Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Will the Senator yield for another question?

Mr. BAUCUS. Does the Senator know that the so-called deal was that whereas MedPAC and the administration and the House wanted to make domestic cuts to home health care, but rather we went to the home health care industry, worked with them, and took two of their major suggestions about fraud and abuse as well as outliers, so we modified so that the home health industry thought this was fair and reasonable? Does the Senator know that was the agreement that was reached?

Mr. BAUCUS. Will the Senator yield? I can answer the Senator's question.

Mr. BAUCUS. Mr. President, this is very frustrating because we have these blocks of time, with Senators lining up to take control of the time and to make their points, and then they flee the Senate floor and we cannot get into a debate or a colloquy. We cannot make points that rebut the points they have made because they have all left the floor.

Mr. BAUCUS. They all come in and make their points and then they flee.

Mr. BAUCUS. Good, I am glad they are staying because I want them to hear this. Maybe we will all learn something. First of all, clearly, we all care about home health care. I mean, let's obviously agree that we all do. I see the Senator from Arizona nodding his head in agreement; he does care about home health care. This Senator cares about home health care. The Senator from Wyoming, Dr. Barrasso--here he is, over here--he cares about home health care. He has talked about home health care. We all know seniors would rather be home than in the hospital or a nursing home, if that is medically appropriate. We all know that. I know that personally. My mother was in the hospital 2 weeks ago, and she is now, thankfully--praise the Lord--out of the hospital, and she is home. We have a home health care person coming in every day to see my mom. When I am there with the home health care person, I am very impressed. They do a super job. It is really something to behold. My mother loves it and I love it. We clearly are not going to do anything to cut home health care. But another point I would assume all my colleagues agree with is that we want to cut waste, if there is waste. We want to cut waste out of the health care system. Why should we allow waste, as representatives of our people--the taxpayers? We want to cut out waste. Again, I see the Senator from Arizona is nodding his head, yes, that clearly we want to cut out waste that may or may not occur in the system. Now, the next question--and it is a question--is, there are lots of forms of waste, and one is fraud--people just ripping taxpayers off and ripping seniors off. That is clear. There is a lot of waste. Let me take one small example in the home health provisions in the Senate bill, and that is this: The General Accountability Office found that in the home health industry there are a lot of outlier expenditures which are fraudulent; that is, some home health agencies classify their expenditures for home health as outliers--as extra payments--for very sick people. In fact, there is one county in Florida which accounts for 60 percent of all outlier reimbursements, whereas they provide health care for only 1 percent of the Nation's people. The GAO has found lots of examples where the outlier portion of home health is abused. It is fraud. It is abused. Well, guess what. The home health care industry came to us and said: Gee, we have some ideas how to stop that because we don't like rotten apples spoiling our barrel. We want to stop this fraud that exists with excessive outlier payments. So they came to us with some ideas. I know it is easy to think that suggestions might be classified as deals or whatnot, but that has not happened. They came with an idea of how to cut excessive costs in outliers, and we have done that. That is in this bill. There are a lot of other provisions with respect to home health care. I know the Senators have letters from their home States. I don't know if they are referring to a House-passed bill, which is very aggressive in cutting home health care benefits, or whether they have read the most recent language in the Senate bill, which essentially is much less aggressive because in talking to the agencies, they were saying: Yes, we can live with these changes--such as rebasing and market basket updates, phasing them in instead of immediately--with the idea, again, of