October 12, 1978
Page 36058
Mr. NELSON. Mr. President, how much time does the Senator from Wisconsin have remaining?
The PRESIDING OFFICER. There are 13 minutes remaining.
Mr. MATSUNAGA. Mr. President, will the Senator yield?
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. NELSON. I had agreed to yield to the distinguished Senator from Maine who, I understand, desired to propose an amendment.
Mr. MUSKIE. That is correct.
Mr. NELSON. Is there time allowed on each amendment to these amendments, may I ask the Chair, or is that the amount of time that the author of the amendment has?
The PRESIDING OFFICER. An amendment in the second degree will be in order when time has expired on the amendment in the first degree. There are 20 minutes of debate equally divided on each side.
Mr. NELSON. It is not in order at this time?
The PRESIDING OFFICER. Not without unanimous consent.
Mr. NELSON. I ask unanimous consent that the amendment to be proposed by the Senator from Maine be permitted to be taken up.
Mr. JAVITS. Mr. President, reserving the right to object. It may be necessary for a little more time because there are a number of us who would like to make statements.
Mr. NELSON. I understand the time will be charged to the Senator from Maine's amendment.
The PRESIDING OFFICER. If there is unanimous consent, 20 minutes to Senator MUSKIE, equally divided, those 20 minutes would not impinge on the Senator's amendment.
Mr. NELSON. I ask unanimous consent to that effect.
The PRESIDING OFFICER. Is there objection?
Mr. CURTIS. Mr. President, reserving the right to object, is the Muskie amendment an amendment to the Nelson amendment?
Mr. NELSON. Yes; it is simply an amendment to allow a State creating its own voluntary program prior to July 1, 1979, 1 year to prove their case.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Hawaii.
Mr. MATSUNAGA. If I may put a question to the Senator from Wisconsin, is this amendment being offered by the Senator from Maine acceptable to the Senator from Wisconsin?
Mr. NELSON. Yes.
The PRESIDING OFFICER. Is there objection to the request of the Senator from Wisconsin?
Mr. NELSON. And I think it is acceptable to the Secretary of HEW, as a matter of fact.
Mr. MAGNUSON. Will the Senator yield for a question?
The PRESIDING OFFICER. Without objection, it is so ordered. The Senator from Maine is recognized.
Mr. MAGNUSON. Under the so-called Nelson amendment, it is my understanding that a State like my own State of Washington—
Mr. NELSON. Yes; the Senator from Washington raises a question about what the effect is if a State has in place its own mandatory program: Are such programs exempt under any provisions of this pending amendment, even though it was triggered for cost control? The answer is "Yes."
Mr. MAGNUSON. Such as that of the State of Washington.
Mr. NELSON. Such as that of the State of Washington.
Mr. MAGNUSON. I thank the Senator.
Mr. MUSKIE. Mr. President, I yield 2 minutes to the distinguished Senator from Michigan.
Mr. RIEGLE. I thank the Senator. Mr. President, I would like to express my support for the amendment offered by the Senator from Wisconsin (Mr.NELSON).
The PRESIDING OFFICER. Excuse the Chair for interrupting. Does the Senator from Maine wish to offer an amendment?
UP AMENDMENT NO. 2065
Mr. MUSKIE. Yes; I call up my amendment and ask that it be stated.
The PRESIDING OFFICER. The amendment will be stated.
The assistant legislative clerk read as follows:
The Senator from Maine (Mr. MUSKIE) for himself and Mr. HATHAWAY, proposes an unprinted amendment numbered 2068.
Mr. MUSKIE. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 17, line 21, insert the following:Strike out the word "subsection" and all that follows through "increase in the" on page 18, line 16, and insert in lieu thereof the following: "subsection (dd) of this section hospitals physically located in such State, if
'(A) The Secretary finds that such State enacted prior to the enactment of this section a program capable of containing hospital costs for inpatient hospital services in the State which covers at least 90 per centum of the hospitals in the State, which would otherwise be covered under subsection (dd) of this section;
'(B) The Secretary finds that the State program applies at least to all revenues for inpatient hospital services of hospitals covered by the program;
'(C) One year after the effective implementation of the State program the Governor (or chief executive) certifies and the Secretary determines, that the aggregate rate of increase in revenues over the previous accounting year for inpatient hospital services for all hospitals in the State will not exceed (i) the increase that the Secretary estimates would be permitted if subsection 1861(dd) (including the pass through of any increase in the * * '."
Mr. MUSKIE. I yield to the Senator from Michigan.
Mr. RIEGLE. Mr. President, I would like to express my support for the amendment offered by
Mr. NELSON, which I believe forges a reasonable compromise between mandatory cost controls and the limited voluntary effort suggested by the Finance Committee. I believe the Nelson amendment should encourge effective, cooperative approaches to controlling hospital costs such as the innovative approach now underway in my home State of Michigan.
I would like to point out to my colleagues that the Nelson amendment does not, like Procrustes, treat all cost control approaches alike. Rather, it leaves ample leeway for innovative approaches to controlling hospital cost increases, provided they meet the ultimate test of success in the long run.
One of the most promising approaches to controlling hospital costs is, of course, prospective budget reviews. In the State of Michigan, a cooperative budget review mechanism involving providers as well as public and private payors has recently been developed and has begun to show promising results. It is my belief that this system, reinforced by a universal commitment on the part of health professionals to control cost increases, will enable Michigan to meet the voluntary goals.
