Susan Collins

Ms. COLLINS

Ms. COLLINS. I thank the Senator. I certainly agree with his analysis.

Ms. COLLINS. Mr. President, I yield myself such time as I may consume from general debate on the bill under the unanimous consent agreement. I am pleased that the Senate has begun debate on the Patients' Bill of Rights and the Patients' Bill of Rights Plus. There is a growing unease across this Nation about changes in how we receive our health care. People worry that if they or their loved ones become ill, their HMO may deny them coverage and force them to accept either inadequate care or financial ruin, or perhaps even both. They believe that vital decisions affecting their lives will be made not by a supportive family doctor but, rather, by an unfeeling bureaucracy. Our goal this week should be to join together to work in a bipartisan way to enact legislation that accomplishes three major purposes. First, it should protect patients' rights and hold HMOs accountable for the care they promise. Second, it should expand, not contract, Americans' access to affordable health care. And, third, it should improve health care quality and outcomes. I believe all of us should be able to agree that medically necessary patient care should not be sacrificed to the bottom line and that health care decisions should be in the hands of medical professionals, not insurance accountants or trial lawyers. We do face an extremely delicate balancing act as we attempt to respond to concerns about managed care without resorting to unduly burdensome Federal controls and mandates that will further drive up the cost of insurance and cause some people to lose their health insurance altogether. That is the crux of the debate we are undertaking this week. The crux of this debate is how can we make sure that we address those critical concerns we all have about managed care without so driving up the cost of the health insurance people have--as the Kennedy bill would do--that we jeopardize coverage for thousands, indeed millions, of Americans. As the President's Advisory Commission on Consumer Protection and Quality noted in its report, ``costs matter . . . the Commission has sought to balance the need for stronger consumer rights with the need to keep coverage affordable. . . Health coverage is the best consumer protection.'' I think President Clinton's quality commission hit it right. I believe they have stated exactly what the debate is before us. I, therefore, have been alarmed by recent reports that American employers everywhere, from giant multinational corporations to the tiny corner store, are facing huge hikes in medical insurance averaging 8 percent and sometimes soaring to 20 percent or more. This is a remarkable contrast to the past few years when premiums rose less than 3 percent, if at all. I am particularly concerned about the impact these rising costs are having on small businesses and their employees. A survey of small employers conducted by the United States Chamber of Commerce earlier this year found that, on average, small businesses were hit with a 20-percent premium hike last year. More important, of the small employers surveyed, 10 percent were forced to discontinue health care coverage for their employees because of these premium increases. Over half of the employers surveyed indicated that they switched to a lower cost plan, while an overwhelming majority indicated that they had passed the additional costs of these premium hikes on to their employees through increased deductibles, higher copays, or premium hikes. This, too, is very troubling since it will induce many more employees, especially lower wage workers and their families, who are disproportionately affected by increased costs, to turn down coverage when it is offered to them. Indeed, in the HELP Committee, on which I serve, we saw a GAO report which indicated that an increasing number of American employees are turning down the health insurance offered by their employers because they simply cannot afford to pay their share of the costs. It is no wonder that the ranks of uninsured Americans increased dramatically last year to 43 million people--the highest percentage in a decade. This is happening at a time when our economy is thriving. Imagine what could happen in an economic downturn. We know that increasing health insurance premiums cause significant losses in coverage. That is the primary reason that I am so opposed to the Kennedy bill. According to the Congressional Budget Office, the Kennedy bill, that has been laid down before us, will increase health insurance premiums by an additional 6.1 percent over and above the premium increases we have already experienced or are likely to experience as a result of a resurgent increase in health care inflation. The CBO report goes on to note that: Employers could respond to premium increases in a variety of ways. They could drop health insurance [coverage] entirely, reduce the generosity of the benefit package [in other words, cut back on the benefits that are provided], increase cost-sharing by [their employees], or increase the employee's share of the premium. CBO assumed that employers would deflect about 60 percent of the increase in premiums through these strategies. In other words, 60 percent of this increased cost is going to go right to American workers. The remaining increase in premiums would be passed on to workers in the form of lower wages. In short, it is the workers of America, it is the employees, who will be paying this increased cost. Lewin Associates, a well-respected health consulting firm, in a study for the AFL-CIO, has estimated that for every 1 percent increase in premiums, 300,000 Americans have their health insurance jeopardized. Based on these projections, passage of the Kennedy bill would result in the loss of coverage for more than 1.8 million Americans. That is more than the entire population of my home State of Maine. The Kennedy bill should be more aptly titled the ``Patients Bill of Costs'' because ultimately it will be the patient who will get hit with higher health care costs if the Kennedy bill is approved. Our legislation, by contrast, provides the key protections that consumers want without causing costs to soar. It responsibly applies these protections where they are needed. The legislation does not preempt but, rather, builds upon the good work that States have done in the area of patients' rights and protections. States have had the primary responsibility for the regulation of health insurance since the 1940s. I spent 5 years in State government as a member of the Governor's cabinet and was responsible for the Bureau of Insurance. I know State insurance regulators have done a good job in protecting the rights and needs of their consumers in their State. In fact, they have been far ahead of the Federal Government in responding to concerns about managed care. For example, 47 States have passed laws prohibiting ``gag clauses'' that restrict communications between patients and their doctors. As a consequence, as the CBO notes in its report on the Kennedy bill, ``Several studies have shown that few plans impose such restrictions today.'' Forty States have requirements for emergency care. All 50 States have requirements for grievance procedures. And 36 States require direct access to an OB/GYN. States have acted without any mandate from Washington, without any prod from Washington, to protect their consumers. Moreover, one size does not fit all; what might be appropriate for one State may not fit for the consumers in another. Florida, for example, provides for direct access to a dermatologist, which is understandable given the high rate of skin cancer in that State. In the State of Maine, another kind of mandate may be more appropriate. Similarly, what may be appropriate for California, which has a high penetration of HMOs, may simply not be necessary in a rural State such as Wyoming where there is little or no managed care. In such States, a new blanket of heavyhanded Federal mandates in coverage requirements will simply drive up costs and impede, not enhance, health care. That is why the National Association of Insurance Commissioners supports the approach we have taken in our bill. Currently, Federal law prohibits States from regulating the self- funded, employer-sponsored health plans that cover 48 million Americans. Our bill, which is intended to protect the unprotected consumer, extends many of the same rights and protections to these individuals and their families that those in State-regulated health plans already enjoy. For the first time, people in self-funded plans will be guaranteed the right to talk freely and openly with their doctors about treatment options without being subjected to any kind of ``gag clauses'' that limit their communications. They will be guaranteed coverage for emergency room care that a ``prudent layperson'' would consider medically necessary without having to get prior authorization from their health plan. They will be able to see their OB/GYN or pediatrician without a referral from their plan's ``gatekeeper.'' They will have the option of seeing a doctor who is outside the HMO's network. They will also be guaranteed access to nonformulary drugs when it is medically necessary, and they will have an assurance of continuity of care if their health care plan terminates its contract with their doctor or hospital. The opponents of our legislation contend that the Federal Government should preempt the States' patient protection laws unless they have already enacted identical protections. However, the States' approaches vary widely--for good reasons. Moreover, if we start adopting a Washington-knows-best approach to health care, we will have HCFA deciding whether a State has met the test of a Federal regulation. Our experience with other laws should show that is not a good idea. Other provisions of our bill provide new protections for additional millions of other Americans. These are the procedural protections that are in our bill. A key provision of our bill builds upon the existing regulatory framework under ERISA to give all 124 million Americans in employer-sponsored plans the assurance that they will get the care they need when they need it. The legislation will enhance and improve current ERISA information disclosure requirements and penalties and strengthen existing requirements for coverage determinations, grievances and appeals, including--and this is the most important provision of our bill--the addition of a new requirement for strong, independent, external review that is available at no cost to the patient. All 124 million Americans in employer-sponsored plans will be entitled to clear and complete information about their health plan-- about what it covers and what it does not cover, about any cost-sharing requirements, and about the plan's providers. Helping patients understand their coverage before they need to use it will help to avoid disputes about coverage later. The goal of any patients' rights legislation should be to resolve disputes about coverage up front when the care is needed, not months or even years later in a courtroom, as the Kennedy bill proposes. Our legislation would accomplish this goal by creating a strong internal and external review process. Both appeals processes are available at no cost to the patient. Here is how it would work. First, patients or doctors who are unhappy with an HMO's decision could appeal it internally through a review conducted by individuals with appropriate expertise who are not involved in the initial decision. Moreover, this review would have to be conducted by a physician, if the denial is based on a determination that the service is not medically necessary or that it was experimental treatment. Patients would expect results from this review within 30 days, or 72 hours, in cases where delay poses a serious risk to the patient's health. Let's say that after this internal review process is completed, the patient or the physician is still unhappy with the decision; let's say that the internal review upheld the HMO's decision. There is still another protection in our bill. Patients turned down by this internal review would then have the right to a free, independent, external review conducted by medical experts who are completely independent of the insurance plan. This review must be completed within 30 days, and even faster, if there is a medical emergency or a risk to the patient's life or health. Moreover, the decision of these outside reviewers is binding on the health plan. It is not binding on the patient. If you have been denied care you think you need, you can apply for an internal review. If you are not happy with that review, you can go on to an independent external review, and the decision of the physician, who has to have expertise in the condition at issue, is binding on the health plan, but it is not binding on you, if you are still unhappy. If you are still unhappy with the decision made, the patient would still have the right, would retain the right to sue in Federal or State court for attorney's fees, for court costs, for the value of the benefit, and injunctive relief. Really, it is a three-stage appeals process: First, an internal review, an external appeal, and then you can still go to court to sue for the benefit and for your attorney's fees and court costs. The purpose of our legislation is to place treatment decisions in the hands of doctors, not insurance company accountants, and not in the hands of trial lawyers. If your HMO denies treatment that your physician believes is medically necessary, you should not have to resort to a costly and lengthy court battle to get the care you need. You should not have to hire a lawyer. You should not have to file an expensive lawsuit to get the treatment. Our approach contrasts with the approach taken in the Kennedy bill, which encourages patients to sue their health plans. I simply do not believe you can sue your way to quality health care. We should solve problems about health care coverage upfront, when the care is needed, not months or even years later, after the harm has occurred. Let's look at the experience with medical malpractice cases. According to the GAO, it takes an average of 33 months to resolve malpractice cases. This does nothing to ensure a patient's right to timely and appropriate care. Moreover, patients receive only 43 cents out of every dollar awarded in malpractice cases. Exposing health plans and employers to greater liability would force plans to cover unnecessary services that do not benefit patients in order to avoid costly litigation and to make decisions based not on the best practice protocols but, rather, on the latest jury verdicts and court decisions or out of fear of being sued. The noted Princeton health economist Uwe Reinhardt was quoted in this Sunday's Washington Post as saying that he believes the financial impact of the Kennedy bill's liability provisions would be profound. He noted: In the end, we're back again to basically the open-ended deal where the individual physician makes a judgment and no one dares question it. Mr. President, all of us treasure the relationships we have with our physicians. We are also well aware of studies that have shown there have been unnecessary hysterectomies, for example, or the use of mastectomy when removal of a lump from a breast would suffice. That is why we need to have reviews based on the best medical evidence and decisionmaking possible. The President's Advisory Commission on Consumer Protection and Quality specifically rejected expanded lawsuits for health plans because the commission believed it would have serious consequences for the entire health care industry. I agree with that assessment. The last thing we need is to introduce more costly litigation into our health care system. At a time when the tort system of the United States has been criticized as inefficient, expensive, and of little benefit to the injured, the Kennedy bill would be bad medicine for American families, workers, and employers, driving up the cost of health insurance and jeopardizing coverage for some who need it most. Our concern is not just theoretical. I met with a group, a very good group of Maine employers who care deeply about their employees. They expressed to me their serious concerns about the Kennedy proposal to expand liability for health plans and employers. For example, the representative from Bowdoin College in Maine talked about how moving to a self-funded ERISA plan had enabled the college to greatly improve the coverage it provided to Bowdoin's employees and to offer affordable coverage to them. Since the college is self-funded, it has actually been able to lower premiums for its employees while at the same time providing an enhanced benefit package with such features as well baby care, free annual physicals, and prescription drug cards with low copayments. The people at Bowdoin College told me that the Kennedy proposal to expand liability would seriously jeopardize their ability to offer affordable coverage for their employees. In fact, they told me they would probably abandon their self-funded plan and go back into the insurance market and, thus, buy a plan that would have fewer benefits for their employees in order to avoid this increased risk of liability and litigation. Similar concerns were expressed to me by the Maine Municipal Association, which represents cities and towns throughout Maine, L.L. Bean, Bath Iron Works, and many other responsible Maine employers. Unlike the Kennedy bill, the Republican bill contains key provisions that will help hold down the cost of health care while improving health care quality and holding HMOs accountable. For example, I am particularly pleased that our bill contains a proposal, introduced by my colleague, the senior Senator from Maine, that prohibits insurers from discriminating on the basis of predictive genetic information. Genetic testing holds tremendous promise for individuals who have a genetic predisposition to breast cancer and other diseases and conditions with a genetic link. However, this promise is significantly threatened when insurance companies use the results of such testing to deny or limit coverage to consumers on the basis of genetic information. Our legislation also establishes the agency for health care research and quality, an initiative of our physician in the Senate, Mr. Frist from Tennessee. The purpose of these provisions is to foster an overall improvement in health care quality, to bridge the gap between what we know and what we do in health care today. Most important, the Republican bill will expand access to health insurance for millions more Americans by making it more affordable. This is the key difference between the two alternatives before the Senate. Our bill would expand access to health care, a critical issue at a time when we have 43 million uninsured Americans. The Kennedy bill would constrict access and jeopardize coverage for many Americans. The biggest obstacle to health care in the United States today is simply cost. This is due, in part, to the Tax Code's inequitable treatment of people who do not receive health insurance through their employers. Some 25 million Americans are in families headed by self-employed individuals, and, of these, 5 million are uninsured. The Republican bill will make health insurance more affordable for these Americans by allowing self-employed individuals to deduct the full amount of their health care premiums. I have never understood the policy behind our Tax Code that allows a large corporation to deduct 100 percent of the cost of the health insurance premiums that it is providing to its employees but restricts a self-employed individual to a deduction of only 45 percent. Our bill would move that to 100 percent immediately. This would help reduce the number of uninsured working Americans. It would help make health insurance more affordable to the 82,000 people in Maine who are self- employed. They include our lobster men, our hair dressers, our electricians, our plumbers, and the owners of our gift shops, which we hope all of you will visit this summer along the coast of Maine. It includes so many hard-working Mainers for whom the cost of health insurance is simply out of reach. Mr. President, I believe that the Republican approach strikes the right balance, as we effectively address concerns about quality and choice without resorting to unduly burdensome Federal controls and expensive, bureaucratic, new Federal mandates that will further drive up costs and cause some Americans to lose their health insurance altogether. I urge my colleagues to join in supporting the Republican health task force legislation. I reserve the remainder of our time. Mr. DASCHLE addressed the Chair.

