Jeff Sessions

Mr. SESSIONS

Mr. SESSIONS. If they can do that, if they are friends, if we were to have some turnover in government or a war were to break out that could deny some of this, we could see prices even higher than that on the world market?

Mr. SESSIONS. Of course, the Senator is not overlooking conservation. That is another way to reduce dependence on foreign oil.

Mr. SESSIONS. That is a big part of this bill that the Senator proposed. I again want to express my appreciation to the Senator. I came to the Senate 5 years ago and heard the Senator delineate this problem and tell us over and over again what we were going to be facing in the future. I think the events in recent weeks have validated the Senator's warnings, the Senator's caution to America, the Senator's call for us to do the smart thing. I also believe if we can produce more oil at home, it would reduce our deficit and help this economy recovery.

Mr. SESSIONS. I will ask one more question. The Senator has challenged us now to name one more project anywhere in this country that will produce as much stimulus as increasing our domestic oil supply as this bill will do, and I think it is a challenge that ought to stay out there and we ought to see if somebody can meet it. Not only will it help us, it will actually produce income and not cost us any money.

Mr. SESSIONS

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 Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. SESSIONS. I thank Senator Reid for his courtesy, as always.

Mr. SESSIONS. Madam President, I have offered three amendments today: Amendment No. 2042, a wage index adjustment amendment; amendment No. 2045, calling for a study on AIDS prevention program funding; and amendment No. 2054, an amendment dealing with a study on student loans, with the goal of reducing fraud and abuse in student loan programs. Having worked with the leadership and the floor managers on these amendments, I withdraw all three amendments at this time, with the understanding that amendments Nos. 2045 and 2054, with modifications, would be made part of the managers' amendment.

Mr. SESSIONS

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

Mr. SESSIONS. Madam President, I offer my amendment I referred to previously.

