[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[Senate]
[Page 25824]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  HEALTH CARE FINANCING ADMINISTRATION


                    PAYMENTS FOR OUTPATIENT SERVICES

  Mr. GRAMM. Mr. President, I am very concerned about how the Medicare 
program has chosen to pay the 10 freestanding cancer hospitals for 
outpatient services. It appears that the Health Care Financing 
Administration has ignored the explicit intent of the provisions we 
enacted last year as part of the Balanced Budget Refinement Act--
provisions intended to help these critically important health care 
institutions.
  Mr. ROTH. Senator, I share the Senator's concern. Last year, the 
Congress was concerned about how cancer hospitals would fare under the 
new Medicare outpatient prospective payment system. Cancer hospitals 
face many unique costs and the advent of exciting new treatments caused 
many to question the wisdom of applying the new outpatient prospective 
payment system to these facilities. To this end, the Finance Committee 
proposed and the Congress enacted provisions to protect these important 
facilities.
  In brief, this provision created a permanent ``hold harmless'' for 
cancer hospitals. We instructed the Medicare program to pay cancer 
centers the same proportion of the facility's cost covered in 1996. In 
addition, we instructed the Secretary of the Department of Health and 
Human Services to make interim payments to these facilities consistent 
with this hold harmless.
  Mr. GRAMM. The Secretary has ignored our concerns and intent. The 
Secretary has allowed the Medicare program to withhold 15 to 20 percent 
of the interim payments owed to cancer facilities. The Medicare program 
will not pay cancer hospitals these withheld funds for up to 4 years.
  Mr. ROTH. I investigated this issue with the Health Care Financing 
Administration, HCFA, to ensure that they are not proceeding in a way 
that disadvantages these facilities and protects access to important 
cancer services. It is my understanding that the Medicare fiscal 
intermediaries are keeping the interim payments to these facilities 
artificially low in order to avoid the risk of overpayments.
  While I think it is appropriate to make interim payments to 
facilities as accurately as possible, paying these facilities as low as 
80-85 percent of what HCFA estimates final costs to be seems too low. 
If in fact these reductions are lower than previous rates of reduction 
when a system transition has been implemented, then I strongly urge 
HCFA to immediately review their proposal to make upward adjustments in 
the payment rates. Also, I urge the Administration to give special 
attention to the expeditious handling of the initial cost reports from 
cancer hospitals as they are submitted over the next few months in 
order to determine what appropriate payment levels need to be.
  Mr. GRAMM. I agree with the Senator. I believe that the Secretary's 
actions are counter productive and I strongly urge including language 
in the Congressional Record that would make our intent clear.
  Mr. ROTH. I, too, support restating within the Congressional Record 
our intent with regard to last year's Medicare bill.

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