Tom Harkin

Mr. HARKIN

Mr. HARKIN. As I understand, what the Senator is saying is that right now under the food stamp rolls, if there is a person in the household who is incarcerated, that you just want to ensure that the changes are made to reflect that there is one less person in that household for purposes of food stamp eligibility and food stamp allotment?

Mr. HARKIN. I just want to again thank my colleague from New York. And I want to say to the Senator from New Mexico, again, I know his strong feelings on medical research. We fought side by side in the past when I was privileged to chair the Appropriations Subcommittee in working with the Senator to increase funds for medical research. I know his strong feelings, and I appreciate that. Again, I just hope we can sort of think outside the box, as I said earlier, of looking at this and get this money into research. We have to do it, get more money into medical research. I mean, they are starving out there. And the young people who want to go into research-- right now, less than 25 percent of the peer-reviewed grants at NIH are being funded. I always talk about medical research as sort of like you have doors that are closed. You want to look behind the closed doors. Well, if you only are looking behind one out of every four doors, the odds are four to one that you are not going to find the answer. If you look at two out of four, or three out of four, your odds are a lot better that you are going to find the answer. That is what we are attempting to do with this amendment. So, again, I hope that we can have a resolution of this and get on with getting the increased funding for NIH. Mr. President, I want to ask the Senator from New Mexico, before I leave, I have two amendments that I would just like to lay down. Should I do those now, send those up?

Mr. HARKIN. I appreciate that. It is a good amendment.

Mr. HARKIN. Mr. President, I thank my friend from New York for his kind words, but also, more important, let me thank him for his stalwart, unwavering support through the years for medical research. I have been involved in this battle for a long time, and I have never found anyone who has fought harder to make sure we had adequate funding for all of the biomedical research we need done in this country than Senator D'Amato from New York. I thank him for that unwavering support down through the years and for his support on this amendment also. Mr. President, this amendment does have strong bipartisan support. Senator Specter and Senator Mack are cosponsors, as well as a number on our side--Senator Rockefeller, Senator Daschle, Senator Boxer, Senator Durbin, Senator Kerry. So it has strong bipartisan support. I want to pick up on what the Senator from New York said. We voted not long ago, the entire Senate, every one of us voted to double funding for NIH by 2002. We are all in favor of that. But it is very hard finding the money. I worked very hard with Senator Specter when I was chairman and he was ranking member. Now he is chairman and I am ranking member. We have worked very hard to get adequate funding for NIH every year. It is getting more and more difficult, and with this balanced budget which I am supporting strongly, which I have continued to support in the past and will continue to support, it is going to be even harder. If we wanted to double NIH funding by 2002 out of our discretionary account, if we zeroed out all the other accounts we have--maternal- child health care, the Centers for Disease Control, mental health block grants and a host of others--if we zeroed all those out and shifted it just to NIH, we would still be $2 billion short of doubling it. We are not going to zero out mental health block grants and the Centers for Disease Control and everything else. So we have to look for someplace else to find this money. Without our action, the investment in NIH research is only going to decline in real terms. The only way that we can get it is by going outside of the regular discretionary spending process. I guess what this amendment is, more than anything, is there was a book of ``Thinking Outside the Box.'' We get put in these boxes and sometimes we have to think outside of the box. What this amendment does, again, to repeat, to reemphasize what Senator D'Amato said, this research trust fund would work in the following way. Every year, CBO and the Secretary of Health and Human Services would look back to determine whether the annual Medicare and Medicaid savings actually achieved as a result of the changes made by the Balanced Budget Act exceeded the savings called for in the budget resolution. In other words, are there more savings than what was called for to balance the budget? If that is so, if there are excess savings, then that excess savings would be deposited each year into a health research fund to be distributed to NIH for the purposes of medical research. It is a very simple, a very elegant amendment, so offset is needed. As we consider long-term changes to the Medicare Program--and we will be--the creation of a medical research trust fund is only common sense. I know a point of order will be made against the amendment that it is not germane. I accept the fact that this amendment is not germane to the bill before us. But I submit to you, it is every bit germane to the issue of saving Medicare and how we are going to deal with Medicare. A number of recent studies have shown that investments in medical research can lower Medicare costs through the development of more cost- effective treatments and by delaying the onset of illnesses. Duke University recently did a study that said the financial crisis in Medicare can be resolved without raising taxes or cutting benefits by improving the health of older Americans through biomedical research. It is the key investment, it is the key to reducing health costs in the long run. If we can find cures for things like breast cancer, lung cancer, Alzheimer's, the savings would be enormous. Unfortunately, while health care spending devours nearly a trillion dollars annually, our medical research budget is dying of starvation. The United States devotes less than 2 percent of its total health care budget to health research. Look at it this way, the Defense Department spends 15 percent of its budget on research, and yet, in health care, we spend less than 2 percent. So we have smart bombs and smart missiles and everything that defends our country, and we are all happy about that, but look what they have done with research. If we want a smart bomb and a smart missile to knock out lung cancer or breast cancer or Alzheimer's, or to help us with mental illness, this is where we have to put the money. Take Alzheimer's alone: Funding for Alzheimer's research is about $300 million a year. Yet, it is estimated that the 4 million people in America who suffer from Alzheimer's is costing us about $100 billion a year. That is about $25,000 per person who has Alzheimer's on average. If we could just delay the onset of Alzheimer's for 5 years, that would go a long way toward solving our Medicare problems. Gene therapy, treatments for cystic fibrosis, Parkinson's--this is a time of great promise. Almost every day new stories are coming out about one advance or another. We are not suffering from a shortfall of ideas. We are suffering from a shortfall of revenues. Also, in the last several years the number of young people going into research is declining. The number of people under the age of 36 even applying for NIH grants dropped by 54 percent in the last 10 years. Why? Because when they submit their proposal, it gets peer reviewed. They say it is a good grant, and there is no money. And so young people who would want to pursue research look for other careers. Well, again, health research saves money. It saves lives. And the time is right. This fund will allow us to pursue the innovative cures, treatments and therapies that will help us solve the Medicare Program. Again, I want to thank my colleague from New York, Senator D'Amato, and Senator Mack, Senator Specter, with whom I work on the Appropriations Committee, and all the others who have worked so hard. This is a very simple and elegant amendment. I hope that Senators will take that step, sort of outside the box, to think newly, to think anew, to think about how we start getting more money into NIH, through a process that will still help us balance the budget as we all voted to do. So, Mr. President, again, I urge my colleagues to support this amendment and urge its adoption.

