Washington…
The campaign to secure additional BBA relief attracts some MedPAC support. Support for additional Medicare payments to hospitals came from a surprising quarter in April when MedPAC, the group that advises Congress on Medicare payment rates, suggested that a larger inflation adjustment is warranted under the inpatient prospective payment system. MedPAC said that the update should be doubled, a change that would increase Medicare payments to Partners acute care hospitals by $7.4 million in FY 2001. MedPAC cited inflation, the cost of new drugs and technology, and changes in DRG coding as reasons for an increase. The move was a surprise because in recent years MedPAC has been critical of hospitals’ Medicare margins and argued that Medicare was simply subsidizing other payers. However, for the first time the group is making its recommendations using post-BBA data from 1998 and 1999 and noted that in 1998 hospital margins declined by more than one-third.
And on Beacon Hill…
The House finishes its budget debate and proposes some hospital/health center relief. After an
all-night session, the Massachusetts House of Representatives concluded debate on the FY 2001 budget on April 14. Of particular interest to Partners are the following amendments adopted by the House:
• Medicaid rate relief for hospitals: An amendment offered by Rep. Hynes and Speaker Finneran would provide $25 million to enhance Medicaid rates for hospitals in Massachusetts. This amendment was the result of an aggressive statewide campaign by hospitals, coordinated by MHA, that garnered the support of 83 House members and caught the attention of Speaker Finneran.
• Medicaid rate relief for health centers: An amendment offered by Rep. Fitzgerald would
provide $11.8 million to enhance Medicaid rates for health centers in Massachusetts. This amendment also includes language stipulating that health centers certified by DMA be paid at actual cost.
• Medicaid rate study: An amendment offered
by Rep. Chandler would require the appointment of an independent consultant to examine Medicaid rates in Massachusetts. The
amendment would require the consultant to examine rates paid to all providers from FY 1992 to FY 2001 and to analyze them as they relate to the cost of care, medical inflation, and other state and federal economic factors. The study would contain a review and comparison of Medicaid rates in states comparable to Massachusetts and would have to be filed with the legislature by December 1, 2000.
The Senate is expected to release its budget sometime in May. Partners will be making the case for increasing Medicaid rates for hospitals, advocating for physician increases, and supporting additional relief for health centers.