Ms. COLLINS. Mr. President, will the Senator yield for a question?

Ms. COLLINS. If the Senator will yield on one further point for a question, would the Senator agree that the health committee legislation is an attempt to protect the unprotected consumers, to reach out to those health care consumers that the States are prohibited from protecting, and that, indeed, the assertions we are hearing from Senator Kennedy, our colleague, and others, and that we are leaving more than 100 million Americans completely unprotected is absolutely false because they are protected under State laws that the States enacted without any prompt from Washington, without any encouragement from Washington, and in fact the States are far ahead of Washington in this debate?

Ms. COLLINS. Will the Senator yield for a question?

Ms. COLLINS

Ms. COLLINS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Ms. COLLINS

Ms. COLLINS. I thank my colleagues for their support and cooperation.

Ms. COLLINS. Mr. President, as a member of the VFW Ladies Auxiliary post in Caribou, ME, and as the daughter of a World War II veteran who was wounded twice in combat, I am honored to lead the charge for this worthwhile legislation. The Veterans of Foreign Wars traces its roots back to 1899, when veterans of the Spanish-American War and the Philippine Insurrection returned home and banded together to establish a handful of local organizations intended to help secure medical care and pensions for their military service. These original foreign service organizations gradually grew in number and influence and in 1914 came to be known collectively as the Veterans of Foreign Wars of the United States. Mr. President, it was several years later, on June 24, 1921, when the VFW's chapter in my home State of Maine was chartered. Today, there are 84 VFW posts in Maine to which over 16,000 veterans belong. Those small groups of veterans who organized in 1899 have today grown to over 2 million strong. During that time, VFW members have fought in every war, conflict, and military intervention in which the United States has been engaged during this century. As we near the start of a new millennium, the VFW's members continue to live by the organization's creed of ``Honor the dead by helping the living.'' They do so by representing the interests of veterans across the nation through an established network of trained service officers who, at no charge, help millions of veterans and their dependents secure the educational benefits, disability compensation, pension, and health care services to which they are rightfully entitled as a result of their distinguished service to our country. This service also extends beyond veterans. The VFW's Community Service Program, through members in its 10,000 posts, serves communities, states, and the nation. During the past program year, for example, the VFW, working side by side with its Ladies Auxiliary, contributed nearly 13 million hours of volunteer service and donated nearly $55 million to a variety of community projects. In addition, the VFW helps young men and women attend college by providing more than $2.6 million in scholarships annually. Mr. President, this Sunday, on the Fourth of July, we will celebrate the 223rd anniversary of the founding of the United States of America. I can think of no more appropriate time to honor the brave men and women who, while far from home, sacrificed so much that the dreams of our founding fathers might become, and remain, a reality. By urging the U.S. Postal Service to issue a commemorative stamp honoring the VFW's 100th anniversary, as was done for its 50th and 75th anniversaries, the Senate can take a small step toward remembering their service and showing our deep appreciation for their unwavering commitment to our country, both in peacetime and in times of conflict. I thank the distinguished Senator from Colorado and the distinguished Senator from North Dakota for working with me on this amendment. It is my understanding the amendment has been cleared and that it is acceptable to the committee.

Ms. COLLINS. On behalf of Senators Campbell, Dorgan, Gregg, and myself, I am pleased to offer a sense-of-the-Senate amendment urging the U.S. Postal Service to issue a commemorative postage stamp honoring the 100th anniversary of the founding of the Veterans of Foreign Wars of the United States. The VFW will be celebrating its centennial in September of this year. This sense-of-the-Senate resolution is similar to legislation I introduced earlier this year which had been cosponsored by 59 of our colleagues. I ask unanimous consent that list of cosponsors be printed in the Record.

Ms. COLLINS. Mr. President, I have an amendment at the desk. I ask for its immediate consideration.