I would like to point out, additionally, that the Nelson amendment we are considering today specifically exempts all new hospitals from the voluntary program. New hospitals would also be
exempt from the standby controls until they have had at least a 2-year chance to get underway and establish efficient procedures for providing essential health services to previously under-served areas.
More specifically, I would like to discuss with the sponsor of this amendment our understanding of the exemption processes provided for under his amendment. The Senator from Wisconsin has repeatedly explained that hospitals in a given State would be subject to the standby cost controls only if the national voluntary effort failed to meet its national goal, and if the average in that State also failed to meet the national goal. Even in such cases, however, the Secretary of HEW would be instructed to exempt State programs that have the capability of effectively controlling hospital cost increases.
These HEW-determined exemptions are designed, at least in part, to encourage the development of innovative and effective cost containment programs in the various States. In discussing the most promising cost containment mechanisms being considered, HEW representatives have repeatedly praised the type of prospective budget review mechanism recently implemented in Michigan. I would therefore anticipate that the Secretary would look favorably on this sort of cooperative approach — which involves State participation and, therefore, supervision without mandating complete State dominance of cost containment processes — in developing his policy on State exemptions. In addition, the Secretary would, of course, give considerable weight to the cost-containment accomplishments already achieved during the initial years of implementing such a statewide system.
Mr. NELSON. I thank the Senator from Michigan for his support of my amendment, and I would like to add that I wholeheartedly agree with his discussion of the implications of the amendment. This proposal includes a number of "escape valves" for effective cost containment programs, including the standby nature of controls if the national voluntary goal is met, the exemption for hospitals in States meeting the national goal, and the discretion given the Secretary of HEW to exempt additional programs that show promise of effectively reducing the rate of increase in hospital costs. In particular, I definitely agree that, in granting such exemptions, the Secretary would, of course, take into account both a State's experience in controlling costs in earlier years and the long-term potential of prospective budget review as a means of coping with inflationary pressures through cooperative means involving both public and private payors as well as health care providers.
Mr. RIEGLE. In order to clarify one additional matter concerning the interpretation of the exemption clauses of the amendment, I would like to ask the Senator if he agrees that a State could qualify for an exemption under section 1861(ee) if the State uses differing methodologies for different payers?
Mr. NELSON. I thank the Senator for raising this issue. I can assure the Senator that a State could be approved for an exemption under section 1861(ee) even with several different methodologies within that State if all the other requirements for an exemption were met, and if the methodologies provide comparable results, taking into consideration the State's capability to move toward identical results in the near future. I understand that the Department of HEW concurs with this interpretation of my amendment, so I can assure the Senator that his understanding is correct.
Mr. RIEGLE. I appreciate the Senator from Wisconsin's assistance in clarifying this provision, and I wish to reemphasize my support for his amendment, which I hope may lend additional impetus to cooperative cost control efforts throughout the country.
Mr. MUSKIE. Mr. President, I will explain my amendment briefly. I have already discussed it with Senator NELSON. Before I discuss my amendment, I would like to say that I have had occasion to study all of these proposals for cost containment, and Senator NELSON's to my mind, has been the best from the beginning; and I have been inclined to support it from the beginning. I think it is a happy combination stimulating voluntary action to bring costs down, and I do not really believe we can get independent effectiveness without voluntary participation, but also need mandatory programs to be enacted in the event voluntary programs do not work.
The purpose of this amendment, Mr. President, is to exempt from mandatory controls any State which enacted a hospital cost containment proposal prior to the enactment of the pending legislation. Federal mandatory controls would go into effect if a State which has enacted such a program did not, after 1 full year of operation, keep its hospital costs down to the level required by the Nelson amendment.
The effect on my State would be this: the last session of the legislature, last winter, enacted such a program. It takes 90 days under our constitution for legislation to take effect. and so the organizing for that effort has just begun, and so the program will go into effect next July. So it will take a year from next July to know the full effect of that program.
It seems to me that States in this situation ought to have that opportunity to prove out their programs. I have full confidence that the program will prove effective.
I think there is much to be said for stimulating effective State programs. I think it would reduce the bureaucratic load. I think it would, in many cases, if the programs are effective, do a better job. But in any case, as of now, when States have already enacted such programs, my amendment would simply give them that year to prove themselves effective.
I have discussed this proposal with the proponent of the Nelson amendment.
Mr. NELSON. Mr. President, let me say that I am happy to accept the amendment of the distinguished Senator from Maine. So far as I can determine, he addresses himself to the case in which a statute has been passed; but by July 1 there may not be enough experience for the Secretary to make a valid determination. This amendment, in that kind of a case, where a statute has already been passed, permits them to have 1 year to prove that their system will work. If not, of course, the Secretary can withdraw their exemption.
Mr. MUSKIE. I understand.
Mr. NELSON. I think it makes eminently good sense.
Mr. MUSKIE. I thank the Senator. Incidentally, this amendment is cosponsored by myself and my distinguished colleague from Maine (Mr. HATHAWAY).
Mr. NELSON. I yield back the remainder of my time.
Mr. MUSKIE. I yield back the remainder of my time.
Mr. NELSON. I move the adoption of the amendment.
Mr. MATSUNAGA. Mr. President, before the Senator does that, will the Senator from Wisconsin yield for a few questions?
Mr. NELSON. As soon as we adopt the amendment. I move the adoption of the amendment.
The PRESIDING OFFICER. Is all remaining time yielded back?
Mr. MUSKIE. All remaining time is yielded back.