Chairman Thomas, Congressman Stark, distinguished Subcommittee members, thank you for
inviting us to discuss refinements to the Balanced Budget Act. The BBA includes important
new preventive benefits and payment system reforms that promote access, efficiency, and
prudent use of taxpayer dollars. These reforms are critical to strengthening and
protecting Medicare for the future. The Medicare Trust Fund, which was projected to be
insolvent by 1999 when President Clinton took office, is now projected to be solvent until
The BBA made substantial changes to the way Medicare reimburses providers in the
fee-for-service program by:
- modifying inpatient hospital payment rules;
- establishing a prospective per diem payment system for skilled nursing facilities to
encourage facilities to provide care that is both efficient and appropriate;
- refining the physician payment system to more accurately reflect practice expenses;
- initiating development of prospective payment systems for home health agencies,
outpatient hospital care, and rehabilitation hospitals that will be implemented once the
Year 2000 computer challenge has been addressed; and,
- authorizing an important test of whether market competition can help Medicare and its
beneficiaries save money on durable medical equipment and supplies.
And the BBA created the Medicare+Choice program, which allows private plans to offer
beneficiaries a wide range of options, similar to what is available in the private sector
today. It has initiated a new beneficiary education campaign to inform beneficiaries about
these options. It includes important new protections for patients and providers, as well
as statutory requirements for quality assessment and improvement. And it initiates a
transition to risk adjustment, which will make the payment system fairer and more
We have fully implemented the majority of the BBAs more than 300 provisions
affecting our programs and made substantial progress on the remainder. While the statute
generally prescribes in detail the changes we are required to make, we are committed to
exercising the maximum flexibility within our limited discretion in the implementation of
It is clear that the BBA is succeeding in promoting efficiency, slowing growth of
Medicare expenditures, and extending the life of the Medicare Trust Fund. However,
according to both the HCFA actuaries and the Congressional Budget Office (CBO), the BBA is
only one factor contributing to changes in Medicare spending. We have made substantial
strides in fighting fraud, waste and abuse that have significantly decreased improper
payments. For the first time ever, the hospital case mix index declined last year due to
efforts to stop "upcoding," or billing for more serious diagnoses than patients
actually have. Low inflation from a strong economy is having an impact on total spending.
And slower claims processing during the transition to new payment systems is contributing
to a temporary slow-down in spending. Backlogged claims are expected to be paid by fiscal
Change of this magnitude always requires adjustment. It is not surprising that some
market corrections would result from such significant legislation. We are proactively
monitoring the impact of the BBA to ensure that beneficiary access to covered services is
not compromised. We are evaluating this information to assess the impact of BBA changes on
beneficiaries and to determine what changes may need to be made to ensure continued access
to quality care.
It is important to note that the BBA is only one factor contributing to challenges
providers face in the rapidly evolving health care market place. Efforts to pay correctly
and promote efficiency may mean that Medicare no longer makes up for losses or
inefficiencies elsewhere. We are concerned about reports on the financial conditions of
some individual and chain providers. But it is essential that we try to delineate the
BBAs impact from the effects of excess capacity, discounted rates to other payers,
aggressive competition, imprudent business decisions, and other factors not caused by the
BBA. And it is essential that we focus on the impact on beneficiary access to high quality
Thus far, our monitoring reveals evidence of isolated but significant problems.
Although our analysis is not yet complete, we are concerned, for example, that some
beneficiaries are not getting necessary care because of the BBAs $1500 caps on
certain outpatient rehabilitation therapies. We will continue working with beneficiaries,
providers, Congress, and other interested parties to closely monitor the situation,
evaluate evidence of problems in access to quality care, and develop appropriate, fiscally
Because of our concerns, the Presidents Medicare reform plan sets aside $7.5
billion from fiscal 2000 to fiscal 2009 to smooth out implementation of BBA payment
reforms that may be adversely affecting beneficiary access to quality care. We want to
work with the Congress to make appropriate adjustments where there is evidence that
adjustments are needed. The Presidents reform plan also dedicates a portion of the
budget surplus to Medicare. This will help prevent excessive cuts in provider payment that
otherwise would be necessary in the future as Medicare enrollment doubles over the next 30
years, since increased efficiencies alone will not be able to cover the increased costs.
