[Congressional Record (Bound Edition), Volume 149 (2003), Part 12]
[Senate]
[Pages 16678-16685]
[From the U.S. Government Publishing Office, www.gpo.gov]




   PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003--Continued


                           Amendment No. 1132

  Mr. SANTORUM. Mr. President, I call up amendment No. 1132 and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Santorum] proposes an 
     amendment numbered 1132.

  Mr. SANTORUM. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To allow eligible beneficiaries in MedicareAdvantage plans to 
        elect zero premium, stop-loss drug coverage protection)

       On page 343, between lines 15 and 16, insert the following:
       ``(f) Zero Premium Stop-Loss Protection and Access to 
     Negotiated Prices For Eligible Beneficiaries Enrolled in 
     MedicareAdvantage Plans.--
       ``(1) In general.--Notwithstanding any provision of this 
     part or part D, a MedicareAdvantage plan shall be treated as 
     meeting the requirements of this section if, in lieu of the 
     qualified prescription drug coverage otherwise required, the 
     plan makes available such coverage with the following 
     modifications:
       ``(A) No premium.--Notwithstanding subsection (d) or 
     sections 1860D-13(e)(2) and 1860D-17, the amount of the 
     MedicareAdvantage monthly beneficiary obligation for 
     qualified prescription drug coverage shall be zero.
       ``(B) Beneficiary receives access to negotiated prices and 
     stop-loss protection for no additional premium.--
     Notwithstanding section 1860D-6, qualified prescription drug 
     coverage shall include coverage of covered drugs that meets 
     the following requirements:
       ``(i) The coverage has cost-sharing (for costs up to the 
     annual out-of-pocket limit under subsection (c)(4) of such 
     section) that is equal to 100 percent.
       ``(ii) The coverage provides the limitation on out-of-
     pocket expenditures under such subsection (c)(4), except that 
     in applying such subsection, `$5000.00' shall be substituted 
     for `$3,700' in subparagraph (B)(i)(I) of such subsection.
       ``(iii) The coverage provides access to negotiated prices 
     under subsection (e) of such section during the entire year.
       ``(C) Application of low-income subsidies.--Notwithstanding 
     subsection (f) or section 1860D-19, the Administrator shall 
     not apply the following provisions of subsection (a) of such 
     section:
       ``(i) Subparagraphs (A), (B), (C), and (D) of paragraph 
     (1).
       ``(ii) Subparagraphs (A), (B), (C), and (D) of paragraph 
     (2).
       ``(iii) Clauses (i), (ii), (iii), and (iv) of paragraph 
     (3)(A).
       ``(2) Penalty for enrolling in a zero premium stop-loss 
     protection plans after initial eligibility for such 
     enrollment.--In the case of an eligible beneficiary that 
     enrolled in a plan offered pursuant to this subsection at any 
     time after the initial enrollment period described in section 
     1860D-2, the Secretary shall establish procedures for 
     imposing a monthly beneficiary obligation for enrollment 
     under such plan. The amount of such obligation shall be an 
     amount that the Administrator determines is actuarially sound 
     for each full 12-month period (in the same continuous period 
     of eligibility) in which the eligible beneficiary could have

[[Page 16679]]

     been enrolled under such a plan but was not so enrolled. The 
     provisions of subsection (b) of such section shall apply to 
     the penalty under this paragraph in a manner that is similar 
     to the manner such provisions apply to the penalty under part 
     D.
       ``(3) Procedures.--The Administrator shall establish 
     procedures to carry out this subsection. Under such 
     procedures, the Administrator may waive or modify any of the 
     preceding provisions of this part or part D to the extent 
     necessary to carry out this subsection.
       ``(4) No effect on medicare drug plans.--This subsection 
     shall have no effect on eligible beneficiaries enrolled under 
     part D in a Medicare Prescription Drug plan or under a 
     contract under section 1860D-13(e).''

  Mr. SANTORUM. Mr. President, one of the key components that many 
Members on this side of the aisle would like to see accomplished is to 
draw as many people as possible into the competitive model set up in 
this bill. We believe it is the more efficient, higher quality delivery 
of health care services, the Medicare Advantage plan.
  Unfortunately, through negotiations, a lot of the incentives the 
President has to encourage people to get into those plans and thereby 
make them work have been taken out in the current version on the floor. 
That is to the great consternation, I know, of the White House and many 
Members on this side of the aisle.
  For quite some time I have been trying to think how they can create 
incentives--carrots, if you will, as opposed to sticks--to encourage 
people to get into these kinds of plans. Originally, I intended to 
offer a differential benefit--in other words, a benefit that would have 
what I call a standard benefit in the fee-for-service option and an 
enhanced benefit in the Medicare Advantage option. I was fairly 
convinced, in discussing with the people on my side of the aisle, we 
probably would not have a chance to succeed; that there were people who 
had made commitments that a differential benefit was not something for 
this time.
  I went about trying to figure out, could we create incentives to 
people to come into Medicare Advantage, which I believe is the future 
of Medicare and the best way to run the system without creating a 
differential benefit. The amendment before the Senate does that. The 
amendment before the Senate creates an option for beneficiaries who 
participate in Medicare Advantage. It is a pharmaceutical option. 
Instead of just having no pharmaceutical benefit, which you could if 
you do not get into the Medicare Advantage Program, we have the 
standard benefit which is required if you participate in the PPOs, 
HMOs, and POSs that will be created here.
  What I will do with this amendment is create another option for 
seniors who select Medicare Advantage. That option would be a zero 
premium catastrophic benefit. So you could choose between the standard 
benefit, the $35 premium, and the 50 percent copay, and the donut hole, 
and all the things described over and over again, or if you did not 
want to pay a premium but wanted some catastrophic coverage, wanted 
some benefit, no premium, no cost, you could join this.
  The CBO scored this as attracting twice as many people into the PPOs 
and HMOs as the underlying bill. It would make those plans much more 
desirable for beneficiaries. I believe that should be one of the goals 
of this legislation, to make the new and improved and stronger plan a 
more robust plan.
  Unfortunately, according to the Congressional Budget Office, when 
people move from the fee-for-service plan into the Medicare Advantage 
plan, the Congressional Budget Office assumes those plans will be more 
expensive. And because they will be more expensive, this amendment 
costs money. It doubles the participation but costs $20, to $25 
billion, which is the back of the envelope. And God bless the CBO; that 
is the best they could do at this late hour.
  I firmly believe this is a reasonable compromise between those who 
would not want to have the differential benefit and those who would 
because it is unfair to the fee-for-service participants and those who 
believe we need to have an incentive for people to get into the 
Medicare Advantage Program. This strikes the compromise. This is where 
we could go.
  There are all sorts of things we have done to eliminate adverse 
selection and all the other problems inherent in offering two different 
benefits. We believe we actually address the vast majority of those 
problems in this amendment. Nevertheless, we have run into the 
roadblock that this bill has run into the entire time when it comes to 
the competitive model and CBO and their estimation of costs.
  For the record, the White House does not see it that way. The White 
House sees the competitive model as saving money. Under their scoring, 
this would probably actually save money and move people into a higher 
quality, more efficient system.


