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SEC. 5. LIMITATION ON BUDGET NEUTRALITY ADJUSTMENT FOR ANNUAL REVISIONS TO SYSTEM COMPONENTS.
Section 1833(t)(9)(B) of the Social Security Act (42 U.S.C. 1395l(t)(9)(B)), as amended by section 2(a)(4), is amended--
(1) in clause (i), by striking ``If the Secretary'' and inserting ``Subject to clause (iii), if the Secretary''; and
(2) by adding at the end the following new clause:
``(iii) LIMITATION ON ADJUSTMENT.--For years after 2001, the budget neutrality adjustment under this subparagraph may not reduce the payments that would otherwise be made under this part but for this subparagraph by more than 2.0 percent.''.
SEC. 6. OUTLIER PAYMENTS.
Section 1833(t)(5) of the Social Security Act (42 U.S.C. 1395l(t)(5)) is amended--
(1) in subparagraph (C)--
(A) in clause (i), by striking ``exceed the applicable'' and inserting ``exceed a percentage specified by the Secretary that is not less than the applicable minimum percentage or greater than the applicable maximum''; and
(B) by striking clause (ii) and inserting the following new clause:
``(ii) APPLICABLE PERCENTAGES.--For purposes of clause (i)--
``(I) the term `applicable minimum percentage' for a year means zero percent for years before 2003 and 2.0 percent for years after 2002; and
``(II) the term `applicable maximum percentage' for a year means 2.5 percent for years before 2003 and 3.0 percent for years after 2002.''; and
(2) in subparagraph (D)--
(A) in the heading, by striking ``TRANSITIONAL AUTHORITY'' and inserting ``FLEXIBILITY''; and
(B) in the matter preceding clause (i), by striking ``for covered OPD services furnished before January 1, 2002,''.
SEC. 7. ADJUSTMENT TO LIMIT DECLINE IN PAYMENT.
Section 1833(t)(7) of the Social Security Act (42 U.S.C. 1395l(t)(7)) is amended--
(1) in the heading, by striking ``TRANSITIONAL ADJUSTMENT'' and inserting ``ADJUSTMENT'';
(2) in subparagraph (A)--
(A) in the heading, by striking ``BEFORE 2002'' and inserting ``IN GENERAL'';
(B) in the matter preceding clause (i)--
(i) by striking ``subparagraph (D)'' and inserting ``subparagraph (B)'';
(ii) by striking ``furnished before January 1, 2002,''; and
(iii) by striking ``subparagraph (E)'' and inserting ``subparagraph (C)''; and
(C) in clause (i), by striking ``subparagraph (F)'' and inserting ``subparagraph (D)'';
(3) by striking subparagraph (D) and inserting the following new subparagraph:
``(D) HOLD HARMLESS PROVISIONS.--
``(i) CANCER, CHILDREN'S, AND SMALL RURAL HOSPITALS.--In the case of a hospital that is described in clause (iii) or (v) of section 1886(d)(1)(B) or is located in a rural area and has not more than 100 beds, for covered OPD services--
``(I) that are furnished on or after the date on which payment is first made under this subsection; and
``(II) for which the PPS amount is less than the pre-BBA amount (or for services furnished on or after January 1, 2002, is less than the greater of the pre-BBA amount or the reasonable costs incurred in furnishing such services),
the amount of payment under this subsection shall be increased by the amount of such difference.
``(ii) EYE AND EAR HOSPITALS.--In the case of a hospital or unit described in subsection (i)(4), for covered OPD services--
``(I) that are furnished on or after January 1, 2002; and
``(II) for which the PPS amount is less than the greater of the base year amount (which for purposes of this subparagraph shall be determined in the same manner as the pre-BBA amount under subparagraph (D), except that clause (ii)(I) of such subparagraph shall be applied by substituting `2001' for `1996') or the reasonable costs incurred in furnishing such services,
the amount of payment under this subsection shall be increased by the amount of such difference.'';
(4) in subparagraph (F)(ii)(I), by striking ``subparagraph (E)'' and inserting ``subparagraph (C)''; and
(5) by striking subparagraphs (B) and (C) and redesignating subparagraphs (D), (E), (F), (G), (H), and (I) as subparagraphs (B), (C), (D), (E), (F), and (G), respectively.
SEC. 8. SPECIAL INCREASE IN CERTAIN RELATIVE PAYMENT WEIGHTS.
Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is amended--
(1) in paragraph (3)(D)(ii), as amended by section 2(a)(3)(B), by striking ``or paragraph (13)(C)'' and inserting ``paragraph (13)(C), or paragraph (14)'';
(2) in paragraph (9)(B)(i), as amended by section 2(a)(4), by inserting ``determined without regard to expenditures made by reason of the adjustments required by paragraph (14)'' after ``paragraph (13)'';
(3) in paragraph (12)(C), by striking ``paragraph (6)'' and inserting ``paragraph (9) (including adjustments authorized by paragraph (14))''; and
(4) by redesignating paragraph (14) (as redesignated by section 2(a)(5)) as paragraph (15) and by inserting after paragraph (13) the following new paragraph:
``(14) REQUIREMENT TO INCREASE RELATIVE PAYMENT WEIGHTS IN CERTAIN CIRCUMSTANCES.--
``(A) IN GENERAL.--Notwithstanding the methodologies specified for determining relative payment weights described in paragraphs (2)(C) and (9)(A), for years beginning with 2002, the Secretary shall, as part of the revisions required by paragraph (9)(A), increase the relative payment weight for any group established or revised under paragraph (2)(C) or (9)(A), respectively, above the weight that would otherwise apply to such group under this subsection if the Secretary determines that such an increase is necessary to ensure that the medicare OPD fee schedule amount for the group for the year is not less than 90 percent of the median costs for services classified within the group.
``(B) PRIORITIES.--For purposes of providing for increases under subparagraph (A), the Secretary shall give priority first to preventive services, second to cancer services, third to services for which the medicare OPD fee schedule amount that would otherwise apply is less the payment level under this title for such services in other settings, and fourth to other services.
``(C) DATA.--The Secretary may base increases under subparagraph (A) on data from any source and is not limited to data appropriate for estimating the costs incurred by hospitals in furnishing such services.
``(D) AGGREGATE EXPENDITURES.--Notwithstanding the application of the percentage specified under subparagraph (A), the Secretary shall provide for increases under such subparagraph for each year so that the estimated amount of additional expenditures attributable to adjustments under such subparagraph is not less than $1,000,000,000 in such year.''.
SEC. 9. PERMANENT EXTENSION OF PROVIDER-BASED STATUS.
Paragraphs (1) and (2) of section 404(a) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (113 Stat. 2763A-506), as enacted into law by section 1(a)(6) of Public Law 106-554, are each amended by striking ``until October 1, 2002''.
--
AMERICAN HOSPITAL ASSOCIATION,
Washington, DC, May 22, 2002.
Hon. JEFF
BINGAMAN,
U.S. Senate, Hart Senate Office Building, Washington,
DC.
DEAR SENATOR BINGAMAN: On behalf of our nearly 5,000 hospital, health care system, network and other health care provider members, the American Hospital Association is writing to express our strong support for the Medicare Hospital Outpatient Fair Payment Act of 2002 that you have introduced with Sen. Olympia Snowe (R-ME). We believe this bill is an essential component to ensuring that America's Medicare patients receive emergency care and outpatient services, and have equal access to the newest medical technologies.
As hospital care continues to shift to the outpatient setting, it is imperative that Congress begins to address the complex operational issues and payment inequities created by the outpatient prospective payment system (OPPS). While the OPPS was created to give providers incentives to deliver quality care in an efficient manner, outpatient payment rates were set at a level substantially below the costs hospitals incur caring for Medicare patients. Medicare currently pays hospitals only 84 cents for every dollar of outpatient care provided.
Your comprehensive legislation would address problems in the OPPS by extending and enhancing provisions that ensure patient care is not disrupted as hospitals transition into OPPS. We applaud your leadership on this important issue and support swift enactment of this legislation. We look forward to working with you further on this issue.
Sincerely,
Rick Pollack,
Executive Vice President.
Ms. SNOWE. Mr. President, I am pleased to join with my colleague and good friend Senator BINGAMAN to introduce the Medicare Hospital Outpatient Fair Payment Act of 2002. We are introducing this bill because of the critical importance of outpatient health care services and the devastating impact that the substantial reduction in Medicare payments for outpatient services will have on the delivery of care. Our legislation will increase payment rates for outpatient care to adequate levels to ensure appropriate access to outpatient care for our Nation's seniors. In addition, since the implementation of the new outpatient prospective payment system in August 2000, it has become evident that changes are needed, and this legislation proposes important reforms that will make the system work better for Medicare and for our Nation's seniors.
Our Nation's seniors rely upon outpatient care delivered through the Medicare program. This is the result of trends in medical care that will continue to place a greater emphasis on
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importance of having an appropriate Medicare payment system for outpatient care.
Without these vitally needed changes in the Medicare outpatient payment system, our medical care infrastructure will suffer and patient care will be harmed. This March, the Medicare Payment Advisory Commission, Medpac, estimated that the aggregate margin for outpatient services would be minus 16.3 percent in 2002.
Congress created temporary additional payments, or transitional ``pass-through'' payments, for certain innovative medical devices, drugs and biologicals in the Balanced Budget Refinement Act, BBRA, of 1999. By establishing the pass-through pool, Congress ensured Medicare beneficiaries would have access to the latest medical technologies. These pass-through payments were capped at 2.5 percent of total outpatient payments prior to 2004, and the Centers for Medicare & Medicaid Services, CMS, is required by law to make a proportional reduction for all pass-through payments if that cap is exceeded. In March 2002, CMS announced a dramatic reduction in pass-through payments of 63.6 percent.