The Presidents plan also includes administrative actions to assure a smooth
implementation process, and we are continuing to explore other actions. Those already
underway address several key areas of concern:
- Inpatient hospital transfers. The BBA requires the Secretary to reduce payments to
hospitals when they transfer patients to another hospital or unit, skilled nursing
facility or home health agency for care that is supposed to be included in acute care
payment rates for ten diagnoses. It also authorizes HCFA to extend this "transfer
policy" to additional diagnoses after October 1, 2000. To minimize the impact on
hospitals, we are delaying extension of the transfer policy to additional diagnoses for
- Hospital outpatient payments. The BBA requires Medicare to begin paying for hospital
outpatient care under a prospective payment system (PPS), similar to what is used to pay
for hospital inpatient care. This new system is schedule to go into effect in July 2000.
To help all hospitals with the transition to outpatient prospective payment, we are
considering delaying a "volume control mechanism" for the first few years of the
new payment system. The law requires Medicare to develop such a mechanism because
prospective payment includes incentives that can lead to unnecessary increases in the
volume of covered services. The proposed prospective payment rule presented a variety of
options for controlling volume and solicited comments on these options. Delaying their
implementation would provide an adjustment period for providers as they become accustomed
to the new system. We also are considering implementing a three-year transition to this
new PPS by making budget-neutral adjustments to increase payments to hospitals that would
otherwise receive large payment reductions such as low-volume rural and urban hospitals,
teaching hospitals, and cancer hospitals. Without these budget-neutral adjustments, these
hospitals could experience large reductions in payment under the outpatient prospective
payment system. And, to help hospitals under the outpatient prospective payment system, we
included a provision in the proposed rule to use the same wage index for calculating rates
that is used to calculate inpatient prospective payment rates. This index would take into
account the effect of hospital reclassifications and redesignations. For all of these
outpatient department reform options, the rulemaking process precludes any definitive
statement on administrative actions until after the implementing rule is published.
- Rural hospital reclassification. Hospital payments are based in part on average
wages where the hospital is located. We are making it easier for rural hospitals whose
payments now are based on lower, rural area average wages to be reclassified and receive
payments based on higher average wages in nearby urban areas and thus get higher
reimbursement. Right now, facilities can get such reclassifications if the wages they pay
their employees are at least 108 percent of average wages in their rural area, and at
least 84 percent of average wages in a nearby urban area. We are changing those average
wage threshold percentages so more hospitals can be reclassified.
- Home health agencies. The BBA significantly reformed payment and other rules for
home health agencies. We are taking several new steps to help agencies adapt to these
changes. We are increasing the time for repayment of overpayments related to the interim
payment system from one year to three years, with one year interest free. Currently, home
health agencies are provided one year of interest free extended repayment schedules. We
are postponing the requirement for surety bonds until October 1, 2000, when we will
implement the new home health prospective payment system. This will help ensure that
overpayments related to the interim payment system will not be an obstacle to agencies
obtaining surety bonds. We also are following the recommendation of the General Accounting
Office (GAO) by requiring all agencies to obtain bonds of only $50,000, not 15 percent of
annual agency Medicare revenues as was proposed earlier. We also have eliminated the
sequential billing rule that some agencies said was adversely affecting cash flow. And we
are phasing-in our instructions implementing the requirement that home health agencies
report their services in 15-minute increments.
We are proactively monitoring the impact of the BBA to ensure that beneficiary access
to covered services is not compromised. We are systematically gathering data from several
sources to look for objective information and evidence of the impact of BBA changes on
access to quality care. These data sources include:
- beneficiary advocacy groups;
- health plans and providers;
- State Health Insurance Assistance Programs;
- claims processing contractors;
- State health officials; and
We also are examining information from the Securities and Exchange Commission and Wall
Street analysts on leading publicly traded health care corporations. This can help us
understand trends and Medicares role in net income, revenues and expenses, as well
as provide indicators of liquidity and leverage, occupancy rates, states-of-operation,
continuing lines of business as well as those exited or sold by the company, and other
costs which may be related to discontinued operations.
We are examining Census Bureau data, which allow us to gauge the importance of Medicare
in each health service industry, looking at financial trends in revenue sources by major
service sectors, and tracking margin trends for tax-exempt providers.
We are monitoring the Bureau of Labor Statistics monthly employment statistics for
employment trends in different parts of the health care industry. Such data show, for
example, that the total number of hours worked by employees of independent home health
agencies is at about the same level as in 1996. That provides a more useful indicator of
actual home health care usage after the BBA than statistics on the number of agency
closures and mergers. The data also show that nursing homes may be slightly reducing the
number of employees and the hours that they work.
