Physician and Hospital Relief
Included in Final Version of FY 2003 Omnibus Legislation
February 14, 2003 - Language that provides increased
Medicare payments to physicians and some hospitals has been
secured in the final version of the FY 2003 omnibus appropriations
bill, H.J.
Res. 2. Instead of a 4.4 cut to CY 2003 payments, physicians
will instead see an increase of 1.6 percent to payments. Small
urban and rural hospitals will also see their payments increase
by 1.6 percent from April 1 to Sept. 31, 2003. Despite the
AAMC and its members' efforts, relief from cuts to Medicare
Indirect Medical Education and Medicaid Disproportionate Share
Hospital payments were not included in the final bill. The
House and Senate approved the measure on Feb. 13, clearing
it for the President's signature.
According to a Feb. 11 Congressional Budget Office (CBO)
letter sent to House Budget Committee Chairman Jim Nussle
(R-Iowa), CBO "believes it is likely" the physician
provision in the appropriations bill would result in the correction
of calculation errors made by the Centers for Medicare and
Medicaid Services (CMS) in 1998 and 1999. The corrections,
CBO reported, would likely generate a 1.6 percent increase
in the CY 2003 physician update to the conversion factor.
Based on these expectations, CBO estimated that the physician
provisions in the Omnibus bill would increase Medicare spending
by approximately $800 million in FY 2003, $22 billion over
five years, and $54 billion over ten years.
The hospital provision would increase the standardized amount
for all hospitals located "other than in a large urban area"
to the standard amount that large urban hospitals currently
receive. Small urban and rural hospitals will temporarily
see their based payments increase 1.6 percent. The provision
is estimated to cost approximately $300 million.
Senate Finance Committee Chairman Charles Grassley (R-Iowa)
and House Ways and Means Committee Chairman Bill Thomas (R-Calif.)
reportedly negotiated the two provisions. Chairmen Grassley
and Thomas reached an agreement based on Sen. Grassley's hospital
provisions included in the Senate passed FY 2003 omnibus appropriations
bill [see Washington
Highlights,
Jan. 17] and Rep. Thomas' legislative concept to grant
the Centers of Medicare and Medicaid Services the authority
to make administrative changes to Medicare's physician payment
sustainable growth rate (SGR) system as passed by the House
last November [see Washington
Highlights,
Nov. 15, 2002].
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
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