[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[Senate]
[Pages 23697-23698]
[From the U.S. Government Publishing Office, www.gpo.gov]



     MEDICARE BENEFICIARY ACCESS TO QUALITY HEALTH CARE ACT OF 1999

  Mr. BAUCUS. Madam President, I am speaking in support of the Medicare 
Beneficiary Access to Quality Health Care Act of 1999.
  Congress faces historic choices in the next few weeks: managed care 
reform, campaign finance legislation, whether to increase the minimum 
wage, Comprehensive Test Ban Treaty. But the problem is, Congress is 
long on disagreement and short on time. In all my years of Congress, I 
have scarcely seen a more partisan and divisive atmosphere than that 
which prevails today.
  One area where Congress appeared ready to act this year is in 
addressing changes to the Balanced Budget Act, otherwise known as BBA, 
of 1997. I am disappointed that we have not yet done so. Rural States 
such as Montana have long battled to preserve access to quality health 
care. I daresay that the State so ably served by the Senator from 
Maine, Ms. Collins, is in somewhat the same condition.
  By and large, and against the odds, it is a battle we have generally 
won. Through initiatives such as the Medical Assistance Facility and 
the Rural Hospital Flexibility Grant Program, Montana and other 
relatively thinly populated States have providers who have worked 
diligently to give Medicare beneficiaries quality health care, but now 
these providers face a new challenge--the impact of BBA Medicare cuts.
  From home health to nursing homes, hospital care to hospice, Montana 
facilities stand to take great losses as a result of the BBA. Many 
already have. One hospital writes:

       Dear Senator Baucus:
       The BBA of 1997 is wreaking havoc on the operations of 
     hospitals in Montana. Our numbers are testimony to this. The 
     reduction in reimbursements of $500,000 to $650,000 per year 
     is something our facility cannot absorb.

  Another tells me:

       Senator Baucus: An early analysis of the negative impact to 
     [my] hospital projects a decrease in reimbursements amounting 
     to an estimated $171,200. My hospital is already losing money 
     from operations and these anticipated decreases in 
     reimbursements will cause a further immediate operating loss. 
     If enacted and implemented, I predict that we will have no 
     choice but to reduce or phase out completely certain services 
     and programs. . . .

  Home health agencies report to me that in a recent survey, 80 percent 
of Montana home health care agencies showed a decline in visits 
averaging 40 percent. Let me state that again. Of the home health care 
agencies in my State, 80 percent report a decline in visits averaging 
40 percent. These are some of the most efficient home health care 
agencies in the Nation. It simply is not fair that they are punished 
for being good at managing costs.
  As for skilled nursing care in Montana, I saw the effects firsthand 
in a visit to Sidney Health Center in the northeast corner of my State. 
A couple of months ago, I had a workday at Sidney. About every month, 
every 6 weeks, I show up at someplace in my home State with my sack 
lunch. I am there to work all day long. I wait tables. I work in 
sawmills. I work in mines--some different job. This time it was working 
at a hospital. Half of it is a skilled nursing home; the other half an 
acute care center.
  At the skilled nursing center, I changed sheets. I took vitals. I 
worked charts. They even had me take out a few stitches. After a while, 
I felt as if I was a real-life doctor doing my rounds with my 
stethoscope casually draped around my neck. One patient actually 
thought I was in medical training; that is, until I treated that 
patient. They also had me read to about 20 old folks for about a half 
hour. I must confess that all but five immediately fell asleep.
  At the end of the day, I had to turn my stethoscope in for a session 
with the administrators. The financial folks showed me trends in 
Medicare reimbursement over the last couple of years. They believe as I 
do, that the BBA cuts have gone too far.
  So what do we do about it? Over the next few weeks, the Senate 
Finance Committee is likely to consider legislation to restore some of 
the funding cuts for BBA. Anticipating this debate, I introduced 
comprehensive rural health legislation earlier this year. The bill now 
has over 30 bipartisan Senate cosponsors.
  Last week, I joined Senator Daschle and the distinguished ranking 
member of the Finance Committee, as well as Senator Rockefeller, in 
support of a comprehensive Balanced Budget Act fix, a remedy to try to 
undo some of the problems we caused. The Medicare Beneficiary Access to 
Quality Health Care Act addresses problems the BBA has caused in 
nursing home care, in home health care, among hospitals and also 
physical therapy, as well as some other areas. In particular, I draw my 
colleagues' attention to section 101 of the bill.
  Medicare currently pays hospital outpatient departments for their 
reasonable costs. To encourage efficiency, however, the BBA called for 
a system of fixed, limited payments for outpatient departments. This is 
called the outpatient prospective payment system, known as PPS. Thus 
far, it appears this PPS will have a very negative impact on small 
rural hospitals. HCFA estimates--the Health Care Financing 
Administration--that under this law, Medicare outpatient payments would 
be cut by over 10 percent for small rural hospitals. I don't have the 
chart here, but hopefully it is coming later. If you look at the chart, 
you will see some of the projected impacts on hospitals in my State.
  Prospective payment is the system of the future, and Congress is 
right to use it where it works. But in some cases, prospective payment 
just doesn't work. Consider what happened with inpatient prospective 
payment about 15 years ago. In 1983, Congress felt, much as it does 
now, that Medicare reimbursements needed to be held in check. It 
implemented prospective payment for inpatient services. Enacting that 
law, it also recognized that for some small, rural facilities, there 
should be exceptions to prospective payment.
  The basic reason is simple, because prospective payment is based upon 
the assumption that the efficient hospitals will do well and survive, 
and the nearby inefficient hospitals not doing well will fail, but that 
is OK because people can always go to the surviving efficient hospital. 
And the assumption, obviously, is invalid for sparsely populated