The HHS Inspector Generals (IG) office has interviewed hospital discharge
planners and nursing home Administrators about the BBAs impact on patient care. The
IG also has agreed to interview discharge planners about access to home health care
following BBA payment reforms and the impact of the $1500 caps on outpatient therapy.
Specific BBA Provisions
Outpatient Rehabilitation Therapy: The BBA imposed $1500 caps on the amount of
outpatient rehabilitation therapy services that can be reimbursed, except in hospital
outpatient clinics. However, these caps are not based on severity of illness or care
needs, and they appear to be insufficient to cover necessary care for many beneficiaries.
We have several industry-sponsored analyses from different sources of 1996 claims data
indicated that approximately 12 to 13 percent of therapy patients will exceed the caps.
Beneficiary groups are reporting many instances of problems with this cap, and we are very
concerned about their adverse impact, particularly on individuals in nursing homes. As
mentioned above, our IG colleagues have agreed to study this problem. We are providing
data to the Medicare Payment Advisory Commission so it can analyze patterns of therapy
service usage. And we will continue to work with Congress and others to determine what
adjustments to the cap should be made.
Skilled Nursing Facilities: We implemented the new prospective payment system
(PPS) called for in the BBA on July 1, 1998. The old payment system was based on actual
costs, subject to certain limits, and included no incentives to provide care efficiently.
The new system uses average prices adjusted for each patients clinical condition and
care needs, as well as geographic variation in wages. It creates incentives to provide
care more efficiently by relating payments to patient need, and enables Medicare to be a
more prudent purchaser of these services.
The BBA mandated a per diem PPS covering all routine, ancillary, and capital costs
related to covered services provided to beneficiaries under Medicare Part A. The law
requires use of 1995 costs as the base year, and implementation by July 1, 1998 with a
three-year transition blending facility-specific costs and prospective rates. It did not
allow for exceptions to the transition, carving out of any service, or creation of an
outlier policy. We are carefully reviewing the possibility of making budget neutral
administrative changes to the PPS.
We held a town hall meeting earlier this year to hear a broad range of skilled nursing
facility concerns, and we continue to meet with provider and beneficiary representatives.
There are concerns that the prospective payment system does not adequately reflect the
costs of non-therapy ancillaries such as drugs for high acuity patients. The Inspector
General found in its interviews of hospital discharge planners and nursing home
Administrators that less than 1 percent of nursing home Administrators say the prospective
payment system is causing access to care problems. The proportion of beneficiaries
discharged to skilled nursing facilities is unchanged from 1998, and hospital lengths of
stay have not increased. However, about one in five discharge planners say it takes more
time to place Medicare patients in nursing homes. The IG also found that both nursing home
Administrators and hospital discharge planners say nursing facilities are requesting more
information before accepting patients. About half of the nursing home Administrators say
they are less likely to accept patients requiring expensive supplies or services such as
ventilators or expensive medications, about half also say they are more likely to admit
patients who require special rehabilitation services such as physical therapy following
joint replacement surgery.
We are therefore conducting research that will serve as the basis for refinements to
the resource utilization groups that we expect to implement next year. We expect to have
the research completed by the end of the year and to then develop refinements that we will
be able to implement next October. Under the statute, we have the authority to refine
these groups and redistribute money across categories in a budget neutral manner. We do
not have discretion under the law to increase the overall level of payments to skilled
nursing facilities. We fully expect that we will need to periodically evaluate the system
to ensure that it appropriately reflects changes in both care practice and the Medicare
Home Health Agencies: The BBA closed loopholes that had invited fraud, waste
and abuse. For example, it stopped the practice of billing for care delivered in low cost,
rural areas from urban offices at high urban-area rates. It tightened eligibility rules so
patients who only need blood drawn no longer qualify for the entire range of home health
services. And it created an interim payment system to be used while we develop a
prospective payment system. We expect to publish a proposed regulation this fall and to
have the prospective payment system in place by the October 1, 2000 statutory deadline.
