Tuesday, Dec. 17, 2013

WASHINGTON - Sen. Chuck Grassley of Iowa and Sen. Michael Bennet of Colorado said today they will look for ways to advance their provision to better coordinate care for children with complex medical conditions under Medicaid and the Children's Health Insurance Program (CHIP), leading to better care and health for these children.

"Considering creative models to promote better outcomes for children with medically complex conditions is something we need to explore in the future," Grassley said.  "Working with the Finance Committee on a bipartisan basis and the Congressional Budget Office, I hope we can move these ideas forward."

"Kids in Colorado and around the country deserve doctors and hospitals that have every tool and resource they need to help them get better," Bennet said. "We need to explore ways that we can ensure kids are getting the seamless care they deserve. We'll continue to work closely with the Senate Finance Committee to get this signed into law."

Grassley, Bennet and seven other bipartisan members of the Finance Committee sponsored an amendment to the physician payments bill considered in committee last week that would establish under the Medicaid program and Children's Health Insurance Program an accountable care collaborative providing a network of services to children with medically complex conditions.

The amendment, which was offered and withdrawn, establishes a Medicaid Children's Care Coordination Program for children with complex medical conditions that would provide services through nationally designated children's hospital networks. Medically Complex Children are defined as those who are included in Clinical Risk Groups (CRG) 5b-9.  The CRG methodology is a well-documented and accepted manner of classifying pediatric patients and their diagnoses nationally and can be adopted for these purposes easily.

Patients in these groups have significant lifelong chronic diseases, limiting the probability of churning in and out of the network, Grassley and Bennet said.  Approximately three million children in the country suffer from medically complex conditions, and two million of these children are in Medicaid, accounting for 6 percent of children enrolled in Medicaid and 40 percent of Medicaid spending on children.

Children with medically complex conditions are often need of specialized care that requires services provided by providers found in states outside of the family's state of residence.  Medicaid's state-based structure creates impediments to seamless, integrated models of care that may be more appropriate for these children.

Children's hospitals are seen as the anchors to the nationally designated hospital network.  While anchor hospitals will provide services for network patients including physician, inpatient and outpatient care, the network will necessarily include other hospitals, physicians, and providers to ensure these children receive the needed services in the most appropriate setting possible.  Key to these networks is assurance that there is an adequate network to support the specific pediatric population, Grassley and Bennet said.

Through integrated care and risk-based reimbursement, improved patient outcomes and lower health care costs can be achieved, the senators said.

Grassley and Bennet said they will look for legislative opportunities to advance this proposal in the coming months.

Prepared Statement of Senator Chuck Grassley of Iowa

Ranking Member, Senate Judiciary Committee

Hearing on "Protecting Small Businesses and

Promoting Innovation by Limiting Patent Troll Abuse"

Tuesday, December 17, 2013

Mr. Chairman, thank you for holding this important hearing today.  The United States is a global leader in innovating, creating and developing new technologies and products.  Intellectual property protection plays a critical role in supporting technological advances, innovation and creativity.  Patents and the U.S. patent system are a significant component of the American tradition of invention and innovation.

However, the innovation and creativity that patents are supposed to protect is being threatened by purposely evasive and deceptive blanket demand letters and abusive litigation practices.  According to one study, lawsuits by patent assertion entities have increased at an alarming rate - in fact, 62 percent of all patent lawsuits filed in 2012 were cases brought by patent assertion entities.  Patent litigation abuse imposes high costs on American businesses, wasting precious resources that could instead be utilized for research, development, job creation and economic growth.

Patent assertion entities, also known as patent trolls, focus on buying and asserting patents, rather than on developing or commercializing patented inventions.  Patent trolls often assert these weak or poorly-granted patents against companies that are already utilizing technologies as ubiquitous as wireless email, digital video streaming and the internet.  These entities frequently carry out their tactics behind the shield of patent holding subsidiaries, affiliates and shells of operating companies.

Patent troll lawsuits rarely have merit:  the statistics are they lose 92 percent of merits judgments.  But the extent of the problem cannot be quantified by looking at these numbers alone.  Most cases don't even get to this stage.  Patent assertion entities usually set their royalty demands strategically below litigation costs.  Consequently, companies make the determination that they should settle weak or meritless cases rather than run the risk of taking on expensive and risky patent litigation. The bottom line is that many small businesses just don't have the resources to litigate and so they submit to this kind of patent extortion.  That's not right.

This phenomenon of patent trolls has hit companies all over the country, and they've targeted my state of Iowa as well.  I recently met with a group of Iowans in Council Bluffs and heard stories about how patent trolls utilize overly broad patents to make claims of infringement against their businesses that are either simply engaging in normal business practices or have bought a technology product or service from a vendor.   Further, I've received a number of letters from Iowans outlining their problems and frustration with these abuses.   They say that these trolls have forced their businesses to divert resources from productive endeavors to instead focus on researching vague demand letters and defending questionable infringement lawsuits.  They 're concerned that billions of dollars are being spent in unwarranted legal costs that could be put to more productive use.  According to one of my constituents, "this practice is now completely out of control."

