(3)(A)(i)), as 
     amended by section 5101(c)(1)(B) of the Tax and Trade Relief 
     Extension Act of 1998 (contained in division J of Public Law 
     105-277) and section 701(b), is amended--
       (1) in subclause (I), by inserting ``but if the reference 
     in section 1861(v)(1)(L)(i)(VI) to 112 percent were a 
     reference to 106 percent'' after ``if the system had not been 
     in effect''; and
       (2) in subclause (III), by inserting ``and if the reference 
     in section 1861(v)(1)(L)(i)(VI) to 112 percent were a 
     reference to 106 percent'' after ``clause (ii) had been in 
     effect''.

     SEC. 703. TREATMENT OF OUTLIERS.

       (a) Waiver of Per Beneficiary Limits for Outliers.--Section 
     1861(v)(1)(L) (42 U.S.C. 1395x(v)(1)(L)), as amended by 
     section 5101 of the Tax and Trade Relief Extension Act of 
     1998 (contained in division J of Public Law 105-277), is 
     amended--
       (1) by redesignating clause (ix) as clause (x); and
       (2) by inserting after clause (viii) the following:
       ``(ix)(I) Notwithstanding the applicable per beneficiary 
     limit under clause (v), (vi), or (viii), but subject to the 
     applicable per visit limit under clause (i), in the case of a 
     provider that demonstrates to the Secretary that with respect 
     to an individual to whom the provider furnished home health 
     services appropriate to the individual's condition (as 
     determined by the Secretary) at a reasonable cost (as 
     determined by the Secretary), and that such reasonable cost 
     significantly exceeded such applicable per beneficiary limit 
     because of unusual variations in the type or amount of 
     medically necessary care required to treat the individual, 
     the Secretary, upon application by the provider, shall pay to 
     such provider for such individual such reasonable cost.
       ``(II) The total amount of the additional payments made to 
     home health agencies pursuant to subclause (I) in any fiscal 
     year shall not exceed an amount equal to 2 percent of the 
     amounts that would have been paid under this subparagraph in 
     such year if this clause had not been enacted.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of enactment of this Act, and 
     shall apply to each application for payment of reasonable 
     costs for outliers submitted by any home health agency for 
     cost reporting periods ending on or after October 1, 1999.

     SEC. 704. ELIMINATION OF 15-MINUTE BILLING REQUIREMENT.

       (a) In General.--Section 1895(c) (42 U.S.C. 1395fff(c)) is 
     amended to read as follows:
       ``(c) Requirements for Payment Information.--With respect 
     to home health services furnished on or after October 1, 
     1998, no claim for such a service may be paid under this 
     title unless the claim has the unique identifier (provided 
     under section 1842(r)) for the physician who prescribed the 
     services or made the certification described in section 
     1814(a)(2) or 1835(a)(2)(A).''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to claims submitted on or after the date which is 
     60 days after the date of enactment of this section.

     SEC. 705. RECOUPMENT OF OVERPAYMENTS.

       (a) 36-Month Repayment Period.--In the case of an 
     overpayment by the Secretary of Health and Human Services to 
     a home health agency for home health services furnished 
     during a cost reporting period beginning on or after October 
     1, 1997, as a result of payment limitations provided for 
     under clause (v), (vi), or (viii) of section 1861(v)(1)(L) of 
     the Social Security Act (42 U.S.C. 1395x(v)(1)(L)), the home 
     health agency may elect to repay the amount of such 
     overpayment ratably over a 36-month period beginning on the 
     date of notification of such overpayment.
       (b) No Interest on Overpayment Amounts.--In the case of an 
     agency that makes an election under subsection (a), no 
     interest shall accrue on the outstanding balance of the 
     amount of overpayment during such 36-month period.
       (c) Termination.--No election under subsection (a) may be 
     made for cost reporting periods, or portions of cost 
     reporting periods, beginning on or after the date of the 
     implementation of the prospective payment system for home 
     health services under section 1895 of the Social Security Act 
     (42 U.S.C. 1395fff).
       (d) Effective Date.--The provisions of subsection (a) shall 
     apply to debts that are outstanding as of the date of 
     enactment of this Act.

     SEC. 706. REFINEMENT OF HOME HEALTH AGENCY CONSOLIDATED 
                   BILLING.

       (a) In General.--Section 1842(b)(6)(F) (42 U.S.C. 
     1395u(b)(6)(F)) is amended by inserting ``(including medical 
     supplies described in section 1861(m)(5), but excluding 
     durable medical equipment described in such section)'' after 
     ``home health services''.
       (b) Conforming Amendment.--Section 1862(a)(21) (42 U.S.C. 
     1395y(a)(21)) is amended by inserting ``(including medical 
     supplies described in section 1861(m)(5), but excluding 
     durable medical equipment described in such section)'' after 
     ``home health services''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 4603 of the Balanced Budget Act of 1997 (Public Law 
     105-33; 111 Stat. 467).

                      TITLE VIII--MEDICARE+CHOICE

     SEC. 801. DELAY IN ACR DEADLINE UNDER THE MEDICARE+CHOICE 
                   PROGRAM.

       (a) Delay in Deadline for Submission of Adjusted Community 
     Rates and Related Information.--Section 1854(a)(1) (42 U.S.C. 
     1395w-24(a)(1)) is amended by striking ``May 1'' and 
     inserting ``July 1''.
       (b) Adjustment in Information Disclosure Provisions.--
     Section 1851(d)(2)(A)(ii) (42 U.S.C. 1395w-21(d)(2)(A)(ii)) 
     is amended in the first sentence by inserting ``, to the 
     extent such information is available at the time of 
     preparation of the material for mailing'' before the period.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

     SEC. 802. CHANGE IN TIME PERIOD FOR EXCLUSION OF 
                   MEDICARE+CHOICE ORGANIZATIONS THAT HAVE HAD A 
                   CONTRACT TERMINATED.

       (a) In General.--Section 1857(c)(4) (42 U.S.C. 1395w-
     27(c)(4)) is amended by striking ``5-year period'' and 
     inserting ``3-year period''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to contract years beginning on or after January 
     1, 1999.

     SEC. 803. ENROLLMENT OF MEDICARE BENEFICIARIES IN ALTERNATIVE 
                   MEDICARE+CHOICE PLANS AND MEDIGAP COVERAGE IN 
                   CASE OF INVOLUNTARY TERMINATION OF 
                   MEDICARE+CHOICE ENROLLMENT.

       (a) Permitting Enrollment in Alternative Plans Upon Receipt 
     of Notice of Medicare+Choice Plan Termination.--
       (1) Medicare+choice plans.--Section 1851(e)(4) (42 U.S.C. 
     1395w-21(e)(4)) is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A)(i) the certification of the organization or plan 
     under this part has been terminated, or the organization or 
     plan has notified the individual of an impending termination 
     of such certification; or
       ``(ii) the organization has terminated or otherwise 
     discontinued providing the plan in the area in which the 
     individual resides, or has notified the individual of an 
     impending termination or discontinuation of such plan;''.
       (2) Medigap plans.--
       (A) In general.--Section 1882(s)(3)(A) (42 U.S.C. 
     1395ss(s)(3)(A)) is amended in the matter following clause 
     (iii)--
       (i) by inserting ``(92 days in the case of a termination or 
     discontinuation of coverage under the types of circumstances 
     described in section 1851(e)(4)(A))'' after ``63 days'';
       (ii) by inserting ``(or, if elected by the individual, the 
     date of notification of the individual by the plan or 
     organization of the impending termination or discontinuance 
     of the plan in the area in which the individual resides)'' 
     after ``the date of the termination of enrollment described 
     in such subparagraph''; and
       (iii) by inserting ``(or date of such notification)'' after 
     ``the date of termination or disenrollment''.
       (B) Effective date.--The amendments made by this paragraph 
     shall apply to notices of intended termination made by group 
     health plans and Medicare+Choice organizations after the date 
     of enactment of this Act.
       (b) Guaranteed Access for Certain Medicare Beneficiaries to 
     Medigap Policies in

[[Page 23537]]

     Case of Involuntary Termination of Coverage Under a 
     Medicare+Choice Plan.--
       (1) In general.--Section 1882(s)(3)(C)(iii) (42 U.S.C. 
     1395ss(s)(3)(C)(iii)) is amended by inserting ``or an 
     individual described in clause (ii) or (iii) of subparagraph 
     (B) in the case of circumstances described in section 
     1851(e)(4)(A)'' after ``subparagraph (B)(vi)''.
       (2) Effective date.--
       (A) In general.--Subject to subparagraph (B), the amendment 
     made by paragraph (1) shall apply to terminations of coverage 
     effected on or after the date of enactment of this Act.
       (B) Transitional medigap open enrollment period for certain 
     individuals affected by plan withdrawals.--In the case of an 
     individual described in clause (ii) or (iii) of subparagraph 
     (B) of section 1882(s)(3) of the Social Security Act in the 
     case of circumstances described in section 1851(e)(4)(A) of 
     such Act (relating to discontinuation of a plan or 
     organization entirely or in an area), if the termination or 
     discontinuation of coverage occurred after December 31, 1998, 
     and before the date of enactment of this Act, the provisions 
     of subparagraph (A) of section 1882(s)(3) such Act (in the 
     matter up to and including clause (iii) thereof) shall apply 
     to such an individual who seeks enrollment under a medicare 
     supplemental policy during the 92-day period beginning with 
     the first month that begins more than 30 days after the date 
     of enactment of this Act in the same manner as such 
     provisions apply to an individual described in the matter 
     following such clause (iii).

