Statements On Introduced Bills And Joint Resolutions

Floor Speech

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By Mr. GRASSLEY:

S. 3216. A bill to amend title XVIII of the Social Security Act to ensure Medicare beneficiary access to physicians, to ensure equitable reimbursement under the Medicare program for all rural States, and to eliminate sweetheart deals for frontier States; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, Medicare's payment system for physicians is flawed in many ways. One of those flaws has for many years given unfairly low payments to high quality areas like my own home state of Iowa and many other rural States. The new health care reform law makes some much-needed changes in that regard.

The legislation I am introducing today makes additional improvements in addressing unfair geographic disparities in payment. It is intended to provide more equitable rural health payments and improve rural access to care for all rural states.

As many of you know, Medicare payment varies from one area to another based on the geographic adjustments known as the Geographic Practice Cost Indices or GPCIs. These geographic adjustments are intended to equalize physician payment by reflecting differences in physician's practice costs.

But they do not accurately represent those costs in Iowa or other rural states. They have been a dismal failure in fact. They discourage physicians from practicing in rural areas like New Mexico, Arkansas, Missouri, and Iowa because they create such unfairly low Medicare rates.

I introduced legislation in the last Congress, and again last year, to correct these unwarranted payment disparities. Last fall, I offered an amendment in the Senate Finance Committee mark up of health reform legislation to reform the inequitable formula that has caused these unduly low payments.

My amendment provided more equity and accuracy in calculating this adjustment, and it provided a national solution to the problem. It was accepted unanimously by the Senate Finance Committee, and it was included in the Senate health reform bill, the Patient Protection and Affordable Care Act, that was signed into law.

But, unfortunately, the rural equity that would be achieved by that amendment has been endangered by another sweetheart deal that was added to the Senate health care reform bill that is now the law.

This special deal was added behind closed doors, that is, the closed doors of the majority leader. This special deal addresses geographic disparities but it helps just five states at the expense of the other 45 states.

It was included in the Senate health reform bill for two Democratic Senators from so-called ``frontier states.'' It's what I call the ``Frontier Freeloader.''

The Frontier Freeloader provision improves Medicare reimbursement in so-called frontier states by establishing floors for the hospital wage index and the physician practice expense GPCI.

A frontier state is defined as one with 50 percent or more frontier counties, defined as counties with a population per square mile of less than six.

The Frontier Freeloader deal ensures that higher payments go to just five states--North Dakota, South Dakota, Montana, Wyoming and Utah--at the expense of every other state.

It is another example of how the deals made behind closed doors to garner votes led to bad policies, like the Cornhusker Kickback, the Louisiana Purchase, and the Florida Gator-aid.

Now we have the Frontier Freeloader deal that became law when the President signed the health care reform bill.

Iowa provides some of the highest quality care in the country but it does not meet the definition of a frontier state. Certainly Iowa should have been helped since Medicare reimbursement for hospitals and physicians is lower in Iowa than in most of these so-called ``frontier'' states.

Medicare also pays much lower rates in other rural states, like Arkansas and New Mexico, but they don't benefit from the Frontier Freeloader because they don't meet the definition of a frontier state.

The Frontier Freeloader is even more egregious because Iowa--and other States like Arkansas and New Mexico that don't benefit--are paying for it! So, taxpayers in your state and mine--all the other 45 states--will kick in to pay the bill for these five states. And that's just the cost for the next few years.

This sweetheart deal is not time-limited. The Frontier Freeloader that benefits these five states continues forever while taxpayers in your State and mine--the other 45--continue to pay the bills.

The bill I am introducing today would repeal the Frontier Freeloader sweetheart deal.

We should improve physician payments for all rural states, not just a select few. It is unfair to improve hospital payments for just a few states. This bill would eliminate those special payment deals for just 5 States.

It would also improve physician payments for all rural states during the transition to more accurate data.

The new health care reform law requires the Secretary of Health and Human Services to limit the impact of the current unfair adjustments to 1/2 of the current adjustment in 2010 and 2011. This bill would use some of the funds saved by repealing the frontier states deal to increase physician payments more in rural states next year.

That would mean higher payments for all rural States, not higher payments for just a few States.

Finally, the bill makes it clear that a side agreement reportedly made between House members and the Secretary of Health and Human Services for an Institute of Medicine study cannot interfere with the legislative changes to the geographic adjustment for physician practice expense that are now law.

My amendment in the Senate bill that became law improves the data that the government uses to calculate geographic physician practice costs.

The House health care reform bill called for a study by the Institute of Medicine to make recommendations on geographic disparities.

It is unclear what agreement was made between Secretary Sebelius and the House, since it was another backroom deal. It is also unclear what advantage it holds for rural health care equity for beneficiaries and physicians.

My amendment that is now the law requires Medicare officials to use accurate data.

The legislation that I am introducing today would ensure that the agreement House members made with Secretary Sebelius--that somehow accompanies the House health-care reconciliation bill--cannot undo the actual legislative fix in the Senate health care bill that is now law.

If the Institute of Medicine comes up with different data or makes recommendations that are not consistent with the requirements for the geographic adjustments that are now law, we could be back where we started, or even worse off. So this legislation would ensure that HHS follows the legislative improvements just enacted to require more accurate data for calculating these geographic adjustments.

To summarize, the bill does three main things:

First, it eliminates the unfair $2 billion Frontier Freeloader carve-out for 5 States that ends up harming all the other rural States. As I said earlier, that extra spending would continue forever if the Frontier Freeloader is allowed to take effect.

Second, the bill helps provide greater rural health care access and payment equity in a way that is fair to all taxpayers and states.

It would provide additional payments for physicians in all rural States during the transition.

Finally, the bill would ensure that Medicare officials use accurate data to calculate geographic adjustments as now required by the new health care reform law.

This legislation helps ensure that seniors in all of rural America continue to have access to needed health care.

It ensures rural health care equity nationwide.

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