March 03,2010

Grassley effort to pay for Medicare legislation rebuffed by Senate Majority

WASHINGTON --- Senators today voted 54 to 45 against an amendment offered by Senator Chuck Grassley to make sure Medicare provisions in a tax-extenders bill are paid for in the federal budget.

“I fought for my amendment to make sure the cost of important Medicare provisionswasn’t added to the federal deficit, but the Majority Leader worked to block it and, unfortunatelyfor taxpayers, he succeeded. As a result, billions more will be spent by Congress without beingpaid for, even while congressional leaders say they are for pay-as-you-go,” Grassley said.“These extensions in Medicare policy are important to many beneficiaries, and they should behandled in a fiscally responsible way.”

Grassley’s amendment would have applied to a number of Medicare policies whichexpired at the end of February, including a physician payment adjustment to make sure Medicarebeneficiaries can access doctors and exceptions to the cap on physical therapy for Medicarebeneficiaries needing additional treatment. Last night, Congress voted to prevent these cuts fromtaking place for another 30 days, but they will expire again at the end of March. Otherprovisions, including payment for mental health services, ambulance payments, and improvedpayments for rural and other hospitals were not temporarily extended.

Beyond the fiscal issues, Grassley said all of these health care items have been managedin an irresponsible way by congressional leaders. “Political games were played at the expense ofseniors’ access to physicians and access to medical care for stroke victims and others withdebilitating injuries,” he said. “Even mental health counseling for veterans was jeopardized byCongress passing a short-term extension at the end of 2009, and then failing to pass a moreresponsible extension in February.”

Last month, Grassley offered a bipartisan proposal with Senator Max Baucus to extend anumber of expiring tax provisions, along with these Medicare policies. The Senate MajorityLeader, Senator Reid, rejected their effort and instead has put forward two partisan proposals, thesecond of which is much larger in scope. Neither Reid bill has been offset under federal budgetrules.

Grassley is the Ranking Member and Baucus is the Chairman of the Senate Committeeon Finance, which is responsible for tax and Medicare legislation.

Below is a list of the Medicare and other health-care related provisions included in H.S.4213, the Tax Extenders bill. The legislative text of Grassley’s amendment is attached. A floor statement by Grassley from this morning’s debate on the amendment follows the list of provisions.

Medicare Part A

Extension of Certain Payment Rules for Long-Term Care Hospital Services and of Moratoriumon the Establishment of Certain Hospitals and Facilities. Extends Sections 114 (c) and (d) of theMedicare, Medicaid and SCHIP Extension Act of 2007 by one year.

Extension of the Medicare Rural Hospital Flexibility Program. Extends the authorization for theFlex Grant program through FY2011.

Section 508 Hospital Wage Index Program. Extends hospital reclassifications under section 508of the Medicare Modernization Act (P.L 108-173) through the end of FY2010.

Technical Correction Related to Critical Access Hospitals (CAHs). Makes a technical correctionto clarify that CAHs are eligible to receive 101 percent of reasonable costs for providingoutpatient care regardless of eligible billing method the facility uses and for providing qualifyingambulance services.

Medicare Part B

Outpatient Hospital Hold Harmless. Extends the existing hospital outpatient hold harmlessprovision for small rural hospitals under 100 beds through December 31, 2010. Applies hospitaloutpatient hold harmless provision to sole community hospitals over 100 beds through December31, 2010.

Sustainable Growth Rate (SGR) Extension. As of March 1, 2010, the sustainable growth rateupdate formula requires a 21 percent reduction in physician payments. The provision woulddelay this payment reduction by 10 months through December 31, 2010, effective as of March 1,2010.

Extension of Exceptions Process for Medicare Therapy Caps. Current law places annual perbeneficiary payment limits for all outpatient therapy services provided by non-hospitalproviders. The Secretary was required to implement an exceptions process for cases in which theprovision of additional therapy services was determined to be medically necessary and thisprocess expired on December 31, 2009. The provision would extend, through December 31,2010, the therapy caps exception process.

