Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to join my colleague Senator Kerry today to introduce the Empowered at Home Act. This bill is a continuation of efforts that I undertook in 2005 to improve access to home and community based services for those needing long-term care. This is an important piece of legislation that continues our efforts to make cost-effective home and community based care options more available to those who need it. In 2005, I introduced the Improving Long-term Care Choices Act with Senator Bayh. That legislation set forth a series of proposals aimed at improving the accessibility of long-term care insurance and promoting awareness about the protection that long-term care insurance can offer. It also sought to broaden the availability of the types of long-term care services such as home and community-based care, which many people prefer to institutional care. The year 2005 ended up being a very important year for health policy as it relates to Americans who need extensive care. In the Deficit Reduction Act of 2005, Congress passed into law the Family Opportunity Act, the Money Follows the Person initiative, and many critical pieces of the Improving Long-term Care Choices Act. With the bill I am introducing today with Senator Kerry, I hope to set us on the path to completing the work we started in 2005. Making our long-term care system more efficient is a critical goal as we consider the future of health care. There are more than 35 million Americans, roughly 12 percent of the U.S. population, over the age of 65. This number is expected to increase dramatically over the next few decades as the baby boomers age and life expectancy increases. According to the U.S. Administration on Aging, by the year 2030, there will be more than 70 million elderly persons in the United States. As the U.S. population ages, more and more Americans will require long- term care services. The need for long-term care will also be affected by the number of individuals under the age of 65 who may require a lifetime of care. Currently, almost half of all Americans who need long-term care services are individuals with disabilities under the age of 65. This number includes over 5 million working-age adults and approximately 400,000 children. Long-term care for elderly and disabled individuals, including care at home and in nursing homes, represents almost 40 percent of Medicaid expenditures. Contrary to general assumptions, it is Medicaid, not Medicare, that pays for the largest portion of long-term care for the elderly. Over 65 percent of Medicaid long-term care expenditures support elderly and disabled individuals in nursing facilities and institutions. Although most people who need long-term care prefer to remain at home, Medicaid spending for long-term care remains heavily weighted toward institutional care. Section 6086 of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) was based on the Improving Long-term Care Choices Act. The DRA provision authorized a new optional benefit under Medicaid that allows States to extend home and community-based services to Medicaid beneficiaries under the section 1915(i) Home and Community-Based Services State Option. Under this authority, States can offer Medicaid- covered home and community-based services under a State's Medicaid plan without obtaining a section 1915(c) home and community-based waiver. Eligibility for these section 1915(i) services may be extended only to Medicaid beneficiaries already enrolled in the program whose income does not exceed 150 percent of the Federal poverty level. To date, only one State, my own State of Iowa, has sought to take advantage of the provision authorized through the DRA. While we had hoped far more States would participate, we know that the relatively low income cap, 150 percent, in the DRA provision creates an administrative complexity that has not made the option appealing for States. In this bill we are introducing today, the income eligibility standard would be raised for access to covered services under section 1915(i) to persons who qualify for Medicaid because their income does not exceed a specified level established by the State up to 300 percent of the maximum Supplemental Security Income, SSI, payment applicable to a person living at home. This will significantly increase the number of people eligible for these services. States will be able to align their institutional and home and community-based care income eligibility levels. The bill would also establish two new optional eligibility pathways into Medicaid. These groups would be eligible for section 1915(i) home and community-based services as well as services offered under a State's broader Medicaid program. Under this bill, States with an approved 1915(k) State plan amendment would have the option to extend Medicaid eligibility to individuals: (1) who are not otherwise eligible for medical assistance; (2) whose income does not exceed 300 percent of the supplemental security income benefit rate; and (3) who would satisfy State-established needs-based criteria based upon a State's determination that the provision of home and community-based services would reasonably be expected to prevent, delay, or decrease the need for institutionalized care. Under this new eligibility pathway, States could choose to either limit Medicaid benefits to those home and community-based services offered under section 1915(k) or allow eligibles to access services available under a State's broader Medicaid program in addition to the 1915(k) benefits. These changes will