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 Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. SESSIONS. Madam President, in this country, I have come to realize we have a very large student loan program which provides great benefits to a lot of American children and students who are not children in college. I am offering an amendment today that will deal with one of the more serious problems in that program that has created quite a good deal of fraud. The amendment I submit would require the General Accounting Office to conduct a study on Federal student loan disbursements to students who attend foreign schools and ask them to report on the fraud, waste, and abuse in the Federal Family Education Loan Program as it relates to students receiving funding in order to attend foreign schools. Study abroad can certainly be a wonderful experience for students, one we ought to encourage. It is something of which more and more students are availing themselves. I certainly celebrate that and encourage it. I do not oppose, as we do today, some form of student loan aid to students who wish to participate in the foreign educational experience. It can be a very enriching time for a student. We do need to ensure, however, that the program involves study and not a European vacation at the expense of hard-working American taxpayers for whom a visit to the ballpark may be beyond their budget. In recent years, there have been a number of criminal cases of so- called students falsely claiming they are attending foreign schools, directing that their student loan checks be paid directly to them as the law will allow and not to the school, and then taking the money and spending it on themselves and not even attending the foreign school at all. This fraud has been documented with many examples listed in the 1997 Department of Education inspector general's report. I believe the Federal Family Education Loan Program is at great risk of fraud unless we institute some sound controls immediately. In the United States, student loan checks, if you go to a college in the United States, are made out to the school and the student. If the school doesn't get the check and tuition is not paid, they don't endorse it; the check can't be cashed. Both the student and the school have to endorse the check, and the tuition is thereby paid with certainty. With regard to foreign schools, the checks are made out simply to the students routinely. Since 1995, there have been at least 25 felony convictions of students who fraudulently claimed they were attending a foreign school and then they just cashed the Government loan check and simply did not attend class. Of course, these are only the students who were caught in this fraudulent activity. I have no doubt that there are many more who have not been apprehended. This is why we should take action. We must prevent cases such as this one. Mr. Conrad Cortez claimed to be such a student. He applied for student loans. In March of 2000, he admitted to charges of submitting 19 fraudulent student loan applications over a 3-year period. He pled guilty before a Federal judge to numerous counts of mail fraud, bank fraud, and Social Security account number fraud in the State of Massachusetts. The prosecutor in that case told the court that Cortez was responsible for dozens of auto loans filed outside Massachusetts, in Florida and in Texas. The absolute disregard for the American taxpayers is epitomized by the activities of Mr. Conrad Cortez. He was living high at the expense of American taxpayers and in violation of law by filing false documents to receive loans and money from the Federal Government. During the period from 1996 through 1999, he bought gifts for his friends, including jewelry and cars, paid for private tennis lessons--I guess he might have thought that was educational--made a downpayment on a house, sent some money back to his native Colombia, ate in the best restaurants, and even paid restitution for a previous charge of defrauding the Government, all with taxpayers' money. It was a fraudulent loan he had claimed. His fraud only ended when he was turned in by his sister's boyfriend who claimed that Mr. Cortez had used his identity to obtain additional loans. In fact, Mr. Cortez was about to help himself to $800,000 worth of loans that you and I would pay for out of our Federal income tax. He had filed 37 false claims in all, spending the money as fast as it arrived. The inspector general's office of the Department of Education, with the FBI and the attorney general's office in Boston, combined forces to apprehend him before he could get all of the money he had claimed through these false loans. He did, however, pocket about $300,000 before he was caught. This is a perfect example of how this program is at risk and is not being managed properly. Currently the methodology for approving and releasing student loan funds is vulnerable. Current law says that a student may request a check be issued directly to him or her when claiming that they are attending a foreign school, and a check will be sent directly to them without the requirement of a cosignature by the school. The Office of Inspector General at the Department of Education found that the number of students claiming to attend foreign schools and applying for loans increased each academic year from 1993 through 1997 and went from 4,594 students to 10,715 students in just 4 years, more than doubling. The later figures since that date of 1997 indicate that the loan numbers for foreign education continue to increase. Indeed, in 1998 to 1999, there were 12,000 loan applications from American students claiming to attend foreign schools. The question then comes, Why are we paying to send students to foreign schools at all? These are American taxpayers' dollars flowing to foreign economies where the standard of education often is not as good as the education we have. Certainly, our education system in the United States--our colleges and universities--is not overcrowded. It certainly has the capacity to handle more students. We need to ask that question to some degree. I would support some assistance in the form of loans or aid to people who would attend school in a foreign country for a year or two. But I have serious doubts about whether this country ought to pay for a full degree course, 4, 5, 6 years, through subsidized loans and grant programs to students who choose to further their education in another country where they will not be accredited according to the standards of the United States. I had attempted to raise that issue. I do believe we have not had sufficient hearings on it. We have not gone into this in some depth. Certainly educating young people through allowing them to be exposed to foreign education programs can have some benefit. But I think we need to look at curtailing that. As a matter of comity and working with the managers of this bill, they did not think this was the appropriate time to move forward on a limit of just how many years a person ought to be able to get Federal subsidies to attend foreign universities. So I have taken that out of this amendment. Basically, what our amendment would do would be to require a GAO study to find out exactly what is going wrong with this program and to make sure that it is tightened up so that these fraudulent activities cannot continue. This report will compare the oversight controls for loans dispensed to students attending foreign schools and domestic institutions and examine the default rates at foreign schools that enroll American students receiving federally guaranteed student loans to determine the number of students that are receiving loans for multiple years. My amendment will also require the GAO to make recommendations for legislative changes that would be required to ensure the integrity of the Federal Family Educational Loan Program. It will help us to get this information we need so that we can have a complete and accurate picture and then Congress should be able to take legislative action to stop this abuse. We have now, as I understand it, an agreement to spend over $600 billion in discretionary money in this year's budget. By any standard, that is a lot of money. I think sometimes we see the big billion dollar numbers so often that we are not impressed at all when somebody comes up and says, well, this person got $300,000 fraudulently. We just don't pay attention to it. I was a Federal prosecutor for almost 15 years, and I put a lot of people in jail for defrauding the Federal Government. I know there are good laws that work to help apprehend thieves. I know there are some areas in which our laws are weak. I know there are procedural methods by which Federal agencies can make it much more difficult to allow a person to defraud the Government. I am sure this person who got $300,000 is not going to be able to pay restitution of $300,000 unless he can figure out a third way to defraud the Government to pay restitution. He is not going to pay us back, the truth be known. We will never get that money back. It is lost. Decent, honest people who do not get a vacation to Disney World will be paying for his extravagant lifestyle, his fraudulent activities, and we ought to tighten up these procedures. Every day that I come to work I have in my mind a commitment to make sure that we have as much accountability in our Federal system as possible. I think sometimes we pay too little attention to it. I have a program I call ``Integrity Watch,'' and it is just a way I focus on abuses in the system that I think could be corrected. And we will try to move to correct those problems. I thank the Chair for the time. I yield the floor. I note the absence of a quorum.