I'd like to quote from a letter that I received from groups representing a wide swath of businesses in my state.  This letter is from Hy-Vee Food Stores, the Iowa Association of Business and Industry, the Iowa Lodging Association, the Motion Picture Association of Iowa, the Iowa Grocery Industry Association, the Technology Association of Iowa, the Iowa Restaurant Association, the Iowa Credit Union League, the Iowa Association of Realtors, the Iowa Telecommunications Association, the Iowa Biotechnology Association, the Iowa Bankers Association, the Independent Insurance Agents of Iowa, and the Iowa Retail Federation.

They write, "Fighting frivolous and burdensome patent lawsuits threatened and filed by patent trolls is an expensive distraction for a large cross-section of Iowa businesses.  Rather than focus their efforts on important economic development catalysts such as innovation, job creation, and business growth, entrepreneurs and business owners from all industries and sizes are more frequently finding themselves diverting valuable attention and limited resources to defending expensive and unnecessary legal threats by patent trolls.  Indeed, businesses, everyday Iowans, and Iowa's economy as a whole are adversely affected by the trolls' seemingly endless barrage of legal threats and frivolous suits.  The trolls' misguided and unbridled mischief unnecessarily drives up costs that are, in part, passed on to Iowa's hardworking families and consumers."  These groups are supportive of Congress taking action because they believe "meaningful reforms that make it difficult for patent trolls to continue their destructive business models, improve patent quality, and streamline patent infringement disputes will drastically reduce costs for Iowa businesses."

I have other letters from Iowans describing their experiences with patent trolls.  Quotes from some of these letters - according to BettrLife in Urbandale, "we must find a way to strengthen the requirements around patent infringement so unscrupulous lawyers can't work through loop-holes to take resources and dollars from companies that are trying to make a positive impact on businesses in their community and the overall economy."   According to Kinze Manufacturing in Williamsburg, their patent troll experience "has left a lasting impact . . . .  .  Contract negotiations with suppliers and service providers now routinely include allocation of liability in the event of patent trolling.  These negotiations require additional resources and delay research, development and production of new products.  This slows farmer's access to the latest technology.  Technology which will help them get more out of every acre while reducing their costs and protecting their soil."  According to Kum & Go based in West Des Moines, claims of patent trolls have cost the company "thousands of dollars in legal fees and corporate counsel has wasted numerous hours dealing with these frivolous claims - time and money that should have been spent on core business functions."

I've also heard from Iowans that are concerned about the ability of patent holders to protect their intellectual property rights and enforce them against infringers.  While they agree that litigation abuse does occur in the patent system, they are concerned that certain proposals will undermine the ability of legitimate patent holders to enforce their patent rights.  These constituents include Iowa State University, the University of Iowa and independent inventors Robert Rees and Paul Morinville.

I agree that it is important to maintain an appropriate balance between protecting the rights of legitimate patent holders and protecting against abusive practices and weak patents.  We need to preserve patent property rights and valid patent enforcement tools which will promote invention, while targeting bad actors and their tactics that target and shake down businesses with weak and frivolous claims for a quick payday.   This will strengthen our patent system and benefit inventors, businesses and consumers alike.

Mr. Chairman, I'd like to put in the record letters from Iowa constituents, both expressing support and concerns with the various proposals we are considering in the Senate.  I also have for the record letters from the National Retail Federation and Stop Patent Abuse Now Coalition expressing concerns with the customer stay provision as currently drafted in the House and Senate bills.

Doing something about the abusive practices plaguing our patent system is important to keeping the United States competitive, creating jobs and boosting our economy.  Members on both sides of the aisle agree that this abusive patent litigation hurts the ability of businesses to expand and flourish.  We should pass effective legislation to curtail abuses of the legal system.  I'm encouraged that the House passed the Innovation Act by a large margin, and the White House issued a statement in support of that bill.

So I look forward to hearing from our witnesses today about their experiences with abusive patent litigation tactics by patent trolls.  I also look forward to hearing from our witness about their views on how we in Congress can help find a solution to this problem.  And Mr. Chairman, I look forward to working with you to pass meaningful legislation that can alleviate the problems that many of our constituents are dealing with and that are harming our economy.  Thank you.

Tuesday, Dec. 17, 2013

WASHINGTON - Sen. Chuck Grassley of Iowa and Sen. Ron Wyden of Oregon said today they will look for ways to advance their provision to improve independent living and community employment for teen-age and young adult Medicaid beneficiaries with disabilities.

"We should use the power of the Medicaid and Medicare programs to improve options for people with disabilities," Grassley said.  "Our proposal promotes creativity and coordination to improve outcomes for these individuals.  I look forward to continuing to work with the Finance Committee on a bipartisan basis and the Congressional Budget Office to make it a reality."

"There have been too many stories of disabled individuals being taken advantage of in the workplace," Wyden said. "Our proposal encourages states to use creative and innovative approaches to improve employment equity and help young people with disabilities become as independent and successful as possible."