Extension of Physician Fee Schedule Mental Health Add-On. The provision would extend,through December 31, 2010, the 5 percent increase in payments for certain Medicare mentalhealth services that expired on December 31, 2009.

Extension of Ambulance Add-On. The provision would extend, through December 31, 2010, theincreased Medicare rates for ambulance services, including in super rural areas that expired onDecember 31, 2009.

Extension of the 1.0 Floor on the Work Geographic Practice Cost Index (GPCI). The provisionwould extend, through December 31, 2010, the existing 1.0 floor on the work geographicadjustment that expired on December 31, 2009.

Extension of Payments for the Technical Component of Certain Physician Pathology Services.The provision would extend, through December 31, 2010, the ability of independent laboratoriesto receive direct payments for the technical component for certain pathology services thatexpired on December 31, 2009.

Extension of Direct Billing for Indian Health Service Providers. The provision would extend,through December 31, 2010, the authorization for Indian Health Service providers to be directlyreimbursed by Medicare Part B.

Accreditation Exemption for Certain Pharmacies that Furnish Durable Medical Equipment.Under current law, suppliers of durable medical equipment, prosthetics, orthotics, and othersupplies (DMEPOS) must prove their compliance with quality standards by being accredited.Certain eligible professionals are specifically exempted from the accreditation requirement. Theprovision would make pharmacies eligible for an exemption from the accreditation requirementsunder certain circumstances.

Electronic Health Record Clarification. The provision clarifies the health informationtechnology provision in current law that allows non-hospital-based physicians and other healthprofessionals who bill Medicare and Medicaid through a hospital to receive electronic healthrecord incentives.

Reduction in the Medicare Improvement Fund. The Medicare Improvement Fund (MIF)contains funds that are available to the Secretary to make improvements to the original fee-forserviceprogram under Parts A and B of Medicare. Under current law, approximately $20.7billion is available. The provision reduces the funding available in the MIF by approximately$17.9 billion.

Medicare Part C

Medicare Advantage Changes. The bill extends the authority of certain types of private plans tooffer coverage under Medicare Advantage for one year, 2011. Those plan types are special needsplans, cost plans, and senior housing programs. The bill also includes a technical fix for existingemployer-sponsored private fee-for-service plans. Finally, it provides $20 million in addedfunds for State Health Insurance Assistance Programs and similar organizations that assistbeneficiaries with Medicare benefits.

Other Health Extenders

Court Improvement Programs. Extends funding for court improvement and handling of courtproceedings relating to foster care and adoption programs through FY 2011, originallyauthorized in the Deficit Reduction Act of 2005.

Family to Family Centers. Extends funding for the development and support of Family to FamilyHealth Information Centers through FY 2011, which helps families of children with disabilitiesor special health care needs make informed decisions about health care. The policy was firstauthorized in the Deficit Reduction Act of 2005.

Extends Gainsharing Demonstration for another 21 months. The demonstration was authorized inthe Deficit Reduction Act of 2005 and under current law was to end on December 31, 2009.

Floor Statement of Senator Chuck Grassley
Ranking Member of the Committee on Finance
Failure to Enact Medicare Health Extenders Harms Beneficiaries
Wednesday, March 3. 2010

 Mr. President, as I stated before, I had worked in early February to put together abipartisan package with my colleague, Finance Committee Chairman Baucus, to address sometime-sensitive matters that need to be considered.

I find it surprising that we are taking up a package this week that, like last week’sexercise, solely belongs to the Senate Democratic Leadership.

We are not taking up the bipartisan package that I put together with Finance CommitteeChairman Baucus.

The Senate Democratic Leadership arbitrarily decided to replace the Baucus-Grassleybipartisan bill with one that is dramatically different. Their package is almost three times the and significantly greater in cost than the bipartisan bill we announced on February 11.It's unfortunate that the Democratic Leadership failed to ensure that these criticallyneededMedicare provisions were extended at the end of last year.

