The American Hospital Association has agreed to support House Republicans’ prescription-drug and Medicare modernization bill, according to a memo from John McManus, staff director of the House Ways and Means Committee’s health subcommittee, to subcommittee staff. A copy of the memo was obtained by Modern Healthcare. In return for the AHA’s support, the draft of the bill was modified so that hospitals’ Medicare payment update in fiscal 2003 would be 0.25 percentage points less than the government’s full inflation factor. Hospitals are scheduled to receive an update that would be 0.55 percentage points below the full inflation factor. Also, a scheduled reduction in indirect medical education payments would be cut in half for 2003, gaining hospitals about $400 million next year. Hospitals’ aggressive lobbying against the bill was blamed for keeping it off the House floor before Memorial Day recess.
AHA, GOP cut deal over prescription-drug bill
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