                      Amendment No. 1132 Withdrawn

  As a result of the fact of the score which is $20 to $25 billion, and 
we do not have that, I am going to withdraw my amendment and hope this 
idea which I believe is in the center here is a compromise between two 
competing ideas of how to structure this bill.
  It will be considered in conference as a way of trying to bring the 
two sides together in something that does not disadvantage the fee-for-
service plan but creates an opportunity for incentives to go to the 
Medicare Advantage plan.
  Mr. President, with that I ask unanimous consent to withdraw my 
amendment.
  The PRESIDING OFFICER. The amendment is withdrawn.
  The Senator from Oklahoma.
  Mr. NICKLES. I compliment my colleague from Pennsylvania. Especially 
this late at night, when a lot of us are thinking about our departed 
friend and colleague, Senator Thurmond, I appreciate his withdrawing 
this amendment.
  For the information of our colleagues, I think we are very close to 
finishing this bill. We may have one or two rollcall votes. I think we 
are just about ready to vote on the Feinstein-Chafee amendment and 
possibly one other amendment, and I think we are very close to be able 
to vote on final passage, for the information of our colleagues.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1060

  Mr. KENNEDY. Mr. President, I will just take a moment to address the 
amendment of the Senator from California, Mrs. Feinstein, and her 
colleagues, in terms of means testing the Medicare system. That is what 
we would be doing, changing what is effectively an insurance system 
into a welfare system. There is, really, no question about that.
  The fact is, the Part B of the Medicare system is basically a 
progressive system as it is at the present time. Wealthy people are 
paying a great deal more into that system than they are taking out.
  My concern is, if this passes, it is only a question of time before 
the healthiest individuals who can qualify under the Part B premium are 
going to leave the Medicare system and it is going to deteriorate into 
a general welfare system. The kind of Medicare system seniors relied 
on, day in and day out, would be destroyed. Make no mistake about it.
  That is why the AARP is strongly opposed to it, as well as the 
National Committee to Preserve Social Security.
  I hope this amendment is not accepted. I suggest the absence of a 
quorum.
  The PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDENT pro tempore. Without objection, it is so ordered.


                     Amendment No. 990, As Modified

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that amendment 
No. 990, previously adopted, be modified with language I send to the 
desk.

[[Page 16680]]

  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of subtitle A of title II, add the following:

     SEC. __. IMPROVEMENTS IN MEDICAREADVANTAGE BENCHMARK 
                   DETERMINATIONS.

       (c) Inclusion of Costs of DOD and VA Military Facility 
     Services to Medicare-eligible Beneficiaries in Calculation of 
     MedicareAdvantage Payment Rates.--
       (1) For purposes of calculating medicare+choice payment 
     rates.--Section 1853(c)(3) (42 U.S.C. 1395w-23(c)(3)), as 
     amended by section 203, is amended--
       (A) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (E)''; and
       (B) by adding at the end the following new subparagraph:
       ``(E) Inclusion of costs of dod and va military facility 
     services to medicare-eligible beneficiaries.--In determining 
     the area-specific Medicare+Choice capitation rate under 
     subparagraph (A) for a year (beginning with 2006), the annual 
     per capita rate of payment for 1997 determined under section 
     1876(a)(1)(C) shall be adjusted to include in the rate the 
     Secretary's estimate, on a per capita basis, of the amount of 
     additional payments that would have been made in the area 
     involved under this title if individuals entitled to benefits 
     under this title had not received services from facilities of 
     the Department of Defense or the Department of Veterans 
     Affairs.''.
       (2) For purposes of calculating local fee-for-service 
     rates.--Section 1853(d)(5) (42 U.S.C. 1395w-23(d)(5)), as 
     amended by section 203, is amended--
       (A) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (C)''; and
       (B) by adding at the end the following new subparagraph:
       ``(C) Inclusion of costs of dod and va military facility 
     services to medicare-eligible beneficiaries.--In determining 
     the local fee-for-service rate under subparagraph (A) for a 
     year (beginning with 2006), the annual per capita rate of 
     payment for 1997 determined under section 1876(a)(1)(C) shall 
     be adjusted to include in the rate the Secretary's estimate, 
     on a per capita basis, of the amount of additional payments 
     that would have been made in the area involved under this 
     title if individuals entitled to benefits under this title 
     had not received services from facilities of the Department 
     of Defense or the Department of Veterans Affairs.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on and after 
     January 1, 2006.


                     Amendment No. 960, As Modified

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that Senator 
Dayton's amendment, No. 960, be modified with the modification that I 
send to the desk.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To require a streamlining of the medicare regulations)

       At the end of subtitle A of title V, add the following:

     SEC. __. STREAMLINING AND SIMPLIFICATION OF MEDICARE 
                   REGULATIONS.

       (a) In General.--The Secretary of Health and Human Services 
     shall conduct an analysis of the regulations issued under 
     title XVIII of the Social Security Act and related laws in 
     order to determine how such regulations may be streamlined 
     and simplified to increase the efficiency and effectiveness 
     of the medicare program without harming beneficiaries or 
     providers and to decrease the burdens the medicare payment 
     systems impose on both beneficiaries and providers.
       (b) Reduction in Regulations.--The Secretary, after 
     completion of the analysis under subsection (a), shall direct 
     the rewriting of the regulations described in subsection (a) 
     in such a manner as to--
       (1) reduce the number of words comprising all regulations 
     by at least two-thirds by October 1, 2004, and
       (2) ensure the simple, effective, and efficient operation 
     of the medicare program.
       (c) Application of the Paperwork Reduction Act.--The 
     Secretary shall apply the provisions of chapter 35 of title 
     44, United States Code (commonly known as the ``Paperwork 
     Reduction Act'') to the provisions of this Act to ensure that 
     any regulations issued to implement this Act are written in 
     plain language, are streamlined, promote the maximum 
     efficiency and effectiveness of the medicare and medicaid 
     programs without harming beneficiaries or providers, and 
     minimize the burdens the payment systems affected by this Act 
     impose on both beneficiaries and providers.
       If the Secretary determines that the two-thirds reduction 
     in words by October 1, 2004 required in (b)(1) is not 
     feasible, he shall inform Congress in writing by July 1, 2004 
     of the reasons for its infeasibility. He shall then establish 
     a possible reduction to be achieved by January 1, 2005.


                Vitiation Of Vote On Amendment No. 1041

  Mr. GRASSLEY. Mr. President, I ask unanimous consent to vitiate the 
vote by which amendment No. 1040 was adopted.
  Mr. BAUCUS. Amendment No. 1041.
  Mr. GRASSLEY. I am sorry, No. 1041.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1096

  Mr. GRASSLEY. I ask unanimous consent that the pending amendment be 
temporarily set aside, amendment No. 1096 be called up, adopted, and 
the motion to reconsider be laid on the table.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The amendment (No. 1096) was agreed to, as follows:

  (Purpose: To require the Secretary of Health and Human Services to 
     conduct a frontier extended stay clinic demonstration project)

       On page 529, between lines 8 and 9, insert the following:

     SEC. 455. FRONTIER EXTENDED STAY CLINIC DEMONSTRATION 
                   PROJECT.

