Congress Begins Medicare
Debate
June 20, 2003
Senate Debate Begins on the Floor
The Senate June 16 began general debate on S. 1, "The
Prescription Drug and Medicare Improvement Act of 2003;"
consideration of amendments began June 17. Sens. Kay Bailey
Hutchison (R-Texas) and Edward Kennedy (D-Mass) are currently
circulating a "Dear Colleague" letter stating they
plan to offer an AAMC-supported amendment to address the current
Medicare IME reduction. The Senate is expected to complete
debate on S. 1 during the week of June 23.
House Committees Mark-up Legislation
The House Ways and Means and House Energy and Commerce committees
June 17 began marking up the "Medicare Prescription Drug
and Modernization Act of 2003" (H.R.
2473). The Ways
and Means Committee June 17 passed H.R. 2473, as amended,
by a vote of 25 - 15. The Energy and Commerce Committee June
19 passed H.R. 2473, as amended, by a vote of 29-20. The House
may debate and vote on H.R. 2473 the week of June 23 after
reconciling the differences between the two versions of the
bill.
Aside from offering a voluntary prescription drug benefit,
providing premium and cost-sharing subsidies to low-income
seniors, and expanding plan choices, both versions of H.R.
2473 include a rural relief package for "underpaid rural
hospitals, physicians, and home health." Some of the
rural hospital and physician provisions include increasing
the standardized amount for other urban and rural hospitals
beginning in FY 2004, equalizing Medicare disproportionate
share hospital payments for rural hospitals beginning in FY
2004, and designating a new essential rural hospitals classification
for purposes of payment.
The following provider provisions in the two versions of
H.R. 2473 are of specific interest to teaching hospitals and
physicians:
- Setting hospital inpatient updates at market basket (MB)
minus 0.4 percent in FYs 2004-06;
- Setting the conversion factor update to physician payments
at no less than 1.5 percent for both FY 2004 and FY 2005.
Rep. Lois Capps (D-Calif.) had offered an amednment in the
Energy and Commerce Committee mark-up to increase the update
to 2.5 percent, but it was defeated by voice vote due to
budget constraints. During the same mark-up, Rep. Sherrod
Brown (D-Ohio) offered and withdrew an amendment calling
for immediate, long-term resolution of problems associated
with the physician update formula. The only other payment
formula-specific provision that passed was the use of a
10-year rolling average when calculating the Gross Domestic
Product;
- Freezing FY 2004-2012 updates to Medicare Direct Graduate
Medical Education (DGME) payments for those hospitals with
per resident limits above 140 percent of the national average.
(Under current law, in FYs 2003-2005, those hospitals with
per resident amounts above 140 percent of the national average
would see their payments increased by market basket minus
2 percent.)
- Redistributing the portion of a hospital's resident limit
that is being "unused" to teaching hospitals seeking
to increase their resident limits. Hospitals in rural and
"other urban" areas would be given preference
to have their resident limits increased on a first-come
first-serve basis; and
- Requiring the Medicare Payment Advisory Commission to
issue a study on niche or boutique hospitals.
The base bill does not contain relief from FY 2003's Medicare
Indirect Medical Education and Medicaid Disproportionate Share
Hospital cuts. The AAMC supports inclusion of such relief
in the House bill.
During the Ways and Means mark-up, committee members approved
39-0 an amendment by Reps. Jim Nussle (R-Iowa) and Earl Pomeroy
(D-N.D.) that would decrease the labor share of the Medicare
wage index from 71.1 percent to 62 percent, at a cost of $5.4
billion over 10 years. The amendment also provides a 5 percent
physician bonus payment for doctors working in areas with
physician shortages. In his press release, Rep. Nussle stated,
"Passing an amendment so meaningful for rural health
care in the urban-dominated House of Representatives should
be considered a major victory."
In the Energy and Commerce Committee, members also passed,
by voice vote, small Medicare demonstration programs regarding
islet cell transplantations and disease management programs
for patients requiring chronic care for diseases such as diabetes.
During the last minutes of the mark-up, the Energy and Commerce
Committee also passed, by voice vote, a Medicaid DSH relief
amendment offered by Rep. Ed Whitfield (R-Ky.) that would
restore approximately $230 million in allotments in FY 2004
(similar to provisions in the Senate package). Rep. Diana
DeGette (D-Colo.) unsuccessfully attempted to amend the Whitfield
amendment to provide total restoration of Medicaid DSH cuts
implemented Oct. 1, 2002, and increase allotments for historically
"low DSH" states.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
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