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House Ways and Means Health Subcommittee

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10/04/2000

Date: 10/4/2000
News: The House Ways and Means Health Subcommittee passed the Medicare Refinement and Benefit Improvement Act of 2000 on October 3rd. The bill is the House Ways and Means Health Subcommittee’s version of a Balanced Budget Act (BBA) givebacks bill. The Ways and Means Committee has jurisdiction over Medicare Part A and Part B. The bill passed unanimously on a roll call vote of 13 - 0.

While there was no release of a final score on the bill from the
Congressional Budget Office (CBO), Chairman Thomas said in his opening remarks that the cost of the bill would not be “higher than
Administration proposal, which is $30 billion over 5 years.”

There are a number of specific items of interest:

• Out-of-pocket hospital outpatient costs would be lowered by
accelerating the phase-in of the cost reduction language included in the BBRA of 1999;

• Additional preventive benefits would be added to Medicare, including annual pap smear screenings and pelvic exams, medical nutrition therapy for patients with diabetes or renal disease, glaucoma screenings, and colon cancer screenings. In addition, there would be a Congressional study of expanding Medicare coverage of thyroid screenings;

• All hospitals would receive the full market basket index (MBI) for
FY2001 for inpatient services – they would receive MBI minus 1.1 percent on or after October 1, 2000 through April 1, 2001, and MBI plus 1.1 percent on or after April 1, 2001 through September 30, 2001;

• PPS payments for hospital outpatient department services would be increased by the MBI increase plus 1 percent for services from April 1, 2001 through September 30, 2001;

• Medicare would increase the percentage of bad debt payment for
hospitals from 55 percent to 60 percent phased-in over 5 years;

• The application of rules for determining provider-based status would be grandfathered for existing arrangements from October 1, 2000 through October 1, 2002. Those facilities who request provider-based status on October 1, 2000 and before October 1, 2002 may not be treated as if it did not have such status during the period of time the determination is pending;

• Children’s hospitals would receive the same treatment as cancer
hospitals under the outpatient PPS;

• All hospitals would be eligible for DSH payments when their DSH
percentage exceeds 15 percent;

• Teaching hospitals would receive a 6.25 percent indirect medical
education (IME) payment adjustment for discharges occurring on or after October 1, 2000 and before April 1, 2001. The IME adjustment would increase to 6.75 percent for discharges occurring on or after April 1, 2001 and before October 1, 2001. The IME adjustment would be set at 6.25 percent in FY2002, and 5.5 percent in FY2003 and subsequent years;

• The three-year rolling average count for calculating direct graduate
medical education (GME) and IME payments would only include residents in allopathic and osteopathic medicine;

• A hospital’s approved per resident amount for direct GME payments for cost reporting periods beginning in FY2002 would not be less than 85 percent of the locality adjusted national percentage per resident amount;

• A hospital would receive direct GME nursing and allied health payments in proportion to its relative cost of allied and nursing health programs and Medicare+Choice utilization in comparison to that in all other hospitals;

• Reductions in the DSH hospital payment formula amounts would be 2 percent in FY2001, 3 percent in FY2002, and 0 percent in FY2003 and subsequent years. Implementation of the provision would be a 3 percent reduction for discharges occurring on or after October 1, 2000 and before April 1, 2001, and a 1 percent reduction for discharges occurring on or after April 1, 2001 and before October 1, 2001;

• Home health payments would not be subject to the 15 percent reduction in FY2001 and would be delayed until October 1, 2002. In addition, payments for home health services would be equal to the full MBI increase for FY2001 and would raise the base for the first year of the PPS and all subsequent years. The Comptroller General would be required to submit a report analyzing the need for the 15 percent reduction by April 1, 2002;

• Skilled nursing facilities (SNFs) would receive the full MBI increase
for FY2001, and would receive the MBI increase minus one percent in FY2002. From October 1, 2000 through March 31, 2001, the rate will be paid at MBI minus 1 percent and paid at MBI plus 1 percent from April 1, 2001 through September 30, 2001;

• The SNF consolidated billing requirement would apply only to services and items furnished to SNF residents in a Medicare part A covered stay and to therapy services furnished in part A and part B covered stays; and

• Payments for telehealth services under Medicare would be made to the physician or practitioner at the distant site in an amount equal to the amount that would have been paid to such physician or practitioner if the service had been provided without the use of a telecommunications system. A $20 facility fee would be paid to the originating site of the telehealth visit through December 2002 and increased by the Medicare Economic Index (MEI) in future years.

While a number of amendments were offered, most were either withdrawn or accepted by the Chairman. Roll call votes did occur on amendments dealing with coverage of X-Rays performed in conjunction with covered chiropractic services, waiving the 24 month waiting period for Medicare coverage for individuals with ALS and an amendment to require the managed care plans participating in the M+C program be required to stay in the program for at least two years. All were defeated along party line votes (Democrats for, Republicans opposed). The only vote that got a Republican vote was the Chiropractor amendment. Sam Johnson (R-TX) voted for this amendment.

The amendments that were accepted were generally either very technical or non-controversial. The one substantive amendment that did pass dealt with participation in the safe needle program. According to the amendments sponsors – Johnson (R-CT), Stark (D-CA) and English (R-PA) – the needle stick legislation which passed on the House floor (H.R. 5178) on October 3 would only cover employees in private hospitals.

This amendment would extend this provision to employees of public
hospitals. The Chairman moved to approve by voice vote. Johnson of Texas asked to be recorded as being opposed to this amendment.

It is not clear whether this bill will go to the full Committee for
mark-up or whether the leadership will try to go straight to the floor.
Chairman Thomas indicated that it was his preference to hold a full
committee mark-up but that no final decision had been made. He went on to further suggest that a final decision would be somewhat dependent on CBO scoring because no official CBO score was available by the time the Subcommittee completed its consideration of the bill.

We will keep you informed of the latest developments. In the meantime, please contact us with questions or comments.


Source: Debra Hardy Havens, Bill Finerfrock and Matt Williams