one of the things i would point out is if it is going to be an inpatient short stay thing, we are still going to need a definition of when inpatient care is necessary because you saw the distinction between inpatient and outpatient. we will have the challenge of how degrade short stay payment when certain drgs are already very short stay. but i know as i said there's some very great minds up in the new york hospital industry that i know are working on this and they've been in touch with us. we have been in touch with other associations so we eagerly await their input. ..

use these and whether there's any type of hospital in particular that uses them differently? >> thank you for your question. as you know we did see a lot of variation but we did not look whether there are certain types of hospitals that are more likely to use short inpatient stays. if the trend continues under the new policy, this is really important question to look into further. >> i certainly think that is one that would give us a lot of information because if you're using it for certain types of hospitals, is it cardiac hospitals? that would be very interesting

to look at variances between 10 and 70%. i want to go to another area where there seems to be a lot of variance. in your testimony under page five underneath of the appeals you note that about 72% of those who appeal are successful. and yet, we keep on hearing this number of 7%. there's, a real disparity there. can you break that down? there is something else there we're not exactly understanding. >> sure, let me try to do that. i think what we're seeing is there's about six, most of the appeals from rac is are not appeals. most of the rac decisions are not appeals. according to our decision about 6% of the rac decision are appealed. once those are reach higher levels, about half of those are overturned.

so that maybe can help reconcile some of those issues. where the 72% comes into play where we looked at the third level of appeals, the alj level. they overturn about 72% of hospitals claims. that would include both races and other issues than just the in patient. >> just to be clear, about 7%, six or 7%, depend hog is talking about that number, somewhere in that range of those decisions that are made by rac are appealed and of those that are appealed in this case of part a hospitals, 72% of those prevail? correct? >> overturned. >> alj level. >> ajl level. that makes a lot more since. there is lot of disparity between 6% and 70%. that helps me understand how, where those numbers are coming

from. thank you very much. thank you, mr. chairman. >> thank you miss black. i'm now confused of the appeals process. i don't mean to intervene a minute so 94% of the claims identified as overpayments are appealed. six, almost half are decided in favor of the appeal, is that right? so the overpayments is 97% of them, at end of the day are considered accurate? >> just repeat that last part of your sentence? i just didn't hear that. >> of the rac decisions claims identified as overpayments 94% aren't appealed. 6% left, half are overturned. >> that is according. >> you say 97% of those overpayments are upheld? >> yes. >> half the six, three, 94. >> that is prior to the surge, in fiscal years 2010 and 2011.

that could also be part of the issue. >> is there a dollar figure attached to that? for example, you may not appeal a $10 overpayment but you would a $10,000 one. does your analysis show of those that were repealed a higher dollar value of those? again, miss black, i don't mean to jump, but you were leading down the right road. what do you know about that? >> i don't have the dollar values in terms of what is appealed in terms of dollar amounts. >> can you try to figure that out? give us a little more texture. >> absolutely. >> of that 6%, what do they look like? and of the higher dollar values are they in a certain area? 72%, tell me about that? >> that's of the hospitals the part a hospitals are 72%. so according to what i'm reading here at the alj level appellants

were most likely to receiver favorable decisions for part a hospital appeals at 72%. >> and if i may, mr. chairman, just interject one other thing that thought about that i keep hearing from these hospitals is the length of time it takes them to go from the original decision that's made by the racs, to the time they reach the alj level. can you give us how much time period there is in that typically? >> sure. particularly know with the postponement of assigning of appeals which the -- just put into place and they're projecting just from what's publicly available that cases will not be assigned for at least two years. so that's pretty significant. >> so there is a cost to the facility in that time period where they're trying to appeal it and the payments have been

taken back. thank you very much. >> so thank you. miss jenkins, you probably thought we would get to you. you're recognized. >> mr. chairman, i thank you for allowing me to join you at today's subcommittee hearing and i appreciate this panel for being here. these issues affect hospitals all over the country and i've heard countless stories from kansas hospitals about the difficulties they face surrounding the medicare program. lawrence memorial hospital in lawrence, kansas, has asked that i share perspective on recovery audit contractors. the hospital currently has $4.7 million being with held because of rac audits. it has appealed nearly all rac audits and so far has demonstrated a 96% success rate in the appeals process from lawrence memorial. it has brought to my attention.

what is a valid concern that i'm hoping you will take into consideration. the hospital force to disallow medicare days and discharges that are currently held up in the rac audit process because of the massive backlog at the alj level of appeal. the hospital is concerned that these audits, which are likely to be resolved in their favor, will not be completed within the three-year window during which it can reopen the cost report window and count towards the ehr meaningful use requirements this is just one of countless hospitals in kansas that is experiencing the immediate and ancillary effects of the current flawed system. as we continue to discuss a way forward on this topic, please take this problem into account. secondly i would like to highlight a program with the 83 critical access hospitals in kansas and others around the country and what they are experiencing. i received a letter from the

anderson county hospital in garnett, kansas, and i would ask the chairman's consent to insert the letter into the record. >> without objection. >> this letter details the hospital's problem with cms's final opps rule for 2014 regarding outpatient therapeutic services at critical access hospitals and supports legislation, that i've introduced, to delay enforcement of the rule until the end of 2014. this rule, while well-intentioned, is creating a regulatory hardship in rule settings. the letter notes that cms has disallowed physicians at a hospital-based rural health clinic from meeting the direct supervision requirements which makes it very difficult for anderson county hospital to be reimbursed by medicare for services rendered. most troubling part of the letter the hospital notes that the physician supervision

requirements have no impact on the quality of care and that the hospital will administer the outpatient therapy even without the medicare reimbursement. this is a telltale sign of a misguided rule that has missed the point. so, mr. cavanagh, is it your opinion requirements on physicians supervision of outpatient therapy services at critical access hospitals are feasible and would cms benefit from a delay in enforcement in order to revisit this rule? >> first of all, thank you for telling us about the experience of these two hospitals. i don't have an opinion on the delay but i'm interested in the issue and i'm happy to look into it further outside of this hearing, if you're willing to share that experience. >> okay. we will follow up with you and would like to work with you to give these folks some relief and better care for kansans. >> i'm more than happy to look further into it. >> thank you, mr. chairman.

i yield back. >> thank you, miss jenkins. and before we dismiss the witnesses dr. mcdermott i would love to have both of you give us more perspective by letter of the 6% that are appealed for overpayments. the value of them relative to the other base of them, which are related to the two payment, two midnights rule. any other, any other insight you can give us on those. the numbers seem very low compared to what we've heard anecdotally and we would really like to have more light shined on those areas if you don't mind. we'll follow up with you by letter but we'd love to have, i think members would love to have that perspective. >> we'd be happy to do that. >> thank you very much for both of you for testifying. let's line up our second panel.

thank you very much. we made the introductions earlier. for the sake of time we'll go into testimony, you're recognized for five minutes. welcome to all the second panel. >> chairman brady, ranking member mcdermott and distinguished members of the subcommittee thank you so much for this opportunity to testify today and share the johns hopkins experience on these important issues affecting hospitals and the medicare program. i'm amy deutchendorf. i'm a nurse. and that includes care coordination and readmissions reduction initiative. my remarks today focus on two major changes, cms definition of inpatient, two-midnight rule and agency's recovery audit program both of which are draining pressure schuss hospital

resources which need to be redirected to quality patient care delivery. we know that the two-midnight rule was spawned out of attempt to limit lengthy observations stays and add clarity to definition of an inpatient but unfortunately the rule has a new layer complexity not only does not meet that cms objective but created confusion and stress for our providers and our patients and has been operationally extremely difficult to implement. our observation rate has increased by 33% as a result of the two-midnight rule. it has taken away physician judgment in the determination of hospitalization and as an inpatient and has instead required our physicians to be become soothsayers as they try to project whether or not a patient who presents to the emergency department with a myriad of symptoms and morbidities and determine if they require greater than a two-midnight stay. more importantly under the two midnight rule we have patients that require services only a hospital can provide, sometimes in the intensive care setting yet we're calling them

outpatients in this new world. this concept belies any rationality and has created safety and quality of care concerns. medicare patients are being billed differently than other patients in equivalent services, for equivalent services. they're subject to paying deductibles and co-pays associated with part b benefits which would be up to 20% of the their hospitalization. they think coming in for hospital care and their part-a benefit covers that. we had patient who is actually left and refused important diagnostic studies and medications as a result of increased financial risk. the two midnight rule is especially devastatings for academic and safety-net hospitals. there's been reduction in inpatient volumes as a result of the two-midnight policy which redirected dollars for necessary hospital care to the outpatient system causing a loss of payments for critical community programs, indirect medical attention, general medical education and disproportionate share payments at a time we need them the most.

