Congress gave physicians and rural hospitals a Valentine last week in the form of a fiscal 2003 budget package that includes hard-won Medicare pay increases. A provision in the budget would boost Medicare payments to physicians by 1.6% in place of a 4.4% cut that was to take effect March 1.
The Medicare physician raise alone would cost the federal government as much as $54 billion over 10 years. Late last week, the Centers for Medicare and Medicaid Services said it would move in the next two weeks to make the 1.6% increase effective, after determining that it has legal authority to make payment changes.
The 2003 omnibus spending bill consolidated 11 appropriations bills that should have been complete months ago but were held up by partisan bickering and disagreements between Capitol Hill and the White House. Congress has yet to take up President Bush's budget proposal for fiscal 2004, which starts Oct. 1. Congress also acted on funding to address the nursing shortage (See story, p. 11).
The House voted 338-83 in favor of the budget bill, and the Senate approved it on a 76-20 vote after prolonged debate over unrelated provisions such as drought relief and Alaskan oil drilling. The $397 billion federal budget, which would finance all government programs except defense through Sept. 30, includes roughly $300 million over six months starting April 1 to pay rural hospitals the same standard rate as their urban counterparts. Bush had not signed the legislation at deadline but said he would do so shortly.
"We appreciate Congress' recognition of the challenges hospitals face. This represents a modest first step," said Rick Pollack, executive vice president of the American Hospital Association, referring to the rural provision. However, he added, "Since this is a temporary adjustment, it will necessitate a review of this and other issues very shortly."
Lawmakers included language in the 2003 budget to give the CMS the legal authority it needs to correct Medicare payment-formula errors that have resulted in previous cuts to physicians. The Congressional Budget Office and industry groups said the corrections will result in a 1.6% payment increase to doctors, and the CMS concluded the same after last week's budget vote.
With the need to publish a regulation, however, the CMS will have to act quickly, possibly issuing an "interim final" rule that could be put into effect immediately.
"The CMS will have to recalculate the payment values, and carriers would then need time to install the revised software and test their systems," said Larry Goldberg, director of the national healthcare practice at Deloitte & Touche in Washington.
Despite possible pitfalls, the AMA was elated.
"The Medicare physician payment provision in the budget bill helps shore up Medicare's foundation," AMA President Yank Coble Jr. said in a written statement. "This bill comes just in the nick of time."