A group representing about 500 large and medium-sized hospitals that are heavily dependent on Medicare is pushing congressional Democrats to support a provision that would give them more than $50 million in extra Medicare payments.
The proposal is included in the Republican budget that passed both houses of Congress last year. It would increase Medicare inpatient payments 0.5% in 1996 for hospitals with more than 100 beds that receive in excess of 60% of their revenues from Medicare. In 1997, the hospitals would receive another 0.33%, and would remain at that level until 2002, when the budget plan would expire. About $55 million would be funneled to the hospitals over a seven-year period.
The measure would increase the amount that Medicare would need to be reduced to meet balanced-budget requirements.
Senior House Democrats, including Rep. Sam Gibbons of Florida, the ranking minority member of the Ways and Means Committee, and Rep. Fortney "Pete" Stark of California, the top Democrat on the Ways and Means health subcommittee, opposed the plan in a letter to Democratic leaders.
An aide to one of the Democrats who opposes the measure called it an "unwarranted giveaway," and said it was a political deal designed to "buy off" hospitals in high-Medicare areas.
According to John Forsman, chairman of the National Association of Medicare-Dependent Hospitals, Clinton administration officials have told supporters of the proposal that they support the provision.
"They recognize that hospitals that have a large number of Medicare patients need to be looked at to ensure that they are viable after the (budget) cutbacks," said Forsman, senior vice president of finance at Community Medical Center in Toms River, N.J.
"A hospital that is 80% Medicare revenues cannot absorb the same cut as a hospital that is 40% Medicare."
The hospitals' greatest obstacle appears to be congressional liberals who sent a letter last month to Democratic leaders opposing the plan, which they said would unfairly aid a small number of hospitals, primarily in Florida and New Jersey.
The three states with the most hospitals affected by the provision
are Florida, New Jersey and Pennsylvania.
But Peter Thomas, a lawyer with the Washington firm of Powers, Pyles, Sutter & Miles who represents the National Association of Medicare-Dependent Hospitals, argues that the provision is the kind of targeted assistance that Congress has supported in the past with disproportionate-share payments to hospitals that care for a high number of Medicaid patients and grants to rural hospitals.
"The hospitals that this is supposed to help don't get other extra payments, so this is an important step in protecting these hospitals," Thomas said.