Healthcare Business News

AHA wants Medicare measures tied to payroll tax-cut legislation

By Rich Daly
Posted: January 22, 2012 - 1:00 pm ET

Hospitals are pushing Congress to include renewals of two Medicare programs set to expire at the end of the federal fiscal year within high-profile legislation to extend payroll tax cuts.

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The Medicare-dependent hospital program and the low-volume program are both scheduled to expire on Sept. 30. Hospitals that benefit from the programs hope to include their renewals in the tax bill, which is viewed as one of the few must-pass bills Congress will consider in the current election year, according to their Washington advocates.

The Medicare-dependent program pays about 200 hospitals for inpatient services at the sum of their prospective payment system payment rate plus three-quarters of the amount by which their cost per discharge exceeds the PPS rate. The program is worth up to $200 million annually to those hospitals, according to a lobbyist.

The low-volume program provides an add-on payment to about 500 hospitals that are more than 15 road miles from a comparable hospital and have fewer than 1,600 Medicare discharges. The program is intended to assist providers who are not able to control costs as well as others because they are low-volume facilities.

The American Hospital Association is pushing for inclusion of both measures in the tax legislation and plans to bring hospital executives to Washington in February to lobby members of Congress for them. Meanwhile, the hospitals in the Medicare-dependent program have launched their own lobbying push for inclusion of that program in the tax bill.

“These are not big hospitals,” said Eric Zimmerman, a partner in the Washington law firm of McDermott Will & Emery LLP, who is spearheading that legislative push. “Without this benefit, their Medicare reimbursements could be pretty severely affected.”

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