Fight ahead to keep rural Medicare provision

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Fight ahead to keep rural Medicare provision

By Ted Monoson

Star Tribune, May 21, 2003

WASHINGTON - Provisions to keep Medicare payments to rural hospitals on par with those paid to urban hospitals have made it into the Senate tax cut provisions but not the House version and it may take a fight to keep them in the final bill.

Wyoming Republican Sen. Craig Thomas has introduced a backstop bill in the event the provision should be cut. He and a handful of other senators will be keeping a careful eye on the Medicare guarantee, which senators voted 86 to 12 to include in the bill.

The Senate version of the tax cut bill, which includes the Medicare provisions, must be reconciled with a version passed by the House of Representatives, which does not include the Medicare provisions. President Bush is urging legislators to settle their differences before leaving for a week-long Memorial Day recess.

Although the provision has widespread support in both the House and Senate, there is some speculation that House Ways and Means Committee Chairman Rep. Bill Thomas, R-Calif, would prefer to not have the provision included in the tax bill but use it to bolster support for a separate Medicare measure.

"Is this the appropriate vehicle is the question," said National Rural Health Association (NHRA) lobbyist Alan Morgan. "At the NHRA we would like to see it in the tax bill."

Rural senators included a provision equalizing payments in a massive spending bill that was signed into law early this year. That law only equalized payments until the fiscal 2003 year ends on Sept. 30, 2003. If legislation permanently equalizing payments is not passed, then Medicare will revert to a system in which hospitals in Montana and Wyoming receive 1.6 percent less than urban hospitals.

"We have been working for several years to make sure that the people of Wyoming, and other rural states, have equal access to health care services and providers," Thomas said. "Currently, many physicians are being forced to limit the number of Medicare patients they serve because of poor reimbursement rates. My amendment ensures adequate payments so our doctors can continue to care for seniors. This is a huge victory for the providers and patients of Wyoming."

Thomas, who is co-chairman of the Rural Health Caucus, and Sen. Kent Conrad, D-N.D., have introduced a separate bill to equalize payments to rural hospitals. If the provision is included in the final tax cut bill, Thomas and Conrad's bill would not be necessary.

The provision in the economic stimulus bill does more than what the provision in the massive spending bill did or what Thomas and Conrad's bill would do. Besides equalizing Medicare payments for hospitals it also would increase Medicare benefits to rural ambulance services and home health agencies by 5 percent.

Supporters of the provision say the difference is based on the false premise that it costs less to treat patients in rural areas.

Senate Finance Committee aides estimate that if the provision becomes law, over the next 10 years Montana hospitals would receive $107 million in additional Medicare money and Wyoming hospitals would receive $56 million.

They estimate that Medicare payments to Montana doctors would increase by 10 percent and payments to Wyoming doctors would increase by 7 percent.

To offset most of the cost of increasing the payments to rural health care providers the provision reduces the amount that Medicare pays for prescription drugs. The rest of the necessary savings come from limiting Medicare payments for equipment such as wheelchairs and requiring co-payments for laboratory services.

The effort to have the provision in the final bill will benefit from having several powerful supporters in the Senate. Baucus is the top Democrat on the Senate Finance Committee, which has jurisdiction over tax issues. Committee Chairman Charles E. Grassley, R-Iowa, was the lead sponsor of the amendment.

Morgan and others are concerned that Rep. Bill Thomas may prefer to save the provision to attract rural legislators' support for a controversial proposal to include prescription drug coverage in the Medicare program.

"He will have to decide if he wants it in a Medicare prescription drug package," Morgan said.

Despite possible opposition from Bill Thomas, supporters are optimistic that Baucus and Grassley will fight for it.

"It is unlikely that senators Grassley, Tom Harkin, (D-Iowa), and Baucus will give this up without a fight," said Richard Coorsh, spokesman for the Federation of American Hospitals.