Hospital lobbyists say HCFA may again miss an Aug. 1 deadline for issuing next year's Medicare hospital inflation adjustment, raising the specter of millions in lost reimbursement.
Under a law enacted in 1995, all major federal regulations must be reviewed publicly for 60 days prior to taking effect.
Last year, HCFA didn't release its fiscal 1997 Medicare prospective payments system adjustment, or "update," until Aug. 29. That meant the 2% update called for in the regulation couldn't go into effect until Oct. 29, 1996, nearly a month after the start of fiscal 1997.
Had the one-month delay stood, it would have cost hospitals more than
$100 million in lost Medicare payments. However, Congress took action to waive the 60-day period and the 2% increase went into effect as scheduled on Oct. 1.
According to hospital groups, HCFA appears to be on the same schedule as last year, and it is likely that congressional action will again be needed.
"We are assuming that this is a problem that needs to be addressed," said Thomas Nickels, vice president and deputy director of federal relations for the American Hospital Association.
A HCFA spokeswoman said she would not comment on pending regulations.
It is unknown how much the hospital update will be for fiscal 1998. The Prospective Payment Assessment Commission recommended in its March 1 report to Congress that hospital Medicare payments remain flat. Republican leaders, including Rep. William Thomas of California, chairman of the House Ways and Means health subcommittee, have said they would consider a freeze as part of a package designed to balance the federal budget.
The Clinton administration recommended in its fiscal 1998 budget that hospital payments be increased by one percentage point less than the rate of inflation in the hospital sector-as measured by the marketbasket of goods and services purchased by hospitals.
However, if Congress does not reach a budget agreement, it is unlikely there will be any changes made to current law, which calls for a fiscal 1998 update equal to the full increase in the hospital marketbasket. ProPAC estimates hospital-sector inflation at 2.8%. Factoring 2.8% inflation, a one-month delay would cost hospitals more than $150 million in Medicare reimbursements.