     SEC. 804. APPLYING MEDIGAP AND MEDICARE+CHOICE PROTECTIONS TO 
                   DISABLED AND ESRD MEDICARE BENEFICIARIES.

       (a) Assuring Availability of Medigap Coverage.--
       (1) In general.--Section 1882(s) (42 U.S.C. 1395ss(s)) is 
     amended--
       (A) in paragraph (2)(A), by striking ``is 65 years of age 
     or older and is'' and inserting ``is first'';
       (B) in paragraph (2)(D), by striking ``who is 65 years of 
     age or older as of the date of issuance and''; and
       (C) in paragraph (3)(B)(vi), by striking ``at age 65''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to terminations of coverage effected on or after 
     the date of enactment of this Act, regardless of when the 
     individuals become eligible for benefits under part A or B of 
     title XVIII of the Social Security Act.
       (b) Permitting ESRD Beneficiaries To Elect Another 
     Medicare+Choice Plan in Case of Plan Discontinuance.--
       (1) In general.--Section 1851(a)(3)(B) (42 U.S.C. 1395w-
     21(a)(3)(B)) is amended by striking ``except that'' and all 
     that follows and inserting the following: ``except that--
       ``(i) an individual who develops end-stage renal disease 
     while enrolled in a Medicare+Choice plan may continue to be 
     enrolled in that plan; and
       ``(ii) in the case of such an individual who is enrolled in 
     a Medicare+Choice plan under clause (i) (or subsequently 
     under this clause), if the enrollment is discontinued under 
     section 1851(e)(4)(A) the individual will be treated as a 
     `Medicare+Choice eligible individual' for purposes of 
     electing to continue enrollment in another Medicare+Choice 
     plan.''.
       (2) Effective date.--
       (A) The amendment made by paragraph (1) shall apply to 
     terminations and discontinuations occurring on or after the 
     date of enactment of this Act.
       (B) Clause (ii) of section 1851(a)(3)(B) of the Social 
     Security Act (as inserted by such amendment) also shall apply 
     to individuals whose enrollment in a Medicare+Choice plan was 
     terminated or discontinued after December 31, 1998, and 
     before the date of enactment of this Act. In applying this 
     subparagraph, such an individual shall be treated, for 
     purposes of part C of title XVIII of the Social Security Act, 
     as having discontinued enrollment in such a plan as of the 
     date of enactment of this Act.

     SEC. 805. EXTENDED MEDICARE+CHOICE DISENROLLMENT WINDOW FOR 
                   CERTAIN INVOLUNTARILY TERMINATED ENROLLEES.

       (a) Previous Medigap Enrollees.--Section 
     1882(s)(3)(B)(v)(III) (42 U.S.C. 1395ss(s)(3)(B)(v)(III)) is 
     amended--
       (1) by inserting ``(aa)'' after ``(III)'';
       (2) by striking the period and inserting ``, or''; and
       (3) by adding at the end the following:
       ``(bb) during the 12-month period described in item (aa), 
     is disenrolled under the circumstances described in section 
     1851(e)(4)(A) from the organization described in subclause 
     (II); enrolls, without an intervening enrollment, with 
     another such organization; and subsequently disenrolls during 
     such period (during which the enrollee is permitted to 
     disenroll under section 1851(e)).''.
       (b) Initial Medigap Enrollees.--Section 1882(s)(3)(B)(vi) 
     (42 U.S.C. 1395ss(s)(3)(B)(vi)), as amended by section 
     804(a)(1)(C), is amended--
       (1) by striking ``benefits under part A, enrolls'' and 
     inserting ``benefits under part A--
       ``(I) enrolls'';
       (2) by striking the period and inserting ``, or''; and
       (3) by adding at the end the following:
       ``(II)(aa) enrolls in a Medicare+Choice plan under part C, 
     which enrollment is terminated or discontinued under the 
     circumstances described in section 1851(e)(4)(A), and
       ``(bb) subsequently enrolls, without an intervening 
     enrollment, in another Medicare+Choice plan, and disenrolls 
     from such plan by not later than 12 months after the 
     effective date of the enrollment in the Medicare+Choice plan 
     described in item (aa).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to terminations and discontinuations occurring on 
     or after the date of enactment of this Act.

     SEC. 806. NONPREEMPTION OF STATE PRESCRIPTION DRUG COVERAGE 
                   MANDATES IN CASE OF APPROVED STATE MEDIGAP 
                   WAIVERS.

       (a) In General.--Section 1856(b)(3) (42 U.S.C. 1395w-
     26(b)(3)) is amended--
       (1) in subparagraph (A), by striking ``The standards'' and 
     inserting ``Subject to subparagraph (C), the standards''; and
       (2) by adding at the end the following:
       ``(C) Continuation of state prescription drug laws.--
     Subparagraph (A) shall not supersede any State law that 
     requires the comprehensive coverage of prescription drugs or 
     any regulation that carries out such a law, if--
       ``(i) the State has a waiver in effect under section 
     1882(p)(6)(A) with respect to requiring such coverage under 
     medicare supplemental policies; or
       ``(ii) the Secretary provides for a waiver for the State to 
     impose such a requirement under section 1882(p)(6)(B).''.
       (b) Medigap Waiver.--Section 1882(p)(6) (42 U.S.C. 
     1395ss(p)(6)) is amended--
       (1) by inserting ``(A)'' after ``(6)''; and
       (2) by adding at the end the following:
       ``(B) The Secretary also may waive the application of the 
     standards described in paragraph (1)(A)(i) so that a State 
     may include comprehensive prescription drug coverage among 
     the benefits required for all medicare supplemental 
     policies.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

     SEC. 807. MODIFICATION OF PAYMENT RULES FOR CERTAIN FRAIL 
                   ELDERLY MEDICARE BENEFICIARIES.

       (a) Modification of Payment Rules.--Section 1853 (42 U.S.C. 
     1395w-23) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)(A), by striking ``subsections (e) and 
     (f)'' and inserting ``subsections (e) through (i)'';
       (B) in paragraph (3)(D), by inserting ``and paragraph (4)'' 
     after ``section 1859(e)(4)''; and
       (C) by adding at the end the following:
       ``(4) Exemption from risk-adjustment system for frail 
     elderly beneficiaries enrolled in specialized programs for 
     the frail elderly.--
       ``(A) In general.--During the period described in 
     subparagraph (B), the risk-adjustment described in paragraph 
     (3) shall not apply to a frail elderly Medicare+Choice 
     beneficiary (as defined in subsection (i)(3)) who is enrolled 
     in a Medicare+Choice plan under a specialized program for the 
     frail elderly (as defined in subsection (i)(2)).
       ``(B) Period of application.--The period described in this 
     subparagraph begins with January 2000, and ends with the 
     first month for which the Secretary certifies to Congress 
     that a comprehensive risk adjustment methodology under 
     paragraph (3)(C) (that takes into account the types of 
     factors described in subsection (i)(1)) is being fully 
     implemented.''; and
       (2) by adding at the end the following:
       ``(i) Special Rules for Frail Elderly Enrolled in 
     Specialized Programs for the Frail Elderly.--
       ``(1) Development and implementation of new payment 
     system.--The Secretary shall develop and implement (as soon 
     as possible after the date of enactment of this subsection), 
     during the period described in subsection (a)(4)(B), a 
     payment methodology for frail elderly Medicare+Choice 
     beneficiaries enrolled in a Medicare+Choice plan under a 
     specialized program for the frail elderly (as defined in 
     paragraph (2)(A)). Such methodology shall account for the 
     prevalence, mix, and severity of chronic conditions among 
     such beneficiaries and shall include medical diagnostic 
     factors from all provider settings (including hospital and 
     nursing facility settings). It shall include functional 
     indicators of health status and such other factors as may be 
     necessary to achieve appropriate payments for plans serving 
     such beneficiaries.
       ``(2) Specialized program for the frail elderly 
     described.--
       ``(A) In general.--For purposes of this part, the term 
     `specialized program for the frail elderly' means a program 
     which the Secretary determines--
       ``(i) is offered under this part as a distinct part of a 
     Medicare+Choice plan;
       ``(ii) primarily enrolls frail elderly Medicare+Choice 
     beneficiaries; and
       ``(iii) has a clinical delivery system that is specifically 
     designed to serve the special needs of such beneficiaries and 
     to coordinate short-term and long-term care for such 
     beneficiaries through the use of a team described in 
     subparagraph (B) and through the provision of primary care 
     services to such beneficiaries by means of such a team at the 
     nursing facility involved.

