[Congressional Record (Bound Edition), Volume 145 (1999), Part 17]
[Extensions of Remarks]
[Page 25301]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  BALANCED BUDGET ACT CUTS TO MEDICARE

                                 ______
                                 

                        HON. JOHN ELIAS BALDACCI

                                of maine

                    in the house of representatives

                      Wednesday, October 13, 1999

  Mr. BALDACCI. Mr. Speaker, Maine hospitals, home health agencies, and 
skilled nursing facilities are in a state of crisis. Congress must 
address this issue before we recess for the year.
  I am proud of the fact that Maine health institutions are efficient 
and perform above the norm nationwide in regards to quality of care. 
But now our providers, especially those in rural areas, are suffering 
disproportionately under the Balanced Budget Act Medicare cuts, and our 
resources are stretched to the limit. With the BBA Medicare cuts, our 
hospitals will lose $338 million over 5 years.
  Maine has the lowest Medicare inpatient operating margins in the 
country. In fact, our operating margins are in the negative. Because of 
these already too-low Medicare reimbursement rates, any cuts to 
Medicare hurt Maine that much harder. There are no more margins left to 
cut. Cost shifting will occur and this will hurt all Maine citizens.
  One area which particularly concerns me and my constituents is the 
effect of the interim payment system on home health agencies. The 
burden home health agencies have been asked to bear is extreme, 
especially when considering that the losses are spread among only 40 
providers in the state. I hope that a fix can be developed for home 
health providers that includes the elimination of the 15 percent 
reduction in payments due to begin October 2000. Home health agencies 
in my district also ask that an outlier payment be added to the Interim 
Payment System to adequately account for high-need, high-cost patients. 
A flexible overpayment schedule, interest-free, would be helpful to 
providers, as well as a gradual raise in the per beneficiary limits for 
agencies falling under the national median and the extension of 
Periodic Interim Payments.
  I am very concerned about the effects of the outpatient prospective 
payment system and the severe cuts Maine providers will experience 
under this reimbursement system. By HCFA's own admission in the May 7 
published rule, rural hospitals will take the biggest hit in 
reimbursements from the outpatient PPS. The total reduction in the 
first year for all institutions will be $900 million, or a 5.7 percent 
average reduction per facility. I hope we consider placing a ceiling on 
the level of cut any hospital would face to their outpatient 
reimbursements.
  Skilled nursing facilities are under particular burdens under the BBA 
as well. The prospective payment system is reducing payments by 20 
percent. Rural facilities, especially, do not have the operating 
margins to absorb such a drastic cut. There are no accounting methods 
to increase payments for medically complex cases. On a related front, 
many providers believe the $1,500 annual cap on therapy services is 
arbitrary and very hurtful for seniors. Many of these seniors have 
multiple therapy needs which can run out in a matter of months under 
this tight cap.
  Changes in reimbursement for Graduate Medical Education 
unintentionally hurt family practice training in districts such as my 
own. I hope that this body reviews the technical corrections to GME 
reimbursements contained in my bill, H.R. 1222, which addressed this 
issue. These corrections are especially important for rural 
communities, where there are still shortages of family practice 
physicians.
  Finally, I hope we consider as part of BBA corrective legislation the 
incorporation of provisions of H.R. 1344, the Triple-A Rural Health 
Improvement Act, developed by the Rural Health Care Coalition of the 
House. This bill is designed to address further the need for health 
care access for seniors in rural areas.
  We must take the initiative to attack the problem of inadequate 
provider reimbursements now. I urge my colleagues to support the 
restoration of some of the most-harmful BBA cuts.

                          ____________________