Portending a tough battle on provider Medicare payment increases, a top House Republican wants his colleagues to ask hard questions about hospitals' finances when meeting with industry executives from their districts.
A letter circulated last week by Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, suggests that lawmakers ask executives for data on how their individual hospitals are faring financially under the payment policies of the Balanced Budget Act of 1997.
The letter touts Medicare policy accomplishments by the Republican-controlled Congress since 1995 and suggests 32 specific questions that members can ask, including 18 directed at hospitals about their inpatient, outpatient, skilled-nursing and home health businesses (See box).
"In order to keep Medicare on solid financial footing so that it can continue to meet the healthcare needs of our nation's seniors, I encourage you to engage in conversations about the specific areas of concern," Thomas wrote. "The attached questions will assist you in holding that dialogue with healthcare providers."
Among Thomas' suggestions are questioning how much of a profit hospitals make on Medicare inpatients.
One hospital lobbyist, who asked not to be named, said that question is aimed at reversing hospital-backed legislation calling for a Medicare inpatient payment update in 2001 and 2002 that is equal to an inflation measure called the hospital "marketbasket." Under the balanced-budget law, inpatient payments are to be updated at 1.1 percentage points below the marketbasket in 2001 and 2002.
Thomas is resisting such an across-the-board approach, and wants to help only "those that are hurting," the lobbyist said.
The letter comes as providers are in the midst of a second consecutive year of lobbying for rollbacks to the 1997 law. Thomas was anticipating that members of Congress would continue to meet with a parade of hospital executives brought to Washington to lobby on Medicare payment issues, as well as meet with providers in their districts when they return home for breaks in July and August.
Hospital lobbyists said Thomas' letter only put on paper the arguments he had been making in meetings with providers all year.
"I think Thomas is saying in more forceful terms what he's been saying: `If providers need relief, I want to see the facts,' " said Thomas Scully, president and chief executive officer of the Federation of American Health Systems. "Members are going to get beat up over the recess. I think (Thomas) is doing a little push-back in response to that."
The balanced-budget law aimed to save $112 billion in Medicare spending between 1998 and 2002 when compared with the law that existed at the time.
Last year, after an extensive campaign by providers that claimed Medicare payment restraints were forcing them to close departments and pare services, Congress and the White House passed the Balanced Budget Refinement Act, increasing Medicare, Medicaid and state children's health insurance program payments by $16.1 billion during the next five years.
Hospitals haven't stopped this year. They are asking for $25 billion during the next five years, including $9.5 billion from increased Medicare inpatient hospital payments.