[[Page 23538]]

       ``(B) Specialized team.--A team described in this 
     subparagraph--
       ``(i) includes--

       ``(I) a physician; and

       ``(II) a nurse practitioner or geriatric care manager, or 
     both; and

       ``(ii) has as members individuals who have special training 
     and specialize in the care and management of the frail 
     elderly beneficiaries.
       ``(3) Frail elderly medicare+choice beneficiary 
     described.--For purposes of this part, the term `frail 
     elderly Medicare+Choice beneficiary' means a Medicare+Choice 
     eligible individual who--
       ``(A) is residing in a skilled nursing facility or a 
     nursing facility (as defined for purposes of title XIX) for 
     an indefinite period and without any intention of residing 
     outside the facility; and
       ``(B) has a severity of condition that makes the individual 
     frail (as determined under guidelines approved by the 
     Secretary).''.
       (b) Continuous Open Enrollment for Certain Frail Elderly 
     Medicare Beneficiaries.--
       (1) In general.--Section 1851(e) (42 U.S.C. 1395w-21(e)) is 
     amended by adding at the end the following:
       ``(7) Special rules for frail elderly medicare+choice 
     beneficiaries enrolling in specialized programs for the frail 
     elderly.--There shall be a continuous open enrollment period 
     for any frail elderly Medicare+Choice beneficiary (as defined 
     in section 1853(i)(3)) who is seeking to enroll in a 
     Medicare+Choice plan under a specialized program for the 
     frail elderly (as defined in section 1853(i)(2)).''.
       (2) Conforming Amendments.--
       (A) Open enrollment periods.--Section 1851(e)(6) (42 U.S.C. 
     1395w-21(e)(6)) is amended--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (iii) by inserting after subparagraph (A) the following:
       ``(B) that is offering a specialized program for the frail 
     elderly (as defined in section 1853(i)(2)), shall accept 
     elections at any time for purposes of enrolling frail elderly 
     Medicare+Choice beneficiaries (as defined in section 
     1853(i)(3)) in such program; and''.
       (B) Effectiveness of elections.--Section 1851(f)(4) (42 
     U.S.C. 1395w-21(f)(4)) is amended by striking ``subsection 
     (e)(4)'' and inserting ``paragraph (4) or (7) of subsection 
     (e)''.
       (c) Development of Quality Measurement Program for 
     Specialized Programs for the Frail Elderly.--Section 1852(e) 
     (42 U.S.C. 1395w-22(e)) is amended by adding at the end the 
     following:
       ``(5) Quality measurement program for specialized programs 
     for the frail elderly as part of medicare+choice plans.--The 
     Secretary shall develop and implement a program to measure 
     the quality of care provided in specialized programs for the 
     frail elderly (as defined in section 1853(i)(2)) in order to 
     reflect the unique health aspects and needs of frail elderly 
     Medicare+Choice beneficiaries (as defined in section 
     1853(i)(3)). Such quality measurements may include indicators 
     of the prevalence of pressure sores, reduction of iatrogenic 
     disease, use of urinary catheters, use of antianxiety 
     medications, use of advance directives, incidence of 
     pneumonia, and incidence of congestive heart failure.''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of enactment of this Act.
       (2) Development of quality measurement program for 
     specialized programs for the frail elderly.--The Secretary of 
     Health and Human Services shall first provide for the 
     implementation of the quality measurement program for 
     specialized programs for the frail elderly under the 
     amendment made by subsection (c) by not later than July 1, 
     2000.

     SEC. 808. EXTENSION OF MEDICARE COMMUNITY NURSING 
                   ORGANIZATION DEMONSTRATION PROJECTS.

       Notwithstanding any other provision of law and in addition 
     to the extension provided under section 4019 of the Balanced 
     Budget Act of 1997 (Public Law 105-33; 111 Stat. 347), 
     demonstration projects conducted under section 4079 of the 
     Omnibus Budget Reconciliation Act of 1987 (Public Law 100-
     203; 101 Stat. 1330-121) shall be conducted for an additional 
     period of 3 years, and the deadline for any report required 
     relating to the results of such projects shall be not later 
     than 6 months before the end of such additional period.

                           TITLE IX--CLINICS

     SEC. 901. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-
                   QUALIFIED HEALTH CENTERS AND RURAL HEALTH 
                   CLINICS UNDER THE MEDICAID PROGRAM.

       (a) In General.--Section 1902(a)(13) (42 U.S.C. 
     1396a(a)(13)) is amended--
       (1) in subparagraph (A), by adding ``and'' at the end;
       (2) in subparagraph (B), by striking ``and'' at the end; 
     and
       (3) by striking subparagraph (C).
       (b) New Prospective Payment System.--Section 1902 (42 
     U.S.C. 1396a) is amended by adding at the end the following:
       ``(aa) Payment for Services Provided by Federally-Qualified 
     Health Centers and Rural Health Clinics.--
       ``(1) In general.--Beginning with fiscal year 2000 and each 
     succeeding fiscal year, the State plan shall provide for 
     payment for services described in section 1905(a)(2)(C) 
     furnished by a Federally-qualified health center and services 
     described in section 1905(a)(2)(B) furnished by a rural 
     health clinic in accordance with the provisions of this 
     subsection.
       ``(2) Fiscal year 2000.--For fiscal year 2000, the State 
     plan shall provide for payment for such services in an amount 
     (calculated on a per visit basis) that is equal to 100 
     percent of the costs of the center or clinic of furnishing 
     such services during fiscal year 1999 which are reasonable 
     and related to the cost of furnishing such services, or based 
     on such other tests of reasonableness as the Secretary 
     prescribes in regulations under section 1833(a)(3), or in the 
     case of services to which such regulations do not apply, the 
     same methodology used under section 1833(a)(3), adjusted to 
     take into account any increase in the scope of such services 
     furnished by the center or clinic during fiscal year 2000.
       ``(3) Fiscal year 2001 and succeeding years.--For fiscal 
     year 2001 and each succeeding fiscal year, the State plan 
     shall provide for payment for such services in an amount 
     (calculated on a per visit basis) that is equal to the amount 
     calculated for such services under this subsection for the 
     preceding fiscal year--
       ``(A) increased by the percentage increase in the MEI 
     (medicare economic index) (as defined in section 1842(i)(3)) 
     applicable to primary care services (as defined in section 
     1842(i)(4)) for that fiscal year; and
       ``(B) adjusted to take into account any increase in the 
     scope of such services furnished by the center or clinic 
     during that fiscal year.
       ``(4) Establishment of initial year payment amount for new 
     centers or clinics.--In any case in which an entity first 
     qualifies as a Federally-qualified health center or rural 
     health clinic after October 1, 2000, the State plan shall 
     provide for payment for services described in section 
     1905(a)(2)(C) furnished by the center or services described 
     in section 1905(a)(2)(B) furnished by the clinic in the first 
     fiscal year in which the center or clinic qualifies in an 
     amount (calculated on a per visit basis) that is equal to 100 
     percent of the costs of furnishing such services during such 
     fiscal year in accordance with the regulations and 
     methodology referred to in paragraph (2). For each fiscal 
     year following the fiscal year in which the entity first 
     qualifies as a Federally-qualified health center or rural 
     health clinic, the State plan shall provide for the payment 
     amount to be calculated in accordance with paragraph (3) of 
     this subsection.
       ``(5) Administration in the case of managed care.--In the 
     case of services furnished by a Federally-qualified health 
     center or rural health clinic pursuant to a contract between 
     the center or clinic and a managed care entity (as defined in 
     section 1932(a)(1)(B)), the State plan shall provide for 
     payment to the center or clinic (at least quarterly) by the 
     State of a supplemental payment equal to the amount (if any) 
     by which the amount determined under paragraphs (2), (3), and 
     (4) of this subsection exceeds the amount of the payments 
     provided under the contract.
       ``(6) Alternative payment system.--Notwithstanding any 
     other provision of this section, the State plan may provide 
     for payment in any fiscal year to a Federally-qualified 
     health center for services described in section 1905(a)(2)(C) 
     or to a rural health clinic for services described in section 
     1905(a)(2)(B) in an amount that is in excess of the amount 
     otherwise required to be paid to the center or clinic under 
     this subsection.''.
       (c) Conforming Amendments.--
       (1) Section 4712 of the Balanced Budget Act of 1997 (Public 
     Law 105-33; 111 Stat. 508) is amended by striking subsection 
     (c).
       (2) Section 1915(b) (42 U.S.C. 1396n(b)) is amended by 
     striking ``1902(a)(13)(E)'' and inserting ``1902(aa)''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1999.