Ms. COLLINS. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Ms. COLLINS

Ms. COLLINS. Mr. President, I rise today to introduce the Medicare Home Health Equity Act of 1999, which is designed to provide a measure of financial and regulatory relief for cost-efficient home health agencies across the country. These agencies are experiencing severe financial problems that are inhibiting their ability to deliver much-needed care, particularly to chronically ill seniors with complex needs. America's home health agencies provide invaluable services that have enabled a growing number of our most frail and vulnerable Medicare beneficiaries to avoid hospitals and nursing homes and stay just where they want to be--in the comfort and security of their own homes. In 1996, home health was the fastest growing component of Medicare spending, consuming one out of every eleven Medicare dollars, compared with one in every forty in 1989. The program grew at an average annual rate of more than 25 percent from 1990 to 1997. As a consequence, the number of home health beneficiaries more than doubled, and Medicare home health spending soared from $2.5 billion in 1989 to $18.1 billion in 1996. This rapid growth in home health spending understandably prompted Congress and the Administration, as part of the Balanced Budget Act of 1997, to initiate changes that were intended to make the program more cost-effective and efficient. Therefore, there was widespread support for the provision in the Balanced Budget Act of 1997 which called for the implementation of a prospective payment system for home care. Until this system can be implemented, home health agencies are being paid according to an ``interim payment system,'' or IPS. In trying to get a handle on costs, however, Congress and the Administration created a system that penalizes efficient agencies and that may be restricting access for the very Medicare beneficiaries who need care the most--the sicker seniors with complex, chronic care needs like diabetic, wound care patients or IV therapy patients who require multiple visits. Unfortunately, the ``interim payment system'' is critically flawed in that it effectively rewards the agencies that provided the most visits and spent the most Medicare dollars in 1994, the base year, while it penalizes low-cost, more efficient providers--and their patients. None of us should tolerate wasteful expenditures, but neither should we impede the delivery of necessary services by low-cost providers. Home health agencies in the Northeast and the mid-West have been among those particularly hard-hit by the interim payment system. As the Wall Street Journal observed last year, ``If New England had been just a little greedier, its home health industry would be a lot better off now--Ironically, the region is getting clobbered by the system because of its tradition of non-profit community service and efficiency.'' Even more troubling, this flawed system may force our most cost- efficient providers to stop accepting Medicare patients with more serious health care needs. According to a recent survey by the Medicare Payment Advisory Commission, almost 40 percent of the home health agencies surveyed indicated that there were patients whom they previously would have accepted whom they no longer accept due to the IPS. Thirty-one percent of the agencies admitted that they had discharged patients due to the IPS. These discharged patients tended to be those with chronic care needs who required a large number of visits and were expensive to serve. As a consequence, these patients caused the agencies to exceed their aggregate per-beneficiary caps. I simply do not believe that Congress and the Administration intended to construct a payment system that inevitably discourages home health agencies from caring for those seniors who need care the most. Last year's Omnibus Appropriations bill did provide a small measure of relief for home health agencies. This proposal did not, however, go far enough to relieve the financial distress that cost-effective agencies are experiencing. These problems are all the more pressing given the fact that the Health Care Financing Administration was unable to meet its original deadline for implementing a prospective payment system. As a result, home health agencies will be struggling under the IPS far longer than Congress envisioned when it enacted the Balanced Budget Act. Moreover, it now appears that Congress greatly underestimated the savings stemming from the BBA. Medicare spending for home health fell by nearly 15 percent last year, and the CBO now projects that post-BBA reductions in home care spending will exceed $47 billion in FY 1998- 2002. This is a whopping three times greater than the $16 billion CBO originally estimated for that time period. I recently chaired a Permanent Subcommittee on Investigations (PSI) hearing where we heard about the financial distress and cash-flow problems cost-efficient agencies across the country are experiencing. Witnesses expressed concern that these problems are inhibiting their ability to deliver much-needed care, particularly to chronically ill patients with complex needs. More than a thousand agencies have closed in the past year because the reimbursement levels under Medicare fell so far short of their actual operating costs. Others are laying off staff or declining to accept new patients with more serious health problems. This points to the most central and critical issue--cuts of this magnitude cannot be sustained without ultimately affecting care for our most vulnerable seniors. At the PSI hearing, Barbara Smith, a senior research staff scientist with the Center for Health Services Research and Policy at George Washington University, testified that the preliminary findings of her studies suggest significant potential effects on beneficiaries, particularly those with unstable chronic care needs. Her research shows that these patients are being displaced from home care or are experiencing significant changes in services that appear to be driven by reimbursement policies rather than by clinical considerations. In her testimony, she stated: ``My main concern is that we are carving out a wedge of people who are chronically ill and have intensive needs for services who are not going to have a reliable source of care in any sector. They are becoming the health care system's untouchables.'' Moreover, the financial problems that home health agencies have been experiencing have been exacerbated by a number of new regulatory requirements imposed by HCFA, including the implementation of OASIS, the new outcome and assessment information data set; new requirements for surety bonds; sequential billing; IPS overpayment recoupment; and a new 15-minute increment home health reporting requirement. Witnesses at the PSI hearing expressed particular frustration about what Maryanna Arsenault, the CEO of the Visiting Nurse Service in Saco, Maine, termed HCFA's regulatory policy of ``implement and suspend.'' They pointed to examples such as the hastily enacted requirements for surety bonds and sequential billing where no sooner had a mandate been put into an effect, than it was suspended but only after agencies had invested significant time and resources in compliance. The legislation that my colleague from Missouri and I are introducing today, along with a bipartisan group of 16 of our colleagues, responds to these concerns. It makes needed adjustments to the Balanced Budget Act of 1997 and related federal regulations to ensure that Medicare beneficiaries have access to medically-necessary home health services. Among other provisions, the bill eliminates the automatic 15 percent reduction in Medicare home health payments now scheduled for October 1, 2000, whether or not a prospective payment system is enacted. When the Balanced Budget Act was enacted, CBO reported that the effect of the BBA would be to reduce home health expenditures by $16.1 billion between fiscal years 1998 and 2002. CBO's March 1999 revised analysis estimates those reductions to exceed $47 billion--three times the anticipated budgetary impact. A further 15 percent cut would be devastating to cost-efficient providers and would further reduce seniors' access to care. Moreover, it is unnecessary since the budget target for home health outlays will be achieved, if not exceeded, without it. The legislation will also provide supplemental ``outlier'' payments to home health agencies on a patient-by-patient basis, if the cost of care for an individual is considered to be significantly higher than average due to the patient's particular health and functional condition. This provision would remove the existing financial disincentive for agencies to care for patients with intensive medical needs who, according to recent reports issued by both the General Accounting Office (GAO) and the Medicare Payment Advisory Commission (MedPAC), are the individuals most at risk of losing access to home health care under the IPS. The current IPS unfairly penalizes historically cost-efficient home health agencies that have been most prudent with their Medicare resources. Our legislation builds on reforms in last year's Omnibus Appropriations Act by gradually raising low-cost agencies' per- beneficiary limits up to the national average over three years, or until the new home health prospective payment system is implemented and IPS is terminated. To decrease total costs in order to remain under their per- beneficiary limits, agencies have had to significantly reduce the number of visits to patients, which has, in turn, increased the cost of each visit. Implementation of OASIS has also significantly increased agencies' per-visit costs. Therefore, the legislation will increase the IPS per-visit cost limit from 106 to 108 percent of the national median. Other provisions of the legislation will: Extend the current IPS overpayment recoupment period from one to three years without interest; Revise the surety bond requirement for home health agencies to more appropriately target fraud; Eliminate the 15-minute incremental reporting requirement; and Maintain the Periodic Interim Payment (PIP) program through the first year of implementation of the prospective payment system to ensure that such a dramatic change in payment systems does not create new cash-flow problems for agencies. I ask unanimous consent that a section-by- section summary further detailing these provisions be included in the Record at the conclusion of my remarks. Mr. President, the Medicare Home Health Equity Act of 1999 will provide a measure of financial and regulatory relief to beleaguered home health agencies in order to ensure that Medicare beneficiaries have access to medically-necessary home health services, and I encourage all of my colleagues to join us as cosponsors. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record.

