Conferees Move Forward on
Provider Agreements; Bush Urges Medicare Conferees To Complete
Their Work
October 31, 2003 - In an Oct. 29 press conference,
President Bush urged the Medicare conferees to complete their
business and send a bill to him to sign into law by the end
of the year. Conferees had hoped to complete their negotiations
before the press conference and have reached tentative agreements
on a number of provider issues including the inpatient hospital
update, Medicare Indirect Medical Education (IME), Medicaid
Disproportionate Share Hospital (DSH) allotments, and the
physician payment update. However, the conferees have yet
to reach an accord on contentious issues such as premium support,
cost containment and drug re-importation.
The conferees reportedly are moving forward on provider provisions
and have tentatively agreed to the following hospital provisions:
- A full inpatient hospital update in FY 2004 and an update
of market basket minus 0.4 percent in FYs 05, 06, and
07. Hospitals participating in the Centers of Medicare
and Medicaid Services (CMS) Voluntary Quality Initiative
would receive full updates.
- An IME adjustment of 6.0 percent beginning April 1,
2004; 5.8 percent in FY 05, 5.55 percent in FY 06, and
5.35 percent in FY 07. Beginning in FY 08 and beyond,
the IME adjustment would be 5.5 percent.
- A substantial one-time increase to states' Medicaid
DSH allotments in FY 04 (mitigating a portion of the BBA's
reductions) and freezing allotments at FY 04 levels in
FY 05 for several years. Allotments for "Low-DSH
states" would be temporarily increased from 1 percent
to 3 percent of their overall Medicaid expenditures in
FYs 04 and 05.
Hospitals will also receive one base rate, the "large
urban" standardized amount, beginning April 1, 2004.
For hospitals with wage indexes of less than one, their labor
shares will be adjusted to 62 percent beginning in FY 2005.
Agreements on niche providers and unused residency slots had
not yet been finalized.
For physicians, it appears the conference agreement will
include provisions to avert the negative 4.2 percent update
(preliminary estimate) to the CY 2004 Medicare physician fee
schedule. CMS is expected to release the final update in its
CY 2004 Final Rule, which could alter the conference agreement.
Stated the President, "I urge the Congress to act quickly,
to act this year, not to push this responsibility to the future.
We have the opportunity; we have the obligation to give seniors
more choices and better benefits. We have come far, and now
is the time to finish the job."
In response to the President's remarks, Senate Finance Ranking
Minority Member and Medicare conferee Max Baucus stated, "I
encourage all of the Conferees and the Administration to continue
to work together and acknowledge the large issues that remain
on the table: premium support, a reliable fallback, health
savings accounts. These are make or break items. This isn't
a time to be optimistic or pessimistic about the final outcome.
It's time to be realistic. Time to roll up our sleeves and
produce a Medicare bill that provides solid drug coverage
and helps our seniors."
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Office of Governmental Relations
ldavisboyle@aamc.org
(202) 828-0526
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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