CMS took steps to avoid even greater reductions in the pass through payments by incorporating 75 percent of the device costs into the base ambulatory payment classifications, APC, amounts. Due to a Congressionally-mandated requirement, CMS was required to make this adjustment on a budget neutral basis, with no recognition for the impact of this shift in payment. As a result, Medicare payments were shifted from low-tech services to high-tech services. In addition, incorporating 75 percent of device costs into the APCs led to a budget-neutrality adjustment of minus 7.2 percent, causing a substantial reduction in the OPPS fee schedule amounts for 2002.
These shifts in payments that resulted from actions Congress took in the BBRA are greater than intended when it was first enacted. It is clear that corrections to the system are needed. Ironically, if these problems with outpatient payments are not corrected, hospitals will be forced to admit patients into the hospital for treatment that could have been provided more efficiently on an outpatient basis.
To address these problems, we are introducing the Medicare Hospital Outpatient Fair Payment Act of 2002. This comprehensive legislation would address problems within the current Medicare hospital outpatient payment system. Specifically, it would address the problems outlined here by; increasing extremely underfunded emergency room and clinic ambulatory payment classifications, APC, rates by 10 percent and requiring an increase in overall outpatient payments to 90 percent of overall costs, still 10 percent less than hospitals spend in delivering necessary outpatient care, but an improvement on the current payment of just 84 percent of costs; limiting the pro rata reduction in pass-through payments to 20 percent; and limiting the budget neutrality adjustment to no more than 2.0 percent.
Furthermore, the bill improves and extends transitional corridor payments to rural hospitals, cancer hospitals, and children's hospitals, and extends the provision to designated eye and ear specialty hospitals.
We believe these changes are necessary if we are to preserve the quality of care in the outpatient setting that seniors deserve. Our Nation's seniors rely upon the health care services provided in the outpatient setting and we invite our colleagues on both sides of the aisle to join us in this effort.
By Mr. BINGAMAN (for himself and Mr. WELLSTONE):
S. 2548. A bill to amend the temporary assistance to needy families program under part A of title IV of the Social Security Act to improve the provision of education and job training under that program, and for other purposes; to the Committee on Finance.
Mr. BINGAMAN. Mr. President, I rise today to introduce the Education Works Act.
In 1996, legislation was passed which made major changes to our welfare laws. Since then, we know that the welfare rolls in most States have dramatically decreased. But reforming welfare is not just about reducing welfare rolls; welfare reform must ultimately be about helping poor individuals achieve self-sufficiency. While many have left welfare for work during the past several years, too many have been left behind because they don't have a high school degree, have little or no work history, have health problems, are in abusive relationships, or are dealing with other circumstances that make it difficult to work. In addition, those who have secured work are working at low wages with limited benefits. These parents experience little earning growth over time, because there are limited opportunities for mobility for those with low skill levels. As we move forward with the reauthorization process, we must do more to support state efforts to help these people find work and to ensure that all individuals leaving welfare are moving to employment that will provide long-term financial independence. The Education Works Act will do just that.
We know that the welfare programs that have been most successful in helping parents work and earn more over the long run are those that have focused on employment but made substantial use of education and training, together with job search and other employment services. In addition, studies find that helping low-income parents increase their skills pays off in the labor market, particularly through participation in vocational training and postsecondary education and training.
Yet, less than one percent of Federal TANF funds were spent on education and training in 2000 and only five percent of TANF recipients participated in these activities in the same year. This is due in large part to the fact that the '96 law discouraged States from allowing welfare recipients to participate in education and training programs. Specifically, the law limits the extent to which education activities count toward Federal work participation requirements, effectively restricting how long individuals can participate in training and capping how many individuals can receive these services.
The Education Works Act would change this by: clarifying that States have the flexibility to allow participation in postsecondary, vocational English as a Second Language, and basic adult education programs by TANF recipients as part of the TANF work requirements; giving States the flexibility to determine how long each participant may participate in education and training activities while receiving benefits; giving States the flexibility to provide childcare and transportation supports, but not cash benefits, to parents and not toll the 5 year time limit for these individuals if they are participating in a full-time education program that will lead to work and long-term independence; and eliminating the 30 percent cap on the number of TANF recipients that can participate in education and training programs in fulfillment of their work requirements
These are not radical changes. They do not discourage work, but rather enable it.
It is important to note that of the 21 States that have operated under TANF waivers since 1996, 18 of them had waivers of the requirements we are talking about here. Delaware, Indiana, Montana, Tennesee, Texas, Utah, Vermont and Oregon to name a few. The other 32 States should be given the same flexibility.
In my home State, we have recognized the important role that education and training, including postsecondary education , can play in helping some welfare recipients to improve their skills so that they can get off welfare and stay off welfare. In our State, we already have an ``Education Works'' program in place. But this program is limited to only 400 participants statewide, because the limitations in the TANF program make it impossible to use Federal TANF funds to implement it. This just doesn't make sense to me. We should give states the flexibility they need to implement the
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