IME Update
In the midst of significant and growing gaps in state and federal budgets, the prospects for increased support for provider relief is diminishing. In January, efforts by Senators Kennedy and Clinton to restore Indirect Medical Education (IME) payments to the 6.5 percent level lacked broader support. At the same time, the MedPAC, the group that advises Congress on Medicare payments, recommended a reduction from the current 5.5 percent level to 2.7 percent over the next five years. The group also advocated for a slight reduction in Medicare reimbursements.
Physician Payment Provision Passes Senate
The Senate voted 69 to 29 to approve a 2003 omnibus spending bill that includes a provision to freeze Medicare physician payment rates at 2002 levels rather than enforce a 4.4% reduction set to take effect March 1. While the $390 billion appropriations bill must be reconciled with the House plan, physicians applauded the Senate for acting to avert the cut. Sponsored by Finance Committee Chairman Chuck Grassley (R-Iowa), the provision would maintain current rates until Sept. 30 at a projected cost of $800 million. The omnibus spending bill also includes a Grassley-sponsored provision to raise the inpatient base rate for rural and small urban hospitals to equal that of large urban hospitals, a $300 million plan that would begin April 1 and end Sept. 30. In addition, the bill would provide $40 million through Sept. 30 in add-on payments for rural home health agencies. Lobbyists said the physician payment provision has a good chance of surviving the House-Senate conference, but the rural hospital clause could be a tougher sell.
State Budget
At the state level, budget prospects continue to have a dampening impact on provider relief. In addition to a projected FY 04 deficit of up to $3 billion, the incoming Romney Administration has been challenged by a $650 million gap in the current state budget. In his first televised speech as Governor, Romney outlined a series of local aid cuts, elimination of state agencies and positions, and alluded to further efforts to reduce access to the Medicaid program as a means to narrow the budget gap.
Romney Appointments
Meanwhile, Governor Mitt Romney has made several health policy appointments to his new administration. Ron Preston, who served as the New England Regional Administrator for the U.S. Department of Health and Human Services for 12 years, has been named the new Massachusetts Secretary of Health and Human Services, succeeding Robert Gittens. Christine Ferguson, former Rhode Island Secretary of Human Services has been named Commissioner of the Massachusetts Department of Public Health, replacing Dr. Howard Koh.