Several congressional leaders want an advisory commission to explain its unexpected recommendation to raise Medicare inpatient payments in fiscal 2001 by more than what hospitals requested.
A harshly written letter to Medicare Payment Advisory Commission Chairwoman Gail Wilensky demands that MedPAC hand over economic data to support its decision.
The panel recommended an update of 3.5% to 4% to Medicare hospital inpatient payments in fiscal 2001, according to sources who have read the letter but requested anonymity. That update is up to 1.1 percentage points higher than the hospital inflation factor known as the marketbasket index.
MedPAC and its predecessor, the Prospective Payment Assessment Commission, rarely recommend increases greater than the index.
During the meeting at which MedPAC made the recommendation, the panel also reported that hospitals' projected profit margin on Medicare inpatient care would be 11.5% in fiscal 2001 (April 17, p. 6).
Hospitals have been lobbying for an increase equal to the marketbasket as part of a campaign to obtain $25 billion during five years in increased provider payments.
Hospital lobbyists described MedPAC's recommendation as a godsend that will strengthen their case as they try to undo payment restraints decreed under the Balanced Budget Act of 1997. That law aimed to reduce projected Medicare spending by $112 billion between 1998 and 2002, largely by trimming annual updates to provider payments and enacting new prospective payment systems.
Under the balanced-budget law, the hospital inpatient update would be 1.1 percentage points less than the marketbasket in fiscal 2001 and 2002.
The letter to Wilensky was signed by Reps. William Thomas (R-Calif.), chairman of the House Ways and Means Committee's health subcommittee, and Fortney "Pete" Stark (D-Calif.), the panel's senior Democrat. It was dated April 14, the day after MedPAC made its recommendation.
Neither Thomas' nor Stark's office would release the letter.
Sources said the letter aims to counteract hospital lobbyists' and executives' use of the MedPAC recommendation as part of an expected blitz of Capitol Hill throughout this session.
"We need an immediate response and hard statistical support from you and the commission staff if the commission is to serve its purpose of helping Congress, rather than being an organized forum of self-interested lobbying," said the letter, according to sources.
Four of MedPAC's 17 members represent hospitals or hospital groups.
Wilensky didn't respond to calls seeking comment last week. MedPAC staff declined comment.
MedPAC based its recommendation on rising costs resulting from scientific and technological advances, chiefly drugs. It also recommended the increase to counterbalance past reductions to hospital updates that aimed to offset expected upcoding. Recent data have indicated that upcoding is on the wane.
Were Congress to follow through on MedPAC's recommendation, it would be the first time since 1985 that the hospital inpatient update exceeded the marketbasket index.