       (a) Authority To Conduct Demonstration Project.--The 
     Secretary shall waive such provisions of the medicare program 
     established under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) as are necessary to conduct a 
     demonstration project under which frontier extended stay 
     clinics described in subsection (b) in isolated rural areas 
     are treated as providers of items and services under the 
     medicare program.
       (b) Clinics Described.--A frontier extended stay clinic is 
     described in this subsection if the clinic--
       (1) is located in a community where the closest short-term 
     acute care hospital or critical access hospital is at least 
     75 miles away from the community or is inaccessible by public 
     road; and
       (2) is designed to address the needs of--
       (A) seriously or critically ill or injured patients who, 
     due to adverse weather conditions or other reasons, cannot be 
     transferred quickly to acute care referral centers; or
       (B) patients who need monitoring and observation for a 
     limited period of time.
       (c) Definitions.--In this section, the terms ``hospital'' 
     and ``critical access hospital'' have the meanings given such 
     terms in subsections (e) and (mm), respectively, of section 
     1861 of the Social Security Act (42 U.S.C. 1395x).


                     Amendment No. 989, As Modified

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Collins 
amendment, amendment No. 989, be modified with modifications that I 
send to the desk.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To increase medicare payments for home health services 
                       furnished in a rural area)

       At the appropriate place in subtitle C of title IV, insert 
     the following:

     SEC. __. INCREASE IN MEDICARE PAYMENT FOR CERTAIN HOME HEALTH 
                   SERVICES.

       (a) In General.--Section 1895 of the Social Security Act 
     (42 U.S.C. 1395fff) is amended by adding at the end the 
     following:
       ``(f) Increase in Payment for Services Furnished in a Rural 
     Area.--
       ``(1) In general.--In the case of home health services 
     furnished in a rural area (as defined in section 
     1886(d)(2)(D)) on or after October 1, 2004 and before October 
     1, 2006, the Secretary shall increase the payment amount 
     otherwise made under this section for such services by 10 
     percent.
       ``(2) Waiver of budget neutrality.--The Secretary shall not 
     reduce the standard prospective payment amount (or amounts) 
     under this section applicable to home health services 
     furnished during any period to offset the increase in 
     payments resulting from the application of paragraph (1).''.
       (b) Payment Adjustment.--Section 1895(b)(5) of the Social 
     Security Act (42 U.S. C. 1395fff(b)(5)) is amended by adding 
     at the end the following ``Notwithstanding this paragraph, 
     the total amount of the additional payments or payment 
     adjustments made under this paragraph may not exceed, with 
     respect to fiscal year 2004, 3 percent, and, with respect to 
     fiscal years 2005 and 2006, 4 percent, of the total payments 
     projected or estimated to be made based on the prospective 
     payment system under this subsection in the year involved.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after October 1, 
     2003.


 Amendments Nos. 1122, 1074, 1023, 1114, 1115, 1045, 1058, 1117, 1044, 
 1056, 996, 1013, 1121, 989, as modified, 1126, 996, 1118, 1085, 1017, 
               968, 948, 960 as modified, 1054, And 1030

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the pending 
amendments be temporarily set aside and that the following amendments 
be called up en bloc: No. 1122, Brownback; No. 1074, Coleman; No. 1023, 
Collins; No. 1114, Kyl; No. 1115, Kyl; No. 1045, Chambliss; No. 1058, 
Craig; No. 1117,

[[Page 16681]]

Baucus; No. 1044, Bayh; No. 1056, Shelby; No. 996, Reed of Rhode 
Island; Bond amendment No. 1013; Kyl, No. 1128; Collins, No. 989, as 
modified; Dole, No. 1126, with Edwards added as a cosponsor; Reed of 
Rhode Island, No. 996; Specter, No. 1118; Specter, No. 1085.
  The PRESIDENT pro tempore. Is there objection?
  Mr. BAUCUS. Mr. President, this side agrees.
  The PRESIDENT pro tempore. Is there objection?
  If not, the amendments will be considered en bloc.
  The amendments are as follows:
  (Amendments Nos. 1122 and 1117 are printed in today's Record under 
``Text of Amendments.'')
  (Amendments Nos. 1017, 968, 948, 1054 and 1030 are printed in a 
previous edition of the Record.)


                           amendment no. 1074

   (Purpose: To amend title XVIII of the Social Security Act to make 
improvements in the national coverage determination process to respond 
                       to changes in technology)

       At the end of subtitle C of title IV, add the following:

     SEC. __. IMPROVEMENTS IN NATIONAL COVERAGE DETERMINATION 
                   PROCESS TO RESPOND TO CHANGES IN TECHNOLOGY.

       (a) In general.--Section 1862 (42 U.S.C. 1395y) is 
     amended--
       (A) in the third sentence of subsection (a) by inserting 
     ``consistent with subsection (j)'' after ``the Secretary 
     shall ensure''; and
       (B) by adding at the end the following new subsection:
       ``(j) National Coverage Determination Process.--
       ``(1) Timeframe for decisions on requests for national 
     coverage determinations.--In the case of a request for a 
     national coverage determination that--
       ``(A) does not require a technology assessment from an 
     outside entity or deliberation from the Medicare Coverage 
     Advisory Committee, the decision on the request shall be made 
     not later than 6 months after the date of the request; or
       ``(B) requires such an assessment or deliberation and in 
     which a clinical trial is not requested, the decision on the 
     request shall be made not later than 9 months after the date 
     of the request.
       ``(2) Process for public comment in national coverage 
     determinations.--At the end of the 6-month period (with 
     respect to a request under paragraph (1)(A)) or 9-month 
     period (with respect to a request under paragraph (1)(B)) 
     that begins on the date a request for a national coverage 
     determination is made, the Secretary shall--
       ``(A) make a draft of proposed decision on the request 
     available to the public through the Medicare Internet site of 
     the Department of Health and Human Services or other 
     appropriate means;
       ``(B) provide a 30-day period for public comment on such 
     draft;
       ``(C) make a final decision on the request within 60 days 
     of the conclusion of the 30-day period referred to under 
     subparagraph (B);
       ``(D) include in such final decision summaries of the 
     public comments received and responses thereto;
       ``(E) make available to the public the clinical evidence 
     and other data used in making such a decision when the 
     decision differs from the recommendations of the Medicare 
     Coverage Advisory Committee; and
       ``(F) in the case of a decision to grant the coverage 
     determination, assign a temporary or permanent code and 
     implement the coverage decision at the end of the 60-day 
     period referred to in subparagraph (C).
       ``(3) National coverage determination defined.--For 
     purposes of this subsection, the term `national coverage 
     determination' has the meaning given such term in section 
     1869(f)(1)(B).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to national coverage determinations as of January 
     1, 2004.


