Mr. President, I want to talk a few minutes about Medicare. If I am on Medicare and I go to my physician for an earache and my physician treats me, hopefully successfully, my physician then does not turn around and send a bill to Medicare…
Mr. President, I want to talk a few minutes about Medicare.
If I am on Medicare and I go to my physician for an earache and my physician treats me, hopefully successfully, my physician then does not turn around and send a bill to Medicare that says: For services rendered for an earache. What my physician does is fill out a form that has a bunch of codes on it, and my physician fills out the form with the code for an earache.
Now, what does that mean? That means that when that form with a code for an earache goes to Washington, the administrators at Medicare look up the code for an earache, and they know then how much they are going to pay my physician for treating an earache.
As you can imagine, there are thousands of codes--literally thousands of codes--because there are thousands of diagnoses for which our citizens on Medicare seek treatment every year.
So, every year, Medicare puts out a fee schedule, and in its essential form this is just a schedule listing all of the codes for all the different illnesses that doctors who treat Medicare patients bill for. And these codes, this fee schedule, are used to reimburse doctors and hospitals. Well, of course, it is not as simple as that, and the way that the codes are put together and the fee schedule is put together are not exactly a model of clarity. And we need to do better, and, hopefully, someday we will do better. But, at the moment, we have to deal with reality as it is.
Now, in setting a code--or how much Medicare is going to pay my doctor for treating my earache under Medicare--and in putting together the fee schedule, which is put together by the Centers for Medicare and Medicaid Services, which I will just refer to it as ``Medicare''-- Medicare takes all kinds of factors into consideration in deciding how much to pay my doctor for an earache. Medicare looks at things like the diagnosis, of course. Medicare will pay less for an earache than for heart surgery. Medicare looks at the procedure that the doctor had to use.
Medicare looks at the location. If I go to my doctor in Baton Rouge, where my primary care physician is located, the cost of living in Baton Rouge is lower than the cost of living in New York. So the fee for an earache paid by Medicare to my Baton Rouge physician is going to be lower than that paid to a physician in New York.
The fee schedule looks at time and expenses of the doctor. The fee schedule that Medicare puts together looks at things like the cost of maintaining a practice: rent, supplies, support personnel. The fee schedule tries to take into consideration the cost of medical malpractice.
So the point is that a doctor treating me in Baton Rouge for an earache will not receive the same fee that a doctor, for example, in New York will receive for treating a patient there under Medicare for an earache.
But every year Medicare gets together and they send out a new fee schedule, and it is a very complicated process. And that process is complicated by the fact of what we call budget neutrality. Under current law, the Centers for Medicare and Medicaid Services--or Medicare, as I have been calling it--is required to make budget neutrality adjustments to the payment schedule. And the technical definition is--I will read it to you, and then I will explain it: Medicare is required to make Medicare physician payment schedule adjustments whenever changes in relative value units generate a payment increase or decrease of $200 million.
I told you it was complicated.
Now, what does that mean? That means that Medicare is statutorily required--required by Congress--to maintain budget neutrality, and this means that, as certain codes increase in value, in order to maintain budget neutrality, Medicare has to reduce payment for other codes. Budget neutrality is also
much more complicated than I just explained it, but those are the basic rules.
Now, here is the problem. The Centers for Medicare and Medicaid Services--CMS, or Medicare, as I have been referring to it--has just released their 2023 physician fee schedule. The new fee schedule has come out, and because of the formula and because of the budget neutrality requirement, CMS is proposing--or Medicare--a 4.5-percent across-the-board reduction in Medicare payments. So every payment is going to be cut 4.5 percent across the board.
Well, it gets even more difficult. Due to the $1.9 trillion deficit increase caused by the American Rescue Plan and under our budget rules, pay-go sequestration is going to be triggered by the American Rescue Plan, and that is going to require an additional 4-percent reduction across the board in payments to physicians and hospitals.
So unless we do something, every physician who treats a patient who is on Medicare--it doesn't matter what for--is going to be paid 8.5 percent less--in the middle of raging inflation, in the middle of not only doctor shortages but staff shortages as well.
