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Federal relief will be divided among the 50 states

BBA refinement measure will ease providers’ pain

Even though the Balanced Budget Refinement Act of 1999, recently signed by President Bill Clinton, will bring health care providers much needed relief, it’s too late for some health care facilities that were forced to forego some programs, halt projects and eliminate positions to withstand the blow from the Balanced Budget Act of 1997.

“The Balanced Budget Refinement Act may have done us some good if we still had our skilled nursing unit,” said Tim Thomas, administrator for Newton County Hospital. “Some changes were made with skilled nursing units but we had already reacted to that and had closed ours.”

Relief from the bill will come in mid-2000, with the largest portion coming from the elimination of a 5.7% across the board rate cut for outpatient services. Almost $1.4 billion will be restored to SNFs over five years.

“For rural hospitals, there wasn’t a whole lot in it,” Thomas said. “For small hospitals with delayed or postponed outpatient reimbursement, it will be very helpful, but we weren’t under that yet and it won’t put any money in our pockets that has already been taken. We were hoping to get Medicare reimbursement improved and, of course, that didn’t happen. Outpatient reimbursement and the fact that they’re going to exempt or postpone rural hospitals under a certain number of beds and phase in larger hospitals over a period of time rather than making it all at once probably has the most benefit to all hospitals. That wasn’t a cut we already had. It was one we were going to get that would have been very detrimental.”

After it became clear that the nearly $200 billion in Medicare cuts threatened access to care, jobs and the survival of many of the state’s health care providers, the health care and business communities lobbied for Congress to restore funding. Over a five-year period, the refinement measure will restore about $17 billion to Medicare, half of which goes to the nation’s hospitals and health systems.

“We should all be proud that, working together, we made Congress aware of the dramatic harm the Balanced Budget Act’s Medicare reductions were causing in communities across Mississippi,” said Thomas Bland, chairman of the Mississippi Hospital Association, established in 1931 that serves more than 100 hospitals and health care systems. “Not only is it unprecedented for Congress to restore Medicare provider cuts, but at the beginning of this year, few in Washington thought it could be done.”

Home health and skilled nursing facilities were big winners, Thomas said. Approximately $1.3 billion will be restored to home health agencies.

Jean McCarty, executive director of Mississippi Association for Home Care, said home health agencies are “real pleased over the postponement of the 15% reimbursement cost limits cut.”

“The 15% reimbursement cost limits cut was first scheduled for October 2000,” she said. “The 15% cut is postponed until a year after the PPS (prospective payment system) goes into effect and until after a study has been performed to determine if the 15% cut is necessary. We have our PPS proposed regulations that were published in November. We’ll be working real hard to prove to Congress that the 15% cut is not necessary.”

Sam Cameron, president and CEO of MHA, said U.S. Senate Majority Leader Trent Lott (R-Miss) stood up for Mississippi’s health care community in the final days of the debate.

“He was the lead negotiator and helped craft the final relief package,” Cameron said. “We want to publicly thank Sen. Lott and our other members of Congress for their help and support.”

Federal relief will be divided among the 50 states, using a complex series of federal government formulas devised to distribute health care funds. MHA is in the process of determining Mississippi’s share.

“It’s important to realize this is only a first step, and we’ll work with Congress and the administration to further restore Medicare funding,” said Brent Alexander, vice president of government relations and communications for MHA.

With a comment period until Dec. 27, home health providers are discussing technical aspects of the PPS, McCarty said.

“We’re concerned about some of the regulations and when reimbursements would come,” she said. “Some of the regulations in place now might present cash flow problems for home health agencies. The last IPS had different regulations and caused serious cash problems. Not all of the home health agencies are for profit. They’ve exhausted lines of credit and supplementary avenues of income in most situations. If they start the PPS with no resources to carry them through the dry spells of reimbursement, it’s going to be very detrimental to a lot of them. Home health agencies are still at risk and they will continue to be at risk under PPS.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or mbj@msbusiness.com.

About Lynne W. Jeter

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