  Mr. KENNEDY. Mr. President, we all want to express our appreciation 
to our leader, Senator Daschle, for the development of this proposal. 
As he has pointed out, we have worked closely with Senator Moynihan and 
the members the Finance Committee. We hope this will be the basis of 
the coming together here in the Senate. This should not be a partisan 
issue. The kinds of problems Senator Daschle pointed out are problems 
not only in urban areas but in rural communities, too. The program he 
has advocated touches the health care needs of people all over this 
country. This particular issue cries for a response and action from 
this Congress in these final few days.
  I join with him and others who say we should not leave, we cannot 
leave, we will not leave this session without addressing these 
problems. We have the time now to work this process through.

[[Page 23539]]

I think the way this has been fashioned has demonstrated a sensitivity 
to the range of different emergencies that are out there across the 
landscape affecting real people.
  So I join others on our side in commending him for the leadership he 
has provided on this issue as in so many other areas. Hopefully, he 
will be successful in reaching across the aisle so that we can all work 
on this issue together.
  Mr. President, no senior citizen should be forced to enter a hospital 
or a nursing home because Medicare can't afford to pay for services to 
keep her in her own home and in her own community.
  No person with a disability should be told that occupational therapy 
services are no longer available because legislation to balance the 
budget reduced the rehabilitation services they need.
  No community should be told that their number one employer and 
provider of health care will be closing its doors or engaging in 
massive layoffs because Medicare can no longer pay its fair share of 
health costs.
  No freestanding children's hospital should wonder whether it can 
continue to train providers to care for children because it receives no 
federal support for its teaching activities. Yet these scenes and many 
others are playing out in towns and cities across the country today, in 
large part due to the unexpectedly deep Medicare cuts in the Balanced 
Budget Act passed two years ago.
  The 1997 Act was the final part of a process undertaken since 1993 to 
balance the federal budget and lay the groundwork for the current 
economic boom and the large budget surpluses we anticipate in the years 
ahead. However, our ability to balance the budget was primarily 
attributable to deep savings achieved by cuts in Medicare--by slowing 
the rate of growth in provider payments and other policy reforms. These 
cuts were expected to total $116 billion over five years, and nearly 
$400 billion over ten years. Clearly, as experience now shows, these 
cuts are too deep for the Medicare program to sustain.
  In fact, these cuts were more than double the amount ever enacted in 
any previous legislation. The Congressional Budget Office has now 
increased the estimate of the savings to total $200 billion over five 
years and more than $600 billion over ten years--far greater than 
Congress intended.
  Not surprisingly, we are now hearing from large numbers of the 
nation's safety net providers--especially teaching hospitals, community 
hospitals, and community health centers. We are hearing from those who 
care for the elderly and disabled when they leave the hospital--nursing 
homes, home health agencies and rehabilitation specialists. We are 
hearing from virtually every group that cares for the 40 million senior 
citizens and disabled citizens on Medicare. They are saying--with great 
alarm and anxiety--that Congress went too far.
  The Medicare Beneficiary Access to Quality Health Care Act that we 
are introducing today will alleviate much of this damage. It will 
provide $20 billion over the next ten years to reduce the pain created 
by the harshest cuts in the Balanced Budget Act. It will ensure that 
the nation's health care system is able to care responsibly for today's 
senior citizens, and is adequately prepared to take care of those who 
will be retiring in the future.
  The current Balanced Budget Act is unfairly imposing a $1.7 billion 
cut over the next five years for Massachusetts hospitals alone. Our 
community hospitals are reeling. Many of our teaching hospitals have 
laid off staff, and are unable to continue to participate in Medicare 
HMO contracts. Some say that these cuts are needed to make Medicare 
more efficient. But Massachusetts teaching hospitals are already 
efficient. In the past six years, one out of five of our teaching 
hospitals and one out of four hospital beds have been closed. We cannot 
afford to compromise on patient care, doctor training, and the state-
of-the-art medical research conducted at the nation's top hospitals.
  In addition, children's hospitals deserve help as well. They 
currently receive almost no federal support for their important 
teaching and training activities. They train a majority of the nation's 
pediatricians and pediatric specialists. Yet current rules keep them 
from receiving the level of federal support available to other teaching 
hospitals. While this particular legislation does not address this 
problem, Senator Bob Kerrey and I have proposed a separate bill with 
strong bipartisan support to correct this injustice and give children's 
hospitals the funding they deserve to train the pediatricians needed to 
care for the nation's children in the years ahead.
  The home-bound elderly--our most vulnerable senior citizens--are also 
suffering. In Massachusetts alone, home health agencies are losing $160 
million annually, and 20 agencies have closed their doors since the 
Balanced Budget Act went into effect. The ones that remain are seeing 
fewer patients, and seeing their current patients less often.
  Massachusetts nursing homes are predicting losses of $500 million 
over the next five years. Eleven facilities have declared bankruptcy 
this year, and more are expected to follow.
  With the impending retirement of the baby boom generation, the last 
thing we should do now is jeopardize the viability and commitment of 
the essential institutions that care for Medicare beneficiaries. Yet 
that is now happening in cities and towns across the nation. In the 
vast majority of cases, the providers who care for Medicare patients 
are the same ones who care for working families and everyone else in 
their community. When hospitals who serve Medicare beneficiaries are 
threatened, health care for the entire community is threatened.
  Nearly one million elderly and disabled Massachusetts residents rely 
on Medicare for their health care. This legislation is a sensible, 
affordable step to ensure that our health care system will continue to 
be there for them when they need it. It deserves prompt consideration 
and passage. I commend Senator Daschle for his leadership on this vital 
issue, and I urge the Senate to approve this important measure.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Mr. President, I congratulate and thank my colleague 
from Massachusetts for his remarks and for his extraordinary commitment 
to this effort. He has been at every meeting. He has been engaged from 
the very beginning, and we are grateful, as on so many of the issues 
our caucus cares deeply about, for the leadership he has provided.
  I am proud of the fact we have had the participation of well over 20 
Members, and the senior Senator from Massachusetts has been the leader 
of the pack, as he is on so many other issues.
  I also thank Senator Rockefeller for the extraordinary effort he has 
put forth. As a member of the Finance Committee, no one has worked 
harder on many of these issues than has he. I am grateful for the 
participation and leadership he has provided to get us to this point.
  Before I yield the floor, let me say how urgent this matter is. My 
colleagues yesterday discussed the urgency of this legislation again 
and again. I am disappointed and deeply concerned about the fact that, 
at least to date, there is no date yet set for consideration and markup 
of a bill to repair the damage done in the 1997 act. We have to address 
and consider and ultimately pass such a bill prior to the time we leave 
the Senate this year. We will do anything, and everything we know how, 
to ensure this becomes one of the highest legislative priorities left 
prior to the end of this session of Congress. It must be addressed. It 
must be passed. We must take this legislation up soon in order for us 
to accomplish what I know is a bipartisan recognition of the 
shortcomings and the miscalculations made in the 1997 act.
  I will say again, the fact that we have over half of our caucus 
already, and will probably have two-thirds of our caucus as cosponsors 
in the not-too-distant future, is a clear recognition of the depth of 
feeling our Members have on this bill and the importance we place on 
getting something

