With the Medicare hospital trust fund seemingly getting healthier by the day, providers want a little acknowledgement of their healing role, and maybe a little payback.
Providers believe the trust fund's recent good health results from greater savings than projected under payment restraints enacted by the Balanced Budget Act of 1997.
HCFA and the Congressional Budget Office dispute that contention, saying other factors, led by the economy, contributed to the healthy Medicare outlook.
The trust fund, which covers hospital, nursing home and other institutional care, will be solvent until 2015, according to Medicare trustees. That is seven years beyond what the trustees projected last year, when they reported that the Balanced Budget Act of 1997 alone had extended the life of the trust fund from 2001 to 2008 (April 5, p. 6).
The CBO, which does not project spending and revenues more than 10 years out, confirmed that the fund will be solvent until after 2010 (March 22, p. 2).
Although the prognosticators don't agree, providers claim that nearly $80 billion in unexpected Medicare savings now being projected between 1998 and 2002 represent greater payment cuts than the balanced-budget law intended.
"I think you can make the argument that more dollars came out of the program than intended, and a modest amount should be put back in," said Thomas Nickels, senior vice president for federal relations at the American Hospital Association.
Providers are using that as an argument for increased payments financed by the $117.3 billion federal budget surplus-even though Congress and President Clinton are trying to preserve it exclusively for fundamental restructuring of Medicare and Social Security.
The CBO estimates that Medicare spending in the five federal fiscal years ending in 2002-the years covered by the balanced-budget law-will be $194.7 billion less than it estimated in January 1997, before the balanced-budget law passed. By comparison, the CBO projected savings of $115 billion when the budget law passed.
Both the CBO and Medicare trustees attributed some of the savings to the federal government's stronger enforcement of fraud and abuse.
"Providers may be experiencing reverse creep, if there is such a thing- downcoding instead of upcoding," said CBO Director Dan Crippen.
In addition, the CBO, which advises Congress on spending and tax legislation, said HCFA and its intermediaries and carriers are processing claims more slowly because they are busy battling the year-2000 computer problem and reviewing providers' bills more carefully.
A one-week increase in the time it takes to process claims decreases current fiscal year expenditures by 2.3%, CBO said. Officials warned, however, that such spending is pushed off by only a year and doesn't really represent savings.
A healthy economy, meanwhile, has filled Medicare's coffers with unexpected tax revenues.
Richard Foster, HCFA's chief Medicare actuary, said the economy is the biggest driver of this year's revised projections.
He said the $124.3 billion the trust fund collected in payroll taxes was $4.3 billion more than HCFA projected, while the $133.8 billion in benefit payments was $7.8 billion less than projected.
Last year, the trustees estimated that Medicare would be spending more than it took in through at least 2007, further eroding trust fund assets, which began running a deficit in 1994.
This year, the trustees report said the trust fund actually ran a surplus in 1998, a trend that will continue through 2006.
As a result, the 1999 trustees report said the trust fund will have amassed $155 billion at the end of 2006, compared with the projection in the 1998 report of just $35.9 billion at the end of 2006.
The providers' argument that they are due money from the surplus takes on greater significance as Capitol Hill prepares for yet another debate on overhauling Medicare.
The chairmen of the National Bipartisan Commission on the Future of Medicare said they will introduce as legislation a plan that earned the support of a majority of the 17-member commission but did not get the 11 votes required by law to make a recommendation.
The bill would replace the current payment system with a "premium support" plan to help beneficiaries pay for private coverage.
Clinton, meanwhile, also is developing a reform plan and wants Congress to pass it by the end of the year.