Heath-care lobby seeking Medicare relief

Friday, July 28th 2000, 12:00 am
By: News On 6

WASHINGTON – Health-care groups, diagnosing their financial conditions as critical, have launched a pre-election lobbying push urging Congress to restore billions of dollars cut from the Medicare budget.
Trade groups for hospitals, home-health agencies, nursing homes and HMOs attribute their dire straits to cuts made in 1997 to balance the budget.

If lawmakers fail to act this year, these groups warn that providers could shut down and patients could lose access to much-needed care.

The fate of popular health-care proposals – a patients' bill of rights and a prescription drug benefit for senior citizens – appears bleak, congressional aides say.

But lawmakers and lobbyists alike agree that Congress will approve higher payments for health-care providers before adjourning.

"There's no question we reduced more than what was necessary," said Sen. Robert Kerrey, D-Neb. "We need to go back now and correct that mistake."

Senior citizens and other patients have experienced the fallout of the recent health-care financial crisis, from the closing of some home-health agencies to the scaling back of hospital services.

But current problems do not represent a widespread epidemic, say independent experts such as Marilyn Moon of the Urban Institute. They have warned Congress not to spend money indiscriminately, because enough medical choices remain in the marketplace.

"Everybody is suddenly there with their hand out, and everybody will get a little bit, which is not the way to do it," said Ms. Moon, a senior fellow at the Washington research group. "There will be a lot of bad policy done at the 11th hour when this is all being negotiated."

She and others say Medicare has overpaid many companies for years. And they blame the firms' current financial woes on shoddy business decisions, competitive pressures and inadequate reimbursements from private insurance plans.

"We don't think everybody's plea is equally justified," said Gail Wilensky, chairwoman of the Medicare Payment Advisory Commission, an independent organization that advises Congress.

Last year, lawmakers restored $16 billion in Medicare reductions at the urging of health-care groups, and $10 billion of that has yet to be paid. Lobbyists are now seeking an additional $50 billion or more.

A national coalition of hospitals said this week it will spend $30 million in the next 18 months, including $1.6 million on advertisements during the political conventions. The trade group representing health maintenance organizations said it would encourage seniors to call members of Congress and show up at their offices.

"We're really into a rescue mission," said Karen Ignagni, president of the American Association of Health Plans in Washington. "We're no longer talking about a midcourse correction."

In its quest to balance the budget in 1997, Congress cut Medicare payments and slowed the program's rate of inflation, projected to save the government $103 billion over five years.

The savings are now projected to reach about $280 billion.

The Congressional Budget Office attributes the revised figure to low inflation and a fraud crackdown within the Medicare program. Health-care groups say the figures prove bureaucrats underestimated the impact of their cost-cutting.

Whatever the cause, health-care companies nationwide report widespread cutbacks:

•One-third of the hospitals are losing money on operations.

•At least one-fourth of nursing homes are reorganizing under bankruptcy court supervision.

•Health maintenance organizations are hemorrhaging cash and withdrawing from the Medicare program, forcing 934,000 senior citizens to find new coverage or return to the traditional Medicare program on Jan. 1.

•Sixty percent of home-health agencies in Texas shut their doors between August 1997 and March 2000. Currently, 47 counties have no home-health services, compared with 19 before the cuts took effect.

"When you start losing agencies, what are seniors in those counties going to do?" said Anita Bradberry, executive director of the Texas Association for Home Care in Austin.

"Go to the hospital or a nursing home.

"Eventually, it will come back around because their costs will start to show up higher," Ms. Bradberry said.

A strong bipartisan majority of Congress supports additional relief this year, and President Clinton has proposed $21 billion in additional spending over five years.

Hospitals have asked for $15 billion to $25 billion over five years; HMOs want $15 billion; home-health agencies want up to $8 billion; and nursing homes seek about $10 billion.

Dr. Wilensky of the Medicare panel said increased payments should be directed toward hospitals and home-health agencies because seniors are at the greatest risk of losing access to those services.

Rep. Silvestre Reyes, D-El Paso, said he has received phone calls from hospital leaders and patients in his district. He has signed on as a co-sponsor to two bills.

"This is one of the biggest issues of concern, at least in my district," he said. "It's not hard to figure out that the hospitals are telling patients to complain to their elected officials."

One senior citizens' advocacy organization told a congressional hearing Tuesday to spend money on projects that will directly benefit older Americans. This includes prescription drug coverage, new preventive care benefits and lower outpatient co-insurance rates.

The group also supports targeted payment increases to providers.

"If all Congress does on Medicare this year is increase provider reimbursement rates, we suspect that beneficiaries' disappointment will turn to anger," said Howard Bedlin, vice president of the National Council on the Aging, which started Meals on Wheels.

But South Texas hospital administrator Don L. Richey testified that seniors suffer when health-care providers stumble.

Patients are forced to travel longer distances for treatment or seek care in settings that Mr. Richey considers less than optimal.

Mr. Richey said his employer, Guadalupe Valley Hospital in Seguin, has been forced to cancel equipment purchases, delay construction on an emergency room and obstetrics unit, and close its skilled-nursing facility.

"For our hospital the next round of cuts would put us in the red," said Mr. Richey. "We're marginally in the black today and fighting to stay there every way we can, including dramatic changes in plans that we had made for the future."