Videos & Speeches
Dec 11 2014
Mr. President, I have visited hospitals many times in our state. In fact, there are 128 community hospitals in Kansas, and I have visited each and every one of them once and, in many instances, two or three times. In fact, last weekend while I was home in Kansas, I visited my hometown hospital, Mercy, in Manhattan, KS.
It is a very useful exercise. I would encourage my colleagues to spend time with health care providers. In the case of hospitals, it gives you the opportunity to visit with hospital administrators, the CEOs, the opportunity to visit with the nurses, patients, with physicians, and get a feel for what is going on in the delivery of health care in your state. I certainly know how valuable that is to me.
One of the interests I have in serving in Congress is a belief that the way we live our lives at home in Kansas is something very special, and it is something that is worth trying to make certain is around for many years to come--in fact, for generations to come.
One of my early conclusions, in looking at public policy and looking at the future of the communities of Kansas and the people who live there, is the access to health care, to affordable health care, is critical. It is a component in which many communities will not continue to exist if there is not access to hospital care, a physician, a hometown pharmacy--all the things that make up the opportunity for someone to be cared for in every aspect of their lives related to their health. I know this from my own circumstance, my hometown of Plainville has a population of about 2,000.
My parents called Plainville home into their nineties. My parents are no longer living, but I know well before the time in which they passed, my sister and I would have had a conversation with my parents talking about: Mom, Dad, I am sorry, but you need to move, and you need to move where you can have adequate health care. You need to move where there is a good hospital and a set of physicians who will care for you.
But because that exists in my hometown and continues to exist in my hometown, those kinds of conversations are not necessary. Wherever the place that you are telling your parents they have to move to access health care--wherever that place is--and it may be a very desirable place, it is not home. My parents would have lived someplace in which they had not lived all of their lives, would not have been surrounded by the people they know and who knew them--particularly as they lived, my dad, until the age of 98. They would not have had the people who checked in on them, made sure they were doing OK each and every day, gave them the opportunity to continue to live at home, the people who would have given them a hug and a pat, and the pharmacist who said to my dad: Ray, you probably need to have your blood pressure taken. Those are very special things about many places many of us come from.
In the absence of those kinds of opportunities for health care, our communities--certainly across my s
tate and across the country--especially in rural America begin to disappear, the point being that in the absence of access to health care, the ability to keep a community together to encourage senior citizens to remain at home in their hometowns and for us to be able to recruit and encourage young families to move to our communities is not going to happen, is not going to be available, unless we have access to health care.
In the discussions I have with those health care providers, the doctors, the nurses, the CEOs, the administrators of the hospital--including the patients--they continued to remind me that what is going on in our nation's capital, in Congress, and certainly in the administration, are barriers, are burdens to the chances of that hospital and those health care providers continuing to be in business.
Every visit involves the raising of concerns to me. Often it is: What you are doing about this, Senator Moran? What are you doing to reduce the Federal regulatory burden that our hospital faces? Are you working to make certain we are able to provide the health care our local residents need?
Last month I introduced legislation that was bipartisan, a resolution that unanimously passed the Senate. It recognized the importance of access to hospitals and other health care providers, particularly in rural areas of our country. It indicated how essential they were and how important they were to the success and survival of the communities in our country.
The point I would make about that resolution is it passed unanimously. While the importance of rural providers is overwhelmingly acknowledged, as evidenced by the unanimous passage of that resolution, the Affordable Care Act and unnecessarily burdensome Federal regulations fail to demonstrate that we follow through on that understanding of the importance of hometown health care.
Among the regulatory concerns I hear about in those hospital visits, serious flaws with what is called RAC, the Medicare Recovery Audit Contractor Program, is it is causing many problems for hospitals and providers across Kansas.
Our hospitals and health care providers have been required to divert significant resources away from caring for patients, their mission to appeal incorrect audit decisions that are almost always ultimately overturned through an appeals process. This broken RAC Program places a tremendous burden on the providers, and it has created a 2-year appeal in backlogs within the Department of Health and Human Services. This program diverts the resources hospitals are devoting to caring for patients, to going through the process of trying to get their money back. That is certainly a problem and increasing the expense of providing health care. But the other aspect of that is often the hospital's money is tied up for 2 years, held by CMS, the Centers for Medicare and Medicaid Services, while it is adjudicated. Again, the overwhelming number of cases is decided ultimately in favor of the hospital, but it is certainly diverting resources and increasing costs.
I met with Secretary Burwell at Health and Human Services to discuss what is an urgent need to improve the Medicare RAC Program. I have requested from HHS a timeline and objectives, measurable objectives, to address the RAC problems and the appeals backlog that is in existence now.
Another concern in addition to the RAC audits is the Federal Government's inflexible physician supervision rules. CMS passed a rule that was delayed but now ultimately put in place. It requires that many pretty routine services that occur in a hospital--that includes things such as a drug infusion or blood infusions, cardiac and pulmonary rehabilitation--that they require physician supervision. That is just not an option in many rural hospital health care settings. There is a lack of understanding and a lack of common sense as to what a small hospital in a small town faces when CMS puts this regulation in place. They make it difficult for those hospitals to continue to provide those necessary services.
