Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that William Storm of my Finance Committee staff be granted privileges of the floor for the duration of the 111th Congress.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, first, I don't know what the order is for the Senate. I was going to speak on one of the nominations that will be before the Senate shortly. I wish to do that, if that is appropriate.

Mr. GRASSLEY. Yes, it is 3 o'clock now.

Mr. GRASSLEY

Mr. GRASSLEY. Reserving the right to object.

Mr. GRASSLEY. Mr. President, I wish to make very clear that I do not oppose this nominee, and I say to Senator Dorgan that I have no problem with what he is doing. I have been asked on the part of Senator Vitter to object, so I must object.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, Medicare's payment system for physicians is flawed in many ways. One of those flaws has for many years given unfairly low payments to high quality areas like my own home state of Iowa and many other rural States. The new health care reform law makes some much-needed changes in that regard. The legislation I am introducing today makes additional improvements in addressing unfair geographic disparities in payment. It is intended to provide more equitable rural health payments and improve rural access to care for all rural states. As many of you know, Medicare payment varies from one area to another based on the geographic adjustments known as the Geographic Practice Cost Indices or GPCIs. These geographic adjustments are intended to equalize physician payment by reflecting differences in physician's practice costs. But they do not accurately represent those costs in Iowa or other rural states. They have been a dismal failure in fact. They discourage physicians from practicing in rural areas like New Mexico, Arkansas, Missouri, and Iowa because they create such unfairly low Medicare rates. I introduced legislation in the last Congress, and again last year, to correct these unwarranted payment disparities. Last fall, I offered an amendment in the Senate Finance Committee mark up of health reform legislation to reform the inequitable formula that has caused these unduly low payments. My amendment provided more equity and accuracy in calculating this adjustment, and it provided a national solution to the problem. It was accepted unanimously by the Senate Finance Committee, and it was included in the Senate health reform bill, the Patient Protection and Affordable Care Act, that was signed into law. But, unfortunately, the rural equity that would be achieved by that amendment has been endangered by another sweetheart deal that was added to the Senate health care reform bill that is now the law. This special deal was added behind closed doors, that is, the closed doors of the majority leader. This special deal addresses geographic disparities but it helps just five states at the expense of the other 45 states. It was included in the Senate health reform bill for two Democratic Senators from so-called ``frontier states.'' It's what I call the ``Frontier Freeloader.'' The Frontier Freeloader provision improves Medicare reimbursement in so-called frontier states by establishing floors for the hospital wage index and the physician practice expense GPCI. A frontier state is defined as one with 50 percent or more frontier counties, defined as counties with a population per square mile of less than six. The Frontier Freeloader deal ensures that higher payments go to just five states--North Dakota, South Dakota, Montana, Wyoming and Utah--at the expense of every other state. It is another example of how the deals made behind closed doors to garner votes led to bad policies, like the Cornhusker Kickback, the Louisiana Purchase, and the Florida Gator-aid. Now we have the Frontier Freeloader deal that became law when the President signed the health care reform bill. Iowa provides some of the highest quality care in the country but it does not meet the definition of a frontier state. Certainly Iowa should have been helped since Medicare reimbursement for hospitals and physicians is lower in Iowa than in most of these so-called ``frontier'' states. Medicare also pays much lower rates in other rural states, like Arkansas and New Mexico, but they don't benefit from the Frontier Freeloader because they don't meet the definition of a frontier state. The Frontier Freeloader is even more egregious because Iowa--and other States like Arkansas and New Mexico that don't benefit--are paying for it! So, taxpayers in your state and mine--all the other 45 states--will kick in to pay the bill for these five states. And that's just the cost for the next few years. This sweetheart deal is not time-limited. The Frontier Freeloader that benefits these five states continues forever while taxpayers in your State and mine--the other 45--continue to pay the bills. The bill I am introducing today would repeal the Frontier Freeloader sweetheart deal. We should improve physician payments for all rural states, not just a select few. It is unfair to improve hospital payments for just a few states. This bill would eliminate those special payment deals for just 5 States. It