Mr. HARKIN

Mr. HARKIN. Madam President, I have an amendment. I know the Senator from Arkansas wants to speak, and I will be as brief as I can.

Mr. HARKIN. Mr. President, since I still have the floor, if I might, this Senator was unaware that a previous agreement had been made by the Senator from Arkansas for this time slot. What I would ask is that when the Senator from Arkansas finishes, then I would be recognized to make my statement.

Mr. HARKIN. I didn't know such an agreement was in effect. That would be fine.

Mr. HARKIN. Yes.

Mr. HARKIN. I would like to speak very briefly and lay down the amendment.

Mr. HARKIN. And that would have to be done by unanimous consent, right?

Mr. HARKIN. Madam President, do I understand that under the procedure now in effect we can lay down amendments this afternoon? Is that the case?

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

Mr. HARKIN

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

Mr. HARKIN. Mr. President, who yields me time? Mr. President, I ask unanimous consent that my time be taken off the minority's time on the bill.

Mr. HARKIN. Mr. President, for many years, I have been working hard to identify and combat fraud, waste, and abuse in the Medicare Program. Starting in 1990, when I took over as chairman of the appropriations subcommittee that funds and has jurisdiction over the administrative funding of Medicare, I began holding hearings, and I held several hearings through those years, released report after report, documenting the unnecessary losses to the Medicare Program. These losses are truly staggering. I have taken the floor many times over the last several years to document this for other Senators. The General Accounting Office estimates that up to 10 percent of Medicare payments could be lost to fraud, waste, and abuse. That adds up to about $18 billion a year. The HHS inspector general just concluded a comprehensive audit of Medicare claims paid last year. It is the most comprehensive review of claims ever made. They found that up to $23 billion of those payments, or about 14 percent, should not have been paid. This is last year, 1 year. The HHS inspector general said that up to $23 billion should not have been paid. So the problem may even be worse than we originally thought. There are many components to this problem. Mr. President, if you can dream up a scam or a ripoff, it has probably already been tried in Medicare. We have uncovered losses due to out-and-out fraud--billing for services that weren't administered, providers paying and receiving kickbacks, double billing. We now even have evidence that organized crime has entered the Medicare fraud business. Clearly, there is a lot of criminal activity that is going on out there which is costing us billions of dollars each year. However, we found, with help from the GAO and inspector general, that even greater losses are due to waste and abuse. That's right, waste and abuse is even bigger than fraud in the Medicare Program, and those losses are often directly due to or encouraged by wasteful Medicare payment policies and practices. At long last, it appears that the bill before us will address some of the most glaring problems. It would make changes that I have been advocating since the beginning of this decade, changes, I might add, that this body has previously defeated. I have offered amendments on the floor in the past to provide for competitive bidding for Medicare, just like the Veterans Administration has, and I was not successful. So now with the competitive bidding, plus a streamlining of Medicare's authority to pare back excessive payment rates, these two steps can cut waste and save taxpayers billions of dollars. I commend Senator Graham of Florida for offering the amendment in committee on competitive bidding. He had cosponsored my proposals in the past. Senator Graham has done us all a great service for his action, and I commend the full committee for adopting it and having it in the bill before us. The need for these reforms could not be clearer. Let me just give you an idea of what I am talking about. Last year, I released a report prepared by my staff on waste in Medicare payments for medical supplies. Remember the $500 toilet seats from the Pentagon of a decade or two decades ago? The good news is, the Pentagon isn't buying them anymore. The bad news is, Medicare is. Our analysis of Medicare payments for a sample of medical supplies and equipment from saline solution to hospital beds reveals that Medicare is paying up to six times more for these items than other Government or private-sector entities. For just 18 items reviewed, Medicare could save over 50 percent, or up to $236 million this year. Let me repeat that. We reviewed 18 items--just 18--out of the tens of thousands that Medicare pays for. In just those, we could save $236 million this year if we paid the same rates in Medicare as we paid in the Veterans' Administration. Same item. If Medicare were just to pay wholesale rates offered to others around the country, it could save $218 million this year. In fact, it was so bad, we found that if Medicare just went down to the local drugstore and paid retail rates, it could save $371 million over the next 7 years; $371 million over 7 years if they just paid retail rates for the 18 items that we looked at. For example, we found that Medicare pays up to $182.80 to rent an air mattress, more than six times the wholesale price of $29.95, three times the price of $53.88. Medicare is paying $99.35 for a simple commode chair that the VA is able to buy for $24.12. Medicare is paying $7.90 for a bottle of sterile saline solution; the VA buys it for $2.38. I have a chart here which just shows some of these items and the potential savings. Here is an irrigation syringe which Medicare is paying $2.93 for; the VA is paying $1.89. Here is a walker. This is one of those plain walkers that elderly people use. It has four legs on it. Medicare is paying $75.52 for them; the Veterans' Administration is paying $25.40 for the same one, the exact same walker made by the same company. A commode chair. You know what a commode chair is; if you can't get to the bathroom, you have it by your bed. Medicare is paying $99.35 for it; the same commode chair, identical, the Veterans' Administration is paying $24.12 for it. Here is the sterile saline solution I talked about. Medicare is paying $7.90 for it; the same item, the Veterans Administration is paying $2.38 for it. Why? Why would the Veterans' Administration pay $25.40 for a walker that Medicare is paying $75 for? Same item, same town. Why? Because the Veterans' Administration is engaging in good old-fashioned competitive bidding. If you want to sell it, put out a bid for what you are selling it for, we will take the lowest bid. That is why Medicare pays bloated prices based on historical charges and the VA, which has much less purchasing power than Medicare, puts it out for both quality and cost control. So the Veterans' Administration is able to save money, because they use competitive bidding to assure it is getting the best rate possible. Right now, under law, Medicare is prohibited--prohibited--from using this measure. Medicare is prohibited from engaging in competitive bidding. But the bill before us now gives them that much-needed authority. It doesn't mandate it. I think we ought to mandate it, but the bill at least gives HCFA the authority to engage in competitive bidding. In the hearings that I have held in the past, Mr. Vladeck, the Administrator of HCFA, has testified that if given the authority, they would use it. So I think this will be sufficient and will get the Health Care Financing Administration to start engaging in competitive bidding. Another important reform that is in this bill is the streamlining of Medicare's authority to reduce grossly excessive payment for items it purchases. It is called the inherent reasonableness authority. Under current law, the authority is tortuous to complete. As a result, it has only been used once. Three years ago, we found that Medicare was paying up to $211 for a home diabetes monitor. At that time, I sent a staff person of mine out to the local K-mart and bought the same item for $49.99 that Medicare was paying $211 for. After several hearings, we got Medicare to begin the process of using their authority, the authority that they call inherent reasonableness authority. We got them to use that to reduce this gross overpayment for these blood glucose monitors. It took them 2 full years to go through all of the hurdles set up in the law. They finally reduced the payment to around $50, and that alone is saving taxpayers $25 million over 5 years. But it took 2 years just to get that done. That delay cost taxpayers $10 million. The bill before us includes a streamlining of this process that I have been suggesting for years. It would allow Medicare to respond quickly when it finds that it is paying prices that are out of line with what everyone else pays. So I am pleased that this finally is before this body, and I hope it is agreed to. Mr. President, I have an amendment that I will be asking to send to the desk, after I give a brief explanation. They are changes that will help to reduce the massive losses due to waste, fraud, and abuse. All of these are based on reports and recommendations by the General Accounting Office and the inspector general of Health and Human Services. I don't believe it will be controversial to anyone, and I hope it will be accepted by the managers of the bill. First of all, Mr. President, the first part of the amendment has to do with improving information to beneficiaries. Under current law, beneficiaries are sent a statement, an explanation of charges and payments. They are brief summaries of the actual bills and payments. There are several shortcomings of these current statements that are sent to beneficiaries. The first thing that you will notice, if you look at a statement, it says in big bold letters: ``This is not a bill.'' So you are an elderly person, you get this, it says, ``This is not a bill.'' Hey, I get a lot of things in the mail that is not a bill. I'm not going to worry about it. So many beneficiaries don't take the time to examine them for the mistakes. In addition, the statements do not provide the number of the toll-free hot line operated by the Medicare contractor to receive reports of errors or fraud or abuse. Finally, there is no requirement that beneficiaries can get copies of complete itemized bills submitted by providers. So what my amendment does is it requires that each explanation of benefits sent to beneficiaries, including the statement, because billing errors do occur and there is significant waste, fraud, and abuse, that the beneficiary should carefully review the statement for errors or other questionable billings and report those to Medicare. It also requires that the statement include the toll-free hotline number to report the suspected