[Congressional Record (Bound Edition), Volume 145 (1999), Part 18]
[Senate]
[Page 25469]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 25469]]

                       SKILLED NURSING FACILITIES

  Mr. DOMENICI. Mr. President, I want to speak for a moment about a 
crisis going on in our nursing home industry. Today, a very large 
nursing home with headquarters in my home State of New Mexico filed for 
Chapter


11, that is bankruptcy protection but it is bankruptcy nonetheless. 
This is the second nursing home chain to file for bankruptcy in the 
last 2 months. These two nursing home chains own hundreds of facilities 
over the country, across it from north to south and east to west. So 
every Senator should be concerned about what is happening in this 
industry.
  Frankly, we could have avoided this crisis if the administration had 
been more willing to acknowledge and address the problem. We wrote a 
bipartisan letter to Secretary Shalala in May, signed by 64 Senators, 
urging her to work with us to address the problem administratively. We 
have yet to get a response. Now I am here to tell you unless something 
very dramatic is done, this crisis is not over. We are going to see 
more bankruptcies and ultimately disruptions in the care for our senior 
citizens unless we fix this problem.
  Clearly, one of the major reasons for these failures is the new 
payment system through the Medicare program for skilled nursing 
facilities and some of the services they give to their patients. 
Everyone, including the Health Care Financing Administration, 
acknowledges that this payment system does not adequately reimburse 
nursing homes for so-called nontherapy ancillary services; that is, 
drugs, oxygen, and other costs incurred, which are a very large part of 
the expenses of taking care of our seniors in nursing homes.
  To address this problem, I joined with Senator Hatch and others in 
introducing S. 1500. That would fix the new payment system and it is 
fiscally responsible.
  Unfortunately, the package of Medicare provisions released by the 
Chairman and Ranking Member of the Finance Committee yesterday is 
woefully inadequate.
  Hatch-Domenici increased the payment rates in the 15 categories of 
reimbursement that clearly underpay for those patients with high non-
therapy ancillary costs.
  The Finance Committee package, however, only includes two of these 15 
categories.
  I am told that this is the position that HCFA supports, perhaps based 
on a contractor's analysis of the problem.
  But I am also told that the same contractor indicates right up front 
in the report that patients with high non-therapy ancillary costs are 
likely to appear in the patient categories covered by the Hatch-
Domenici bill.
  But, it seems to me that there is no higher priority in Medicare than 
fixing this problem, which is on the verge of disrupting care for 
millions of seniors in every state.
  The Finance Committee is working on a bill to help in this area and 
some others. I have seen the bill as of yesterday. It is totally 
inadequate to take care of this problem, this crisis across this land. 
In my State, if this company goes bankrupt, totally bankrupt, it will 
not only hurt seniors across this land but we will have 700 to 800 
people who will lose their jobs. They have been working in this 
industry for years.
  I ask the Finance Committee to reconsider what they contemplated 
yesterday. I will begin working with some of them, with specifics. But 
I guarantee those who are contemplating a bill to do some justice and 
fairness in this area, we are not going to get by with the provisions 
that were in the bill as of yesterday.

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