Liberty Place, Suite 700
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(202) 638-1100 Phone

Friday, November 21st 2003

Dear Representative:

On behalf of our nearly 5,000 member hospitals, health care systems, networks and other providers of care, and the patients and communities they serve, the American Hospital Association is writing to express our strong support for the conference report on H.R.1, the Medicare Prescription Drug, Improvement and Modernization Act of 2003.  We strongly urge all senators and representatives to vote for this important legislation.

H.R.1 achieves two critical objectives that affect millions of Americans:  It provides a much-needed prescription drug benefit for America’s seniors, and it protects and improves access to high-quality hospital care for those seniors and for other patients across the nation – especially in rural areas.

Specifically, the legislation:

  • Eliminates the disparity in Medicare’s standardized amount between “large urban” and other hospitals by ensuring that all hospitals receive the large urban rate in perpetuity;
  • Minimizes the negative impact of an unreasonably low wage index by reducing the portion of the Medicare payment that is adjusted downward for hospitals with a wage index of less than 1.0, while holding all others harmless;
  • Provides much-needed assistance to America’s teaching hospitals and academic medical centers by improving indirect medical education (IME) payments beginning in April 2004;
  • Improves payments to hospitals that serve a disproportionate share of low-income patients by increasing Medicaid Disproportionate Share Hospital program (DSH) state allotments by $3 billion;
  • Grants additional relief to rural and small urban hospitals by increasing the Medicare DSH cap from 5.25% to 12%, and makes much-needed improvements in the Critical Access Hospital program;
  • Protects communities’ access to the entire range of health care services provided in full-service community hospitals by providing an 18-month moratorium on new physician-owned specialty or niche hospitals while MedPAC and HHS study the issue; and
  • Does not reduce the inpatient inflation update for FY 2004, and provides an opportunity for hospitals to receive a full update in FY 2005-2007.

All of these provisions will help the people of America’s hospitals take care of the patients and communities they serve.  We strongly urge Congress to pass, and the President to sign, this historic legislation.


Rick Pollack
Executive Vice President

This letter was sent to all members of the House and Senate

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