HCFA has declined to take up the controversial cause of some urban hospitals that hoped to shift millions in additional Medicare capital reimbursements to their coffers.
That leaves the hospitals with no choice but to beg Congress for a legislative change, which some of the hospitals tried and failed to win in 1997.
"Based on our belief that these changes may have an impact on a significant number of hospitals . . . we have concluded that the more appropriate forum for addressing the capital special exception is the legislative process in Congress rather than the regulatory process," HCFA said in its final rule outlining Medicare payment policy for inpatient services, published in the July 30 Federal Register.
The hospitals wanted to change the requirements so that they would qualify for a "special exception" to receive more money from a $10 billion pool of Medicare funds paid to hospitals for capital expenditures.
Under a 1992 law that changed the way hospitals are reimbursed for capital costs, Medicare pays hospitals at least 70% of its share of those costs. The payments are added to DRG reimbursements.
However, the law required capital payments to eventually be set prospectively rather than be based on hospital costs. That transition is supposed to occur over a 10-year period ending in 2002.
Fourteen hospitals, hoping to win special exceptions and postpone prospective capital payments, have asked HCFA in the past year to consider changing the requirements (See chart).
One of the 14, 492-bed Northwestern Memorial Hospital, Chicago, could have benefited from such changes to the tune of $250 million over five years (July 19, p. 6). Northwestern opened its $580 million replacement hospital earlier this year.
In public comments filed with HCFA, Northwestern said it deserves a special exception because delays in its certificate-of-need application cost the hospital construction time.
Yet in the same letter Northwestern said it completed its project on time and on budget.
The hospital did not return a call for comment by deadline.
Another teaching hospital powerhouse seeking more Medicare reimbursements is 2,038-bed New York Presbyterian Hospital, which also blames CON delays for its alleged woes.
But not only the rich and powerful sought special exceptions.
A group of 10 "financially distressed" hospitals in the greater New York City area wanted HCFA to lower the $200 minimum cost of a reimbursable capital project. Their projects ranged in size from $32 million to $148 million.
It is unclear whether the hospitals will pursue legislative relief at a time when many of their peers are busy pushing Congress to roll back other Medicare spending reductions mandated by the Balanced Budget Act of 1997.