As provider groups bombard Capitol Hill with stories of financial distress, Congress is getting down to the business of considering whether it's necessary to mend the 1997 budget law that providers blame for their misery.
Although members of Congress already have introduced numerous bills to fix specific Medicare payment issues (See chart), the likely vehicle for changes to the Balanced Budget Act of 1997 is a massive tax-and-budget package to be drafted later this summer.
Congress is trying to put together such a package in July, before it goes on its traditional August recess, with the hope of final passage in September, before federal fiscal 2000 begins Oct. 1.
It's not clear which corrections to budget-law payment policies, if any, would be included. Some leading candidates are emerging, however. Among them is a possible boost in payments for high-acuity patients being treated in skilled-nursing facilities.
Also a high priority are a repeal of the $1,500-a-year per-beneficiary cap on outpatient rehabilitation therapy and possible revisions to Medicare+Choice payments aimed at heading off a new round of health plan withdrawals.
Fixing Medicare+Choice may be the highest priority among those seeking broad Medicare reform such as that envisioned by the National Bipartisan Commission on the Future of Medicare, which would make Medicare more reliant on private-sector health plans.
Hospitals, meanwhile, want to limit the losses projected under a prospective payment system for outpatient departments, as well as to repeal a provision that reduces hospital reimbursement for some patients discharged to post-acute settings. They also want to reduce cuts in graduate medical education payments.
But because so many separate provider groups are seeking relief, some observers said the chances for congressional action are in jeopardy.
In addition, provider groups may face some procedural hurdles because of language in the congressional budget blueprint and a separate bill that has passed the House.
Those two documents reserve in a "lockbox" the federal budget surplus, now estimated at $111 billion in federal fiscal 1999, to be used for broad Medicare reform. They could prevent the use of the surplus for short-term revisions to payment formulas.
The combination of the lockbox plan and multiple claims on the surplus makes "it easier for Congress to say no, because it's easier to say no to everybody," said John Rother, legislative director for the American Association of Retired Persons.
Meanwhile, some recent federal reports have cast doubt on provider groups' claims that the budget law is to blame for their woes and that beneficiaries' access to necessary services has been reduced (May 24, p. 6).
The most recent of those was a report from the General Accounting Office, Congress' investigative arm, that said payment caps on home health agencies have not led to reduced access.
In fact, the GAO said, although some 14% of home health agencies closed between Oct. 1, 1997, and Jan. 1 of this year, the number of agencies now available is about the same as in 1996. Most of the closures were in urban areas, where other agencies have taken up the slack. The closed agencies were among those that provided more visits per patient and were used at higher rates than the national average, the report said.
Separately, Rep. Fortney "Pete" Stark (D-Calif.) has asked the Medicare Payment Advisory Commission to analyze a report prepared for the American Hospital Association that blames the balanced-budget law for reducing hospital profits. MedPAC has agreed to the review.
The congressional advisory panel already has rebutted a similar report released earlier this year by the Federation of American Health Systems (May 24, p. 6). The analysis of the federation report said hospitals share some of the blame for their financial woes because they used healthy Medicare profits to cushion losses from managed-care contracts.