Floor Statements

Mr. President, I am a little confused because for the last hour I have been listening to debate on an overtime amendment and, as far as I can tell, an overtime amendment has not been laid down. But it is my understanding that when it is, what it will do is keep the Secretary of Labor from spending a single dollar to review the proposed rule dealing with overtime.

Now, the process we usually have is that agencies propose rules, they publish them, and then they get comments. As I understand it, there are 80,000 comments on this. Now, the job of the agency following that is to take those comments into consideration and, if worthy, put them into the rule. What we are saying is we don't want anybody to look at what the public is saying; we don't want anybody to say what the 80,000 people who took the time to comment said. We don't want to see if there can be a change to this rule. We think we can blast it best in its present form. So don't let the Secretary look at the comments.

It is her job to look at them. It is her job to see if there needs to be a change to the proposed rule. All this amendment does is keep the Secretary from taking that action. I suppose it is no coincidence that we are possibly taking up this amendment right after the Labor Day weekend. Each year at this time, we honor those who work hard and help to strengthen the economies of our States and the country. The holiday cannot help but remind us of

those workers this amendment purports to protect.

Now we must carefully consider who is really helped and hurt by this amendment--this amendment that stops the Secretary of Labor from looking at 80,000 comments on ways to improve her rule.

Most of us were able to spend a considerable amount of the August work period meeting with our constituents. At each town meeting I held, there was usually someone in attendance who was quite concerned about Government regulations. I was often told to rein in big Government, keep the rules and regulations simple, current, responsive, and make sure they make sense in today's everchanging workplace.

This amendment that would keep the Secretary of Labor from looking at the 80,000 comments has the opposite approach. Instead of keeping the regulations simple and current, it would prohibit the Secretary of Labor from updating the rules exempting white-collar employees from the Fair Labor Standards Act overtime requirements. Simply put, it is an attempt to reject the new, turn back the clock, look to yesterday for the answer to tomorrow's problems. It is an approach that is doomed to failure before it is even applied, and I am opposed to it.

There is no question that the workplace has dramatically changed during the last half century. It changed during the last half decade. The regulations governing white-collar exemptions, however, remain substantially the same as they were 50 years ago. The existing rule takes us back to a time when workers held titles such as ``straw boss,'' ``keypunch operator,'' ``legman,'' and other occupations that do not exist today. As our economy has evolved, new occupations have emerged that were not even contemplated when those regulations were written 50 years ago.

A 1999 study by the General Accounting Office recommended that the Department of Labor ``comprehensively review current regulations and restructure white-collar exemptions to better accommodate today's workplace and to anticipate future workplace trends.'' That was the General Accounting Office telling the Department of Labor they needed to ``comprehensively review current regulations and restructure white- collar exemptions to better accommodate today's workplace and to anticipate future workplace trends.'' That is precisely what the Department of Labor's proposal to update and clarify the white-collar regulations will do.

While the Department's proposal will update and clarify, this amendment will do neither. It keeps it from happening, it keeps the comments from being reviewed, and it will set the clock back to 1954 and try to force the square peg of the jobs of the 21st century into the round hole of the workplace of 50 years ago.

I am a former shoe salesman, and I know how to tell when something will not fit. This amendment just will not fit. It is like trying to force a size 10 foot into a size 6 shoe. It will not fit no matter how hard you try.

So let's be clear about what this amendment will do. The amendment that keeps the Secretary from looking at the 80,000 comments will undermine the Department of Labor's efforts to extend overtime protection to 1.3 million low-wage workers. Under the current rules, these 1954 rules, only those rare workers earning less than $8,060 a year are automatically protected for overtime. You have to make under $8,060 to automatically be protected.

The administration's proposed rule would raise that threshold to $22,100. As a result, 20 percent of the lowest paid workers would be guaranteed overtime pay. The overtime provisions of the Fair Labor Standards Act were originally intended to protect lower income workers. The proposed rules would provide lower income workers with the protection they deserve.

By undermining the administration's efforts to better protect lower income workers, whom will this amendment protect? The supporters of this amendment claim that an estimated 8 million workers will become ineligible for overtime under the proposed rules. However, this estimate is based on a study by the Economic Policy Institute, and I have to tell you, Mr. President, it looks as if it is riddled with errors.

For example, the study includes in its calculations at least 18 percent of the workforce who work 35 hours or less a week. These part- time workers do not work more than 40 hours a week and, therefore, they do not receive overtime in the first place.

The study also claims the proposed rule will deny overtime pay to white-collar employees earning more than $65,000 a year. However, not all employees earning over $65,000 are exempt under the proposed rule-- only those performing office or nonmanual work or one or more exempt duties. This means that workers such as police officers, firefighters, plumbers, teamsters, carpenters, and electricians will not lose their overtime pay. Of course, under union contracts, that is already stipulated regardless of what kind of rule there is.

The Department of Labor does acknowledge the possibility that 644,000 highly educated workers making over $65,000 a year might lose their overtime. It rings in 1.3 million making under $22,100, and then there is the possibility that 644,000 making over $65,000 a year would lose their overtime.

Supporters of this amendment claim the proposed rules will strip overtime pay for first responders and nurses. If we strip the rhetoric from the reality, we will find there will be virtually no change in status for the first responders and nurses under the proposal. Under both the current and the proposed regulations, only registered nurses are exempt from overtime pay.

Again, what this amendment does is keep the Secretary of Labor from looking at the 80,000 comments on the proposed rule to see if the rule ought to be changed. There is not anything in the appropriations bill that automatically puts into place any rule, but it will keep her from looking at the comments that have been sent in.

Whom will this amendment protect if not lower income workers, first responders, nurses, or millions of other working Americans? The antiquated and confusing white-collar exemptions have created a windfall for trial lawyers. Ambiguities and outdated terms have generated significant confusion regarding which employees are exempt from overtime requirements. The confusion has generated significant litigation and overtime pay awards for highly paid white-collar employees. Wage and hour cases now exceed discrimination suits as the leading type of employment law class action.

The amendment will not preserve overtime for millions of working Americans. This amendment will not help employers and employees clearly and fairly determine who is entitled to overtime.

The only clear winners of this amendment will be the people filling in their time from chasing personal injuries. It is a sideline. So the trial lawyers will continue to benefit from the current state of this confusion.

Businesses need to know the rules. The rules need to be interpretable by the average small businessman. I really object to the inference that the only reason anybody would pay overtime is that the Federal Government said you had to. That is not true. That is not the way it works, and I can tell you that even if the Federal Government says you have to, there will still be one-tenth of 1 percent of the people who will not comply. But for the most part, 99.9 percent of the people do comply and want to comply--not only will comply but will exceed complying in a number of areas.

We are spending taxpayers' dollars sorting through the court cases that could be solved with clarity. We are talking about taxpayer money being spent to review the 80,000 comments. I think that is entirely necessary. I expect any agency that has a rule to review the comments of the rule and to make changes based on the comments.

The Department of Labor has received and is currently reviewing those 80,000 comments to the proposed regulation. We should allow that regulatory process to continue and give the Department a chance to complete its review of the proposed rules.

Once the review is completed, the Department will align the white collar regulations with the realities of the 21st century workplace and what they have learned from the comments, should they get to read them, and the intent of the Fair Labor Standards Act.

I want to assure my colleagues that if the rule has gone astray, when it is

finished we put into place something called the Congressional Review Act. That is where we get to jerk these agencies back to reality if they do not follow the proper procedures, if they do not pay attention to what is being said. We have used that before, and that would be the appropriate place for us to jerk the Department of Labor back to reality if they do not pay attention to the comments that are coming in.

I urge my colleagues to oppose this amendment, allow those comments to be read, check and see if there are going to be changes to the overtime rules, and see if it does not clarify it for the workers and the employers so that there will be less conflict.

Time spent in court does not benefit anybody but the trial lawyer. There is no point in having that done if we can clarify things so everybody understands what the rules are, and we raise that terrible $8,000 up to $22,100 so that we are covering more people for overtime.

I do ask that the amendment be defeated when it is put in, should it be put in.

I yield the floor.

Mr. President, I rise today to introduce a bill that will help bring about a more reliable system of medical justice for all Americans.

Earlier this month, we had a robust debate on a critical issue-- medical liability reform. Though a majority of the Members of this body wanted to begin working to pass the bill, we didn't have the 60 Senators necessary to begin the real work on the legislation.

I co-sponsored that bill, the Patients First Act, and I still support it. Passing the Patients First Act would be an important short-term step to controlling the excesses in our legal system that have sent medical liability insurance premiums through the roof. Skyrocketing premiums are forcing doctors to move their practices to States with better legal environments and lower insurance premiums. This is endangering the availability of critical healthcare services in many areas of Wyoming and other states.

Throughout our debate, I heard many of my colleagues say that they wanted to work on this issue, but that they simply could not support the bill as it stood. We heard that the bill approaches the issue from too narrow of a perspective. We heard that the bill's caps on non- economic damages are unfair to patients, despite the fact that the bill places no limits whatsoever on a patient's right to recover all quantifiable economic damages.

While I disagree with my colleagues who oppose the Patients First Act, I

respect their opposition. I also trust that they sincerely want to help solve our Nation's medical liability and litigation crisis.

During the debate this month, I noticed something interesting. While we argued the ``pros and cons'' of the bill, no one stood up to defend our current system of medical litigation. Now, we heard a lot about the caps, and the insurance industry, and we heard Senators say that ``Yes, there is a problem, but the bill before us won't solve it.''

One thing we didn't hear was a rousing defense of our medical litigation system. Even some of the lawyers in this body agreed that frivolous lawsuits are a problem and that our medical litigation system needs reform.

Why didn't we hear anyone defend the merits of our current medical litigation system? It's because our system doesn't work. It simply doesn't work for patients or for healthcare providers.

Compensation to patients injured by healthcare errors is neither prompt nor fair. The randomness and delay associated with medical litigation does not contribute to timely, reasonable compensation for most injured patients. Some injured patients get huge jury awards, while many others get nothing at all.

Let's look at the facts. In 1991, a group of researchers published a study in the New England Journal of Medicine. The study, known as the Harvard Medical Practice Study, was the basis for the Institute of Medicine's estimate that nearly 100,000 people die every year from healthcare errors.

As part of their study, the researchers reviewed the medical records of a random sample of more than 31,000 patients in New York State. They matched those records with statewide data on medical malpractice claims. The researchers found that nearly 30 percent of injuries caused by medical negligence resulted in temporary disability, permanent disability or death. However, less than 2 percent of those who were injured by medical negligence filed a claim. These figures suggest that most people who suffer negligent injuries don't receive any compensation.

When a patient does decide to litigate, only a few recover anything. Only one of every ten medical malpractice cases actually goes to trial, and of those cases, plaintiffs win less than one of every five. In addition, patients who file suit and are ultimately successful must wait a long time for their compensation--the average length of a medical malpractice action filed in state court is about 30 months.

While the vast majority of malpractice cases that go to trial are settled before the court hands down a verdict, the settlements even then don't guarantee that patients are compensated fairly, particularly after legal fees are subtracted. Research shows that for every dollar paid in malpractice insurance premiums, about 40 cents in compensation is actually paid to the plaintiff--the rest goes for legal fees, court costs, and other administrative expenditures.

To sum up: most patients injured by negligence don't file claims or receive compensation. Few of those that do file claims and go to court recover anything, and those who are successful wait a long time for their compensation. And those who settle out of court end up receiving only 40 cents for every dollar that healthcare providers pay in liability insurance premiums.