give the States the option of exploring the use of an interventional use of home and community-based services. If States have the flexibility to provide the benefit as contemplated in the bill, they can try to delay the need for institutional care and people in their homes longer. As the number of Americans reaching retirement age grows proportionally larger, ultimately the number of Americans needing more extensive care will grow. Many of those Americans will look to Medicaid for assistance. States need more tools to provide numerous options to people in need so that they can stay in their own homes as long as possible. The cost of providing long-term care in an institutional setting is far more expensive care than providing care in the home. States will benefit from having options before them that allow them to keep people appropriately in home settings longer. The more States learn how to use those tools, the more states and ultimately the Federal taxpayer will benefit from reduced costs for institutional care. I am also pleased that this bill will include key provisions from S. 2337, the Long-Term Care Affordability and Security Act of 2007. The bill includes important tax provisions that I introduced in previous Congresses as well--most recently, the Improving Long-term Care Choices Act of 2005, introduced in the 109 Congress. Research shows that the elderly population will nearly double by 2030. By 2050, the population of those aged 85 and older will have grown by more than 300 percent. Research also shows that the average age at which individuals need long-term care services, such as home health care or a private room at a nursing home, is 75. Currently, the average annual cost for a private room at a nursing home is more than $75,000. This cost is expected to be in excess of $140,000 by 2030. Based on these facts, we can see that our Nation needs to prepare its citizens for the challenges they may face in old age. One way to prepare for these challenges is by encouraging more Americans to obtain long-term care insurance coverage. To date, only 10 percent of seniors have long-term care insurance policies, and only 7 percent of all private-sector employees are offered long-term care insurance as a voluntary benefit. Under current law, employees may pay for certain health-related benefits, which may include health insurance premiums, co-pays, and disability or life insurance, on a pre-tax basis under cafeteria plans and flexible spending arrangements, ``FSAs''. Essentially, an employee may elect to reduce his or her annual salary to pay for these benefits, and the employee doesn't pay taxes on the amounts used to pay these costs. Employees, however, are explicitly prohibited from paying for the cost of long-term care insurance coverage tax free. Our bill would allow employers, for the first time, to offer qualified long-term care insurance to employees under FSAs and cafeteria plans. This means employees would be permitted to pay for qualified long-term care insurance premiums on a tax-free basis. This would make it easier for employees to purchase long-term care insurance, which many find unaffordable. This should also encourage younger individuals to purchase long-term care insurance. The younger the person is at the time the long-care insurance contract is purchased, the lower the insurance premium. Our bill also allows an individual taxpayer to deduct the cost of their long-term care insurance policy. In other words, the individual can reduce their gross income by the premiums that they pay for a long- term care policy, and therefore, pay less in taxes. This tax benefit for long-term care insurance should encourage more individuals to purchase these policies. It certainly makes a policy more affordable, especially for younger individuals. This would allow a middle-aged taxpayer to start planning for the future now. Finally, a provision that is included in our bill that I am really proud of is one that provides a tax credit to long-term caregivers. Long-term caregivers could include the taxpayer, him- or herself. Senator Kerry and I recognize that these taxpayers--who have long-term care needs, yet are taking care of themselves--should be provided extra assistance. Also, taxpayers taking care of a family member with long- term care needs would also be eligible for the tax credit. These taxpayers should be given a helping hand. As our population continues to age, the least that we can do is provide a tax benefit for these struggling individuals.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to join my colleague Senator Kerry today to introduce the Empowered at Home Act. This bill is a continuation of efforts that I undertook in 2005 to improve access to home and community based services for those needing long-term care. This is an important piece of legislation that continues our efforts to make cost-effective home and community based care options more available to those who need it. In 2005, I introduced the Improving Long-term Care Choices Act with Senator Bayh. That legislation set forth a series of proposals aimed at improving the accessibility of long-term care insurance and promoting awareness about the protection that long-term care insurance can offer. It also sought to broaden the availability of the types of long-term care services such as home and community-based care, which many people prefer to institutional care. The year 2005 ended up being a very important year for health policy as it relates to Americans who need extensive care. In the Deficit Reduction Act of 2005, Congress