Prescription Drug and Medicare Improvement Act of 2003

PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003

Ms. COLLINS. Mr. President, I was pleased to join my colleagues, Senators BOXER, COLEMAN, LANDRIEU, KOHL & MURRAY in offering an amendment to authorize a Medicare demonstration project on pancreatic islet cell transplantation to help advance this tremendously important research that holds the promise of a cure for more than 1 million Americans with Type 1 or juvenile diabetes.

As the founder and cochair of the Senate Diabetes Caucus, I have learned a great deal about this serious disease and the difficulties and heartbreak that it causes for so many Americans and their families as they await a cure. Earlier this week, I had the privilege of chairing a hearing featuring young delegates from the Juvenile Diabetes Research Foundation's Children's Congress who had traveled to Washington from every State in the country to tell Congress what it is like to have diabetes, just how serious it is, and how important it is that we find a cure.

Diabetes is a devastating, lifelong condition that affects people of every age, race, and nationality. It is the leading cause of kidney failure, blindness in adults, and amputations not related to injury. Moreover, a study released by the American Diabetes Association earlier this year estimates that diabetes cost the Nation $132 billion last year and that health spending for people with diabetes is almost double what it would be if they did not have diabetes.

The burden of diabetes is particularly heavy for people with juvenile diabetes. Juvenile diabetes is the second most common chronic disease affecting children. Moreover, it is one that they never outgrow.

In individuals with juvenile diabetes, the body's immune system attacks the pancreas and destroys the islet cells that produce insulin. While the discovery of insulin was a landmark breakthrough in the treatment of people with diabetes, it is not a cure, and people with juvenile diabetes face the constant threat of developing life-threatening complications as well as a drastic reduction in their quality of life.

Thankfully, there is good news for people with diabetes. We have seen some tremendous breakthroughs in diabetes research in recent years, and I am convinced that diabetes is a disease that can be cured and will be cured.

I am encouraged by the development of the Edmonton Protocol, an experimental treatment developed at the University of Alberta involving the transplantation of insulin-producing pancreatic islet cells, which has been hailed as the most important advance in diabetes research since the discovery of insulin in 1921. Of the 257 patients who have been treated using variations of the Edmonton Protocol, all have seen a reversal of their life-disabling hypoglycemia, and 80 percent have maintained normal glucose levels without insulin shots for more than 1 year. Amazingly, many of the transplant recipients have even reported a reversal of some of their complications, such as improved vision and less pain from neuropathy.

Earlier this year, I joined with my colleague from Washington, Senator PATTY MURRAY, as well as my colleague and cochair of the Senate Diabetes Caucus, Senator JOHN BREAUX, in introducing the Pancreatic Islet Cell Transplantation Act of 2003, which will help to advance this significant research that holds the promise of a cure for the more than 1 million Americans with juvenile diabetes. The amendment we are introducing today is based on one of the provisions of that bill, which currently has 43 Senate cosponsors.

Diabetes is the most common cause of kidney failure, accounting for 40 percent of new cases, and a significant percentage of individuals with Type 1 diabetes will experience kidney failure and become Medicare-eligible before they are 65.
Medicare currently covers both kidney transplants and simultaneous pancreas-kidney transplants for these individuals. To help Medicare decide whether it should cover pancreatic islet cell transplants, the amendment authorizes a 5-year demonstration project to test the efficacy of pancreatic islet cell transplantation for individuals with Type 1 diabetes who are eligible for Medicare because they have end-stage renal disease, ESRD.

The cost of this demonstration would not be high. The Health Strategies Consultancy LLC, a highly regarded independent health policy firm, estimates that the net Federal cost of the proposal would be about $6.2 million in 2004 and about $84 million over 10 years.

The cost of the demonstration project is low because the number of islet cell transplants that could be performed is limited.
Islet cells are extracted from a donated pancreas, and the number of pancreas donors is extremely small when compared to the number of Medicare beneficiaries who could benefit from islet cell transplants. In 2002, there were 1,875 pancreas donations, but there were over 27,000 Medicare beneficiaries who have diabetes as the primary cause of their end-stage renal disease and who might potentially benefit from islet cell transplants.