                           amendment no. 1023

 (Purpose: To provide for the establishment of a demonstration project 
                to clarify the definition of homebound)

       At the appropriate place in subtitle B of title IV, insert 
     the following:

     SEC. __. DEMONSTRATION PROJECT TO CLARIFY THE DEFINITION OF 
                   HOMEBOUND.

       (a) Demonstration Project.--Not later than 180 days after 
     the date of enactment of this Act, the Secretary shall 
     conduct a two-year demonstration project under part B of 
     title XVIII of the Social Security Act under which medicare 
     beneficiaries with chronic conditions described in subsection 
     (b) are deemed to be homebound for purposes of receiving home 
     health services under the medicare program.
       (b) Medicare Beneficiary Described.--For purposes of 
     subsection (a), a medicare beneficiary is eligible to be 
     deemed to be homebound, without regard to the purpose, 
     frequency, or duration of absences from the home, if the 
     beneficiary--
       (1) has been certified by one physician as an individual 
     who has a permanent and severe condition that will not 
     improve;
       (2) requires the individual to receive assistance from 
     another individual with at least 3 out of the 5 activities of 
     daily living for the rest of the individual's life;
       (3) requires 1 or more home health services to achieve a 
     functional condition that gives the individual the ability to 
     leave home; and
       (4) requires technological assistance or the assistance of 
     another person to leave the home.
       (c) Demonstration Project Sites.--The demonstration project 
     established under this section shall be conducted in 3 States 
     selected by the Secretary to represent the Northeast, 
     Midwest, and Western regions of the United States.
       (d) Limitation on Number of Participants.--The aggregate 
     number of such beneficiaries that may participate in the 
     project may not exceed 15,000.
       (e) Data.--The Secretary shall collect such data on the 
     demonstration project with respect to the provision of home 
     health services to medicare beneficiaries that relates to 
     quality of care, patient outcomes, and additional costs, if 
     any, to the medicare program.
       (f) Report to Congress.--Not later than 1 year after the 
     date of the completion of the demonstration project under 
     this section, the Secretary shall submit to Congress a report 
     on the project using the data collected under subsection (e) 
     and shall include--
       (1) an examination of whether the provision of home health 
     services to medicare beneficiaries under the project--
       (A) adversely effects the provision of home health services 
     under the medicare program; or
       (B) directly causes an unreasonable increase of 
     expenditures under the medicare program for the provision of 
     such services that is directly attributable to such 
     clarification;
       (2) the specific data evidencing the amount of any increase 
     in expenditures that is a directly attributable to the 
     demonstration project (expressed both in absolute dollar 
     terms and as a percentage) above expenditures that would 
     otherwise have been incurred for home health services under 
     the medicare program; and
       (3) specific recommendations to exempt permanently and 
     severely disabled homebound beneficiaries from restrictions 
     on the length, frequency and purpose of their absences from 
     the home to qualify for home health services without 
     incurring additional unreasonable costs to the medicare 
     program.
       (g) Waiver Authority.--The Secretary shall waive compliance 
     with the requirements of title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.) to such extent and for such 
     period as the Secretary determines is necessary to conduct 
     demonstration projects.
       (h) Construction.--Nothing in this section shall be 
     construed as waiving any applicable civil monetary penalty, 
     criminal penalty, or other remedy available to the Secretary 
     under title XI or title XVIII of the Social Security Act for 
     acts prohibited under such titles, including penalties for 
     false certifications for purposes of receipt of items or 
     services under the medicare program.
       (i) Authorization of Appropriations.--Payments for the 
     costs of carrying out the demonstration project under this 
     section shall be made from the Federal Supplementary 
     Insurance Trust Fund under section 1841 of such Act (42 
     U.S.C. 1395t).
       (j) Definitions.--In this section:
       (1) Medicare beneficiary.--The term ``medicare 
     beneficiary'' means an individual who is enrolled under part 
     B of title XVIII of the Social Security Act.
       (2) Home health services.--The term ``home health 
     services'' has the meaning given such term in section 1861(m) 
     of the Social Security Act (42 U.S.C. 1395x(m)).
       (3) Activities of daily living defined.--The term 
     ``activities of daily living'' means eating, toileting, 
     transferring, bathing, and dressing.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.


                           Amendment No. 1114

 (Purpose: To require the GAO to study the impact of price controls on 
                            pharmaceuticals)

       At the appropriate place, insert the following:

     SEC.  . GAO STUDY OF PHARMACEUTICAL PRICE CONTROLS AND PATENT 
                   PROTECTIONS IN THE G-7 COUNTRIES.

       (A) Study.--The Comptroller General of the United States 
     shall conduct a study of price controls imposed on 
     pharmaceuticals in France, Germany, Italy, Japan, the United 
     Kingdom and Canada to review the impact such regulations have 
     on consumers, including American consumers, and on innovation 
     in medicine. Such study shall include--
       (1) The pharmaceutical price control structure in each 
     country for a wide range of pharmaceuticals, compared with 
     average pharmaceutical prices paid by Americans covered by 
     private sector health insurance;
       (2) The proportion of the costs for innovation borne by 
     American consumers, compared with consumers in the other six 
     countries;
       (3) A review of how closely the observed prices in 
     regulated markets correspond to

[[Page 16682]]

     the prices that efficiently distribute common costs of 
     production (``Ramsey prices'');
       (4) A review of any peer-reviewed literature that might 
     show the health consequences to patients in the listed 
     countries that result from the absence or delayed 
     introduction of medicines, including the cost of not having 
     access to medicines, in terms of lower life expectancy and 
     lower quality of health;
       (5) The impact on American consumers, in terms of reduced 
     research into new or improved pharmaceuticals (including the 
     cost of delaying the introduction of a significant advance in 
     certain major diseases), if similar price controls were 
     adopted in the United States;
       (6) The existing standards under international conventions, 
     including the World Trade Organization and the North American 
     Free Trade Agreement, regarding regulated pharmaceutical 
     prices, including any restrictions on anti-competitive laws 
     that might apply to price regulations and how economic harm 
     caused to consumers in markets without price regulations may 
     be remedied;
       (7) In parallel trade regimes, how much of the price 
     difference between countries in the European Union is 
     captured by middlemen and how much goes to benefit patients 
     and health systems where parallel importing is significant; 
     and
       (8) How much cost is imposed on the owner of a property 
     right from counterfeiting and from international violation of 
     intellectual property rights for prescription medicines.
       (B) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under subsection (A).


                           amendment no. 1115

   (Purpose: To express the sense of the Senate concerning Medicare 
         payments to physicians and other health professionals)

       At the appropriate place, insert the following:

     SEC.  . SENSE OF THE SENATE CONCERNING MEDICARE PAYMENT 
                   UPDATE FOR PHYSICIANS AND OTHER HEALTH 
                   PROFESSIONALS.