since its inception rac has created enormous financial and administrative burden on hospitals as we struggle to respond to the plethora of medical record requests and denials and mounted appeals processes. rac targeted short stays on the assumption these stays are medical unnecessary. in truth short hospital stays are good and reflect efficient and appropriate management of care some which can be very intensive. even though hopkins has a rigorous compliance process we review every day of every single medicare patient stay for medical necessity, rac denied 50% of the medical records that were requested. we took 239 of these to discussion and immediately 135, almost 60% were overturned at discussion even before the first level of appeal. the rest of our 92% are in the appeal process. the rac problem is costing american hospitals millions of dollars in administrationtive

burden to manage the rac request denials and appeals processes as well as financial hit for revenue losses for care that was provided to patients. there are a lot of smart and committed legislators and policymakers who put their heads around these issues to come up with solutions that are workable. unfortunately with each iteration, and layer of new ideas come complexities and unintended consequences that seem to yield the opposite result. in the case of the two mid-night rule congress and cms consider reverting to an earlier time, that before october 1st, 2013 and should reinstate the determination of inpatient hospitalization based on physician judgment with one caveat, the patients who are hospitalized for greater than two midnights for medical necessity, or medically necessary hospital services should be presumed to be inpatients. if we are thoughtful about rac reform, the short-stay problem goes away. alternative short-stay payment

policies become unnecessary. congress should consider the formation of a multistakeholder collaborative working group to develop a sound alternative to the current medicare audit program. we appreciate congressman gerlach's and congressman crowley's leadership as lead sponsors of hr 369, and chairman bringing did i, thank you for your attention to this issue holding a hearing on it. nearly half the members of this committee support needed reform sends an important message to the hospitals and cms this issue must be addressed. the two midnight rule and rac program are draining precious time, resources and attention that need to be more effectively focused on patient care. johns hopkins and hospitals around the country stand ready to work with congress and cms to support these efforts. thank you so much for allowing me to testify. >> thank you. dr. ebets. >> chairman brady, ranking

member dr. mcdermott, members of the committee, thank you very much for this opportunity to testify before you today. i'm dr. ellen evans, lead physician with health data insight, cms recovery auditor. i am a proud graduate of the university of texas medical school, residency-trained, board-certified licensed family physician with a certificate of added qualifications in geriatric medicine. i joined hgi during the rac demonstration program. at hdi i oversee all of our medical and clinical recovery audit activities. the recovery audit program is not focused on fraudulent payments. we review claims to insure compliance with medicare practices and also identify underpayments that are returned to the providers. this program is a critical component of medicare operations because over $30 billion are improperly paid by medicare every year. since the recovery audit program

was passed and implemented in 2006, over 8 billion improperly paid medicare dollars have been recovered as well as $700 million in under payments returned to providers. recovery auditors identify types of claims most at risk of improper payment by employing vast auditor experience and using federal publications such as hhs, oig, gao and cert reports. every issue a recovery auditor seeks to review submitted to cms for rigorous valuation and approval process. issues that are approved are posted to the recovery auditor's provider portal in advance of any activity. cms has limited the recovery audit medical record request to 2% of medicare claims for any given provider. all medical reviews are conducted by licensed and experienced clinicians who

undergo extensive screening and comprehensive training. when a provider disagrees with an audit finding the provider can initiate a discussion period before formally appealing the denial. this is in addition to the usual cms appeals process. though the program has proven to be cost effective recent constraints have caused a significant decrease in recovery audit reviews. first, as part of the implementation of the two-midnight rule a moratorium was placed on recovery auditors, preventing audittings of short-stay hospitals for 18 months. second, cms announced the program would be suspended until new contracts are in place. the award date is currently unknown. these two changes will result in over $5 billion of improper payments not being restored to the medicare trust fund. now let me provide you some facts about the program. first, the recovery auditor is required to return all of its fee when a find something

reversed money level of provider appeal. this means recovery auditors are incentivized to work accurately and precisely. second, according to the most recent cms report that congress only 7% of all recovery audit determinations have been overturned on appeal. third, recovery auditors are accurate. an independent cms validation contractor gave recovery auditors a cumulative accuracy score of over 95%. finally, recovery auditors target improperly-paid claims of all types. yet medicare data have noted consistent high dollar errors for inpatient short stays. based on this data it is imperative to the longevity of the medicare trust fund to correct inpatient short stays. that being said, we understand the frustration expressed by the hospital community surrounding the two-midnight rule. we want to work with cms and

providers to bring clarity to the rule. as the committee moves forward on this important issue i offer the following recommendations for the program. first, we support the alj appeal reforms outlined in the november 2012 hhs office of the inspector general report. second, we support continued effort by cms to offer providers front end education to increase provider knowledge of medicare policies and lastly we support increased dialogue among recovery auditors, providers, policymakers, to improve the direction of the program. we are pleased to be a part the dialogue today. the recovery audit program must continue to play a role in the medicare program, especially in light of the recent increases in improper payment rates. i appreciate the opportunity to appear before y'all today and would be pleased to answer any questions that you may have. >> thank you.

dr. she he? >> chairman brady ranging member mcdermott and members committee thank you for testifying today on two midnight rule and other issues. i'm a physician at university of hospital at madison, wisconsin. i'm a member of the public hospital of society of hospital medicine and association that represents nation's more than 44,000 hospitals. observation care is provided same hospital bed as inpatient care to a physician and patient the care provided is indistinguishable but considered outpatient not covered by medicare part a. misdemeanor he had care beneficiaries how can they be outpatients when they're staying overnight in hospital. many can ask me to change to inpatient which is something i can't not do under current policy. they describe it as well-defined set of services last only 24 hours and rare exceptional cases span over 4hours.

we published the hospital data in earnnal medicine last summer. one in six of our observations patients lasted longer than 4hours. we had 1141 distinct observation codes. we concluded that observation status for hospitalized patient was markedly different from the cms definition i just stated as length of stay longer than 24 hours, observation stays beyond 48 hours were common and number of diagnosis codes show this was not well-defined. this numbers observation care in clinical practice is vastly different how cms intended observation to be. any reform of observation policy must recognize how far observation status strayed from what observation should truly mean. this is more beneficiaries disadvantaged by observation. most report documented 28.5% increase in outpatients services from 2006 to 2012 with a 12.6% decrease in inpatient discharges over the same time period. as the committee is aware cms

recently established a new policy to determine observation and inpatient status. as of october 1, patients staying less than two midnights with some exceptions were to be observation and those two or more were inpatient though full enforcement is delayed until march 2015. the two midnight rule presents challenges in observation care. medicare beneficiary may be hospitalized with pneumonia and improved enough to leave hospital after 40 hours of care. if that patient happens to get sick and present to our hospital tuesday at 1:00 a.m. this means i discharge them on five p.m. on wednesday a one midnight stay. if the patient becomes ill at 10 p.m. on tuesday and needs exact same 40 hours of care i would discharge them on 2:00 p.m. thursday, a two midnight stay. a time patient gets sick not different clinical needs may determine a patient east hospital status and insurance benefits. this not a theoretical finding n a second "jama" publication we found almost half of university of wisconsin hospitals less than

two midnight encounters would have been assignedded hospital inpatient status. clinically the two midnight rule hurt as new population of patients those staying less than two midnights. as an example a patient with diabetic quito as ciscos sis may require admission and extraordinary amount of services can be live of life saving certainly level of care that can not be delivered as outpatient. these patients can improve quickly sometimes 24, 4hours. short stay inends tense sieve care unit can be considered outpatient of the rac program was well-intentioned and medicare fraud and abuse can not be tolerated. we need more inside over the auditing programs the rac program calls all of us. in recent one year period of university wisconsin hospital from october 2012 to september of 2013 we appealed 92% of rac audits for medical necessity and we won every single appeal cited as of may 14th of 2014 which

is 2/3 of these cases. our hospital pace to repair these cases in order to prove we were right the first time but rac pays no penalty for generating work. these are medicare dollars that hospitals spend not on direct medical care but defending themselves against rac auditors. in addition the federal government pays for unchecked rac activity in appeals process evidenced by the case backlog. the racer system generates a large number of payment denials at no consequences to the races but direct cost to the federal government. to again consider patient with diabetic needing intensive care for less than two midnights why would the not claim inpatient status? this is counter to the hospital observation rule of two midnights. a auditor who never net patient in question a year or more of after the patient discharged home may decide do question my patient and audit. the ability to do what is right can be trumped by the rac system. in conclusion observation status

