November 12, 1999
(Washington, D.C.)--The Texas Medical Center and Texas families are set to benefit from a tentative agreement reached last night between Congressional and White House negotiators on a package of revisions to the 1997 Balanced Budget Act, announced Congressman Ken Bentsen, (TX-25).
Congressman Bentsen, who has actively pushed for passage of legislation to correct the unintended cuts that resulted from Medicare provisions included in the 1997 Balanced Budget Act, hailed the agreement. "It is appropriate and necessary for us to revisit the BBA and not allow unintended consequences to adversely affect our nation's medical education and teaching hospitals-- including those in my district in Texas," Congressman Bentsen said.
Congressman Bentsen's district, home of the Texas Medical Center, has several hospitals that would benefit from the change in medical education funding included in the agreement. These hospitals include St. Luke's Episcopal Hospital, Methodist Hospital, the Harris County Hospital District, M.D. Anderson, and Memorial Hermann Hospital.
"This agreement is an important step toward ensuring that our nation continues to support its 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."
The revisions recently agreed to would "give back" $12 billion over five years to hospitals, nursing homes, home health agencies, managed care plans, and other health care providers who have suffered since passage of the 1997 bill that cut deeper than Congress intended. One of the critically important provisions of the "give back" bill would benefit teaching hospitals nationwide comes from a change in how the formula for medical education funding is determined at the federal level.
"This provision would ensure that Texas hospitals receive an equitable reimbursement formula based upon a national per residency formula," Congressman Bentsen said. "No longer would Hermann Hospital receive $6,924 per resident while Beth Israel Medical Hospital in New York City receives $57,000 annually for the same medical student. This disparity would be eliminated."
The provision containing this change is based on legislation (H.R. 1224) Bentsen has introduced with Congressman Ben Cardin (D-MD) to correct the current funding disparity nationwide. "This provision replaces the existing system with a more equitable one based upon actual resident salaries and fringe benefits while adjusting them for area wage indices in addition to changes in the consumer price index," the Congressman continued."We must level the playing field for Hermann and other hospitals in order to ensure fairness and quality patient care. This Medicare ‘Giveback' Bill goes far to address the inequities our teaching hospitals suffer."
Specifically, in regards to the per resident amount for Direct Graduate Medical Education (DGME) payments, the recent agreement provides for the establishment of what conferees are calling a DGME "corridor" surrounding a weighted standardized national average per resident amount.
Those hospitals with per resident amounts below 70% of the national average would see their payment increase to 70% level and updated annually for inflation.
For those hospitals above 140% of the national average, their payments would be frozen at current levels in FYs 2001 and 2002 and updated by market basket minus two in FYs 2003, 2004, and 2005.
All those between 70% and 140% of the national average would continue to receive their current payment levels, updated annually by inflation.
Also included in the agreement for the "Giveback" bill is a freeze on BBA's reductions in the Medicare Indirect Medical Education (IME) payment, saving teaching hospitals approximately $700 million. Specifically, the deal includes a two-year IME freeze at 6.5% in FY 2000 and 6.25% in FY 2001. In FY 2002 and thereafter, the IME would be reduced to 5.5%. (Under the BBA, IME payments are reduced from 6.0 in FY 2000 to 5.5% in FY 2001.) This provision is a significant improvement from current law and H.R. 3075, which freezes IME at 6% in FY 2001.
Another legislative priority of Congressman Bentsen's that would be accomplished in the agreement is a provision that would educate nurses and other allied health professionals to care for the nation's sick and injured through teaching hospitals. "This budget-neutral and bipartisan initiative will empower hospitals and education programs to supply the critical allied health and nursing workforce in the 21st century, and provide vital services to Medicare beneficiaries."
Finally, also of great significance to Texas under the agreement is the adjustment of the Children's Health Insurance Program (CHIP) funding formula that lifts the sunset provision for the $500 million in funds available to states for outreach to families losing welfare but still eligible for Medicaid. (The 1997 welfare reform law separated eligibility systems for TANF and Medicaid. As part of that law, Congress allocated $500 million to states that can be used for outreach an other activities to improve eligibility systems to get poor families and children health insurance through Medicaid, even if they are losing TANF funds.)
"Texas is eligible for more than $27 million of this allocation, but eligibility of these funds is scheduled to expire on December 31, 1999," Congressman Bentsen said. "Lifting the sunset provision will give Texans more time to make the best use of these monies."
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