The interim payment system is a first step toward giving home health agencies
incentives to provide care efficiently. Before the BBA, reimbursement was based on the
costs they incurred in providing care, subject to a per visit limit, and this encouraged
agencies to provide more visits and to increase costs up to the limits. The interim system
includes a new, aggregate per beneficiary limit designed to provide incentives for
efficiency that will be continued under the episode-based prospective payment system. Last
year Congress increased the cost limits in an effort to help agencies during the
transition to prospective payment. We are also taking the steps discussed above to help
agencies adjust to these changes, and in March we held a town hall meeting to hear
directly from home health providers about their concerns.
To date, evaluations by the GAO and HHS have not found that BBA changes are causing
significant quality or access problems. Our monitoring of employment data shows that
freestanding home health agencies have made small reductions in their workforce, back to
the level seen in 1996. However, we have heard reports from beneficiary groups, our
regional offices, and others regarding home health agencies that have inappropriately
denied or curtailed care, and incorrectly told beneficiaries that they are not eligible
for services. We are also hearing reports from beneficiary advocates and others that some
high cost patients are having trouble finding home health agencies to provide the care
they need. This may result from a misunderstanding of the new incentives to provide care
efficiently, or from efforts to "cherry pick" low cost patients and game the
system. The CBO attributes some of the lower health spending to the fact that agencies are
incorrectly treating the new aggregate per beneficiary limit as though it applies to each
We have therefore provided home health agencies with guidance on the new incentives and
their obligation to serve all beneficiaries equitably. We have instructed our claims
processing contractors to work with agencies to further help them understand how the
limits work. And, because home health beneficiaries are among the most vulnerable, we are
continuing ongoing detailed monitoring of beneficiary access and agency closures.
Hospitals: We have implemented the bulk of the inpatient hospital-related
changes included in the BBA in updated regulations. We have implemented substantial
refinements to hospital Graduate Medical Education payments and policy to encourage
training of primary care physicians, promote training in ambulatory and managed care
settings where beneficiaries are receiving more and more services, curtail increases in
the number of residents, and slow the rate of increase in spending. We have implemented
provisions designed to strengthen rural health care systems. We have carved out graduate
medical education payments from payments to managed care plans and instead are paying them
directly to teaching hospitals (and are proposing in the Presidents Medicare reform
plan to similarly carve out disproportionate share hospital payments).
We expect to implement the prospective payment system for outpatient care next year.
The outpatient prospective payment system will include a gradual correction to the old
payment system in which beneficiaries were paying their 20 percent copayment based on
hospital charges, rather than on Medicare payment rates. Regrettably, implementation of
the prospective payment system as originally scheduled would have required numerous
complex systems changes that would have substantially jeopardized our Year 2000 efforts.
We are working to implement this system as quickly as the Year 2000 challenge allows. We
issued a Notice of Proposed Rule Making in September 1998 outlining plans for the new
system so that hospitals and others can begin providing comments and suggestions. We are
actively reviewing all of the comments from the industry and other interested parties that
we received during the comment period, which we extended until July 30. We are focusing
most of our continuing work on rural, inner city, cancer, and teaching hospitals because
our analysis suggests that the outpatient prospective payment system will have a
disproportionate impact on these facilities. And we are continuing to develop
modifications to the system for inclusion in the final rule.
The hospital industry has submitted data projecting significant decreases in total
Medicare margins. Our actuaries believe the methodology used to develop these projections
understates base year total margins by approximately 7 percent. And, according to the
Medicare Payment Advisory Commission (MedPAC), Medicare costs per case have declined for
an unprecedented fifth year in a row. However, MedPAC also notes that while rural
hospitals have generally posted healthy margins, many small rural hospitals appear to be
in especially poor financial condition.
We continue to hear reports of financial distress, and we understand the challenge
hospitals are facing in todays changing health care marketplace. We are reviewing
the data as it comes in, and we will continue to monitor this situation closely.
Physicians: As directed by the BBA, we are on track in implementing the
resource-based system for practice expenses under the physician fee schedule, with a
transition to full implementation by 2002 in a budget-neutral fashion that will raise
payment for some physicians and lower it for others. The methodology we used addresses
many concerns raised by physicians and meets the BBA requirements. We fully expect to
update and refine the practice expense relative value units in our annual regulations
revising the Medicare fee schedule. We included the BBA-mandated resource-based system for
malpractice relative value units in this years proposed rule. We welcome and
encourage the ongoing contributions of the medical community to this process, and we will
continue to monitor beneficiary access to care and utilization of services as the new
system is fully implemented.