merits reform and two midnight rule is the not answer. two midnight rule an observation status in general negatively impacts delivery of good patient care. we need common sense solutions most importantly consider the original intent of observation policy i would caution that observation reform will not be successful unless there is reform of federal auditing program that. we look forward to working workh the committee to identifiable solutions to observation care and two midnight care. >> thank you. >> mr. chairman, and members of the committee, my name is toby edelman. i'm a senior policy attorney with the washington, d.c. office of the center for medicare advocacy. the center is an not-for-profit, non-partisan public interest law firm based in connecticut that provide education advocacy and legal assistance to medicare beneficiaries. we are very pleased to be invited to testify today about the impact on medicare patients of outpatient status and

observation status. six years ago a woman called our office with a medicare problem. she had spent some time in skilled nursing facility but the facility told her that medicare part a would not pay for her stay because she had not been an inpatient in an acute care hospital for three days. she asked how that could possibly be true. after all she had been in the hospital for 13 days. it turned out that the hospital had called her an outpatient for all 13 days. wisconsin woman had no way of knowing she was an outpatient in observation status. she was in a bed in the hospital for 13 nights. she had diagnostic tests, received physician and nursing care, medications, treatment, food, a wristband. her care was indistinguishable from the medically necessary care she would have received if she had been formally admitted as an inpatient. as in most hospitals she was intermingled with inpatients so even physicians and nurses providing care to her didn't know whether she was inpatient

or outpatient, and the hospital was not required by cms rules to inform her she was an outpatient or the consequences of that status. but solely because she was called an outpatient in observation status medicare part a did not pay for her posthospital care. medicare limits payments for hospital patient who is are called inpatients for three consecutive days not counting the day of discharge what we call the three hid night rule. in the past six years the center spoken with literally hundreds of families from all over the country with similar experiences. it's a very rare day that goes buy that we don't hear from at least one person and usually more. . .

if the men had been formally admitted to the hospital as an inpatient medicare part would've paid the bill everything that the patient needs during that state. medicare pays 100% of the cost for the first 20 days and beginning on j-20 one the resumes a copayment. up to 100 a maximum number of days and could be. because her father had been called an outpatient, medicare did not pay. the man had to pay out of pocket charges for room and board for

charges for $4375 for his day. in addition here today medicare part b copayments for al all ofe therapy received daily and he had to pay for his prescription drugs. minister barak judges from the man primary care physicians totally an inpatient admission and she found he had not been informed of this outpatient status. nevertheless, she upheld the denial of part eight payments for his stay so because he was hospitalized as an outpatient. obviously, from the perspective of patients and their families what is happening makes no sense. when patients need to be in the hospital for the diagnosis and treatment of acute care conditions and weather getting medically necessary care they need an hospital for multiple days and nights. they do not understand why they're called outpatients and why their care will not be covered. you have heard from physicians

and hospitals why the patients were calling hospitalized patient's outpatients is causing hardship for them. some issues the issues that we've been discussing is very complex. but the solution is simple and straightforward. h.r. 11 to nine counts all the time from hospital for purposes of satisfying the three midnight rule as a last week there were 144 cosponsors, a companion bill in the senate and the bills are bipartisan. legislation is supported by broad illusion of 30 organizations and i've attached our comments that she to the end of my testimony with all of our logos on top. we urge the committee to quickly move on this legislation as you consider these other for more complicated issues. thank you. >> thank you all for your testimony. ms. deutschendorf, do you think you do rac sketch boldly target high-value inpatient claims?

>> yes. >> yes spent in the appeals of those did you give us what you think is a true cost touch my assumption is high-value claims are more complex, there's more of, bring in medical professionals as well. in a case like that, for a hospital, what's the true cost of that appeal, roughly? i'm sure it varies. >> so we actually win the rac was proposed over years ago as a public part of the program we went through a process to estimate the cost of an individual appeal. you have to add in to that all of the costs associated with the medical record request, the issues in terms of loading this into software because of the mountain, for hospital like hospice coming to be 600.

in your 50% that may be denied so than attracting and everything that goes along with it. it is all of that prior work. then there is the estimation of time it is for our nurses to review the cases, our physicians to review the cases and -- >> do you think -- >> so we estimated it was about $2000 appeal. as first and second level but when you get into the alj level that requires another add on because you need a turning support with that as well as physician advisor support during that time. spenspent what do you think that cost is? >> i could probably get back to buyou but i would say it's a couple thousand dollars at the alj level. >> in addition, after the first step? >> yes. we actually, we spent about $4 million just gearing up for the rac process.

to add on the additional personnel it would take to manage that process. >> is that compliance and appeals? >> and medical records and just managing tracking the process as well as software. >> dr. sheehy, do you estimate on the cost of an appeal on high-valuhigh-valu e claims? >> i don't have an estimate on the exact single of you but i can say the resource the hospital puts forth in the whole process with multiple nurse case managers that their entire job is determined status. and physicians are helping to determine the status. once an appeal is made when the team of lawyers, our cmo, physicians and other manager staff whose job is to fight the appeals process. anyone looking at those numbers of staff can calculate this is a costly endeavor to our hospital. >> do both of you here

mr. kavanagh described one solution sure to stay outlier of approach? do you have a view on whether that helps, hurts, doesn't solve problems? >> i think, and, we been talking a different solutions and i think cms did implement the two midnight rule. they recognize their issues with the current occupation policy. i think now we've seen the rule has issues. we would hope they would be more consideration of policies going forward. the true definition of what observation truly means, very short stay in a very well sit some defined -- would also strongly ask for a pilot. i think where the two midnight rule is evidence, unintended consequence i think upon it would be a great benefit. >> i would agree with that come

with everything dr. sheehy said. one of the statements made earlier is there was disparity between the cost of observation stay, and i would say one of the reasons is the true definition of what observation could be, that was a period of time to help determine whether or not the patient needed hospitalization as an inpatient or could be sent home. those short stays and observations would be very less costly but by the time they need to be admitted those are patients require extensive diagnostic studies and intensive treatment. sometimes those patients turn around in less than today's. so we should not be penalized for being efficient in our billing to manage those patients with an inpatient. >> thank you. ms. edelman, you made a pointed to my attention. you are making the case that is outpatients from hospital within 30 days the return for readmission because they were labeled as outpatient.

some portion the admissions -- any idea how frequent that is, what percentage of the report that might represent? >> we don't have data that would indicate what portion of the we admitted patients are, not called it readmitted because of observation but the only reason we have ever heard from families told by the hospital's that they are using observation status is a recovery audit program. nobody has ever actually got up the hospital readmission issue but we know that that is now in effect so it obviously has some impact because if somebody returns to the hospital as outpatient, that does not count as an inpatient and if it's not ability, would not be applied. >> dr. evans, when there are costs associated with the hospital, specially high-value

inpatient claim, and they are overturned, the rac returns to commission, is that correct? >> that's correct. >> do they share in the cost of that appeal at all? >> the cost of our work to do that appeal and the work doing the review initially. >> but having lost that claim do you share, does the rac reimbursed some portion of the cost speak with we are paying back all of the funds that were used speed right, because it was an improper determination up front but do you share in the cost -- so you don't -- do you share -- >> the our financial penalties that occur. that's the financial penalty that occurs. there's not a payment for any of the cost of the hospital. i'm not aware. >> the impact, that you don't share in the cost of the loss of appeals? >> we pay our portion of it penny for appeal and the provider -- we pay our portion

of attending the appeal and the provider pays their portion of attending the appeal. >> win or lose that's how it is -- >> that's correct. when we went there's not any difference either. >> i will finish with this. listening to testament today, that are a nice wooded number of problems that was discussed earlier. in the oversight of the rac program could cms ever intervene to stop odds so that insert a targeted approach to quickly and easily solve the problem of the short stay drgs? >> you set a target drg approach? they have an independent. it's been to stop the short stay review with the two midnight rule but that's not an intervention. what we've heard said it is there's a lot of variety, also a difference across providers in the rate of improper payments for out payment versus inpatient care and i think we've also seen

that, and with also some discussion that we need to look at where we go forward. so for instance, cms is proposing in the new contract that we have a variation in the amount of medical records that are reviewed based on the providers outcome. so if we had to provide who has a very low rate of improper payments, we would expect to decrease as we go forward their number of records looked at. if we have a provider who has a higher rate we would expect to increase that going forward. cms is looking at that. so i think what i would say is we want to cloud it with you and i think this opportunity to share information is very good and i look very good to be involved in continuing this information exchange. >> thank you. dr. mcdermott. >> thank you, mr. chairman. there was a senator by the name of daniel patrick moynihan who said there are a lot of simple answers of them but we need a great complex of fire, and the fact is we have a very complex

question here and the next level is going to be it seems to me even more complex. goes you all have a great the basic observations or inpatient patient gets what they're supposed to get. so what we're discussing here is who pays how much to whom. it's a question of whether the beneficiaries get charged more or the hospitals get less money or that seems to be where we are. one of the issues that's come up here, ms. edelman, is one that i would like to hear your thoughts about our, there has been talk about the different cost sharing between part a and part b. and people are suggesting that we roll part eight and part b together and that that somehow will eliminate or alleviate or something in this whole process.

