Some hospitals apparently have succeeded in getting HCFA to resurrect the debate over whether Medicare should pay them more money to cover steep construction costs.
Two pages of the Medicare rule on hospital inpatient payments for fiscal 2000 describe the "concerns" of several unnamed hospitals that feel they will be unfairly denied a "special exception" to receive more money from a pool of Medicare funds paid to hospitals for capital expenditures.
About 25 hospitals tried to get that exception two years ago through the Balanced Budget Act of 1997 (July 7, 1997, p. 2). However, the provision was stripped from the bill before Congress passed the measure. It was opposed by a number of excluded hospitals and hospital groups, including the Catholic Health Association and the National Rural Health Association.
Under a 1992 law that changed the way hospitals are reimbursed for capital costs, Medicare pays hospitals no less than 70% of its share of those costs. The payments are added to DRG payments.
However, the 1992 law required that capital payments eventually be set prospectively rather than be based on hospital costs, and be blended into a hospital's DRG payment. That transition is supposed to occur over a 10-year period ending in fiscal 2002.
In 1994, HCFA revised the rules implementing the 1992 law to include an exemption for a handful of hospitals that had large capital projects in place during the 10-year transition period.
As described in the May 7 Federal Register, hospitals would like to see HCFA make the following changes to the rules on capital expenditures:
* Allow hospitals to complete their projects by December 2005-so they are reimbursed based on costs rather than prospectively-a significant extension from the current October 2001 deadline.
* Lower the $200 million minimum cost of a reimbursable capital project.
* Raise the minimum payment level from 70% to 85% of total capital costs.
* Open eligibility to hospitals that treat fewer indigent patients and perform less charity care than is currently required.
HCFA does not make any specific proposal and does not offer an estimate on what the benefiting hospitals' suggestions would cost Medicare-not to mention what they would cost the other hospitals that wouldn't qualify. HCFA said some hospitals would lose money if others gained funds through such changes.
Time is running out for hospitals to comment on the rule. The 60-day public comment period ends July 6.