A complete summary of the 15 point plan follows below at the end of the news release.

Lucas spent yesterday reviewing the provisions of the legislation called "The Medicare Balanced Budget Refinement Act," and upon seeing the provisions specifically addressing rural health care–the overriding topic of conversation between Lucas, Thomas and Oklahoma health leaders two weeks ago–immediately signed onto the bill as an official cosponsor.  

"Our health care providers are struggling across the nation in large cities and small towns. But the challenge to keep hospital doors open and home health administration services going is nowhere more difficult than in rural America where we have a higher percentage of Medicare beneficiaries as patients," Lucas said.  "I wanted Chairman Thomas to really understand the financial hurt we are feeling out in Oklahoma, and I can honestly say our input was heeded in the legislation the Chairman unveiled yesterday.

"I believe this legislation will move quickly in the House," Lucas continued.  "At the same time, however, I am seeking out additional legislative answers to the problems we are feeling in the rural health care industry."

The legislation addresses the severe cuts in Medicare reimbursement rates that came into law as part of the "Balanced Budget Act of 1997."  Members who supported the BBA did so for many good reasons.  However, it became painfully evident that the provisions related to Medicare reimbursements are far too strict and are causing intolerable financial challenges.

Specifically for rural hospitals, the legislation adopts a new average 96 hour length of stay for patients in rural areas; allows hospitals that closed or downsized within the last 10 years to convert to a critical access hospital, which provides intense outpatient medical care; eliminates co-payments by beneficiaries for lab services; increases flexibility in determining
payment status and bed use; extends the medicare Dependent Hospital program; provides financial relief to some sole community hospitals; modifies a grant program to permit hospitals to obtain computer software and staff training to accommodate changes to new payment systems, among many other provisions.

Other aspects of the legislation include incentives for health care providers entering counties that do not currently offer managed care plans; allows plans to offer seniors more choices; improves outpatient rehabilitation services; maintains the vitality of teaching hospitals; preserves hospitals' ability to better coordinate care; ensures smooth transition for outpatient hospitals switching to the new payment system; just to name a few of the 15 points of the plan.  To see all points of the plan and details describing each, please see the summary that follows below this release.

"We have had 32 closures of home health agencies in 1997-1998 alone and the estimate of hospital closing in Oklahoma through 2002 stands at 23 if we don't take some action now," Lucas continued.  "Our hospitals, nursing homes, home health agencies and other health providers have financially slimmed themselves down to negative operating margins.

"We have asked far too much of our rural health care providers," Lucas continued.  "Right now is the time to give the Medicare system a shot in the arm or soon it will be too late for those of us living in rural America.  Our providers of health services will be far and few between."

Thomas' subcommittee intends to hold hearings on the bill Friday, October 15.

15 Point Plan to Strengthen Medicare
"The Medicare Balanced Budget Refinement Act"

    On October 13, 1999, Ways and Means Subcommittee on Health Chairman Bill Thomas announced a plan to strengthen and improve the Medicare program for current and future generations.  The plan also calls on the Clinton Administration to fully implement those areas that Congress envisioned when it passed the "Balanced Budget Act of 1997."  U.S. Sixth District Congressman Frank Lucas is an official cosponsor of the legislation.

MAIN FEATURES:

Strengthen Rural Hospitals – The refinement package increases flexibility in determining payment status and flexibility of rural hospital bed use (swing beds); extends the Medicare Dependent Hospital program for rural areas; provides financial relief to some sole community hospitals, and; modifies the existing Rural Hospital Flexibility Grant Program to permit rural hospitals to obtain computer software and staff training to accommodate changes to new payment systems. 

Critical Access Hospitals – The plan adopts a new average 96 hour length of stay for patients in rural areas; allows hospitals that closed or downsized within the last 10 years to convert to a critical access hospital, which provides intense outpatient medical care; eliminates co-payments by beneficiaries for lab services.

Offer Beneficiaries More Flexibility Through Medicare +Choice –  The plan will offer incentives for health care providers entering counties that do not currently offer managed care plans; allow plans to offer seniors more choices by varying benefit packages; allow Medicare+Choice beneficiaries an open enrollment period when they learn that their plan is ending its contract.

Improve Outpatient Rehabilitation Services – Provides for separate $1500 caps for physical and speech therapy services and exempts 1% of high acuity patients for 2 years.

Maintain the vitality of teaching hospitals – Permits rural hospitals to increase their Medicare resident numbers to better serve rural  beneficiaries.

Preserve Hospitals' Ability to Better Coordinate Care – The plan requires Heath Care Financing Administration (HCFA) to preserve hospitals' ability to coordinate care for patients and improve the accuracy in calculating Medicare payments to hospitals with a disproportionate share of beneficiaries (DSH).

Ensure Smooth Transition for Outpatient Hospitals Switching to New Payment System – Creates an "outlier" adjustment for high acuity patients; adjusts payments for innovative medical devices, drugs and biologicals, including orphan and cancer drugs; and provides targeted incentives to increase hospital efficiency. 

Ensure Availability of Home Health Care – Beneficiaries will receive increased access to home health care services through delaying 15 percent payment reductions to home health agencies until one year after implementation of the prospective payment system (PPS).  The plan also assists agencies with added paperwork and record keeping costs.  The plan also calls on HCFA to waive interest on repayments to Medicare made by home health agencies. 

Increase Care for Medically Complex SNF Patients – Skilled nursing facilities (SNFs) caring for medically complex patients will receive adjustments in their payments.  In addition, the plan increases the Federal per diem rate for SNF "market baskets."

Increase Ability to Offer Prostheses, Cancer Fighting Drugs and Ambulance Services--Allows separate billing by skilled nursing facilities for certain prosthetic devices, chemotherapy drugs, and ambulance and emergency services.

Improving Graduate Medical Education (GME) – Freezes the Indirect Medical Education (IME) program for one year and adopts a more equitable structure for direct GME payments to teaching hospitals nationwide.

Provide Payment Updates for Renal Dialysis, and Durable Medical Equipment – The plan improves beneficiaries' access to renal dialysis treatments and durable medical equipment such as wheelchairs.

Helping Long-Term and Psychiatric Hospitals – Adjusts the payment system for existing long-term and psychiatric hospitals through increased continuous improvement and bonus payments through FY 2002.  The plan also requires the Secretary to develop and implement a payment system based on discharge of patients.

Maintain Risk Adjuster Payment Demonstration Project for Frail Elderly – The plan calls on the Administration and HCFA to continue a demonstration project that will help those special needs seniors.

Update Payments for Physicians Caring for Beneficiaries (Sustainable Growth Rate) – The plan modifies the way doctors are paid for treating patients, based on a sustainable growth rate (SGR) that stabilizes Medicare payments to physicians.