[[Page 23540]]

done this year. We must do it. We will do it, and we will work with our 
Republican colleagues to make that happen.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Mr. President, I strongly agree with the words our 
Democratic leader has offered, and I congratulate him for mobilizing 
this effort, but it is a mobilization not so much of Democrats as it is 
of Senators in general. Hospitals and patients and skilled nursing 
facilities and home health agencies are not Republican or Democrat. The 
shortages, the closings, the health care denied is not Republican or 
Democrat. It has to do with the people of our States and of our 
country.
  This is a bipartisan matter. I know, without even having talked to 
but five or six of my colleagues on the other side of the aisle, when 
they went back to their homes during the August recess and when they 
have been back since, this has been the subject with which we have all 
been, in a sense, lobbied in the best sense; that is, lobbied by our 
own constituents, by our own voters, by people who are patients, by 
people who have had these problems.
  It is right; we should be fixing this because Congress, in 1997, when 
we passed the Balanced Budget Act, made changes that were larger in 
Medicare than any in the history of the program, and we made mistakes. 
This is actually one of the reasons our colleagues on the other side of 
the aisle often criticize congressional action because we are trying to 
play doctor. We often try, but we often do not do it very well. In this 
case, we did not. We made mistakes.
  When we make a mistake, we are causing skilled working facilities, 
home health agencies, and hospitals to close; we are putting in 
jeopardy margins of profit, which have gone into the red already, of 
other hospitals, particularly rural hospitals. We have to correct it.
  There is nothing more self-evident to me than the need for this 
Congress to take up the BBA corrections and, in fact, do them on a 
bipartisan basis. We do not have very much time. There seems to be 
quite a lot of anxiousness to get out of here. That is not shared by 
the junior Senator from West Virginia. In that case, it puts more 
pressure on us to do it. We need a date. We need to do this. This is 
not makeup stuff. These are real problems.
  In my State of West Virginia, which is not large but our citizens are 
no less important than anybody else's, and to me they are more 
important, in the next 4 years our hospitals are going to face an 
almost $600 million cut in payment because of mistakes we made in the 
1997 Budget Act. They did not make the mistakes. They have not been 
keeping their books incorrectly. They have not been trying to be 
inefficient. We made the mistakes. We made the mistakes in Congress, 
and it is up to us to correct them.
  Many critical public health services will be cut back. That has 
happened already. It will continue to happen. Home care agencies in my 
State expect there will be almost 5,000 less Medicare patients being 
admitted for their services than before.
  Eleven home health care providers in West Virginia have closed. That 
is not a lot, but that is a lot in West Virginia, and it is in a lot of 
places. We have 55 counties and 1.8 million people. Eleven home health 
agencies is a lot; 2,500 on a nationwide basis are closed. They are not 
thinking about closing but have closed because of mistakes we in 
Congress have made in making these enormous changes to Medicare. They 
have been forced to close down because the current payment system does 
not adequately reimburse them for what they have to do.
  CBO originally estimated home health reimbursement reductions would 
be $16 billion. It turned out the reduction was $47 billion. That was 
not the hospitals' fault; That was not the home health agencies' fault; 
that was our fault. We made that mistake. We have to correct that 
mistake.
  The $1,500 cap on therapy is having bad results on nursing home 
patients with Parkinson's disease, burns, and other things. We need to 
correct that because we made the mistakes.
  I will end by saying, I agree on teaching hospitals. We have three 
teaching hospitals in West Virginia. Whatever happens in general 
happens in a much worse way in rural States. That is by definition, 
that is by nature, whether it is hospitals, nursing homes, or anything 
else. That has always been the case.
  Rural hospitals have very little to fall back on because they do not 
have margins. They depend on Medicare more than those in larger and 
more urban States. These were unintended cuts we made, but we 
nevertheless made them. The mistake is ours. It is a bipartisan 
mistake. It came along with a very good bill, the Balanced Budget Act 
of 1997. Within it, there was some cancer, and the cancer was caused by 
us, and it is the mistakes we made which are causing havoc all over the 
health care world. We can change it easily and change it before we 
leave here, and surely we should. I yield the floor.
  Ms. MIKULSKI. Mr. President, I rise today as a cosponsor of Senator 
Daschle's bill to address the draconian cuts to Medicare under the 
Balanced Budget Act of 1997 (BBA). I thank Senator Daschle for 
introducing this important piece of legislation.
  I support this bill for two reasons. First, I believe the BBA went 
too far when it cut reimbursements to Medicare. Second, as we move 
towards the millennium and our senior population continues to grow, our 
seniors must be able to rely on a sound and secure Medicare Program. 
This bill will help them do just that.
  When I travel throughout the State of Maryland, the issue my 
constituents want to talk about most is cuts in services for the 
elderly. I have worked long and hard to find solutions to these cuts. 
That is why I cosponsored an amendment to the recent tax bill which 
placed a priority on fixing Medicare before providing for a tax cut. 
That is why I am working on a new and improved Older Americans Act, and 
that is why I am cosponsoring Senator Daschle's legislation, which 
helps providers who are struggling under BBA cuts to Medicare.
  The BBA is one of the reasons why we have a projected budget surplus. 
It put us on the right track of fiscal prudence, but it went too far in 
the case of Medicare by imposing deep cuts on providers: It cut 
reimbursements to home health agencies; it cut reimbursements to 
nursing homes; it cut reimbursements to Medicare HMOs. Our seniors and 
our providers are now feeling the effects of these cuts.
  What exactly do these cuts mean? In my State of Maryland, this means 
that 34 Home Health Agencies have closed their doors and only two 
public Home Health Agencies remain. This is a particular problem in 
rural counties in Maryland. Agencies in these areas are committed to 
providing health care to those who cannot travel to hospitals or 
doctors offices. In fact, they are so committed to providing home-bound 
patients with care, I know some health care providers who have traveled 
to homes by a snowmobile in winter months just to get to a patient. But 
because of substantial cuts in reimbursements under BBA, these agencies 
are left with no choice but to close their doors; families lose these 
services, employees lose their jobs, and nobody wins.
  Our Skilled Nursing Facilities (SNFs) also need the relief provided 
by this legislation. The BBA changed the way that payments are 
calculated so that facilities do not get paid more money when they 
provide expensive services such as chemotherapy or prosthetics. In some 
cases, the reimbursement is so low, that facilities cannot afford to 
take the patients who need a high level of care. I hear stories about 
patients who need chemotherapy treatment but cannot find a facility to 
provide it. Why? The answer is because Medicare doesn't pay enough to 
cover the cost of the chemotherapy treatment. Where does this patient 
go? They could go to a hospital, but frequently this is more expensive, 
or might not specialize in these services. Patients and their families 
do not want to hear complex stories about payment methodologies, or 
resource utilization

[[Page 23541]]

