As Hurricane Isabel sent members of Congress home before their week was through, the storm over Medicare provider payments continued to rage on Capitol Hill and in the offices of hospital lobbyists.
The major disturbance is a difference in opinion over what is most important to hospitals in the House and Senate bills that negotiators have been attempting to reconcile since late June.
The provider hurricane has been brewing for a while but gathered strength earlier this month when Federation of American Hospitals President Chip Kahn declined to join other members of the hospital lobby in condemning a House provision that would cut hospital payments by $12 billion over three years.
Sen. Charles Grassley (R-Iowa) asked all the major hospital groups to "stand with me" in opposing the House provision, which would give hospitals a payment increase of 0.4 percentage points less than full inflation in 2004 and 2005.
"Surprisingly, one hospital group, the Federation of American Hospitals, told me the $12 billion in cuts hospitals would have to absorb was not the highest priority for their membership," Grassley wrote in a letter to the hospitals in his state.
"I was shocked" by the federation's reply, wrote Grassley, who is vice chairman of the House-Senate conference committee negotiating a final bill and also chairman of the Senate Finance Committee.
For Iowa hospitals, Grassley argued, the House bill would result in some $160 million of lost revenue over three years.
Kahn said overall payment rates are important, but other issues are more critical to his members, including a Senate provision that would restrict physician ownership of specialty hospitals and provisions in both bills that would boost rural hospital payments.
"The specialty provision is a question of the future of community hospitals," Kahn said.
Increasing disproportionate share payments to rural hospitals is the second major priority federation members have identified, he said.
Selecting the issues
He added that in a conference negotiation "you have to select the issues you feel most strongly about and focus on those," as well as try to avoid getting between two different chairmen shepherding the bill, in this case Grassley and Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee.
Kahn's approach makes sense, one federation member told Modern Healthcare. "I think Chip's being brave, and I think he's being honest," said Tony Fay, vice president of government affairs for Brentwood, Tenn.-based Province Healthcare Co.
But as some defended Kahn's lobbying tactics, other Washington healthcare advocates won-dered about his strategy's effectiveness.
"It was unwise not to help the chairman of the Finance Committee, and I think that refusal will put at risk some of the priorities of the federation," said one lobbyist who asked not to be identified.
Congressional aides did not dismiss that possibility but said it's unlikely to be a problem because provisions important to the federation also are important to a number of other groups.
"We've got an entire bill we're working on, and our focus is to find ways to get a final product to the president that helps providers, especially in rural areas, and delivers a drug benefit to seniors," said Christin Tinsworth, a spokeswoman for the House Ways and Means Committee.
Members of the conference committee did not meet formally last week, aides said, but staff members continued to work on sections of the bill relating to both providers and the drug benefit.