getting rid of excessive payments and fraudulent payments. I say excessive because the home health care industry is enjoying an 11-percent growth rate annually, as it is right now in dollars. Well, some think it is 17 percent. The chart I have is 11 percent, but maybe 17 percent. Then the national health care spending rate, spending for all care, goes up about 6 percent a year, about 6 percent a year nationwide. Home health without reform is between 11 and 17 percent. It is almost double. Under this legislation spending will be about 8 percent. Remember, national health spending is 6 percent, and the home health industry did write a letter saying: Yes, we can live with that. My approach, frankly, in regard to legislation, is to work with groups, to work with industries and talk to them and not just be draconian and not be arbitrary in cuts or changes. You talk to them to see what accommodations can be made consistent with your principles. One of my principles is stopping a lot of the fraud and to see if there is a way to cut excessive spending because sometimes there is excessive spending around here, and that is what we have done in the home health industry. I could go into more detail, but I want my colleagues to know there is real, solid, sound reason for these changes in the home health provisions, and it is my judgment this will not hurt home health care for patients. That is a very important point to make. The same is basically true with the other industries--say with regard to the hospital industry. We worked with them and said: OK, we know you should be cut. I talked to a lot of hospital administrators privately and said: What do you think? They said: Yeah, Max, we should take a haircut. Our hospital should take a haircut. As you well know, you sometimes go to a hospital and you say: Good gosh, why do they have that big fountain out front? Why do they have all that marble? Why does this look like the Taj Mahal? You don't need that for health care. So then they crank that back for the need of their health care. Some of the executives say to me privately: Yeah, there should be some reductions in hospital payments. So we go to the hospitals and say: What is reasonable? Remember, this is over a 10-year period. They say: We could take a $155 billion cut. But they say that, in part, because they know what they lose on the margin they can make up in volume because of everybody's health insurance. That means, too, that we can get health care reform. You know, it is hard to get the health insurance industry to work with us if there is no health insurance for most Americans. If there is no health insurance for most Americans, then the health insurance industry is inclined to revert back to their old ways--or try to anyway--underwriting insurance, denying policies based on preexisting conditions, et cetera. So this whole effort is to work with groups--work with consumer groups, with labor, with hospitals, doctors, the insurance industry, pharmaceuticals--to see what is reasonable. That is democracy--to try to get some kind of broad-based kind of rough justice agreement to put this together. That is the effort we have undertaken in this legislation. I hear criticism, well, gee, we are cutting this and cutting that. But let's remember--and I know my colleagues agree with this--the waste in the American health care system is somewhere between $300 billion a year to upper estimates of $800 billion a year. It is waste, and we have to figure out a way to get rid of the waste without sacrificing care and actually, at the same time, improving the quality of care. That is the major goal. So when you see reductions in some of the payments to providers, a lot of that is an honest attempt to get rid of the waste or excessive payments. Let's take Medicare Advantage. Somebody quoted Tom Scully today. I have a quote from Tom Scully that says there is way too much spending in Medicare Advantage. I don't have the exact quote, but it is basically a public quote that we should cut Medicare Advantage spending because there is way too much expense in Medicare Advantage. It is a question of judgment as to how much to cut, I grant you. But still there are areas where there is excessive spending, there is waste, and home health care is a good area where we worked hard to refine the changes to get rid of some of the fraud--the outliers I mentioned--but in a way that helps seniors get good home health care.

