June 20, 2000

Congressman Ken Bentsen (D-Texas) applauded a plan that President Clinton announced today to provide $40 billion more over ten years than current law allows for Medicare and Medicaid reimbursements to health care providers.

"This is an important first step in ensuring that our nation's hospitals receive the health care dollars that they need," said Congressman Bentsen.

The President's initiative includes three important provisions that would provide $10 billion more over 10 years for our nation's hospitals, such as those at the Texas Medical Center. "It is critical that we support our teaching hospitals in this era of managed health care," Congressman Bentsen said. "It will ensure stable, guaranteed funding to train future doctors and other health care professionals and conduct vital clinical research. This is an essential step toward ensuring that the United States continues to have the best health care system in the world."

The President's plan includes three provisions to invest $5 billion in hospitals over 5 years ($10 billion over 10 years) by:

-eliminating reductions in Medicare disproportionate share hospital (DSH) payment rates for FY 2001 and freezing the Medicaid DSH allotments at the FY 2000 level

-eliminating payment reductions for indirect medical education (IME) for FY 2001

-increasing inpatient hospital payment rates in FY 2001 at the full market basket rate

The first provision of the Clinton plan is similar to an amendment to the FY 2001 Budget that Congressman Bentsen offered last February to restore Medicaid disproportionate share hospital (DSH) payments rates for hospitals. DSH payments are those payments which are paid to hospitals which serve a disproportionate number of low-income and underserved working families.)Under current law, hospitals are expected to receive lower DSH payments next year. Unfortunately, the final Budget Resolution, which passed along partisan lines, did not include the Bentsen amendment However, the President's new plan would repeal Medicare DSH payments for next year. This provision would save hospitals $200 million over five years. The President's plan would also freeze Medicaid DSH payments for next year and save hospitals $300 million over five years.

"Our hospitals which serve a disproportionate number of low-income and underserved working families must be given the means to continue their mission," Congressman Bentsen said.

The second provision of the Clinton plan is similar to efforts that Congressman Bentsen has led to ensure that hospitals are reimbursed for Indirect Medical Education (IME) Costs. (Under current law, Medicare pays a portion of the cost of graduate medical education costs for teaching hospitals such as those at the Texas Medical Center (TMC). The President's plan would provide $200 million more for Indirect Medical Education (IME) costs by freezing the IME payments at 6.5 percent for next year.

"Over the years, teaching hospitals have come to rely on the IME payments to help defray the costs of administering a teaching program," Congressman Bentsen said. "I am pleased that the President's plan will ensure that our nation's teaching hospitals get the support they need to train physicians."

The third provision increasing inpatient hospital payment rates in FY 2001 at the full market basket rate is also similar to the Budget amendment that Congressman Bentsen sponsored as a Senior member of the Budget Committee. Bentsen's plan would have repealed the Medicare PPS-hospital market basket reductions for FY 2001 and 2002.

A final provision included in the President's plan would provide $1 billion more in payments for home health agencies. "Home health agencies have been shown to save health care dollars and to help Medicare beneficiaries to receive the health care services they need in their homes," said Bentsen. The Clinton plan would delay the 15 percent cut included in the Balanced Budget Amendment of 1997. Congressman Bentsen has co-signed a letter supporting this delay in reductions for home health agencies.

After today's announcement, the President's plan will become part of the on-going budget debate on reforming Medicare. "We must take action to correct the unforeseen problems brought on by the BBA language of 1997 by passing these critically important Medicare reforms," Congressman Bentsen said. "We must assure the availability of an affordable, meaningful option to all elderly and disabled Medicare beneficiaries."

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