Ms. COLLINS

Ms. COLLINS. Mr. President, I rise today to introduce the Medicare Home Health Equity Act of 1999, which is designed to provide a measure of financial and regulatory relief for cost-efficient home health agencies across the country. These agencies are experiencing severe financial problems that are inhibiting their ability to deliver much-needed care, particularly to chronically ill seniors with complex needs. America's home health agencies provide invaluable services that have enabled a growing number of our most frail and vulnerable Medicare beneficiaries to avoid hospitals and nursing homes and stay just where they want to be--in the comfort and security of their own homes. In 1996, home health was the fastest growing component of Medicare spending, consuming one out of every eleven Medicare dollars, compared with one in every forty in 1989. The program grew at an average annual rate of more than 25 percent from 1990 to 1997. As a consequence, the number of home health beneficiaries more than doubled, and Medicare home health spending soared from $2.5 billion in 1989 to $18.1 billion in 1996. This rapid growth in home health spending understandably prompted Congress and the Administration, as part of the Balanced Budget Act of 1997, to initiate changes that were intended to make the program more cost-effective and efficient. Therefore, there was widespread support for the provision in the Balanced Budget Act of 1997 which called for the implementation of a prospective payment system for home care. Until this system can be implemented, home health agencies are being paid according to an ``interim payment system,'' or IPS. In trying to get a handle on costs, however, Congress and the Administration created a system that penalizes efficient agencies and that may be restricting access for the very Medicare beneficiaries who need care the most--the sicker seniors with complex, chronic care needs like diabetic, wound care patients or IV therapy patients who require multiple visits. Unfortunately, the ``interim payment system'' is critically flawed in that it effectively rewards the agencies that provided the most visits and spent the most Medicare dollars in 1994, the base year, while it penalizes low-cost, more efficient providers--and their patients. None of us should tolerate wasteful expenditures, but neither should we impede the delivery of necessary services by low-cost providers. Home health agencies in the Northeast and the mid-West have been among those particularly hard-hit by the interim payment system. As the Wall Street Journal observed last year, ``If New England had been just a little greedier, its home health industry would be a lot better off now--Ironically, the region is getting clobbered by the system because of its tradition of non-profit community service and efficiency.'' Even more troubling, this flawed system may force our most cost- efficient providers to stop accepting Medicare patients with more serious health care needs. According to a recent survey by the Medicare Payment Advisory Commission, almost 40 percent of the home health agencies surveyed indicated that there were patients whom they previously would have accepted whom they no longer accept due to the IPS. Thirty-one percent of the agencies admitted that they had discharged patients due to the IPS. These discharged patients tended to be those with chronic care needs who required a large number of visits and were expensive to serve. As a consequence, these patients caused the agencies to exceed their aggregate per-beneficiary caps. I simply do not believe that Congress and the Administration intended to construct a payment system that inevitably discourages home health agencies from caring for those seniors who need care the most. Last year's Omnibus Appropriations bill did provide a small measure of relief for home health agencies. This proposal did not, however, go far enough to relieve the financial distress that cost-effective agencies are experiencing. These problems are all the more pressing given the fact that the Health Care Financing Administration was unable to meet its original deadline for implementing a prospective payment system. As a result, home health agencies will be struggling under the IPS far longer than Congress envisioned when it enacted the Balanced Budget Act. Moreover, it now appears that Congress greatly underestimated the savings stemming from the BBA. Medicare spending for home health fell by nearly 15 percent last year, and the CBO now projects that post-BBA reductions in home care spending will exceed $47 billion in FY 1998- 2002. This is a whopping three times greater than the $16 billion CBO originally estimated for that time period. I recently chaired a Permanent Subcommittee on Investigations (PSI) hearing where we heard about the financial distress and cash-flow problems cost-efficient agencies across the country are experiencing. Witnesses expressed concern that these problems are inhibiting their ability to deliver much-needed care, particularly to chronically ill patients with complex needs. More than a thousand agencies have closed in the past year because the reimbursement levels under Medicare fell so far short of their actual operating costs. Others are laying off staff or declining to accept new patients with more serious health problems. This points to the most central and critical issue--cuts of this magnitude cannot be sustained without ultimately affecting care for our most vulnerable seniors. At the PSI hearing, Barbara Smith, a senior research staff scientist with the Center for Health Services Research and Policy at George Washington University, testified that the preliminary findings of her studies suggest significant potential effects on beneficiaries, particularly those with unstable chronic care needs. Her research shows that these patients are being displaced from home care or are experiencing significant changes in services that appear to be driven by reimbursement policies rather than by clinical considerations. In her testimony, she stated: ``My main concern is that we are carving out a wedge of people who are chronically ill and have intensive needs for services who are not going to have a reliable source of care in any sector. They are becoming the health care system's untouchables.'' Moreover, the financial problems that home health agencies have been experiencing have been exacerbated by a number of new regulatory requirements imposed by HCFA, including the implementation of OASIS, the new outcome and assessment information data set; new requirements for surety bonds; sequential billing; IPS overpayment recoupment; and a new 15-minute increment home health reporting requirement. Witnesses at the PSI hearing expressed particular frustration about what Maryanna Arsenault, the CEO of the Visiting Nurse Service in Saco, Maine, termed HCFA's regulatory policy of ``implement and suspend.'' They pointed to examples such as the hastily enacted requirements for surety bonds and sequential billing where no sooner had a mandate been put into an effect, than it was suspended but only after agencies had invested significant time and resources in compliance. The legislation that my colleague from Missouri and I are introducing today, along with a bipartisan group of 16 of our colleagues, responds to these concerns. It makes needed adjustments to the Balanced Budget Act of 1997 and related federal regulations to ensure that Medicare beneficiaries have access to medically-necessary home health services. Among other provisions, the bill eliminates the automatic 15 percent reduction in Medicare home health payments now scheduled for October 1, 2000, whether or not a prospective payment system is enacted. When the Balanced Budget Act was enacted, CBO reported that the effect of the BBA would be to reduce home health expenditures by $16.1 billion between fiscal years 1998 and 2002. CBO's March 1999 revised analysis estimates those reductions to exceed $47 billion--three times the anticipated budgetary impact. A further 15 percent cut would be devastating to cost-efficient providers and would further reduce seniors' access to care. Moreover, it is unnecessary since the budget target for home health outlays will be achieved, if not exceeded, without it. The legislation will also provide supplemental ``outlier'' payments to home health agencies on a patient-by-patient basis, if the cost of care for an individual is considered to be significantly higher than average due to the patient's particular health and functional condition. This provision would remove the existing financial disincentive for agencies to care for patients with intensive medical needs who, according to recent reports issued by both the General Accounting Office (GAO) and the Medicare Payment Advisory Commission (MedPAC), are the individuals most at risk of losing access to home health care under the IPS. The current IPS unfairly penalizes historically cost-efficient home health agencies that have been most prudent with their Medicare resources. Our legislation builds on reforms in last year's Omnibus Appropriations Act by gradually raising low-cost agencies' per- beneficiary limits up to the national average over three years, or until the new home health prospective payment system is implemented and IPS is terminated. To decrease total costs in order to remain under their per- beneficiary limits, agencies have had to significantly reduce the number of visits to patients, which has, in turn, increased the cost of each visit. Implementation of OASIS has also significantly increased agencies' per-visit costs. Therefore, the legislation will increase the IPS per-visit cost limit from 106 to 108 percent of the national median. Other provisions of the legislation will: Extend the current IPS overpayment recoupment period from one to three years without interest; Revise the surety bond requirement for home health agencies to more appropriately target fraud; Eliminate the 15-minute incremental reporting requirement; and Maintain the Periodic Interim Payment (PIP) program through the first year of implementation of the prospective payment system to ensure that such a dramatic change in payment systems does not create new cash-flow problems for agencies. I ask unanimous consent that a section-by- section summary further detailing these provisions be included in the Record at the conclusion of my remarks. Mr. President, the Medicare Home Health Equity Act of 1999 will provide a measure of financial and regulatory relief to beleaguered home health agencies in order to ensure that Medicare beneficiaries have access to medically-necessary home health services, and I encourage all of my colleagues to join us as cosponsors. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record.

Ms. COLLINS

Ms. COLLINS. Mr. President, I am pleased to be a coauthor of the Independent Counsel Reform Act of 1999. At the outset, let me express my deep appreciation to Senators Specter, Lieberman, and Levin for the bipartisan spirit in which they approached the task of drafting this important legislation. Legislation of this complexity, which must balance innumerable competing but important interests, is never easy to achieve. This is particularly true when the legislation--as is the case in this bill--touches on political nerves that are still raw and fresh. We have worked very hard to achieve legislation that I believe truly serves the public interest while correcting the significant flaws in the current law. Supporting the reauthorization of the Independent Counsel Act is not likely to win this bipartisan group much applause from the Clinton administration or congressional partisans on either side of the aisle. Many of our colleagues say let it die. However, I caution my colleagues against short memories. We should not forget what prompted passage of this legislation more than two decades ago and its reauthorization three times since then. The Congress that passed the independent counsel law after Watergate wanted to assure the public that there were institutional guarantees that would never again allow the political leadership of the Justice Department to obstruct a criminal investigation of the President and the highest Government officials in the land. Their concern was not abstract or based on conjecture. The Justice Department, indeed, the Attorney General himself was implicated in the coverup of criminal acts by the incumbent administration. Do we think it couldn't happen again? Clearly, unfortunately, it could. The fact is, there will always be cases in which the Attorney General has an actual or an apparent conflict of interest. The Attorney General simply cannot credibly conduct an extensive investigation and make prosecutorial decisions involving his or her boss, the President, the Vice President, or colleagues in the Cabinet. We must have an institutional mechanism that assures the public that allegations of serious criminal conduct by high level officials will be thoroughly investigated and, if necessary, prosecuted. Only by resorting to a prosecutor beyond the actual and perceived control of the administration can the public be assured that impartial justice extends to the most influential and powerful leaders of our land. Moreover, the independent counsel law fosters public confidence in the decision not to prosecute high level Government officials. A Government official who has been investigated but cleared by an independent counsel can justifiably and with credibility reclaim his or her public reputation. Political opponents cannot reasonably claim that the official escapes scrutiny and punishment by pulling political strings at the Justice Department. We should keep in mind that the majority of the independent counsel over the past two decades have conducted prompt and cost-effective investigations that resulted in decisions not to prosecute or indict the official accused of the criminal wrongdoing. Can there be any doubt that the political credibility of these decisions was enhanced significantly because the prosecutor had no political or financial connections to the target or other members of the administration? If we return these important decisions to the Justice Department, I fear we will encourage public skepticism of decisions not to prosecute. There will always be a cloud of suspicion tainting the decision. The need for the independent counsel mechanism is as evident today as it was back in 1978, when the law was first enacted. We have learned much from our experience with the law. It is flawed. It needs significant reform. That is just what the legislation we are introducing today would do. Though I strongly believe we should reauthorize the Independent Counsel Act, I am mindful of its many shortcomings. I participated in an excellent series of hearings chaired by my colleague from Tennessee, Senator Thompson, and virtually every witness agreed that the law must be changed. The legislation we are introducing today takes significant steps to rein in the length and the cost of independent counsel investigations. It limits all independent counsel investigations to a maximum of 2 years and only allows the investigation to proceed for additional 1- year periods upon a special showing to the court. It requires independent counsel to serve full time and to submit annual budgets to the General Accounting Office. We substantially limit the number of covered officials under the act, limiting coverage to only the President, the Vice President, the Cabinet, and the President's chief of staff. By limiting the coverage of the law, we have reserved the extraordinary remedy of an independent counsel for those high-level officials who will always, by virtue of their position, pose a conflict of interest to the Justice Department. We make many other changes. We heighten the threshold for the appointment of an independent counsel, and we make clear that an independent counsel must follow the prosecutorial guidelines of the Department of Justice. We also abolish the requirement for independent counsel to report impeachable conduct to the House of Representatives. We have come up with a bill that would preserve this important mechanism while correcting the serious flaws in the current act. Let me conclude by again recognizing the efforts of my distinguished colleagues and applaud them for their leadership on this important issue. My hope is that the rest of our colleagues will take advantage of this opportunity to remedy the weaknesses in the independent counsel law before the next unfortunate and inevitable crisis occurs and the public is left doubting whether it can have confidence that the laws of this country will be enforced impartially, without regard to rank or privilege. I thank the Chair.

