Medicare Prescription Drug, Improvement, and Modernization Act of 2003-Conference Report

MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003-CONFERENCE REPORT

Mr. GRASSLEY. I yield myself 30 seconds, before I yield to the Senator from Maine 7 minutes, for just a little bit of history and to applaud the Senator from Maine.

She was active in this issue of Medicare prescription drugs a long time before I was. But on July 25, 2001, we held our first meeting of what was called the tripartisan group. She was obviously part of that tripartisan group along with Senators HATCH, JEFFORDS, BREAUX, and GRASSLEY.

I remember that meeting we had. The AARP sent us a birthday cake with a pie-shaped piece cut out of it. Their admonition to the tripartisan group was: Fill in the missing piece. The missing piece of Medicare was prescription drugs.

The Senator from Maine has been very aggressive since July 25 in various ways, helping us fill in that piece of the pie. On August 1 of that year, we held a news conference, all five of us, announcing our plans for doing that. We have not exactly come out where we were a year ago. We probably have come out a lot better with the legislation we have before us. But regardless, the Senator from Maine was in on the ground floor, a long time before I was, on that issue.

I yield to the Senator from Maine 7 minutes.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, I should not take more than 5 minutes, so please tell me when 5 minutes are up.

This is the opportunity, a time of destiny, whether or not this Congress will deliver on the promises of the last three elections, the promises the other party has made as well. Thank God there are people in the Democratic Party who are working in a bipartisan way to deliver on the promises of that party as there are Republicans willing to deliver on the promises of the Republican Party.

Nothing gets done in this body without bipartisanship. This is bipartisan. We are putting aside partisanship. It is time the other side put aside rhetoric and complete our work on this bill for which the AARP says seniors have waited far too long.

This bill offers an affordable, universal prescription drug benefit. This bipartisan bill offers better coverage than today's Medigap policies plus Medicare. It also offers much more generous coverage for 14 million lower income seniors. And just to emphasize this point, this bill does not harm 6 million seniors, as the opponents of this legislation claim. That is political poppycock.

In fact, this bill protects the benefits for these 6 million and then adds generous prescription drug coverage for an additional 8 million. It expands coverage for lower income seniors, far more than anything offered today. This means that for about two in five seniors, this bill offers drug coverage with lower or no premiums, no coverage gap, and coverage of 85 to 95 percent of the cost of prescription drugs. And it is voluntary.

The opponents of this legislation happen to believe-and they sincerely believe-that Government should always force people into doing something. We want the right to choose for our seniors. Seniors can stay in traditional Medicare if they like what they have today and have full access to prescription drugs. There is also a guaranteed Government fallback if private plans might not go to all rural areas of America. This bill protects retiree benefits in the corporation from which they retired. Overall, we put $89 billion in this bill to protect retiree health coverage.

This bill also creates new choices similar to what Federal employees have for beneficiaries in a new revitalized Medicare Advantage Program. With respect to drug costs, the bill speeds the delivery of new generic drugs to the marketplace, lowering drug costs to Americans and not just those on Medicare.

Finally, the bill includes long overdue improvements in Medicare's complex regulations. It also revitalizes the rural health care safety net with the biggest package of rural payment improvements that Congress has ever done or seen. I urge my colleagues to put the interests of our seniors first and give them more choices and better benefits by supporting this bill.

Most importantly, we have brought this bill as far as we have over the last 4 or 5 years because of bipartisanship. I hope this body will not let the narrow partisanship of a few on the other side of the aisle destroy our efforts.

I yield the floor.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. I yield myself such time as I might consume.

This may sound like a simple vote, to raise a point of order about a budget and how this fits into the budget. But what this vote is all about is whether or not we are going to have any bill whatsoever providing prescription drugs for seniors. That is what this next vote is all about because I believe if we get 60 votes like we did 70 votes on the cloture motion, we will be on our way to passage, in a bipartisan way-everything has been bipartisan on this bill, as far as I am concerned-in a bipartisan way, passage of this bill, so our seniors can have prescription drugs, so that the biggest hole that has ever existed in Medicare for the last 38 years is filled in.

So all the arguments can be made about this little budget deal or that little budget technicality, but this is a vote about keeping the promises of both political parties over the last three elections. I do not think we ought to pooh-pooh keeping the promises of the last election. People are cynical about political leaders anyway-overpromising, not delivering on promises. This is our opportunity. This is one of the last two votes for this bill to go to the President of the United States.