Fortunately, we have had some success in addressing this issue. Congress passed legislation that prevents the Federal Government from enforcing that regulation through the near future. I have introduced original legislation to make that change, that regulatory prohibition, permanent. I will reintroduce that legislation in January in the new Congress as we try to capitalize upon the temporary success we have had in fighting back this regulation from CMS to make it permanent so that when the temporary prohibition expires that we will have the opportunity to keep them from reintroducing that provision.
I will say that hospital administrators and employees, when I have a conversation with them, the discussion typically involves serious and strong opposition to a number of proposals that come from the Obama administration each year.
One of those is to change the number of miles that you must be apart from another hospital in order to qualify to be a critical access hospital. It is a program under Medicare and Medicaid Services that allows for a reimbursement that is more based upon cost than otherwise would be the case.
Also the administration has continued to propose a 1-percent reduction in the funding for those critical access hospitals.
Those are pretty much life-and-blood issues for community hospitals across Kansas and around the country. That critical access hospital designation in receiving that cost-based reimbursement means that a hospital with few patients, one that doesn't have hundreds of patients each day, can still be reimbursed at a rate in which they can almost make ends meet, that they can cover their costs but still rarely is there any profit or extra revenue generated from that so-called cost-based reimbursement.
Cutting reimbursements to the hospitals, removing them from the critical access program, I have little doubt but that it would eliminate many, if not most, of those hospitals currently in that critical access hospital program. There would be no place else for them to go, no other category within Medicare that would allow them to survive. I believe the number now is 88 of Kansas's 128 hospitals are those critical access hospitals.
The other topics of conversation that arise in those conversations in visiting with health care providers at a hospital--the physician, the nurses, the physical therapists, the CEO of the hospital, the trustees, the board of directors of the hospital--is the Affordable Care Act.
Again, we symbolically say we care a lot about rural health care providers, but the reality is the Affordable Care Act is creating significant problems, challenges, for the survival of hospitals, particularly the smallest hospitals in my state and across the country.
The Kansas Hospital Association projects that the Affordable Care Act will cost Kansas health care providers approximately $1.3 billion in Medicare funding over the next 10 years. These Affordable Care Act cuts include reductions to hospitals' Medicare reimbursements and a payment called disproportionate share that the hospital receives in order to cover the high level of uninsured patients.
These cuts are taking place on top of what Congress and the President agreed to under sequestration--a 2-percent across-the-board cut--that many, if not all, of our providers are now receiving. So what was supposed to be cost-based reimbursement, which nearly never covered the cost, is being reduced by another 2 percent as a result of sequestration. Again, this is something this Congress--and if not this Congress, the new Congress that begins in January--needs to deal with, the issue of sequestration.
For this and for other reasons sequestration is a significant problem. While I certainly support the reduced spending aspects--what the goal was of sequestration--the idea that we would do across-the-board cuts is irresponsible. We ought to be establishing the priorities--the things Congress, on behalf of the American people, thinks are the most important and beneficial to the American people, the things that are allowed for under our Constitution. Those are the things we ought to be funding, as compared to taking a step back and just having automatic cuts because we don't have the ability to decide in a responsible way what we can afford and what we cannot afford.
Further, I would say the Affordable Care Act forced states to adopt--the original act as passed by Congress--an expansion of Medicaid. The U.S. Supreme Court, in its 2012 ruling, indicated that Medicaid expansion was optional, not mandatory under the Constitution. So that portion of the Affordable Care Act was determined to be unconstitutional.
states are now faced with the difficult decision that involves Medicaid and long-term costs associated with potential expansions, and hospitals face tremendous uncertainty about how they will care for an increased number of patients while they are already absorbing the Affordable Care Act's Medicare cuts. So states are struggling to figure out what to do about expansion of Medicaid.
Hospitals are suffering from the consequence of not having additional Medicaid dollars. That is on top of the cuts that occur as a result of changes in Medicare. Really, in most hospitals across my state, two components are so important: Medicaid and Medicare cover a significant portion of the number of patients that are admitted to a hospital, and in many instances there are not many private pay patients who have their own health insurance to add additional revenue to the hospital's revenue stream.
This scenario of Medicare and Medicaid both creating problems, being squeezed from both programs, presents significant problems for rural hospitals. Again, those reimbursements--Medicare and Medicaid--make up about 60 percent of those hospitals' revenues.
The Affordable Care Act also put hospitals in the difficult position of having to balance increasing regulatory burden with reduced revenues. So in addition to the Medicare-Medicaid pressure, there is also the problem of increasing costs associated with more and more regulations emanating from the Department of Health and Human Services and other places across the Federal Government at the same time the reimbursement rates are declining. So increased cost, reduced revenue--again, a significant problem.
In 2011, the average Medicare margin for hospitals in Kansas was a negative--not enough to cover the cost--4.9 percent. These losses have to be offset somewhere, and that often results in a reduction in staffing. It sometimes means a reduction of services. The end result is a hospital that is not always able to meet the needs of their citizens--their patients.
