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Floor Statement: Medicare Reimbursement Reforms

Medicare Reimbursement Reforms - Tuesday, July 08, 2008 View video | Can't view the video?

Mr. President, Medicare provides important health care benefits to our nation's seniors. Since 1965 the Federal government has promised those over the age of 65 years -- or those afflicted with certain disabilities -- that they will have access to health care. Unfortunately, Congress has had a checkered history of keeping that promise.

The vote we had two weeks ago to which the distinguished Senator from Michigan just alluded and one we will apparently have tomorrow afternoon should be an embarrassment to Congress but not for the reasons that she and others have suggested. We should be looking to solve the looming problems with Medicare permanently not just with temporary patches or fixes. We need a permanent solution. We should keep our promise to seniors that they can rely on Medicare and provide fair compensation for the physicians to make sure that our seniors will actually have access to that coverage. I've repeatedly heard from seniors in Texas who depend on Medicare but find it hard even to find a physician who will accept below market Medicare reimbursement rates. Even if we pass an 18-month extension now I'm not optimistic Congress will seriously consider permanent reform before the next round of scheduled cuts and I shutter to think whether we can prevent the 20% cut that will occur 18 months from now. This, of course, should not be about partisan politics which it has become because this is about people's lives.

The Medicare program, simply put, is in a nose dive, headed for bankruptcy. As this chart demonstrates, the future is bleak, indeed, for Medicare providers without a long-term solution. This depicts how the practice costs of physicians continues to go up year after year yet because of a law Congress passed in 1997 Medicare reimbursement rates continue to be projecting downward. You can see the gap here. No wonder many physicians are no longer able to accept Medicare patients. In Texas recently a survey of physicians indicated that only 58.1% of physicians currently accept new Medicare patients because reimbursement rates are so low that they're below market and physicians cannot afford to accept those patients and those low Medicare reimbursement rates.

Congress needs to step up with a permanent solution, not the kind of shameful, temporary patches and fixes that require physicians and other health care providers to come hat and hand to Congress every six months or twelve months or eighteen months and leave Medicare beneficiaries in doubt, our seniors, whether, in fact, Congress will do its duty. No one -- no one -- gets to conduct their business this way other than the United States Congress. If you were in the private sector, a small or large business, you'd be out of business or behind bars if you tried to operate your business the same way Congress has dealt with Medicare reimbursement rates.

Medicare trustees expect future costs to increase at a faster pace than both workers' earnings and the economy overall. As a matter of fact, the Medicare hospital insurance fund will be exhausted by 2019 and Part (b) premiums have to increase rapidly to match expected expenditure growth. The Medicare trustees warned Congress more than once to act, cautioning the sooner the solutions are enacted the more flexible and gradual they can be.

Mr. President, Medicare is a ticking time bomb. Today, Congress should be all about debating and preserving Medicare. Instead, we have been presented a bill that turns a blind eye do this smoldering powder keg of Medicare problems and the terribly flawed physician payment system. Rather than real reform, the majority party, the Democratically controlled Senate has presented us with a bill that prolongs damaging and rigid price controls, sets up increased premiums and increased taxes, abandons some private-sector options and keeps Medicare on the path toward more health care rationing. Why would anyone be proud of this? The distinguished Senator from Michigan was saying that all they needed was one more vote to pass this partisan bill. Why would anyone be proud of this temporary fix, these price controls, along with sub-market reimbursement rates so that while we may make the promise of Medicare coverage the acutality of access is diminishing with each day.

This partisan bill that bypassed not only the minority in the Senate, it bypassed the Senate Finance Committee, as well. And now we're told by the Majority Leader that he will refuse the opportunity to offer any amendments when the bill comes to the floor. The Democratic-controlled majority have not held one hearing or introduced one piece of legislation in the last six months that begins to address the long-term problems. Mr. President, I intend to offer a bill that will begin the process of reform and permanently eliminate the periodic cuts that are almost never allowed to go into effect. I think seniors and physicians and the American people deserve explanations and answers and ultimately solutions rather than more posturing and just kicking the can down the road.

It's worth just a few minutes to recall how we got here in the first place. In 1997, Congress was struggling with rising costs under Medicare and passed the Balanced Budget Act and established something called the Sustainable Growth Rate or formula which was intended to serve as a restraint on Medicare spending. Thus, the Federal government instituted arbitrary price controls in an effort to reduce Medicare spending. What was the result? The SGR or Sustainable Growth Rate formula have reduced access to quality care for beneficiaries. While the first two years after implementation the SGR resulted in positive updates for physician payments, decreases in payments have been required every year since 2002.

What has been the experience of Congress? This chart indicates that, except for the first year in 2002, every year Congress has acted to reverse the cuts that have come with temporary patches, temporary fix after temporary fix. In fact, I think one could be forgiven for wonnerring whether Congress ever intended these cuts to take effect in the first place? Thank goodness we haven't, because continuing to duty into the muscle and then into the bone of the Medicare system means that the promise of Medicare coverage is a hollow one, indeed, for patients, for seniors, who increasingly are having a very difficult time finding physicians who can accept Medicare rates because they're so low.