[[Page 23698]]

parts of America because if there is a hospital in a sparsely populated 
part of America that fails under undue pressure because of 
reimbursement, there is no other hospital or health care facility for 
somebody in rural America. That is the essential failing in the 
assumption behind PPS.
  Congress called these facilities ``sole community hospitals,'' and 42 
of the 55 hospitals in my State enjoy that status--that is, the 
security of being named a sole community provider or medical assistance 
facility.
  Section 101 of the bill we introduced last week would provide similar 
security for outpatient services, and it should be enacted right now.
  Just last week, the health care research firm, HCIA, and the 
consulting firm, Ernst and Young, released a study showing that 
hospital profit margins could fall from their current levels of about 4 
percent to below zero by the year 2002. We must act now to ensure that 
this does not happen.
  I might say, however, time is running out. We are already in the 
midst of a 3-week stopgap measure to keep the Government running. If we 
don't sit down and iron out our differences soon, we risk going home 
not having acted on the BBA and not correcting this problem, which I 
think is irresponsible.
  Despite the partisan atmosphere that has prevailed here over the last 
several months, Congress does have a record of success in dealing with 
important health care issues in a bipartisan way.
  A few years ago, we passed the Health Insurance Portability Act to 
prevent people from losing health insurance when they change jobs.
  In 1997, we worked together--Members of all stripes--in passing the 
Children's Health Insurance Plan, legislation to provide children of 
working families with health insurance. Just last week, children in my 
State started enrollment in that program.
  With some common sense on both sides of the aisle and with fast 
action on the issue, Congress can come together to solve some of the 
problems caused by the so-called BBA of 1997. We ought to do so, and we 
ought to do it right now.
  Mr. President, you might be interested in what some of the conditions 
of the BBA 1997 are in the State of the Presiding Officer. In Maine, 
the hospital in Bangor would lose 24 percent of payments it would 
otherwise receive. Booth Bay Harbor would find about a 38-percent 
reduction. That is somewhat typical of hospitals of that size and in 
that situation around the country.
  So I hope that at the appropriate time we can work with dispatch and 
expeditiously solve this problem before we adjourn.
  Mr. LEVIN. Madam President, I rise today in support of the Medicare 
Beneficiary Access to Care Act.
  I have traveled around my State of Michigan and I have heard from all 
types of health care providers. I consistently hear one message: all 
health care providers, big and small, are reeling from the cuts 
mandated under the 1997 Balanced Budget Act (BBA).
  When Congress passed the BBA, it was estimated that it would save 
$112 billion in Medicare expenditures. The Congressional Budget Office 
has reestimated those savings at $206 billion. It is clear that the BBA 
has gone further than we intended.
  This bill addresses some of the problems the health care community is 
facing. The bill provides some measure of relief to providers by 
committing $20 billion dollars towards addressing some of the BBA 
problems.
  Here are some of the bill's provisions:
  Medicare currently pays hospital outpatient departments for their 
reasonable costs, subject to some limits and fee schedules. To create 
incentives for efficient care, the BBA included a prospective payment 
system (PPS) for hospital outpatient departments. HCFA expects to 
implement this system in July 2000. When implemented, it is expected to 
reduce hospital outpatient revenues by 5.7 percent on average. Michigan 
hospitals have told me that this payment system will reduce annual 
hospital payments for out patient services by $43 million for Michigan 
hospitals.
  This bill would protect all hospitals from extraordinary losses 
during a transition period. Each hospital would compare its payments 
under the PPS to a proxy for what the hospital would have been paid 
under cost-based reimbursement. In the first year, no hospital could 
lose more than 5% under the new system. This percentage would increase 
to 10% in the second year and 15% in the third year.
  Prior to the BBA, a hospital's inpatient payments increased by 7.7% 
if the hospital had one intern or resident for every 10 beds. This 
percentage was cut to 7.0% in 1998, and phased down to be set 
permanently at 5.5% by 2001. This bill freezes Indirect Medical 
Education (IME) payments at the current level of 6.5% for 8 years.
  Due to concern that Medicare+Choice managed care plans were not 
passing along payments for Graduate Medical Education (GME) to teaching 
hospitals, the BBA carved out payments for GME and IME from Medicare + 
Choice rates and directed them to those hospitals. However, the carve 
out was phased in over several years. This bill contains a provision 
that would speed up the carve-out, ensuring that teaching hospitals get 
adequate compensation for the patients they serve.
  Teaching hospitals are critically important to Michigan. There are 58 
teaching hospitals in Michigan, which constitutes one of the nation's 
largest GME programs.
  The BBA reduced disproportionate share hospital (DSH) payments by 1% 
in 1998, 2% in 1999, 3% in 2000, 4% in 2001, and 5% in 2002. This bill 
would freeze the cut in disproportionate share payments at 2% for 2000 
through 2002.
  The BBA created a prospective payment system (PPS) for skilled 
nursing facilities. There has been a concern that the PPS may not 
adequately account for the costs of high acuity patients. This bill 
includes a number of provisions to alleviate the problems facing 
skilled nursing facilities. Importantly, this bill repeals the 
arbitrary $1500 therapy cap that was mandated under the BBA.
  The BBA mandated a 15% cut to home health payments. Last year 
Congress delayed this cut to October 2000. Our bill would further delay 
this 15% cut for two years. In addition, our bill creates an outlier 
policy to protect agencies who serve high cost beneficiaries.
  The BBA phased out cost based Medicaid reimbursement for rural health 
clinics and federally qualified health centers but did not replace it 
with anything to assure that these clinics would be adequately funded. 
Our bill creates a new system for clinic payments.
  In summary, these provisions are vitally important to the health care 
community of Michigan, both providers and beneficiaries. We cannot 
afford to allow our health care system, the best in the world, to 
decline.

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