T he hospital lobby won a hard fought yet ultimately partial victory last week, helping to sway Congress to approve a bill that will add back billions of dollars in Medicare reimbursements that otherwise would have been eliminated.
The change comes through a streamlined extenders bill that quietly sped through the House and Senate. Federal lawmakers unanimously OKd the legislation, which in part trims back the so-called behavioral offset the CMS included in its inpatient prospective payment system and that was set to go into effect Oct. 1.
The bill likely wont raise any red flags with the White House, the American Hospital Association said. President Bush has 10 days to either veto or sign it. If he does neither, then it automatically becomes law.
The AHA and the Federation of American Hospitals pressed to have the reduction reversed, with the AHA estimating that if implemented, the 4.8% offset would ultimately cut some $20 billion in hospital Medicare payments over the next five years. The adjustment is still expected to cost hospitals about $13 billion.
Considering how difficult it is to get any legislation through Congress right now, the fact that we were successful in getting some relief in this reduction is a major victory, said Chip Kahn, the federations president.
The CMS called for the offset based on the assumption that hospitals would upcode as its new system of Medicare severity-DRGs is implemented. As a result, the agency called for reductions of 1.2%, 1.8% and another 1.8% over the next three years. But under a provision in the legislation, the proposed CMS cuts have been halved in 2008 and 2009. The 1.8% cut slated for 2010 is still on the table, however. The measure would instead restore about $7 billion over those years, the AHA has estimated.
The bill, which was introduced and passed by the House and Senate within a two-day window, was designed for speed and written to skirt controversy, according to sources familiar with the negotiations.
Kahn said the measure is needed because the CMS underpays hospitals, citing a Medicare Payment Advisory Commission estimate that puts hospital margins for this year at negative 5.4%.
Others on the provider side of the equation agree. Congress has previously pointed out that a prospective cut for hospitals that are already receiving insufficient reimbursement from Medicare will restrict access to critical hospital services, said Blair Childs, spokesman for the Premier hospital alliance, in a statement.
Along with the behavioral offset, the bill also includes a six-month delay in requiring tamper-resistant prescription pads in the Medicaid program, increases funding by $340 million for the Medicare Physician Assistance and Quality Initiative fund and extends the Transitional Medical Assistance program through Dec. 31.
Were very pleased that Congress is addressing this issue, said Richard Pollack, executive vice president of advocacy and public policy at the AHA. However, its only a partial fix to the problem and we hope that they will consider further adjustments in the future.