groups. What these families want to hear is that their loved ones can 
get the care that they need.
  My State of Maryland has also had a devastating problem with Medicare 
HMOs. Because of payment changes, reimbursements to many HMOs were cut. 
What are the effects of these cuts? One HMO in my state is projecting 
losses of over $5 million this year in the rural counties of Maryland 
alone. This HMO can no longer afford to cover Medicare patients so it 
is closing up shop. 14,000 senior citizens in Maryland will lose their 
Medicare HMO. Where do these seniors go? In the rural counties of 
Maryland, these seniors do not have any other Medicare HMO to choose. 
They all left--not because they weren't making a profit--these HMOs 
couldn't even break even. Rural counties throughout Maryland and the 
nation will have seniors with little or no access to the extra benefits 
many HMOs provide, including prescription drug coverage and preventive 
benefits such as dental, vision and hearing screenings.
  Imagine if your 85-year-old grandmother, living on a fixed income, 
got a letter in the mail that says in 4 months she will no longer have 
a Medicare HMO. She might not understand what it means. Is she losing 
her health care coverage altogether? Is she losing her doctor? Is she 
losing her medicine coverage? In many cases, my constituents aren't 
wondering where they should go for a mammogram or prostate screening, 
but if they can even go at all because their HMO is leaving town.
  Some will say these cuts aren't so bad--why can't you just buy a 
Medigap policy? For around $150 a month you could get some of the 
supplemental benefits that HMOs provide. But many of these senior 
citizens only have $11,000 or $12,000 a year in retirement income and 
many times their income is much less. These seniors cannot afford $150 
a month for a Medigap policy, so many of them will be forced to make 
difficult choices between food, rent, health care and prescription 
medications. This legislation provides needed relief so that our 
seniors would not have to make these terrible decisions.
  I also know that our non-profit health facilities are having a 
particularly rough time. These are providers such as Hebrew Home in 
Rockville, Maryland, or Mercy Hospital in Baltimore, who are struggling 
to provide care under current reimbursements. It is especially 
difficult for these providers because the care they provide is 
frequently uncompensated. This is health care that they frequently do 
not get reimbursed for, also known as charity care. In many cases, they 
provide the health services to seniors who have no other place to go. 
If we do not take steps to fairly reimburse them, where will these 
seniors go to get the care they need?
  One of my priorities as a United States Senator has always been to 
honor your mother and father. It is a good commandment and good public 
policy--in the federal law books and checkbooks. We must address these 
cuts in Medicare because our safety net for seniors is badly frayed, 
and senior citizens are being left stranded because many health care 
providers have no choice but to close their doors.
  In 1965 when Medicare was created, the Federal Government promised 
that Americans who work hard all of their lives can count on Medicare 
when they retire. I believe that promises made should be promises kept. 
Senator Daschle's bill will help us keep the promise we have made to 
the Nation's senior citizens.
  Mr. JOHNSON. Mr. President, I am pleased to cosponsor the Medicare 
Beneficiary Access to Quality Health Care Act introduced today that 
works to correct the inequities of Medicare reforms included in the 
Balanced Budget Act of 1997.
  I commend Senator Daschle for his tremendous efforts on this issue 
and for his leadership with the introduction of this bill. As well, I 
congratulate a number of my other colleagues who have contributed 
immensely to the crafting of this critical piece of legislation, 
including Senators Moynihan, Kennedy, Rockefeller, Baucus, Conrad, and 
others.
  As part of the effort to balance the Federal budget, the Balanced 
Budget Act of 1997 (BBA) provided for major reforms in the way Medicare 
pays for medical services. The Balanced Budget Act of 1997 (BBA) 
included numerous cuts in Medicare payments to health care providers. 
These changes were originally expected to cut Medicare spending by 
about $115 over five years, but recent CBO projections show spending 
falling nearly twice that much. In the face of these deep cuts, health 
care providers are struggling, and beneficiary access to care is 
threatened. The Medicare Beneficiary Access to Care Act is a targeted 
solution to certain specific problems that the Balanced Budget Act has 
created.
  As implementation of these reforms proceeds, health care providers 
and patient advocacy groups have asserted that some of the reforms are 
having--or are likely to have--undesirable or unintended consequences. 
Areas in patient care such as rehabilitative therapy, skilled nursing 
facilities, home health services, and hospital outpatient services have 
already begun to feel the effects of the reforms set forth in 1997.
  Not surprising, I have heard from many safety net providers in South 
Dakota about the devastating effects such reductions in reimbursements 
are having throughout the health care industry. Consumers are also 
feeling the pain, as many individuals are being turned away from 
hospitals and nursing homes who cannot afford to accept new patients 
because of the lower reimbursement rates included in the Balanced 
Budget Act. These cuts are devastating and feared to have severe 
implications on the quality and access of health care throughout our 
nation, including South Dakota, unless Congress acts immediately to 
correct these problems. In South Dakota, and other rural parts of the 
country, hospitals and other health care providers have an extremely 
high percentage of Medicare beneficiaries making these cuts in 
reimbursement even more devastating. If Congress does not act in a 
timely fashion many of these providers may be forced to close their 
doors.
  I look forward to continue working with my colleagues on passage of 
the Medicare Beneficiary Access to Quality Health Care Act which 
develops creative, cost-effective approaches to address the unintended, 
long-term consequences of the BBA. The proposed budget surplus provides 
Congress the unique opportunity to address many of the deficiencies in 
our nation's health care system. We need to address the valid concerns 
of teaching hospitals, skilled nursing facilities, home health 
providers, rural and community hospitals, and other health care 
providers who require relief from the consequences of the BBA.
  Mr. CLELAND. Mr. President, we are all hearing from our constituents 
about the hardships they have encountered from the unintended 
consequences of the Balanced Budget Act (BBA) of 1997. From rural 
hospitals to home health care agencies, cuts in Medicare reimbursement 
have forced these health care providers to absorb tremendous debt and 
have threatened patients' access to care. Senator Daschle has proposed 
over 30 items that will provide immediate relief across the health care 
continuum. Among these provisions, the bill would redirect BBA surplus 
monies to provide a cap on hospital outpatient Prospective Payment 
System (PPS) loss, a delay on the proposed 15 percent cut to home 
health care reimbursement, a fix for the graduate medical education 
resident cap and the indigent care problem, the repeal of nursing home 
therapy caps, a technical correction to limit oscillations to Medicare 
physician reimbursement, a delay of risk adjustment for frail elderly/
Evercare. Senator Daschle is to be commended for developing this 
comprehensive BBA relief bill in an incredibly short period of time. My 
colleague has more than met the challenge of this urgent health care 
dilemma. I am proud to be an original cosponsor of this critical 
remedial legislation for a BBA fix. I will support Senator Daschle with 
all my resources to pass a BBA fix this session.
  Mr. KERREY. Mr. President, I support the legislation offered earlier 
by

[[Page 23542]]

the Senator from South Dakota, the Medicare Beneficiary Access to Care 
Act of 1999.
  I supported strongly the balanced budget amendment of 1997, the 
deficit reduction acts of 1993 and 1990, and am proud of the supporting 
role I played over the last 7 or 8 years in taking the United States of 
America to the point where the Federal Government was borrowing 
hundreds of billions of dollars--$300 billion when I came in 1989--to a 
point where we now have a surplus. It is quite an exciting change in 
the dynamics of this country.
  This morning's New York Times had a story by Louis Uchitelle about 
1.1 million Americans having been lifted off the rolls of poverty as a 
consequence of demands of wages that occur because interest rates are 
low, corporate profits are good, and the American economy is as strong 
as it has been in my lifetime. It is quite impressive what a strong 
economy will do with low interest rates and what increased rates in 
productivity will do. The report also pointed out the significant 
problems we still have with income growth, especially with African 
Americans.
  But I am proud of the role I played in eliminating the deficit and 
creating a surplus that has contributed enormously to the growth of the 
U.S. economy. Certainly lots of action in the private sector 
contributed to it, but Congress and those who were here--Republicans 
and Democrats--over the last 7 or 8 years who voted for these three 
pieces of legislation can take some pride in taking the United States 
not just into recovery economically, but I remember how frustrating the 
deficit was--politically frustrating--that caused Americans to lose 
confidence that Congress could get anything done. It seemed a 
relatively small ``bone'' in a great nation and I am glad we finally 
coughed it up. I don't want to backtrack on that.
  That is why I am pleased Senator Daschle has indicated this bill has 
to be paid for. Not only do we have to be careful to not drain the 
Social Security trust fund, but we have to be careful we not do this in 
a fashion that takes America back to the bad old days of deficit 
financing. It is easy to do that.
  The 1997 act had an impressive number of people in the Senate and the 
House voting for the legislation. The United States was to produce $100 
million of savings in 10 years. It is now estimated it will produce 
$200 million in savings. I voted for $100 million. That is what I 
thought the legislation would produce. Not all of that $200 million 
estimate occurs as a consequence of the changes in reimbursement. Some 
has occurred as a result of the vigorous effort by Secretary Shalala 
and HCFA to reduce fraud and, as a consequence, save taxpayer money. 
They made billing changes that produced some savings. They are doing a 
better job of managing the taxpayers' money. Some of the savings has 
occurred as a consequence.
  There is no question there is a fraction of that excess $100 million 
that has come as a result of our making some changes to take more out 
of the providers than anyone anticipated. This legislation will put $23 
billion back. I believe that is fair, reasonable, and defendable. I 
think it will have a tremendously positive impact on the ability of my 
State of Nebraska to get high-quality health care; that is what is at 
stake. What is at stake is not just the health of health care 
institutions but the health of the citizens of the country who depend 
upon those institutions.
  I believe this piece of legislation is needed. It is needed in 
Nebraska and by citizens who depend upon their doctors, who depend upon 
their hospitals, who depend upon this thing we call the health care 
system in the United States of America. It is an issue of life and 
death for them. It is a very important issue. It is a very personal 
issue.
  When we talk to somebody in a hospital, it is easy to acquire the 
right sense of urgency to overcome whatever ideological differences we 
might have. The people of Nebraska need this Congress to act. It is not 
just something that we are being asked to do; it is something that is 
necessary in order to improve the quality of life in our State.
  I will go through some of the things this legislation does. For 
hospitals, the 1997 act cuts hospital payments in several ways: Lower 
inpatient payments; a new outpatient prospective payment system; a 
special payments cut for low-income patients: and cuts in graduate 
medical education.
  This legislation does not restore all of those cuts. It creates a 3-
year transition period to protect hospitals under this new outpatient 
system, and there is additional protection for rural and cancer 
hospitals. The bill also moderates the cut in DSH and GME payments, a 
central concern of teaching and academic centers. And it takes action 
for pediatric hospitals.
  I urge colleagues who have not studied this to examine the very low 
reimbursements for graduate medical education for pediatric hospitals. 
There is a glaring difference and it will create tremendous problems as 
we try to train pediatricians--a very important profession in the 
health care industry.
  There are a number of changes that increase the quality of care in 
Nebraska hospitals and increase the chances, especially in rural 
hospitals, that we will not see a continuation of what we had in 1998 
when two rural hospitals closed. My hospital administrators tell me 
there may be more of the same unless we make some reasonable 
adjustments.
  The Balanced Budget Act made some changes in skilled nursing 
facilities. We understand the need to balance the budget. This does not 
undo that. It is paid for. The Balanced Budget Act created a 
prospective payment system for skilled nursing facilities. This does 
not adequately account for the costs of very sick patients and rare 
high-cost services. This bill attempts to address both of these 
problems by increasing payments for groups of patients for whom payment 
is low and by paying separately for high-cost services, such as 
prosthetics, to ensure the nursing homes receive adequate payment.
  We have heard about the impact of therapy caps. I hope in addition to 
putting some money back into the providers, we can take the advice of 
the Senator from Oklahoma and get some structural changes enacted in 
Medicare. One of the problems we have as a Congress trying to make 
changes in Medicare is we don't know the full impact of changes.
  Senators Breaux and Thomas were proposing the creation of a new 
Senate-confirmed board that has authority over HCFA to make certain 
HCFA has the authority to offer fee-for-service plans on a competitive 
basis and make sure competitors have a level playing field to compete 
and offer their plans against the fee for service that HCFA has. I 
think it would be easier to solve the problem of dealing with waste, 
fraud, and abuse and make it more likely the consumers receive good 
information when they are trying to make decisions about what to buy. 
Consolidating Part A and Part B was also in the proposal of Senator 
Breaux, and as a consequence of consolidating those two programs, it 
would make it much more likely when dealing with medical procedures, 
such as therapy, that we get it right.
  What we did with the Balanced Budget Act is create a 1,500-per-
annual-beneficiary cap, but these are arbitrary. They don't allow any 
flexibility based upon the need of the patient. What we have done with 
the legislation is repeal the caps until 2003 and require HCFA to 
implement a new system for therapy payments that is budget neutral to 
caps. It is designed to address the needs for varying amounts of 
therapy based upon a patient's condition. That is the point I was 
trying to make earlier, why we need structural changes, as well.
  There are varying needs of the patient that are extremely difficult 
for HCFA to address. It is a central system. They have fiscal 
intermediaries in the country making payments. It is still a centrally 
controlled system and awfully difficult to get it right in Ohio, 
Nebraska, and Missouri simultaneously. They have to apply a system 
nationwide. It is better, in my judgment, if we have a board of 
directors, Senate-confirmed, to manage HCFA, moving in a direction 
where the private sector is able to compete for

