The House last week passed a balanced-budget package that freezes inpatient hospital payments and squeezes total savings of $115 billion from Medicare over five years.
Fifty-one Democrats crossed party lines to vote in favor of the bill, giving it a comfortable 270-162 margin.
Proponents fought off the protests of some members whose states are heavily reliant on Medicaid disproportionate-share hospital payments. DSH payments are designated for hospitals that serve a population heavily dependent on Medicaid.
For states that received more than 12% of their total Medicaid revenues in the form of DSH payments in 1995, DSH payments in 1998 would be cut 2% below their 1995 levels. Those cuts would rise to 40% below 1995 levels in 2002.
As a result of that provision, 13 high-DSH states would contribute 57% of the $13.1 billion in DSH savings sought over five years in the budget bill, according to Rep. Ken Bentsen (D-Texas), whose state is one of the 13 high-DSH states.
States that received between 1% and 12% of their total Medicaid revenues in the form of DSH payments would suffer DSH payment cuts half that of the high-DSH states.
But the objections of some lawmakers were quelled after Rep. John Kasich (R-Ohio), chairman of the House Budget Committee, pledged that the distribution of DSH payments would be resolved in the House-Senate conference committee that will resolve differences between their bills.
"We don't have it right yet," Kasich said. "(But) we can't fix it."
White House has told representatives from high-DSH states that it will be a priority in conference negotiations to ensure that deep DSH cuts do not burden their hospitals.
As the budget bill moved to debate on the House floor last week, Republican leaders raised to $1.5 billion from $500 million the amount of Medicaid funding available over five years for protecting low-income Medicare beneficiaries from Part B premium increases.
The provision raises the top income of Medicare beneficiaries able to receive a full Part B premium subsidy under Medicaid to 135% of the federal poverty level from 120%.
Lawmakers also tried to protect low-income beneficiaries from the effects of a shift of $33.6 billion in home health costs from the Medicare Hospital Insurance Trust Fund to the Part B pool. It would extend some premium subsidies to beneficiaries with incomes between 135% and 175% of the federal poverty level for any Part B premium increase that would result from the shift.
That shift, according to the Congressional Budget Office, would contribute to a Part B premium increase of $1.30 a month in 1998 and $8.20 a month by 2002.