House Ways and Means Committee
Leaders Announce Intent to Increase Medicare Funding to Hospitals
May 31, 2002- House Ways and Means Committee Chairman
Bill Thomas (R-Calif.) and Ways and Means Health Subcommittee
Chairwoman Nancy Johnson (R-Conn.) announced May 29 an agreement
with the hospital community that would increase Medicare funding
for hospitals. Such funding increases would be part of a larger
Medicare bill to be unveiled in June that will include a prescription
drug benefit and program improvements.
In a written statement released by the committee, Chairman
Thomas stated, "The agreement will increase funding to
all hospitals by about $9 billion over 10 years, and will
particularly help struggling hospitals in rural and small
urban areas." Previous drafts of the bill's hospital
provisions included $17 billion in new hospital reductions.
Specifically, the agreement includes the following provisions:
- Updates for inpatient service payments at market basket
(MB) minus 0.25 in FY 2003 and MB in FY 2004;
- Indirect Medical Education payments at 6.0 in FY 2003
and 5.9 in FY 2004;
- Increasing the standardized amount for rural and other
urban hospitals;
- Increasing the Medicare Disproportionate Share Cap to
10 percent for rural and small urban hospitals, phased
in over 5 years; and
- Improvements to the Critical Access Hospital program.
In addition, the bill would freeze Direct Graduate Medical
Education (DGME) payments for those hospitals with per resident
amounts above 140 percent of the national average. The bill
would also provide the opportunity to redistribute unused
residency slots to rural and other urban areas for purposes
of calculating DGME payments.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Office of Governmental Relations
ldavisboyle@aamc.org
(202) 828-0526
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