The House voted late last week to add new financial relief for rural hospitals as it approved legislation to increase Medicare provider payments by as much as $11.8 billion over the next five years.
But hospitals still can't be sure of receiving an additional $4.5 billion in relief for outpatient services, as Congress and the White House continued to wrangle over how to reverse a 5.7% cut to outpatient department fees that HCFA imposed when it implemented the Balanced Budget Act of 1997.
Under the final version of the bill approved last week, outpatient departments at small rural hospitals would have an option to return temporarily to a cost-based Medicare reimbursement system.
The legislation to adjust payment policies imposed by the balanced-budget law would allow rural hospitals with fewer than 100 beds to choose to keep the current cost-based payment system for three additional years. It could mean an extra $100 million over five years for those hospitals.
The House bill previously would have protected hospital outpatient departments through a formula that would have temporarily limited the payment losses for three years under a prospective payment system, which is scheduled to take effect next year.
"We couldn't be happier," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems. "If the (5.7% cut) gets fixed . . . it will be an absolutely tremendous, slam-dunk year."
A move to correct the 5.7% cut to outpatient department fees remained stalled, meanwhile, as Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, withdrew language that gave HCFA the authority to rescind that cut.
The cut results from HCFA's effort to keep Medicare spending under control while limiting beneficiary copayments.
The Clinton administration has been asking for language giving HCFA the authority to rescind the cut. But the Congressional Budget Office has told Thomas that the authorizing language he drafted would prompt it to increase its estimates of the cost of Medicare relief.
The White House, however, has given Congress language that it said should not result in increases in its estimates of Medicare spending.
Hospitals urged Congress to make clear its opinion on the outpatient cuts.
"This clarifying language must be included in any final Medicare (budget-law) relief package," said a letter last week from the federation, the American Hospital Association, the Association of American Medical Colleges and the Catholic Health Association.
The House passed the Medicare legislation by a 388-25 vote under an expedited procedure that precluded amendments if it received a two-thirds vote.
The Senate, meanwhile, appeared unlikely to approve relief legislation passed by the Finance Committee. Leadership from both the House and the Senate were hoping to resolve differences between its bills during the weekend before attaching a compromise Medicare package to a spending bill to be sent to the White House.