Mr. SESSIONS. Yes.

Mr. SESSIONS. On the previous one, I do expect that I will not ask for a vote. On the one I am offering today, I believe we have reached an accord by altering my original language and it will be accepted.

Mr. SESSIONS. I asked unanimous consent to move from debate on the pending amendment so I may offer a new amendment, one that is approved on the list.

Mr. SESSIONS. Madam President, I ask unanimous consent that I be permitted to speak for 10 minutes and that we move from the pending amendment so I may offer another amendment.

Mr. SESSIONS. I offer the amendment and note that it has eliminated certain language from it. I yield the floor.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I ask unanimous consent reading of the amendment be dispensed.

Mr. SESSIONS. I thank Senator Specter for his leadership and courtesy in allowing me to present this amendment which I believe is exceedingly important to health care in America. It is a problem with which we simply have to deal. It affects hospitals all over America, causing the richer hospitals to get richer and the poorer hospitals to get poorer. The problem is the wage index. I offer the Wage Index Fairness Act, and I send the amendment to the desk.

Mr. SESSIONS. I think it would take a point of order to do this. I wanted to raise this issue, and maybe others would like to speak on it. I would like to go on to another issue. I have had my say at this point. Perhaps a vote would not be necessary on this amendment or on a point of order. It is a health care bill. It is time to talk about one of the biggest problems we have in health care, which I believe is the wage index. I have been to hospitals and talked to administrators and CFOs, the people writing the checks, and the heads of nursing, and they see people leave, driving up the wage index at another hospital and reducing theirs even further. We have to fix this.

Mr. SESSIONS. I thank the Senator for his interest and leadership. I yield the floor.

Mr. SESSIONS. I yield.

Mr. SESSIONS. The Wage Fairness Index Act.

