Despite a congressional budget report that could ease pressure for more Medicare savings, President Clinton's budget proposal for fiscal 2000 will freeze Medicare inpatient hospital rates for one year, according to top hospital lobbyists.
Due out this week, Clinton's budget will seek $4.5 billion in savings from Medicare hospital payments. The freeze will be combined with increased savings from hospital "bad debt" payments, which reimburse hospitals for the unpaid bills of Medicare beneficiaries.
A freeze in fiscal 2000 would follow a freeze in fiscal 1998 that was mandated by the previous year's balanced-budget law. Without changes to that 1997 law, hospital Medicare payment rates would rise 0.7% in 2000.
Meanwhile, the Congressional Budget Office, in releasing its budgetary outlook, gives some ammunition to lobbyists fighting Medicare payment reductions.
The CBO's most recent projection, released late last week, estimates that Medicare will spend $3 trillion between 1999 and 2008, or about $200 billion less than what the CBO estimated last year.
For federal fiscal 1999, the CBO projects Medicare spending of $220 billion, down more than $10 billion from earlier estimates.
CBO Director June O'Neill said the new 1999 estimate reflects slower-than-anticipated Medicare spending growth in recent months, as well as a new risk-adjustment formula for paying Medicare managed-care plans. The formula will save money instead of being cost-neutral as previously assumed.