i'd like to hear from you as a patient advocate what you think will happen to beneficiaries if we roll the a and b together, generally, but also specifically in this outpatient inpatient, or outpatient observation status but because i think we don't want to make another step that is even worse. we were trying to fix the problem with what we did, so did in your ideas. >> thank you for that question. simplifying the program, the complex medicaid program would be helpful. the problem with the medicare redesign proposals that we have seen that combined part a cost-sharing obligations is that they also prohibit other insurance like medigap policies that provide first dollar coverage. so the consequence is that these combined part a part because sharing obligations would shift

costs to the patients. the idea that is infected make people pay more out of pocket on the assertion that there will be -- there will be more health care consumers. will people avoid medically necessary care because they won't be able to afford it. medicare beneficiaries already spent and much our proportion of their income on health care than younger people. half of the medicare beneficiaries have incomes of $23,500 a year. they really cannot afford to pay more out of pocket which would happen as result of a number of these, these redesign proposals that we have seen. our program with a couple of other programs, the medicare rights and and california health advocates said a statement to this committee a year ago about concerns about the medicare redesign proposals. i would be happy to submit that for the record. >> how would the role of you to

together affect this whole question of

for going into the nursing home? >> they do not get the three midnight do not stay. so the woman in wisconsin was in the hospital for 13 days, consecutive days as an outpatient, did not have a three day qualifying inpatient stay. >> rolling part a and part b together would not make that, would not change that? >> wouldn't change the two midnight rule. that is still there. >> you know what we're trying to do. how would you design what we should do at this point? everybody said we should call it community together i would like so much of a summit on the table and see if anybody has an idea, what we should do in this situation, i'd like to hear it speak for the simple issue of qualifying for skilled nursing facility care, h.r. 1179 does it by just counting all the time. doesn't do with whether observation makes sense or doesn't make sense. it doesn't do with recovery

auditors. doesn't deal with all of the much more competent issues but it's as if you been in hospital for three nights, the time should count. i would just say when medicare was enacted in 1955, the average length of stay in an acute care hospital for people aged 65 and over was 12 plus days. the average length of stay now in the acute care hospital for people 65 and over is five plus base. so it's really not, the three midnight rule is a problem considering a medicine is practiced today. >> thank you. >> thank you, mr. chairman. ms. deutschendorf, in your testimony he basically said that the two midnight policy now requires physicians to abandon the medical assessment component of the medical necessity test when determining the appropriate setting of care and instead imposes a rigid time-based approach. can you elaborate or expand on

that a bit? >> so for our providers, what happens now is the patient presents to the emergency department and now they are faced with the question do you expect that time this patient will require hospital services will be greater than two midnight, which to dr. sheehy's point could be depend on whether the patient arrived one minute before midnight on the first midnight and then stay 24 hours and one minute in the second midnight, or whether they would need to be hospitalized for up to 48 hours. a lot can happen in 48 hours. what we have found since october 1 is we have tripled the amount of patients who have started out as an outpatient and has been converted to an inpatient after or just before the second midnight because, in fact, we got it wrong.

because we really don't know patients present to the emergency department with a muted of problems, some of which are going to respond rapidly, some of which will not respond rapidly. there's no way of knowing that and we are doing the right thing. we do have an army of case managers and utilization management nurse is who now have to run around the hospital looking for patients who have crossed the first midnight to see if these patients will require medically necessary services beyond the second midnight so we can get them converted. we have been instructed by cms that if the patient is going to cross the second midnight they wanted to be converging even if they're going to go home in the next 12 hours. it's logistically a very difficult policy to implement and has required a lot of financial increases as a result of that. >> h.r. 3698 would require the secretary of hhs to establish a

new methodology for utilization in situations involving a shorter stay in hospitals. we've got some ideas from ms. edelman about what she would like to see relative to that kind of new methodology. could i have quickly the of the three of you please give us your thoughts to mr. mcdermott's question. was specifically change wise what kind of new methodology ought to be employed so there's a fairness, and equity in terms of the hospitals reimburse those who come in in very short stay kind of situation. dr. sheehy, can we start with you? >> thank you for that question but i think it's a very complicated topic and i think a simple answer is probably a difficult to get. i think getting back to the principles of observation be a triaged definition. it was always meant to be a definition where someone did a few additional hours to determine whether they should be

fully admitted as an inpatient or discharged home. i think we need to get back to the principles of that definition and come up with a methodology that respects that definition. i think we also need to think about the difficulty as a provider, i have telling a patient staying overnight in hospital getting inpatient or into, getting intravenous medication and test in a hospital setting how can i ask how i can explain that that they're an outpatient. i think getting back to the heart of what observations really mean i think is what we need to focus on coming up with a new policy. >> and then you added -- done on a pilot basis, test the idea to see the really in a practical way is working before expanded to the entire system? >> that is correct. i think we will see the unintended consequences. i think we'll understand better how a policy should be audited and do it on a smaller scale so hospitals across the country are not investing a lot of money on a whole new plan that has a lot of issues. we can figure out those issues

and tweak the plan before it's of limited nationwide. >> doctor evans, do you have a quick answer is no, you look at it from the rac respective? >> as far as from the rac perspective again i said the collaboration and discussion is very good and i think the idea that there's some changes that can be made are good. if there was a pilot would be willing to be involved in that. i would say as i fear for the recovery audit work but i'm very interested in this personally if after the meeting or something someone to talk to me as a taxpayer. i'm a physician -- >> you're not having hard obligations right now, are you? >> no. i find. i love this but i think it's excellent to have this discussion. i'm running over to okay. i just want to say i've been a medical director, skilled nursing facility, and i've got a lot of ideas but i think we would support this type of reform and we could offer discussion and support

afterwards. thank you. >> thank you. >> thank you, mr. chairman. want to thank our panelists for excellent presentation today. dr. sheehy, a special welcome to you. i found an opportunity to visit your hospital system and clinic but i've always been impressed with the quality of care, the measurements that are being established back home. you are probably sensing a source of frustration, tough cop is stuff. we are listening to you try to thread the needle on different statuses and observation, inpatient, outpatient. as policymakers will have a hard time being able to provide direction at this level of expertise or knowledge that's required of it. it's the source of frustration we have with you over all pashtun the overall health care payment system that we have in our country today. is this coding, this payment based on how much is done, not how well is being done and there are tools in place right now and many of us have been pushing

hard and have been very inpatient to move to a more value quality outcome based reimbursements system. if we can get the financial incentives i think outlined right are going to unleash a heck of a lot of innovation in health care system. knowing what those benchmarks need to be, with those measurements are and then figure out a way how to make them. the truth is, we only -- we don't have so much of a deficit budget problem in washington as much as the health care problem. there only a few options. one is greater cost shifting, having patience bear more of the risk of higher costs. we see that with a vulture proposal or what have you. or you will have some provider cuts being made and the provider community isn't going to be very happy with it. we see this through sequestration and pushing the hospital cuts out for infinity is seems at this point. or we need to be working with the provider community to

establish those quality measurements and then outlined the financial incentives so it is value-based and the longer observational status or all these technical definitions that just weigh us down to it's exhausting. having these conversations and getting feedback from patients and providers alike. i guess just a general question. dr. sheehy, ideally where do we need to be going with the health care payment system of this country right now so that we are not having hearings like the stock an inpatient or outpatient or observational status and trying to figure out what the best policy is in addressing it? >> thank you for the question and think of all the work you did for the state of wisconsin on health care. i would be more than happy to work with you in the future on these issues going forward. i think it is very complicated. i think there's certainly a role for quality measures in physician payments, and i think as hospitals were trying to figure out exactly how we fit into that payment model.