passed into law the Family Opportunity Act, the Money Follows the Person initiative, and many critical pieces of the Improving Long-term Care Choices Act. With the bill I am introducing today with Senator Kerry, I hope to set us on the path to completing the work we started in 2005. Making our long-term care system more efficient is a critical goal as we consider the future of health care. There are more than 35 million Americans, roughly 12 percent of the U.S. population, over the age of 65. This number is expected to increase dramatically over the next few decades as the baby boomers age and life expectancy increases. According to the U.S. Administration on Aging, by the year 2030, there will be more than 70 million elderly persons in the United States. As the U.S. population ages, more and more Americans will require long- term care services. The need for long-term care will also be affected by the number of individuals under the age of 65 who may require a lifetime of care. Currently, almost half of all Americans who need long-term care services are individuals with disabilities under the age of 65. This number includes over 5 million working-age adults and approximately 400,000 children. Long-term care for elderly and disabled individuals, including care at home and in nursing homes, represents almost 40 percent of Medicaid expenditures. Contrary to general assumptions, it is Medicaid, not Medicare, that pays for the largest portion of long-term care for the elderly. Over 65 percent of Medicaid long-term care expenditures support elderly and disabled individuals in nursing facilities and institutions. Although most people who need long-term care prefer to remain at home, Medicaid spending for long-term care remains heavily weighted toward institutional care. Section 6086 of the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) was based on the Improving Long-term Care Choices Act. The DRA provision authorized a new optional benefit under Medicaid that allows States to extend home and community-based services to Medicaid beneficiaries under the section 1915(i) Home and Community-Based Services State Option. Under this authority, States can offer Medicaid- covered home and community-based services under a State's Medicaid plan without obtaining a section 1915(c) home and community-based waiver. Eligibility for these section 1915(i) services may be extended only to Medicaid beneficiaries already enrolled in the program whose income does not exceed 150 percent of the Federal poverty level. To date, only one State, my own State of Iowa, has sought to take advantage of the provision authorized through the DRA. While we had hoped far more States would participate, we know that the relatively low income cap, 150 percent, in the DRA provision creates an administrative complexity that has not made the option appealing for States. In this bill we are introducing today, the income eligibility standard would be raised for access to covered services under section 1915(i) to persons who qualify for Medicaid because their income does not exceed a specified level established by the State up to 300 percent of the maximum Supplemental Security Income, SSI, payment applicable to a person living at home. This will significantly increase the number of people eligible for these services. States will be able to align their institutional and home and community-based care income eligibility levels. The bill would also establish two new optional eligibility pathways into Medicaid. These groups would be eligible for section 1915(i) home and community-based services as well as services offered under a State's broader Medicaid program. Under this bill, States with an approved 1915(k) State plan amendment would have the option to extend Medicaid eligibility to individuals: (1) who are not otherwise eligible for medical assistance; (2) whose income does not exceed 300 percent of the supplemental security income benefit rate; and (3) who would satisfy State-established needs-based criteria based upon a State's determination that the provision of home and community-based services would reasonably be expected to prevent, delay, or decrease the need for institutionalized care. Under this new eligibility pathway, States could choose to either limit Medicaid benefits to those home and community-based services offered under section 1915(k) or allow eligibles to access services available under a State's broader Medicaid program in addition to the 1915(k) benefits. These changes will give the States the option of exploring the use of an interventional use of home and community-based services. If States have the flexibility to provide the benefit as contemplated in the bill, they can try to delay the need for institutional care and people in their homes longer. As the number of Americans reaching retirement age grows proportionally larger, ultimately the number of Americans needing more extensive care will grow. Many of those Americans will look to Medicaid for assistance. States need more tools to provide numerous options to people in need so that they can stay in their own homes as long as possible. The cost of providing long-term care in an institutional setting is far more expensive care than providing care in the home. States will benefit from having options before them that allow them to keep people appropriately in home settings longer. The more States learn how to use those tools, the more states and ultimately the Federal taxpayer will benefit from reduced costs for institutional care. I am also pleased that this bill