MEDICARE GIVEBACKS: House Approves Restoration of $16B
As part of the omnibus appropriations measure the House passed last night, $16 billion will be restored to hospitals, nursing homes, home health care agencies and other care providers over the next five years. CongressDaily/A.M. reports that the Congressional Budget Office had insisted on adding $3.9 billion to the total because of a "drafting error" in the 1997 Balanced Budget Amendment regarding hospital outpatient payments. The White House assured Congress that it will not score the provision and would leave the five-year total at $12.4 billion. As part of the package, hospitals will receive $3.3 billion, nursing homes will get back $2.1 billion, home health and hospice providers $1.3 billion and $300 million to dialysis and durable medical equipment providers. Managed care plans will receive $1.9 billion in "direct relief" because of changes to the phase- in of a "risk adjuster" that would lower payments for healthier enrollees (Rovner, 11/19).
Medicare Premiums Rise
Because of the givebacks, Medicare monthly premiums will rise about $1 a month for beneficiaries starting in 2001. The 2000 premium already has been set at $45.50 a month, the same as this year. By law, money raised from Medicare Part B premiums must cover a quarter of the total annual cost of Medicare recipients' doctors office visits and other outpatient care. In other words, if fees paid to health care providers rise, so must beneficiaries' monthly premiums. John Rother, public policy director for the AARP, said, "This is painful. ... Clearly they're getting some assurance that providers will continue to have services available where they were saying they would have to cut back before." The AP/Philadelphia Inquirer reports that lawmakers "have routinely glossed over this financial impact on beneficiaries in their publicly released cost estimates for legislation." But the "impact on beneficiaries' premiums in future years could turn out to be smaller or larger than expected, depending on variables such as inflation in health care prices" (Love, 11/19).