going forward though i think, i'm from a small town in wisconsin as well. i grew up near madison where i work, and what i do on a daily basis is take care of patients iin the hospital, some patients might of been my neighbors are made and middle school teacher and i think if we can get back to thinking about they have worked their whole lives and what is the right thing to do for them. i think we are going to find those solutions. solutions. >> ms. edelman, i am concerned about the impact on the beneficiaries, the patients. seems like they're getting caught and often not to their knowledge, just based on definitions that are applied to the. and the increased out of pocket creates a tremendous hardship. and yet within the medicare system itself we have seen beneficiary payments come down dramatically in recent years and hopefully that is sustainable and obligated to do some of the reforms that are taking place,

delivery system across some of the new payment models. how much concern do you have right now in regards to the cost shift you are seeing with the beneficiary community? >> the cost shifting in the observation status is considerable and we know that some people really do not have the money to pay for nursing home care out of pocket when they're told what the cost is and they go home. demo here is a couple of days later they have another fall, they break a hip, they are back in hospital. the cost to the system are very intense but we know families are contributed huge amounts of money to pay for out of pocket costs because medicare is not paying for the nursing home. so we've heard of them being asked to reject a nursing home today for $7000 for his aunt to get care. people are doing that. families are taking in money that they may not really have. we heard a families cashing in life insurance policies that were intended for burials because they need to get the nursing home care.

so it's having a tremendous impact on medicare beneficiaries and their families trying to pay these high cost. the average private rate as like $250 a day but i was in a nursing home in boston last month and the private rates were 450-480 today. most people can't afford that. >> thank you, mr. chairman. >> thank you, mr. chairman. ms. deutch, in your testimony referenced the medicare audit improvement act, h.r. 1280. supported by numerous members of the house. wondering if you could reflect a bit on an alternative which i happened to introduce h.r. 2329, administered release and payments act. have you reviewed that bill and could reflect on that at all? >> i have not but i would be happy to respond in writing. >> thank you very much.

ms. edelman, what do you believe is -- first of all, do you believe that medicare beneficiaries are very familiar with the financing or the various -- we've heard a lot of technical things. .. i don't believe we can expect them to be familiar with these intricate details in the funding system. is there any possible way just

to have a system to where seniors are more familiar with what is going on with the funding? not that it has to be out of pocket, so that they can perhaps know more what their options are. as you point out in your testimony they were considered an outpatient but they were in the hospital so long, certainly thought they were en in patient, what do you think alternatives should be? >> there are some bills that would suggest giving -- give them information that they are out patients and a couple states have passed laws, maryland and new york requiring people be informed they are out patients as with the consequence is. like other medicare systems they don't have an opportunity to

have -- to contest their outpatient status. if somebody goes in as an inpatient the person of form as your rights as a medicare patient. as the hospital wants to discharge anyone. there is an immediate appeal to representatives of the medicare program to make a decision in observation status. there is nothing they can do. and we want to give them an opportunity to say i will be called and in patient, not an outpatient. >> would you agree the more the government has gotten involved the more expensive health care has become. >> i don't know if the cost of government has been the cause of health care becoming expensive, certainly before the government was involved the lot of people

didn't get health care. it has been critically important, medicare is a very important program for older people and most older people love their medicare program. without it they wouldn't get the health care they need. >> i yield back. >> mr. chairman, i would like to make a couple points in response to my friend whose comments in the last panel about state budget neutrality, was interesting to the finance how affects what we are talking about. new jersey is a unique position because my state, in all urban states, no rule or critical access hospitals. i would like to point out, the permanent adjustments have always been based on the national budget, always.

so this includes adjustments for critical access. ironically, there are 53 critical access hospitals in mr. roskam's state of illinois. we need to make that clear. your organization has an significant work in the area of observation stays and worked directly with the number of beneficiaries who have run into problems with the way they were classified. i think you, they find that. in your experience to beneficiaries generally know whether they are classified as in patients or under observation status in your experience? >> most patients do not know they are in observation and the medicare program does not

require hospitals to tell them. >> do they have a right to know that? >> they should have a right to know it. they should. >> when do patients generally find out what their status is? >> at the time of discharge, bring the checkbook to the nursing home because medicare will not be paying. >> you mentioned earlier observation status is particularly problematic when medicare beneficiaries need care in skilled nursing facility after leaving the hospital. because medicare won't cover the services unless a patient has been classified as in patient for three days. am i right so far? >> yes. >> miss edelman. in the case is your organization has handled, what is happening to observations that is patients in need of care at less skilled

nursing facility after leaving the hospital? >> some are not going because they can't afford it. some are going and paying out of pocket and trying to appeal leader through the medicare summary notice that they get trying to appeal through the administrative process that many people i spoke to that i have spoken to, do not pursue the appeals. it is too complicated and time-consuming. >> many of these are paying out of pocket? >> they are paying out of pocket and their families are as well. >> mr. chairman, in conclusion, if we don't identify and respect the rights to know, and we had a patient's bill of rights which is part of the reform process we are now going through, then we defeat the purpose of what we

are doing. seniors, anybody has a right to know what status they are in, what that implies and how much it is going to cost them eventually if they don't get out of that status or crossover. i think this is serious business. i asked you to bring us to attend to it in this legislation which is bipartisan and i hope you will do that. thank you. >> thank you. >> thank the panel for being here. it is interesting because i think we are talking about a problem and there is a symptom of a problem, the problem is hospital readmission reduction program and quite frankly the policy that was written was probably the thought was good, the outcomes are becoming bad. the patient and the hospital, they are classified as observation, they are not admitted. all kind of things, putting in

classifications because we don't want them to be penalized for the reduction program in the hospital and again i am not blaming the hospitals in that sense, they are trying to survive too but quite frankly who is getting hurt here but the patient? let's look at the unintended consequences. we have patients that go into a hospital, they have got -- we know they are coming back and we have an issue there. it is one of the reasons why i introduced 488 requiring the secretary of h h s 2 just payment to account for disparities in patient population, this adjustment will make a huge difference to hospitals across the country, and a 9 million duly eligible beneficiaries relying on these for critical care needs. we need to make sure there are patients to come into a hospital that going to go back to the hospital and those hospitals are being penalized. this bill will help that issue.

on the other side i have a problem when you take a patient who quite frankly doesn't need to go to a hospital, should be going directly to the nursing home. we have another policy that says you have to go to the hospital first and spend three days in that hospital and the patient goes to the hospital and spend three days, they don't know whether observation or in patient and come out and go to a nursing home and they are penalized. that is a problem too. that is what we talked earlier about, the bill i introduced earlier. some patients have to go in the hospital but some go directly to the nursing home. i question why we would never be paying $11,000 to have someone stay in hospital for three days versus going into a nursing home when the average stay is 27

days. quite frankly it doesn't make sense. we are spending money that is not necessary. i would ask you do you think the elimination of the three day hospital stay is good policy? >> ultimately makes sense, the length of stay in hospitals has gone down so much the three days is a large portion of how much time you spend in the hospital. this is where as congress is considering care reform which is the top -- topic of discussion, that should be part of the discussion. and make sure this is not a lot of gaming in nursing home this. this is where in needs to go.