Mr. SESSIONS. I note that Iowa is also adversely impacted by this wage index formula. I introduced this amendment as a bill earlier this year with my colleagues, Senator Shelby and Senator Hutchinson. We have a terrible inequity in the system and in the index formula. This amendment will establish a floor on the area wage index adjustment factors that are utilized under the Medicare prospective payment system for inpatient and outpatient hospital services. I believe this is the best way to do that. Several other Members have other proposals to help fix this problem. This is a solution I believe would be most effective. Over the past several years, I visited a number of hospitals, 15 or more, in the State of Alabama. In every one, hospital administrators and staff have urged me to do something about the wage index. Time after time it has been cited to me in personal and confidential discussions, just heart to heart, as we discussed the frustrations and problems they face in hospitals, and in particular rural hospitals. It has been raised to me as a No. 1 issue facing hospitals in Alabama. The Alabama Hospital Association and its members have helped craft a plan. They consider it an emergency problem and a priority for them. The National Hospital Association has recognized this as a problem, and they support reform. A complicated and a mostly arbitrary formula, the wage index, is part of the hospital prospective payment system which was created just in the early 1990s, about 10 years ago. We are just now beginning to feel how it plays out in real life. It was an effort to cut Medicare spending. It established a base rate for Medicare reimbursement based on two components--the labor component and the nonlabor-related costs. That is how a hospital is paid for Medicare services they render to a person who is not otherwise paying. This could be the elderly on Medicare and they come in and the hospital provides services. All they get for that service is what the Federal Government pays them under the Medicare Act. So everyone knows that basically hospitals are not making any money. In fact, they lose money, often, on Medicare patients. It is the individuals who pay their way or have insurance to pay their way who help them be a success. The hospitals that have larger numbers of Medicare patients who serve a poorer population are more critically impacted by this problem. Once again, the wage index is falling particularly hard on hospitals that serve a disproportionately high number of Medicare patients and poor patients--Medicaid also. It established a base rate for paying Medicare costs. They decide how much we are going to pay for a gall bladder operation, how much we will pay for pneumonia and other things, and that is what the hospital gets. They factor that on labor and nonlabor costs. Nonlabor costs--that is the material and all--are similar nationwide, and the factors come out the same. But labor-related costs must be adjusted to regional differences in wage costs. This adjustment is made according to the wage index. The wage index, by the way, is a larger component of the cost of hospital care than the other factors. It is the biggest component. I believe about 60 percent of the reimbursed rate is based on the wage rate. Rural areas such as Alabama and other States have lower wage costs, which is not a good thing. We don't like it that our nurses and support personnel aren't paid the same wages as in other States. But it is true we have some lower wage rates. Therefore, the Medicare reimbursement cost for health care in Alabama and many other States and rural areas even within larger States is much lower. Actually, Alabama has the lowest average wage index in the country and Montgomery, AL, the capital--a good, strong city, not some small rural town--has the lowest wage rate in the State. In fact, the wage index for all Alabama hospitals is between .74 and .89, well below the national average of 1.0. In other words, where the national average is hospitals are reimbursed at the rate of $1, they are reimbursed at the rate of maybe 78 cents in Alabama, many of them at 74 cents. Some hospitals in the country that have somehow, some way, under this formula found their costs higher, they get as much as $1.50. So it is twice as much, 74 cents to $1.50, on 60 percent of the formula on the payment for health care. This is too big a gap. This is more than we ought to accept. For person in Iowa, a person in Alabama, their health care is just as valuable and as important as the health care of someone in New York or California. To further exacerbate the problem, Alabama has to compete for nurses