So this vote is about our seniors, and also we can include Americans with disabilities. So a successful vote against overriding this point of order will gut the immediate funding we provide for prescription drug discount cards.

Much has been said by the opponents of this bill about not providing help to seniors fast enough. How many times, in the last 3 days, 4 days of debate on this bill have you heard the point: "Well, this bill is not going to take effect for 2 years. I don't know why it can't take effect sooner"?

Now, that is not our choice. We pass a bill. You have to give some time for bureaucrats to implement it and write the regulations, and you want to do it right. So that is what they say: They need that amount of time, No. 1. No. 2, this bill takes effect immediately for part of it, and that part is the drug discount card for seniors and the disabled so they can get 15 to 25 percent discounts on drugs right away.

So apparently a discount card available to all seniors in less than 5 months, and also with a direct $600 subsidy to those with the lowest incomes, is something that opponents of this bill-crying in their beer all the time about this not doing enough for seniors or not taking effect soon enough-is a reason to block this bill.
They are talking out of both sides of their mouth when they say that. On the one hand, they say it is not going into effect soon enough, and then with the next vote we are going to have up, they are going to guarantee no drug benefit for years, and just with some little budget technicality on a procedure vote.

That is pretty ironic, that they would take that stand over the course of 4 days-argue that this bill is not going into effect soon enough, ignoring the discount card that starts immediately, and saying we are not doing enough-and then they are willing to block it on a technicality.

It seems to me that anybody who says we are not providing drug benefits quickly enough for our seniors and our disabled would vote to override this point of order so we can get to the next vote, final passage of this legislation.

Also, I just heard some of my colleagues from the other side of the aisle say this bill, in some instances, does not do enough for rural health care delivery. We provide $25 billion in this bill for rural providers to deal with the inequitable situation of the 30 States below the national average. That is because the formulas for doctors and hospitals in rural areas treat them less well, less equitably than the formulas for urban areas, because the assumption is in rural areas you can deliver health care for less costs.

But they are crying in their beer about maybe that is not doing well enough. And if they vote as 1 of the 41 who might keep us from overriding that point of order, then how can they talk out of both sides of their mouth-one time saying, "We are not doing enough," and then, on the other hand, "Kill this bill on this budget technicality"? Because just as soon as this bill passes, rural providers are going to get a great deal of help from this legislation.

Now, that help is not just for our providers because we feel sorry for doctors or hospitals. We are not being able to recruit doctors and maintain our hospitals in rural America. This $25 billion in this bill will strengthen our hospitals. It will give us an opportunity to recruit doctors.

So if you are 1 of the 41 who does not help us override this point of order, you are saying no to the recruitment of doctors in rural America. You are saying it is OK to close rural hospitals. Because you know what is going to happen right away if we do not pass this legislation-all the doctors of America are going to take a 4.5-percent cut in their reimbursement because of the way our formulas work. I do not know how formulas such as that were written, but those formulas have an egregious impact upon the doctors.

I strongly disagree that that ought to happen and that we ought to have situations where medical doctors are fed up with working with Medicare patients and they just get out of the program. Then our seniors have fewer doctors to take care of their needs.

But if this bill passes, it is going to give relief to our doctors, not only stopping that 4.5-percent cut, it will give them a 1.5-percent increase in reimbursement.

It seems to me a vote against overriding the point of order is a vote against our rural hospitals every day because every day our hospitals are doing more with less. They serve our elderly. They serve the uninsured, those who live in some of the remotest parts of our country, and those who live in our cities as well because city hospitals have problems, too.

Are we going to tell those hospitals what they do every day in saving lives and improving patients' quality of life is not somehow important? I certainly hope not. But a vote against overriding this point of order is a thumb in the eyes of health care providers, in the eyes of the people who run our hospitals, the nurses who work there.

So this is going to be a vote against some of our neediest seniors. And the neediest of our seniors are those in nursing facilities who need physical therapy. They need occupational therapy, speech therapy. This bill, out of this $25 billion, provides a 2-year moratorium from the therapy cap that is in law today, which, basically, at $1,500 is saying, if you have a stroke, if you have some sort of major operation, you are only going to get physical therapy up to $1,500; and too bad after that.