problems. These toll-free lines already exist. I am not setting anything up that does not exist. They already exist, but many seniors do not know about it. All I am saying is, the phone number ought to be put on the statement of benefits. My amendment provides that a beneficiary may, if they request, be provided an itemized bill within 30 days of their request when the beneficiary suspects irregularities from having read the summary provided to them. My amendment also requires that any specific allegations of errors or other problems made by beneficiaries based on a review of the itemized bill be reviewed and any appropriate recoveries made for the trust fund. Second, Mr. President, Medicare payments are supposed to be limited to those that are reasonable, necessary, and related to patient care. That is the law, and those are the regulations. However, while most other Federal agencies specifically prohibit indirect cost allowances for gifts, entertainment expenses, education costs for spouses and dependents, Medicare does not prohibit this. In addition, Medicare does not explicitly prohibit indirect cost reimbursement for fines and other penalties imposed by Federal, State, or local governments on health care providers. As such, providers can escape a fine by simply charging them back to Medicare. Well, as documented by the General Accounting Office and the Office of Inspector General, this lack of clarity in Medicare policy invites confusion and abuse. For example, a report by the Office of Inspector General found that Medicare had been billed for a portion of the cost of a sailing regatta for hospital employees, reimbursement for ballet tickets, reimbursement for Tiffany crystal pitchers, reimbursement even for a trip to Italy to inspect a piece of art for an executive office. This amendment explicitly prohibits Medicare reimbursement for indirect costs related to entertainment, gifts, donations, personal use of motor vehicles, costs for fines and penalties, and tuition for spouses or dependents of health care providers. In other words, it brings it into line with other Federal law. The next part of my amendment goes to the losses due to frequently abused items. Currently under the law, the Secretary may--may; does not say ``shall''--may make a list of medical supply and equipment items that she finds to be frequently subject to unnecessary utilization. In other words, you see something popping up all the time, it keeps being utilized, well, the Secretary may develop a list of suppliers found to have business practices that result in a pattern of utilization. So the Secretary's power is she may. The Secretary has failed to use this authority, thereby missing potential for significant savings. I do not mean to point at this Secretary. The Secretary before this one did not use it either. And therein lies the problem. My amendment simply changes the word ``may'' to ``shall'' and requires the Secretary to develop the list of overutilized medical supply items and questionable suppliers. Lastly, in OBRA 1993, it provided for certain medical supplies, including surgical dressings, to be reimbursed based on a fee schedule. As a result, providers must submit to fiscal intermediaries claims that itemize the specific supplies and quantities billed. However, this provision does not apply to items billed by home health care agencies. So since 1993, for certain medical supplies, like surgical dressings, reimbursed on a fee schedule, it does not apply to home health agencies. Now, in addition, current law prohibits the Secretary--prohibits the Secretary--from using her inherent reasonableness authority to reduce grossly excessive payment rates for surgical dressings. Why that was left out we do not know, but it was left out. The General Accounting Office has documented that these two exceptions to Medicare law result in considerable unnecessary losses. They found, for example, that items as diverse as pacemakers were being billed as medical supplies, and those claims were paid because Medicare does not know what specific items they are being billed for. In addition, the GAO found that payments for surgical dressings could be reduced by half if more reasonable prices were paid. For example, they found that Medicare pays $2.32 for a gauze pad whose wholesale price is 19 cents and that another Government agency buys for 4 cents, in this case the Veterans' Administration. Again, Medicare is paying $2.32 for a gauze pad; the VA is paying 4 cents for the same one. My amendment would say the home health agencies would be required to submit to fiscal intermediaries claims that itemize the specific supplies and the quantities billed for surgical dressings. All other providers are currently required to do the same, but not home health agencies. Mine would just bring the home health agencies in under this umbrella. Finally, the loophole that for some reason is there that excludes surgical dressings from the Secretary's inherent reasonableness authority would be closed. She would have that authority to pay on a reasonable basis, to get that down to the same level that the Veterans' Administration is paying. Mr. President, I am going to be asking unanimous consent to set aside the pending amendment and lay down my amendment. We are now discussing it with the Finance Committee. I am hopeful it can be cleared without the need for a vote in the next day or two. Amendment No. 428 (Purpose: To reduce health care fraud, waste, and abuse)