and hospital personnel with nearby urban areas such as Atlanta. To recruit these highly qualified health care professionals, Alabama hospitals must compete with urban wages. This has become a bidding war and has really impacted adversely the bottom line of hospitals in the State. Until we fix this problem, Alabama hospitals and hospitals all over the country will continue to lose millions of dollars each year. Unfortunately, it is falling hardest, and the losses fall most often, on hospitals in poorer areas, the ones that are actually doing the care and the good deed of treating people who otherwise would not have health care. They are already forced to make the most of limited resources and to continue to provide care for the State's uninsured. These hospitals will face tough decisions regarding health care services. They will continue to postpone important projects and the purchasing of much needed equipment. The rich are getting richer and the poor are getting poorer. In fact, what happens is, when your wage index is low and you talk with your nurses about what kind of raises they might expect, or how many RNs and how many LPNs and how many less skilled personnel you have because you are not being reimbursed at the national rate but maybe 75 percent of the national rate, you end up cutting those salaries even more, so you have more LPNs rather than RNs, you have more support personnel than nursing personnel to try to get by, and what happens then? Your wage index goes down even further. They come in and say: Look, your wage index isn't that high. You don't get reimbursed as much. So your formula can even go down worse. The Center for Medicare and Medicaid Services, CMS, the Medicare Payment Advisory Commission, and the MedPAC have recognized the problem, and they have even made recommendations to improve the wage index. In addition to these recommendations, several pieces of legislation have been introduced in this Congress to address the wage index. Five bills have been introduced so far this year to address the wage index. Forty-five Senators from twenty-nine States have either sponsored or cosponsored wage index legislation. Eight members of the Senate Finance Committee, including the ranking member, Senator Grassley, agree something must be done. Unfortunately, although many have recognized the problem with the wage index, we have not been able to do anything to fix it. So I raise this issue today to call attention to what is a critical problem in health care in America. Particularly in light of September 11, we know we are going to have to be sure we have a healthy health care system to deal with crises with which we may be faced at any time. If we allow an unfair reimbursement system to continue, then we will allow our hospitals to weaken and eventually close. This is a matter of serious import. The wage index is irrational. It is not working correctly. It is ratcheting down wages on poorer hospitals in rural areas. When the hospitals cut and reduce and cut and reduce, then the next year the wage index formula people come in and say your wages are lower, and your index drops even further, and you go down even more. This is something we have to confront. I will share this specific example from my hometown of Mobile, AL. The wage index dropped from .81 to .77, whereas 50 miles away in Pensacola, FL, it is maybe .87; it is in the high .80s in Pascagoula, MS, an hour's drive either way from the city. That means millions of dollars of reimbursement for those people. Montgomery, our capital, has the lowest rate in the Nation. Its hospitals are hurting as a result. Mr. President, this is an important issue. The time has come to address it. Although this is a Health and Human Services bill that deals with health care issues, I recognize that this amendment is not appropriately favored to be offered here--although we could offer it with a point of order. I hope we can begin to draw some attention to an issue that is getting out of control. The gap is simply too large. We cannot accept it. We cannot allow it to continue. We have to do something to fix this problem. My bill will bring everybody up to 92 percent. It would not bring down anybody. It would at least bring those 74-cents-on-the-dollar hospitals up to 92 cents on the dollar. They would still be well below the national average--and well below the people who are above the national average--but it would at least bring them out of poverty and allow them to provide the kind of quality health care we need. Mr. President, I appreciate the opportunity to make these remarks. I yield the floor and suggest the absence of a quorum.