would also improve physician payments for all rural states during the transition to more accurate data. The new health care reform law requires the Secretary of Health and Human Services to limit the impact of the current unfair adjustments to \1/2\ of the current adjustment in 2010 and 2011. This bill would use some of the funds saved by repealing the frontier states deal to increase physician payments more in rural states next year. That would mean higher payments for all rural States, not higher payments for just a few States. Finally, the bill makes it clear that a side agreement reportedly made between House members and the Secretary of Health and Human Services for an Institute of Medicine study cannot interfere with the legislative changes to the geographic adjustment for physician practice expense that are now law. My amendment in the Senate bill that became law improves the data that the government uses to calculate geographic physician practice costs. The House health care reform bill called for a study by the Institute of Medicine to make recommendations on geographic disparities. It is unclear what agreement was made between Secretary Sebelius and the House, since it was another backroom deal. It is also unclear what advantage it holds for rural health care equity for beneficiaries and physicians. My amendment that is now the law requires Medicare officials to use accurate data. The legislation that I am introducing today would ensure that the agreement House members made with Secretary Sebelius--that somehow accompanies the House health-care reconciliation bill--cannot undo the actual legislative fix in the Senate health care bill that is now law. If the Institute of Medicine comes up with different data or makes recommendations that are not consistent with the requirements for the geographic adjustments that are now law, we could be back where we started, or even worse off. So this legislation would ensure that HHS follows the legislative improvements just enacted to require more accurate data for calculating these geographic adjustments. To summarize, the bill does three main things: First, it eliminates the unfair $2 billion Frontier Freeloader carve- out for 5 States that ends up harming all the other rural States. As I said earlier, that extra spending would continue forever if the Frontier Freeloader is allowed to take effect. Second, the bill helps provide greater rural health care access and payment equity in a way that is fair to all taxpayers and states. It would provide additional payments for physicians in all rural States during the transition. Finally, the bill would ensure that Medicare officials use accurate data to calculate geographic adjustments as now required by the new health care reform law. This legislation helps ensure that seniors in all of rural America continue to have access to needed health care. It ensures rural health care equity nationwide.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, Medicare's payment system for physicians is flawed in many ways. One of those flaws has for many years given unfairly low payments to high quality areas like my own home state of Iowa and many other rural States. The new health care reform law makes some much-needed changes in that regard. The legislation I am introducing today makes additional improvements in addressing unfair geographic disparities in payment. It is intended to provide more equitable rural health payments and improve rural access to care for all rural states. As many of you know, Medicare payment varies from one area to another based on the geographic adjustments known as the Geographic Practice Cost Indices or GPCIs. These geographic adjustments are intended to equalize physician payment by reflecting differences in physician's practice costs. But they do not accurately represent those costs in Iowa or other rural states. They have been a dismal failure in fact. They discourage physicians from practicing in rural areas like New Mexico, Arkansas, Missouri, and Iowa because they create such unfairly low Medicare rates. I introduced legislation in the last Congress, and again last year, to correct these unwarranted payment disparities. Last fall, I offered an amendment in the Senate Finance Committee mark up of health reform legislation to reform the inequitable formula that has caused these unduly low payments. My amendment provided more equity and accuracy in calculating this adjustment, and it provided a national solution to the problem. It was accepted unanimously by the Senate Finance Committee, and it was included in the Senate health reform bill, the Patient Protection and Affordable Care Act, that was signed into law. But, unfortunately, the rural equity that would be achieved by that amendment has been endangered by another sweetheart deal that was added to the Senate health care reform bill that is now the law. This special deal was added behind closed doors, that is, the closed doors of the majority leader. This special deal addresses geographic disparities but it helps just five states at the expense of the other 45 states. It was included in the Senate health reform bill for two Democratic Senators