[Congressional Record Volume 146, Number 81 (Friday, June 23, 2000)]
[Extensions of Remarks]
[Pages E1099-E1100]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              HIGH NEED HOSPITAL MEDICARE RATE RELIEF ACT

                                 ______
                                 

                        HON. JOHN J. DUNCAN, JR.

                              of tennessee

                    in the house of representatives

                         Friday, June 23, 2000

  Mr. DUNCAN. Mr. Speaker, I recently introduced the High Need Hospital 
Medicare Rate Relief Act of 2000 to address the unintended consequences 
of the Balanced Budget Act of 1997. It had a disproportionate impact on 
hospitals that serve especially large numbers of Medicare and Medicaid 
patients. These hospitals are located in our most rural communities and 
in our largest urban areas and include sole rural hospitals and large 
academic medical centers.
  What they have in common is the overwhelming amount of care they 
provide to our Country's elderly and poor, insured and uninsured. It is 
their service mission that distinguishes them and now puts them at 
grave financial risk.
  With the revenue stream heavily weighted toward Medicare and 
Medicaid, these 600 or so safety net hospitals are more dependent on 
federal and state reimbursement than any other hospitals. They have 
relatively few commercially insured patients, and therefore, little or 
no ability to offset Medicare costs. This financial problem is 
exacerbated by the large numbers of uninsured patients that rely on 
these same providers for care.
  We are talking about the providers that make up the Nation's health 
care safety net. The High Need Hospital Medicare Rate Relief Act of 
2000 defines these hospitals as ones whose combined Medicare and 
Medicaid inpatient days exceed 65 percent and whose Medicare 
disproportionate share percentage exceeds 40 percent. The Act targets 
relief to these high-need hospitals through two separate payment 
mechanisms.
  First, this bill directs the Secretary of Health and Human Services 
to calculate a qualifying hospital's market basket update--or inflation 
adjustment--for federal fiscal years 2001 and 2002 as if there had not 
been a 1.8 percentage reduction in the market basket adjustment for 
fiscal year 2000. By restoring the rate base at these hospitals for 
purposes of calculating future year rates, this proposal would 
partially offset the accumulated cuts inflicted by the

[[Page E1100]]

Balanced Budget Agreement, which are compounded each year due to 
Medicare's rate setting methodology.
  Second, since there is no uniform measurement of uncompensated care, 
this legislation provides a 2 percent adjustment to the Medicare 
inpatient rates of high-need hospitals to reflect the added costs 
incurred by providing large amounts of uncompensated care. The rate 
supplement is authorized for three years, with the expectation that new 
federal and state insurance initiatives will gradually reduce the 
number of uninsured patients.
  The High Need Hospital Medicare Relief Act of 2000 targets relief to 
safety net hospitals across the Country from Tennessee to California 
and ensures that vulnerable patients have continued access to essential 
health care services.

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