       (a) Findings.--The Senate makes the following findings:
       (1) The formula by which Medicare payments are updated each 
     year for services furnished by physicians and other health 
     professionals is fundamentally flawed.
       (2) The flawed physician payment update formula is causing 
     a continuing physician payment crisis, and, without 
     Congressional action, Medicare payment rates for physicians 
     and other practitioners are predicted to fall by 4.2 percent 
     in 2004.
       (3) A physician payment cut in 2004 would be the fifth cut 
     since 1991, and would be on top of a 5.4 percent cut in 2002, 
     with additional cuts estimated for 2005, 2006, and 2007; from 
     1991-2003, payment rates for physicians and health 
     professionals fell 14 percent behind practice cost inflation 
     as measured by Medicare's own conservative estimates.
       (4) The sustainable growth rate (SGR) expenditure target, 
     which is the basis for the physician payment update, is 
     linked to the gross domestic product and penalizes physicians 
     and other practitioners for volume increases that they cannot 
     control and that the government actively promotes through new 
     coverage decisions, quality improvement activities and other 
     initiatives that, while beneficial to patients, are not 
     reflected in the SGR.
       (b) Sense of the Senate.--It is the Sense of the Senate 
     that Medicare beneficiary access to quality care may be 
     compromised if Congress does not take action to prevent cuts 
     next year and the following that result from the SGR formula.


                           amendment no. 1045

 (Purpose: To provide for a demonstration project for the exclusion of 
     brachytherapy devices from the prospective payment system for 
                     outpatient hospital services)

       At the end of subtitle B of title IV, add the following:

     SEC. __. DEMONSTRATION PROJECT FOR EXCLUSION OF BRACHYTHERAPY 
                   DEVICES FROM PROSPECTIVE PAYMENT SYSTEM FOR 
                   OUTPATIENT HOSPITAL SERVICES.

       (a) Demonstration Project.--The Secretary shall conduct a 
     demonstration project under part B of title XVIII of the 
     Social Security Act under which brachytherapy devices shall 
     be excluded from the prospective payment system for 
     outpatient hospital services under the medicare program and, 
     notwithstanding section 1833(t) of the Social Security Act 
     (42 U.S.C. 1395l(t)), the amount of payment for a device of 
     brachytherapy furnished under the demonstration project shall 
     be equal to the hospital's charges for each device furnished, 
     adjusted to cost.
       (b) Specification of Groups for Brachytherapy Devices.--The 
     Secretary shall create additional groups of covered OPD 
     services that classify devices of brachytherapy furnished 
     under the demonstration project separately from the other 
     services (or group of services) paid for under section 
     1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) in a 
     manner reflecting the number, isotope, and radioactive 
     intensity of such devices furnished, including separate 
     groups for palladium-103 and iodine-125 devices.
       (c) Duration.--The Secretary shall conduct the 
     demonstration project under this section for the 3-year 
     period beginning on the date that is 90 days after the date 
     of enactment of this Act.
       (d) Report.--Not later than January 1, 2007, the Secretary 
     shall submit to Congress a report on the demonstration 
     project conducted under this section. The report shall 
     include an evaluation of patient outcomes under the 
     demonstration project, as well as an analysis of the cost 
     effectiveness of the demonstration project.
       (e) Waiver Authority.--The Secretary shall waive compliance 
     with the requirements of title XVIII of the Social Security 
     Act to such extent and for such period as the Secretary 
     determines is necessary to conduct the demonstration project 
     under this section.
       (f) Funding.--
       (1) In general.--The Secretary shall provide for the 
     transfer from the Federal Supplementary Insurance Trust Fund 
     established under section 1841 of the Social Security Act (42 
     U.S.C. 1395t) of such funds as are necessary for the costs of 
     carrying out the demonstration project under this section.
       (2) Budget neutrality.--In conducting the demonstration 
     project under this section, the Secretary shall ensure that 
     the aggregate payments made by the Secretary do not exceed 
     the amount which the Secretary would have paid if the 
     demonstration project under this section was not implemented.


                           amendment no. 1058

 (Purpose: To restore the Federal Hospital Insurance Trust Fund to the 
  financial position it would have been in if a clerical bookkeeping 
                        error had not occurred)

       At the appropriate place in title VI, insert the following:

     SEC. __. RESTORATION OF FEDERAL HOSPITAL INSURANCE TRUST 
                   FUND.

       (a) Definitions.--In this section:
       (1) Clerical error.--The term ``clerical error'' means the 
     failure that occurred on April 15, 2001, to have transferred 
     the correct amount from the general fund of the Treasury to 
     the Trust Fund.
       (2) Trust fund.--The term ``Trust Fund'' means the Federal 
     Hospital Insurance Trust Fund established under section 1817 
     of the Social Security Act (42 U.S.C. 1395i).
       (b) Correction of Trust Fund Holdings.--
       (1) In general.--Not later than 120 days after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     take the actions described in paragraph (2) with respect to 
     the Trust Fund with the goal being that, after such actions 
     are taken, the holdings of the Trust Fund will replicate, to 
     the extent practicable in the judgment of the Secretary of 
     the Treasury, in consultation with the Secretary of Health 
     and Human Services, the holdings that would have been held by 
     the Trust Fund if the clerical error had not occurred.
       (2) Obligations issued and redeemed.--The Secretary of the 
     Treasury shall--
       (A) issue to the Trust Fund obligations under chapter 31 of 
     title 31, United States Code, that bear issue dates, interest 
     rates, and maturity dates that are the same as those for the 
     obligations that--
       (i) would have been issued to the Trust Fund if the 
     clerical error had not occurred; or
       (ii) were issued to the Trust Fund and were redeemed by 
     reason of the clerical error; and
       (B) redeem from the Trust Fund obligations that would have 
     been redeemed from the Trust Fund if the clerical error had 
     not occurred.
       (c) Appropriation.--Not later than 120 days after the date 
     of enactment of this Act, there is appropriated to the Trust 
     Fund, out of any money in the Treasury not otherwise 
     appropriated, an amount determined by the Secretary of the 
     Treasury, in consultation with the Secretary of Health and 
     Human Services, to be equal to the interest income lost by 
     the Trust Fund through the date on which the appropriation is 
     being made as a result of the clerical error.


                           amendment no. 1044

         (Purpose: To adjust the urban health provider payment)

       At the appropriate place, insert the following:

     SEC. __. URBAN HEALTH PROVIDER ADJUSTMENT.