will include key provisions from S. 2337, the Long-Term Care Affordability and Security Act of 2007. The bill includes important tax provisions that I introduced in previous Congresses as well--most recently, the Improving Long-term Care Choices Act of 2005, introduced in the 109 Congress. Research shows that the elderly population will nearly double by 2030. By 2050, the population of those aged 85 and older will have grown by more than 300 percent. Research also shows that the average age at which individuals need long-term care services, such as home health care or a private room at a nursing home, is 75. Currently, the average annual cost for a private room at a nursing home is more than $75,000. This cost is expected to be in excess of $140,000 by 2030. Based on these facts, we can see that our Nation needs to prepare its citizens for the challenges they may face in old age. One way to prepare for these challenges is by encouraging more Americans to obtain long-term care insurance coverage. To date, only 10 percent of seniors have long-term care insurance policies, and only 7 percent of all private-sector employees are offered long-term care insurance as a voluntary benefit. Under current law, employees may pay for certain health-related benefits, which may include health insurance premiums, co-pays, and disability or life insurance, on a pre-tax basis under cafeteria plans and flexible spending arrangements, ``FSAs''. Essentially, an employee may elect to reduce his or her annual salary to pay for these benefits, and the employee doesn't pay taxes on the amounts used to pay these costs. Employees, however, are explicitly prohibited from paying for the cost of long-term care insurance coverage tax free. Our bill would allow employers, for the first time, to offer qualified long-term care insurance to employees under FSAs and cafeteria plans. This means employees would be permitted to pay for qualified long-term care insurance premiums on a tax-free basis. This would make it easier for employees to purchase long-term care insurance, which many find unaffordable. This should also encourage younger individuals to purchase long-term care insurance. The younger the person is at the time the long-care insurance contract is purchased, the lower the insurance premium. Our bill also allows an individual taxpayer to deduct the cost of their long-term care insurance policy. In other words, the individual can reduce their gross income by the premiums that they pay for a long- term care policy, and therefore, pay less in taxes. This tax benefit for long-term care insurance should encourage more individuals to purchase these policies. It certainly makes a policy more affordable, especially for younger individuals. This would allow a middle-aged taxpayer to start planning for the future now. Finally, a provision that is included in our bill that I am really proud of is one that provides a tax credit to long-term caregivers. Long-term caregivers could include the taxpayer, him- or herself. Senator Kerry and I recognize that these taxpayers--who have long-term care needs, yet are taking care of themselves--should be provided extra assistance. Also, taxpayers taking care of a family member with long- term care needs would also be eligible for the tax credit. These taxpayers should be given a helping hand. As our population continues to age, the least that we can do is provide a tax benefit for these struggling individuals.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased today to introduce the Medicare Physician Payment Equity Act of 2008. I stood before this body last December as we agreed to a short-term Medicare extension bill so that we would have the opportunity to address other pressing priorities in a bipartisan Medicare package this year. One of the most significant issues I had hoped to address was the need to provide more equitable payment for physicians in Iowa and other rural states. While the Medicare bill that Congress just enacted improves the situation for physicians in the near-term by averting the SGR payment cuts scheduled to occur during the next 18 months, it does little to remedy the unjustifiable geographic disparities in physician payment that exist. It is unfortunate that reforms to the geographic physician payment adjusters were not included in H.R. 6331. I have long supported more equitable treatment of physicians in rural areas, and I have pressed for reforms to the work and practice expense geographic adjustments in the Medicare physician fee schedule. However, much- needed reforms such as the establishment of a practice expense floor are not in the Medicare bill that Congress enacted last week. The legislation I am introducing today is designed to remedy this problem by providing more equitable treatment for physicians in rural areas. The bill reduces inequitable disparities in physician payment resulting from the Geographic Practice Cost Indices or adjusters, known as GPCls, by establishing a 1.0 floor for physician practice expense adjustments as of 2009 and by providing a national 1.0 geographic index for physician work expense after the expiration of the existing 1.0 floor in 2010. Although geographic adjustments are intended to reflect actual cost differences in a given area compared to a national average of 1.0, the existing, inaccurate formulas create significant disparities in physician reimbursement that penalize, rather than equalize, physician payment in Iowa and other rural states. These geographic disparities lead to rural states experiencing significant difficulties