It's hard to say that our medical litigation system does right by patients in light of those facts. Unfortunately, our system doesn't work for healthcare providers either.

Earlier, I spoke about those Harvard researchers who found that fewer than 2 percent of those who were injured by medical negligence even filed a claim. As they reviewed the medical records for their study, the researchers also found another interesting fact--most of the providers against whom claims were eventually filed were not negligent at all.

That's right--most providers who were sued had not committed a negligent act.

In matching the records they reviewed to data on malpractice claims, the Harvard researchers found 47 actual malpractice claims. In only 8 of the 47 claims did they find evidence that medical malpractice had caused an injury. Even more amazingly, the physician reviewers found no evidence of any medical injury, negligent or not, in 26 of the 47 claims. However, 40 percent of these cases where they found no evidence of negligence nonetheless resulted in a payment by the provider. Basically, the researchers found no positive relationship between medical negligence and compensation.

That study was based on 1984 data. The same group of researchers conducted another study in Colorado and Utah in 1992, and they found the same thing. As in the 1984 study, they found that only 3 percent of patients who suffered an injury as a result of negligence actually sued. And again, physician reviewers could not find negligence in most of the cases in which lawsuits were filed.

Now, I assume that the patients who sued had either an adverse medical outcome, or at least an outcome that was less satisfactory than the patient expected. But our medical litigation system is not supposed to compensate patients for adverse outcomes or dissatisfaction--it's supposed to compensate patients who are victims of negligent behavior. It's supposed to be a deterrent to substandard medical care.

It's not fair to doctors and hospitals that they must pay to defend against meritless lawsuits. Nor is it fair that they must face a choice between settling for a small sum, even if they aren't at fault, so that they avoid getting sucked into a whirlpool of our medical litigation system.

It's not hard to understand why physicians and hospitals and their insurers want to stay out of court. When they lose, the decisions are increasingly resulting in mega-awards based on subjective ``non- economic'' damages. The number of awards exceeding $1 million grew by 50 percent between the periods of 1994-1996 and 1999-2000. Today, more than half of all jury awards exceed $1 million.

As a result, when a patient suffers a bad outcome and sues, providers have an incentive to settle the case out of court, even if the provider isn't at fault. But is this how our medical litigation system is supposed to work--as a tool for shaking down our healthcare providers?

Let's face it--our medical litigation system is broken. It doesn't work for patients or providers. Even worse, it replaces the trust in the provider-patient relationship with distrust.

Then, when courts and juries render verdicts with huge awards that bear no relation to the conduct of the defendants, this destabilizes the insurance markets and sends premiums skyrocketing. This forces many physicians to curtail, move or drop their practices, leaving patients without access to necessary medical care. This is a particular problem in states like Wyoming, where we traditionally struggle with recruiting doctors and other healthcare providers.

Perhaps we could live with this flawed system if litigation served to improve quality or safety, but it doesn't. Litigation discourages the exchange of critical information that could be used to improve the quality and safety of patient care. The constant threat of litigation also drives the inefficient, costly and even dangerous practice of ``defensive medicine.''

Yes, indeed, defensive medicine is dangerous. A recent study found that one of every 1200 children who receive a CAT scan may die later in life from radiation-induced cancer. Knowing this puts a physician faced with anxious parents in a difficult situation. Does the doctor use his or her professional judgment and tell the parents of a sick child not to worry, or does the doctor order the CAT scan and subject the child to radiation that is probably unnecessary, just to provide some protection against a possible lawsuit?

We have a medical litigation system in which many patients who are hurt by negligent actions receive no compensation for their loss. Those who do receive compensation end up with about 40 cents of every premium dollar after legal fees and other costs are subtracted. And the likelihood and the outcomes of lawsuits and settlements bear little relation to whether or not a healthcare provider was at fault.

We like to say that justice is blind. With respect to our medical litigation system, I would say that justice is absent and nowhere to be found.

During our debate on the Patients First Act, I said that the current medical liability crisis and the shortcomings of our medical litigation system make it clear that it is time for a major change. I also said that regardless of how we voted, we all should work toward replacing the current medical tort liability scheme with a more reliable and predictable system of medical justice.

Today, I am introducing a bill that would help achieve that goal.

Most of us are familiar with the report on medical errors from the Institute of Medicine, also known as the IOM. Many of us may be less familiar with another report that the IOM published earlier this year. That report is called ``Fostering Rapid Advances in Healthcare: Learning from System Demonstrations.''

Our Secretary of Health and Human Services, Tommy Thompson, challenged the IOM to identify bold ideas that would challenge conventional thinking about some of the most vexing problems facing our healthcare system. In response, an IOM committee developed this report, which identified a set of demonstration projects that committee members felt would break new ground and yield a very high return-on-investment in terms of dollars and health.

Medical liability was one of the areas upon which the IOM committee focused. The IOM suggested that the federal government should support demonstration projects in the states. These demonstrations should be based on ``replacing tort liability with a system of patient-centered and safety-focused non-judicial compensation.''

The bill I am introducing today is in the spirit of this IOM report. This bill, the Reliable Medical Justice Act, would authorize funding for States to create demonstration programs to test alternatives to current medical tort litigation.

The funding to States under this bill would cover planning grants for developing proposals based on the models or other innovative ideas. Funding to States would also include the initial costs of getting the alternatives up and running.

The Reliable Medical Justice Act would require participating states and the Federal Government to collaborate in continuous evaluations of the results of the alternatives as compared to traditional tort litigation. This way, all States and the federal government can learn from new approaches.

By funding demonstration projects, I believe Congress could enable States to experiment with and learn from ideas that could provide long- term solutions to the current medical liability and litigation crisis.

In introducing this bill, I wanted to provide some alternative ideas that would contribute to the debate. As a result, the bill describes three models to which states could look in designing their alternatives.

For instance, a State could provide healthcare providers and organizations with immunity from lawsuits if they make a timely offer to compensate an injured patient for his or her actual net economic loss, plus a payment for pain and suffering if experts deem such a payment to be appropriate. This could give a healthcare provider who makes an honest mistake the chance to make amends financially with a patient, without the provider fearing that their honesty would land them in a lawsuit.

Another idea would be for a state to set up classes of avoidable injuries and a schedule of compensation for them, and then establish an administrative board to resolve claims related to those injuries. A scientifically rigorous process of identifying preventable injuries and setting appropriate compensation would be preferable to the randomness of the current system.

Still another option would be for a state to establish a special healthcare court for adjudicating medical malpractice cases. For this idea to work, the State would need to ensure that the presiding judges have expertise in and an understanding of healthcare, and allow them to make binding rulings on issues like causation compensation, and standards of care.

We already have specialized courts for complicated issues like taxes and highly charged issues like substance abuse and domestic violence. With all the flaws in our current medical litigation system, perhaps we should consider special courts for the complex and emotional issue of medical malpractice.

I believe one thing in our medical liability debate is absolutely clear--people are demanding change. Ten States have passed some liability reform in the past year, and another 17 have debated it. States are heeding this call for change, and Congress should support those efforts.

My own State, Wyoming, had a lively legislative debate on medical liability reform this year, but we have a constitutional amendment that prohibits limits on the amounts that can be recovered through lawsuits. The Wyoming Senate considered a bill to amend our State's constitution to create a commission on healthcare errors. That commission would have had the power to review claims, decide if healthcare negligence had occurred, and determine the compensation for the death or injury according to a schedule or formula provided by law. However, the bill died in a tie vote on the Wyoming Senate floor.

According to one of the sponsors of the bill, Senator Charlie Scott, one of the biggest obstacles to passage was the uncertainty surrounding this new idea. No one had any basis for knowing what a proper schedule or formula for compensation would be. No one knew how much the system might cost, or how much injured patients would recover compared to what they recover now.

Senator Scott wrote me to say that federal support for finding answers to these questions might help the bill's sponsors sufficiently respond to the legitimate concerns of their fellow Wyoming legislators. We should be helping state legislators like Senator Scott develop thoughtful and innovative ideas such as the one he has proposed. That's one of the reasons I am offering this bill.

Clearly, the American people and their elected representatives have identified the need to reform our current medical litigation system. The United States Senate did not vote to proceed to the Patients First Act this month, but no member of this body denied that there is a medical liability crisis, or that Congress needs to act sooner rather than later.

While we continue that debate, we ought to lend a hand to States that are working to change their current medical litigation systems and to develop creative alternatives that could work much better for patients and providers. The States have been policy pioneers in many areas-- workers' compensation, welfare reform, and electricity de-regulation, to name three. Medical litigation should be the next item on the agenda of the laboratories of democracy that are our 50 States.

No one questions the need to restore reliability to our medical justice system. But how do we begin the process? One way is to foster innovation by encouraging States to develop more rational and predictable methods for resolving healthcare injury claims. And that is what the Reliable Medical Justice Act aims to do.

In the long run, we would all be better off with a more reliable system of medical justice than we have today. I know that my fellow Senators recognize this, so I hope my colleagues on both sides of the aisle will work with me on this legislation.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, the U.S. economy is still the greatest economy in the world and our credit markets have helped to make that happen. During the past decade, our credit markets have taken advantage of technology and innovation in order to provide more consumers with more timely credit approvals and with more financing options. Nowhere is there a better example of this than our housing market.

Today, the time it takes to review a mortgage application and approve it has been cut drastically by our financial institutions. Consumers find that they have a wide array of financing options they can choose from to secure the purchase of a home--from fixed-rated loans to variable-rate loans, or even adjustable rate loans. While the wide variety of choices has helped more families to purchase homes in the past decade, even more families could buy homes if they understood how the credit market works.

Although there are many pluses to the expansion of the availability of credit there is also a downside. Individuals may get in over their heads when too much credit is made available to them. In addition, identity theft is a bigger problem than it has been before. Consumers need to educate themselves about the potential problems they might face and how to avoid them. Increasing consumer financial literacy is not just about providing information, however, it is about giving families the proper informational tools so that they can put their financial affairs in order.

Today, my friend and colleague, Senator Stabenow and I are introducing the ``Financial Literacy Community Outreach Act'' to help to bring together all of the federal government's financial literacy programs under one roof.

The Department of Treasury, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Securities and Exchange Commission, the Department of Housing and Urban Development, and the Department of Labor are just a few of the many federal agencies that have established excellent financial literacy programs and initiatives. These programs cover a wide variety of topics ranging from how to save, spend, and invest to programs that provide guidance on how to prepare for retirement, select a pension plan, or purchase a home. Still others help individuals avoid the threat of identity theft.

Unfortunately, consumers attempting to find financial literacy information from the federal government may find that information scattered throughout the government. Our bill would provide a one-stop- shop where consumers could find the appropriate financial literacy programs for their needs. A single web site and a toll-free number will go a long way toward bringing this vital information to the individuals and families who need it.

In addition, the bill establishes the Financial Literacy Commission, a body comprised of the heads of the federal agencies with financial literacy programs. The Commission will ensure that the federal government has a cohesive and coordinated federal policy on financial literacy as it provides Congress with vital information on what can be improved in our government's financial literacy outreach efforts. In addition to the web site and the toll-free number, the Commission will highlight successful public/private partnerships already existing around the country.

One such partnership is thriving in my home state of Wyoming. The Wyoming Partners in HomeBuyer Education, led by the Wyoming Community Development Authority, includes local banks, real estate agents, the University of Wyoming, the U.S. Department of Agriculture, the U.S. Department of Housing and Urban Development, and Fannie Mae, in the effort to provide distance learning to potential home-buyers through the use of compressed video technology. This training program is perfect for a state like Wyoming in that home-buyers in rural communities have access to all of the essential elements of the home buying experience just like their urban community counterparts.