>> anyone else on your panel talking about age or 4188, and there are admissions, that they shouldn't have. >> thank you for asking. i am possible for the remission reduction program. we have been at this for four years and we are working really hard to implement all of the strategies that were suggested in the demonstration projects. academic centers where we take care of the biggest patients in the country who are transplants, who are duly eligible, we have not been able to move that ball and in fact we talk about numerators and denominators, the

short stays out of the denominator and patients are sicker the readmission rates go up. despite what we are doing and we have some successes but we have not been able to do that but having that bill with taking out transplants, substance abuse and psychoses and other things, the other thing we really learned about this has to do with patients, believes and preferences. so it is very important we share this responsibility not just with providers but patients. >> i yield back. >> thank you, i am way of free here. give you a different angle here to look at. i want to thank you for holding to the panelists, it is something i am concerned about for more rural section of the

state of new york. rural hospitals in particular are struggling, and the easy issues as well as many others and i want to read for the record a letter i received from one of our hospital directors at jones memorial hospital in new york. jones memorial is sold community hospital in rural upstate western new york, jones has an average daily census of 20 patients, many rural state hospitals, jones has limited resources trying to keep costs down to the overall health care system. she writes in 2012 jones began receiving grant programs on this notice. the case dated back to 2009, they received a total of 240 in patient claim denials. jones have appealed and won 197 of those claims, 240 claims, 18 were not successful on appeal.

they're still pending. pretty good outcome in regards to challenging these requests but this is what stuck out to me in the letter. jones memorial with an average daily census of 20 has to employ three full time case managers to make sure someone is hear the majority of the time to assure compliance with the two midnight rule. they spend a lot of time working on appeals for the audits, we have 3 billion medical records staff that spend 30% of their time on audits and appeals. the dollar is being expended for small hospital are unsustainable. when i hear that letter, i know eva very well at jones memorial, how these rural hospitals will sustain themselves if they take on those administrative cost

burdens we just articulated and keep the doors open and comply with this complexity coming out of washington d.c.. anyone on the panel disagree with me? in particular rural hospitals are at a distinct threat of the burden out of this ambiguity. >> i can answer that question. the university of wisconsin, care referral hospital, and community hospitals and practice a small hospital. i agreed that the burden on smaller hospitals is enormous. i also think a lot of smaller hospitals have contracted with private companies who actually do like the hospital described instead of hiring their own case managers they hire a private company and pay them a lot of money to look at these claims for them and the costs are

enormous, to learn how to do these audits and appeals is staggering. >> anyone else share that sentiment or oppose that sentiment? >> i agree with you. those are dollars and otherwise could be going to the community in terms of servicing health care needs as opposed to complying with administrative burdens. of hospital of 20 average daily census and got essentially five full-time workers. how can we do better? >> hospitals are spending an enormous amount of time and money trying to make in patient outpatient decisions. the first thing they do is a proprietary computer program, they are hiring staff to make these decisions and the case management association which is

part of the coalition supporting 1179 did a survey of the hospital discharge planners. three quarters of hospitals reported hiring staff just to be making in patient outpatient medical necessity decisions. the third of them spent $150,000 a couple years ago on that staff. then there using an outside secondary reviewer, the companies we know of use to report on its web site how many medical necessity cases they have done since 1997. they have done 4 million. discharging they think $250 apiece. that is a lot of money from out of the system, out of the medicare system which should be designed to provide care to people but only to make the decision whether people should be admitted as in patients or outpatients and the care is identical. >> my balance has expired and i thank you for that input. >> thank you, miss black.

>> thank you for allowing me to sit with the committee and ask questions. i want to go back to the issue of the amount of over turn cases. i know this is a complex situation. the numbers keep floating around and there is a report that i want to submit for the record and from the inspector general improvements are needed at the administrative level of medicare appeals. there are some good pieces in here as well. dr. evans, i want to start with you on this question. members are hearing 70% number that the providers when these appeals. i understand there are two different ways they adjudicate cases. can you explain how the view of the overturn rate and how these numbers can deceive when looked

at out of context? >> the report you referred to, the data that is in there is from 2010 and that was early on in the recovery audit program. i haven't done the analysis but it is good -- there is some further investigation of the data that can be done among the different experts. that data is from 2010 and at that time we are getting information about any hearings, we attended a few in the demonstration but we are not hearing and asking about those. what we found out was they were 89%, 90%, they were huge numbers that were on the record. there's a high of return rate, pretty much all overturned. all of the contractors have data that shows that there is a steady with one of the contractors where the attendance of cms at the hearing makes a

difference in the outcome of those hearings, medicare rules and regulations and medical record compared to the claim is reviewed so i think it is an area that can be looked at but i think that is part of the difficulty. if you look at the last sunday, 7% over turn across the board is the most current data we have. >> those law providers weigh in on this from your perspective as well? your cases that get to the a l.j. level? let me go with dr. sheehy first. >> we have little data on the a l j level iii appeals at this time. the majority of appeals are turned over in level i or level ii. the 2010 data is i think the process and observation, so enormously in the last four years that it is worth looking at a new set of data and set of

numbers. we know the recovery rate, the recovery rate for the government has increased and the number of audits have increased comment and now but hold on further audits and appeals. paulino this is a lot tutu to rack denials. we need to look at a fresh set of numbers before thinking about a 7% no.. on behalf of our hospital we appeal almost everything and we win almost everything. number i cited in my testimony we appealed in the last one year we appeal 92% of the audits the racks made and already won two thirds of them and the rest of level i or level ii of appeals that history is we will win 100% of our appeals. a lot of hospitals out there are similar. >> a good piece of information. others want to weigh in on that? >> we have 10 cases that have

made it fair and part of that has to do with the delay. we are able to take 239 cases of our 430 some denials directly for discussion and we took, we spent a lot of time preparing legal land physician advisers and went straight to the medical directors, 135 of those cases were overturned. and the remainder of those are in the repeal process, that is 50%, 55% over turn rate at the discussion level. i just want to say one other thing. we have 108 cases denied for intensity modified radiation therapy. all 108 of those cases were overturned at the discussion level because these were medically necessary services. the rack was not able to

understand why these cases were brought forward. >> mr. chairman, thank you for this hearing. it seems to me one of the things i learned from this hearing, certainly needs to have more oversight, more investigation to find out how the program is working because i am so concerned, being a nurse for 40 years that the care we are giving and dr. sheehy every time you give the testimony use the example of a diabetic because it is so compelling to make the case for how you just don't know what the patient is going to need when you receive them into the hospital but thank you so much, i look forward to more hearings. >> thank you, just an inquiry. thank you for all the witnesses in the first panel from dr. evans, we heard the audit solve the problem, 94% i not appealed.

and overturned percentagewhy is a very small amount. and what i heard from dr. deutschendorf is current appeals are much greater than that. and is substantial as well. and there may be a small percentage, and there is a high value claims so proportionally more important, probably more expensive to appeal. is that correct? what other perspective should we bring to this? >> that is a correct assessment. and the letter to hospitals, one of the numbers cited is old data, they said in january of

2012, and 1250 appeals a week. and in 2014 they had 15,000, i think the rate, and that number tells you how practices change. >> the inspector general's report was from 2011. >> i would agree with that, that the appeals have mounted as hospitals have been able to change their processes and have you less rigorous asian processes that are insuring their compliance and regulatory requirements for medicare review of inpatient stays. in our compliance program we self deny medicare days the we feel we can justify for medical

necessity. it is justifiable, we will appeal. >> the mic bcu, a little bit confused by what i am hearing but it seems like what you are saying is the racks operate like the fishermen in my district. they go out and throw a great big net and that is where the 12,000 from 1500 at the end of one year to 12,000 and a lot of stuff in there. most of which turns out not to be justified. because they are going on volume, you are saying they're going on volume, they got a lot of catch and have to throw it back because it doesn't work. >> exactly right. and what is considered improper,

we respectfully disagree about improper payments. appealing 92%, almost the same with dr. sheehy. >> thank you. >> one of thing that is so complicated for hospitals to do these appeals, imagine what it is like for beneficiaries doing it on their own. one gentleman from chicago that i talked to every couple months is home bound, last conversation he was grabbing his cancer and therapies he is having an doing this appeal for his wife, very difficult for beneficiaries if they can get to that stage to appeal their outpatient status. >> i would like to thank our witnesses and continued assistance getting answers to questions asked by the committee, these are challenging issues, into related facing cms and hospital providers.

have to address some head on to ensure seniors -- do not face necessary charges. it is equally import for providers and taxpayers to get these strange out. and as a reminder, any member wishing to submit a question will have 14 days to do so any questions are submitted to the witnesses i ask witnesses responded timely manner. the subcommittee is adjourned. [inaudible conversations] >> c-span's newest book sundays at 8:00, collection of interviews from 25 years of book notes and q&a conversations. >> at that point i was what you might have called henry jackson democrat, cold war liberal, believer in the great society but also a believer in the tough

approach to the soviet union which means i have a home in the democratic party at the time, you had pat moynihan, henry jackson, great senator from washington state, and later on that element of the democratic party shrunk to nothing and as it did i was without a home. i remain generally without a political home. you could obviously fairly call me at neo conservative. >> one of the nation's top story tellers on c-span sundays at 8:00 published by public affairs and available at your favorite book seller. >> the u.s. and about to gavel in to start the day for legislative business, general speeches will begin, final vote on stanley fischer's nomination, federal reserve vice chair scheduled for 5:00 p.m. eastern, lawmakers will break between

