Deficit Reduction Act of 2005--Conference Report

DEFICIT REDUCTION ACT OF 2005--CONFERENCE REPORT

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Mr. GRASSLEY. Mr. President, before I comment on the Senate Committee on Finance portion of the Deficit Reduction Act, I will go over some ground that has been covered by other Members on our side of the aisle through this chart or similar charts, to point out how three entitlement programs--Social Security, Medicare, and Medicaid--as a percentage of the gross domestic product are going to continue to grow and grow and grow until reaching a point where it squeezes out almost everything else in the Federal budget.

This is already legislated. The red on the chart, if we do nothing, is where we end up.

This bill is doing something about that problem. But we ought to be doing a lot more.

I start out by saying what we are doing in this entire deficit reduction package is reducing expenditures of the Federal Government over the next 5 years. Five years is the length of the budget reconciliation changes that we are making. During that 5-year period of time, the Federal Government will spend about $12.5 trillion. We are cutting out of that $12.5 trillion, a 5-year figure, about $10 billion as shown in the red part of the chart.

The reason I try to put that in perspective, one-quarter of 1 percent is at $40 billion, compared to the $12.5 trillion. That is a spit in the ocean compared to what the problem is.

I point out two things. We will hear from Members of this Senate, mostly from the other side of the aisle, that it is catastrophic we are making changes to one-quarter of 1 percent in all the money the Federal Government is going to spend over the next 5 years. It is catastrophic. The world is coming to an end, we will hear.

Then, from the other point of view, considering what these problems are that we know we face today--and no Republican or Democrat disagrees with that--for what we are doing we ought to be somewhat ashamed we cannot do more than one-quarter of 1 percent of all the money the Federal Government is going to spend in the next 5 years.

For the average American who votes and thinks that Washington, DC, is on some other land from the standpoint of what we do in the Congress, they would say to both sides of the argument that the world is coming to an end, that we are going to eliminate or reduce one-quarter of 1 percent or to those that are bragging--I will be in that category of bragging--about doing something about one-quarter of 1 percent, they are going to say, you guys have to be crazy if you cannot find in all the money that the Federal Government spends, some way of saving more than one-quarter of 1 percent of the $12.5 trillion that will be spent over the next 5 years. They would probably say you ought to go out and find some other work where you can accomplish something.

Those are the extreme points of view. That is what I think the public is probably going to say to us at our town meetings when we go back home if we are going to brag about this, or maybe to the people that are going to complain about it, asking if we are really doing much. It is similar to all the labor that an elephant will go through to give birth and then give birth to a mouse. That is what we have here, a mouse compared to the elephant of a problem.

I take an opportunity to explain what is in the Senate Committee on Finance portion of this bill. Senator Gregg needs to be complimented for getting us where we are today on this conference agreement. What I described, one-quarter of 1 percent of all money over the next 5 years, $12.5 trillion worth, this is the first time we have gone through this process in almost 10 years.

So we do not do this every year. And the public watching would say: Why don't you do it every year? I wish I had a responsible answer for that. But I think we ought to recognize Senator Gregg's involvement and the involvement of all the chairmen of the committees in putting together, over several months, this budget reconciliation package for spending to achieve this goal, and achieving this goal regardless of how small it might be.

It is important for the reason I have given you, that by all accounts, the growth in entitlement spending has monumental implications for our Nation's economic and financial strength.

The chart I just spoke about shows the Congressional Budget Office's projections for mandatory spending, including Social Security, Medicare, and Medicaid. According to this chart, by 2050 mandatory spending will approach 30 percent of the Nation's gross domestic product. That is 30 percent by 2050. This would push Federal spending well above the levels that it has been throughout much of the post-World War II period, as evidenced by that straight line that goes across that chart.

This might be, hopefully, a worst case scenario, but it is a plausible scenario. The agreement that we are going to be voting on, called the budget reconciliation package, begins to get at this situation--the red on this chart--by achieving nearly $40 billion in savings over the next 5 years. That includes $6.4 billion in net Medicare savings and $4.7 billion in net Medicaid savings.

I actually hesitate to mention those amounts because for many of our constituents it is hard to get past the numbers. To them, any reduction--any reduction--even if it is only one-fourth of 1 percent, is a bad reduction. But the policy--and we ought to be making decisions in this body based upon sound policy--the policy behind these reductions is sound, just as the policy behind the numerous spending provisions in this entire package is sound.

Throughout this process I have sought to reduce wasteful spending, eliminate loopholes, and pay providers more accurately. I have sought to advance policies that will ensure the availability of important health care and social services, to update these programs to reflect our Nation's changing needs, and also to promote the delivery of high-quality health care services.