in recruiting and retaining physicians and other health care professionals because of their significantly lower reimbursement rates. This in turn leads to reduced beneficiary access to rural health care providers. Here is a simple example that demonstrates the inequity of the current GPCI formulas. Iowa is widely recognized as providing some of the highest quality health care in the country, yet Iowa physicians receive some of the lowest Medicare reimbursement of any physicians in the country because of inequitable geographic adjustments. Medicare physician payment is equal in all 89 Medicare payment localities until the geographic adjusters, or GPCls, are applied. After the GPCI adjustments, however, Medicare reimbursement for some physician services in Iowa is at least 30 percent lower than payment for the same service in other parts of the country, and it is fundamentally unfair. Congress needs to reduce these unwarranted payment variations and realign Medicare incentives to reward physicians' quality instead of their geography. Sadly, the inequitable geographic formulas which make these adjustments have merely exacerbated the problems of rural access to health care. Rural America today has far fewer physicians per capita than urban areas do. According to the National Rural Health Association, only about 10 percent of physicians practice in rural areas although nearly a quarter of the U.S. population lives there. Another grave concern is the lack of specialists in rural areas: only about 40 specialists exist per 100,000 in rural areas compared to more than three times as many--134 per 100,000--in urban areas. The evidence is clear that the existing geographic adjusters have been a dismal failure in promoting an adequate number of physicians in Iowa and other rural states. More severe physician shortages will occur in the future if we do not make essential changes to these formulas now. The Medicare Physician Payment Equity Act revises the formulas used to determine geographic work and practice expense adjustments. The physician work formula currently used by the Centers for Medicare and Medicaid Services to estimate physician wages measures geographic differences in the earnings of six categories of professionals (lawyers, engineers, and others), rather than differences in physicians' earnings. In addition, the data that are used are based on outdated proxy data from the 2000 census. This bill recognizes that physician work for a service requires the same skill and training regardless of the geographic area, and should be similarly valued, and it establishes a national index of 1.0 for physician work beginning in 2010. The practice expense formula used by CMS is inaccurate, outdated, and does not represent the actual office rent or employee wage costs for physicians in many areas. The office rent component uses Department of Housing and Urban Development residential apartment rental data from 2000 which does not accurately reflect physician office rent. The employee wage component comes from 2000 census data on clerical workers, nurses, and medical technicians which does not take into account any of the more highly compensated workers such as physician assistants, office administrators, and other specialists employed in physician practices today. The Medicare Physician Payment Equity Act provides for a more appropriate recognition of the geographic differences in employee wages and office rents by reducing the impact of this index to reflect more accurately the differences in physician practice costs, as of 2010. We must act now to help recruit and retain rural physicians to ensure that beneficiaries in Iowa and other rural areas will continue to have access to health care. I urge my colleagues to support this legislation to address the growing problem of health care shortages in rural America by providing more equitable payment for physicians. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased today to introduce the Medicare Physician Payment Equity Act of 2008. I stood before this body last December as we agreed to a short-term Medicare extension bill so that we would have the opportunity to address other pressing priorities in a bipartisan Medicare package this year. One of the most significant issues I had hoped to address was the need to provide more equitable payment for physicians in Iowa and other rural states. While the Medicare bill that Congress just enacted improves the situation for physicians in the near-term by averting the SGR payment cuts scheduled to occur during the next 18 months, it does little to remedy the unjustifiable geographic disparities in physician payment that exist. It is unfortunate that reforms to the geographic physician payment adjusters were not included in H.R. 6331. I have long supported more equitable treatment of physicians in rural areas, and I have pressed for reforms to the work and practice expense geographic adjustments in the Medicare physician fee schedule. However, much- needed reforms such as the establishment of a practice expense floor are not in the Medicare bill that Congress enacted last week. The legislation I am introducing today is designed to remedy this problem by providing more equitable treatment for physicians in rural areas. The bill reduces inequitable disparities in physician payment resulting from the Geographic Practice Cost Indices or adjusters, known as GPCls, by establishing a 1.0 floor for physician practice expense adjustments as of 2009 and by providing a national 1.0 geographic index for physician work expense after