Mr. HARKIN. So, Mr. President, I ask unanimous consent to have the pending amendment laid aside so that I may lay down my amendment.

Mr. HARKIN. Sure.

Mr. HARKIN. Absolutely.

Mr. HARKIN. I understand it.

Mr. HARKIN. We are working with the Finance Committee. What I suggested I hope will be accepted in the next day or two.

Mr. HARKIN. Yes.

Mr. HARKIN. Yes; I sent it to the desk.

Mr. HARKIN

Mr. HARKIN. Mr. President, on Tuesday, June 17, I was unable to vote. I would have voted ``yes'' on the Lugar amendment No. 382 to S. 903, the Foreign Affairs Reform and Restructuring Act of 1997. I believe that the United States should pay our debt to the United Nations. However, I also believe that change and reform in the United Nations are essential if the United Nations is to be revitalized. The U.S. dues for the regular U.N. budget and for international peacekeeping should be reduced. These cost-saving goals can be achieved but we will have to convince our allies and friends, who will have to bear a larger portion of the costs as our contributions decline, that we are serious about our leadership and our compliance with our obligations. That is why I believe that Senator Lugar offered a reasonable solution to wipe the slate clean of our arrears and clear the way to pursue the U.N. reforms that will make it a more viable institution. I am hopeful that when this bill emerges from the conference committee the 38 benchmarks mandated in title XXII of the bill as pre- conditions for our payment will be addressed and corrected.