from so-called ``frontier states.'' It's what I call the ``Frontier Freeloader.'' The Frontier Freeloader provision improves Medicare reimbursement in so-called frontier states by establishing floors for the hospital wage index and the physician practice expense GPCI. A frontier state is defined as one with 50 percent or more frontier counties, defined as counties with a population per square mile of less than six. The Frontier Freeloader deal ensures that higher payments go to just five states--North Dakota, South Dakota, Montana, Wyoming and Utah--at the expense of every other state. It is another example of how the deals made behind closed doors to garner votes led to bad policies, like the Cornhusker Kickback, the Louisiana Purchase, and the Florida Gator-aid. Now we have the Frontier Freeloader deal that became law when the President signed the health care reform bill. Iowa provides some of the highest quality care in the country but it does not meet the definition of a frontier state. Certainly Iowa should have been helped since Medicare reimbursement for hospitals and physicians is lower in Iowa than in most of these so-called ``frontier'' states. Medicare also pays much lower rates in other rural states, like Arkansas and New Mexico, but they don't benefit from the Frontier Freeloader because they don't meet the definition of a frontier state. The Frontier Freeloader is even more egregious because Iowa--and other States like Arkansas and New Mexico that don't benefit--are paying for it! So, taxpayers in your state and mine--all the other 45 states--will kick in to pay the bill for these five states. And that's just the cost for the next few years. This sweetheart deal is not time-limited. The Frontier Freeloader that benefits these five states continues forever while taxpayers in your State and mine--the other 45--continue to pay the bills. The bill I am introducing today would repeal the Frontier Freeloader sweetheart deal. We should improve physician payments for all rural states, not just a select few. It is unfair to improve hospital payments for just a few states. This bill would eliminate those special payment deals for just 5 States. It would also improve physician payments for all rural states during the transition to more accurate data. The new health care reform law requires the Secretary of Health and Human Services to limit the impact of the current unfair adjustments to \1/2\ of the current adjustment in 2010 and 2011. This bill would use some of the funds saved by repealing the frontier states deal to increase physician payments more in rural states next year. That would mean higher payments for all rural States, not higher payments for just a few States. Finally, the bill makes it clear that a side agreement reportedly made between House members and the Secretary of Health and Human Services for an Institute of Medicine study cannot interfere with the legislative changes to the geographic adjustment for physician practice expense that are now law. My amendment in the Senate bill that became law improves the data that the government uses to calculate geographic physician practice costs. The House health care reform bill called for a study by the Institute of Medicine to make recommendations on geographic disparities. It is unclear what agreement was made between Secretary Sebelius and the House, since it was another backroom deal. It is also unclear what advantage it holds for rural health care equity for beneficiaries and physicians. My amendment that is now the law requires Medicare officials to use accurate data. The legislation that I am introducing today would ensure that the agreement House members made with Secretary Sebelius--that somehow accompanies the House health-care reconciliation bill--cannot undo the actual legislative fix in the Senate health care bill that is now law. If the Institute of Medicine comes up with different data or makes recommendations that are not consistent with the requirements for the geographic adjustments that are now law, we could be back where we started, or even worse off. So this legislation would ensure that HHS follows the legislative improvements just enacted to require more accurate data for calculating these geographic adjustments. To summarize, the bill does three main things: First, it eliminates the unfair $2 billion Frontier Freeloader carve- out for 5 States that ends up harming all the other rural States. As I said earlier, that extra spending would continue forever if the Frontier Freeloader is allowed to take effect. Second, the bill helps provide greater rural health care access and payment equity in a way that is fair to all taxpayers and states. It would provide additional payments for physicians in all rural States during the transition. Finally, the bill would ensure that Medicare officials use accurate data to calculate geographic adjustments as now required by the new health care reform law. This legislation helps ensure that seniors in all of rural America continue to have access to needed health care. It ensures rural health care equity nationwide.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I call up amendment No. 3569.