Mr. BAUCUS. I agree, so long as it comes off their future time.

Mr. BAUCUS. Mr. President, I would very much like to respond to that question. First of all, I appreciate the implied premise in the statement that the Senator agrees there should be savings. The question is, Where should the savings go? I mean, basically, the Senator is implying there should be savings, and that is very good to hear. I think that is a very constructive addition to a part of this dialogue, this conversation, that we should take savings because there is waste. The Senator's question is, OK, you take the savings, what should we do with the savings? That is the basic question. The fact is, because of the reforms in Medicare, a couple things are happening. No. 1, we are extending the solvency of the trust fund; it is another 5 years. The Medicare trust fund will now be extended 5 years, so that helps seniors. I know the Senator didn't mean this at all, but, rhetorically, earlier he said: Why does this side want to throw seniors under the bus? I know he didn't mean that. I know he knows nobody is trying to throw seniors under the bus, nobody wants to do that in the Senate. But the fact is, these changes do extend the solvency of the trust fund. Then he asked a different question, and it is a very good question. It is a judgment call, what should be done with the additional savings? This legislation takes those savings to help more people get health insurance. One could argue those savings should not be used to help those without health insurance get health insurance for them. They could go back to the Medicare trust fund, they could reduce the budget deficits--there are a lot of different options here. But this is a health care reform bill. In this legislation, we are trying to come up with a system, if you will, that gets some coherence nationwide in health care. We don't have a system today. It is a hodgepodge. It is a collection. It is kind of a free-for-all. Docs do their things, hospitals do their things, nursing homes do their things; each attempt to get health care based on profit motive, but it is kind of incoherent. There is no real--anything there. We say let's try to look for coherence. We are the only industrialized country in the world that does not have some system, some way where everybody has health insurance. It seems to me we should try to see if we can have some kind of system, some way, where everybody has health insurance. I know it is extremely complicated. There is no doubt it is complicated. But if people have health insurance, that opens up lot of doors for other reform; one is to prevent companies, health insurance companies, from denying coverage based on preexisting conditions, health care status, and so on and so forth, because then what they lose on the margin, they can make up in volume because everybody has health insurance. It is the same with the hospitals, same with the pharmaceutical industry, same with virtually all providers, the whole system. If everybody has health insurance, not most everybody--more have health insurance the better the system is. That is a judgment call. But I do believe, when people have health insurance--those who do not now have it--are going to be more healthy. I think that is a good thing. Hospitals will not have to worry near as much about uncompensated care, which is a big challenge to hospitals these days. The average, I think, is about $1,100, $1,200 a year per family, when it comes to uncompensated care that private patients' pay. Then, after that, we open up doors to delivery system reform. You get the system working a lot better, compensating more on quality outcomes rather than quantity, et cetera. I know the Senator knows much about all these things. But it is a judgment call for those savings. I am glad the Senator seems to imply there should be or are savings, but it is a judgment call as to where the savings go. The 21 percent in docs, we are going to have to take that up after this bill. It is going to be difficult because some want to pay for it; some want to not pay for it. I grant you, that is going to be a huge battle. You might ask: Why is that not in this bill?

Mr. BAUCUS. My answer to that is, A, it is not part of health reform. But, B, on the other hand, it is; they are docs, we care about our docs and we are going to have to find a way to pay for them and we will, I think, by the end of this year because we have to. Docs--there cannot be any reduction. Frankly, there is a partial fix in this bill anyway. It is 1 year with an update. At least this bill does take care of docs for at least 1 year and with an increase. That is 1 year. The House wants a permanent fix. Frankly, I would love to have a permanent fix, but we are having a hard time finding the dollars to pay for it all, but this legislation does have a 1-year fix for docs. I yield to the Senator from Massachusetts.

Mr. BAUCUS. If the Senator will yield, I thank my colleagues for staying on the floor. I appreciate that.

Mr. BAUCUS. It will have to be on your time.

Mr. BAUCUS. Mr. President, I think we have less than 4 minutes remaining on this side. I see someone else who wishes to speak. I promised him time, and Senator Durbin as well. I know they are both eloquent orators. It is a bit difficult here. So I will split it in half, the time remaining, between each of the two.

Mr. BAUCUS. Fine.

Mr. BAUCUS. Thank you.

Mr. BAUCUS. Madam President, I ask unanimous consent that we continue with debate, and debate only, as under the previous order, for an additional hour, with Senators permitted to speak for up to 10 minutes each.

Mr. BAUCUS. Madam President, I yield to the Senator from Michigan, Ms. Stabenow, 5 minutes.

Mr. BAUCUS. I yield 1 minute.

Mr. BAUCUS. Madam President, I ask unanimous consent that Senator Rockefeller be added as cosponsor to the Lincoln amendment, No. 2905.

Mr. BAUCUS. Madam President, may I ask how much time remains on each side?

