Final Tax Bill Includes Medicaid
Relief; Medicare Rural Provider Provisions Stripped
May 30, 2003 - The $350 billion tax cut bill recently
signed by President Bush includes $20 billion in temporary
state fiscal relief, one-half of which will support a short-term
increase in the federal assistance percentage (FMAP), commonly
referred to as the "Medicaid Match."
Specifically, the new law temporarily increases the FMAP
for each state by 2.95 percent. The increase is limited to
the last two quarters of FY 2003 and first three quarters
of FY 2004 (April 1, 2003 through June 30, 2004). The law
prohibits states from reducing their Medicaid eligibility
levels below those in effect as of Sept. 2, 2003. States may
not apply the FMAP increase to Medicaid DSH, SCHIP, or enhanced
Medicaid payments.
The temporary FMAP increase is based on an AAMC-supported
amendment offered by Sen. Susan Collins (R-Maine) (S.A. 596)
during debate over the Senate's initial tax bill (S.
1054) [see Washington Highlights,
May 16].
While the Senate also passed an AAMC-supported amendment
by Sen. Jeff Bingaman to increase Medicaid DSH allotments
for "extremely low DSH states" the provisions were
not included in the final bill. Additionally, the AAMC and
other hospital organizations supported efforts by Rep. Ed
Whitfield (R-Ky.) and 24 other House Republicans to send a
letter asking the conferees to include in the final tax bill
language that would have restored the Medicaid DSH cuts implemented
on Oct. 1, 2002; however, such DSH provisions were not included
in the final version.
Senate provisions which increased Medicare payments for rural
providers including hospitals and physicians [see Washington
Highlights, May 16] were not included in the final
bill despite the efforts of forty Senators sending a letter
to the conferees reinforcing their support for keeping the
Senate provisions in the final tax bill.
After the tax bill was finalized, President Bush sent Senate
Finance Committee Chairman Charles Grassley a letter May 22
indicating his support for increased Medicare assistance to
rural providers. The letter states, "I will support the
increased Medicare funding for rural providers contained in
your amendment as a part of a bill that implements our shared
goal for Medicare reform."
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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