The Health Strategies' cost estimate does not include the financial benefits that would accrue to Medicare for the reduced medical care costs that would occur for beneficiaries who receive islet cell transplants and, as a result, suffer fewer diabetes-related complications such as kidney failure, heart disease, blindness and amputation. Since diabetes currently accounts for one out of every four Medicare dollars, I believe that this amendment actually holds much promise for reducing Medicare spending in the future.

I understand this demonstration project has been included in the Medicare prescription drug legislation that is being considered by the House. I hope that the Senate demonstrates similar wisdom, and I urge all of my colleagues to support it.

Mr. KOHL. Mr. President, I rise to oppose S. 1, the Prescription Drug and Medicare Improvement Act. This bill is good for drug companies, insurance companies, and people who make TV ads for politicians—but it is not good for Wisconsin seniors.

I know that many of my colleagues will vote for this legislation and that it will pass the Senate. I know that many of my colleagues believe that this is a first step, if an imperfect one. I would like to agree with them. I would like to vote for a bipartisan compromise that delivers even a part of the drug benefit our seniors rightly demand. But this is not that bill. This is, instead, an empty promise of straightforward help for seniors struggling with crippling drug costs. When they figure out the details—when they see the costs—when they understand the limited benefit provided—when they work through the complicated formulas determining whether they ought to sign up—when they see the drug industry continue to raise their prices and reap record profits—they will—rightly, rightly—revolt.

I warn my colleagues, this is no bird in the hand—it is a vulture. And I cannot support it.

I cannot support a so-called benefit that asks many seniors, for months at a time, to pay premiums but receive absolutely no help with their drug costs. I cannot support a "benefit" that could cause up to 37 percent of retirees to lose their retiree health plans, leaving their former employees worse off than before we passed this bill. And I cannot support a "benefit" which is denied to low-income seniors eligible for both Medicaid and Medicare. A "benefit" of no benefit for seniors above average drug costs, for seniors with decent retiree plans, for seniors who are poor.

I also cannot support a plan that neither I nor anyone in this body can explain because its details depend on the vagaries of a private market that doesn't exist yet. Under this system, seniors could be forced into a different plan, pay a different premium, and have different medicines covered every year. Insurance companies can come in and out, leaving seniors lost and confused in a maze of paperwork and choices every year. And we know that for those insurance companies that do participate, premiums are sure to increase because there is no limitation on premiums in this law.

I also cannot support a plan that relies so heavily on the private sector to offer something they have never been willing to offer before. Drug-only plans are virtually nonexistent in today's marketplace. And the Medicare+Choice experiment, which also uses private insurance companies, has not worked in Wisconsin and in many other States. I cannot support a plan that has to pay insurance companies huge subsidies in order to offer a drug benefit. Not only is there no guarantee that they will participate; but precious Medicare dollars that could be used to pay directly for medicines are wasted, funneled to a drug industry that, last I checked, was not in need of a Federal handout. Even worse, this plan does not take advantage of the potential for controlling drug costs by utilizing the purchasing power of the millions of Medicare beneficiaries.

I do not want to point out that aside from the Medicare drug benefit, there are several provisions that I strongly in this bill.
I am very pleased that the bill includes long-needed reforms that will finally take a strong step toward fixing the distorted Medicare system we have today—a system that penalizes Wisconsin health care providers by paying them less than other States, and a system that penalizes Wisconsin seniors by offering them fewer benefits than seniors in other States enjoy.
Not only is this unfair for people in the Medicare system; it also increases costs for Wisconsin businesses, employees, and
families, who pay higher costs to make up the Medicare shortfall. The bill before us changes many of Medicare's payment systems, especially for rural areas, and goes a long way toward making Medicare fair for seniors and providers, no matter where they live.