       (a) In General.--Beginning with fiscal year 2004, 
     notwithstanding section 1923(f) of the Social Security Act 
     (42 U.S.C. 1396r-4(f)) and subject to subsection (c), with 
     respect to a State, payment adjustments made under title XIX 
     of the Social Security Act (42 U.S.C. 1396 et seq.) to a 
     hospital described in subsection (b) shall be made without 
     regard to the DSH allotment limitation for the State 
     determined under section 1923(f) of that Act (42 U.S.C. 
     1396r-4(f)).
       (b) Hospital Described.--A hospital is described in this 
     subsection if the hospital--
       (1) is owned or operated by a State (as defined for 
     purposes of title XIX of the Social Security Act), or by an 
     instrumentality or a municipal governmental unit within a 
     State (as so defined) as of January 1, 2003; and
       (2) is located in Marion County, Indiana.
       (c) Limitation.--The payment adjustment described in 
     subsection (a) for fiscal year 2004 and each fiscal year 
     thereafter shall not exceed 175 percent of the costs of 
     furnishing hospital services described in section

[[Page 16683]]

     1923(g)(1)(A) of the Social Security Act (42 U.S.C. 1396r-
     4(g)(1)(A)).


                           amendment no. 1056

 (Purpose: To prevent the Secretary of Health and Human Services from 
    modifying the treatment of certain long-term care hospitals as 
                       subsection (d) hospitals)

       At the end of subtitle A of title IV, add the following:

     SEC. __. TREATMENT OF GRANDFATHERED LONG-TERM CARE HOSPITALS.

       (a) In General.--The last sentence of section 1886(d)(1)(B) 
     is amended by inserting ``, and the Secretary may not impose 
     any special conditions on the operation, size, number of 
     beds, or location of any hospital so classified for continued 
     participation under this title or title XIX or for continued 
     classification as a hospital described in clause (iv)'' 
     before the period at the end.
       (b) Treatment of Proposed Revision.--The Secretary shall 
     not adopt the proposed revision to section 412.22(f) of title 
     42, Code of Federal Regulations contained in 68 Federal 
     Register 27154 (May 19, 2003) or any revision reaching the 
     same or substantially the same result as such revision.
       (c) Effective Date.--The amendment made by, and provisions 
     of, this section shall apply to cost reporting periods ending 
     on or after December 31, 2002.


                           amendment no. 1013

   (Purpose: To ensure that patients are receiving safe and accurate 
                      dosages of compounded drugs)

       At the appropriate place, insert the following:

     SEC. __. COMMITTEE ON DRUG COMPOUNDING.

       (a) Establishment.--The Secretary of Health and Human 
     Services shall establish an Committee on Drug Compounding 
     (referred to in this section as the ``Committee'') within the 
     Food and Drug Administration on drug compounding to ensure 
     that patients are receiving necessary, safe and accurate 
     dosages of compounded drugs.
       (b) Membership.--The membership of the Advisory Committee 
     shall be appointed by the Secretary of Health and Human 
     Services and shall include representatives of--
       (1) the National Association of Boards of Pharmacy;
       (2) pharmacy groups;
       (3) physician groups;
       (4) consumer and patient advocate groups;
       (5) the United States Pharmacopoeia; and
       (6) other individuals determined appropriate by the 
     Secretary.
       (c) Report and Recommendations.--Not later than 1 year 
     after the date of enactment of this Act, the Committee shall 
     submit to the Secretary a report concerning the 
     recommendations of the Committee to improve and protect 
     patient safety.
       (d) Termination.--The Committee shall terminate on the date 
     that is 1 year after the date of enactment of this Act.


                           amendment no. 1121

 (Purpose: To express the sense of the Senate concerning the structure 
    of Medicare reform and the prescription drug benefit to ensure 
        Medicare's long-term solvency and high quality of care)

       At the appropriate place, insert the following:

     SEC.  . SENSE OF THE SENATE CONCERNING THE STRUCTURE OF 
                   MEDICARE REFORM AND THE PRESCRIPTION DRUG 
                   BENEFIT.

       (a) Findings.--The Senate makes the following findings:
       (1) America's seniors deserve a fiscally-strong Medicare 
     system that fulfills its promise to them and future retirees.
       (2) The impending retirement of the ``baby boom'' 
     generation will dramatically increase the costs of providing 
     Medicare benefits. Medicare costs will double relative to the 
     size of the economy from 2 percent of GDP today to 4 percent 
     in 2025 and double again to 8 percent of GDP in 2075. This 
     growth will accelerate substantially when Congress adds a 
     necessary prescription drug benefit.
       (3) Medicare's current structure does not have the 
     flexibility to quickly adapt to rapid advances in modern 
     health care. Medicare lags far behind other insurers in 
     providing prescription drug coverage, disease management 
     programs, and host of other advances. Reforming Medicare to 
     create a more self-adjusting, innovative structure is 
     essential to improve Medicare's efficiency and the quality of 
     the medical care it provides.
       (4) Private-sector choice for Medicare beneficiaries would 
     provide two key benefits: it would be tailored to the needs 
     of America's seniors, not the government, and would create a 
     powerful incentive for private-sector Medicare plans to 
     provide the best quality health care to seniors at the most 
     affordable price.
       (5) The method by which the national preferred provider 
     organizations in the Federal Employees Health Benefits 
     Program have been reimbursed has proven to be a reliable and 
     successful mechanism for providing Members of Congress and 
     federal employees with excellent health care choices.
       (6) Unlike the Medicare payment system, which has had to be 
     changed by Congress every few years, the Federal Employees 
     Health Benefits Program has existed for 43 years with minimal 
     changes from Congress.
       (b) Sense of the Senate.--It is the Sense of the Senate 
     that Medicare reform legislation should:
       (1) Ensure that prescription drug coverage is directed to 
     those who need it most.
       (2) Provide that government contributions used to support 
     Medicare Advantage plans are based on market principles 
     beginning in 2006 to ensure the long and short term viability 
     of such options for America's seniors.
       (3) Develop a payment system for the Medicare Advantage 
     preferred provider organizations similar to the payment 
     system used for the national preferred provider organizations 
     in the Federal Employees Health Benefits Program.
       (4) Limit the addition of new unfunded obligations in the 
     Medicare program so that the long-term solvency of this 
     important program is not further jeopardized.
       (5) Incorporate private sector, market-based elements, that 
     do not rely on the inefficient Medicare price control 
     structure.
       (6) Keep the cost of structural changes and new benefits 
     within the $400 billion provided for under the current 
     Congressional Budget Resolution for implementing Medicare 
     reform and providing a prescription drug benefit.
       (7) Preserve the current employer-sponsored retiree health 
     plans and not design a benefit which has the unintended 
     consequences of supplanting private coverage.
       (8) Incorporate regulatory reform proposals to eliminate 
     red tape and reduce costs.
       (9) Restore the right of Medicare beneficiaries and their 
     doctors to work together to provide services, allow private 
     fee for service plans to set their own premiums, and permit 
     seniors to add their own dollars beyond the government 
     contribution.


                     amendment no. 989, as modified

   (Purpose: To increase medicare payments for home health services 
                       furnished in a rural area)

       At the appropriate place in subtitle C of title IV, insert 
     the following:

     SEC. __. INCREASE IN MEDICARE PAYMENT FOR CERTAIN HOME HEALTH 
                   SERVICES.

