Republicans, Hospitals Reach Agreement on Medicare Reimbursement Increase
House Ways and Means Committee Chair Bill Thomas (R-Calif.) said yesterday that he has reached a deal with hospitals to increase Medicare reimbursements, removing one of the obstacles to the passage of the GOP's Medicare reform package, CongressDaily reports. The deal calls for hospital payments to increase by a total of $9.2 billion over the next 10 years. Earlier drafts of the GOP Medicare reform package, which includes a drug benefit, had called for a payment cut of $17 billion over the next decade. Hospital groups lobbied against the proposal, and rank-and-file Republicans expressed reluctance to vote to cut payments to hospitals in an election year. The deal would also slow scheduled decreases in funding for medical schools, increase reimbursement rates for rural and suburban hospitals to the level of urban hospitals and "phase in a higher reimbursement rate for rural hospitals that serve a disproportionate number of low-income individuals." The increase in funding will apparently be offset in part by decreasing the Medicare drug benefit in the GOP plan from $320 billion over 10 years to between $301 billion and $310 billion, CongressDaily reports (Fulton, CongressDaily, 5/29). Federation of American Hospitals President Chip Kahn said the payment boost would "provid[e] significant relief to America's hospitals at a time when we face great pressure from nursing shortages, bioterrorism-preparedness requirements, an aging population and ever-increasing costs" (Lueck, Wall Street Journal, 5/30).
While the agreement with hospitals will "likely make it easier for some legislators to vote for the [House GOP Medicare reform] package," CongressDaily reports that some roadblocks still remain. Some lawmakers are concerned about a plan to introduce a copayment of $50 for home health services, and other issues, such as the average wholesale price of drugs and "laboratory and oncology issues," have yet to be addressed. In addition, doctors are still lobbying for a Medicare reimbursement increase; recent drafts of the package would give physicians a 2% boost annually over the next three years (CongressDaily, 5/29). Medicare reimbursements to doctors decreased 5.4% this year and are scheduled to drop 17% by 2005 (California Healthline, 5/15). "The hospitals screamed, and now the hospitals saw a $26 billion turnaround. The question is, what do the docs need to do?" a GOP aide said (CongressDaily, 5/29). Even if the House approves the Republican plan, it is not expected to pass in the Democratic-controlled Senate, making it "unlikely that Congress will pass a drug benefit this year," although provider payment legislation "is anticipated," the Wall Street Journal reports (Wall Street Journal, 5/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.