Ms. COLLINS

Ms. COLLINS. Mr. President, there is growing unease across this Nation about the changes in how we receive our health care, which has prompted the current debate on managed care. People worry, if they or their loved ones become ill, that their HMO may deny them coverage and force them to accept either inadequate care or financial ruin--or perhaps even both. They believe vital decisions affecting their lives will be made not by a supportive family doctor but by an unfeeling bureaucracy. All Members agree that medically necessary patient care should never be sacrificed to the bottom line and that health care decisions should be in the hands of medical professionals, not in the hands of insurance accountants. We do, however, face an extremely delicate balancing act as we attempt to respond to concerns without resorting to unduly burdensome Federal controls and mandates that will further drive up the costs of health insurance and cause some people to lose their coverage altogether. That is the crux of this entire debate. I am very alarmed by recent reports that American employers everywhere, from giant multinational corporations to the small corner store, are facing huge hikes in their medical insurance coverage for their employees, averaging over 8 percent, and sometimes soaring to 20 percent or more. This is a remarkable contrast to the past few years when premiums rose less than 3 percent, if at all. We know for a fact that increasing health insurance premiums cause significant losses in coverage. That is the primary reason why I am so opposed to the approach offered by the Senator from Massachusetts. Even if we discard CBO's previous estimate that the Kennedy bill would increase premiums by 6.1 percent and accept the newly revised estimate of 4.8 percent, the fact is the CBO score for the Democratic bill is six times higher than the cost for the bill we are proposing. Moreover, the Lewin Associates, in a study for the AFL-CIO, has estimated that for every 1-percent increase in premiums, we are jeopardizing the insurance coverage of as many as 300,000 Americans. Based on these projections, the passage of the Kennedy legislation could result in the loss of coverage for more than 1.4 million Americans. That is more than the population of the entire State of Maine. This is a significant cost. If you look at the CBO estimate of the revised Kennedy bill, CBO estimates it will impose additional costs to the private sector of nearly $41 billion over the next 5 years. That is a cost that is going to cause employers to drop insurance altogether or employees to be unable to pay their share of the premium. At a time when the number of uninsured Americans, unfortunately, is increasing with every year, we should be acting to decrease the number of uninsured Americans, not impose costly new burdens that are going to cause some of the most vulnerable working Americans to lose their coverage altogether. Our approach, on the other hand, provides the key protections that consumers need and want without causing costs to soar. It applies these protections responsibly, where they are needed. Our legislation does not preempt, but rather builds upon the good work the States have done in the area of patients' rights and protections. States have had the primary responsibility for the regulation of health insurance since the 1940s. As someone who has worked in State government for 5 years overseeing a Bureau of Insurance, I know State regulators and State legislators have done an excellent job of responding to the needs and concerns of their citizens. Let me give you just a few examples. Mr. President, 47 States have already passed laws prohibiting gag clauses that restrict communications between patients and their doctors; 40 States have requirements for emergency care; all 50 States have requirements for grievance procedures; 36 require direct access to an obstetrician or a gynecologist. The States have acted, without any prod or mandate from Washington, to protect health care consumers. That is why the National Association of Insurance Commissioners supports the approach we have taken in our bill. In a March letter to the chairman of the Committee on Health, Education, Labor, and Pensions, the NAIC pointed out: It is our belief that states should and will continue the efforts to develop creative, flexible, market-sensitive protections for health consumers in fully insured plans, and Congress should focus attention on those consumers who have no protections in self-funded ERISA plans. That is exactly the approach we have taken. Currently, Federal law prohibits States from regulating the self-funded, employer-sponsored health plans that cover 48 million Americans. Our legislation is intended to protect the unprotected. We would extend many of the same rights and protections to these consumers and their families that those in State-regulated plans already enjoy. For the first time they will be guaranteed the right to talk freely and openly with their doctors about their treatment options. We would ban the gag clauses. They will be guaranteed coverage for emergency room care that a ``prudent layperson'' would deem medically necessary without prior authorization. They will be able to see a pediatrician or an OB/GYN without a referral from their plan's ``gatekeeper.'' They will have the option of seeing a doctor who is not part of the HMO's network. They will be guaranteed access to nonformulary drugs when it is medically necessary. They will have an assurance of continuity of care if their health plan terminates its contract with their doctor or hospital. The opponents of our legislation contend that the Federal Government should simply preempt the States' patient protection laws unless they are virtually identical to what the Federal Government would require. But the States' approaches to these patient protections vary widely. For example, States may have emergency requirements, but not exactly the same standard that the Democrats in Senator Kennedy's bill would impose on everyone. States that have already acted in this area would have to make extensive changes to their laws, if they are forced to comply with the one-size-fits-all model. Moreover, what if the State has made an affirmative decision not to act in one of these areas? What if the bill failed in the legislature or was vetoed by the Governor? Let me give you a recent example from my State. Maine law requires plans to allow direct access to ob/gyn care-- without a referral from the primary care physician--but only for an annual visit. Maine also requires plans to allow ob/gyns to serve as the primary care provider. Our State Legislature recently decided that the current provisions provide sufficient protection and rejected a bill that would have expanded the direct access provision, primarily out of concern that it would drive up premium costs. I would note that this decision was made by a legislature controlled by the Democratic Party. In cases like these, the Kennedy proposal for a one-size-fits-all model would be a clear pre-emption of State authority. Other provisions of our bill provide new protections for millions more Americans. A key provision of our bill builds upon the existing regulatory framework under ERISA to give all 124 million Americans in employer-sponsored plans assurance that they will get the care that they need when they need it. The legislation will enhance current ERISA information disclosure requirements and penalties and strengthen existing requirements for coverage determinations, grievances and appeals, including the addition of a new requirement for independent, external review. All 124 million Americans in employer-sponsored plans will be entitled to clear and complete information about their health plan-- about what it covers and does not cover, about any cost-sharing requirements, and about the plan's providers. Helping patients understand their coverage before they need to use it will help to avoid coverage disputes later. The goal of any patients' rights legislation should be to resolve disputes about coverage up front, when the care is needed, not months or even years later in a court room. Our bill would accomplish this goal by creating a strong internal and an independent external review process. First, patients or doctors who are unhappy with an HMO's decision could appeal it internally through a review conducted by individuals with ``appropriate expertise'' who were not involved in the initial decision. Moreover, this review would have to be conducted by a physician if the denial is based on a determination that the service is not medically necessary or is an experimental treatment. Patients could expect results from this review within 30 days, or 72 hours in cases when delay poses a serious risk to the patient's life or health. Patients turned down by this internal review would then have the right to a free, external review by medical experts who are completely independent of the health plan. This review must be completed within 30 days--and even faster in a medical emergency or when the delay would be detrimental to the patient's health. Moreover, the decision of these outside reviewers is binding on the health plan, but not on the patient. If the patient is not satisfied, he or she retains the right to sue in federal or state court for attorneys' fees, court costs, the value of the benefit and injunctive relief. Our bill places treatment decisions in the hands of doctors, not lawyers. If your HMO denies you treatment that your doctor believes is medically necessary, you should not have to resort to a costly and lengthy court battle to get the care you need. You should not have to hire a lawyer and file an expensive lawsuit to get the treatment. Our approach contrasts with the approach taken in the measure offered by Senators Daschle and Kennedy that would encourage patients to sue health plans. I do not support Senator Kennedy's approach. You just can't sue your way to quality health care. We would solve problems up front, when the care is needed, not months or even years later after the harm has occurred. According to the GAO, it takes an average of 33 months to resolve malpractice cases. This does nothing to ensure a patient's right to timely and appropriate care. Moreover, patients only receive 43 cents out of every dollar awarded in malpractice cases. The rest winds up in the pockets of trial lawyers and administrators of the court and insurance systems. I met with a group of Maine employers who expressed their serious concerns about the Kennedy proposal to expand liability for health plans and employers. The Assistant Director for Human Resources at Bowdoin College talked about how moving to a self-funded, ERISA plan enabled them to continue to offer affordable coverage to Bowdoin employees when premiums for their fully-insured plan skyrocketed in the late 1980s. Since they self-funded, they have actually been able to lower premiums for their employees, while, at the same time, enhance their benefit package with such features as well-baby care, free annual physicals, and prescription drug cards with low copayments. They told me that the Democrats' proposal to expand liability seriously jeopardizes their ability to offer affordable coverage for their employees. Similar concerns were expressed by the Maine Municipal Association, L.L. Bean, Bath Iron Works, and other responsible Maine employers. And finally, our amendment will make health insurance more affordable by allowing self-employed individuals to deduct the full amount of their health care premiums. Establishing parity in the tax treatment of health insurance costs between the self-employed and those working for large businesses is a matter of basic equity, and it will also help to reduce the number of uninsured, but working, Americans. It will make health insurance more affordable for the 82,000 people in Maine who are self-employed. They include our lobstermen, our hairdressers, our electricians, our plumbers, and the many owners of mom-and-pop stores that dot communities throughout my state. Mr. President, I believe that this amendments strikes the right balance as we effectively address concerns about quality and choice without resorting to unduly burdensome federal controls and mandates that will further drive up costs and cause some Americans to lose their health insurance altogether, and I urge all of my colleagues to join me in supporting it.

Ms. COLLINS. Mr. President, I thank the assistant majority leader. The goal of any patients' rights legislation should be to resolve disputes about coverage, about access to treatment upfront when the care is needed, not months or even years later in a courtroom. That is a fundamental difference between the bill supported by Senator Kennedy and the proposal that we have advanced. Our legislation would accomplish this goal by creating a strong internal and external review process. If a patient or a physician is unhappy with an HMO's decision, the patient or the provider can appeal it internally for a review. If they are unhappy with the review decision, the internal review, they have the right for a free and quick review by an external panel. The goal of our legislation is to ensure that people get the treatment they have been promised. Moreover, the decision of the outside reviewers is binding on the health plan but not on the patient. If the patient is still not satisfied, he or she retains the right to sue in Federal or State court for attorneys' fees, court costs, value of the benefit, and injunctive relief. Our bill places treatment decisions in the hands of physicians, not trial lawyers. If your HMO denies you the treatment your doctor believes is medically necessary, you should not have to resort to a costly and lengthy court battle to get the care you need. You should not have to hire a lawyer and file an expensive lawsuit to get treatment. Our approach contrasts with the approach taken in the measure offered by Senator Kennedy. Their approach, which I do not support, would encourage patients to sue health care plans. You just can't sue your way to quality health care. We want to solve the problems upfront, when the care is needed, not months or even years later, after the harm has occurred. According to the GAO, it takes an average of 33 months to resolve medical malpractice cases. This does nothing to ensure a patient's right to timely and appropriate care. Moreover, patients only receive 43 cents out of every dollar awarded in malpractice cases. The rest winds up in the pockets of trial lawyers and the administrators of court and insurance systems. Suing is not the answer. The answer is having a fair, free, and prompt appeals process that gets patients the care they need, the care they were promised before harm can be done. I recently met with a group of Maine employers who expressed their very serious concerns about the Kennedy proposal to expand liability for health plans and employers. One of these employers was Bowdoin College in Brunswick, ME. I want to talk briefly about Bowdoin's experience. They moved to a self-funded plan in order to improve the coverage provided to their employees. They now provide an annual physical, low- cost prescription coverage, and well-baby care. But they told me that if the Democrats' proposal to expand liability goes through, it would seriously jeopardize their ability to offer affordable coverage for their employees. They would return to the insurance market and to a plan less favorable to their employees. I thank the assistant majority leader for yielding the additional minute. I yield back my time to the assistant majority leader.

