Just as provider groups were readying to put out their hands to Washington lawmakers for more Medicare payments, they got a slap from Congress' investigative arm, the General Accounting Office.
The Medicare provider payment increases enacted in 1999 and 2000 are accelerating Medicare cost growth, causing a more pessimistic outlook for Medicare financing in coming years, the head of the GAO said.
Comptroller General David Walker told the House Budget Committee that Medicare spending has increased 7.5% in the first eight months of fiscal 2001 compared with the same period in 2000. The cost increase is partly a result of the federal government's passage of more than $50 billion in provider payment increases, taking effect from 2000 to 2005, to reverse payment caps enacted under the Balanced Budget Act of 1997.
"The slowdown in Medicare spending growth that we have recently seen appears to have come to an end," Walker said. "The fiscal discipline imposed through the Balanced Budget Act of 1997 continues to be challenged, while interest in modernizing the Medicare benefits package to include prescription-drug coverage has increased. Taken together, these developments mean higher, not lower, healthcare cost growth."
In 2000, Medicare spent $87.8 billion on inpatient hospital care, according to the Medicare trustees' report.
Walker warned that Congress needs to rely on "hard evidence" instead of anecdotal information when deciding on the merits of Medicare payment increases in the future.
An American Hospital Association lobbyist said, however, that Congress didn't eliminate all of the spending caps, and hospitals still are suffering as a result of the balanced-budget law.
"(The budget law), including the refinements Congress has made, has contributed significantly to the solvency of the trust fund," said Thomas Nickels, AHA's senior vice president of federal relations.
Nickels said he agreed with Walker that changes need to be backed up by hard data.
Walker's testimony was given at a House Budget Committee hearing on Medicare management reforms and overall restructuring (See story, p. 8). But it also came as provider groups are beginning their push for another round of Medicare payment increases-this time, to help them hire workers that are now in short supply.
Seven hospital groups, led by the AHA and the Federation of American Hospitals, last week were preparing to send their members draft resolutions calling on Congress to end the workforce shortage by increasing Medicare payments and funding nursing education and training programs. The resolution is part of a multipronged attack for higher Medicare payments that includes a new advertising campaign from a hospital coalition.
The resolution will be sent to hospital chief executives and boards of directors for them to debate and approve, said Al Jackson, the AHA's vice president of political affairs and grassroots advocacy.
The sponsors hope hospital executives and board members will then invite members of Congress to their hospitals during the August congressional recess to discuss workforce troubles. The groups called on their hospitals to pass similar resolutions in 1999 during a campaign that succeeded in securing $6.6 billion in Medicare payment increases for hospitals from 2000 to 2004.