Then they failed to extend the provisions that had expired in 2009 for over two months.Today, I am offering an amendment that would ensure that the Medicare provisions arefully offset. And my amendment would also extend the physician update through the end of thisyear.

These provisions are essential to the health and well being of Medicare beneficiaries.And this is the fiscally responsible way to extend them--by paying for them.These Medicare provisions have been routinely supported by both sides, fully offset, andpassed repeatedly in recent years.

Now it is the 3rd of March.

Medicare beneficiaries around the country are suffering from the Senate DemocraticLeader’s decision to abandon the Baucus-Grassley bipartisan package that my colleague and Ihad worked out weeks ago.

First, there is the urgently needed physician payment update, known as the “doc fix”.A two-month extension that was passed in December expired on February 28th so, as ofMarch 1st, physicians, nurses, and other health care professionals were subject to severe paymentcuts of 21 percent.

Now with the 30-day extension having passed last night, physician payments will be inplace until the end of March. But we should not be running Medicare on a month-to-monthbasis.

These cuts to physician payment cannot be allowed to occur. And as damaging as thesewould be to beneficiary access to care anywhere, these cuts are even more disastrous for accessto care in rural states, like Iowa, where Medicare reimbursement is already at least 30 percentlower than in other areas.

I am appalled that seniors’ access to physicians and needed medical care has beenhandled this way because of the political games that are being played by the Senate DemocraticLeadership.

Should these cuts remain in place, they will have a truly devastating effect on the abilityof seniors to find physicians who take Medicare patients.

Many beneficiaries have already been affected by Medicare provisions that the SenateDemocratic Leadership allowed to expire last December.

One of the most urgent situations involves limitations that Medicare places on the amount ofcertain kinds of treatments for beneficiaries.

Medicare places annual limits on the amount of outpatient physical therapy, speech-languagepathology therapy and occupational therapy that a beneficiary can receive.

In 2005, the law was changed to provide for an exceptions process to these therapy capsfor situations when additional therapy is medically necessary. But that needed protection forbeneficiaries expired at the end of 2009.

Medicare beneficiaries who have suffered strokes or serious debilitating injuries, such as a hipfracture, have significant rehabilitation needs. Some have already exceeded the caps for 2010.Those with the greatest need for therapy will be the hardest hit. Here again, with the 30-day extensions bill having passed last night, this problem has been temporarily fixed.But this is another case where this Congress is playing political games with Medicare.

These should have all been taken care of at the end of last year. And they could already havebeen resolved even now if the Senate had taken up the original Baucus-Grassley bill.Other essential provisions include additional payments for mental health services. Thisbenefits Medicare beneficiaries in need of mental health counseling as well as veterans sufferingfrom post-traumatic stress and other disorders since TRICARE is based on Medicare rates.Another issue concerns additional payments for ambulance services that many ambulanceproviders need to keep their doors open. Those provisions also expired at the end of last yearand they were not extended in the 30-day bill voted on last night.

Another important issue affects community pharmacies. Pharmacies that have not gonethrough an accreditation process will soon be forced to turn away Medicare beneficiaries.A provision in my amendment would ensure that beneficiaries who need vital medicalsupplies like diabetic test strips, canes, nebulizers, and wound care products can continue to haveaccess to these products at local pharmacies.

Many eligible professionals, such as physicians, nurse practitioners, physical therapists,and others have been specifically exempted from this requirement. This provision would alsoexempt community pharmacies under certain conditions.

A number of other expired provisions are extended in this package. These includeimproved payments for hospitals, especially rural hospitals that rely on these provisions to keeptheir doors open. And like many others, these problems were not fixed in the 30-day bill passedlast night. These problems still remain.

The impact of a hospital shutting its doors would be especially hard on rural andunderserved areas where hospitals offer the only access to health care.

We need to pass this critically-needed and fiscally responsible amendment now. And I urge mycolleagues to support it.

I yield the floor.