Liberty Place, Suite 700
325 Seventh Street, NW
Washington, DC 20004-2802
(202) 638-1100 Phone

Monday, June 24th 2002

Dear Representative:

On behalf of the American Hospital Association's (AHA) more than 5,000 hospitals, health systems, networks, and other providers of care, I am writing to express our support for H.R. 4954.  We believe this legislation will take another step forward in addressing the unintended consequences of the Balanced Budget Act (BBA), as well as improve payments for all hospitals, particularly rural hospitals.  Consequently, we support this legislation, and urge Members to vote in favor of its passage when it reaches the House floor.

The legislation includes a number of provisions that provide relief to hospitals, and therefore begins to address the pressures America’s hospitals are experiencing today.  Such provisions include:

  • An increase of market basket minus .25% in Fiscal Year 2003 for all hospitals except for Sole Community Hospitals, who will receive full market basket in Fiscal Year 2003, and no reductions in market basket updates for all hospitals in Fiscal Year 2004 and beyond;
  • Adjustments for Indirect Medical Education (IME) of 6.0% in Fiscal Year 2003 and 5.9% in Fiscal Year 2004;
  • Equalization of the standardized amount for rural and other urban hospitals, phased in over a two-year period;
  • Increases in Medicare DSH payments to rural hospitals and other hospitals of fewer than 100 beds;
  • Improvements in the Critical Access Hospital program, and
  • Increases in Medicaid DSH payments to begin to address the reductions scheduled for fiscal year 2003 and beyond.

In addition, the bill will provide relief for skilled nursing facilities, permanently eliminate the upcoming 15% reduction in home health payments, continue the 10% add-on for rural home health agencies, and accelerate the buy-down of beneficiary coinsurance for Medicare outpatient hospital services.

We look forward to working with the Senate and in conference to achieve further refinements to the bill.  Again, we urge your support of H.R 4954.


Dick Davidson


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