Well, we take care of that in this legislation. But the people who vote against overriding this point of order are saying no to those neediest of seniors in the nursing homes who will be hit by this $1,500 cap and will not be able to get the physical therapy services they need.

We are at a point where all this effort about rural hospitals has been supported by an overwhelming majority in both the House and the Senate.

We heard our colleague, Senator Bennett of Utah, speak passionately about his daughter. His daughter is a speech therapist and knows all too well how nursing home residents benefit from therapies after they have suffered a stroke, heart attack, or maybe just a fall. Are we going to say to Senator Bennett's daughter that we don't need to delay these caps? Are we going to say to our seniors that access to physical therapy doesn't matter? I certainly hope not.

You will hear a lot about this vote being a comment on how we spend money in this Medicare bill. You will hear how this vote might be a vote against special interests in America. I ask my colleagues what they mean because if their seniors need immediate relief from high prescription drug bills, their hometown doctors need some help, their local hospitals need some help, their seniors recovering from stroke and heart attack need some help because they need more therapy, then I guess they should vote against these people.

That isn't what I hear from the other side of the aisle. They are the great humanitarians of the American political environment. They are concerned about all these people. Well, this next vote will show how concerned they are because they are voting against all these people who have need, most often the seniors of America who need prescription drugs.

I do not intend to vote against them and, in the process, hopefully get this bill to final passage.

I reserve the remainder of my time and yield the floor.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. I want to take 30 seconds and then yield 5 minutes to the Senator from Louisiana and then the Senator from Montana.

Before I do that, how many times have we heard from the other side of the aisle about this being a 1,000-page bill? I want them to read, if they know how to read: There are 678 pages here. I want to know how you folks can raise a point of order when you can't even count the number of pages in a bill? I yield the floor.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, I yield myself such time as I might consume, and probably all of it.

Keeping the point of order means keeping the status quo. So I am asking my friends on the other side of the aisle, what is there about the status quo on Medicare that is good and acceptable? The lack of prescription drugs? The slowness in getting cheaper generic drugs out into the market? Arbitrary caps on physical therapists? Insufficient funding for rural hospitals and long waiting lines for seeing the doctors, if Medicare people can get in to see a doctor in rural America?

I ask my colleagues, is this status quo acceptable? Apparently it is, at least to the Senators who are refusing to waive the point of order.

I say nothing about Medicare's status quo is acceptable, not doctors' cuts, not decreasing hospital and home health payments, not the lack of access to health plans in rural areas such as mine. And most of all, seniors' lack of access to prescription drugs for all these years is what I find to be most unacceptable about the reality of the status quo.

For those of you happy with the status quo, I say, try telling that to your doctors, your hospitals, and, most of all, to your seniors. You try telling these people that a technical point of order is more important than changing Medicare's status quo. I will not try, and I hope my colleagues will not try either.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, there is an issue that my colleague from Iowa brought up that I don't want to take exception to or argue with him about. He finds fault with something on page 53 of this bill called noninterference. That is perfectly legitimate for him to take that point of view. But I want to point out something that Senator Santorum had pointed out earlier in the day's debate, in which a very similar noninterference provision was in a Democrat prescription drug proposal introduced May 10, 2000.

I don't mind intellectual arguments against this, but when Republicans take a Democrat idea and put it in our bill, I don't think it is fair for colleagues on the other side of the aisle to find fault with what we are doing. I only want to make that point. I don't want to argue with my friend from Iowa. I think everybody ought to know that this is something that has had broad bipartisan support.

I yield the floor.

Mr. HARKIN. Will the Senator yield because I was mentioned? I just want 30 seconds. I was opposed to it at that time, too. I was opposed to the noninterference at that time. I have always been opposed to it.

Mr. GRASSLEY. I thank the Senator.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. I thank my friend from Montana for that explanation. And as he and the Senators from Washington and North Dakota know, we have a demonstration program in this bill that covers, until the Part D drug benefit starts in 2006, self-injectable and oral anti-cancer drugs. This demonstration program is in the statutory language. That is good news. However, the report language is clearly in error and refers to an entirely different provision, not the one we negotiated.

Mr. BAUCUS. That is right. And for clarification's sake, we would like to ask you some questions about this demonstration project. First, in negotiations we intended that this demonstration would be available and would operate without limitation to the number of States, correct?