The agreement makes some important improvements in the Medicare Program, not the least of which is addressing a scheduled reduction in payments to physicians, which could have led to access problems for beneficiaries. The agreement builds on progress made 3 years ago that linked increases in Medicare payments to hospitals to the reporting of quality data.

I actually would have preferred to do more in the area of pay for performance, and I will continue to push further for changes because we just cannot sit back on this issue, as the private sector is moving much faster than Government, particularly the major corporations of America, in making sure they do their health care business with people in the health care profession and institutions in the health care profession that are going to deliver quality care. We have to be more concerned about this than we have in the past in the Federal Government.

Medicare is the single largest payer of health care in the Nation. Taxpayers and beneficiaries deserve to get the highest value for every Medicare dollar spent. Unfortunately, there is no question that today we are not getting the most value for the taxpayer dollar.

The bill also takes steps to ensure access to quality care in rural communities. It does this by reinstating special payment programs, such as a 5-percent add-on for rural home health providers, the Medicare dependent hospital program, and the hold-harmless payments for small rural hospitals.

The conference agreement also includes coverage of valuable preventive benefits not covered by Medicare. These preventive benefits are important to prevent illnesses and to keep beneficiaries healthy.

This bill also saves beneficiaries and Medicare money by changing the payment structure for durable medical equipment.

Now Medicare will only pay for DME services that are needed; that is, after we get this passed.

I would like to look at Medicaid changes.

In our efforts to reform the Medicaid Program, we take some very important steps, many of them recommended by a bipartisan group of our Nation's Governors. Eventually, all 50 Governors made suggestions to us in a unanimous agreement.

Let's just look at long-term care. In the very near future, a lot of older people are going to need long-term care. Right now, Medicaid is a primary payer for long-term care services. The Deficit Reduction Act expands the Long-Term Care Partnership Program and will promote awareness about long-term care insurance.

We combine that with a policy to tighten restrictions on seniors' ability to transfer or hide assets with the intention of qualifying for Medicaid. These policies protect the integrity of Medicaid and create an incentive for seniors to explore new long-term care options.

The agreement will ensure accurate payments to pharmacies for the cost of drugs, and it has little effect on the market.

We give States the ability to offer Medicaid beneficiaries coverage more consistent with coverage typically offered by employers, while at the same time guaranteeing that children do not lose any benefits currently provided under Medicaid.

We include protections for preventive services and treatment for children. This bill continues to require States which cover early, periodic, screening, diagnosis, and treatment services to continue to do that. The language of the bill is very clear.

Mr. President, on that very point, I ask unanimous consent to have printed in the RECORD a statement by Dr. McClellan, Administrator of CMS, supporting our interpretation of the provisions.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

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Mr. GRASSLEY. We also include policies that give States the option of asking for a limited set of Medicaid beneficiaries to share in the cost of their care.

The cost-sharing policy excludes anyone under the Federal poverty level, mandatory children, adoption or foster care children, preventative care and immunizations for all children, pregnancy-related services, hospice residents, and women who qualify for Medicaid under the breast and cervical cancer eligibility group.

It is a reasonable, responsible policy that I encourage my colleagues to support. These are all modifications of what the House of Representatives did in their provisions in this area.

These are important, measured first steps that our Governors, in this communication to the Congress to which I previously referred, have asked for, on a bipartisan basis, to reform the Medicaid Program.

Now, the Medicaid Program is a Federal-State program. It is a big cost to the Governors. If we have Governors, 50 of them, of both political parties, coming to us and saying: We can tell you how to spend your taxpayers' dollars more wisely, and we will save some money at the State level, and we will be able to serve more people--they came to us and said that to us. And this document responds to that.

I don't know how 100 Senators can put their judgment--just in case they disagree with what we are trying to do. I suppose if they agree, this doesn't apply to them. I don't know how those Senators who disagree with what we are doing on a Federal-State program can put their judgment above that of 50 Governors who are almost equally divided between Republicans and Democrats.

This bill also dramatically increases funding to protect Medicaid from fraud and abuse. It does so by creating a Medicaid integrity program that mirrors a similar program already in place in the sister program of Medicare.

The agreement incorporates the Family Opportunity Act. This is a major improvement in Medicaid. This is a program that Senator Kennedy and I have been working on for 7 years. These provisions will help families meet the needs of their children with disabilities. Right now, these parents, if they have a child with disabilities, face difficult decisions. I can document this among my own constituents in Iowa, that time and time again, many parents of disabled children tell me of their struggles getting health care for their children with costly special needs.

Many parents have been effectively forced to quit their jobs, to take low-paying jobs so this child with costly medical care can qualify for Medicaid. Why? Because the services their child needs are not available with private health insurance. So they need the assistance of Medicaid.

