Suddenly, more than $12 billion doesn't sound too bad to the hospital industry.
Faced with the chance that Medicare payment relief will slip through cracks of election-year politics, the hospital lobby--now locked arm in arm with the health insurance lobby--is fully backing a relief bill that it once criticized for giving too much to health insurers.
Hospitals have until early December to persuade Congress that a measure to increase Medicare payments is must-pass legislation before lame-duck lawmakers adjourn for good.
After indicating they would resume work on tax and spending legislation in a lame-duck session that began last week, congressional leaders decided to put off all votes until the week of Dec. 5. They passed a measure temporarily funding the federal government through that week and then left town again.
That came as the capital awaited the results of the presidential race and the U.S. Senate race in Washington state, which will determine whether Republicans hold the majority in the Senate or will share a 50-50 split with the Democrats.
Wrapped up in pending tax legislation awaiting a Senate vote is a measure that would increase spending for Medicare, Medicaid and state children's health insurance programs by $32.6 billion between now and 2005.
The legislation repeals spending-growth caps imposed under the Balanced Budget Act of 1997. Most significantly for hospitals, it allows for a full inflation update of 3.4% in 2001 for hospital inpatient payments, rather than the update of 1.1 percentage point less than inflation as called for under the balanced-budget law.
That provision alone will increase hospital payments by $3.7 billion between now and 2005. This figure combined with other provisions adds up to more than $12 billion.
President Clinton had vowed to veto that bill, however, in part because he said the legislation gave too much money to Medicare HMOs at the expense of hospitals and other providers. Medicare+Choice plans would receive $10 billion over the same five years.
Hospitals and Medicare HMOs had been feuding over much the same issue (Oct. 9, p. 6).
But last week, confronted with the possibility that a protracted battle between a lame-duck White House and Congress might not yield any Medicare payment-increase legislation, HMOs and providers came together on a united letter asking for Congress to adopt a bill based on what already has passed the House.
It was the first time since Congress began acting on Medicare legislation this year that the two sides jointly signed a letter.
"The coalition activity is designed to bolster the prospects (of passage), to convey the message that this was important enough for these groups to come together in a perhaps unprecedented way," said Susan Pisano, spokeswoman for the American Association of Health Plans.
"We saw an increasing likelihood of nothing (passing)," said Thomas Scully, president and chief executive officer of the Federation of American Hospitals.
Key congressional leaders warned, however, that the only way the Medicare legislation will pass is if the spending totals in the bill don't increase.
Senate leaders now are trying to decide whether to pass the Medicare measure separately from the tax bill. They would have to send the stand-alone Medicare bill back to the House for adoption before President Clinton could sign it.
But Senate leaders fear that if they follow that strategy, provider and managed-care groups will lobby to increase spending.
"If none of them gets greedy . . . we can pass the bill," said Sen. Charles Grassley (R-Iowa), who is likely to become chairman of the Senate Finance Committee in January.
If the Senate chooses to pass it as a stand-alone measure, Scully said he believes provider groups will agree not to push for more money.
In addition to signing the letter, hospitals used other means in their last-ditch attempt to persuade lawmakers to pass the legislation. A coalition of hospital groups began airing the fourth in a series of advertisements pushing for increased Medicare and Medicaid payments for hospitals.
The television advertisements are airing on cable and network news programs in 20 markets, as well as print and radio outlets in Washington.
Hospital groups also brought executives to town to discuss the legislation with their local lawmakers. But Congress' decision to put off votes on the measure forced hospital groups to abruptly delay some lobbying visits. About 200 executives visited lawmakers early in the week, but more postponed their appointments until the week of Dec. 5.