       (a) In General.--Section 1895 of the Social Security Act 
     (42 U.S.C. 1395fff) is amended by adding at the end the 
     following:
       ``(f) Increase in Payment for Services Furnished in a Rural 
     Area.--
       ``(1) In general.--In the case of home health services 
     furnished in a rural area (as defined in section 
     1886(d)(2)(D)) on or after October 1, 2004 and before October 
     1, 2006, the Secretary shall increase the payment amount 
     otherwise made under this section for such services by 10 
     percent.
       ``(2) Waiver of budget neutrality.--The Secretary shall not 
     reduce the standard prospective payment amount (or amounts) 
     under this section applicable to home health services 
     furnished during any period to offset the increase in 
     payments resulting from the application of paragraph (1).''.
       (b) Payment Adjustment.--Section 1895(b)(5) of the Social 
     Security Act (42 U.S. C. 1395fff(b)(5)) is amended by adding 
     at the end the following: ``Notwithstanding this paragraph, 
     the total amount of the additional payments or payment 
     adjustments made under this paragraph may not exceed, with 
     respect to fiscal year 2004, 3 percent, and, with respect to 
     fiscal years 2005 and 2006, 4 percent, of the total payments 
     projected or estimated to be made based on the prospective 
     payment system under this subsection in the year involved.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after October 1, 
     2003.


                           amendment no. 1126

(Purpose: To provide for the treatment of certain entities for purposes 
                of payments under the medicare program)

       At the end of subtitle A of title IV, add the following:

     SEC. __. TREATMENT OF CERTAIN ENTITIES FOR PURPOSES OF 
                   PAYMENTS UNDER THE MEDICARE PROGRAM.

       (a) Payments to Hospitals.--
       (1) In general.--Notwithstanding any other provision of 
     law, effective for discharges occurring on or after October 
     1, 2003, for purposes of making payments to hospitals (as 
     defined in section 1886(d) and 1833(t) of the Social Security 
     Act (42 U.S.C. 1395(d)) under the medicare program under 
     title XVIII of such Act (42 U.S.C. 1395 et seq.), Iredell 
     County, North Carolina, and Rowan County, North Carolina, are 
     deemed to be located in the Charlotte-Gastonia-Rock Hill, 
     North Carolina, South Carolina Metropolitan Statistical Area.
       (2) Budget Neutral Within North Carolina.--The Secretary 
     shall adjust the area wage index referred to in paragraph (1) 
     with respect to payments to hospitals located in North 
     Carolina in a manner which assures that the total payments 
     made under section 1886(d) of the Social Security Act (42 
     U.S.C., 1395(ww)(d)) in a fiscal year for the operating cost 
     of inpatient hospital services are not greater or less than 
     the total of such payments that would have been made in the 
     year if this subsection had not been enacted.
       (b) Payments to Skilled Nursing Facilities and Home Health 
     Agencies.--
       (1) In general.--Notwithstanding any other provision of 
     law, effective beginning October 1, 2003, for purposes of 
     making payments to skilled nursing facilities (SNFs) and home 
     health agencies (as defined in sections 1861(j) and 1861(o) 
     of the Social Security Act (42 U.S.C. 1395x(j); 1395x(o)) 
     under the medicare program under title XVIII of such Act, 
     Iredell County, North Carolina, and Rowan County, North 
     Carolina, are

[[Page 16684]]

     deemed to be located in the Charlotte-Gastonia-Rock Hill, 
     North Carolina, South Carolina Metropolitan Statistical Area.
       (2) Application and Budget Neutral Within North Carolina.--
     Effective for fiscal year 2004, the skilled nursing facility 
     PPS and home health PPS rates for Iredell County, North 
     Carolina, and Rowan County, North Carolina, will be updated 
     by the prefloor, prereclassified hospital wage index 
     available for the Charlotte-Gastonia-Rock Hill, North 
     Carolina, South Carolina Metropolitan Statistical Area. This 
     subsection shall be implemented in a budget neutral manner, 
     using a methodology that ensures that the total amount of 
     expenditures for skilled nursing facility services and home 
     health services in a year does not exceed the total amount of 
     expenditures that would have been made in the year if this 
     subsection had not been enacted. Required adjustments by 
     reason of the preceding sentence shall be done with respect 
     to skilled nursing facilities and home health agencies 
     located in North Carolina.
       (c) Construction.--The provisions of this section shall 
     have no effect on the amount of payments made under title 
     XVIII of the Social Security Act to entities located in 
     States other than North Carolina.


                           amendment no. 996

(Purpose: To modify the GAO study of geographic differences in payments 
for physicians' services relating to the work geographic practice cost 
                                 index)

       In section 445(a) of the bill, strike paragraph (6) and 
     insert the following:
       ``(6) an evaluation of the appropriateness of extending 
     such adjustment or making such adjustment permanent;
       ``(7) an evaluation of the adjustment of the work 
     geographic practice cost index required under section 
     1848(e)(1)(A)(iii) of the Social Security Act (42 U.S.C. 
     1395w-4(e)(1)(A)(iii)) to reflect \1/4\ of the area cost 
     difference in physician work;
       ``(8) an evaluation of the effect of the adjustment 
     described in paragraph (7) on physician location and 
     retention in higher than average cost-of-living areas, taking 
     into account difference in recruitment costs and retention 
     rates for physicians, including specialists; and
       ``(9) an evaluation of the appropriateness of the \1/4\ 
     adjustment for the work geographic practice cost index.''.


                           amendment no. 1118

      (Purpose: To express the sense of the Senate regarding the 
establishment of a nationwide permanent lifestyle modification program 
                      for Medicare beneficiaries)

       At the end of title VI, insert the following:

     SEC. __. SENSE OF THE SENATE REGARDING THE ESTABLISHMENT OF A 
                   NATIONWIDE PERMANENT LIFESTYLE MODIFICATION 
                   PROGRAM FOR MEDICARE BENEFICIARIES.

       (a) Findings.--Congress finds that:
       (1) Heart disease kills more than 500,000 Americans per 
     year.
       (2) The number and costs of interventions for the treatment 
     of coronary disease are rising and currently cost the health 
     care system $58,000,000,000 annually.
       (3) The Medicare Lifestyle Modification Program has been 
     operating throughout 12 States and has been demonstrated to 
     reduce the need for coronary procedures by 88 percent per 
     year.
       (4) The Medicare Lifestyle Modification Program is less 
     expensive to deliver than interventional cardiac procedures 
     and could reduce cardiovascular expenditures by 
     $36,000,000,000 annually.
       (5) Lifestyle choices such as diet and exercise affect 
     heart disease and heart disease outcomes by 50 percent or 
     greater.
       (6) Intensive lifestyle interventions which include teams 
     of nurses, doctors, exercise physiologists, registered 
     dietitians, and behavioral health clinicians have been 
     demonstrated to reduce heart disease risk factors and enhance 
     heart disease outcomes dramatically.
       (7) The National Institutes of Health estimates that 
     17,000,000 Americans have diabetes and the Centers for 
     Disease Control and Prevention estimates that the number of 
     Americans who have a diagnosis of diabetes increased 61 
     percent in the last decade and is expected to more than 
     double by 2050.
       (8) Lifestyle modification programs are superior to 
     medication therapy for treating diabetes.
       (9) Individuals with diabetes are now considered to have 
     coronary disease at the date of diagnosis of their diabetic 
     state.
       (10) The Medicare Lifestyle Modification Program has been 
     an effective lifestyle program for the reversal and treatment 
     of heart disease.
       (11) Men with prostate cancer have shown significant 
     improvement in prostate cancer markers using a similar 
     approach in lifestyle modification.
       (12) These lifestyle changes are therefore likely to affect 
     other chronic disease states, in addition to heart disease.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Secretary of Health and Human Services should carry 
     out the demonstration project known as the Lifestyle 
     Modification Program Demonstration, as described in the 
     Health Care Financing Administration Memorandum of 
     Understanding entered into on November 13, 2000, on a 
     permanent basis;
       (2) the project should include as many Medicare 
     beneficiaries as would like to participate in the project on 
     a voluntary basis; and
       (3) the project should be conducted on a national basis.


