Last week, there were two significant developments in the ongoing effort to secure relief for hospitals and continuing care providers from the cuts contained in the Balanced Budget Act of 1997 (BBA).

GOP Leaders: First, on September 25, 2000, House Speaker Dennis Hastert (R-IL) and Senate Majority Leader Trent Lott (R-MS) sent a joint letter to President Clinton proposing "that an additional $21 billion be spent over the next five years to provide relief to Medicare providers, especially those that can ensure that Medicare plans that currently provide drug coverage to seniors continue to do so and expand their coverage to others.... We firmly believe this can and must be acted upon before we adjourn." The $21 billion figure cited by the Congressional leaders is the same amount of BBA relief proposed by President Clinton earlier this year. The president proposed over $9 billion in specific one-year relief for hospitals, teaching hospitals, disproportionate share hospitals (DSH), skilled nursing facilities (SNFs), and home health providers, and left the remaining $11 billion open for Congressional negotiations. In their letter, Speaker Hastert and Senator Lott signaled that they would spend a good portion of the remaining $11 billion on proposals to stem the tide of Medicare HMO exits from the Medicare marketplace. Unfortunately, neither the President nor Congressional leaders have proposed enough relief to ensure that GNYHA's top priorities are enacted and provide more resources for Medicare HMOs. These priorities include permanent, full market basket updates for hospitals and continuing care providers; permanent relief from further cuts to teaching and DSH hospitals; a capital transition provision for SNFs; relief from further Medicaid DSH cuts; and the repeal of the restrictions on the ability of legal immigrants to gain Medicaid and other publicly sponsored health insurance coverage. GNYHA has therefore stepped up its considerable advocacy activities, including the sponsorship of advertisements through the Coalition to Protect America's Health Care.

Commerce Committee: The second development was the House Commerce Committee's approval on September 26 of a $21 billion bipartisan BBA relief bill entitled "The Beneficiary Improvement and Protection Act of 2000." Because the Commerce Committee has jurisdiction over only Medicare Part B and the Medicaid programs, the hospital and SNF communities' top Medicare Part A priorities are not contained in the final bill. The bill does, however, include a gradual softening of the BBA cut in reimbursements for Medicare bad debts; a three-year moratorium on SNF Part B consolidated billing requirements through October 1, 2003; a further one-year extension of the moratorium on physical, occupational, and speech therapy caps; a further one-year delay in the 15% rate reduction for home health services; the elimination of further cuts to statewide Medicaid DSH allotments; the creation of an option for states to cover immigrant pregnant women and children under Medicaid and the State Children's Health Insurance Program (SCHIP) after the immigrant has lived in the United States legally for at least two years; a variety of Medicare+ Choice provisions including a minimum 3% premium update for Medicare+Choice plans and a variety of measures to encourage the entry of Medicare+Choice plans into rural areas; the elimination of the Medicare inflation factor cut for ambulance services in FY 2001 and FY 2002; and the imposition of a new prospective payment system for federally qualified health centers in 2001. The bill also eliminates the time limitation on Medicare benefits for drugs following an organ transplant, expands the areas eligible for Medicare reimbursement for telemedicine services (similar to videoconferencing), permits Medicaid beneficiaries to elect to return to the SNF in which they resided prior to a hospitalization, gives states the option to allow more entities to determine presumptive eligibility for Medicaid and SCHIP, simplifies the process to enable low-income Medicare beneficiaries to apply for assistance to pay copayments and deductibles, and extends the Welfare to Work Medicaid transition program by one year. The Commerce Committee bill also contains a provision that would limit the amount of funds reallocated among states under the SCHIP program. Under current law, the Federal government is required to reallocate funds from states that have not spent all of their SCHIP funds for FY 1998 to the nine states that have. New York is one of the nine states that has spent all of its FY 1998 allotment. Under the Commerce Committee provision, only 40% of the $1.9 billion that has not been spent would be reallocated to states such as NY over the next two years.

Engel and Medicaid: During the Commerce Committee deliberations, Congressman Eliot Engel (D-NY) offered an amendment that would have prevented the U.S. Health Care Financing Administration (HCFA) from promulgating new regulations that would hamper the ability of some states, including NY, to draw down Federal Medicaid funds through a change in the way the Federal government calculates so-called Medicare upper payment limits. Governor Pataki, GNYHA, and members of the NY Congressional Delegation have been concerned that new regulations, if not properly drafted, could cost NYS and its counties nearly $500 million in Federal Medicaid funding. Congressmen Jim Greenwood (R-PA) and Bobby Rush (D-IL) offered similar amendments, but all amendments were withdrawn due to opposition from the bipartisan leadership of the Commerce Committee. GNYHA is grateful to Congressman Engel for his advocacy, and continues to work closely with him, Governor Pataki, Clinton Administration officials, and other members of the New York Congressional Delegation to ensure that New York does not lose critical Medicaid funding.