To date, more than 3,000 individuals have completed the training program and it has led to making the home-buying process easier and more understandable for rural and urban families alike.

I strongly believe that this bill will help millions of families find the appropriate financial literacy materials they need to make better credit and investment decisions.

It is my pleasure to be cosponsoring this bill with Senator Stabenow because of our shared concern about making financial literacy available to more families across the country. In addition, I would like to recognize Senator Sarbanes' tremendous effort to focus our attention on financial literacy, both when he was Chairman of the Committee on Banking, Housing and Urban Affairs last year and as Ranking Member of the Committee this year. He has been an extraordinary advocate for this important issue. Chairman Shelby of the Committee has also recognized the importance of this issue, as just this week, it was the subject of a hearing by the Committee. I look forward to working with my colleagues on the Committee and in the full Senate to ensure that we expand and build upon the government's present financial literacy efforts to help individuals and families increase their knowledge of and access to our credit and investment markets.

Mr. President, every morning, from the time we wake up to the time we turn out the lights and go to sleep, we all spend a good portion of our day in cyberspace. Probably without thinking, each time we head out to the internet, we broadcast some very specific information about our lives as we use our computers for email. Each time we use our cell phones we rely on a sense of privacy about the information we convey, which may not be present. And, when we use hand held devices to send quick messages back and forth to friends, coworkers and family we assume no one else is listening or receiving our information, which often includes social security numbers, family names and even credit card and pin numbers.

Cyberspace is a high tech criminal's dream and it has helped contribute to the fastest growing crime in America--identity theft.

Simply put, identity theft is the ability to impersonate someone else and steal their credit, their money and even their identity for their own use.

Although the use of high-tech devices has certainly contributed to the proliferation of identity theft, many individuals have been victimized by simple criminals who have carefully picked through trash cans and mailboxes to find old receipts and social security numbers. Regardless of the medium through which the information is collected, identity theft is the result of criminals who have learned how to manipulate a growing network of information--some public, some private--and then use that data to their own advantage.

The problem with identity theft is that it is not confined to one state. It affects Americans from every walk of life from coast to coast. Some Americans may discover that someone else has been using their social security number to obtain fraudulent employment, while others learn that people have been using fraudulent identification cards to obtain lines of credit and then leaving innocent victims to deal with the bills they left behind.

People from small States like Wyoming are not immune to this new crime wave. Although there are only 493,000 people in Wyoming, we have the same rate of identity theft per capita as is present anywhere else in the United States. That is why we have to approach this issue from every angle, taking a systemic approach that includes prevention, enforcement and assistance to victims of identity theft.

Today, we will take the first step with victim's assistance for this crime. I believe we have to provide some real options for our constituents who are trying to recover from the trauma that identity theft has caused in their lives. That is why my colleague from Washington and I are introducing legislation that will make it easier for victims to get the information they need to begin reversing the damage and lasting effects of this crime. Our bill, the Identity Theft Victim's Assistance Act of 2003, is very similar to a bill we offered last year that passed the Senate unanimously in November. I expect and hope for the same result this year since this is a growing problem and the need for action on this issue grows more urgent with each passing day.

Our bill includes key provisions that would allow victims to work with businesses to obtain information related to cases of identity theft and then contact credit reporting agencies to block false information on credit reports. In drafting this legislation we worked with all of the stakeholders to ensure a balance between the needs of consumers and the needs of small businesses, banks and other credit agencies.

The reintroduction of this bill is timely given the recent hearings in the Senate Banking and Commerce Committees and recent action by both the House and Administration.

Earlier this month, the House Financial Services Subcommittee reported a bill called the Fair and Accurate Credit Transactions Act. Also known as the FACT Act, the bill includes a provision nearly identical to Section 4 of our bill. Section 4 of our bill requires consumer credit reporting agencies to block information that appears on a victim's credit report as a result of identity theft, provided the victim did not knowingly obtain goods, services or money as a result of the blocked transaction.

Our provision, which amends the Fair Credit Reporting Act, was also addressed in a recent hearing before the Senate Banking Committee. On July 10, the Chairman of the Federal Trade Commission testified that ``blocking would mitigate the harm to consumers' credit record that can result from identity theft'' and recommended that this practice be codified.

I am also encouraged by similar recommendations from the Treasury Department that would require credit reporting agencies to cease reporting allegedly fraudulent account information on consumer reports when the consumer submits a police report or similar document, unless there is a reason to believe the report is false.

Providing consumers with the tools necessary to recover from identity theft is the first step in providing real relief to the hundreds of thousands of individuals whose lives have already been turned upside down by identity theft. I urge my colleagues to work with me as we move forward on this important issue and make progress on the reauthorization of critical legislation like the Fair Credit Reporting Act. We must take action this year before the crime of identity theft hurts the hundreds of thousands of working people and families who are expected to become victims this year.

Mr. President, I rise today to introduce a bill that will help bring about a more reliable system of medical justice for all Americans.

Earlier this month, we had a robust debate on a critical issue-- medical liability reform. Though a majority of the Members of this body wanted to begin working to pass the bill, we didn't have the 60 Senators necessary to begin the real work on the legislation.

I co-sponsored that bill, the Patients First Act, and I still support it. Passing the Patients First Act would be an important short-term step to controlling the excesses in our legal system that have sent medical liability insurance premiums through the roof. Skyrocketing premiums are forcing doctors to move their practices to States with better legal environments and lower insurance premiums. This is endangering the availability of critical healthcare services in many areas of Wyoming and other states.

Throughout our debate, I heard many of my colleagues say that they wanted to work on this issue, but that they simply could not support the bill as it stood. We heard that the bill approaches the issue from too narrow of a perspective. We heard that the bill's caps on non- economic damages are unfair to patients, despite the fact that the bill places no limits whatsoever on a patient's right to recover all quantifiable economic damages.

While I disagree with my colleagues who oppose the Patients First Act, I

respect their opposition. I also trust that they sincerely want to help solve our Nation's medical liability and litigation crisis.

During the debate this month, I noticed something interesting. While we argued the ``pros and cons'' of the bill, no one stood up to defend our current system of medical litigation. Now, we heard a lot about the caps, and the insurance industry, and we heard Senators say that ``Yes, there is a problem, but the bill before us won't solve it.''

One thing we didn't hear was a rousing defense of our medical litigation system. Even some of the lawyers in this body agreed that frivolous lawsuits are a problem and that our medical litigation system needs reform.

Why didn't we hear anyone defend the merits of our current medical litigation system? It's because our system doesn't work. It simply doesn't work for patients or for healthcare providers.

Compensation to patients injured by healthcare errors is neither prompt nor fair. The randomness and delay associated with medical litigation does not contribute to timely, reasonable compensation for most injured patients. Some injured patients get huge jury awards, while many others get nothing at all.

Let's look at the facts. In 1991, a group of researchers published a study in the New England Journal of Medicine. The study, known as the Harvard Medical Practice Study, was the basis for the Institute of Medicine's estimate that nearly 100,000 people die every year from healthcare errors.

As part of their study, the researchers reviewed the medical records of a random sample of more than 31,000 patients in New York State. They matched those records with statewide data on medical malpractice claims. The researchers found that nearly 30 percent of injuries caused by medical negligence resulted in temporary disability, permanent disability or death. However, less than 2 percent of those who were injured by medical negligence filed a claim. These figures suggest that most people who suffer negligent injuries don't receive any compensation.

When a patient does decide to litigate, only a few recover anything. Only one of every ten medical malpractice cases actually goes to trial, and of those cases, plaintiffs win less than one of every five. In addition, patients who file suit and are ultimately successful must wait a long time for their compensation--the average length of a medical malpractice action filed in state court is about 30 months.

While the vast majority of malpractice cases that go to trial are settled before the court hands down a verdict, the settlements even then don't guarantee that patients are compensated fairly, particularly after legal fees are subtracted. Research shows that for every dollar paid in malpractice insurance premiums, about 40 cents in compensation is actually paid to the plaintiff--the rest goes for legal fees, court costs, and other administrative expenditures.

To sum up: most patients injured by negligence don't file claims or receive compensation. Few of those that do file claims and go to court recover anything, and those who are successful wait a long time for their compensation. And those who settle out of court end up receiving only 40 cents for every dollar that healthcare providers pay in liability insurance premiums.

It's hard to say that our medical litigation system does right by patients in light of those facts. Unfortunately, our system doesn't work for healthcare providers either.

Earlier, I spoke about those Harvard researchers who found that fewer than 2 percent of those who were injured by medical negligence even filed a claim. As they reviewed the medical records for their study, the researchers also found another interesting fact--most of the providers against whom claims were eventually filed were not negligent at all.

That's right--most providers who were sued had not committed a negligent act.

In matching the records they reviewed to data on malpractice claims, the Harvard researchers found 47 actual malpractice claims. In only 8 of the 47 claims did they find evidence that medical malpractice had caused an injury. Even more amazingly, the physician reviewers found no evidence of any medical injury, negligent or not, in 26 of the 47 claims. However, 40 percent of these cases where they found no evidence of negligence nonetheless resulted in a payment by the provider. Basically, the researchers found no positive relationship between medical negligence and compensation.

That study was based on 1984 data. The same group of researchers conducted another study in Colorado and Utah in 1992, and they found the same thing. As in the 1984 study, they found that only 3 percent of patients who suffered an injury as a result of negligence actually sued. And again, physician reviewers could not find negligence in most of the cases in which lawsuits were filed.

Now, I assume that the patients who sued had either an adverse medical outcome, or at least an outcome that was less satisfactory than the patient expected. But our medical litigation system is not supposed to compensate patients for adverse outcomes or dissatisfaction--it's supposed to compensate patients who are victims of negligent behavior. It's supposed to be a deterrent to substandard medical care.

It's not fair to doctors and hospitals that they must pay to defend against meritless lawsuits. Nor is it fair that they must face a choice between settling for a small sum, even if they aren't at fault, so that they avoid getting sucked into a whirlpool of our medical litigation system.

It's not hard to understand why physicians and hospitals and their insurers want to stay out of court. When they lose, the decisions are increasingly resulting in mega-awards based on subjective ``non- economic'' damages. The number of awards exceeding $1 million grew by 50 percent between the periods of 1994-1996 and 1999-2000. Today, more than half of all jury awards exceed $1 million.

As a result, when a patient suffers a bad outcome and sues, providers have an incentive to settle the case out of court, even if the provider isn't at fault. But is this how our medical litigation system is supposed to work--as a tool for shaking down our healthcare providers?

Let's face it--our medical litigation system is broken. It doesn't work for patients or providers. Even worse, it replaces the trust in the provider-patient relationship with distrust.

Then, when courts and juries render verdicts with huge awards that bear no relation to the conduct of the defendants, this destabilizes the insurance markets and sends premiums skyrocketing. This forces many physicians to curtail, move or drop their practices, leaving patients without access to necessary medical care. This is a particular problem in states like Wyoming, where we traditionally struggle with recruiting doctors and other healthcare providers.

Perhaps we could live with this flawed system if litigation served to improve quality or safety, but it doesn't. Litigation discourages the exchange of critical information that could be used to improve the quality and safety of patient care. The constant threat of litigation also drives the inefficient, costly and even dangerous practice of ``defensive medicine.''

