May 11, 2001

Senate IME Freeze, PPS Update Legislation Introduced

Sens. Kay Bailey Hutchison (R-Texas) and Evan Bayh (D-Ind.) May 7 introduced the "American Hospital Preservation Act of 2001," S. 839. This is a companion bill to H.R. 1556, sponsored by Reps. Mark Foley (R-Fla.) and Richard Neal (D-Mass.) [see Washington Highlights, April 27]. The bills maintain the Medicare Indirect Medical Education (IME) payment at 6.5 percent in FY 2003 and thereafter and provide a full inflation update for Medicare inpatient services in FYs 2002 and 2003.

Last year's enacted legislation, the "Benefits Improvement and Protection Act" (BIPA), maintains the IME at 6.5 percent in FYs 2001 and 2002 before reducing it to 5.5 percent in FY 2003 and thereafter. BIPA also provides a full market basket (MB) update in FY 2001, but reduces the MB by 0.55 percent in FYs 2002 and 2003.

Sens. Tim Hutchinson (R-Ark.), Conrad Burns (R-Mont.), John Kerry (D-Mass.), Lincoln Chafee (R-R.I.), Edward Kennedy (D-Mass.), Jessie Helms (R-N.C.), Hillary Clinton (D-N.Y.), Charles Schumer (D-N.Y.), and Joseph Biden (D-Del.) are also co-sponsors of the legislation.

Freezing IME payments and updating PPS payments are the major Medicare legislative priorities for the AAMC this year.

Information: Lynne L. Davis or Christiane Mitchell, AAMC Office of Governmental Relations, 202-828-0526.