10-12-2002

HEALTH: Spending Millions to Unleash Billions

Hospitals, doctors, and nursing homes have been pouring millions of
dollars into a Capitol Hill lobbying effort to unleash billions of dollars
from Medicare. The health care providers say they have been suffering
financially because of Medicare reimbursement rates that were slashed by
the 1997 Balanced Budget Act. If Congress does not reverse the cuts, they
insist, doctors, hospitals, and other facilities will be forced to reduce
care or turn seniors away altogether.


An American Medical Association ad, for example, warns senators to act now
"to avert a meltdown" in access to care. In another ad, the
Coalition to Protect America's Health Care declares a " `Code Blue'
for America's hospitals," one-third of which are losing money. The
coalition, which includes the American Hospital Association, state and
local hospital associations, and the U.S. Chamber of Commerce, says,
"Billions of dollars in new cuts took effect on October 1, making the
crisis even more urgent."


The hospital ads are part of a $30 million media campaign that's been
under way for more than two years but has reached a fever pitch as
Congress rushes toward adjournment and Election Day draws near. The ads
have aired on TV and radio in Washington and in states with hot Senate
races, and have run in various print publications, including National
Journal's CongressDaily.


Huge sums have also been spent on in-house and outside lobbying. From
January 2000 to June 2002, the AMA spent $39 million on federal lobbying
while the AHA spent $27 million, according to the groups' federal filings.
Although those expenditures were for a variety of matters, lobbyists for
the associations say that the Medicare "giveback" issue, as it
is called, has been at the very top of their agenda on Capitol Hill since
2000.


The situation is complicated because of yet another health care hot
potato: a proposed Medicare prescription drug benefit. Most members of
Congress seem ready to approve a "giveback" and restore higher
Medicare payments to hospitals, doctors, and nursing homes. But the
political parties, especially in the Senate, are far apart on the issue of
a Medicare drug benefit.


The House passed a Medicare prescription drug bill in June that included a
Medicare "giveback" provision of $30 billion over 10 years for
providers hurt by the 1997 cuts. It included an increase of $14 billion
for hospitals, $11.5 billion for physicians, and the rest for nursing
homes, home health companies, and other providers.


But things are bogged down in the Senate, which is awaiting action on a
stand-alone $43 billion "giveback" bill. It includes about $25
billion over 10 years for hospitals, $11.5 billion for doctors, and the
rest for other providers. Sens. Olympia Snowe, R-Maine, and John Breaux,
D-La., have vowed to attach a Medicare drug benefit to any relevant health
care bill, making any Medicare "giveback" a prime
target.


"There is no question it's made it more complicated," said
Richard Corlin, a Santa Monica gastroenterologist and immediate past
president of the AMA.


When new reductions kicked in on October 1, physicians began facing a 12
percent payment cut over the next three years. Doctors say they have
already been hit by a 5.4 percent cut this year and cannot absorb more. In
a recent AMA survey of its members, 42 percent said they would stop
participating in Medicare next year if payments weren't changed.


"It's the perfect-storm situation," Corlin said. "We've got
these cuts that everybody indicates are inappropriate, yet they're not
fixing it. And we're [seeing] an increasing number of Medicare
recipients."


The AHA points out, meanwhile, that Medicare payments account for almost
40 percent of the average hospital's annual gross revenues. "We've
been doing the basic blocking and tackling for over a year in an effort to
deal with this," said Richard Pollack, the AHA executive vice
president for congressional and public affairs.


Health care providers, one lobbyist said, are focused on "eight
Senate races that are really significant" with the intent of
persuading candidates to lobby their party leaders. The outcome of those
races could hold the key to which party controls the Senate. For example,
hospital groups persuaded Sen. Timothy P. Johnson, D-S.D., who is locked
in a tight re-election race, to send a letter last month to Senate Finance
Committee Chairman Max Baucus, D-Mont., asking for an extension on a
particular Medicare laboratory-billing provision.


The American Association of Health Plans, which represents HMOs, has also
been working the issue. AAHP member companies are partners with the
government on Medicare+Choice plans that provide seniors with benefits
beyond what Medicare alone can offer. In 2000, these plans received a
temporary reimbursement increase, which has since expired. Meanwhile, many
plans are pulling out of states where the service is unprofitable.


AAHP's grassroots outfit, the Coalition for Medicare Choices, boasts
230,000 seniors, many of whom visit Capitol Hill annually to tell Congress
to keep Medicare funding flowing to the HMOs. "If you're a senior on
a fixed income, you care about this and you vote on it," said Karen
Ignagni, president and CEO of AAHP.


Health care lobbyists argue that the "giveback" bill shouldn't
be held hostage by the prescription drug legislation. "We cannot let
Medicare providers' foundation crumble while we're talking about other
things to add to the program," said Corlin of the AMA.


April Fulton

National Journal