Yes, indeed, defensive medicine is dangerous. A recent study found that one of every 1200 children who receive a CAT scan may die later in life from radiation-induced cancer. Knowing this puts a physician faced with anxious parents in a difficult situation. Does the doctor use his or her professional judgment and tell the parents of a sick child not to worry, or does the doctor order the CAT scan and subject the child to radiation that is probably unnecessary, just to provide some protection against a possible lawsuit?

We have a medical litigation system in which many patients who are hurt by negligent actions receive no compensation for their loss. Those who do receive compensation end up with about 40 cents of every premium dollar after legal fees and other costs are subtracted. And the likelihood and the outcomes of lawsuits and settlements bear little relation to whether or not a healthcare provider was at fault.

We like to say that justice is blind. With respect to our medical litigation system, I would say that justice is absent and nowhere to be found.

During our debate on the Patients First Act, I said that the current medical liability crisis and the shortcomings of our medical litigation system make it clear that it is time for a major change. I also said that regardless of how we voted, we all should work toward replacing the current medical tort liability scheme with a more reliable and predictable system of medical justice.

Today, I am introducing a bill that would help achieve that goal.

Most of us are familiar with the report on medical errors from the Institute of Medicine, also known as the IOM. Many of us may be less familiar with another report that the IOM published earlier this year. That report is called ``Fostering Rapid Advances in Healthcare: Learning from System Demonstrations.''

Our Secretary of Health and Human Services, Tommy Thompson, challenged the IOM to identify bold ideas that would challenge conventional thinking about some of the most vexing problems facing our healthcare system. In response, an IOM committee developed this report, which identified a set of demonstration projects that committee members felt would break new ground and yield a very high return-on-investment in terms of dollars and health.

Medical liability was one of the areas upon which the IOM committee focused. The IOM suggested that the federal government should support demonstration projects in the states. These demonstrations should be based on ``replacing tort liability with a system of patient-centered and safety-focused non-judicial compensation.''

The bill I am introducing today is in the spirit of this IOM report. This bill, the Reliable Medical Justice Act, would authorize funding for States to create demonstration programs to test alternatives to current medical tort litigation.

The funding to States under this bill would cover planning grants for developing proposals based on the models or other innovative ideas. Funding to States would also include the initial costs of getting the alternatives up and running.

The Reliable Medical Justice Act would require participating states and the Federal Government to collaborate in continuous evaluations of the results of the alternatives as compared to traditional tort litigation. This way, all States and the federal government can learn from new approaches.

By funding demonstration projects, I believe Congress could enable States to experiment with and learn from ideas that could provide long- term solutions to the current medical liability and litigation crisis.

In introducing this bill, I wanted to provide some alternative ideas that would contribute to the debate. As a result, the bill describes three models to which states could look in designing their alternatives.

For instance, a State could provide healthcare providers and organizations with immunity from lawsuits if they make a timely offer to compensate an injured patient for his or her actual net economic loss, plus a payment for pain and suffering if experts deem such a payment to be appropriate. This could give a healthcare provider who makes an honest mistake the chance to make amends financially with a patient, without the provider fearing that their honesty would land them in a lawsuit.

Another idea would be for a state to set up classes of avoidable injuries and a schedule of compensation for them, and then establish an administrative board to resolve claims related to those injuries. A scientifically rigorous process of identifying preventable injuries and setting appropriate compensation would be preferable to the randomness of the current system.

Still another option would be for a state to establish a special healthcare court for adjudicating medical malpractice cases. For this idea to work, the State would need to ensure that the presiding judges have expertise in and an understanding of healthcare, and allow them to make binding rulings on issues like causation compensation, and standards of care.

We already have specialized courts for complicated issues like taxes and highly charged issues like substance abuse and domestic violence. With all the flaws in our current medical litigation system, perhaps we should consider special courts for the complex and emotional issue of medical malpractice.

I believe one thing in our medical liability debate is absolutely clear--people are demanding change. Ten States have passed some liability reform in the past year, and another 17 have debated it. States are heeding this call for change, and Congress should support those efforts.

My own State, Wyoming, had a lively legislative debate on medical liability reform this year, but we have a constitutional amendment that prohibits limits on the amounts that can be recovered through lawsuits. The Wyoming Senate considered a bill to amend our State's constitution to create a commission on healthcare errors. That commission would have had the power to review claims, decide if healthcare negligence had occurred, and determine the compensation for the death or injury according to a schedule or formula provided by law. However, the bill died in a tie vote on the Wyoming Senate floor.

According to one of the sponsors of the bill, Senator Charlie Scott, one of the biggest obstacles to passage was the uncertainty surrounding this new idea. No one had any basis for knowing what a proper schedule or formula for compensation would be. No one knew how much the system might cost, or how much injured patients would recover compared to what they recover now.

Senator Scott wrote me to say that federal support for finding answers to these questions might help the bill's sponsors sufficiently respond to the legitimate concerns of their fellow Wyoming legislators. We should be helping state legislators like Senator Scott develop thoughtful and innovative ideas such as the one he has proposed. That's one of the reasons I am offering this bill.

Clearly, the American people and their elected representatives have identified the need to reform our current medical litigation system. The United States Senate did not vote to proceed to the Patients First Act this month, but no member of this body denied that there is a medical liability crisis, or that Congress needs to act sooner rather than later.

While we continue that debate, we ought to lend a hand to States that are working to change their current medical litigation systems and to develop creative alternatives that could work much better for patients and providers. The States have been policy pioneers in many areas-- workers' compensation, welfare reform, and electricity de-regulation, to name three. Medical litigation should be the next item on the agenda of the laboratories of democracy that are our 50 States.

No one questions the need to restore reliability to our medical justice system. But how do we begin the process? One way is to foster innovation by encouraging States to develop more rational and predictable methods for resolving healthcare injury claims. And that is what the Reliable Medical Justice Act aims to do.

In the long run, we would all be better off with a more reliable system of medical justice than we have today. I know that my fellow Senators recognize this, so I hope my colleagues on both sides of the aisle will work with me on this legislation.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, the U.S. economy is still the greatest economy in the world and our credit markets have helped to make that happen. During the past decade, our credit markets have taken advantage of technology and innovation in order to provide more consumers with more timely credit approvals and with more financing options. Nowhere is there a better example of this than our housing market.

Today, the time it takes to review a mortgage application and approve it has been cut drastically by our financial institutions. Consumers find that they have a wide array of financing options they can choose from to secure the purchase of a home--from fixed-rated loans to variable-rate loans, or even adjustable rate loans. While the wide variety of choices has helped more families to purchase homes in the past decade, even more families could buy homes if they understood how the credit market works.

Although there are many pluses to the expansion of the availability of credit there is also a downside. Individuals may get in over their heads when too much credit is made available to them. In addition, identity theft is a bigger problem than it has been before. Consumers need to educate themselves about the potential problems they might face and how to avoid them. Increasing consumer financial literacy is not just about providing information, however, it is about giving families the proper informational tools so that they can put their financial affairs in order.

Today, my friend and colleague, Senator Stabenow and I are introducing the ``Financial Literacy Community Outreach Act'' to help to bring together all of the federal government's financial literacy programs under one roof.

The Department of Treasury, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Securities and Exchange Commission, the Department of Housing and Urban Development, and the Department of Labor are just a few of the many federal agencies that have established excellent financial literacy programs and initiatives. These programs cover a wide variety of topics ranging from how to save, spend, and invest to programs that provide guidance on how to prepare for retirement, select a pension plan, or purchase a home. Still others help individuals avoid the threat of identity theft.

Unfortunately, consumers attempting to find financial literacy information from the federal government may find that information scattered throughout the government. Our bill would provide a one-stop- shop where consumers could find the appropriate financial literacy programs for their needs. A single web site and a toll-free number will go a long way toward bringing this vital information to the individuals and families who need it.

In addition, the bill establishes the Financial Literacy Commission, a body comprised of the heads of the federal agencies with financial literacy programs. The Commission will ensure that the federal government has a cohesive and coordinated federal policy on financial literacy as it provides Congress with vital information on what can be improved in our government's financial literacy outreach efforts. In addition to the web site and the toll-free number, the Commission will highlight successful public/private partnerships already existing around the country.

One such partnership is thriving in my home state of Wyoming. The Wyoming Partners in HomeBuyer Education, led by the Wyoming Community Development Authority, includes local banks, real estate agents, the University of Wyoming, the U.S. Department of Agriculture, the U.S. Department of Housing and Urban Development, and Fannie Mae, in the effort to provide distance learning to potential home-buyers through the use of compressed video technology. This training program is perfect for a state like Wyoming in that home-buyers in rural communities have access to all of the essential elements of the home buying experience just like their urban community counterparts.

To date, more than 3,000 individuals have completed the training program and it has led to making the home-buying process easier and more understandable for rural and urban families alike.

I strongly believe that this bill will help millions of families find the appropriate financial literacy materials they need to make better credit and investment decisions.

It is my pleasure to be cosponsoring this bill with Senator Stabenow because of our shared concern about making financial literacy available to more families across the country. In addition, I would like to recognize Senator Sarbanes' tremendous effort to focus our attention on financial literacy, both when he was Chairman of the Committee on Banking, Housing and Urban Affairs last year and as Ranking Member of the Committee this year. He has been an extraordinary advocate for this important issue. Chairman Shelby of the Committee has also recognized the importance of this issue, as just this week, it was the subject of a hearing by the Committee. I look forward to working with my colleagues on the Committee and in the full Senate to ensure that we expand and build upon the government's present financial literacy efforts to help individuals and families increase their knowledge of and access to our credit and investment markets.

Mr. President, every morning, from the time we wake up to the time we turn out the lights and go to sleep, we all spend a good portion of our day in cyberspace. Probably without thinking, each time we head out to the internet, we broadcast some very specific information about our lives as we use our computers for email. Each time we use our cell phones we rely on a sense of privacy about the information we convey, which may not be present. And, when we use hand held devices to send quick messages back and forth to friends, coworkers and family we assume no one else is listening or receiving our information, which often includes social security numbers, family names and even credit card and pin numbers.

Cyberspace is a high tech criminal's dream and it has helped contribute to the fastest growing crime in America--identity theft.

Simply put, identity theft is the ability to impersonate someone else and steal their credit, their money and even their identity for their own use.

Although the use of high-tech devices has certainly contributed to the proliferation of identity theft, many individuals have been victimized by simple criminals who have carefully picked through trash cans and mailboxes to find old receipts and social security numbers. Regardless of the medium through which the information is collected, identity theft is the result of criminals who have learned how to manipulate a growing network of information--some public, some private--and then use that data to their own advantage.

The problem with identity theft is that it is not confined to one state. It affects Americans from every walk of life from coast to coast. Some Americans may discover that someone else has been using their social security number to obtain fraudulent employment, while others learn that people have been using fraudulent identification cards to obtain lines of credit and then leaving innocent victims to deal with the bills they left behind.

People from small States like Wyoming are not immune to this new crime wave. Although there are only 493,000 people in Wyoming, we have the same rate of identity theft per capita as is present anywhere else in the United States. That is why we have to approach this issue from every angle, taking a systemic approach that includes prevention, enforcement and assistance to victims of identity theft.

Today, we will take the first step with victim's assistance for this crime. I believe we have to provide some real options for our constituents who are trying to recover from the trauma that identity theft has caused in their lives. That is why my colleague from Washington and I are introducing legislation that will make it easier for victims to get the information they need to begin reversing the damage and lasting effects of this crime. Our bill, the Identity Theft Victim's Assistance Act of 2003, is very similar to a bill we offered last year that passed the Senate unanimously in November. I expect and hope for the same result this year since this is a growing problem and the need for action on this issue grows more urgent with each passing day.