Mr. GRASSLEY. Yes.

Mrs. MURRAY. Isn't it true that you intended that the demonstration ensure that the Secretary preserve physician and beneficiary treatment options by providing for equitable coverage of all qualifying products?

Mr. GRASSLEY. That is correct.

Mr. CONRAD. Isn't it true that the conference committee intended to provide $500 million above what Medicare would have expended absent this provision to cover replacement self-injectable medications and oral anti-cancer therapies?

Mr. GRASSLEY. Yes, that is right.

Mr. BAUCUS. I thank the chairman for the clarification.

Mr. CONRAD. I also thank the chairman for that clarification and, again, would like to thank both the chairman and Senator BAUCUS for their work on this important effort. I also strongly share their view that the rural health provisions in the Medicare conference report are a real victory for not only our States, but for all of rural America.

BREAK IN TRANSCRIPT

DEFINITION OF NEGOTIATED PRICE

Mr. BAUCUS. Mr. President, I rise today to engage the distinguished chairman in a colloquy regarding three sections of the conference report, 1860D-2(d)(1)(B) and 1860D-15(b)(3) as they relate to the new Part D prescription drug benefit, and 1860D-31(e)(1)(A)(ii), in order to clarify the intent of the conferees with respect to the prices paid for prescription drugs, particularly the concept of negotiated price.

Mr. GRASSLEY. I thank the Senator from Montana and my Democratic partner in this legislation, Senator BAUCUS, for seeking to clarify this issue. I would be pleased to engage in a colloquy.

Mr. BAUCUS. As I understand the conference report, how the bill defines negotiated price is critical to Medicare beneficiaries, prescription drug plans, and Medicare Advantage plans offering prescription drug coverage. More specifically, I understand in section 1860D-2(d)(1)(B) that with respect to drugs purchased under Medicare Part D, the intent is for negotiated prices to include "any dispensing fees for such drugs."

I also understand in section 1860D-15(b)(3) that "gross covered prescription drug costs" includes "costs directly related to dispensing." The issue for me then is how the conference report intends the Secretary to operationalize the concept of dispensing costs especially with respect to Medicare Advantage plans whose Medicare members do not fill prescriptions at retail pharmacies.

I am referring to plans that operate their own pharmacies and take possession of prescription drugs directly from manufacturers and wholesalers. For these plans, is it the intent of the conferees that dispensing costs include all reasonable costs related to plan activities needed to deliver prescription drugs to their Medicare members, including the costs of delivering this benefit? For example, this would include salaries for pharmacists, and facility- and equipment-related costs.

Mr. GRASSLEY. Yes, the distinguished Senator is correct. The intent of the conference report is to recognize that different Medicare Advantage plans are organized in different ways to deliver the new Part D prescription drug benefit and the benefits of the Medicare-endorsed drug discount card.

The conferees understand that Medicare members of some Medicare Advantage plans fill their prescription in retail pharmacies and others in a plans' own pharmacies. For Medicare beneficiaries that will be using retail pharmacies to fill their prescriptions, the conferees understand that the prices negotiated between the prescription drug plan or the Medicare Advantage plan plus dispensing-related costs include the pharmacies' reasonable overhead costs.

Similarly, it is the conferees' intention that Medicare Advantage plans whose Medicare members do not use retail pharmacies, but instead fill their prescriptions at the plan's pharmacies be reimbursed for the costs they incur in delivering the benefit when reimbursed for the same types of costs.

SECTION 507

Mr. BREAUX. I coauthored Section 507 of H.R. 1, the Prescription Drug and Medicare Improvement Act of 2003, which would amend current law regarding physician self-referrals. I would like to engage in a colloquy with my colleague, Mr. GRASSLEY, in relation to the exception language contained in this provision.

I would like to clarify congressional intent with regard to the "exception" language included in S. 1, as this language may ultimately be included in any compromise between the two bills.

I would like to discuss the extent to which the Secretary would have discretion to exempt a hospital based on the factors identified in the language. The language in the conference agreement states that, for the purpose of determining whether a hospital qualifies as under development, and therefore exempt from the self-referral limitation, the Secretary:

. . . shall consider-

(1) whether architectural plans have been completed, funding has been received, zoning requirements have been met, and necessary approvals from appropriate State agencies have been received; and

(2) any other evidence the Secretary determines would indicate whether a hospital is under development as of such date.