The Presidents fiscal 2000 budget contains a legislative proposal for a
budget-neutral technical fix to ensure the BBAs sustainable growth rate (SGR) for
physician payment is stable. Medicare payments for physician services are annually updated
for inflation and adjusted by comparing actual physician spending to a national target for
physician spending. The BBA replaced the former physician spending target rate of growth,
the Medicare Volume Performance Standard, with the SGR. The SGR takes into account price
changes, fee-for-service enrollment changes, real gross domestic product per capita, and
changes in law or regulation affecting the baseline. After BBA was enacted, HCFA actuaries
discovered that the SGR system would result in unreasonable year-to-year fluctuations.
Also, the SGR target cannot be revised to account for new data. The Presidents
budget proposal addresses both of these concerns.
Medicare+Choice: Successfully implementing this program is a high priority for
us. Medicare managed care enrollment has tripled under the Clinton Administration, and
there are now 6.48 million beneficiaries enrolled in Medicare+Choice plans. We meet
regularly with beneficiary advocates, industry representatives, and others to discuss ways
to improve the program. We launched a national education campaign and participated in more
than 1,000 events around the country to help beneficiaries understand it. And we are
establishing a federal advisory Committee to help us better inform beneficiaries.
We have taken steps to assist plans and encourage plan participation in
Medicare+Choice. We worked with Congress to give plans two more months to file the
information used to approve benefit and premium structures so plans were able to use more
current experience when designing benefit packages and setting cost sharing levels. We
also published refinements to Medicare+Choice regulation that improve beneficiary
protections and access to information while making it easier for health plans to offer
more options. The new rule:
- clarifies that beneficiaries in a plan that leaves the program are entitled to enroll in
remaining locally available plans;
- specifies that changes in plan rules must be made by October 15 so beneficiaries have
information they need to make an informed choice during the November open enrollment;
- allows plans to choose how to conduct the initial health assessment;
- waives the mandatory health assessment within 90 days of enrollment for commercial
enrollees who choose the same insurers Medicare+Choice plan when they turn 65, and
for enrollees who keep the same primary care provider when switching plans;
- stipulates that the coordination of care function can be performed by a range of
qualified health care professionals, and is not limited to primary care providers;
- limits the applicability of provider participation requirements to physicians; and,
- allows plans to terminate specialists with the same process for terminating other
We intend to publish a comprehensive final rule with further refinements this fall.
We have also undertaken a comprehensive beneficiary education program. We launched the
National Medicare Education Program to make sure beneficiaries receive accurate, unbiased
information about their benefits, rights, and options. The campaign includes:
- mailing a Medicare & You handbook to explain health plan options;
- a toll-free "1-800-MEDICARE" [1-800-633-4227] call center with live operators
to answer questions, and provide detailed plan-level information;
- a consumer-friendly Internet site, www.medicare.gov, which includes comparisons
of benefits, costs, quality, and satisfaction ratings for plans available in each zip
- working with more than 120 national aging, consumer, provider, employer, union, and
other organizations who help disseminate information to their constituencies;
- beneficiary counseling from State Health Insurance Assistance Programs;
- a national publicity campaign;
- a Regional Education About Choices in Healthcare (REACH) campaign that will conduct
State and local outreach activities nationwide; and,
- a comprehensive assessment of these efforts.
We tested the system in five States in 1998 and learned how to improve efforts for this
Novembers open enrollment period. For example, we have made the Medicare &
You handbook easier to use and improve the accuracy of information about plans that
are withdrawing. We have added new links on our Medicare Compare website at
www.medicare.gov to help users find information faster. We are standardizing plan
marketing materials that summarize benefits so beneficiaries can more easily make
apples-to-apples comparisons among plans in this Novembers open enrollment period.
And we have added information on managed care plan withdrawals to the Important Notes
section of the 1999 plan information on our Medicare Compare website.
To help us continually improve our education efforts, we are establishing the
Citizens Advisory Panel on Medicare Education, under the Federal Advisory Committee
Act. The panel will help enhance our effectiveness in informing beneficiaries through use
of public-private partnerships, expand outreach to vulnerable and underserved communities,
and assemble an information base of "best practices" for helping beneficiaries
evaluate plan options and strengthening community assistance infrastructure. Panel members
will include representatives from the general public, older Americans, specific disease
and disability groups, minority communities, health communicators, researchers, plans,
providers, and other groups.