the expiration of the existing 1.0 floor in 2010. Although geographic adjustments are intended to reflect actual cost differences in a given area compared to a national average of 1.0, the existing, inaccurate formulas create significant disparities in physician reimbursement that penalize, rather than equalize, physician payment in Iowa and other rural states. These geographic disparities lead to rural states experiencing significant difficulties in recruiting and retaining physicians and other health care professionals because of their significantly lower reimbursement rates. This in turn leads to reduced beneficiary access to rural health care providers. Here is a simple example that demonstrates the inequity of the current GPCI formulas. Iowa is widely recognized as providing some of the highest quality health care in the country, yet Iowa physicians receive some of the lowest Medicare reimbursement of any physicians in the country because of inequitable geographic adjustments. Medicare physician payment is equal in all 89 Medicare payment localities until the geographic adjusters, or GPCls, are applied. After the GPCI adjustments, however, Medicare reimbursement for some physician services in Iowa is at least 30 percent lower than payment for the same service in other parts of the country, and it is fundamentally unfair. Congress needs to reduce these unwarranted payment variations and realign Medicare incentives to reward physicians' quality instead of their geography. Sadly, the inequitable geographic formulas which make these adjustments have merely exacerbated the problems of rural access to health care. Rural America today has far fewer physicians per capita than urban areas do. According to the National Rural Health Association, only about 10 percent of physicians practice in rural areas although nearly a quarter of the U.S. population lives there. Another grave concern is the lack of specialists in rural areas: only about 40 specialists exist per 100,000 in rural areas compared to more than three times as many--134 per 100,000--in urban areas. The evidence is clear that the existing geographic adjusters have been a dismal failure in promoting an adequate number of physicians in Iowa and other rural states. More severe physician shortages will occur in the future if we do not make essential changes to these formulas now. The Medicare Physician Payment Equity Act revises the formulas used to determine geographic work and practice expense adjustments. The physician work formula currently used by the Centers for Medicare and Medicaid Services to estimate physician wages measures geographic differences in the earnings of six categories of professionals (lawyers, engineers, and others), rather than differences in physicians' earnings. In addition, the data that are used are based on outdated proxy data from the 2000 census. This bill recognizes that physician work for a service requires the same skill and training regardless of the geographic area, and should be similarly valued, and it establishes a national index of 1.0 for physician work beginning in 2010. The practice expense formula used by CMS is inaccurate, outdated, and does not represent the actual office rent or employee wage costs for physicians in many areas. The office rent component uses Department of Housing and Urban Development residential apartment rental data from 2000 which does not accurately reflect physician office rent. The employee wage component comes from 2000 census data on clerical workers, nurses, and medical technicians which does not take into account any of the more highly compensated workers such as physician assistants, office administrators, and other specialists employed in physician practices today. The Medicare Physician Payment Equity Act provides for a more appropriate recognition of the geographic differences in employee wages and office rents by reducing the impact of this index to reflect more accurately the differences in physician practice costs, as of 2010. We must act now to help recruit and retain rural physicians to ensure that beneficiaries in Iowa and other rural areas will continue to have access to health care. I urge my colleagues to support this legislation to address the growing problem of health care shortages in rural America by providing more equitable payment for physicians. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to introduce the Rural Hospital Act of 2008. Back in December, I stood before this body explaining that we were only passing a 6-month Medicare bill in order to provide the opportunity for us to address a number of priorities. One of the biggest priorities I identified was the need to ensure access to rural hospital services. The type of rural hospitals that top the priority list are what are known as ``tweeners.'' These hospitals are too large to be critical access hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. It is absolutely imperative that these tweener hospitals get the assistance they need in order to keep their doors open. They are often not only the sole provider of health care in rural areas but are also significant employers and purchasers in the community. Also, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop. While the Medicare bill that Congress just enacted improves the situation for some tweeners, many more are left in financial peril. It is unfortunate that comprehensive payment reforms for tweener hospitals were not included in the bill that just passed. As you know, I have long proposed a number of tweener payment improvements in previous bills this Congress and they were included in the agreement that Senator Baucus and I reached for this year's Medicare bill. Unfortunately, the core tweener hospital payment improvements were dropped from the bill once the process became partisan. It is for this reason that I am introducing this bill. We must improve the financial health of tweener hospitals and ensure that people have access to health care. Most tweener hospitals are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. While the bill that recently passed Congress improves payments for Sole Community Hospitals, there are no provisions that benefit Medicare Dependent Hospitals. This bill would benefit Medicare Dependent Hospitals by not adjusting their payments for area wages unless it would result in improved payments. Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. Back when we passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, I made sure that this law included an add-on payment for low volume rural hospitals. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities, both Medicare Dependent Hospitals and Sole Community Hospitals, with low volumes would receive the assistance they desperately need. To offset the increases in spending from these tweener hospital payment improvements, this bill would address another priority that we wanted to include in a more comprehensive Medicare bill. Many know my position regarding physician owned hospitals and my concern about the effect these facilities have on health care access and costs as well as patient safety. There has been much debate regarding these facilities over the years, especially with physician owned limited service hospitals. This bill would eliminate the exceptions under the physician self-referral laws for physician-owned hospitals and provide a limited exception for existing facilities. As you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this urgent matter.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to introduce the Rural Hospital Act of 2008. Back in December, I stood before this body explaining that we were only passing a 6-month Medicare bill in order to provide the opportunity for us to address a number of priorities. One of the biggest priorities I identified was the need to ensure access to rural hospital services. The type of rural hospitals that top the priority list are what are known as ``tweeners.'' These hospitals are too large to be critical access hospitals, but too small to be financially viable under the Medicare hospital prospective payment systems. It is absolutely imperative that these tweener hospitals get the assistance they need in order to keep their doors open. They are often not only the sole provider of health care in rural areas but are also significant employers and purchasers in the community. Also, the presence of a hospital is essential for purposes of economic development because businesses check to see if a hospital is in the community in which they might set up shop. While the Medicare bill that Congress just enacted improves the situation for some tweeners, many more are left in financial peril. It is unfortunate that comprehensive payment reforms for tweener hospitals were not included in the bill that just passed. As you know, I have long proposed a number of tweener payment improvements in previous bills this Congress and they were included in the agreement that Senator Baucus and I reached for this year's Medicare bill. Unfortunately, the core tweener hospital payment improvements were dropped from the bill once the process became partisan. It is for this reason that I am introducing this bill. We must improve the financial health of tweener hospitals and ensure that people have access to health care. Most tweener hospitals are currently designated as Medicare Dependent Hospitals and Sole Community Hospitals under the Medicare program. While the bill that recently passed Congress improves payments for Sole Community Hospitals, there are no provisions that benefit Medicare Dependent Hospitals. This bill would benefit Medicare Dependent Hospitals by not adjusting their payments for area wages unless it would result in improved payments. Also, a major driver of the financial difficulties that tweener hospitals face is the fact that many have relatively low volumes of inpatient admissions. Back when we passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, I made sure that this law included an add-on payment for low volume rural hospitals. This bill would improve the existing low-volume add-on payment for hospitals so that more rural facilities, both Medicare Dependent Hospitals and Sole Community Hospitals, with low volumes would receive the assistance they desperately need. To offset the increases in spending from these tweener hospital payment improvements, this bill would address another priority that we wanted to include in a more comprehensive Medicare bill. Many know my position regarding physician owned hospitals and my concern about the effect these facilities have on health care access and costs as well as patient safety. There has been much debate regarding these facilities over the years, especially with physician owned limited service hospitals. This bill would eliminate the exceptions under the physician self-referral laws for physician-owned hospitals and provide a limited exception for existing facilities. As you can see, we still have much to do when it comes to ensuring access to health care in rural America. I look forward to working with my colleagues on this urgent matter.