Ms. COLLINS

Ms. COLLINS. Mr. President, on behalf of myself and my distinguished colleagues Senator Durbin and Senator Grassley, I rise today to introduce the Medicare Fraud Prevention and Enforcement Act of 1999. Both of these Senators have been leaders in the fight against Medicare fraud. This bill will help solve an almost $13 billion problem. According to the HHS Inspector General, waste, fraud, abuse, and other improper payments drained about that much from the Medicare Trust Fund in fiscal year 1998. Fraud and abuse not only compromise the solvency of the Medicare program but also, in some cases, directly affect the quality of care delivered to the 38 million older and disabled Americans who depend upon this program. Although this legislation will not prevent all of the waste, fraud, and abuse that now plagues Medicare, it represents an important step toward a solution to a problem that threatens the financial integrity of this vital social program. Unfortunately, there is no line item in the budget called ``Medicare Waste, Fraud and Abuse'' that we can simply cut to eliminate this insidious problem. It is a complicated, difficult challenge to plug the holes that make Medicare at high risk for fraud and abuse. In May 1997, the Permanent Subcommittee on Investigations, which I chair, started an extensive investigation of the Medicare program. So far, my Subcommittee has held three hearings in an effort to expose fraud and abuse within Medicare. As the Subcommittee's hearings revealed, we are now seeing a dangerous and growing problem with Medicare fraud. Career criminals and bogus providers with no background in health care are increasingly entering the system with the sole purpose of stealing hard-earned taxpayer dollars from the Medicare Trust Fund. Only tough deterrents can prevent these unscrupulous providers from entering the Medicare system. At the same time, however, we must be careful not to make entry into the Medicare program so difficult that the process deters legitimate health care providers. We owe it to the American public to strike this crucial balance. During a Subcommittee hearing earlier last year, we heard testimony describing egregious examples of fraud committed by unscrupulous health care providers. For example, two physicians who submitted in excess of $690,000 in fraudulent Medicare claims listed nothing more than a Brooklyn laundromat as their office location. We were also told that over $6 million in Medicare funds were sent to durable medical equipment companies that provided no services; one of these companies even listed a fictitious address that would have placed the firm in the middle of a runway at the Miami International Airport. While the number of unscrupulous providers in the Medicare program is very small relative to the number of honest providers, these criminals nevertheless are able to steal millions of dollars from Medicare, wreaking financial havoc on the program. This fraud contributes to the tremendous increase in health care expenditures and adversely affects the quality of health care given to our nation's elderly and disabled. In response to the serious problems identified through my Subcommittee's investigation, Senator Durbin, Senator Grassley, and I are introducing legislation designed to prevent waste, fraud, and abuse by strengthening the Medicare enrollment process, expanding certain standards of participation, and reducing erroneous payments. Among other things, this legislation gives additional enforcement tools to the federal law enforcement agencies pursuing health care criminals. One of the most important steps this bill takes is to prevent scam artists and criminals from securing the provider numbers that permit them to gain access to the Medicare system. Specifically, this bill requires background investigations to be conducted on all new providers to prevent career criminals from getting involved with Medicare in the first place. In addition, this bill requires site inspections of new durable medical equipment suppliers and community mental health centers prior to their being given a provider number. This will help close the system to those who apply for a provider number from a bogus or nonexistent location. Together, these provisions are designed to make it more difficult for unscrupulous individuals to obtain a Medicare provider number and begin submitting fraudulent claims. This legislation also requires community mental health centers to meet applicable certification or licensing requirements in their state before they are issued a provider number, and requires the Secretary of Health and Human Services to establish additional standards for such centers to participate in the Medicare system. In September of last year, Health Care Financing Administration Administrator Nancy-Ann DeParle acknowledged the extensive fraud associated with community mental health centers as she announced a 10- point plan to curb abuses within this program. I applaud Administrator DeParle for taking a step in the right direction, but we can go further. Our legislation requires each agency that bills Medicare on behalf of physicians or provider groups to register with HCFA and receive a unique registration number. Many billing companies receive a percentage of the claims they submit that are paid by Medicare. Unethical companies, therefore, have a financial incentive to inflate the cost or number of claims submitted. Because billing companies do not have a Medicare provider number, however, it is difficult for HCFA to sanction or exclude them from billing Medicare. Hence, there is little to deter unscrupulous billing companies from submitting inflated claims. This bill makes all companies accountable for their billings through a uniform registration system. This legislation also provides that Medicare contractors should be held financially accountable for any amounts they improperly pay to excluded providers 60 or more days after being notified of the exclusion. There have been numerous instances in which a Medicare contractor has continued to pay a provider after HCFA had excluded the provider from participating in the program. As a result, excluded providers have sometimes continued to receive unauthorized payments due to the negligence of contractors. Why should American taxpayers swallow the cost of improper payments when a contractor has been specifically told not to pay a particular provider and yet continues to do so? This bill would help deter such negligence. I realize, however, that this is a complex issue and that this accountability provision may require further refinement. Under our legislation, providers also would be required to refund overpayments even if they filed for bankruptcy, if the overpayments were incurred through fraudulent means. This money would then be deposited into the Medicare Trust Fund. Some bad actors have used bankruptcy as a shield against repaying Medicare. Essentially, unscrupulous individuals steal literally hundreds of thousands of dollars from the Medicare program, hide or spend it quickly, and then file for bankruptcy protection when they are caught, leaving the Medicare Trust Fund in debt. With this bill, we intend to close this loophole. Another provision of this legislation aims to halt trafficking in provider numbers. The bill makes it a felony to knowingly, purchase, sell, or distribute Medicare beneficiary or provider numbers with the intent to defraud. Our investigation revealed that there is a growing problem with unscrupulous providers using ``recruiters'' to fraudulently obtain Medicare beneficiary identification numbers, thereafter using these numbers to bill for services never delivered. This problem must be stopped. Our legislation will also grant much needed statutory law enforcement authority to qualified special agents of the Department of Health and Human Service's Office of Inspector General. Even though one of their major responsibilities is to enforce federal criminal laws, these special agents have no statutory authority to carry firearms, make arrests, or execute search warrants. The office now operates under a temporary Memorandum of Understanding with the Department of Justice. This lack of full law enforcement authority jeopardizes the safety of HHS-OIG special agents and witnesses under their protection. As my Subcommittee's hearings have demonstrated, more and more career criminals are becoming involved in health care fraud; this increases the potential danger to the agents charged with investigating these crimes. It is time for Congress to spell out the law enforcement authorities of the HHS Office of Inspector General in a more permanent way. I am very pleased that Senator Grassley, who has been a leader in the fight against Medicare fraud, waste, and abuse, has agreed to be an original cosponsor of our legislation. Senator Durbin and I have incorporated into our legislation a valuable proposal that Senator Grassley sponsored, namely requiring the use of Universal Product Numbers (``UPNs'') on claims forms for reimbursement under the Medicare program. Senator Grassley, and a bi-partisan coalition, introduced this concept as a freestanding bill, S.256, which I cosponsored earlier this year. These provisions of our legislation would require that a UPN that uniquely identifies the item would be affixed by the manufacturer to medical equipment and supplies. The UPNs would be based on commercially-accepted identification standards, however, customized equipment would not be required to comply with this requirement. Senator Durbin and I believe that this proposal is complementary to our package of reforms and strengthens the legislation we are introducing today. Mr. President, the bill we are introducing today represents our concrete commitment to improve the Medicare program by providing additional tools that are needed to combat the extensive waste, fraud, and abuse that plague our nation's most important health care program. The unscrupulous individuals who commit Medicare fraud drive legitimate providers out of business, cost taxpayers vast sums of money, deliver substandard services and equipment, and endanger our elderly by not providing needed services. We must use common sense and cost-effective solutions to curtail the spreading infection of fraud that threatens the vitality of Medicare. Yet, we must do more. We have a serious responsibility to older Americans across the country and to the nation's taxpayers to protect the Medicare program. We urge our colleagues to join us in this bi- partisan effort to strengthen and improve the Medicare program. Thank you, Mr. President, and I ask unanimous consent that the bill, a section-by-section analysis of the bill, and four letters endorsing the legislation be printed in the Record.

