MEDICARE: Clinton Plan Boosts Payments by $21B

      As expected, President Clinton yesterday officially announced his plan to increase Medicare payments to health care providers by $21 billion over five years, the AP/Philadelphia Inquirer reports. Asserting that current federal reimbursements to hospitals, home health care agencies and nursing homes are too low and put Medicare patients at risk, Clinton said, "We have to face the challenge of making sure we pay the Medicare providers enough so they can give our seniors the high-quality care they deserve." The proposal would cost $40 billion over 10 years (Love, 6/21). Under the plan, hospitals would receive $5 billion over five years and $10 billion over the next decade, as well as a "full allowance for inflation." Special payments for teaching hospitals and facilities that serve primarily indigent patients also would increase. In addition, the proposal calls for a one-year delay in the 15% payment cut to the home health care industry. Home health agencies, which were "hit harder than any other service" by 1997 Medicare cuts, would receive $2 billion over five years, $3 billion over 10 years and a 3.4% inflation allowance, rather than the 2.3% currently provided by law. Clinton's plan also would offer nursing homes $1 billion over five years and $2 billion over 10 years and would postpone restrictions on physical, occupational and speech therapy for one year (Pear, New York Times, 6/21). In announcing his plan, Clinton also embraced Vice President Al Gore's Medicare "lockbox" proposal (AP/Philadelphia Inquirer, 6/21).

HMOs Want More
      Although Clinton's plan also offers a small increase in payments to managed care companies, executives said the additional funding falls short of the amount needed to prevent more Medicare HMOs from pulling out of the market. American Association of Health Plans President Karen Ignagni said, "The administration seems not to be addressing the crisis facing Medicare beneficiaries in HMOs" (New York Times, 6/21).