[[Page 23543]]

HCFA's fee for service simultaneously, with HCFA offering its fee-for-
service plans.
  It makes changes in home health. We created under the BBA an interim 
payment system for home health agencies which limits payments on both a 
per beneficiary as well as a per visit basis. The temporary system 
locked in very low rates. This affects rural areas more than urban 
areas. There are very low rates for areas that had traditionally low 
costs such as Nebraska. We have low costs.
  The IPS locked in those very low costs in October 2000, and the IPS 
is scheduled to be replaced by a new PPS system for home health 
services. Those payments will be reduced in an arbitrary fashion by 15 
percent. We make three changes in the legislation that are vital: 
First, we postpone this 15-percent cut for 2 years; second, we assist 
low-cost agencies that have been disadvantaged under the IPS by 
increasing the per visit limit; finally, the bill reduce administrative 
burdens placed upon the providers by eliminating interest on 
overpayments, eliminating a 15-minute reporting requirement, and 
eliminating a requirement for home health agencies to do the billing 
for durable medical equipment.
  We make changes for physicians. The BBA created a new system for 
physician payments based on a target rate of growth. The system 
includes bonus payments and reductions intended to create incentives to 
meet the target rate of growth. However, what we have done will cause 
payments to fluctuate widely, creating tremendous uncertainty in the 
physician communities and causing physicians who are out there trying 
to manage a clinic or their business to say: We can't depend upon HCFA. 
We can't depend upon a revenue stream. There is too much uncertainty in 
the system. We may opt out as a consequence.
  They are facing a very big challenge in dealing with HCFA's 
representation that there may be fraud when, in fact, all that has 
occurred is there are a number of additional changes that will be very 
constructive for physicians, for Medicare+Choice, for rural health 
clinics, federally qualified health centers, and for hospice care where 
we have not had any rebasing of payments since 1982. It is a $1 
billion--an extremely important program.
  Unfortunately, we do not pay a lot of attention to the problem we are 
facing when individuals know for certain they are dying. Hospice 
addresses that. This is an important change, in my view, and I urge 
colleagues on both sides of the aisle to say, whether it is with the 
Daschle bill, which I support, or a bill that comes out of the Finance 
Committee, which I am apt to support as well: This is one of the things 
we need to do. We need to get this done.
  I hope we can at least get some minimal changes in Medicare as well, 
but we need to address this.
  Mr. BINGAMAN. Mr. President, I rise today to join my colleagues in 
introducing the ``Medicare Beneficiary Access to Care Act of 1999.'' I 
want to commend the leadership in the development of this legislation 
and hope that the Congress will act upon this now, before we adjourn.
  The bill is designed to modify some of the many, unforseen 
consequences of the Balanced Budget Act of 1997. Daily I receive 
letters and calls citing the negative impact of the Balanced Budget Act 
on access to patient care and to the delivery of quality care in an 
ongoing and coordinated fashion. In my State of New Mexico, the health 
care delivery system has been particularly hard hit. Essentially, the 
system for delivery of health care that we have worked so hard to 
attain is being eroded and must be bolstered before patients face a 
crisis.
  I represent a state where 21 out of 33 counties are designated as 
health professional shortage areas. I represent a state that has seen 
an exodus of physician specialists and rural doctors this past year. 
Over the last year, New Mexico had 70 home care agencies close despite 
yeoman's efforts to keep these agencies open and serving our citizens. 
This represents closure of over 40 percent of our home health care 
agencies. We currently have one county, Catron, that has no home care 
entity available for serving patients. Failure to deal with the 
additional 15-percent cut that is slated to go into effect in October 
of 2000 would be the end of numerous other home health agencies 
throughout my state. It would be inexcusable not to address this issue 
this session.
  Additionally, the system is further under stress in the nursing home 
arena. We have seen one nationally based entity declare bankruptcy and 
face the demise of others. Long term care facilities must be reimbursed 
at a level that reflects the acuity of the residents for whom they 
care. Long term care is key not only for the residents but for their 
families near and far.
  Mr. President, several of my colleagues have addressed the issue of 
GME and the plight of our teaching hospitals. Hospitals have a 
multitude of services that they provide and which we should bolster. I 
must note, for example, that in New Mexico, declining Medicare 
reimbursement is forcing the only acute care hospital in Dona Anna 
County to close a 15 bed skilled nursing unit because of mounting 
financial losses. Realities such as this must make us mindful of the 
far reaching and adverse effects the BBA of 1997 is now having on 
communities and their residents. We want to ensure that no other 
facilities face closure.
  Finally, I must add that rural and frontier clinics are critical 
components to care for seniors and others in the community with limited 
resources and serve to allow for timely, geographic access where there 
otherwise would be no health care available. I am pleased that some 
redress of their needs is provided in this legislation.
  Others have outlined the components of this legislation and I will 
not repeat the specifics. It is sufficient to say, that these changes 
are needed to avert a crisis in the health care delivery system of this 
country, to maintain access to quality care for our seniors and to 
rectify problems for the system that were created inadvertently. We 
must act now to provide for easy access to quality, continued health 
care for our citizens.
  I look forward to working with all of my colleagues here in the 
Senate to see that this legislation is passed prior to adjournment.
  Mr. MURRAY. Mr. President, I am pleased to join with my Democratic 
colleagues in introducing this important legislation. In the Balanced 
Budget Act of 1997, we reformed the Medicare program to extend its 
solvency. In the past year, we have seen the dramatic and negative 
impact of those reforms on patients and health care providers. The bill 
we are introducing today will fix those unintended consequences and 
will ensure that millions of seniors have access to high quality health 
care. I urge the Republican leadership to act on it before we adjourn 
for the year.
  Two years ago, the Medicare Program was in serious trouble--facing 
bankruptcy within 5 years. We had to make substantial changes to the 
program to extend its solvency. It was a painful and difficult process, 
but we made changes intended to slow the growth of Medicare 
expenditures.
  And overall, it worked. Medicare is still functioning and is on a 
more sound financial footing.
  But the revisions we implemented went too far. Let me give you an 
example. Based on the estimates we had at the time, our changes were 
supposed to reduce the overall growth in Medicare expenditures by $100 
billion over 10 years. In reality, the changes we enacted will result 
in more than $200 billion in lost Medicare revenue for health care 
providers over the same period. This was not the order of change I 
supported.
  And today we see that those revisions are hurting our health care 
providers and making it more difficult for them to give patients the 
high quality care they need.
  When I meet with health care providers in my state, this is their top 
concern. Each day we delay making these corrections, we make it harder 
for them to ensure that quality health care is available to millions of 
seniors.
  I have heard from hundreds of hospital administrators, home health 
care