Mr. SESSIONS. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. SESSIONS. Mr. President, I will just follow up on the remarks I made previously concerning the wage index and share with our fellow Members some of the information I have concerning this issue. I have a letter from the Mobile/Baldwin County area hospitals. It was sent to me, Senator Shelby, and Congressman Callahan. I will share some of the things that are in it supporting the legislation I have offered. They note this: Because of the huge discrepancy in the Area Wage Index which applies in Mobile and Baldwin Counties, Alabama as compared to our neighboring areas of Pascagoula, Mississippi and Pensacola, Florida, not to mention the even greater discrepancy with other parts of the country, we are beginning to face a critical shortage of skilled registered nurses with which to staff our hospitals. In the last three months alone we have lost at least 87 registered nurses from our area labor pool to traveling nurse agencies and to facilities in adjacent states. Collectively, we have over 200 registered nurse vacancies in the hospitals of Mobile and Baldwin Counties. . . . We are literally unable to compete with the salaries that are being offered these individuals because of the very low (.80) Medicare Area Wage Index under which we must now labor. Already our ability to handle the volume of patients being seen in our emergency rooms has been hampered and the waiting time has increased significantly. Already this summer we have had occasions where one or more of our hospitals have had to declare a ``Code Red'' status, meaning that they could not accept any more patients in their facility that would require intensive care due to a lack of staffed intensive care beds. As a matter of fact, this weekend I was in an airport and talked to an administrator at one of our area hospitals. He told me for the first time in years, they cannot accept more patients. This is a great hospital. My mother has been there a number of times; other relatives, including my father, have been hospitalized there. I said: You mean you don't have beds or you don't have nurses? He said: We don't have nurses. We have the beds. We don't have nurses. This index situation is working in a perverse way so that when you economize, when you reduce your cost and cut your salary and negotiate toughly with nurses and pay them the most minimum salary you can get away with paying them, then they come back the next year and rate your wage costs lower. Then they want you to cut it again next year. This thing is getting out of sync. We have nurses in Alabama--and I have heard this all over the State in talking to administrators--who go off for a week or two. They work long hours at nearly twice the salaries they make in the State of Alabama. Then they quit working at the local hospitals where they have worked before. This is done because the majority of health care in hospitals in most areas of the country is Medicare/Medicaid work. So if you are not paying a living wage, if you are not paying a basic amount for those Medicare payments--this is our elderly who are most often hospitalized--then the net result of all that is the hospital gets squeezed badly. Last year, we made a good step in increasing the overall inflation index for hospitals. We had reduced that substantially as part of the Balanced Budget Act of 1997. It helped us create a surplus in this country, but we realized that it was beginning to cut deeper and deeper and deeper into hospitals. So this helped hospitals across the board. I know the hospitals in more rural areas are at a double disadvantage because 60 percent of their reimbursement cost is based on the wage index. Again, in Mobile, one of the larger cities in the State, a city on the coast, Mobile's wage index is 80. They get 80 cents on the dollar. The average in America is $1. Some hospitals in America are being reimbursed at $1.50. So this is really a huge difference. That is almost twice. In Montgomery, another sizable city in the State of Alabama--Alabama is a State of 4 million people, an almost average State in America--it is being reimbursed at 74 cents on the dollar. That is half what you are getting reimbursed in some other areas of this country. It is draining our qualified nursing personnel and endangering health care, causing the poor to be poorer and the rich, in a way, to get richer. At least the poor will get poorer. Nobody is getting rich on Medicare reimbursement today. I will share one more letter from the Baptist Health Care System of the State of Alabama. I talked with Dennis Hall a number of times. I have visited in several of his hospitals around the State of Alabama. He is passionately of the belief that the wage index is devastating their health care system. He said: The national crisis is affecting hospitals in Alabama in dramatic ways. Most of the hospitals in Alabama, including the very strong Baptist Health System, are losing money on operations. We have counted on interest earnings on reserves to offset losses. However, most institutions are now facing losses on their reserves also. Our total losses in operations for our year ended June 30, 2001 will be in excess of $21 million. Charity, Medicaid and Medicare played a big role in causing these losses. We simply cannot continue to sustain these operating losses. We certainly cannot be adequately prepared to respond to bio- terrorism should it strike one of our hospitals where we serve. Mr. President, I have also a letter from the Coffee Health Group. I visited the Coffee Health Group. It is in Florence, AL, the Quad Cities area. There are a number of people in this area, a series of smaller communities in a fairly sizable metropolitan area. This is what Carl Bailey writes me: The wage index is a complicated issue that I truly believe few understand. Nevertheless, you have asked us to help you get some grasp of the problem by describing the impact of the recruitment of a registered nurse from one of our Alabama hospitals (``Hospital A'') to another institution (``Hospital B'') that is already receiving higher Medicare payment due to higher wage index. Hospital B will pay the travel, lodging, and higher wages to recruit the RNs. This additional cost to Hospital B actually increases the wage index for Hospital B. The hospital that is hiring a person at a higher wage and paying all these costs then bills that to create a higher wage index. This increase can only be paid from other areas because of budget neutrality. Get that? This increase for Hospital B that is paying a higher wage can only be paid from taking money from the other areas because of budget neutrality. We only have a certain pot of money. Therefore, Hospital A must share in the cost of paying for the increased wages of Hospital B. Since Hospital A cannot replace this RN, Hospital A's average wage decreases due to the loss of an employee with a higher than average hourly rate. You get that? Hospital A's, the losing hospital's wage index goes down because their wage rate goes down because they lost one of their higher paid people and one of their better people. This lowers the wage index for Hospital A and because of budget neutrality further increases the wage index gain for Hospital B. To respond to the shortage of staff, Hospital A then hires two or three nursing assistants to share the workload, reducing the number of nurses. This creates an even lower wage index for Hospital A which decreases the wage index even more. It also decreases the quality of care in Hospital A. Again, because of budget neutrality, the decrease in reimbursement to Hospital A is passed on as a higher wage index to Hospital B. Hospital B is now in a better financial position to hire additional employees from Hospital A than they were before, and the cycle continues. Although this scenario takes three years to play out, the mechanics are very real. We in Alabama have been living with similar recruitment strategies and subsequent negative reimbursement impact that has occurred in the past. Our loss in the past cannot be recruited, but we must stop the flow of Medicare funds from the ``have-nots'' to the ``haves.'' Mr. President, those are the points we are making. This affects hospitals all over America, States such as New York. Both Senators from New York support wage index reform because their State has large numbers of hospitals that are being adversely affected. It is not just what State or what area of the State you are from; the gap has grown too great, and the gap is widening and accelerating. It is not good for quality of health care in America. We have to do something about it. Perhaps this is not the best bill to fix it, but I hope we can bring some increased attention to it. I look forward to working on it. I yield the floor.