Our bill includes key provisions that would allow victims to work with businesses to obtain information related to cases of identity theft and then contact credit reporting agencies to block false information on credit reports. In drafting this legislation we worked with all of the stakeholders to ensure a balance between the needs of consumers and the needs of small businesses, banks and other credit agencies.

The reintroduction of this bill is timely given the recent hearings in the Senate Banking and Commerce Committees and recent action by both the House and Administration.

Earlier this month, the House Financial Services Subcommittee reported a bill called the Fair and Accurate Credit Transactions Act. Also known as the FACT Act, the bill includes a provision nearly identical to Section 4 of our bill. Section 4 of our bill requires consumer credit reporting agencies to block information that appears on a victim's credit report as a result of identity theft, provided the victim did not knowingly obtain goods, services or money as a result of the blocked transaction.

Our provision, which amends the Fair Credit Reporting Act, was also addressed in a recent hearing before the Senate Banking Committee. On July 10, the Chairman of the Federal Trade Commission testified that ``blocking would mitigate the harm to consumers' credit record that can result from identity theft'' and recommended that this practice be codified.

I am also encouraged by similar recommendations from the Treasury Department that would require credit reporting agencies to cease reporting allegedly fraudulent account information on consumer reports when the consumer submits a police report or similar document, unless there is a reason to believe the report is false.

Providing consumers with the tools necessary to recover from identity theft is the first step in providing real relief to the hundreds of thousands of individuals whose lives have already been turned upside down by identity theft. I urge my colleagues to work with me as we move forward on this important issue and make progress on the reauthorization of critical legislation like the Fair Credit Reporting Act. We must take action this year before the crime of identity theft hurts the hundreds of thousands of working people and families who are expected to become victims this year.

Mr. President, I associate myself with the remarks that have gone on before. It was a truly inspiring speech. I think there is a little bit of irony to the fact that we have a Brit inspire us on freedom and liberty. That was the most inspiring speech I have heard since Margaret Thatcher did the same thing. They somehow have the ability to look into our past and explain our present and move us on into the future. I appreciate the fact that he was here and spoke and shared those words with us. It was awe inspiring.

Mr. President, the managers' amendment includes a provision that will help solidify the strong friendship that exists between the United States and the United Kingdom. The provision is a result of a great deal of work between the chairman, the ranking member of the Foreign Relations Committee, and the Department of State. They are to be commended for helping to strengthen the partnership between our two countries, a partnership we have relied on for many years.

The provision will allow the U.S. to finalize a bilateral agreement with the United Kingdom and provide a licensing exception to the UK for certain defense-related items. Such an agreement will pave the way for enhancing both our defense capabilities as it promotes cooperation with our coalition partners, especially on matters of defense.

Enhancing our defense capabilities and the industrial and economic cooperation that exists between our two nations is critical if we are to continue to have the ability to promote peace, freedom and democracy throughout the world. As we have seen for many years, and through many international conflicts, the United States and the United Kingdom are steadfast allies who have come to the aid of each other whenever it was necessary to preserve the peace. Our troops fought together in the deserts of Iraq and the United Kingdom has demonstrated time and time again that we can always count on them in a time of crisis.

Another important objective of this agreement is the improvement of the industrial cooperation between our countries. Industries of all types are consolidating in the face of economic downsizing and globalization so that research and development of new products and new technologies can be pursued. This consolidation has only further highlighted the need for effective export control measures.

The United States must now work with our Allies, especially our friends in the United Kingdom, to improve the flow of information and increase the level of cooperation in the areas of export control reform, multilateral control regime participation, and improvements in licensing procedures.

I thank the distinguished chairman and ranking member for working with me on this issue during both the committee markup and in recent days. This provision means a great deal to both our long-term interests and to our continued friendship with the United Kingdom.

The United Kingdom has consistently proved their support for our common cause of peace. Most recently, by their efforts in Iraq. Prime Minister Tony Blair took a great deal of heat for his position, but he held fast to it because our cause was just. We will recognize him for his efforts when he speaks at a Joint session of Congress on July 17. I believe our action here today is also a strong and very welcome show of support for his and his country's efforts.

Mr. President, I thank the Senator from Nevada. I always appreciate his comments. He has one of the fastest growing States in the Nation. I come from the most sparsely populated State in the Nation. We have some very common problems.

In the last couple of days, we have heard a lot of discussion about insurance companies. We have heard that medical liability insurers are the source of the problem; that they are gouging doctors to make up for investment losses.

Well, the Nasdaq index yesterday closed at its highest level since April 2002. The Nasdaq is up more than 30 percent since the beginning of the year. For that matter, the Dow Jones Industrial Average is up more than 10 percent in 2003. Under the logic we have heard this week, the stock market rebound ought to be leading to a sharp reduction in medical liability premiums. So why aren't we seeing any relief?

We are not seeing any relief because insurance companies are paying out more in losses than they are receiving in premiums. It is that simple. It does not take an accountant to figure that out. For every premium dollar collected in 2001, medical liability insurers experienced $1.53 in losses. Ten years earlier, for every premium dollar collected, insurers lost $1.03.

Regardless of investment gains or losses, the fact is that payments for medical litigation judgments and settlements are rising much faster than the incoming premium payments, even though premiums are escalating dramatically. Insurance companies cannot make up the gap between the $1 they take in and the $1.53 they pay out without raising premiums. That is why we are not seeing reductions in medical liability premiums, despite the stock market's advance in 2003.

It all comes back to our legal system. It is simply out of control. People who are truly injured by health care errors ought to receive fair compensation. The problem is that our medical justice system is completely out of whack. Doctors and hospitals live in constant fear of litigation. They order unnecessary tests out of legal fear.

Doctors look at their patients as potential lawsuits, not people in need of their help, because of this legal fear. They are forced to move their practices to States that have reformed their legal systems. All of this because of legal fear.

Some of my colleagues may have read a book that came out several years ago, in 1995. The book was called ``The Death of Common Sense.'' The book was written by Philip Howard, a lawyer by training. His premise was that American law and regulation are stifling human judgment and good sense.

Well, Mr. Howard just published a new book, and I encourage my colleagues to read it. It is called ``The Collapse of the Common Good.'' In the book, he describes how law and regulation in America create a warped sense of individual rights. In America today, people use the concept of individual rights to bully other members of society, using the threat of legal action as a weapon.

Some of what Mr. Howard has written is pertinent to this debate. For instance, some of my colleagues believe that this legislation would limit a patient's right to sue a doctor. We all believe that patients who are truly injured deserve fair compensation. The problem is that some personal injury lawyers are taking advantage of this belief to bring all sorts of claims against doctors, whether the doctors are at fault or not.

Let me share a passage from Mr. Howard's book. He writes on pages 22 and 23:

Like ancient Mayans accepting human sacrifice or Catholics

in the Middle Ages buying indulgences, Americans today accept

that being sued is the price of freedom, and that diving for

cover is the natural response to reasonable daily choices.

Our faith in individual rights keeps us from pausing even to

question this conception of justice. But should individual

rights include the right to go to court over a sandbox

disagreement involving 3-year-olds, or to milk the system

whenever there is a freak accident, or to scare towns and

school systems out of seesaws and peanut butter? The idea of

individual rights derives its moral force from the rhetoric

of liberty. But is this what our founders had in mind when

they organized a society around the freedom of each

individual?

Actually, no. Our founding fathers would be shocked. There

is no ``right'' to bring claims for whatever you want against

someone else.

Suing is a use of state power. A lawsuit seeks to use

government's compulsory powers to coerce someone else to do

something. Asserting individual rights sounds benign, like

praying in the church or synagogue of your choice. Sticking a

legal gun in someone's ribs, however, is not a feature of

what our founders intended as an individual right. The point

of freedom is almost exactly the opposite: We can live our

lives without being cowed by use of legal power. The

individual rights our founders gave us were defensive, to

protect our liberty. Liberty, we somehow forgot, does not

include taking away someone else's liberty. . . .

Courts are not supposed to be commercial establishments

where, for the price of a lawyer, anyone can buy a chance on

a raffle. Courts supposedly represent the wisdom of law,

overseeing when those powers can be used against others in a

free society. There's no right to sue except as the state

permits.

I can practically feel your confusion. How else can we

organize justice? People obviously have the ability to go to

court. But by what rules and standards? Our modern

consciousness is so focused on individual rights we can't

conceive of another way to ensure fairness. But if lawsuits

are recognized as an exercise of state power, perhaps the

state should make conscious judgments of who can sue for

what. That's what legal rules and interpretations are for.

That is what this debate is about. That is what this legislation intends to do--make conscious judgments about who can sue and for what, and the rules and limits under which medical lawsuits can go forward.

Is this bill a perfect bill? No. I have yet to see a perfect bill, and I am in my seventh year in the Senate, following 10 years in the Wyoming Legislature. But we ought to vote to begin this debate and move on to the consideration of this bill, and the amendments to the bill, so that we can address this medical liability crisis before it further compromises the liberties of the people in Wyoming and the other States, and especially their access to medical care.

We are debating whether to proceed to debate, whether to proceed to begin the amendments which can even be whole substitutes to this bill. So if my colleagues have a better idea, a way to solve this, they should vote to proceed, then bring their amendments.

Our Declaration of Independence speaks to our unalienable rights, as granted to us by our Creator, and that among these rights are life, liberty, and the pursuit of happiness.

Well, it is pretty hard for an expectant mother in Wyoming to pursue her happiness when she has to pursue her doctor for one more well-baby check-up before he closes his practice and leaves for a State where insurance premiums are lower.

There is another passage in Mr. Howard's book that is pertinent to our discussion about limits on pain-and-suffering awards. The statistics show that insurance premiums are lower in States with such limits, but I have heard Members on the other side of the aisle argue that the limit in this bill is too low, that it is unfair to someone who is severely injured, despite the fact that the bill does not limit in any way that person's right to recover every cent of the economic damages that result from that injury.

Well, if the limit on pain-and-suffering awards in this bill is too low, then what is the right amount?

I quote another passage from Mr. Howard's book, and I hope everybody will read at least the first chapter of this book.

A great thing about bringing lawsuits in modern America is

that it is so easy to threaten the adversary's entire

livelihood. One stroke of the finger on the lawyer's word

processor, and damages go from $100,000 to $1,000,000. Three

more key strokes, and we're suing for a billion dollars. This

is fun.

What kind of justice system is it that allows someone to

make up an amount of money to demand? Is that a fact to be

``found'' by a jury? It doesn't even qualify as a value

judgment, which at least is a conclusion based on facts.

Damages claimed today are completely arbitrary. Just stick

your finger in the air and threaten someone with any number

that comes to mind.

Judges treat damage claims almost as if they are property,

and only with greatest reluctance intercede. In 1987, five-

year-old Gregory Strothkamp climbed up several shelves to the

top of the linen closet, got an unopened box of Q-Tips, and,

while trying to use them, punctured his eardrum. His parents

sued the maker of Q-Tips for, among other things, $20 million

in punitive damages. Whatever the merits of the argument that

Q-Tips should come in childproof packaging (which would raise

everyone's cost), most people probably agree that making Q-

Tips is not an evil act.

When the jury awarded young Gregory $20 million in punitive

damages, the judge did what was obvious from the beginning

and overturned the award. The claim ended sensibly, but is

this how justice should work? Sweating through trial and

verdict to get to obvious justice, while the judge is sitting

there the whole time, doesn't exactly instill confidence in

the system.