I am also pleased that the bill includes provisions to make generic drugs more available to all Americans. It will close loopholes in our current law that keep generics off the market and keep drug prices too high for too long. The CBO estimates that this provision will save Americans $60 billion over 10 years.

I hope, but don't expect, that these two important provisions will survive the upcoming conference with the House of Representatives. And while I continue to hope that the conference will come back with a better Medicare drug benefit, I regret that it is unlikely to be the case. The House bill is in many ways even worse than the Senate bill before us.

Mr. President, I regret that none of the amendments that I supported during this debate prevailed. These amendments would have greatly improved this bill and provided a real prescription drug benefit to seniors—a benefit we could all have been proud of. Instead, this bill is an empty promise to seniors and the disabled on Medicare. This is not the kind of plan they have been asking for or have a right to expect. We could and should have done better. But at minimum, we could and should be able to hold our work here to the standard set in the Hippocratic Oath: do no harm. And we have failed.

I yield the floor.

Ms. COLLINS. Mr. President, I want to thank the chairman of the Finance Committee for including provisions in S. 1 that will provide a measure of relief to rural health care providers, and in particular to home health agencies serving patients in rural areas. I am concerned, however, that the underlying bill does not go quite far enough and have filed an amendment with Senator BOND to increase the rural add-on payment for home health agencies to 10 percent. This was the amount of the payment prior to its expiration on April 1, and I believe it is the amount that is necessary to ensure that Medicare patients in rural areas continue to have access to the home health services that they need.

Home health has become an increasingly important part of our health care system. The kinds of highly skilled—and often technically complex—services that our Nation's home health agencies provide have enabled millions of our most frail and vulnerable older persons to avoid hospitals and nursing homes and stay just where they want to be—in the comfort and security of their own homes.

Surveys have shown that the delivery of home health services in rural areas can be as much as 12 to 15 percent more costly because of the extra travel time required to cover long distances between patients, higher transportation expenses, and other factors. Because of the longer travel times, rural caregivers are unable to make as many visits in a day as their urban counterparts. Saundra Scott-Adams, the executive director of the Visiting Nurses of Aroostook in Aroostook County, ME, where I am from, tells me her agency covers 6,600 square miles with a population of only 72,000. Her costs are understandably much higher than the average agency due to the long distances her staff must drive to see clients. And, her staff is not able to see as many patients.

Agencies in rural areas are also frequently smaller than their urban counterparts, which means that their relative costs are higher due to smaller scale operations. Smaller agencies with fewer patients and fewer visits mean that fixed costs, particularly those associated with meeting regulatory requirements, are spread over a smaller number of patients and visits, increasing overall per-patient and per-visit costs.

Moreover, in many rural areas, home health agencies are the primary caregivers for homebound beneficiaries with limited access to transportation. These rural patients often require more time and care than their urban counterparts, and are understandably more expensive for agencies to serve. If the rural add-on payment is not reinstated, agencies may be forced to make decisions not to accept rural patients with greater care needs, and access will suffer further.

The loss of the rural add-on has already caused many agencies to reduce their service areas. Some are eliminating services altogether in remote areas. There are some counties in Montana, for example, that have no home health services. And agencies in my home State of Maine have had to eliminate delivery of services to some of our outlying islands.

If the 10 percent rural add-on payment is not restored, it will only put more pressure on rural home health agencies that are
already operating on very narrow margins and could force more of these agencies to close. Many home health agencies operating in rural areas are the only home health providers in a vast geographic area. If any of these agencies are forced to close, the Medicare patients in that region will lose complete access to home care.

There is strong support in the Senate for restoring the rural add-on. Earlier this month, 55 Senators joined me in sending a letter to the chair and ranking member of the senate Finance Committee urging that they extend the 10 per cent rural add-on for home health agencies, and I ask unanimous consent that this letter be printed in the RECORD.

The chairman of the Finance Committee and his staff have been working with us to try to accommodate my amendment, and I am very appreciative of their efforts. I am hopeful that we will be able to work this out so that we will be able to ensure that Medicare patients in rural areas continue to have access to the home health services that they need.