The BBA also initiated important payment reforms that begin to correct for historical
overpayment. It established a competitive pricing demonstration in which plan payment
rates will be set through a bidding process, similar to what most employers and unions use
to decide how much to pay plans. And, starting in January, the BBA mandates that we
"risk adjust" payments to account for the health status of each enrollee.
Studies by the Congressional Budget Office, Physician Payment Review Commission, and many
others have shown that we overpay plans in part because Medicare fails to adjust payments
for the health of enrollees.
That is why risk adjustment cannot be budget neutral. The vast majority of
beneficiaries enrolled in Medicare+Choice cost far less than what Medicare pays plans for
each enrollee. Budget neutral risk adjustment would mean Medicare and the taxpayers who
fund it would continue to lose billions of dollars each year on Medicare+Choice. Budget
neutral risk adjustment would cost taxpayers an estimated $11.2 billion over the five
years that we are phasing it in if health plans maintain their current, mostly healthy
We are concerned about disruptions to beneficiaries caused by plan decisions to trim
participation in Medicare+Choice. The GAO reported in April that many factors contribute
to such decisions. For instance, plans may have trouble establishing adequate provider
networks, enrolling enough beneficiaries to support fixed costs, or otherwise competing in
a given market.
However, inadequate reimbursement to plans does not fully explain these plan decisions.
Payment is rising in all counties this coming year by an average of 5 percent. In fact,
despite BBA reforms, aggregate payment to plans continues to be excessive, according to
another GAO report released in June, because of a forecasting error that the BBA locked
into the statutory payment formula. The result is that plans are being paid an additional
excess amount that totaled $1.3 billion in 1998 and will increase each year.
BBA reforms may, however, mean that payments in some counties no longer include enough
excess to cover losses in other areas or to subsidize extra benefits that fee-for-service
Medicare does not currently cover, such as prescription drugs.
Clearly all beneficiaries need a more stable and reliable source of prescription drug
coverage. And, if plans primary problem is paying for benefits beyond the Medicare
benefit package, the best solution is to improve the benefit package by providing all
beneficiaries with access to an affordable prescription drug benefit, and paying plans
explicitly for providing it.
The Presidents Medicare reform plan gives all beneficiaries the option to pay a
modest premium for a prescription drug benefit that will cover half of all prescription
drug costs up to $5,000 when fully phased in, with no deductible. Medicare+Choice plans
would be explicitly paid for providing a drug benefit, and would no longer have to depend
on what the rate is in a given area to determine whether they can afford to do so.
The Presidents plan also will modernize the way Medicare pays managed care plans.
Rates would be set through competition among plans rather than through a complicated
statutory formula. All plans would be paid their full price through a combination of
government and beneficiary payments. The lower the price, the less beneficiaries pay. And
the Presidents plan also includes several provisions to preserve beneficiary options
and strengthen protections when plans withdraw from Medicare.
The BBA made important changes to the Medicare program to strengthen and protect it for
the future. These changes, along with a strong economy and our increased efforts to combat
fraud, waste, and abuse, have extended the life of the Trust Fund until 2015. With changes
of the magnitude encompassed in the BBA, some issues have arisen that may require
adjustment and fine tuning. The Presidents Medicare reform plan sets aside $7.5
billion to smooth out implementation of BBA reforms. The Presidents plan also
includes administrative adjustments to help in the transition to new payment systems. It
dedicates a portion of the budget surplus to Medicare, which will help protect against
excessive provider payment reductions in the future as Medicare enrollment doubles over
the next 30 years, and increased efficiencies alone will not be able to cover the
It is not surprising that necessary market corrections would result from such
significant legislation. As always, we remain concerned about the effect of policy changes
on beneficiaries access to affordable, quality health care. We are proactively
monitoring the impact of the BBA to ensure that beneficiary access to covered services is
not compromised. We welcome the opportunity to look at any new information regarding
beneficiary access to quality care. We are committed to continuing to look at refinements
to the BBA that are within our administrative authority.
We also are committed to working with Congress to enact bipartisan Medicare reform this
year that makes a prescription drug benefit available and affordable for all
beneficiaries, dedicates a significant portion of the budget surplus to Medicare, and sets
aside funding specifically for smoothing out BBA payment reforms.
I thank you for holding this hearing, and I am happy to answer your questions.