Do judges enjoy watching the Q-Tip companies, or a Little

League coach, or a doctor squirm at the end of a

multimillion-dollar hook?

Lying dormant along the side of society is another

important legal principle: that a person injured should be

``made whole'' by damages. Traditionally, this meant out-of-

pocket losses, like lost wages or medical bills. In an

unusual case, like a homemaker with no wages, claims were

permitted in categories not actually calculable, like ``pain

and suffering.'' In cases of genuine evil, punitive damages

were possible.

Today, the exceptions have engulfed the rule, with all

kinds of side effects. Juries are regularly asked ``to assume

the baffling task of trying to place a monetary value on pain

and suffering,'' Dean Bok observed, ``although the

predictable result [is] to encourage a rise in litigation and

the growth of the most unsavory and deceptive practices.''

Judges might concede the principle but can't imagine how to

apply it. They need some objective legal post to hang on to.

If $1.35 billion is too much, what is the right amount? The

``exercise of judicial power is not legitimate,'' as one

scholar put it, ``if it is based on a judge's personal

preference rather than law.'' So what do the judges do? They

abdicate. Judges look up at the allegorical figure of Justice

and interpret her blindfold as impotence.

But Justice is also holding balanced scales. How does

Justice achieve balance but through the values and wisdom of

judges? Proportion is critical to justice. Equals should be

treated alike, Aristotle believed, and unequals

proportionally to their relative differences: ``the unjust is

what violates the proportion.'' These distinctions, Aristotle

observed, can only be made with human wisdom.

Dead people can be so smart. ``[T]o speak somewhat

paradoxically,'' Cardozo observed, there are times ``when

nothing less than a subjective measure will satisfy an

objective standard.'' Justice Potter Stewart had it right

after all. Judges have to know it when they see it. One

billion dollars for a wrongful dismissal case is absurd.

Everyone knows it. The case should be dismissed unless the

plaintiff comes back with some amount he can plausibly

justify.

I wonder if judges ever ask themselves why it is that

damage claims have escalated to a level where they are like a

parody of a dysfunctional system of justice. The answer

couldn't be more obvious. Judges sit on their hands and

tolerate claims that make lotteries seem like small change.

The reason people bring huge claims is not hard to divine:

It's a form of extortion. Why else sue for such ridiculous

amounts? Being sued for, say, $5 million for a regular

accident may not cause you to fold your hand, but the

possibility of ruin never strays far from your consciousness.

Most million-dollar claims end up settling for thousands or

less. But not all. All that it takes is for a jury to get

mad. . . .

The point I am making is that there is an imbalance. I think that everybody recognizes there is an imbalance. We want to have a just system. What we need to do is approve this cloture petition, end the debate of whether to proceed to the debate, and bring in substitute bills. And I have heard of some pretty good ones floating around. We can debate the issue and come up with something that will make doctors still accessible in States such as Nevada and Wyoming and the other ones that we have had on the chart of states in crisis. There are only about five that are not in crisis. Then there are varying degrees of crisis among the rest of them.

The problem we are facing today is that multimillion-dollar awards for pain and suffering are contributing to dramatic increases for insurance premiums for doctors. When this forces doctors to leave their practices, it hurts innocent patients who lose their access to medical care. Do we not have an obligation to say enough is enough, and set some limits on lawsuits?

As Mr. Howard points out in his book, if lawsuits are an exercise of State power, perhaps the State should make conscious judgments of who can sue for what.

When I spoke on this bill yesterday, I said the current medical liability crisis and the shortcomings of our medical litigation system make it clear it is time for a major change. I also said that regardless of how we vote on this legislation, we ought to start working toward replacing the current medical tort litigation scheme with a more reliable and predictable and faster system of medical justice.

I have heard Members on the other side of the aisle say they want to work with Republicans to find a better way to solve this problem, to find reasonable good-faith alternatives to this legislation. If we vote not to proceed on this bill, I hope this process will begin sooner rather than later. I hope we proceed so Members can bring their ideas out and suggest amendments; then we can vote up or down. The people of Wyoming and other States in crisis cannot afford to lose any more doctors. We cannot afford to lose any more time.

If we do not proceed on this bill today, I pledge to continue working to find solutions to this million-dollar liability crisis. I hope Members on both sides of the aisle will also take this pledge to keep working on this.

I yield the floor.

Mr. President, I ask unanimous consent that the Senate begin a period of morning business until 12:30 p.m.

Mr. President, throughout the West, and all over the country,

more and more physicians are closing up shop and moving their practices out of State because they can no longer afford their medical liability insurance premiums in States that don't have some kind of a control over the amount that can be awarded.

Whenever I go home for a town meeting or when I visit with constituents, I hear story after story about people who are facing the loss of the sole option for health care in their towns because of the skyrocketing premiums their doctors must pay.

One constituent told me about her family physician in Newcastle, WY. She had to close her doors because the cost of insurance premiums made it impossible for her to provide obstetrical services to the pregnant women of the town. She said: Telling a pregnant woman I won't be there to deliver her baby was one of the hardest things I had to do as a family physician.

She then joined two other doctors in Newcastle to announce as of July 1 they would be unable to deliver babies because of a more than 50- percent increase in their liability insurance premiums. That means pregnant women in the Newcastle area will now drive 30 to 90 miles when it comes time to deliver their babies. This is a problem for the people of Newcastle, but it is one that also faces the people who live in a lot of towns throughout my State of Wyoming and many other States.

Take Jackson, WY, for instance. A surgeon there paid $16,000 for liability insurance in his first year in practice. He is now facing an increase in his rates that will place his premium at $164,000. That is a jump of $148,000 in 1 year. Emergency room and trauma doctors are facing similar jumps in the cost of liability insurance. An emergency room doctor in Rawlins, WY, nearly closed his practice after his insurance company announced it would no longer provide coverage for emergency room services. Fortunately, his hospital was able to find him coverage at the last minute, but this is merely a temporary solution to a critical problem.

Recruiting physicians to practice in rural States such as Wyoming is a difficult job. The high cost of medical liability premiums is making it nearly impossible. These examples highlight the problem we are facing. This problem is not just about lawsuits and insurance rates, it is about people who cannot get the medical attention they need. It is about communities without doctors to serve them. It is about a health care system in crisis.

The cost of medical liability insurance and the role of medical litigation raise very complex issues, but the focus is not and should not be on doctors or trial lawyers or insurance companies fighting among themselves. Our focus should be on patients and on ensuring accessible and affordable health care for all Americans. In Wyoming, ensuring access to affordable health care is a persistent challenge. We probably would have a shortage of health care providers even if our medical liability system worked perfectly, but the costs of medical litigation and of medical liability insurance are taking matters from bad to worse for the people of my State.

In fact, a study released yesterday by the Agency for Health Care Research and Quality found that States that limit pain and suffering awards in medical lawsuits have more physicians per capita than States such as Wyoming that have no such limits.

Here are some other examples of the impact this crisis is having on Wyomingites:

Two physicians who practice internal medicine in my hometown of Gillette have been notified that their medical liability insurance will be canceled as of July 31--not increased, canceled. If they are unable to find insurance coverage to replace their canceled policy in 2 weeks, they will be forced to close their practice in a town that is already experiencing a shortage of primary care doctors.

Another doctor in Casper, WY, was barely able to find insurance coverage for this year. The doctor delivers more than 350 babies each year. Nearly half of the mothers are covered by Medicaid. He also performs nearly one-half of the gynecological surgeries in the Casper area. The only insurance he was able to find cost him $140,000 per year with an additional $69,000 to purchase ``tail'' coverage in case he is sued for something that happened before his new insurance took effect.

In Wyoming, a physician who delivers a baby can be sued any time until the child's eighth birthday. So this ``tail'' is quite long, which means the premium could be quite high. In addition, this coverage is a short-term policy only good for 1 year, and he expects his cost of insurance will increase substantially again next year. Without his service, many pregnant mothers will find it difficult to obtain important prenatal care, especially expectant mothers in low-income families.

Earlier this year, a doctor in Wheatland, WY, went to a high school basketball game between the Wheatland Bulldogs and the nearby Douglas Bearcats. At the game, he announced he would not be delivering any more babies in Wheatland or Douglas and may be leaving the State because of the cost of liability insurance. The irony is that he had delivered just about every player on both teams. This was not somebody new in practice.

We also have doctors who are being forced to leave Wyoming to find relief from the financial burden of liability insurance. One doctor from Riverton, WY, grew up there, married a native of Wyoming, and returned to Riverton to raise his family and practice medicine in the State he loves. But between paying off student loans from medical school and paying expensive premiums on liability insurance, he is being forced to move to a State that has limits on pain and suffering awards. By moving, he will reduce his premiums by $43,000 a year.

The threat of lawsuits is enough by itself to raise insurance premiums in a State such as Wyoming. Plus, with so few doctors purchasing insurance in the pool, one major payout, whether the doctor was at fault or not, can really send premiums for every doctor right through the roof. As a result, many doctors in Wyoming are moving to States with larger risk pools and fairer liability laws, just as their colleague from Riverton is doing.

People who are truly injured by errors made by health care providers ought to be compensated fairly for their losses. However, the medical justice system today does not achieve this objective. If fair compensation is the standard, our medical justice system falls woefully short of the mark. Most people who are injured as a result of health care errors do not receive any compensation. However, some who are injured receive multimillion-dollar judgments as compensation for a bad outcome often without regard for whether the physician or hospital was even negligent.

The unpredictability of our medical justice system really does not serve patients or providers well. The only people who come out ahead are the personal injury lawyers who happen to find the right case. When it becomes impossible for insurance companies to predict their losses with any certainty, premiums go up. It is a fact of the business, and it is no different for property insurers or life insurers than it is for medical liability insurers.

Yes, people are hurt by health care errors, but skyrocketing medical liability premiums are hurting people, too. They are hurting physicians and hospitals in my home State by forcing them to curtail services or, in the case of doctors, to leave their practices entirely. Those doctors who continue to practice now look at each patient as a potential lawsuit. So they order more tests, whether or not the patient needs the tests. They spend less time discussing a course of treatment with the patient so they can spend more time writing a report after the appointment to justify the treatment decision in case they get sued.

Ordering more tests and writing more reports costs an already overworked doctor time with his or her family and time to catch up on his or her sleep. Doctors should not have to make choices between what is right for their patients and what is right for themselves, but our medical litigation system does not offer them a real alternative.

Most importantly, the medical liability crisis in my State is hurting innocent citizens who are losing their trusted hometown doctors to other States that have reformed their medical justice systems.

What do we know about our overall system of medical justice in America

today? We know compensation to patients injured by medical errors is neither prompt nor fair. We also know verdicts with huge awards that do not match the severity of injuries or the conduct of the defendants destabilize the insurance markets. This sends premiums skyrocketing, which forces many physicians to curtail, move, or drop their practices. This leaves patients without access to necessary medical care.

Finally, we know litigation does nothing to improve quality or safety. In fact, the constant threat of litigation drives the inefficient and costly practice of defensive medicine and also discourages the exchange of information about preventable health care errors that we could use to improve the quality and safety of patient care.

The current medical liability crisis and the shortcomings of our medical litigation system make it clear that this is the time for a major change. We need a medical justice system that promotes accountability and fairness instead of discouraging them.

