Legislation Providing Medicare
Payment Relief to Teaching Hospitals Reintroduced
April 18, 2003 - Legislation providing Medicare payment
relief to teaching hospitals was reintroduced on April 10
and 11 by Reps. Mark Foley (R-Fla.) and Richard Neal (D-Mass.)
in the House, and Sens. Kay Bailey Hutchison (R-Texas) and
Evan Bayh (D-Ind.) in the Senate. Entitled "The American
Hospital Preservation Act," HR
1710/S.
899 would compensate hospitals for the market basket (MB)
and Indirect Medical Education (IME) payment cuts to Medicare
inpatient payments that took place in FY 2003. The bill also
ensures that hospitals' Medicare inpatient payments are updated
by a full inflation adjustment known as the market basket
(MB) and maintains the IME adjustment at 6.5 percent.
Specifically, the bill would increase hospital inpatient
payments by MB + 0.55 in FY 2004 before adjusting inpatients
by the full inflation adjustment in FY 2005 and beyond. The
bill would increase the IME adjustment to 7.5 percent in FY
2004 and 6.5 percent in FY 2005 and thereafter.
Because Rep. Foley and Sen. Hutchison were concerned that
the Centers for Medicare and Medicaid Services (CMS) could
not make "retroactive" payments, they chose instead
to increase MB and IME payments for FY 2004.
In her introductory remarks, Sen. Hutchison said, "Lower
reimbursement rates coupled with bioterrorism risks and a
workforce shortage make our hospitals a time bomb waiting
to go off. Our hospitals are always open and must accept anyone
who walks through their doors. It is our responsibility to
ensure they have adequate resources from the Federal Government."
The AAMC is endorsing the legislation.
In FY 2003, IME payments were reduced from 6.5 to 5.5 percent
and inpatient payments were updated by MB minus 0.55. Under
current law, IME payments will remain at 5.5 percent in FY
2004 and beyond and inpatient payments will be adjusted by
a full MB inflation adjustment.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Office of Governmental Relations
ldavisboyle@aamc.org
(202) 828-0526
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