The Senate has unveiled a $41 billion bill for hospitals and other providers, proposing a broad range of Medicare payment changes that the Bush administration views as excessive. The bill, introduced yesterday by Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking Republican Charles Grassley of Iowa, would give sole community hospitals a full-inflation update in Medicare payments for 2003 and set the update for other hospitals at one-fourth of a percentage point less than inflation, consistent with the terms of a House bill passed this summer.
Having developed the legislation without including a Medicare prescription-drug benefit, the Finance Committee faces criticism from seniors' groups and fellow lawmakers about the prudence of giving hospitals money while not assisting beneficiaries.
"Under the Senate's misguided approach, seniors will not have lower drug costs or prescription-drug coverage, plus seniors will pay higher Medicare premiums because of the increased adjustment to providers," said Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee. The AARP also has been critical of relief for hospitals without assistance for its members.
The Senate failed last summer to agree on a prescription-drug benefit, and now Baucus believes further debate would imperil hospital givebacks. "I will not support reviving a prescription-drug debate that threatens passage of the important bill Sen. Grassley and I are introducing," Baucus said in a written statement.
In addition to the payment update for hospitals, the Senate bill addresses a wide range of provider reimbursement issues, including restoration of previous physician payment rates, which were cut by an average of 5% this year.
The bill also would modify the formula used to calculate physician payment updates; eliminate a 15% cut to home health payments that took effect Oct. 1; equalize payments for rural and urban hospitals; provide $5 billion in fiscal relief to struggling state Medicaid programs; restore disproportionate-share payments to safety net hospitals; and give states an extra year to spend State Children Health Insurance Program funds that would otherwise be returned to the federal treasury.
The American Hospital Association, along with other provider groups including the National Association of Children's Hospitals, voiced support for the Senate bill, saying it should be passed "swiftly."
Hospital alliance Premier viewed the legislation similarly. "There's a little bit for everybody," said Herb Kuhn, Premier's vice president for advocacy. "Not everyone is 100% happy, but everybody gets something."
The Centers for Medicare and Medicaid Services, meanwhile, opposes the Senate package, arguing that payment increases for providers are much too large. Rather, the CMS says, lawmakers should focus on fortifying Medicare+Choice and repairing the often-criticized physician fee schedule. The Bush administration supports competitive bidding for durable medical equipment, which is included in the Senate's package.
The Senate bill is likely to skip the committee process in favor of consideration by the full Senate but its exact path is still unclear. A summary of the Beneficiary Access to Care and Medicare Equity Act of 2002 is available online in PDF format. Click here.