Regardless of how we vote on this legislation before us, we all ought to start working toward replacing the current medical tort liability scheme with a more reliable and predictable system of medical justice. We need a system that restores rationality to the way in which we compensate the injured and learn from mistakes. We need a system that restores the trust that patients and providers used to have in each other. It is incumbent upon all of us to strive for such a system so that we may raise the overall standard of health care in this country.

The legislation we are considering today is an important step in the short term toward making the medical justice system work better for everyone, not just a fortunate handful of personal injury lawyers. I urge my colleagues to join me and vote for this bill.

I ask unanimous consent that at 2:15, Senator Kyl be recognized to speak for up to 15 minutes to be followed by Senator Feinstein for up to 25 minutes.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Tuesday, July 8, 2003, at 2:15 p.m., in closed session, to receive a classified briefing on the situation in Africa, with a focus on Liberia.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Tuesday, July 8, 2003, at 9:30 a.m., on the nomination of Nicole Nason, DOT, and Pamela Harbour, FTC, and immediately following a hearing on ``Radio Ownership'' in SR-253.

Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session on Tuesday, July 8, 2003, at 10 a.m., to hear testimony on An Examination of U.S. Tax Policy and Its Effect on the Domestic and International Competitiveness of U.S.-Based Operation.

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on ``Executive Nominations'' on Tuesday, July 8, 2003, at 2:30 p.m., in the Dirksen Senate Office Building Room 226.

Agenda

Panel I: Senators.

Panel II: Michael J. Garcia to be Assistant Secretary, U.S. Department of Homeland Security; and Jack Landman Goldsmith III to be Assistant Attorney General, Office of Legal Counsel, U.S. Department of Justice.

Mr. President, I ask unanimous consent that the Subcommittee on Clean Air, Climate Change, and Nuclear Safety be authorized to meet on Tuesday, July 8, at 9:30 a.m., to examine agricultural sequestration of carbon.

The hearing will take place in SD 406 (Hearing Room).

Mr. President, I ask unanimous consent that the Subcommittee on National Parks of the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Tuesday, July 8, 2003, at 10 a.m.

The purpose of the hearing is to conduct oversight of the maintenance backlog, land acquisition backlog, and deficit in personnel within the National Park System, including the impact of new park unit designations on resolving each of these concerns.

Madam President, I rise in opposition to this amendment submitted by my colleague from North Carolina, Senator Edwards. Yesterday, the Senate defeated an amendment offered by my colleague that would have restricted direct-to-consumer advertising of prescription medicines.

This new amendment continues this effort by offering similar advertising provisions to those already defeated.

I have a list of 14 organizations which I ask unanimous consent be printed in the Record.

Madam President, these are organizations that are advocates for millions of Americans who suffer from a broad range of illnesses. Early detection and treatment of these illnesses is more communication. Public education and awareness are key components. Advertising is the key component of it.

This amendment would require the Secretary of Health and Human Services to promulgate new rules that would require advertisements to provide information about a drug's effectiveness in comparison to other drugs for ``substantially the same condition.'' In other words, you have to advertise with your competitors as well. The unfortunate effect would be to make the advertisements even more complex, not less, for consumers. It would force ads to drop other information that would be beneficial to consumers.

I ask that you reject the amendment.

Mr. President, I ask the body to vote no on the Edwards amendment to increase drug costs. This is a new drug approval. The amendment masquerades as a direct-to-consumer advertising amendment while sweeping away carefully calibrated FDA drug approval standards.

While the Edwards amendment masquerades as an amendment to ``strengthen protections against misleading direct-to-consumer advertising,'' the amendment drastically changes the requirements for drug approval in the United States.

We have a great system that is working. Under the current law, pharmaceuticals must demonstrate they are safe and effective to be approved by the Food and Drug Administration. Under the Edwards amendment, the Secretary of Health and Human Services would be authorized to vary this standard on a

drug-by-drug basis to create new hurdles to drug approvals.

These new hurdles include lengthy, costly comparative trials and a showing that the drug is safer or more effective for a subpopulation or condition than a previously approved drug.

These changes to fundamental, longstanding law could hurt patients by delaying, and possibly denying, the approval of new drugs that patients need; by dramatically adding to drug development costs, discouraging companies from developing additional drugs to treat the same conditions; and increasing drug spending by reducing brand-to-brand competition.

We know far more about pharmaceuticals than many other medical interventions since, unlike most other interventions, they must obtain approval under FDA's safe and effective standard before they can be used. We should reject this amendment as it would add another regulatory hurdle to the already long and costly drug development and approval process.

Madam President, I ask unanimous consent to set the pending amendments aside and call up amendment No. 1051.

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

Madam President, I rise to offer an amendment that would build upon the protections for seniors and pharmacists that the Senate approved last week. I am pleased to be joined by my distinguished colleague from Arkansas, Senator Lincoln, in offering this amendment.

This amendment would ensure that seniors have convenient access to local pharmacies. The amendment would accomplish this in two ways.

First, there is language in the Finance Committee's bill that requires

the Government to develop a standard for ensuring that seniors have convenient access to local pharmacies. This amendment would further define what we mean by ``convenient access.''

The amendment would ensure that access to retail pharmacies under Medicare is ``no less favorable to enrollees'' than the access standards under the TRICARE retail pharmacy program.

TRICARE is the health care program for active-duty and retired members of the uniformed services, their families, and survivors. TRICARE is a regionally managed program that offers eligible beneficiaries three choices for their health care.

First, there is TRICARE Prime, where military facilities such as Department of Defense hospitals are the principal source of health care services. There is also TRICARE Extra, a preferred provider option. Finally, there is a TRICARE Standard, the fee-for-service option that used to be known as CHAMPUS.

For all three options, TRICARE offers pharmacy benefits that include access to a retail pharmacy network. To win an award to manage TRICARE benefits for the military, a contractor must maintain a retail pharmacy network that ``minimizes the number of eligible beneficiaries who will have to change pharmacies'' to use the contractor's network.

There are three minimum beneficiary access standards for the TRICARE retail pharmacy network.

In urban areas, the contractor must have a network pharmacy within 2 miles of 90 percent of eligible beneficiaries. In suburban areas, the standard is a pharmacy within 5 miles of 90 percent of the beneficiaries. In rural areas, the standard is a pharmacy within 15 miles of 70 percent of the beneficiaries.

The Enzi-Lincoln amendment would not require Medicare drug plans to meet these exact standards. It would only require that a Medicare drug plan's network be ``no less favorable'' to seniors than the TRICARE program is for active-duty military and retirees, including those who participate in the new TRICARE Senior Pharmacy Program, provided by the 2001 National Defense Authorization Act. If the Administrator of the new Center for Medicare Choices or a Medicare drug plan had a better way of meeting or exceeding the TRICARE standard, they would not be restrained from doing so.

As I mentioned earlier, there is another way this amendment would ensure that seniors have convenient access to their local pharmacies. The amendment includes a provision that prohibits a Medicare drug plan operator from requiring pharmacies to accept non-Medicare business and reimbursement rates as a condition of participating in the plan's Medicare business, or vice versa.

I expect that health plans and pharmacy benefits managers that operate in the commercial insurance market will be the same companies that will compete to provide Medicare drug plans and Medicare Advantage preferred provider options to seniors. If a plan wins a bid to provide a Medicare drug benefit, they may offer reimbursement rates to retail pharmacies that are better or worse than the rates they offer in their private sector commercial business. That is fine with me.

What concerns me is the possibility of these large plans ``tying'' their Medicare and non-Medicare business together. A Medicare drug plan should not be able to require a community pharmacist to accept an unprofitable reimbursement rate for its private sector business as a condition of participating in its Medicare network. Likewise, a community pharmacist should not have to take a money-losing Medicare reimbursement rate in order to keep its non-Medicare business from the same large plan.

We should allow community pharmacists to refuse unprofitable private sector business from a health insurer or a pharmacy benefits manager yet participate in a Medicare drug plan run by the same entities. By doing so, we will further ensure that seniors have convenient access to local pharmacies based on fair reimbursement rates that should take into account the added costs pharmacies incur in providing counseling and advice to Medicare beneficiaries, especially since pharmacists are rarely reimbursed directly for the time and effort it takes to provide that counseling and advice.

I urge my colleagues to join with Senator Lincoln and me in continuing to improve this Medicare bill by ensuring that seniors have convenient access to their local pharmacists.

I yield the floor to my colleague on this amendment.

Mr. President, I thank the Senator from Arkansas for her diligent effort. I ask my colleagues to vote for it.

Madam President, I ask unanimous consent to set aside the pending amendment and call up amendment No. 1030.

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

Madam President, this amendment would make the Medicare Advantage preferred provider organization option more attractive to people in areas of the country that have shortages of doctors and other health care providers.

The proposed amendment would ensure that Medicare Advantage plans pay for covered services provided by any properly licensed health professionals to seniors in ``medically underserved States.''

In other words, if a MedicareAdvantage plan covers a service, then the plan must pay for the service if it is provided by a licensed provider in a medically underserved State, regardless of other plan limitations on the types of health professionals that may provide the service.

I assure my colleagues that this is nothing new. The law that governs the Federal Employees Health Benefits Program provides special consideration for enrollees of preferred-provider plans who live in States with critical shortages of physicians and other health professionals. Such States are designated as ``medically underserved areas'' for purposes of the Federal employees program, and the law requires preferred provider organizations to pay for services provided by any qualified providers in these States.

As a result, in medically underserved areas, Federal employees' health plans must treat any licensed health professional as a ``covered provider'' for any covered services performed within the scope of that State's licensure laws.

This amendment simply would require the same treatment by MedicareAdvantage plans of seniors who live in medically underserved States. If the plan says that a physician must provide a service, but a nurse practitioner is permitted under State law to provide the service, a senior in a medically underserved State could get that service from his or her local nurse practitioner.

The amendment would define a ``medically underserved State'' in the same way it is defined for the Federal Employees Health Benefits Program. The Federal employees program law defines a ``medically underserved State'' as one in which 25 percent or more of the population lives in health professional shortage areas, as defined by the Secretary of Health and Human Services. This amendment would transfer that language to MedicareAdvantage.

In 2003, the following States were considered ``medically underserved'' for purposes of the Federal employees health plan: Alabama, Idaho, Kentucky, Louisiana, Maine, Mississippi, Missouri, Montana, New Mexico, North Dakota, South Carolina, South Dakota, Texas, Utah, West Virginia and Wyoming.

By the way, Louisiana, Maine, and West Virginia were added to the list in 2003, which demonstrates that the list if flexible enough to recognize States that may not have shortages of health professionals right now, but may have a shortage in the future.

Here's an example of how this provision works in the Federal employees program. The Rural Letter Carrier Benefit Plan allows physical and occupational therapy services to be provided by qualified and licensed physical therapists, occupational therapists, and physicians. However, the Govern-

ment Employees Hospital Association Benefit Plan, or the G-E-H-A plan, does not generally allow qualified physicians to provide physical or occupational therapy services. As a result, physicians who may have special expertise in rehabilitation medicine, for example, cannot provide such services to members of the G-E-H-A plan.

However, in medically underserved States, the G-E-H-A plan must allow Federal employees to receive physical or occupational therapy services from any physician who is qualified to do so and whose State license permits him or her to do so.

As a result, Federal employees in medically underserved States who live 50 miles from the nearest physical or occupational therapist don't have to drive 50 miles to receive a service they could get from the local physician.