Now, this is not the first time we have had this problem. We had it last year, and we had it the year before. We solved it then, but we need to solve it today. And you do not have to be a senior at Cal Tech to figure out that if you cut physicians' fees for every different diagnosis for which Americans seek treatment from a Medicare physician by 8.5 percent, physicians are going to have to either make it up somewhere or stop seeing Medicare patients. So all of a sudden your doctor under Medicare is not taking any more Medicare patients. We don't want that.
Not only that, but the Medicare fee schedule is looked to by private insurance companies when they determine how much to pay physicians under their insurance plans. That is the problem.
Here is what my bill would do to solve it. My bill would freeze the current fee schedule in this sense--not per se but indirectly. My bill would keep physician reimbursement at existing levels. So the amount that doctors are paid today for that earache would be the same next year.
My bill would pause the pay-go cuts until 2024. So, in effect, my bill would prevent, next year, an 8.5-percent reduction across the board to physician fees.
Now, I know what you are thinking, Mr. President. You are thinking: Well, I have heard speeches by Kennedy before about controlling the cost of spending in government and the rate of growth. So here he is suggesting that we spend more.
And it is true that this bill would replace the fee schedule cuts by adding money to the Medicare budget. The pay-go cuts would just be postponed. But I have a pay-for. I am not asking this Congress just to add spending and go borrow the money and put us further in debt. I have a way to pay for it.
As you know, we sent--``we,'' meaning the U.S. Congress, sent--a lot of money to our healthcare delivery system during COVID to help patients, or, rather, to help physicians and hospitals deal with our healthcare crisis. We sent a lot of that money through what is called the Provider Relief Fund. These are dollars that were sent out to the hospitals and the doctors to help them get through the COVID pandemic.
Our doctors and hospitals didn't use all that money. They have returned some of it, believe it or not. As of February of this year, a few months ago, they had returned $9.8 billion. And I suspect, by now, they have returned, as best as we can tell from CBO, about $15 billion. So we have $15 billion in our healthcare budget that is not accounted for in terms of how it would be spent.
My bill would cost $2.25 billion. I would propose, Mr. President, that we pay for that $2.25 billion and take it out of what I believe is the $15 billion pot of money that was returned to the Provider Relief Fund. So I have a problem, I have a solution, and I have a way to pay for it without us having to spend money we don't have and thereby borrow it.
So, Mr. President, as if in legislative session, I ask unanimous consent that the Committee on Finance be discharged from further consideration of S. 5194.
Let me stop just for a moment, Mr. President. We have to solve this problem. We are going to solve this problem. We solved it last year, and we solved it the year before. Nobody in this body wants to throw people off Medicare.
Now, we are having trouble putting together a budget. I don't know how that movie is going to end. It may end with an omnibus. It may end with a continuing resolution, where we will wait for a new Congress. But we need to solve this problem now and not make it contingent on an omnibus and not make it contingent upon a continuing resolution. We need to solve it now for the American people who depend on Medicare, and that is what my bill does.
We can continue to fight over the budget. We can continue to fight over the CR. But we are going to solve this problem today with a pay- for, with my bill.
So I repeat, as if in legislative session, I ask unanimous consent that the Committee on Finance be discharged from further consideration of S. 5194 and the Senate proceed to its immediate consideration, and I further ask that the bill be considered read a third time and passed and that the motion to reconsider be considered made and laid upon the table.
Mr. President, I appreciate my good friend Senator Wyden's comments. And I hope he gets some sleep off that red-eye flight.
I am just going to repeat quickly what I said before.
I hope we can put together--we can't solve this problem without passing a bill. I don't know if we are going to be able to pass a bill, any kind of bill. Hopefully, before we go home for Christmas and before this Congress ends, we will be able to do the National Defense Authorization Act, which I think we are going to do this week. There will be some people objecting to the NDAA. I know that. And it will slow it down. But after they object and they get to be dramatic for a little while, we will come back and pass the bill. And then we will decide whether to do an omnibus or whether we are going to do a continuing resolution and wait for the new Congress.