In many instances it is the hospital that may be among the largest employer in a county or community in our state. In addition to reduced staffing, an inability to buy equipment, and reducing certain specialty programs offered at the hospital, we are also seeing a significant depletion in their cash reserves and a freeze on capital expenditures. This circumstance is just not sustainable, and so we are seeing hospitals close.
Since about 1990, the number of rural hospitals across the country has remained stable at around 2,000, but last year 15 rural hospitals closed. We have to be concerned there are more to follow. This is an alarming trend. These hospitals play a vital role in health care to those rural communities. It can determine whether a community has a future--whether individuals and families will decide to live there. The loss of a hospital has huge ripple effects and it harms patients. Their primary purpose is to save lives and improve health care, but it is also a tremendous loss to the community itself.
I outlined problems that I believed would occur for hospitals with the passage of ObamaCare long before the law became law. I also would say it doesn't mean I don't believe there aren't significant improvements to be made to our health care delivery system, but I think the reality is that the Affordable Care Act causes more problems--significantly more problems--than those it solves.
Many Kansas hospitals struggle to meet the needs of the aging population in their states and the Affordable Care Act cuts are an exacerbation of their circumstance. Again, the Affordable Care Act had the promise of: If you like your plan, you can keep it. If you like your health insurance plan, you can keep it. If you like your physician, you can keep him or her. That didn't turn out to be true.
In fact, if you liked your policy, you were probably not able to keep it, and you’ve got something else now and that other policy--that replacement policy--often involves increased copayments and deductibles. That certainly is a problem for the policyholder and his or her family. It is a problem for the business and their employees. But we may have forgotten it is a huge problem for the health care provider.
Almost every hospital I have visited, now that the Affordable Care Act is being implemented, will tell me about the increasing amount of unpaid hospital bills--the amount of money that is owed that is attempting to be recovered. The reason that occurs is because the copayments and deductibles are so significantly higher that patients don't have the ability to pay a $5,000 copayment or even a $1,000 copayment. So the hospital's bad debt is increasing because patients don't have the necessary amount of money to pay for their portion of what their health care insurance policy now requires of them.
Again, this comes from a law that was described to us as going to increase the affordability and the availability of health care. I guess what I would point out is, in the circumstance we are now in, the policies are so expensive, so much more costly both in premiums and copayments and deductibles, that the affordability is a problem again and not just for the patient, not for the policyholder but for the hospital that is now left holding the bag because so many of their patients can't pay the copayments or the deductibles.
When the Affordable Care Act passed, the President's own Medicare Chief Actuary noted that the cuts would cause as many as 15 percent of hospitals, skilled nursing facilities, and home health agencies to be unprofitable by 2019. While that point in time may have seemed a long time away, 2019 is now just about 5 years away. The longer that ObamaCare remains in place, the estimated percentage of unprofitable providers is projected to increase, reaching roughly 25 percent in 2030 and 40 percent in 2050. So by 2030 25 percent of the hospitals, health care providers, will be unprofitable, and by 2050 40 percent--nearly half--of the health care providers will be unprofitable.
Again, in particularly rural communities, if you can't make it on the revenues that come from patients, from providing health care to individuals, often the option is to increase taxes--property taxes, sales tax--or something to keep your hospital doors open. That ought not be the consequence of legislation passed by Congress--to require taxes to be raised for a Federal program called Medicare because it is failing to meet the needs of American citizens, our patients. These providers, our hospitals, just simply can't sustain in the circumstance they find themselves in. The Affordable Care Act has put us on a path that I think is dangerous for individuals, for businesses, and now for the health care providers themselves.
In addition to the bad debt experience, many of the new health care plans have limited or restricted provider networks, so that a local hospital may be eliminated from their network. This means that while under their previous insurance policy they could see a hometown physician or be admitted to their hometown hospital, because of these network restrictions they must go someplace out of town to access health care. This again is a terrible consequence for the individual, for the patient, but also something that drives revenues away from the hometown provider, much to the detriment of everybody who would want to make certain that provider, that doctor, remains in the community and that the hospital doors remain open.
There is lots of evidence that the problems we are facing are real. They demand attention. Access to affordable health care is something that still deserves our attention. I look forward to trying to make certain we have that opportunity. Again, that is nothing that is going to happen in the next few days, but we have a responsibility to see that the things that are reducing the access to affordable health care are addressed. The efforts that resulted from the Affordable Care Act are exacerbating the problem, not solving the problem.
With a new Congress soon beginning, I look at elections as like a new year. There is this optimism that maybe something good can come from a new Congress; that we can establish our New Year's resolutions and we can begin working, and I certainly make the offer to my colleagues throughout the Senate--all 99 of my colleagues--to be someone who wants to be problem solving, oriented toward finding solutions, and working together to make sure those health care providers that are so important to our lives, our safety, to our health, are around for a long time to come and that the communities that depend upon those hospitals--those 128 hospitals in my home state--have a viable future.
We have to get the regulatory environment under control, we have to resolve the problems created by the Affordable Care Act, and we need to make certain that health care is an opportunity for people who live in places across my state to still have the opportunity to see the hometown physician, to have a prescription filled by the hometown pharmacist, and to make certain those hometown hospital doors remain open for today and for future generations of communities across my state.