[[Page 23544]]

workers, doctors, rehabilitation therapists, teaching hospitals, 
skilled nursing facilities, and hospice providers. For example, I've 
received letters from Providence General Medical Center in Everett, 
Washington, from hospital caregivers at Prosser Memorial Hospital, from 
the University of Washington's School of Medicine and from hundreds of 
others. They have shared with me the impact of the 1997 changes and 
what it means for patient care. I believe the situation is critical.
  If we fail to correct this, we will see hospitals closing. We will 
see home health agencies turning away patients. We will see skilled 
nursing facilities unable to take complex patients. We will see a 
devastated rural health system. Our health care system is in jeopardy.
  The bill we are introducing today will go a long way toward 
correcting some of the unintended consequences of the Balanced Budget 
Act of 1997. I worked with my Democratic colleagues in drafting what I 
believe is a reasonable bill that provides immediate relief to 
hospitals, home health care agencies, skilled nursing facilities and 
hospice care to ensure that seniors in this country have access to 
quality, affordable health care services. The bill we have put forth is 
modest. It is not a cure-all, but it addresses the most pressing 
challenges. This is not about repealing the fiscal discipline imposed 
in BBA97. This is about adjusting the changes we made to reflect the 
current estimates. Our bill fixes the problems and provides legislative 
remedies. It does not jeopardize the solvency of Medicare. We can and 
should make changes to improve access and ensure access without 
jeopardizing solvency.
  There is still much we have to address from quality care to 
affordable health insurance to prescription drugs. However, if the 
hospitals close or seniors are denied quality care, the ability to pay 
is not an issue. The very foundation of our health care system is at 
stake. This legislation is long overdue. We need to pass it and make 
the Medicare Program function better today.
  Mr President, at the same time, we cannot forget that the entire 
Medicare Program will run out of money in 2015. So, I want to remind my 
colleagues there is still much work to be done to ensure Medicare 
remains a stable program that our children will be able to count on for 
their health care.
  Mr. President, from my point of view, this Congress has failed on too 
many vital issues this year. This Congress failed to pass a real 
Patients' Bill of Rights--that would put patients and doctors, not 
insurance companies, in charge of their medical decisions. Earlier this 
week, this Senate failed our children, by cutting our commitment to 
putting 100,000 teachers in the classroom to reduce the size of our 
overcrowded classrooms. This Congress failed to help our farmers, and 
all those facing too many challenges in rural America. Let me just say, 
that I am not giving up or letting up on any of those fights--because 
they are too important. And let's not forget that this Congress even 
failed to do one of its most basic work--passing our appropriations 
bill on time, with real numbers--not gimmicks.
  Mr. President, it is high time we bring some good news back to our 
constituents. I want my hospitals and health care providers, as well as 
the senior citizens in Washington State, to know I have heard their 
concerns and I recognize the dangerous implications of BBA97 on health 
care. It is high time we show them we see the problems facing Medicare, 
we understand them, and we are acting to fix them. It is high time we 
move on our priorities. This is one of them. I urge my colleagues to 
support this legislation.
  Mrs. LINCOLN. Mr. President, today I rise to voice my support for a 
bill which addresses the unintended consequences of the Balanced Budget 
Act of 1997. I am pleased to join my Democratic colleagues as an 
original cosponsor of the Medicare Beneficiaries Access to Care Act.
  Since I've been in the Senate, one of the greatest concerns of 
Arkansans is the lowered Medicare reimbursement rate for a variety of 
services that resulted from the Balanced Budget Act. Yes, we must 
continue to rid our Medicare system of waste, fraud and abuse. That is 
a high priority for our government and it should remain so. However, 
when Medicare changes were made as part of the Balanced Budget Act of 
1997, Members of Congress did not intend to wreak havoc on the health 
care industry.
  Enough time has elapsed to know the unintended consequences of the 
Balanced Budget Act. Hospitals have lost tremendous amounts of money 
due to changes in the outpatient prospective payment system. Many 
hospitals in my state are on the brink of closing due to the tremendous 
financial losses they have suffered. Nursing homes have not been 
reimbursed by Medicare at rates that cover the cost of patients with 
acute care needs. Payments for physical and rehabilitation therapy have 
been arbitrarily capped. Teaching hospitals have lost funding to 
support their training programs. Home health agencies have been forced 
to absorb huge losses and limit services to the elderly. Rural health 
clinics have been forced to cope with even more losses and operate on a 
shoestring budget.
  Not only do these cuts and changes in Medicare reimbursement wreak 
havoc on the health care community and force them to absorb unfair 
financial losses, but Medicare beneficiaries, the very people that 
Medicare was set up to help, lose access to critical services. We 
cannot allow our parents and grandparents to be denied access to 
coverage or receive limited medicare care because we didn't take action 
to correct the devastating cuts of the Balanced Budget Act.
  As a member of the Senate Rural Health Caucus and a member of the 
Senate Special Committee on Aging, I care deeply about the quality of 
health care and our citizens' access to health care. Over the past few 
months I have cosponsored various pieces of legislation which address 
all of the above-mentioned issues and the need to restore Medicare 
cuts. However, this legislation is ``all encompassing'' and if passed, 
would ensure that hospitals, skilled nursing facilities, physical 
therapy clinics, home health agencies, rural health clinics, and 
hospice programs receive important financial relief.
  Above all, this legislation is about priorities. Ensuring the health 
and well-being of our Nation's seniors and most vulnerable citizens 
should be our highest priority. I thank my colleagues for their hard 
work on this proposal and I look forward to the quick passage of this 
legislation so we can deliver relief to our health care communities and 
let them know how much we value their services.
  Mr. KERRY. Mr. President, I am pleased to join with Senators Daschle, 
Kennedy, Rockefeller and others to introduce the Medicare Beneficiary 
Access to Care Act of 1999.
  In July, during consideration of tax relief legislation, I offered an 
amendment on the floor of the Senate to carve out $20 billion from the 
tax bill and devote it towards relief for Medicare providers from the 
unintended consequences of the Balanced Budget Act. Although the 
amendment received the support of 50 Senators, including seven of my 
Republican colleagues, it did not gather the necessary three-fifths 
majority required for passage. Today's legislation, a $20 billion 
package of specific measures to address the shortcomings of the 
Balanced Budget Act, represents the embodiment of our continued 
commitment to ensure that this relief is enacted before the end of the 
congressional session.
  Mr. President, I cannot fully express the urgency of this matter. 
Here in Washington, we often throw around numbers with little 
realization of the real impact on America's communities. In this 
instance, I assure you, the impact is real. Take the town of Quincy, 
Massachusetts, population 88,000, and the birthplace of former 
presidents John Adams and John Quincy Adams. As we introduce this bill, 
the community hospital in Quincy, Massachusetts stands at the edge of 
closure. Jeffrey Doran, the hospital's CEO, has been working overtime 
to ensure that if the hospital closes, patients will be safely 
transferred to health care providers outside the community. Over the 
past

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several weeks, I have been on the phone multiple times with our State 
leaders asking them to step in and provide the needed relief where the 
Federal Government has failed. Failed, Mr. President, because the 
Medicare cuts enacted in 1997 have gone above and beyond what we 
intended or desired. The budget savings have exceeded the levels we 
envisioned at the time of enactment.
  Alternatively, Mr. President, let's take a look at the home health 
care industry. Home health care providers deliver rehabilitative 
services to Medicare beneficiaries in the safety and comfort of their 
home. In the State of Massachusetts, just since passage of the Balanced 
Budget Act, we have witnessed the closure of 20 home health care 
agencies who are no longer able to cover their costs as a result of 
cuts in Medicare payment reimbursements. The same is true with our 
nursing homes and extended care facilities.
  And just to provide some perspective, the cost of the legislation we 
introduce today amounts to less than three percent of the cost of the 
tax bill President Clinton vetoed last month. The cost of the entire 
bill is less than one provision in the tax bill to subsidize the 
interest expenses of American multinational corporations operating 
overseas. In fact, we could have passed this bill, repealed the 
interest expense provision, and saved American taxpayers an additional 
$4 billion.
  What a sad reflection on our state of affairs when the Senate would 
approve a tax provision to expand eligibility for Roth IRAs for people 
making over $100,000 a year, a provision that would cost over $6 
billion, but has yet to address the dire needs of our teaching 
hospitals. A full legislative remedy for the Medicare payment problems 
facing teaching hospitals would cost $5.7 billion.
  Mr. President, the time will come for this debate, and the time will 
come before we adjourn. The bipartisan support exists. Let's keep the 
doors of our teaching and community hospitals, nursing homes, home 
health care agencies, and rural clinics open. Let's accept 
responsibility for the unintended effects of our previous legislation. 
Let's not wait any longer.

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