Hospital groups got what they were looking for last week when the Centers for Medicare and Medicaid Services said it would delay the Jan. 1 start of the 2002 Medicare hospital outpatient rates. But Congress did not deliver on a bioterrorism package that included direct hospital funding.
The outpatient rate delay, which led the American Hospital Association and other groups to call off their threatened lawsuit against HHS, was one of the few positives for healthcare providers that came out of Washington last week.
The CMS will review the controversial outpatient rule to correct errors in the payment schedule. The CMS said the review would not extend past March 31 but did not give a new implementation date.
It is projected that hospitals-which will be paid at 2001 rates until the new rates are implemented-will receive about $240 million more next year because of the delay, industry sources said. During the delay, hospitals won't benefit from a scheduled 2.3% across-the-board rate increase for ambulatory payment classifications but will escape, at least temporarily, steep reductions in "pass-through" payments for high technology. The outpatient rule was published in November in two parts. Hospital groups pushed for a three-month delay of the rule's implementation because the CMS said difficulties updating its computer software would keep the agency from processing claims with the 2002 rates at least until April. Upsetting hospitals further, the agency told fiscal intermediaries to hold 2002 outpatient claims until the software was ready to go.
The AHA, the Association of American Medical Colleges and the Federation of American Hospitals threatened to sue HHS Secretary Tommy Thompson if the CMS didn't release the data and methodology underlying the payment changes.
While this excitement was going on at HHS, the first session of the 107th Congress ended with a yawn for the healthcare industry. The end of the session last week was more notable for what failed to get done than for what made it to President Bush's desk.
"This is the year of nothing," one healthcare industry lobbyist said.
A bill delaying implementation of a Health Insurance Portability and Accountability Act rule on insurance claims processing (See p. 4) made it to President Bush's desk. Small successes were the approval in both the House and the Senate of bioterrorism preparedness funding bills and legislation that would pay for recruiting and training nurses.
Hospitals will be eligible for $135 million in bioterrorism preparedness grants next year, according to the AHA, in a Department of Defense allocation bill that passed both houses last week. In the same bill, another $140 million will be made available to compensate healthcare providers for losses related to Sept. 11.
A disagreement over healthcare coverage for the unemployed was blamed for the demise of the $87 billion economic stimulus package, even though two versions of the bill passed the House. The bill would have given $9.6 billion in healthcare funds to states in addition to refundable tax credits to help people who have lost their jobs buy insurance.
It was the first time in four years that lawmakers didn't make adjustments in the Medicare or Medicaid programs. A broadly supported House bill to reduce the cut in the Medicare physician fee schedule next year from 5.4% to 0.9% didn't make it to the floor.