ACTION

FROM THE COMMITTEE ON WAYS AND MEANS
Subcommittee on Health

FOR IMMEDIATE RELEASE, Contact: (202) 225-3943
October 18, 1999
No. HL 1-A

Congressman Bill Thomas (R-CA), Chairman of the Subcommittee on Health of the Committee on Ways and Means, today announced that on Friday, October 15, 1999, the Subcommittee ordered favorably reported to the full Committee, as amended, H.R. 3075, the "Medicare Balanced Budget Refinement Act of 1999," by voice vote.

BACKGROUND:

The Balanced Budget Act of 1997 (P.L. 105-33) fundamentally changed the Medicare program. It offered more choices, expanded preventive benefits, gave the Secretary of the U.S. Department of Health and Human Services additional tools to fight waste, fraud, and abuse, and modernized the fee-for-service part of the program through new payment systems. The changes enhanced and extended the financial life of the Medicare program.

DESCRIPTION OF H.R. 3075 AS APPROVED:

• Administrative Action - The bill would also call on the Administration to fully implement those areas that Congress envisioned when it passed the Balanced Budget Act of 1997.

• Strengthen Rural Hospitals - The bill would increase flexibility in determining payment status and flexibility of rural hospital bed use (swing beds), would extend the Medicare Dependent Hospital program for rural areas, would provide financial relief to some sole community hospitals, and would modify 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.

• Expand the Number of Critical Access Hospitals - The bill would adopt a new average 96-hour length of stay for patients in rural areas, and would allow hospitals that closed or downsized within the last 10 years to convert to a critical access hospital.

• Offer Beneficiaries More Flexibility Through Medicare +Choice - The bill would offer incentives for health care providers entering counties that do not currently offer managed care plans and would allow plans to offer seniors more choices by varying benefit packages.

• Improve Outpatient Rehabilitation Services - The bill would provide for separate $1,500 caps for physical and speech therapy services and would exempt 1 percent of high-acuity patients for two years.
  
  
• Maintain the Vitality of Teaching Hospitals - Payments to teaching hospitals would be increased and rural hospitals would be permitted to increase their Medicare resident numbers to better serve rural beneficiaries.
  
  
• Preserve Hospitals' Ability to Better Coordinate Care - The bill would require the Health Care Financing Administration (HCFA) to preserve hospitals' ability to coordinate care for patients.
  
  
• Ensure Smooth Transition for Outpatient Hospitals Switching to Prospective Payment System (PPS) - The bill would create "outlier" adjustments for high-acuity patients, would adjust payments for innovative medical devices and drugs, including orphan/cancer drugs, and would provide targeted incentives to increase hospital efficiency.
  
  
• Ensure Availability of Home Health Care - The 15 percent scheduled reduction in payment reductions to home health agencies would be delayed until one year after implementation of the PPS. The bill would also assist agencies with added paperwork and record-keeping costs. The bill would also call on HCFA to waive interest on repayments to Medicare made by home health agencies for three years.
  
  
• Increase Care for Medically Complex Skilled Nursing Facilities (SNF) Patients - SNFs caring for medically-complex patients would receive adjustments in their payments. In addition, the bill would increase the Federal per diem rate for SNFs in fiscal year 2001.
  
  
• Increase Ability to Offer Prostheses, Cancer Fighting Drugs, and Ambulance Services - The bill would allow separate billing by SNFs for certain prosthetic devices, chemotherapy drugs, and ambulance and emergency services.
  
  
• Improving Graduate Medical Education (GME) - Indirect Medical Education payments would increase and a more equitable structure would be used for direct GME payments to teaching hospitals nationwide.
  
  
• Provide Payment Updates for Renal Dialysis and Durable Medical Equipment - The bill would increase payments for renal dialysis treatments and durable medical equipment such as wheelchairs.
  
  
• Helping Long-Term and Psychiatric Hospitals - The bill would adjust the payment system for existing long-term and psychiatric hospitals through increased continuous improvement bonus payments through fiscal year 2002. The bill would also require the Secretary to develop and implement a PPS for these services.
  
  
• Payments for Physicians Caring for Beneficiaries (Sustainable Growth Rate) - The bill would modify the calculation of the sustainable growth rate in order to stabilize Medicare payments to physicians.