Grassley and Wyden sponsored an amendment, which was offered and withdrawn, to the physician payments bill considered in the Finance Committee last week that would create Medicaid bonuses for states that think creatively in coordinating services for the disabled across several programs - including vocational rehabilitation, education, housing, and transportation - that lead to more independent living and employment within the community.  The proposal is directed at individuals ages 14 to 30 years old.

Grassley and Wyden said Medicaid and Medicare are such major programs that they can and should help drive better outcomes for the participating individuals.  The amendment took the approach of using Medicaid funding to create incentives to increase opportunities for youth with disabilities.  With more coordination of health care and support services than exists now, Medicaid could lead to improved health for individuals with disabilities that could lead to independent living and employment.

Grassley and Wyden said they will look for legislative opportunities to advance this proposal in the coming months.

December 13, 2013

Washington, D.C. - Senators Joe Donnelly (D-IN) and Chuck Grassley (R-IA) today led a group of 31 senators in writing a letter to United States Trade Representative, Ambassador Michael Froman, and U.S. Department of Agriculture Secretary Tom Vilsack about the importance of addressing barriers to market access for American pork producers in the Trans-Pacific Partnership.

The senators noted the importance of exports to the economic well-being of U.S. pork producers and the U.S. economy as a whole, writing, "U.S. pork production supports an estimated 550,000 domestic jobs, around 110,000 of which are the direct result of exports. Pork exports now make an annual surplus contribution of nearly $5 billion to the overall U.S. trade balance."

Currently, there are numerous market access barriers for U.S. pork in countries participating in the TPP, such as Japan's complex system of tariffs.  These barriers limit the contributions U.S. pork exports can make to the U.S. economy.  The senators insisted to Ambassador Froman and Secretary Vilsack that, as part of the TPP agreement, all tariffs and non-tariff barriers on pork in TPP partner nations be eliminated.

A signed copy of the letter is available by clicking here. Full text of the letter follows.

December 13, 2013

Ambassador Michael Froman

Office of the United States Trade Representative

600 17th Street NW

Washington, DC 20508

Secretary Tom Vilsack

United States Department of Agriculture

1400 Independence Avenue SW

Washington, DC 20250

Dear Ambassador Froman and Secretary Vilsack:

We write to emphasize the importance of addressing market access barriers to U.S. pork exports in the Trans-Pacific Partnership (TPP).

We know that you are both well aware how important exports are to the economic well-being of U.S. pork producers and the U.S. economy as a whole. U.S. pork production supports an estimated 550,000 domestic jobs, around 110,000 of which are the direct result of exports. Pork exports now make an annual surplus contribution of nearly $5 billion to the overall U.S. trade balance.

Around the world, however, numerous market access barriers exist that prevent pork exports from contributing even more to the domestic economy. The Trans-Pacific Partnership (TPP) negotiation presents an important opportunity to open new markets to U.S. pork in the Asia-Pacific region, to expand several existing markets, and to establish a standard for all future trade agreements involving pork. The participants in the TPP negotiations represent significant markets for increased U.S. pork exports with the successful removal of tariff and non-tariff barriers.

Currently, U.S. pork producers encounter highly restrictive trade barriers that slow the growth of U.S. exports into a number of TPP participant countries. Japan, for example, maintains a complex system of tariffs that reduces the price and quality advantages of U.S. pork. Vietnam, in addition to burdensome administrative requirements, continues a reference price scheme on imported pork that raises the cost to import certain pork cuts above the market price. Furthermore, despite an existing bilateral trade agreement, Australia still uses non-tariff barriers to limit U.S. exports to either processed pork or frozen, boneless pork for further processing.

It is estimated that if tariffs and all non-tariff barriers are eliminated in each TPP nation, U.S. pork exports will grow by over 50 percent within 10 years of implementation. We strongly urge you to insist that all tariffs and non-tariff barriers on pork in TPP partner nations be eliminated as part of the TPP agreement.

Sincerely,

U.S. Senator Joe Donnelly

U.S. Senator Chuck Grassley

U.S. Senator Amy Klobuchar

U.S. Senator Deb Fischer

U.S. Senator Tom Harkin
U.S. Senator Roy Blunt

U.S. Senator Carl Levin
U.S. Senator Pat Roberts

U.S. Senator Tim Johnson
U.S. Senator Mike Johanns

U.S. Senator Robert Casey
U.S. Senator Richard Burr

U.S. Senator Tammy Baldwin
U.S. Senator Rob Portman

U.S. Senator Debbie Stabenow
U.S. Senator Mark Kirk

U.S. Senator Mark Udall
U.S. Senator John Thune

U.S. Senator Claire McCaskill
U.S. Senator John Barrasso

U.S. Senator Sherrod Brown
U.S. Senator James Inhofe

U.S. Senator Richard Durbin
U.S. Senator John Cornyn

U.S. Senator Michael Bennet
U.S. Senator Tom Coburn

U.S. Senator Mark Pryor
U.S. Senator Patrick Toomey
U.S. Senator Jerry Moran
U.S. Senator Ron Johnson
U.S. Senator Mike Lee