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

Mr. GRASSLEY. Mr. President, this is about geographical equity for all States. The Senate health reform bill just signed into law includes a frontier sweetheart deal that improves Medicare payments for five rural States at the expense of the other 45. The special deal is for North Dakota, South Dakota, Montana, Utah, and Wyoming. The Washington Post calls these deals the ``Candy Land'' of the health care bill. Repealing this provision will not kill the bill because it has to go back to the House anyway. My amendment also ensures that Health and Human Services cannot undo the formula fix that my amendment established in the Senate health care bill that is now law.

Mr. GRASSLEY. Mr. President, parliamentary inquiry.

Mr. GRASSLEY. Mr. President, I have submitted a list of provisions for review by the Chair. It is my understanding that these provisions of the bill have been reviewed and further, if points of order were raised against these provisions, the Chair would have ruled that the various points of order would not have been taken. Is this the opinion of the Chair?

Mr. GRASSLEY. I thank the Chair. I ask unanimous consent to have printed in the Record the list of provisions just referred to.

Mr. GRASSLEY

Mr. GRASSLEY. I wish to speak in support of Senator Inhofe's amendment No. 3588, which would be to exclude medical devices for children and persons with disabilities from a medical device tax. I know that when you talk about a medical device tax and if it is on the manufacturers, you are going to say: Well, what should I be concerned about that for because some manufacturer is going to pay it. Well, don't fool yourself. You know, corporations do not pay taxes, only people pay taxes, and there are three categories of people who pay taxes: stockholders or employees or consumers. And I will bet in most cases consumers end up paying for that. So this provision in this bill is much broader than the Inhofe amendment would apply to, but I think Senator Inhofe has picked out a very important aspect of adding taxes, the extent to which surely the vulnerable people whom you call children and persons with disabilities are consumers who shouldn't be paying for a tax to pay for a bill that 59 percent of the people in this country say they are against. But because the majority party and the President want to make history, just make history, don't worry about the people at the grassroots of America, what they think. So there are all these taxes and all of these fees in here, and I compliment Senator Inhofe for his leadership in at least trying to reduce this burden on people who are very vulnerable, people with disabilities. Of the many taxes in this bill, I am especially worried about the tax on medical devices. What will happen when the Democrats impose a new tax hike on $20 billion of these innovative medical devices? During the markup of the Finance Committee bill, I asked the question to the nonpartisan Congressional Budget Office and the nonpartisan Joint Committee on Taxation. For people who might not understand the emphasis of ``nonpartisan'' about the Congressional Budget Office and the Joint Committee on Taxation, I would like to say it is very important that you understand that because everybody thinks everything connected with Congress is totally political. Well, these are professionals who are around here a lot longer than a lot of Senators and Representatives, and then their job is, in a professional way, to look at what things cost and how much money certain taxes will raise. So they are kind of like God around here. They are believed. If you want to overrule them, you know, it takes 60 votes. That is a lot of power when you have to have 60 votes to overrule something on a point of order. So explaining what nonpartisanship is with the Congressional Budget Office and our constituents understanding that so they understand we are not quoting a Republican or a Democrat, we are quoting professionals, I think is very basic to understanding the points we individually make so that they are accepted as intellectually honest. In this particular case where these two offices--both of them said these excise taxes will be passed on to consumers in the form of higher prices and higher insurance premiums. When I began my remarks, I said that is what is going to happen. Well, Chuck Grassley said that, but I want you to know that is what these professionals in the Joint Committee on Taxation and the Congressional Budget Office backed me up in saying. Who are the consumers of these devices? I have the exact language here of how these things are going to be passed on to consumers so that you know, you see the document right here. Who are these consumers of these devices who will bear the burden of the new medical device excise tax? I would like to tell the story of the Tillman family, a family who would bear the burden of this new medical device tax. At only 5 months old, Tiana Tillman had her life saved by a medical device. This story has received a lot of attention because Tiana's father is a professional football player for the Chicago Bears. However, lifesaving stories like this happen all across the country. When Charles Tillman reported to training camp in 2008, it was not long before his coach told him his 5-month-old daughter Tiana had been rushed to the hospital. When Charles got to the hospital, Tiana's heart rate was over 200 beats per minute. The doctor told Charles and his wife Jackie that Tiana may not make it through the night. Tiana survived the night, and after a series of tests, she was diagnosed with cardiomyopathy, that is, an enlarged heart that is unable to function properly. Her condition was critical, and without a heart transplant, she would not survive. But finding pediatric donors is very difficult, and many children do not survive that long wait time. Tiana was immediately put on ECMO, a device that would help the functions of the heart while Tiana waited for a transplant. However, ECMO is an old device that has many shortcomings. The Tillmans waited for one of two outcomes: either Tiana would receive the transplant or she would die waiting on ECMO. If you want to know, ECMO is E-C-M-O, an acronym. But then doctors told them about the new pediatric medical device called the Berlin Heart--the Berlin Heart is an external device that performs the function of the heart and lungs--the Tillmans decided to move forward with the Berlin Heart. After 13 days of being on ECMO without any movement, Tiana underwent surgery to connect the Berlin Heart. After the operation, you can see Tiana in that photo. It pumped her blood through her body--a job her heart could not perform on its own. Doctors said the Berlin Heart helped Tiana regain her strength because she was off the paralytic medication and finally moving. Not long after Tiana connected to the Berlin Heart, a donor was found and Tiana underwent an 8-hour transplant surgery. The risky surgery was a success, thank God. Usually it takes some time for a new heart to start working, but doctors said that due to Tiana's strength, her new heart started working immediately. So you see here Tiana today. She probably loves that football just like her dad loved the football. She is a happy and healthy 2-year-old girl. She enjoys playing on her swing and watching her dad play football. Without the Berlin Heart to keep her alive and help her to gain strength, she might not, in fact, be alive. Democrats would increase costs for families such as the Tillmans with this tax, particularly. But it will be relieved somewhat if we adopt the Inhofe amendment. In fact, the Democratic bill would tax most pediatric medical devices. I wish to make clear that any vote against the Inhofe amendment is an endorsement of the tax on devices such as the Berlin Heart and many others children across this country rely upon. Not only that, it would also probably have a great impact upon research that brings about some of these miracle medical devices that make a difference. Taking money away from research at businesses is going to delay the miracle things that come along, whether they are pharmaceuticals or medical devices. We should not be discouraging that. In the rest of the world, there has not been as much research done in the rest of the world as is done in the United States. Maybe go back 50 years ago and you had Germany and other European countries very much involved. But their government taking over everything and their high rates of taxation are drying up resources used for research. So the United States has been the beneficiary of that. Our pharmaceutical industry and medical device industry have taken advantage of it. So much new development around the world in the enhancement of these devices as well as pharmaceuticals have come because of the research we do. This tremendous tax burden that the American consumer is going to feel from the massive money coming in to fund this bill, which isn't going to drive down health care costs, is going to stymie a lot of innovation we should not want to stymie. May I ask the Chair how many minutes my side has remaining?