As you can see from this chart, not only has Congress, except for 2002, not allowed these cuts to go into effect based on temporary patches it has actually provided a very modest update in most years except for 2007 when it just got back to zero. But the fact of the matter is, Congress never really intended or was never prepared to allow these cuts to go into effect and most of the times if you look for how Congress has attempted to "pay for," or find revenue to offset this reversal of these cuts, all it amounts to is budgetary gimmicks and games. As the American Medical Association has noted, every temporary intervention has increased the cost of a permanent solution. Thus, seniors and physicians find themselves coming back to Congress every six months or every eighteen months, hat if hand, seeking to prevent these cuts with the kind of histrionics we see on the floor and as we did by the Majority Leader after the failed cloture vote. Not a serious discussion of public policy but rather a political action designed to gain partisan advantage.

At this point, to repeal the Sustainable Growth Rate formula will cost an estimated $250 billion or more. That's a big number and a major reason why Congress has been unable to pass, or more likely, unwilling, to even debate a long-term solution. While many of my colleagues have spoken at great length about their grandiose plans to reform the entirety of America's health care system they seem to whistle past the Medicare graveyard. We can and we must do better. What good is Medicare if there is no access to the coverage? Even with the first thing draconian cuts and reimbursements many doctors simply refuse to see patients with Medicare because the patients are so low.

And yet Congress is seen patting itself on the back, saying, didn't we do a good job, only to have more and more seniors unable to find doctors willing to accept Medicare paymentsst physician cuts have been looming over the heads of seniors and physicians for years yet Congress repeatedly puts off till tomorrow what desperately needs to be done today. What does the bill do, the bill before us, use to pay for reversing these cuts for 18 months? Well, it undermines the one private sector-alternative to traditional Medicare: Medicare Advantage, currently subscribed to by about 450,000 Texas seniors. Leading to less choices, fewer services, and, yes, more government control.

We have a choice: do we pass the hot potato once again praying that we aren't the ones who get burned? Or do we stand up, do the responsible thing, and actually take decisive action by reforming the broken SGR formula for Medicare reimbursement?

While some in Congress seem determined to have the government control all health care decisions, competition in the private sector holds real promise. All we have to do is look at Medicare Part D, the prescription drug program that we passed just a few short years ago. The Congressional Budget Office recently released a report showing just how effective Part D has been in lower drug prices for seniors. This year Part D expenses will be almost half that of the original projections two years ago. Competition by private companies who provide benefits to seniors under Medicare Part D have actually seen that this competition has actually created about $40 billion in savings just this year. What's more, Part D will be returning roughly $4 billion this year in unused funds due to cheaper-than-expected drug purchases.

Still, with the resounding success of Medicare Part D and the competition that we should look to as a model, not one to be discarded or gutted or cannibalized in an effort to pay for this temporary patch, many of my colleagues want to give up on the private-sector alternatives to traditional Medicare. Competition created by programs like Medicare Advantage have the potential to save more money in the long run and to provide more choices and better quality of services to Medicare beneficiaries. I would be the first one to say that Medicare Advantage is far from perfect. As a matter of fact I've heard from many of my constituent physicians who have complaints about the way Medicare Advantage is run, but it would be a terrible mistake to gut it. We ought to fix it, not gut it. Rather than abandon the principles and the benefits of competition in health care, we should work to make it better. With the results of Medicare Part D as an example, we should work to increase the role of non-government entities and lowering costs and increasing access and affordability of health care.

Now, these are just a few of the reasons why over three months ago in anticipation of the looming physician payment cut set for July 1, I introduced legislation that solves this problem permanently. This legislation I called the Ensuring The Future Physician Workforce Act of 2008, and it provides positive reimbursement updates for providers. It eliminates the ineffectual cap and increases physician data reporting. At the same time this bill facilitates adoption of health information technology by addressing costs and legislative barriers, educates and empowers physician and beneficiaries in relation to Medicare spending and benefits usage and studies ways to realign the way that Medicare pays for health care. My bill does not mandate whether physician payments should be based on utilization, performance, care coordination, or any other methodology. But it does start to lay down a new path for reform, innovation, and restoration of the eroded physician-patient relationship. It does say that the providers and beneficiaries should not be the ones to be punished by Congress's failure to act.

Mr. President, we have to decide now whether Medicare is worth protecting or political gamesmanship and partisan politics are going to take over. While it's costly to fix Medicare and the SGR, stalling will be far more expensive. So while some of my colleagues on the other side of the aisle may be content with another shortsighted short-term fix, I suggest we debate and pass a bipartisan solution that will keep the promise of Medicare for seniors but also make sure there'll be access to that coverage by providing fair compensation for physicians. Why should we and why should they settle for less?