A whirl of behind-the-scenes dealmaking occurred last week as state and healthcare lobbyists sought special breaks to soften the blow of congressional Medicare and Medicaid cuts.
In a last-minute deal to secure votes for the Republican Senate budget, Majority Leader Bob Dole (R-Kan.) agreed to pump between $8 billion and $10 billion back into federal Medicaid spending to help states that would have been hurt by the Medicaid distribution formula.
In the House, New York GOP leaders snatched a key concession on the formula for reducing the growth of federal Medi-caid payments through 2002. Originally, New York hospitals would have received increases of 2% from 1997 through 2002. Late last week, House Speaker Newt Gingrich (R-Ga.) agreed to ease the decline in the rate of growth, allowing a growth level of 3.5% in 1997, 3% in 1998, 2.5% in 1999 and 2% thereafter.
"This is still going to have a significant negative effect in New York," said Kenneth Raske, president of the Greater New York Hospital Association.
New York now receives $12.3 billion in federal Medicaid funding.
New Jersey lawmakers also made headway on funding issues.
In a letter to Rep. William J. Martini (R-N.J.), Gingrich promised to address several key issues, including funding for foreign medical graduates and hospitals that serve a disproportionately large share of Medicare patients.
Peter Lillo, the New Jersey Hospital Association's vice president of government relations, said 32 of New Jersey's 121 hospitals, or about one in four, rely on Medicare for more than 60% of patient revenues. Currently, those hospitals face a $30 million cut over seven years.
House GOP leaders also made concessions on Medicaid funding to secure late support from Republicans representing Florida, Oregon and Tennessee. Florida's share of Medi-caid funding would drop from 45% to 35% of the state's total Medicaid budget, and federal Medicaid funding would grow at a faster rate.
The biggest deals were being cut in the Senate, however.
After a few Republican senators threatened to vote against the budget, GOP leaders agreed to add $8 billion to $10 billion back into federal Medicaid funds.
The budget originally called for projected Medicaid spending to be reduced by $187 billion over seven years. The Congressional Budget Office estimates that absent any changes by lawmakers, federal Medicaid spending will increase at more than 10% a year from $89 billion this year to $178 billion in 2002.