Mr. HARKIN

Mr. HARKIN. Mr. President, today, I rise to introduce the Working Family Child Care Tax Relief Act of 1977. This legislation is targeted to those families most in need of a tax break--working families with child or dependent adult care expenses. The need for child care continues to grow, 60 percent of women in the workforce have children under 6 years of age. Moreover, hard working families throughout Iowa and across America are struggling to meet the escalating costs of child care. A family with a preschool-age child spent an average of $15 more per week on child care in 1993 than in 1986. Currently, average child care costs for a working family in Iowa run about $3,000 to $6,000 per year. Today, there is a child care tax credit available for many working families--but that credit hasn't been increased since 1982--and it wasn't even adequate then. Inflation has reduced the value of the credit by about 60 percent since it was last adjusted in 1982. Under current law, families with $10,000 in adjusted gross income are eligible for a 30-percent credit on the first $2,400 in child care expenses for one child or $4,800 for two children. The credit phases down to 20 percent at $28,000 and all incomes above that level. Because the child care tax credit is not refundable, few families actually qualify for the full 30 percent credit under current law. Families with an income of less than $10,000 do not have a tax liability against which they can apply the credit. This legislation would expand the child care tax credit and make it available for more working families. The amount of child care expenses eligible for the credit would be increased to $4,000 for one child or other dependent and $8,000 for two or more dependents. For example, my proposal would provide a 30-percent refundable credit for working couples with an adjusted gross income of up to $50,000 on the first $8,000 in child care expenses for two or more children or other dependents. For families earning between $50,000 and $80,000, the credit gradually phases down to current level. Families earning more than $80,000 would be eligible for the same level of benefits they receive under current law. Although we must continue our efforts to reach a balanced budget, we must also realize that American families with child or dependent care expenses deserve a tax break. But I am not talking about doling out huge new tax breaks for those on top who don't need it. This legislation is targeted directly to families in the middle--they are not on welfare and they are not rich. They work hard, they care about their families and their jobs, and they deserve a break. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HARKIN

Mr. HARKIN. Mr. President, today, I rise to introduce the Working Family Child Care Tax Relief Act of 1977. This legislation is targeted to those families most in need of a tax break--working families with child or dependent adult care expenses. The need for child care continues to grow, 60 percent of women in the workforce have children under 6 years of age. Moreover, hard working families throughout Iowa and across America are struggling to meet the escalating costs of child care. A family with a preschool-age child spent an average of $15 more per week on child care in 1993 than in 1986. Currently, average child care costs for a working family in Iowa run about $3,000 to $6,000 per year. Today, there is a child care tax credit available for many working families--but that credit hasn't been increased since 1982--and it wasn't even adequate then. Inflation has reduced the value of the credit by about 60 percent since it was last adjusted in 1982. Under current law, families with $10,000 in adjusted gross income are eligible for a 30-percent credit on the first $2,400 in child care expenses for one child or $4,800 for two children. The credit phases down to 20 percent at $28,000 and all incomes above that level. Because the child care tax credit is not refundable, few families actually qualify for the full 30 percent credit under current law. Families with an income of less than $10,000 do not have a tax liability against which they can apply the credit. This legislation would expand the child care tax credit and make it available for more working families. The amount of child care expenses eligible for the credit would be increased to $4,000 for one child or other dependent and $8,000 for two or more dependents. For example, my proposal would provide a 30-percent refundable credit for working couples with an adjusted gross income of up to $50,000 on the first $8,000 in child care expenses for two or more children or other dependents. For families earning between $50,000 and $80,000, the credit gradually phases down to current level. Families earning more than $80,000 would be eligible for the same level of benefits they receive under current law. Although we must continue our efforts to reach a balanced budget, we must also realize that American families with child or dependent care expenses deserve a tax break. But I am not talking about doling out huge new tax breaks for those on top who don't need it. This legislation is targeted directly to families in the middle--they are not on welfare and they are not rich. They work hard, they care about their families and their jobs, and they deserve a break. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.