Ms. COLLINS

Ms. COLLINS. Mr. President, on behalf of myself and my distinguished colleagues Senator Durbin and Senator Grassley, I rise today to introduce the Medicare Fraud Prevention and Enforcement Act of 1999. Both of these Senators have been leaders in the fight against Medicare fraud. This bill will help solve an almost $13 billion problem. According to the HHS Inspector General, waste, fraud, abuse, and other improper payments drained about that much from the Medicare Trust Fund in fiscal year 1998. Fraud and abuse not only compromise the solvency of the Medicare program but also, in some cases, directly affect the quality of care delivered to the 38 million older and disabled Americans who depend upon this program. Although this legislation will not prevent all of the waste, fraud, and abuse that now plagues Medicare, it represents an important step toward a solution to a problem that threatens the financial integrity of this vital social program. Unfortunately, there is no line item in the budget called ``Medicare Waste, Fraud and Abuse'' that we can simply cut to eliminate this insidious problem. It is a complicated, difficult challenge to plug the holes that make Medicare at high risk for fraud and abuse. In May 1997, the Permanent Subcommittee on Investigations, which I chair, started an extensive investigation of the Medicare program. So far, my Subcommittee has held three hearings in an effort to expose fraud and abuse within Medicare. As the Subcommittee's hearings revealed, we are now seeing a dangerous and growing problem with Medicare fraud. Career criminals and bogus providers with no background in health care are increasingly entering the system with the sole purpose of stealing hard-earned taxpayer dollars from the Medicare Trust Fund. Only tough deterrents can prevent these unscrupulous providers from entering the Medicare system. At the same time, however, we must be careful not to make entry into the Medicare program so difficult that the process deters legitimate health care providers. We owe it to the American public to strike this crucial balance. During a Subcommittee hearing earlier last year, we heard testimony describing egregious examples of fraud committed by unscrupulous health care providers. For example, two physicians who submitted in excess of $690,000 in fraudulent Medicare claims listed nothing more than a Brooklyn laundromat as their office location. We were also told that over $6 million in Medicare funds were sent to durable medical equipment companies that provided no services; one of these companies even listed a fictitious address that would have placed the firm in the middle of a runway at the Miami International Airport. While the number of unscrupulous providers in the Medicare program is very small relative to the number of honest providers, these criminals nevertheless are able to steal millions of dollars from Medicare, wreaking financial havoc on the program. This fraud contributes to the tremendous increase in health care expenditures and adversely affects the quality of health care given to our nation's elderly and disabled. In response to the serious problems identified through my Subcommittee's investigation, Senator Durbin, Senator Grassley, and I are introducing legislation designed to prevent waste, fraud, and abuse by strengthening the Medicare enrollment process, expanding certain standards of participation, and reducing erroneous payments. Among other things, this legislation gives additional enforcement tools to the federal law enforcement agencies pursuing health care criminals. One of the most important steps this bill takes is to prevent scam artists and criminals from securing the provider numbers that permit them to gain access to the Medicare system. Specifically, this bill requires background investigations to be conducted on all new providers to prevent career criminals from getting involved with Medicare in the first place. In addition, this bill requires site inspections of new durable medical equipment suppliers and community mental health centers prior to their being given a provider number. This will help close the system to those who apply for a provider number from a bogus or nonexistent location. Together, these provisions are designed to make it more difficult for unscrupulous individuals to obtain a Medicare provider number and begin submitting fraudulent claims. This legislation also requires community mental health centers to meet applicable certification or licensing requirements in their state before they are issued a provider number, and requires the Secretary of Health and Human Services to establish additional standards for such centers to participate in the Medicare system. In September of last year, Health Care Financing Administration Administrator Nancy-Ann DeParle acknowledged the extensive fraud associated with community mental health centers as she announced a 10- point plan to curb abuses within this program. I applaud Administrator DeParle for taking a step in the right direction, but we can go further. Our legislation requires each agency that bills Medicare on behalf of physicians or provider groups to register with HCFA and receive a unique registration number. Many billing companies receive a percentage of the claims they submit that are paid by Medicare. Unethical companies, therefore, have a financial incentive to inflate the cost or number of claims submitted. Because billing companies do not have a Medicare provider number, however, it is difficult for HCFA to sanction or exclude them from billing Medicare. Hence, there is little to deter unscrupulous billing companies from submitting inflated claims. This bill makes all companies accountable for their billings through a uniform registration system. This legislation also provides that Medicare contractors should be held financially accountable for any amounts they improperly pay to excluded providers 60 or more days after being notified of the exclusion. There have been numerous instances in which a Medicare contractor has continued to pay a provider after HCFA had excluded the provider from participating in the program. As a result, excluded providers have sometimes continued to receive unauthorized payments due to the negligence of contractors. Why should American taxpayers swallow the cost of improper payments when a contractor has been specifically told not to pay a particular provider and yet continues to do so? This bill would help deter such negligence. I realize, however, that this is a complex issue and that this accountability provision may require further refinement. Under our legislation, providers also would be required to refund overpayments even if they filed for bankruptcy, if the overpayments were incurred through fraudulent means. This money would then be deposited into the Medicare Trust Fund. Some bad actors have used bankruptcy as a shield against repaying Medicare. Essentially, unscrupulous individuals steal literally hundreds of thousands of dollars from the Medicare program, hide or spend it quickly, and then file for bankruptcy protection when they are caught, leaving the Medicare Trust Fund in debt. With this bill, we intend to close this loophole. Another provision of this legislation aims to halt trafficking in provider numbers. The bill makes it a felony to knowingly, purchase, sell, or distribute Medicare beneficiary or provider numbers with the intent to defraud. Our investigation revealed that there is a growing problem with unscrupulous providers using ``recruiters'' to fraudulently obtain Medicare beneficiary identification numbers, thereafter using these numbers to bill for services never delivered. This problem must be stopped. Our legislation will also grant much needed statutory law enforcement authority to qualified special agents of the Department of Health and Human Service's Office of Inspector General. Even though one of their major responsibilities is to enforce federal criminal laws, these special agents have no statutory authority to carry firearms, make arrests, or execute search warrants. The office now operates under a temporary Memorandum of Understanding with the Department of Justice. This lack of full law enforcement authority jeopardizes the safety of HHS-OIG special agents and witnesses under their protection. As my Subcommittee's hearings have demonstrated, more and more career criminals are becoming involved in health care fraud; this increases the potential danger to the agents charged with investigating these crimes. It is time for Congress to spell out the law enforcement authorities of the HHS Office of Inspector General in a more permanent way. I am very pleased that Senator Grassley, who has been a leader in the fight against Medicare fraud, waste, and abuse, has agreed to be an original cosponsor of our legislation. Senator Durbin and I have incorporated into our legislation a valuable proposal that Senator Grassley sponsored, namely requiring the use of Universal Product Numbers (``UPNs'') on claims forms for reimbursement under the Medicare program. Senator Grassley, and a bi-partisan coalition, introduced this concept as a freestanding bill, S.256, which I cosponsored earlier this year. These provisions of our legislation would require that a UPN that uniquely identifies the item would be affixed by the manufacturer to medical equipment and supplies. The UPNs would be based on commercially-accepted identification standards, however, customized equipment would not be required to comply with this requirement. Senator Durbin and I believe that this proposal is complementary to our package of reforms and strengthens the legislation we are introducing today. Mr. President, the bill we are introducing today represents our concrete commitment to improve the Medicare program by providing additional tools that are needed to combat the extensive waste, fraud, and abuse that plague our nation's most important health care program. The unscrupulous individuals who commit Medicare fraud drive legitimate providers out of business, cost taxpayers vast sums of money, deliver substandard services and equipment, and endanger our elderly by not providing needed services. We must use common sense and cost-effective solutions to curtail the spreading infection of fraud that threatens the vitality of Medicare. Yet, we must do more. We have a serious responsibility to older Americans across the country and to the nation's taxpayers to protect the Medicare program. We urge our colleagues to join us in this bi- partisan effort to strengthen and improve the Medicare program. Thank you, Mr. President, and I ask unanimous consent that the bill, a section-by-section analysis of the bill, and four letters endorsing the legislation be printed in the Record.

Ms. COLLINS

Ms. COLLINS. Mr. President, I thank my colleague from Illinois for his courtesy. (The remarks of Ms. Collins and Mr. Durbin pertaining to the introduction of S. 1231 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Ms. COLLINS

Ms. COLLINS. I thank the Chair. Mr. President, I will be speaking off the time allocated to the Republican side. For the information of my colleagues who are waiting to speak, I do not anticipate taking more than 10 minutes. (The remarks of Ms. Collins pertaining to the introduction of S. 1225 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Ms. COLLINS. I yield the floor. Mr. WELLSTONE addressed the Chair.

Ms. COLLINS

Ms. COLLINS. Mr. President, I rise today to introduce the Rural Education Initiative Act. I am very pleased to be joined by my colleagues Senators Gregg, Conrad, Kerrey, Burns, Hutchinson, and Hagel as original cosponsors of this commonsense, bipartisan proposal to help rural schools make better use of Federal education dollars. I also want to acknowledge the valuable assistance provided by the American Association of School Administrators in the drafting of this legislation. The Elementary and Secondary Education Act authorizes formula and competitive grants that allow many of our local school districts to improve the education of their students. These Federal grants support efforts to promote such laudable goals as the professional development of teachers, the incorporation of technology into the classroom, gifted and talented programs and class-size reduction. Schools receive several categorical grants supporting these programs, each with its own authorized activities and regulations and each with its own redtape and paperwork. Unfortunately, as valuable as these programs may be for thousands of predominantly urban and suburban school districts, they simply do not work well in rural areas. The Rural Education Initiative Act will make these Federal grant programs more flexible in order to help school districts in rural communities with fewer than 600 students. Six hundred may not sound like many students to some of my colleagues from more populous or urban States, but they may be surprised to learn that more than 35 percent of all school districts in the United States have 600 or fewer students. In my State of Maine, 56 percent, or 158 of its 284 school districts, have fewer than 600 students. The two education initiatives contained in our legislation will overcome some of the most challenging obstacles that these districts face in participating in Federal education programs. The first rural education initiative deals with four formula grants. Formula-driven grants from some education programs simply do not reach small rural schools in amounts that are sufficient to improve curriculum and teaching in the same way that they do for larger suburban or urban schools. This is because the grants are based on school district enrollment. Unfortunately, these individual grants confront smaller schools with a dilemma; namely, they simply may not receive enough funding from any single grant to carry out meaningful activity. Our legislation will allow a district to combine the funds from four categorical programs. Under the Rural Education Initiative Act, rural districts will be permitted to combine the funds from these programs and use the money to support reform efforts of their own choice to improve the achievement of their students and the quality of the instruction. Instead of receiving grants from four independent programs, each insufficient to accomplish the program's objectives, these rural districts will have the flexibility to combine the grants and the dollars to support locally chosen educational goals. I want to emphasize that the rural initiative I have just described does not change the level of funding a district receives under these formula grant programs. It simply gives these rural districts the flexibility they need to use the funds far more effectively. The second rural initiative in our legislation involves several competitive grant programs that present small rural schools with a different problem. Because many rural school districts simply do not have the resources required to hire grant writers and to manage a grant, they are essentially shut out of those programs where grants are competitively awarded. The Rural Education Initiative Act will give small, rural districts a formula grant in lieu of eligibility for the competitive programs of the ESEA. A district will be able to combine this new formula grant with the funds from the regular formula grants and use the combined moneys for any purpose that will improve student achievement or teaching quality. Districts might use these funds, for example, to hire a new reading or math teacher, to fund important professional development, to offer a program for gifted and talented students, to purchase high technology, or to upgrade a science lab, or to pay for any other activity that meets the district's priorities and needs. Let me give you a specific example of what these two initiatives will mean for one Maine school district, School Administrative District 33. This district serves two northern Maine communities, Frenchville and St. Agatha. Each of these communities has about 200 school-age children. SAD 33 receives four separate formula grants ranging from about $1,900 from the Safe and Drug Free Schools Program to $9,500 under the Class Size Reduction Act. You can see the problem right there. The amounts of the grants under these programs are so small that they really are not useful in accomplishing the goals of the program. The total received by this small school district for all four of the programs is just under $16,000. But each grant must be applied for separately, used for different--and federally mandated--purposes, and accounted for independently. Under our legislation, this school district will be freed from the multiple applications and reports, and it will have $16,000 to use for locally identified education priorities. In addition, since SAD 33 does not have the resources needed to apply for the current competitively awarded grant programs, our legislation will allow this school district to receive a supplemental formula grant of $34,000. The bottom line is, under my legislation this district will have about $50,000 and the flexibility to use these Federal funds to address its most pressing educational needs. But with this flexibility and additional funding comes responsibility. In return for the advantages and flexibility that our legislation provides, participating districts will be held accountable for demonstrating improved student performance. Each participating school district will be required to administer the same test of its choice annually during the 5-year period of this program. Based on the results of this test, a district will have to show that student achievement has improved in order to continue its participation beyond the 5-year period. Since Maine and many other States already administer annual education assessments, districts will not incur any significant administrative burden in accounting and complying with this accountability provision. More important, the schools will be held responsible for what is really important, and that is improved student achievement, rather than for time-consuming paperwork in the form of applications and reports. As one rural Maine superintendent told me: ``Give me the resources I need plus the flexibility to use them, and I am happy to be held accountable for improved student performance. It will happen.'' The Federal Government has an important role to play in improving education in our schools. But it has a supporting role, whereas States and communities have the lead role. We must improve our education system, we must enhance student achievement, without requiring every school in this Nation to adopt a plan designed in Washington and without imposing burdensome and costly regulations in return for Federal assistance. The two initiatives contained in our bill will accomplish those goals. They will allow rural schools to use their own strategies for improvement without the encumbrance of onerous regulations and unnecessary paperwork. It is my hope that we will be able to enact this important and bipartisan legislation this year. I thank my colleagues for their attention.