12:30 and 2:00, it will attend a weekly caucus lunch and later today votes are expected for judicial and executive nominations planned for approximately 10:00 p.m. eastern. the house comes in today at noon eastern and will resume consideration of the defense authorization bill, you can follow the house, they gavel in at 10:00 for general's beaches. now to the senate floor on c-span2. the chaplain: let us pray. thank you, dear god, for the gift of this day and for the opportunity to serve both you and country. we aren't worthy of the least of your blessings, yet you give us the privilege of working to keep our nation strong.

as our lawmakers this day seek to be responsible stewards of their high calling, make them salt and light to this generation. may as salt they help make our world safer and more palatable. may as light they illuminate the dark corridors of disunity and contention, replacing them with harmony and civility. our father, this is the day that you have given us to seek to leave our world better than we found it. use us today as instruments of your glory.

we pray in your great name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., may 21, 2014. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable edward j. markey, a senator from the commonwealth of massachusetts, to perform the duties of the chair. signed: patrick j. leahy, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader.

mr. reid: i've heard the good chaplain talk about some of the things we shouldn't do, and one of them is be envy kwrus, and i try not to be, but i have to admit every morning i hear his speech i am envious of his voice. i've got what i've got. it's not much in the way of voice. if i could stand here and give that dr. barry black voice, but i can't do that. even though it's not right thing to do, i am still envious of his voice and i will always be. i move to proceed to calendar 92, the franklin mcneil crime reduction act. calendar 92, s. 162. the clerk: motion to proceed to calendar number 92, s. 162, a bill to authorize and improve the mentally ill treatment and

crime reduction act. the presiding officer: mr. president, following my remarks and those of the republican leader if any the senate will be in a period of morning business until 12:15 today. because of a change in schedule the republicans will have their caucus today rather than yesterday as we normally do. so the time until 12:15 will be equally divided and controlled between the two leaders or their designees. at 12:15 thr-bl a roll -- there will be a roll call vote on the fish sherr nomination -- fischer nomination. i'm happy we're going to get this good man confirmed. but this obstruction is unbelievable. fischer is now going to be a member of the federal reserve board. he also is, has been chosen to be the vice chair of the federal reserve board. janet yellen, the chairman of the federal reserve board, has called many of my colleagues

saying why do we need another vote? we need him here. we're going to have to go through the cloture process all over again on this man. what a waste of our time. our time. the people's time. so anyway, that's what we're going to do. we're going to confirm him today and then come back at some later time and confirm him to be the vice chair. we couldn't confirm him as vice chair first because he's not a member of the board. following that vote the senate will be in recess until 2:00 p.m. today for allowing for the republican caucus meeting. at 2:10 there will be up to five roll call votes in relation to several nominations. cloture on the barron nomination for him to be a circuit court judge for the first circuit. confirmation of the cook nomination, who is a member of the privacy and civil liberties oversight board. confirmation of the daley nomination to be u.s. attorney of connecticut, confirmation of the green nomination to be u.s. attorney in louisiana and

confirmation of the martinez nomination to be u.s. attorney in new mexico. i'm told that s. 2362 is due for its -- 2363 is due for its second reading. mr. reid: the clerk will read the title of the bill for a second time. the presiding officer: s. 2363 a bill to enhance opportunities for recreational hunting, fishing and shooting and for other purposes. mr. reid: i would object to any further proceedings with respect to this bill at this time. the presiding officer: objection is heard. the bill will be placed on the calendar. mr. reid: mr. president, my good friend, the democratic whip, seated next to me, he and i came here at the same time many years ago to washington. and i think, judging from the work that he does, he works very hard. the presiding officer served with us in the house of representatives. it's a hard job, the jobs we

have. we seek these jobs. they are the choice of our life. they are an extreme honor to be a member of the united states house of representatives or the united states senate. but we have traditionally worked very hard, and i've seen it. our families recognize how hard we work. it's not uncommon for us to wake up in the middle of the night, "i should have done that." write yourself a note. this has been going on for, since we've been a senate, i'm sure. i've seen members of the united states congress work themselves to exhaustion, but i confess i've never seen senators, those on the other side of the aisle, work so hard to do nothing, so little. my republican colleagues have exerted so much effort to get nothing to get done. they prefer it that way. they've broken their backs

ensuring that nothing happens here on the senate floor. last week was another example of the republicans fruitless hard work. the republicans blocked debate on a bill that would reinstate important and expired tax provisions. mr. president, tax cuts, legislation extends tax cuts and helps american families, american businesses as they recover from the recession. the bill that they stopped last week extends current tax provisions that bolsters, students, teachers, american workers and employers, american families and businesses, saving money and growing our economy. mr. president, now, now -- listen to this. now the republicans are against tax breaks. they have been against that extended unemployment benefits in recent weeks. they have been against raising the minimum wage. they have been against pay

equity. they deny climate change. now they've added a new one to that. they're against tax cuts. it's hard to comprehend how hard they work to get nothing done. stunningly -- now listen to this one, mr. president -- stunningly, some of the very republicans who helped craft the legislation that they killed helped filibuster the bill. the primary republican who negotiated this, the ranking member of the finance committee, voted against his own bill. mr. president, that's what i said. it's true. republicans are voting against their own legislation again. and for what? to stop president obama from accomplishing anything. that's what they set out to do five and a half years ago and they have stuck to that, to the

detriment of the american people. mr. president, we have a letter signed by different organizations. 152. that's pretty stunning. there's so many names on this, it takes three or four pages to get all the names. conservative organizations like the united states chamber of commerce, the national association of manufacturers, two of the most conservative organizations in the world, certainly in our country. but they are joined by 150 others saying we want tax breaks. everybody in america wants them. republicans want them. democrats want them. independents want them. that is republicans, they're located every place except in the congress of the united states. now we have a new one.

the republicans in congress are against tax breaks. so what have they accomplished? nothing but bringing anxiety to the american people, businesses, and individuals, and certainly hurting our economy. they continue to obstruct. now, you know, mr. president, they've broken my legislative heart so many times. yesterday afternoon i had a couple of conversations here with republicans. they say they're going to try to do this. they're going to meet with their caucus today. well, that caucus has ruined a lot of legislation. i hope that people i talk to are strong and emphatic in saying it's not good for the country, and it's certainly,

mr. president, not good for this body. we need to move forward and get certain things done, some things done. so i hope that my legislative heart is not broken again, that i can respond to the people of nevada that we're going to have a tax deduction for transit. we have a lot of transit now, and in the wisdom of the congress, we created a tax break for those people who take the trains and subways and mono rails, buses. the presiding officer has worked really hard in his entire career to do something about the environment. that tax break i talked about is part of what the presiding officer has always advocated. let's do what we can to get people off the highways to

reduce pollution. we have in this bill something for nevada that gives -- but it's not for nevada. it's for everybody. a sales tax. it is a deductible item. not since these tax breaks, we haven't been able to bring them up. and there are many other things all across this country. tax cuts that the republicans have stopped. so, mr. president, i hope that the few republicans i talked to yesterday will be extremely strong in their caucus saying this is the right thing for the country. we've done enough to try to embarrass the president. let's try to do something that helps our people in all 50 states. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of morning business until

12:15 p.m. with the time equally divided and controlled between the two leaders or their designees. mr. durbin: mr. president? the presiding officer: the majority whip. mr. durbin: mr. president, yesterday i was visited by several hospitals from chicago, and mount sinai is an amazing hospital. originally, you can tell by its name, it was founded by jewish families living in a section of chicago. the families have moved on. the remaining population is largely african-american and hispanic. it's a very poor neighborhood. it's a violence-ridden neighborhood. but in an amazing show of magnanimity and charity, many of the jewish families whose ancestors and predecessors predated them and founded this hospital continue to support mount sinai. it is a beacon of quality medical care in one of the toughest, meanest neighborhoods in that great city. and they came to speak yesterday to meet with me. they just merged with another

extraordinary hospital, holy cross hospital in marquette park. i have a special affection for this hospital because for decades it was run by the sisters of saint kasmir, a lithuanian catholic order of nuns who devoted their lives first to the lithuanian population that lived in that neighborhood, and then after that population left, to those who came after them. many of them very, very poor people. mount sinai and holy cross merged and between the two of them, i can't think of better examples of hospitals with the mission to help the poorest people and make sure they have the care that all of us would like to have for our families. they came to me yesterday to talk to the affordable care act. there are so many speeches on the floor about the affordable care act. most of them from the other side of the aisle are entirely negative. but there are some things that were brought to my ateption by these two -- my attention by these two inner-city hospitals

