Two key congressional committees approved legislation last week to roll back Medicare payment restraints imposed under the Balanced Budget Act of 1997.
Although the separate packages passed by the Senate Finance Committee and House Ways and Means Committee will offer more than $10 billion in relief over five years from the budget law's cuts, hospital lobbyists said they will be back for more even if this package is passed.
"It's a terrific help, but it's probably a small piece of what needs to be done to help hospitals over the next couple of years because of the (budget law)," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems.
The next steps for the bills have yet to be determined. Although they could become part of a major spending package being negotiated between Congress and the White House, Assistant Senate Majority Leader Don Nickles (R-Okla.) said the bill passed by the Senate Finance Committee could face a vote in the full Senate as a stand-alone measure.
Meanwhile, the White House and congressional leaders continued to haggle over whether and how to rescind a scheduled 5.7% reduction in Medicare outpatient payments to hospitals that will result from a reduction in beneficiary copayments.
Congressional leaders have asked the Clinton administration to withdraw the reduction, worth $4.5 billion over five years, saying they did not intend to impose that cut, which is set to take effect next year.
The administration, however, argued that the budget law calls on HCFA to make the cut and said Congress should pass a law to give HCFA the authority to withdraw it. Congress is reluctant to do so, because passing such a law could cause the Congressional Budget Office to increase its estimates of Medicare spending.
The administration fears it would expose itself to a lawsuit if it made the change administratively, since the balanced-budget law spells out such a reduction.
In a letter last week to Senate Finance Committee Chairman William Roth Jr. (R-Del.), President Clinton said he agreed that Congress didn't intend to make the cut but asked for clarifying language-something that already was included in legislation drafted by the House Ways and Means Committee.
The House Ways and Means package adds $10.6 billion in Medicare payments over the next five years to hospital outpatient departments, skilled-nursing facilities, home health agencies and other healthcare interests.
The Ways and Means plan assumes the Clinton administration will make some administrative changes in the implementation of the 1997 budget law, adding another $5 billion to the Medicare money pot for a total of $15 billion in relief.
In the Senate, meanwhile, the Finance Committee passed a package worth $10.7 billion over five years.
Both committees defeated Democratic efforts to offset the increased costs by expanding HCFA's authority to seek discounts from providers through such means as competitive bidding for hospitals providing complex surgical procedures.
The House Commerce Committee canceled a scheduled vote on its version of a Medicare-relief package after Democrats threatened to derail the bill with amendments to offset the increased provider payments and to add prescription drugs to the Medicare benefit package.
Although they are similar, the House and Senate bills differ on technical provisions. Differences include how they limit hospitals' losses under an outpatient prospective payment system, how they boost payments for high-cost skilled-nursing cases and how they reduce cuts to teaching hospitals' indirect medical education payments.