Mr. GRASSLEY. I will take that 3\1/2\ minutes to comment on another aspect of the bill. This is not on the Inhofe amendment, at this point. It is something unrelated to health care, but in a sense it is related to health care. This is the nationalization of the student loan program. For a long time, colleges on behalf of their students have had the benefit of going with a direct student loan from the government or getting it through the banks. They have voted by their feet, by the overwhelming amount of them going to the banks to get their student loans. Now this reconciliation is going to nationalize student loans, have just direct loans. There are about 31,000 people around the country who have something to do with student loans. Those people are going to be out of work at a time when we are all talking about jobs. We need to do something for jobs. So we're going to nationalize education loans and have that unemployment and then take four call centers around the country to take its place. Do you think college students are going to get the service they get when they have to deal with the Federal bureaucracy redtape? I don't believe so. But there's supposedly a certain amount of savings in this. I don't know whether it is real savings, but the CBO, which I say is God around here, scored it as a certain amount of savings, even considering the fact that the government is going to have to borrow $\1/2\ trillion to get this program underway. They are going to use those supposed savings from the student loan program to fund this bill, the health care bill. We are in a situation that is just something that common sense Americans in the Midwest are not going to understand. But it is something, I suppose, you would expect to happen in Washington, DC, which is an island surrounded by reality, that you are going to have college students who are going to pay 6.75 percent interest on their loans to the Federal Government that the government only pays 2.75 percent to borrow, that you are going to be taxing college students to pay for health care. It doesn't add up, at the very same time that too many of us in this body are complaining about the increased cost of education. I hope the college students will speak up in this particular instance about what is being done, that college students should not be taxed to provide health insurance. But this whole health care bill taxes everything. It just seems like everything. How many minutes are remaining?

Mr. GRASSLEY. I agree with the chairman.

Mr. GRASSLEY. Mr. President, my amendment would require the President, the Vice President, Cabinet members, and White House staff to use exchanges created in this bill. It would also fix a loophole so that the committee and leadership staff are also required to obtain coverage in these exchanges. Today, after seeing my amendment, the White House announced that President Obama will voluntarily participate in the health insurance exchange that starts in 2014. This is a little presumptuous since he has another election before 2014, but it is still effectively an endorsement of my amendment to make sure that political leaders live under the laws they pass for everyone else. But the principle should not be voluntary for political leaders. Congress and President Clinton confirmed that in 1995 by enacting the Congressional Accountability Act that Senator Lieberman and I sponsored. It is a matter of not having a double standard. I urge my colleagues to support my amendment and make sure we are living under the same laws.

Mr. GRASSLEY. Mr. President, pursuant to section 904(c) of the Congressional Budget Act of 1974, I move to waive section 313 of the Budget Act for the consideration of the pending amendment.

Mr. GRASSLEY. I send an amendment to the desk and ask for its consideration.

Mr. GRASSLEY. I ask unanimous consent that reading of the amendment be dispensed with.

Mr. GRASSLEY. This amendment is based largely on the extenders package that passed the House last week. It includes a 30-day extension for unemployment insurance, COBRA coverage, and the SGR Medicare physicians payment fix. It includes provisions on Federal poverty guidelines, national flood insurance, satellite television and compensation for highway programs. There is one very important difference between my amendment and the House bill. My amendment is fully offset. We can do this without adding to the deficit. I urge its passage and reserve the remainder of my time.

Mr. GRASSLEY. Do I have time left?

Mr. GRASSLEY. Yes? Mr. President, let's wake up. This has to be passed. It has to be passed before the end. One of the problems we always have is that it is not offset. It was included in the Baucus- Grassley bill way back in February. The leader had the chutzpah to dump his own chairman aside and go ahead with a partisan bill. Then the other side complained about the Bunning filibuster, and we have an opportunity now to avoid all that. We ought to avoid it and move on.

Mr. GRASSLEY. Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974 and section 4(G)(3) of the statutory pay-as-you-go act of 2010, I move to waive all applicable provisions of those acts and applicable budget resolutions for purposes of my amendment and ask for the yeas and nays.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that Brittney Balduf of my staff be granted floor privileges for the duration of the debate.