Mr. BAUCUS. I thank the Chair. I yield 10 minutes to the Senator from Illinois.

Mr. BAUCUS. Madam President, I suggest the Senator from Iowa be recognized.

Mr. BAUCUS. Madam President, I ask unanimous consent that 10 more minutes of debate be allowed, evenly divided.

Mr. BAUCUS. Hearing no objection?

Mr. BAUCUS. Madam President, I would just like to state as clearly as I possibly can, so people understand, the Medicare savings are being used for Medicare. There is a strong implication by many Senators that the savings are not going to be used for Medicare, that it will go someplace else. That is not true. The Medicare savings are going to be used for Medicare. What are the savings? I think all Senators would like to reduce waste. All Senators agree there is too much waste in the current system. It makes good sense to try to attack that waste, root out that waste, and where there are overexpenditures, to try to get the levels down to a reasonable level. Everybody knows we have spent too many dollars on Medicare Advantage. Everybody knows that. That is why we are bringing that cost down. There is also waste and fraud--I know my good friend from South Dakota understands this--in home health care agencies. In the State of Florida, for example, the Government Accountability Office showed that in Florida 60 percent of the outlier payments--the extra money that goes for sicker patients--were in one county. That county has 1 percent of seniors. It had 60 percent of the outlier payments, according to the Government Accountability Office. That is fraud. They rooted out a lot of fraud in home health. Home health is very good. My mother is in home health right now. It works really well. I am very proud of the home health caretaker there who takes care of my mother. But we are reducing some of the overpayments. We are getting the waste out. And guess what. Those savings, where do they go? They go back into Medicare. I repeat that. They go back into Medicare. I do not know if any Senator wants to open up his ears or her ears and hear that. They go back into Medicare. Guess what. That is why the solvency of the Medicare trust fund is extended. If these so-called cuts, which we hear about on the other side, were really cuts, as implied by the other side, you would think that would hurt Medicare. You would think that might reduce the period in which the trust fund would be solvent; that it would go insolvent at an earlier time, if we were really cutting Medicare. No, it is the opposite. These are savings in Medicare which extend the life of Medicare. Please, please--I see my friend from Iowa. I think he understands, these Medicare savings go into Medicare for extending the solvency of the Medicare trust fund. I see my friend from South Dakota. I think he understands--he is sitting there and grinning at me now-- I think he understands those savings go back into Medicare and extend the solvency of the trust fund. So let's make that very clear. Second, we are using some of the money to reduce Part B premiums. That helps seniors. If Part B premiums are reduced, that helps seniors. By how much? Madam President, $30 billion over 10 years. That will reduce seniors' Part B premiums. That helps seniors. We are not taking money away from seniors; we are helping seniors, giving more dollars to seniors in this legislation. In addition, there are additional benefits for seniors in this legislation. We are starting to close the doughnut hole--that is something seniors talk about--in prescription drug benefits. They want that doughnut hole closed. I might add to that, there are other benefits: new preventive benefits under Medicare for mammograms, preventive screenings, colonoscopies, annual wellness visits--all new benefits. So I want to make it very clear that it is not true when some Senators say we are taking money away from Medicare and creating a whole new entitlement program. We are not taking money away from Medicare and hurting seniors. We are reforming how dollars are paid, taking the waste out, and extra, excessive payments, and putting the money back into Medicare, back for seniors, back for beneficiaries. Also, not one penny of guaranteed benefits will be cut. Not one penny can be cut. So please, people, understand that the savings go to help seniors, with more benefits, extending the solvency of the trust fund. That is what we are doing. If we keep that firm point in mind, then maybe we can go address some of the next steps that are in this bill. But that is very important. Madam President, I do not know how much time I have.

Mr. BAUCUS. Madam President, he can probably extend a little bit. I see the Senator from Minnesota anxiously sitting over there in the corner. Maybe we could give him a couple----