It was my intent in crafting this language that the factors outlined would serve as an illustrative guide to the Secretary. The Secretary "shall consider" these factors, but will not be required to see that each and every factor is met. Is it your interpretation, that the Secretary would have discretion to make a reasonable determination of whether a specialty hospital is "under development"?

Mr. GRASSLEY. Yes, I believe you are correct in saying that the Secretary would have discretion to consider these factors, but would not be limited to or bound by those factors. The language states that the Secretary "shall consider," which implies that the Secretary shall consider these factors but that he or she should use the factors to make a reasonable decision as to whether a speciality hospital was "under development" as of a certain date.

Mr. BREAUX. Is it your understanding that a specialty hospital that has, as of November 18, 2003, met zoning requirements, received approval from the local planning board, and received partial funding, but has not yet completed all architectural plans would quality for the exception?

Mr. GRASSLEY. Yes, it is my understanding that the Secretary would have discretion to determine to what extent the hospital was under development as of November 18, 2003. If the Secretary found that the hospital was "under development" despite not having completed all architectural plans, the Secretary could exempt that speciality hospital from the 18-month self-referral limitation.

Mr. BREAUX. Similarly, is it your understanding that a specialty hospital that has completed or substantially completed architectural plans but has not yet received full funding would also qualify for the exception?

Mr. GRASSLEY. The Secretary would have discretion to exempt a hospital that had completed architectural plans and initiated funding and, in making this determination, would consider the extent to which the other enumerated factors had been completed. It is my understanding that the language included in H.R. 1 is meant to provide guidance to the Secretary, and that the Secretary will ultimately determine to what extent the factors have been met and to what extent the hospital was "under development" as of November 18, 2003.

Mr. BREAUX. I thank my distinguished colleague for engaging in the colloquy.

RETAIL PHARMACIES AND COMMUNITY PHARMACISTS

Mr. ENZI. Mr. President, I rise today to engage the distinguished chairman of the Finance Committee, Senator Grassley, in a colloquy regarding benefits that Medicare beneficiaries may receive through retail pharmacies and community pharmacists.

Section 1860D-4 of the conference report to accompany the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 states that sponsors of Medicare drug plans or organizations that offer MedicareAdvantage plans shall permit plan enrollees to receive benefits through a pharmacy other than a mail-order pharmacy. These benefits may include a 90-day supply of drugs or biologicals. The conference report states that such enrollees would pay any differential in charge.

I offered the amendment to add this language to the Senate version of the Medicare bill during our debate in June. My intent in offering this amendment was to prohibit plans from implementing restrictions that would steer consumers to mail-order pharmacies. The Senate voted 95 to 0 in favor of requiring Medicare drug plans and MedicareAdvantage organizations to allow local community pharmacists to fill long-term prescriptions and offer any other services that they are equipped and licensed to provide.

The language does permit a Medicare drug plan or MedicareAdvantage organization to charge a different copayment for a mail-order prescription versus a prescription filled by a community pharmacist. This happens today in many health plans.

I note that the conference report would require plans to provide clear information about copayments and deductibles. This information would have to include details on the differences in charges between mail-order and retail prescriptions.

My concern is that any differences in charges between mail order and retail be reasonable differences, based on the actual cost of delivering the service. I would be concerned if differences in charges were used as a method of steering seniors and the disabled to mail order pharmacies.

I know that Chairman GRASSLEY and I both agree that since seniors trust their local pharmacists, they should be allowed to keep those relationships in place.

Mr. GRASSLEY. Mr. President, I say to my colleague from Wyoming that Medicare drug plans and MedicareAdvantage organizations should not force seniors or the disabled to choose a mail-order house when they would prefer to patronize their local community pharmacy.

The Senator from Wyoming is correct in noting that the conference report permits plans to set a different charge to the beneficiary for a mail-order prescription versus a retail prescription. However, it is my expectation that any differential in charge be reasonable and based on the actual cost of providing the service in or through the setting in which it is provided. I also would expect that the Secretary of Health and Human Services would disapprove of any plan that would impose a differential charge that was intended primarily to steer Medicare beneficiaries to mail-order pharmacies versus retail pharmacies.

Mr. ENZI. I thank the distinguished chairman for this clarification.