Liberty Place, Suite 700
325 Seventh Street, NW
Washington, DC 20004-2802
(202) 638-1100 Phone
Friday, April 11th 2003
The Honorable Mark Foley
United States House of Representatives
104 Cannon House Office Building
Washington, DC 20515-3218
Dear Rep. Foley:
On behalf of the American Hospital Association's (AHA) nearly 5,000 member hospitals, health care systems, networks and other providers of care, I am writing to express our strong support for your bill, H.R.1710, The American Hospital Preservation Act of 2003. The AHA applauds your leadership to ensure that Medicare beneficiaries continue to receive access to hospital inpatient services.
Hospitals and health systems across America are struggling to meet the growing demands of burdensome regulatory requirements, new and costly technologies and a growing Medicare population. In fact, hospital expenses have increased 8.2 percent since Fiscal Year (FY) 1998, yet payment rates have increased by only 1.6 percent. Medicare's below-inflation updates have posed additional challenges for hospitals facing rising pharmaceutical and blood supply expenses, and administrative requirements that are not captured in the current update calculation, known as the market basket. Current Medicare payment updates have failed to keep pace with hospital inflation rates. Your bill seeks to remedy this inequity by providing an inflationary update to hospitals to "make them whole" for FY 2003 and beyond.
Also, you recognize the extra costs incurred in providing care in a teaching or academic institution. The Indirect Medical Education (IME) adjustment for FY 2003 was reduced by 1 percentage point, to 5.5 percent, by the Balanced Budget Act. Your legislation raises the adjustment to 7.5 percent for FY 2004 to recoup the FY 2003 reductions, and then freezes it at 6.5 percent for FY 2005 and beyond. This approach will allow teaching hospitals to continue educating our future physicians without further funding cuts.
We commend you for addressing two critical issues that will help maintain the highest quality of care for Medicare beneficiaries. We strongly support H.R.1710 and look forward to working with you and your colleagues to ensure swift passage of this legislation.
Executive Vice President
This letter was also sent to the Honorable Richard E. Neal