But in order to solve this problem, we have got to do something now. And there are millions of Americans out there that are looking at an 8\1/2\ percent cut to Medicare when we have an 8-percent inflation. That is a 16-point swing. And those millions of people are not just physicians or nurses. They are patients who depend on Medicare for life and death.
So I hope that the chairman of Finance, who is whip smart, will consider my proposal. It would postpone the pay-go cuts of 4 percent, and it would freeze the current fee schedule. If we don't, if the new fee schedule goes into effect, we are going to have another 4\1/2\ percent cut--that is where I get the 8\1/2\ percent--and it would pay for it.
It wouldn't increase debt at all. We pay for it, very simply, as I explained. We pay for it out of the $15 billion in the Provider Relief Fund.
And if our Finance Committee doesn't like that as a pay-for, I have another one. You can pay for it out of the Medicare Improvement Fund. It has 7.3 billion in it. Now, that is $24 billion we have got to solve the $2.5 billion problem so the elderly in our country can sleep tonight. So I hope my esteemed colleague will take this into consideration. And I know that he will.
Mr. President, I am going to talk for a minute about another subject: flood insurance. It doesn't do any good to offer flood insurance when people can't afford it. And that is what FEMA is doing right now.
We all know--or most people know--that you can't buy flood insurance really in the private market. I mean, you can, but for the most part, you can't. And if your house floods and you have homeowners insurance, don't make the mistake of thinking your homeowners insurance covers it because it doesn't. You have got to go buy special flood insurance.
And we have had this problem for a while, and the Federal Government addressed it by creating the National Flood Insurance Program. We call it, as you know, NFIP. About 5 million people who wouldn't be insured for flood otherwise are members of the National Flood Insurance Program. They don't get it for free. They pay for the flood insurance, and they pay dearly.
My State, Louisiana, has 5,000 people out of 5 million who depend on the National Flood Insurance Program. We in Louisiana have the highest participation rate in the country, bar none. And despite what some people may think, my people who are buying flood insurance, they are not multimillionaires; they are working people. They are people who get up every day and go to work, and they obey the law and pay their taxes. They try to do the right thing by their children. They live paycheck to paycheck. These aren't multimillionaires paying for this flood insurance. And they are not paying for the flood insurance on mansions on the beach. We don't have those in Louisiana. These are working people.
Now, for my people and for most Americans who carry flood insurance, their home is their biggest investment. It is the biggest investment they will ever make. It is the most money they will ever spend at one time. And so they want to protect their investment. And they need flood insurance to do that. And we in the Federal Government solved the problem when we created the National Flood Insurance Program.
Now, last year, FEMA, which is under the executive branch, of course--we all know what FEMA is--FEMA rolled out the most significant change in history in the way the National Flood Insurance Program calculates the cost of flood insurance--the most important change in history--and they didn't ask Congress for our input. They just did it.
They went out and hired a consultant who created a new algorithm. And this algorithm, supposedly, says FEMA, can see the future. It can look out 35 years and tell whether your home is going to flood and when it is going to flood. And they cannot only look at a particular area, they say this algorithm is so good that it can look at your specific property and tell whether it is going to flood and assess the risk. Man, I want a dozen of those.
FEMA calls this Risk Rating 2.0. There is just one problem: FEMA won't tell any of us in the U.S. Congress, much less the American people, how this algorithm works. I asked them to give me the algorithm, and I would pay, at my expense--at my expense--to have somebody evaluate it. FEMA said, if I showed it to you, Kennedy, I would have to kill you. They won't show it to us.
But yet when I asked them about it--I have asked them in committees-- FEMA says, Risk Rating 2.0--that is what they call it--they say it is fairer, and they say it is based on the value of your home and the unique flood risk for that property. Once again, man, FEMA is clairvoyant. This algorithm is awesome. They can look out 35 years; they just won't tell us how they do it.
There is no transparency on this grading 2.0. People have absolutely no idea, Members of the U.S. Congress have no idea, how this algorithm works and how they come up with the specific price for every home in America. But I will tell you what we do know: All the prices have gone up.