This policy we presently have in place and in the Family Opportunity Act turns by 180 degrees; it is totally backward.

This agreement allows States to give these parents in this situation the option to buy into Medicaid while continuing to work and probably in most cases continuing to pay taxes. These are folks who want to work and can work, and we should not have a disincentive to productive employment in America just because some family has a child with special very expensive health needs.

Moving on, the agreement also fills shortfalls in funding of their State children's health insurance programs that States would have experienced just next year.

We also include $2 billion to assist Louisiana, Alabama, and Mississippi, as well as other States to meet health care needs of people whose lives were devastated by Katrina. It extends TANF Programs with a few minor improvements. It closes several loopholes in TANF and in child support, while providing funding for childcare, child welfare, and allowing more child support to go directly to families.

For nearly 4 years, I have tried to reauthorize TANF in the regular order. Without any help from Democrats, I reported a bill out of the last Congress on a partisan basis. That year, Senator Frist devoted a week for the consideration of welfare. The first floor amendment offered on behalf of Senator Snowe would have increased childcare spending by $6 billion--I voted for it--bringing the total childcare money to $7 billion. That passed with 78 votes. Unfortunately, even with that victory which they won, Democrats blocked it.

I kept trying, and this year I worked out a bipartisan bill with Senator Baucus that the committee reported out on a voice vote. But again, efforts to reauthorize welfare in regular order have stalled. If we don't pass the Deficit Reduction Act, we will have to extend TANF for a 12th time. That is an unconscionable way to legislate. States cannot continue operating their welfare programs unsure of what the next reauthorization will bring.

Advocates complain that the $1 billion is not enough childcare money. But I say to them, where were you over the past year when there was $6 billion on the table and I was committed to bringing that $6 billion out of conference or we would not have had a conference report on TANF?

There has never been enough childcare money to satisfy those on the far left--$5.5 billion wasn't enough; $7 billion wasn't enough. I don't even know if $20 billion would have been enough. The fact remains that there hasn't been an increase in childcare for 4 years, and if we persist in passing extension after extension, there won't be any new childcare money at all.

As I said in the beginning, it is difficult for many folks to get beyond the numbers. But as I laid out here, this agreement includes many provisions to provide services that better meet people's needs, and it does so by getting rid of waste and abuse in the programs.

These are dollars that right now we are simply throwing away. They get taxpayers and beneficiaries nothing. Without some changes, these important programs of Medicare, Medicaid, and TANF will be driven into the ground. That some folks don't support these changes--well, to me, I believe they cannot see the forest for the trees.

The agreement before us includes sound policies. It achieves savings by reducing wasteful spending, closing loopholes, and taking steps to pay providers more accurately. It improves oversight of Medicaid to crack down on fraud and wasteful spending. It establishes policies to help families and beneficiaries and to ensure long-term viability of these programs. I urge my colleagues to support it.

I yield the floor and reserve the remainder of the time for Senator Gregg.

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REVISIONS TO PAYMENTS FOR THERAPY SERVICES

Mr. ENSIGN. Mr. President, I would like to raise an issue of clarification regarding section 5107, Revisions to Payments for Therapy Services. It is my understanding that this provision retains the therapy limitation of $1,740 for outpatient physical therapy and speech-language pathology and $1,740 for outpatient occupation therapy but provides an exception process for services that are needed by a beneficiary over this amount. This exception process is expressly to permit services above the cap that are medically necessary. Mr. President, I ask the Chairman of the Senate Finance Committee whether this interpretation is correct.

Mr. GRASSLEY. Mr. President, this is correct.

Mr. ENSIGN. In addition, there should be no delay in implementing the exceptions process. CMS should work diligently to develop a process to determine whether a service is medically necessary. This process could include a ``code modifier'' and standard audit review of medical necessity and reflect similar processes that currently exist. It is my understanding, based on the language, that if CMS does not develop a process, a request for therapy services will be deemed medically necessary if CMS does not act on the request within 10 business days. Further, the language also appears to permit a beneficiary to request medically necessary coverage outside the caps at the outset of treatment. If CMS does not develop a process and fails to act within 10 business days, then the beneficiary can receive covered therapy services in excess of the cap. I would hope that further information from CMS regarding the exceptions process is laid out as we approach January 1, 2006, when the therapy caps go into effect. Senator GRASSLEY, do you agree with these statements?

Mr. GRASSLEY. I agree that CMS needs to develop a process to permit medically necessary Part B therapy services that exceed the cap in a timely manner. I also believe that this process should not result in the delay of needed therapy services. I would hope that CMS would provide an outline as to how they envision the exceptions process to work so that beneficiaries needing therapy services beyond the $1,740 caps receive the therapy they need if medically necessary.

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