Mr. GRASSLEY

Mr. GRASSLEY. I ask Senator Kyl, didn't Chairman Leahy and the other Democratic members of the Judiciary Committee say that a unanimous ``well qualified'' rating by the American Bar Association is somewhat of a ``gold standard'' by which all nominees should be judged?

Mr. GRASSLEY. Of course. Isn't he nominated to fill a seat deemed ``a judicial emergency'' by the nonpartisan Administrative Office of the Courts?

Mr. GRASSLEY. Yes. We have always had an understanding around here that if both Senators of the home State supported a nominee, they would move forward. Doesn't Judge Conrad satisfy this third prong of the ``Leahy standard'' for confirming judges since he has the strong support of both his home State Senators?

Mr. GRASSLEY. Mr. President, I yield the floor.

Mr. GRASSLEY. Mr. President, I say to the Senator, he talked about judicial emergencies. I think it would be good if the public knew what a judicial emergency is and why it is so important that we emphasize getting those positions filled ahead of others and why there should be no excuse for holding them up, if you have any respect for the work of the judicial branch of Government.

Mr. GRASSLEY. Mr. President, if the Senator will yield further--and I only remember two names, but I think these two names would permit me to ask a question that I think is legitimate and that the public ought to take into consideration as to the holding up of those nominations--I remember the Senator mentioned a Peter Keisler, who has been waiting for 750 days, and Robert Conrad, who also has been waiting for a long period of time, 365 days. Now, obviously, if these nominations are not being processed, there must be people who think these individuals are incompetent and should not be nominated. So what are the accusations of incompetency for these individuals not being approved?

Mr. GRASSLEY. Well, if they are competent, shouldn't they be approved?

Mr. GRASSLEY. So I draw the conclusion, I say to the Senator from Pennsylvania, that the people blocking these nominations really are not concerned at all about the efficient operation of the judicial branch of Government. But we should get our job done and confirm these nominees because that is what it takes for the judicial branch to get their work done. The judiciary needs to have the personnel to get their job done.

Mr. GRASSLEY. Mr. President, I ask Senator Kyl, aren't there a lot of other well-qualified nominees being blocked as well?

Mr. GRASSLEY. How close are they to being confirmed?

Mr. GRASSLEY. I believe it is also true, that Judge Conrad meets the fourth and final prong of Chairman Leahy's standard because he previously received bipartisan approval by the Judiciary Committee and the Senate when he was confirmed by a noncontroversial voice vote to be a U.S. Attorney in North Carolina and when he was confirmed by voice vote to the District Court for the Western District of North Carolina. It seems to me that these bipartisan voice votes indicate that Judge Conrad is a noncontroversial consensus nominee.

Mr. GRASSLEY. Well, I have had a chance to review that, and I can say that as you know, in May of 2000, during President Clinton's last year in office, Senator Leahy, referring to the Thurmond rule, said: There is a myth that judges are not traditionally confirmed in presidential election years. That is not true. Recall that 64 judges were confirmed in 1980, 44 in 1984, 42 in 1988 when a Democratic majority in the Senate confirmed Reagan nominees and, as I have noted, 66 in 1992 when a Democratic majority in the Senate confirmed 66 Bush nominees. That is the end of the Leahy quote in regard to the Thurmond rule.

Mr. GRASSLEY. Well, the answer is yes, of course. Let me explain that Senate Democrats allege that Republicans, then in the minority and anticipating a change in power in the 1980 election, stalled the approval of President Carter's judicial nominees. The Majority points to a discussion at an executive business meeting which took place on September 10, 1980, when Ranking Member Thurmond asked Chairman Kennedy to hold over 13 nominees for 1 week because their background investigations were not complete. However, this allegation is not accurate.

Mr. GRASSLEY. Yes, it is. In fact, a 1-week holdover in the Judiciary Committee is any Senator's prerogative--in fact, prerogatives I have used a few times myself--and over the last 2 years, the Majority has held over virtually all of President Bush's nominees for 1 week before a committee vote. Do you recall whether the Senate later confirmed any of these nominees who were held over?

Mr. GRASSLEY. I think it is pretty clear then, Senator Sessions, referring to the accusations made about Senator Thurmond, it doesn't sound to me as though Senator Thurmond was blocking nominees in anticipation of an upcoming election.

Mr. GRASSLEY. Let me also point to a nonpartisan source. Didn't Mr. Steve Rutkus from the Congressional Research Service testify at the Senate Republican Conference's forum on the judicial nomination process on Monday that the facts do not support a Thurmond rule? Would that be correct? Is that the way you understand it?

Mr. GRASSLEY. Yes. The record shows the Senate did. That is entirely true.