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Senate Finance Committee Chairman Roth Releases Draft Legislation on Medicare


Date: 10/4/2000
News: Senate Finance Committee Chairman Bill Roth (R-DE) released a summary of draft legislation entitled “Medicare, Medicaid and SCHIP Improvements Act of 2000" on October 3rd. Chairman Roth has asked the members of the Committee to review the draft and meet in a closed session review on Wednesday, October 4.

Highlights of the draft bill include the following:

• Out-of-pocket hospital outpatient costs for beneficiaries would be
lowered by accelerating the phase-in of the cost reduction language
included in the Balanced Budget Refinement Act (BBRA) of 1999;

• The hospital inpatient payment rate would be the full market basket
index (MBI) for 2001 and 2002. The update would be MBI minus 1.1 percent in 2003;

• Indirect graduate medical education payments (IME) would be set at 6.5 percent for FY2001 and FY2002;

• Hospital DSH reductions would be 2 percent in FY2001 and 3 percent in FY2002, which is an improvement for those facilities. They are currently slated for a 3 and 4 percent reduction in FY2001 and FY2002, respectively;

• Medicaid DSH payments would be frozen at FY2000 levels in FY2001, as opposed to the reductions in DSH payments instituted by the BBA;

• Telehealth services would be paid at the same rate as an in-person

• Children’s hospitals would receive the same treatment as cancer
hospitals under the outpatient prospective payment system (PPS);

• Skilled nursing facilties (SNFs) would receive the full MBI plus 1
percent in FY2001 and FY2002;

• 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 B covered stays;

• The rule regarding provider-based criteria would be delayed until July 10, 2001. The Health Care Financing Administration (HCFA) would be directed to “work with affected parties on revising the criteria before implementation.”

• The Committee would direct the Medicare Payment Advisory Commission (MedPAC) to study the refinements to the practice expense relative value units during the transition to a resource-based practice expense system for Medicare physician payments;

• 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;

• Rural home health agencies would receive bonus payments in 2001 and 2002;

• Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) would be placed under a new PPS beginning in FY2001. Existing FQHCs and RHCs would be paid per visit payments equal to 100 percent of the reasonable costs incurred during the previous year in FY2001; and

• Funds for the State Children’s Health Insurance Program (SCHIP) would be distributed under a revised payment formula regarding those moneys which were not spent in FY1998 and FY1999. States who have spent their allotment would be eligible for a certain amount of unspent funds. States who have not spent their allotment would also be eligible to obtain most of their unspent allotment.

It is currently unclear whether the Committee will mark up the bill. We have heard comments from the staff of some Members of the Committee that they are displeased with the process and some of the substance of the bill. For instance, adding a prescription drug benefit to the Medicare benefits package has been a high profile issue this year. Many members of the Finance Committee have introduced legislation to offer such a benefit, and no bill on the issue has been passed by the Finance Committee. However, the bill was drafted in an attempt to gain the favor of as many Members as possible, a process which is still in flux.

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

Source: Debra Hardy Havens and Matt Williams