Let me give you an example. In Louisiana, we have a lot of levees. A lot of those levees are helped paid for with Americans' taxpayer money. And we are grateful to our neighbors and America for helping us out. But a lot of those levees are paid for by Louisiana citizens. We have asked: How does this algorithm, in raising these prices, take into account the levees? Are we getting credit for our levees? And they say: Sure. And I say: Can you show me? And they say: If I showed you, I would have to kill you; this is a secret algorithm.
No transparency. None.
Now, in the past, FEMA has already recognized levees and their importance. And they say they are doing it now under Risk Rating 2.0. But they won't show us how. And our levees work. Our levees work.
Last year, we had a number of storms. We had one that came through New Orleans. We have a levee system around New Orleans. It held. Thank you, American taxpayers. But we don't know how FEMA takes that into account. They say they do. They say: Trust us.
You know, every now and then, I play poker with friends. And they are all good friends. I trust them. But you know what, every time I play poker, every hand, I cut the cards. It is not a matter of friendship or trust. That is just the way it is supposed to be: transparency.
Now, this isn't just my opinion. There was an interview in the Times- Picayune, Mr. Dwayne Bourgeois. Mr. Bourgeois knows what he is talking about. He is the executive director of the North Lafourche Conservation, Levee, and Drainage District in Louisiana. He is an expert on floodwater drainage and levees. This is what he said about the Risk Rating 2.0:
I [just] can't figure out why some people get this minimum
result and these other people get the maximum result. I can't
tell you what the secret sauce is to get to that rate.
And the reason he can't is because FEMA will not tell us what the secret sauce is. What is the effect of this secret sauce? FEMA says it is going to make everything fairer. I know this much: It is going to make everything more expensive.
According to FEMA's estimates, 80 percent of the people who have flood
insurance and have to have flood insurance in Louisiana--in part because the mortgage company requires it--are going to see their rates go up.
The likely average full-risk premium for a home in Louisiana under this new secret sauce is $1,700. Under the old system, it was $766. That is a 122-percent increase because of this algorithm, this secret sauce, which FEMA will not let us see.
My people can't afford this. And the reality is, people are already dropping flood insurance. They are saying: We just can't pay for it. Something has to give. We have inflation at 8 percent or my rent has gone up. Food has gone up. Gas has gone up. We just can't afford it.
The number of flood insurance policies in eight of my parishes--we call our counties parishes--in eight of my parishes or counties, the number of policies has dropped from 290,000 in October 2021 to 267,000 in November of 2022, and it has fallen.
So that is 22,000 people--almost 23,000--out of only 8 parishes or counties who have had to give up their flood insurance.
Now, it is not just Louisiana, Mr. President. You may be having the problem in California.
The Associated Press estimates that 1 million fewer Americans will be able to afford to buy flood insurance by the end of the decade because of Risk Rating 2.0, their algorithm, their secret sauce. And E&E News has identified 425,000 policyholders across the country who have already discontinued coverage.
What does that mean for each State? Well, for example, cancellations of flood insurance because they can't afford it. Eleven percent of the people of California who were buying flood insurance can't afford it anymore, they have dropped it; 11 percent of the policyholders in Texas; 9.6 percent in Florida; in Virginia, North Carolina, Georgia, and South Carolina, 8 percent.
Now, this is a disaster waiting to happen. And I am all for a fair system, but I will tell you what I am not for. I am not for having a Federal Agency, without consulting the U.S. Congress, without talking to you, Mr. President, about your policyholders in California or me in Louisiana, without explaining to us how they are doing it, just unilaterally raising prices with an algorithm or their secret sauce, as I call it.
Now, Senators Cassidy and Gillibrand and I have introduced a bill. It is called the Flood Insurance Pricing Transparency Act. It is a bipartisan bill. All we are asking that FEMA do is talk to us and tell us how they are coming up with these rate increases.
The American people pay the salary of the people at FEMA, and my people and your people, Mr. President, deserve to know how their policies are being priced.
And, Mr. President--Mr. President Biden, if you are listening--I hope you will pick up the phone and you will call your FEMA Director, for whom I have great respect--I don't hate anybody--but I hope the President will call the FEMA Director here and ask him what planet he just parachuted in from and what is he thinking, raising these kinds of prices without telling the American people why.
Nomination of Dana M. Douglas