that we should all take a look at carefully. they are telling us that more and more people are shoaling up now and -- showing up now and paying. in days gone by, many who came in were charity cases. their cost of their service was passed on to everyone else. now, under the affordable care act, many of these lower-income families have health insurance for the first time in their lives. i've met some of these families, and i know what it means to them. it was several years ago when i was approached by the chairman of the cook county board, the president, and we asked for a waiver from things about the oba administration to enroll families in the affordable care act before it actually went into effect. we were given that waiver. we now have 100,000 individuals in cook county, low-income individuals, who have medicaid protection. this medicaid protection has allowed them to have quality health insurance for the first time in their lives, in many

cases, and also it means when they present themselves for care at hospitals, they're paying. they are paying through the medicaid program rather than coming in as charity cases. what we're finding as well, as more and more americans have the option of health insurance through the affordable care act, is that the percentage of americans who are uninsured has gone down. the share of adults without health insurance declined to 13.4% last month from 15.6% just a few months before. it's an indication of more and more people in america having the peace of mind that comes with health insurance coverage. i also want to make a point -- i see th the senator from kentucks here, and i know he reserved the floor this morning. but i want to make a point as well that as we are bringing in more cost savings through the affordable care act, we are seeing the overall increase in

health care costs starting to decline and slow down. that is what we were shooting for. more and more accessibility and coverage. more affordable care ac affordat coverage and the overall costs starting to come down. it is an experiment which is starting to show good results. as proud as i am to have supported this law, it is not perfect. there are things we need to do to improve it and to refine it. we should do those on a bipartisan basis. that's what we're waiting for. the house of representatives has now voted -- i believe the number is 50 times -- 50 times to repeal the affordable care act. i hope they've gotten it out of their system and will now sit down with us and work on a bipartisan basis to make it a better law. we can do that. and we should do it together. so i commend this effort to both sides of the aisle in the senate as well as in the house, and i hope that we shoul we can achiee

something that will make davens. i'd like to close by stating something with regard to two constituents. philosophy walk certificate a 28-year-old -- philosophy walker is a 28-year-old student in biblical studies at the university of chicago. her husband is a part-time youth minister. philosophy -- that would require them to take out additional student loans to pay their health insurance while they're in school. before moving to chicago, they were paying $700 a month for health insurance through cobra, which is an option for those who've lost health insurance but an expensive one. the $700 payment depleted their savings because their -- because her husband struggled to find a full-time job. and going without health insurance wasn't an option because philosophy walker has some severe allergy problems. last november they signed up

through the affordable care act exchange and purchased a plan comparable to the cobra coverage that had cost them $700 a month, but the plan also included dental insurance, which they never had before. philosophy and her husband under this affordable care act plan pay $200 a month. it went from $0700 to $200. she also received her monthly allergy medication for free rather than the monthly co-pay. it's a true. laurel tyler runs a small business with her husband in illinois. because they have two employees and one of the children of one of their employees has asthma, the policies they were sold in the past are extremely spean sivment because of the affordable care act, because of the illinois marketplace, laurel's business is going to save 20% on health care costs and the 22-year-old son with

asthma can stey sta stay on the employee's plan. let's build on that success. let's work together to make this law even stronger. mr. president, i yield the floor to my colleague. mr. paul: mr. president? the presiding officer: the senator from kentucky. mr. paul: i rise today in opposition to the killing of american citizens without trials. i risi rise today to say that te is no legal precedent for killing american citizens not involved in combat and that any nominee who rubber stamps and grants such power to a president is not worthy of being placed

one step away from the supreme court. it isn't about just seeing the baron memos. some seem to be placated by the fact that, oh, they can read these memos. i believe it's about what the memos themselves say. i believe the barron memos, at their very core, disrespect the bill of rights. the bill of rights isn't so much for the american idol winner. the bill of rights isn't so much for the prom queen or the high school football quarterback. the bill of rights is especially for the least popular among us. the bill of rights is especially for minorities. whether you are a minority by the virtue of the color of your skin or the shade of your ideology. the bill of rights is especially for unpopular people and unpopular ideas and unpopular religions. it is easy to argue for trials for prom queens.

it is easy to argue for trials for the high school quarterback or the american idol winner. it is hard to argue for trials for traitors and for people who'd wish to harm our fellow americans. but a mature freedom defends the defenseless, allows trials for the guilty, protects even speech of the most despicable nature. after 9/11, we all recoiled in horror at the massacre of thousands of innocent americans. we fought a war to tell other countries that we would not put up with this, that we would not allow this to happen again. as our soldiers began to return from afghanistan, i asked them to explain in their own words what they had fought for, and to a soldier they would tell me they fought for the american way; they fought to defend the constitution and they fought for our bill of rights. i think it's a disservice to

their sacrifice not to have an open and full-throated public debate about whether an american citizen should get a trial before they are killed. let me be perfectly clear. i'm not referring to anybody involved in a battlefield, anybody shooting against our soldiers, anybody involved in combat gets no due process. what we're talking about is the extraordinary concept of killing american citizens who are overseas but not involved in combat. it doesn't mean that they're not potentially and probably are bad people, but we're talking about doing it with no accusation, no trial no charge, no jury. the nomination before us is about killing americans not involved in combat. the nominee david barron has i s written a defense of executions of american citizens not involved in combat.

make no mistake, these memos do not limit drone executions to one man. these memos become historic precedent for killing americans abroad. some have argued that releasing these memos is sufficient for his nomination. this is not a debate about transparency. this is a debate about whether or not american citizens, not involved in combat, are guaranteed due process. realize that during the bush years, most of president obama's party, including the president himself, argued against the detention -- not the killing; they argued against the detention of american citizens without a trial. yet now the president and the vast majority of his party will vote for a nominee that advocates the killing of american citizens without trial. how far have we come?

how far have we gone? we were once talking about can detaining american citizens and objecting that they would get no trial, no now we are condoning killing american citizens without a trial. before president obama's first election, told "the boston globe," no, i reject the bush administration's claim that the president has plenary authority under the constitution to detain american citizens without charges as unlawful combatants. but now not only has he signed legislation to detain american citizens without trial, but he is now approving of killing american citizens without a trial. where o. wherwhere o'where has e obama gone? david barron puts forward memos that justifies killing american citizens without a trial. i can't tell you what he wrote

in the memos. the president forbids it. i. barron did not write or cite any legal case to justify killing an american without a trial. because no such legal precedent exists. it has never been adjudicated. no court has ever looked at this. there has been no public debate because it has been held secret from the american people. barron creates out of whole cloth a defense for executing american citizens without trial. the cases he cites, which i am forbidden from talking about, which i am forbidden from citing to you today, are unrelated to the issue of killing american citizens because no such cases have ever occurred. we have never debated this in public. we are going to allow this to be decided by one branch of government in secret. and yet the argument against the barron memo, the argument against what barron proposes should be no secret and should be obvious to anyone who looks at this issue.

no court has ever decided such a case. so barron's secret defense of drone executions relies on cases which, upon critical analysis, have no pertinence to the case at hand. am i the only one who thinks that something so unprecedented as an assassination of an american citizen, that this should not be discussed, that we should discuss this in light of day? am i the only one that thinks that the question of such magnitude should be decided in the open by the supreme court? barron's arguments for the extra judicial killing of american citizens challenges over 1,000 years of jurisprudence. trials based on the presumption of innocence are an ancient right. the romans wrote that the burp n of proof son he who asserts that

you are guilty, not on he who denies. the burden son the government. we describe this principle as the principle being considered innocent until guilty. this is a profound concept. this is not something we should quietly acquiesce to having it run roughshod on or diluted and eventually destroyed. in many nations the presumption of innocence is a legal righ rio the accused even in the trial. in america we go one step further to protect the a. us --o protect the accused. we place the burden of proof on the prosecution. we require the government to collect and present enough compelling evidence to a jury, not to one person who works for the president, not to a bunch of people in secret, but to a public jury the evidence must be presented. but then we go even further to protect the possibility of innocence. we require that the accused is guilty beyond reasonable doubt.

if reasonable doubt remains, the accused is to be acquitted. we set a very high bar for conviction and answer stree -- n extremely high bar for prosecution. and we still sometimes have gotten it wrong and have executed people after jury trials mistakessenly, -- mistakenly. but now we're talking about only accusations. are we comfortable killing american citizens no matter how awful or heinous the crime they're accused of? are we comfortable killing them based on accusation that is no jury has reviewed? innocent until proven guilty, the concept is tested. we are being tested. it is tested when the consensus is that the accused is very likely guilty. in this case the traitor that was killed in all likelihood is