Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - July 22, 2008)

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By Mr. GRASSLEY:

S. 3300. A bill to amend title XVIII of the Social Security Act to provide for temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals and to provide for the use of the non-wage adjusted PPS rate under the Medicare-dependent hospital (MDH) program, and for other purposes; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, I am pleased to introduce the Rural Hospital Act of 2008. Back in December, I stood before this body explaining that we were only passing a 6-month Medicare bill in order to provide the opportunity for us to address a number of priorities. One of the biggest priorities I identified was the need to ensure access to rural hospital services.

The type of rural hospitals that top the priority list are what are known as ``tweeners.'' These hospitals are too large to be critical access hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. It is absolutely imperative that these tweener hospitals get the assistance they need in order to keep their doors open. They are often not only the sole provider of health care in rural areas but are also significant employers and purchasers in the community. Also, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop.

While the Medicare bill that Congress just enacted improves the situation for some tweeners, many more are left in financial peril. It is unfortunate that comprehensive payment reforms for tweener hospitals were not included in the bill that just passed. As you know, I have long proposed a number of tweener payment improvements in previous bills this Congress and they were included in the agreement that Senator Baucus and I reached for this year's Medicare bill. Unfortunately, the core tweener hospital payment improvements were dropped from the bill once the process became partisan.

It is for this reason that I am introducing this bill. We must improve the financial health of tweener hospitals and ensure that people have access to health care.

Most tweener hospitals are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. While the bill that recently passed Congress improves payments for Sole Community Hospitals, there are no provisions that benefit Medicare Dependent Hospitals. This bill would benefit Medicare Dependent Hospitals by not adjusting their payments for area wages unless it would result in improved payments.

Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. Back when we passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, I made sure that this law included an add-on payment for low volume rural hospitals. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities, both Medicare Dependent Hospitals and Sole Community Hospitals, with low volumes would receive the assistance they desperately need.

To offset the increases in spending from these tweener hospital payment improvements, this bill would address another priority that we wanted to include in a more comprehensive Medicare bill. Many know my position regarding physician owned hospitals and my concern about the effect these facilities have on health care access and costs as well as patient safety. There has been much debate regarding these facilities over the years, especially with physician owned limited service hospitals. This bill would eliminate the exceptions under the physician self-referral laws for physician-owned hospitals and provide a limited exception for existing facilities.

As you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this urgent matter.

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