Here's another example. The Rural Letter Carriers plan allows chiropractors to perform manipulation of the spine and extremities, as well as related procedures such as ultrasound and cold-pack application. The G-E-H-A plan allows chiropractors to perform manipulation of the spine and certain X-rays to detect and determine nerve interferences, but it doesn't allow for chiropractors to perform ultrasound or other related procedures like the Rural Letter Carriers plan does. Both plans also reserve certain procedures for other types of health professionals.

However, in medically underserved States, both plans must permit chiropractors to perform any service that the plans cover--provided that the services are within the scope of the chiropractor's State license.

Now that I have explained what this amendment would accomplish, let me be clear about what this amendment would not do.

First, the amendment would not require MedicareAdvantage plans to pay for services that they would not ordinarily cover. It would only require that plans pay for covered services in medically underserved States without limiting the types of professionals who may provide the service. Again, this provision only applies to services that the plan has already decided to cover.

Second, this amendment is not an ``any willing provider'' amendment. A number of States have ``any willing provider'' laws that require health plans to permit all providers to participate in the network if they agree to accept the plan's contract terms, especially their payment rates.

This amendment, however, would not require MedicareAdvantage plans to allow any health care provider to participate in the plan's network just because he or she is willing to do so. Nor would this amendment provide that a MedicareAdvantage plan could not pay a non-network provider any less than whit it pays a network provider.

This amendment simply directs plans to pay either their in-network or out-of-network for covered services that are provided by any type of health professional who is licensed to provide the service in a medically underserved State.

Finally, this amendment is not intended to favor physicians versus physical therapists, nurse practitioners, or other health professionals, or for that matter, to favor those other health professionals versus physicians.

This amendment simply would recognize the reality of healthcare in rural and frontier America--there simply aren't enough healthcare providers to go around. In States like Wyoming, the problem is getting worse, not better. Many of our doctors and other health professionals are growing older and retiring, while others are leaving our State to move to places with better medical liability laws.

In States with dire shortages of doctors and other healthcare providers, seniors shouldn't have to get into the car in the heat of summer or the cold of winter to drive to the nearest city to get healthcare services that they could get in their own town, or the town next door.

Even going to the town next door can be a challenge in Wyoming, because the town next door may be many miles away!

I want seniors in Wyoming and other sparsely populated States to be able to choose a MedicareAdvantage plan if they want comprehensive health coverage. These plans will be competing to offer seniors an integrated medical and drug benefit, innovative services like disease management, and more complete preventive services to keep seniors healthier.

For seniors in rural States to choose MedicareAdvantage, they need to know that a plan's network provides real access. There's a big difference between a network of health care providers being available, and a network of health care providers being accessible.

This amendment would provide protection and peace-of-mind to seniors who might consider joining a MedicareAdvantage plan. It's the same safeguard enjoyed by other Federal employees, including the Members of this Body. I ask my colleagues to join me in passing this amendment to ensure that seniors in rural and frontier States receive the same protection and piece-of-mind that we have in our own Federal health plan.

I yield the floor.

Mr. President, I rise in opposition to amendment No. 1000, offered by Senator Clinton. This amendment would give the Federal Government new funding to manage comparative effectiveness studies of pharmaceuticals. While this may sound good on the surface, this amendment would end up as a tool for health care rationing by bureaucrats in Washington.

Comparative effectiveness analysis in the private sector can provide useful information. However, giving the Federal Government the power to make national determinations based on one or two comparative studies is dangerous, because these decisions would affect tens of millions of patients who rely on the Government for their health insurance.

This amendment would get the Federal Government even further into the business of making medical decisions. It would promote one-size-fits- all medicine.

Studies conducted under this amendment may be misused by the Centers for Medicare and Medicaid Services or other bureaucracies by encouraging broad and simplistic decisions about which patients should have access to new medicines.

Even worse, these comparative effectiveness studies might become a rigid benchmark adopted by payers across the health care system. Private insurers already look to Medicare for decisions on medical procedures and technologies, and doctors are already concerned about the way Medicare conducts those determinations.

Private insurers copy many of Medicare's limitations on the procedures and therapies from which physicians choose in determining the best course of treatment for their senior patients. If we extend this level of bureaucratic control to drugs and biotechnology, the Government's decisions about medical access would end up being imposed on many more patients than just Medicare beneficiaries.

In considering this amendment, we need to keep in mind that innovations in health care are usually incremental. This applies to drug developments, where ``next-generation'' advances yield incremental benefits compared to existing treatments.

Government studies on comparative effectiveness may fail to recognize or value fully these advances. If we had a Medicare drug benefit in place today that only paid for so-called ``breakthroughs'' in pharmaceuticals, we may not have reaped the benefits of many antibiotics, antivirial drugs, non-steroidal anti-inflammatory agents, and ``beta blockers'' for controlling high blood pressure.

Finally, centralized comparative analysis runs the risk of overlooking the value of specific medicines for individual patients. Prescription medicines to treat a specific disease or condition are different from one another. That is why patients and doctors need choice.

Population-based comparative effectiveness determinations such as those proposed in this amendment may fail to recognize important differences in the way individuals and sub-populations respond to different drugs and drug combinations. As a result, such studies can discourage access to new

medicines that can benefit many patients with diseases and conditions such as hypertension, diabetes, heart disease and mental illness.

Comparative effectiveness studies are not dangerous, and we ought to encourage more and better studies on the relative merits of various drugs for various people. What concerns me is how this amendment would put the Government in control of these studies.

If one branch of the Government is conducting these broad studies, and another branch of the Government is paying for the drugs that your loved one needs, it is just a matter of time before the results of the broad studies are imposed upon the freedom that your family doctor has to choose the best drug therapy for your loved one.

Coming from Wyoming, I am used to fighting against one-size-fits-all solutions from the Federal Government. I certainly cannot support an amendment that would impose such an approach on something as important as healthcare for seniors who rely on pharmaceuticals to make their lives better.

I urge my colleagues to vote against this amendment.

Mr. President, I call for regular order.

Thank you, Mr. President.

Amendment No. 932, As Modified

I send a modification to my amendment to the desk.

Thank you, Mr. President.

I thank the Senator from North Carolina for her comments about the amendment and appreciate her support. I am going to try to convince everybody else that support is also warranted.

I have offered a modified version of amendment 932 to the original one yesterday on behalf of myself and my distinguished colleague from Rhode Island, Senator Reed. Senators Pryor, Cochran, and Chambliss also join us on offering this modified amendment. I welcome their cosponsorship and support.

These modifications ensure the amendment will not add to the cost of this Medicare bill, which is a concern I share with Chairman Grassley and a great many of my colleagues.

I thank the Senator from Iowa for his willingness to work with me to address the concerns of our seniors and pharmacists.

The heart of this amendment remains the provisions that would ensure fair prices for consumers and fair treatment for local pharmacists under a new Medicare prescription drug benefit.

To ensure reasonable drug prices for seniors, the amendment would hold Medicare drug plans and Medicare Advantage organizations accountable for passing on to their consumers a fair portion of the rebates, discounts, and other incentives the plans may receive from drug manufacturers and other sources.

The amendment would require disclosure of these incentives to the Federal Government. It would also clarify that the Government may audit the records of these plans and organizations to ensure compliance with this disclosure requirement. The amendment would not, however, make these disclosures part of the public record. This is certainly not our intent. The amendment simply ensures that our corporate partners are held accountable for sharing with our seniors the savings they generate.

To ensure fair treatment for the pharmacists in our communities, the amendment we are offering would prohibit Medicare drug plans from implementing restrictions that would steer consumers to only mail-order pharmacies. It would require Medicare drug plans to allow local community pharmacists to fill long-term prescriptions--long-term prescriptions; not just 30-day ones but 90 days as well--and offer other services they are equipped and licensed to provide.

Seniors trust their local pharmacist, and they should be allowed to keep that relationship in place under this bill. This drug benefit should not force them to choose a mail-order house when a pharmacist who could provide the same or better service is right down the street, and they are used to dealing with them.

This amendment would permit a Medicare drug plan or Medicare Advantage organization to charge a different cost for a mail-order prescription versus a prescription filled by a community pharmacist. This happens today in many health plans. As an example, one health plan for Federal employees charges a $10 copay for a 30-day prescription filled at a local pharmacy but charges a $20 copay for a 90-day prescription filled through a mail order. That is a $10 savings. This would allow the local pharmacist to offer the 90-day prescription so the consumer could take advantage of the same reduction in copay.

Under this amendment, Medicare drug plans could still charge different copays, but the plans could not prohibit a local pharmacy from filling 90-day prescriptions.

I know some of my colleagues are concerned that seniors may get confused. Actually, if they can get through the rest of the bill without being confused, they will not be confused by this. But some people are concerned that may happen or that they may pay more than they should for their drugs. In response, I would say the Finance Committee's bill clearly states that seniors cannot be charged more than the negotiated price of a covered drug.

The bill is also very direct in its expectations of Medicare drug plans. The bill would require plans to provide clear information about copayments and deductibles. This information would have to include details on the differences in cost between mail-order and retail prescriptions.

I think seniors and their families are very smart about drug costs, and they will take factors, such as different copays, into account when they make a health care decision.

I am sure Medicare drug plans will encourage seniors to use mail order, just as health plans encourage us to use mail order. What this amendment would do is give seniors the option--the option--to use their local pharmacists.

The bill already requires health plans to give seniors accurate information on the costs of their options. From that point, I think we should trust seniors and their families to make the decisions that are best for them, without arbitrary limitations on services that steer seniors in one direction or the other.

Again, I thank Senators Reed, Pryor, Cochran, and Chambliss for joining me in offering this modified amendment. The sponsors of this bill appreciate the role local pharmacists play in helping all Americans manage their medications, especially the elderly and the sick, who need the most advice.

As I mentioned yesterday, Senator Reed and I worked last week to pass a bill to address the pharmacist shortage through the Committee on Health, Education, Labor and Pensions. We agreed to work together on that bill to ensure our aging population has access to the knowledge of pharmacists on how to use a new Medicare drug benefit appropriately and safely.

As highly educated professionals, our pharmacists know how important drug therapy is in helping seniors live longer and better lives, and they want to support this bill. In fact, many pharmacies and pharmacists are supporting, and will support, the bill, in part because of this amendment.

The National Association of Chain Drug Stores and the Food Marketing Institute support this amendment. I ask unanimous consent to have letters of support printed in the Record.

Mr. President, by ensuring fair prices for seniors and fair treatment for pharmacists, we will ensure this new Medicare drug benefit does right by seniors and values the trusted relationship that pharmacists and their senior patients share.

This is just a small step to helping community pharmacists. I would like to do more, but we are matching that constraint with the requirement that there can be no amendment that adds dollars to the cost of this bill. So we are staying in that constraint but still giving that option for the local pharmacists.

I ask my colleagues to support this amendment, as modified, and I am gratified by all the people who are doing that.

Amendment No. 944 To Amendment No. 932, As Modified

Mr. President, I offer, on behalf of Senator Cantwell, a second- degree amendment to my amendment and send the amendment to the desk.

I thank Senator Cantwell, who has worked with Senator Reed and myself on coming up with this amendment, which also does not add a single dollar of additional cost to the pharmacy bill but does provide some clarification on how any audits would be done on records to make sure that rebates and refunds are going to the proper place.

I thank the Chair and yield the floor.

Mr. President, I am sure it has been cleared on both sides, and I would be more than happy to do that at this time.

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

Mr. President, I ask unanimous consent that Senator Lincoln be added as a cosponsor to my modified amendment.

I suggest the absence of a quorum.

I ask for the yeas and nays.