                           amendment No. 1085

    (Purpose: To express the sense of the Senate regarding payment 
         reductions under the Medicare physician fee schedule)

       At the end of title VI, insert the following:

     SEC. __. SENSE OF THE SENATE ON PAYMENT REDUCTIONS UNDER 
                   MEDICARE PHYSICIAN FEE SCHEDULE.

       (a) Findings.--Congress finds that--
       (1) the fees Medicare pays physicians were reduced by 5.4 
     percent across-the-board in 2002;
       (2) recent action by Congress narrowly averted another 
     across-the-board reduction of 4.4 percent for 2003;
       (3) based on current projections, the Centers for Medicare 
     & Medicaid Services (CMS) estimates that, absent legislative 
     or administrative action, fees will be reduced across-the-
     board once again in 2004 by 4.2 percent;
       (4) the prospect of continued payment reductions under the 
     Medicare physician fee schedule for the foreseeable future 
     threatens to destabilize an important element of the program, 
     namely physician participation and willingness to accept 
     Medicare patients;
       (5) the primary source of this instability is the 
     sustainable growth rate (SGR), a system of annual spending 
     targets for physicians' services under Medicare;
       (6) the SGR system has a number of defects that result in 
     unrealistically low spending targets, such as the use of the 
     increase in the gross domestic product (GDP) as a proxy for 
     increases in the volume and intensity of services provided by 
     physicians, no tolerance for variance between growth in 
     Medicare beneficiary health care costs and our Nation's GDP, 
     and a requirement for immediate recoupment of the difference;
       (7) both administrative and legislative action are needed 
     to return stability to the physician payment system;
       (8) using the discretion given to it by Medicare law, CMS 
     has included expenditures for prescription drugs and 
     biologicals administered incident to physicians' services 
     under the annual spending targets without making appropriate 
     adjustments to the targets to reflect price increases in 
     these drugs and biologicals or the growing reliance on such 
     therapies in the treatment of Medicare patients;
       (9) between 1996 and 2002, annual Medicare spending on 
     these drugs grew from $1,800,000,000 to $6,200,000,000, or 
     from $55 per beneficiary to an estimated $187 per 
     beneficiary;
       (10) although physicians are responsible for prescribing 
     these drugs and biologicals, neither the price of the drugs 
     and biologicals, nor the standards of care that encourage 
     their use, are within the control of physicians; and
       (11) SGR target adjustments have not been made for cost 
     increases due to new coverage decisions and new rules and 
     regulations.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Center for Medicare & Medicaid Services (CMS) 
     should use its discretion to exclude drugs and biologicals 
     administered incident to physician services from the 
     sustainable growth rate (SGR) system;
       (2) CMS should use its discretion to make SGR target 
     adjustments for new coverage decisions and new rules and 
     regulations; and
       (3) in order to provide ample time for Congress to consider 
     more fundamental changes to the SGR system, the conferees on 
     the Prescription Drug and Medicare Improvement Act of 2003 
     should include in the conference agreement a provision to 
     establish a minimum percentage update in physician fees for 
     the next 2 years and should consider adding provisions that 
     would mitigate the swings in payment, such as establishing 
     multi-year adjustments to recoup the variance and creating 
     ``tolerance'' corridors for variations around the update 
     target trend.


                           amendment no. 960

    (Purpose: To Require a Streamlining of the Medicare Regulations)

       At the end of subtitle A of title V, add the following:

     SEC. __. STREAMLINING AND SIMPLIFICATION OF MEDICARE 
                   REGULATIONS.

       (a) In General.--The Secretary of Health and Human Services 
     shall conduct an analysis of the regulations issued under 
     title XVIII of the Social Security Act and related laws in 
     order to determine how such regulations may be streamlined 
     and simplified to increase the efficiency and effectiveness 
     of the medicare program without harming beneficiaries or 
     providers and to decrease the burdens the medicare payment 
     systems impose on both beneficiaries and providers.
       (b) Reduction in Regulations.--The Secretary, after 
     completion of the analysis under subsection (a), shall direct 
     the rewriting of the regulations described in subsection (a) 
     in such a manner as to--
       (1) reduce the number of words comprising all regulations 
     by at least two-thirds by October 1, 2004, and
       (2) ensure the simple, effective, and efficient operation 
     of the medicare program.
       (c) Application of the Paperwork Reduction Act.--The 
     Secretary shall apply the

[[Page 16685]]

     provisions of chapter 35 of title 44, United States Code 
     (commonly known as the ``Paperwork Reduction Act'') to the 
     provisions of this Act to ensure that any regulations issued 
     to implement this Act are written in plain language, are 
     streamlined, promote the maximum efficiency and effectiveness 
     of the medicare and medicaid programs without harming 
     beneficiaries or providers, and minimize the burdens the 
     payment systems affected by this Act impose on both 
     beneficiaries and providers. If the Secretary determines that 
     the two-thirds reduction in words by October 1, 2004 required 
     in (B)(1) is not feasible, he shall inform Congress in 
     writing by July 1, 2004 of the reasons for its unfeasibility. 
     He shall then establish a feasible reduction to be received 
     by January 1, 2005.
  Mr. GRASSLEY. I ask unanimous consent that these amendments and the 
following pending amendments be adopted en bloc and that the motion to 
reconsider be laid upon the table: Amendment No. 1017, Allard; No. 968, 
Harkin; No. 948, Graham of South Carolina; No. 960, Dayton; No. 1054, 
Feingold; No. 1030, Enzi.
  The PRESIDENT pro tempore. Is there objection?
  Without objection, it is so ordered.
  The amendments were agreed to.
  Mr. GRASSLEY. Thank you. I suggest the absence of a quorum.
  The PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRAHAM of South Carolina. Mr. President, I ask unanimous consent 
that the order for the quorum call be rescinded.
  The PRESIDENT pro tempore. Without objection, it is so ordered.

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