Ms. COLLINS

Ms. COLLINS. Mr. President, I rise today to introduce the Rural Education Initiative Act. I am very pleased to be joined by my colleagues Senators Gregg, Conrad, Kerrey, Burns, Hutchinson, and Hagel as original cosponsors of this commonsense, bipartisan proposal to help rural schools make better use of Federal education dollars. I also want to acknowledge the valuable assistance provided by the American Association of School Administrators in the drafting of this legislation. The Elementary and Secondary Education Act authorizes formula and competitive grants that allow many of our local school districts to improve the education of their students. These Federal grants support efforts to promote such laudable goals as the professional development of teachers, the incorporation of technology into the classroom, gifted and talented programs and class-size reduction. Schools receive several categorical grants supporting these programs, each with its own authorized activities and regulations and each with its own redtape and paperwork. Unfortunately, as valuable as these programs may be for thousands of predominantly urban and suburban school districts, they simply do not work well in rural areas. The Rural Education Initiative Act will make these Federal grant programs more flexible in order to help school districts in rural communities with fewer than 600 students. Six hundred may not sound like many students to some of my colleagues from more populous or urban States, but they may be surprised to learn that more than 35 percent of all school districts in the United States have 600 or fewer students. In my State of Maine, 56 percent, or 158 of its 284 school districts, have fewer than 600 students. The two education initiatives contained in our legislation will overcome some of the most challenging obstacles that these districts face in participating in Federal education programs. The first rural education initiative deals with four formula grants. Formula-driven grants from some education programs simply do not reach small rural schools in amounts that are sufficient to improve curriculum and teaching in the same way that they do for larger suburban or urban schools. This is because the grants are based on school district enrollment. Unfortunately, these individual grants confront smaller schools with a dilemma; namely, they simply may not receive enough funding from any single grant to carry out meaningful activity. Our legislation will allow a district to combine the funds from four categorical programs. Under the Rural Education Initiative Act, rural districts will be permitted to combine the funds from these programs and use the money to support reform efforts of their own choice to improve the achievement of their students and the quality of the instruction. Instead of receiving grants from four independent programs, each insufficient to accomplish the program's objectives, these rural districts will have the flexibility to combine the grants and the dollars to support locally chosen educational goals. I want to emphasize that the rural initiative I have just described does not change the level of funding a district receives under these formula grant programs. It simply gives these rural districts the flexibility they need to use the funds far more effectively. The second rural initiative in our legislation involves several competitive grant programs that present small rural schools with a different problem. Because many rural school districts simply do not have the resources required to hire grant writers and to manage a grant, they are essentially shut out of those programs where grants are competitively awarded. The Rural Education Initiative Act will give small, rural districts a formula grant in lieu of eligibility for the competitive programs of the ESEA. A district will be able to combine this new formula grant with the funds from the regular formula grants and use the combined moneys for any purpose that will improve student achievement or teaching quality. Districts might use these funds, for example, to hire a new reading or math teacher, to fund important professional development, to offer a program for gifted and talented students, to purchase high technology, or to upgrade a science lab, or to pay for any other activity that meets the district's priorities and needs. Let me give you a specific example of what these two initiatives will mean for one Maine school district, School Administrative District 33. This district serves two northern Maine communities, Frenchville and St. Agatha. Each of these communities has about 200 school-age children. SAD 33 receives four separate formula grants ranging from about $1,900 from the Safe and Drug Free Schools Program to $9,500 under the Class Size Reduction Act. You can see the problem right there. The amounts of the grants under these programs are so small that they really are not useful in accomplishing the goals of the program. The total received by this small school district for all four of the programs is just under $16,000. But each grant must be applied for separately, used for different--and federally mandated--purposes, and accounted for independently. Under our legislation, this school district will be freed from the multiple applications and reports, and it will have $16,000 to use for locally identified education priorities. In addition, since SAD 33 does not have the resources needed to apply for the current competitively awarded grant programs, our legislation will allow this school district to receive a supplemental formula grant of $34,000. The bottom line is, under my legislation this district will have about $50,000 and the flexibility to use these Federal funds to address its most pressing educational needs. But with this flexibility and additional funding comes responsibility. In return for the advantages and flexibility that our legislation provides, participating districts will be held accountable for demonstrating improved student performance. Each participating school district will be required to administer the same test of its choice annually during the 5-year period of this program. Based on the results of this test, a district will have to show that student achievement has improved in order to continue its participation beyond the 5-year period. Since Maine and many other States already administer annual education assessments, districts will not incur any significant administrative burden in accounting and complying with this accountability provision. More important, the schools will be held responsible for what is really important, and that is improved student achievement, rather than for time-consuming paperwork in the form of applications and reports. As one rural Maine superintendent told me: ``Give me the resources I need plus the flexibility to use them, and I am happy to be held accountable for improved student performance. It will happen.'' The Federal Government has an important role to play in improving education in our schools. But it has a supporting role, whereas States and communities have the lead role. We must improve our education system, we must enhance student achievement, without requiring every school in this Nation to adopt a plan designed in Washington and without imposing burdensome and costly regulations in return for Federal assistance. The two initiatives contained in our bill will accomplish those goals. They will allow rural schools to use their own strategies for improvement without the encumbrance of onerous regulations and unnecessary paperwork. It is my hope that we will be able to enact this important and bipartisan legislation this year. I thank my colleagues for their attention.

Ms. COLLINS

Ms. COLLINS. Mr. President, I ask unanimous consent that the Senate now proceed to a period of morning business with Senators permitted to speak for up to 10 minutes each, to extend for 40 minutes equally divided between the two leaders.

Ms. COLLINS

Ms. COLLINS. Mr. President, I am pleased to be an original cosponsor of S. 331, the Work Incentives Improvement Act of 1999. This historic initiative, which Republicans have been working on for many years now, has strong bipartisan support and will help tear down the barriers that prevent disabled Americans who want to work from reaching their full potential and achieving economic independence. Approximately 8 million American adults receive more than $73 billion a year in cash benefits under the Supplemental Security Income and the Social Security Disability programs, making these disability programs the fourth largest entitlement expenditure in the Federal budget. In Maine, there are close to 55,000 people receiving more than $335 million each year in cash disability benefits under these two programs. If only 1 percent, or 75,000, of these disabled Americans were to enter the workplace, Federal savings in cash benefits would total $3.5 billion over the worklife of these individuals. While surveys show that the overwhelming majority of adults with disabilities want to work, fewer than one half of 1 percent of them actually do. The reason is very simple: The current law contains disincentives that prevent these people with disabilities from going into the workforce. I know that the Presiding Officer has been working on this issue for several years and shares our concern. Removing the barriers that prevent Americans with disabilities from working will not only assist these individuals in their pursuit of self-sufficiency, but it will also contribute to preserving the Social Security trust fund. Advances in medicine and technology, coupled with civil rights laws, have made it possible for more and more people with physical and mental disabilities to enter the workforce. These are people who genuinely want to work. They have the skills and the talents necessary to contribute greatly to the American economy, but they currently face a Catch-22. If they leave the disability rolls for a job, they risk losing essential Medicare and Medicaid benefits that made it possible for them to overcome the obstacles that prevented them from entering or reentering the workforce in the first place. Moreover, many of these individuals' lives depend on the prescription drugs, the technology, the personal assistant services and the medical care that they receive. Let me put a human face on this problem which is facing too many Americans with disabilities. In Bangor, ME, I know a young man in his 20s who unfortunately suffers from a severe mental illness. The good news is that if he takes his medicine, which is very expensive and is now covered by Medicaid, he can hold down a part-time job. He very much enjoys working. He enjoys the skills he is learning. He enjoys the companionship. He enjoys the sense of pride he feels when he works. Unfortunately, if he goes to work, he loses the very Medicaid coverage that provides the essential prescription drug that he needs to enable him to work. He should not face that kind of dilemma. The truth is that no one should have to make the choice between a job and essential health care. The Work Incentives Improvement Act of 1999 will create and fund new options for States, to encourage them to allow people with disabilities who enter into the workforce to buy into the Medicare program and the Medicaid program so that they can continue to receive the essential prescription drugs they need which enable them to work, and the personal assistant services and the medical care upon which they depend. It will also allow workers who leave the Social Security Disability Insurance program to extend their Medicare coverage for 10 years. This is tremendously important since many people returning to work after having been on SSDI either work part-time and, therefore, are not eligible for most employer-based insurance, or they work in jobs that simply do not offer health insurance. Allowing these disabled Americans to maintain their Medicare coverage, and to maintain their Medicaid coverage in some cases, will serve as a tremendous incentive for them to return to or to enter the workforce. Other provisions of this legislation incorporate a more user-friendly approach in programs, providing job training and placement assistance to individuals with disabilities who want to and are able to work. Our legislation gives disabled SSI and SSDI beneficiaries greater consumer choice by creating essentially a ticket that enables them to choose whether they want to go to a public or a private provider of vocational rehabilitation services. The bill also provides grants to States and organizations to help connect people with disabilities with the appropriate services, and it funds demonstration projects and studies to better understand and identify the policies that will encourage and enable work. Mr. President, this legislation is an investment in human potential that promises tremendous returns. By ensuring that Americans with disabilities have access to affordable health insurance, we are removing a major barrier, a significant disincentive that too often keeps them out of the workplace. The Work Incentives Improvement Act of 1999 will both encourage and enable Americans with disabilities to be full participants in our Nation's workforce and growing economy and, equally important, it will allow them to reach their full potential. It deserves our strong support and the President's signature. I am very proud to be an original cosponsor of this landmark legislation.