March 23,2010

Grassley works for rural equity in health care debate

Iowa senator fights for fair treatment, certain outcomes for all rural states

WASHINGTON --- Senator Chuck Grassley said today that he will offer an amendment
for rural health care equity during Senate debate on the health-care reconciliation bill. Grassley
said at issue is how Medicare calculates payments to physicians and unfairly penalizes rural
doctors, making it increasingly difficult for rural Medicare beneficiaries to find a doctor.

Grassley said his amendment this week would repeal the special deal for five selected
frontier states that became law today when the President signed health-care reform legislation.
The higher payments given to these five states, North Dakota, South Dakota, Montana,
Wyoming and Utah, come at the expense of every other state and will make it more difficult to
secure passage of formula changes to achieve equity for rural states nationwide. The Grassley
amendment would improve physician payments for all rural states, not a selected few.

Grassley said his amendment to the reconciliation bill also would make clear that a side
agreement reported over the weekend between House members and the Secretary of Health and
Human Services for an Institute of Medicine study about geographic disparity cannot interfere
with the clear-cut improvement made during Senate debate on the health care bill to improve the
accuracy of the data the government uses to factor in physician practice costs in determining
Medicare payments. Last September, the Finance Committee adopted a Grassley amendment to
make this change. The Senate proposal was much stronger than the health care bill in the House
of Representatives because the House bill only had a study to make recommendations. It didn’t
make actual improvements to the status quo for rural providers.

“I want to make sure the agreement with Secretary Sebelius that somehow accompanies
the House health-care reconciliation bill, cannot un-do the actual formula fix established by the
Grassley amendment in the health-care reform bill to secure more equitable payment for doctors
serving Medicare beneficiaries in rural areas,” Grassley said.

The Grassley amendment that’s part of the health-care reform that became law today tells
Medicare officials to use accurate data. Grassley said his concern is “if the House reconciliation
bill results in the Institute of Medicine coming up with different data and makes
recommendations that aren’t consistent with the requirements for the practice-expense
geographic adjustments that are now law, we could be back where we started, or worse off. It’s
unclear what was agreed to between Secretary Sebelius and the House, and what the advantage is
for rural health care equity for physicians, so anything could happen.”

The senator said that another concern is that descriptions of the study promised by the
Secretary of Health and Human Services say it would be part of the work of the new Independent
Payment Advisory Board. “The purpose of that Board is to cut Medicare spending, which likely
will not result in improvements for rural areas,” Grassley said.

“I hope senators don’t let politics get in the way of making sure these important policies
are established in a way that is equitable and fair. These formulas determine how well Medicare
works, or doesn’t work, for beneficiaries in rural states,” Grassley said.

Separately, the health-care reconciliation bill passed by the House and pending in the
Senate also raises questions by creating a new reimbursement cliff for doctors in Medicaid, on
top of the physician payment formula problem that exists already in Medicare. “As bad as the
physician payment problem is in Medicare, House members now have set up the same kind of
problem in Medicaid. The health care reform bill puts another 16 million Americans in
Medicaid, so Medicaid’s problems will get even bigger. That’s a disservice to beneficiaries in
both programs,” Grassley said.