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Medicare Bill Includes Big Boost for Rural Health Care

Medicare Bill Includes Big Boost for Rural Health Care

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WASHINGTON - Tucked into the new prescription-drug package that Congress approved Friday is one of the biggest boosts for rural health care in a quarter-century, providing aid for hospitals and physicians whose location and small patient base are making it increasingly hard for them to stay in business.

"This literally is going to keep the doors open on some hospitals I represent," said Rep. Earl Pomeroy (D-N.D.), who broke with other House Democrats to vote for the Medicare bill.

The Senate included $25.3 billion over 10 years for health relief for rural areas, while the House padded its legislation with $27.2 billion. That money served as a little-noticed sweetener that pushed the legislation over the finish line, attracting members of Congress who feared the package otherwise would leave rural residents with little care.

It would be hard to exaggerate the role that rural-state lawmakers played in the Medicare debate. They hold key positions - starting with Sen. Charles Grassley (R-Iowa), who chairs the committee that wrote the Senate bill - and are deeply concerned that care in low-population areas is increasingly the weak spot in the American health-care system.

It was those lawmakers' concerns that helped kill President Bush's initial proposal to revamp Medicare. Some feared the private health plans promoted in Bush's blueprint as an alternative to Medicare would refuse to operate in less-lucrative rural areas, where residents tend to be older and sicker.

Rural lawmakers' concerns dominated committee negotiations. And worries about rural constituents are likely to color House-Senate negotiations as the bills are combined this summer in conference committee.

"We've got to make certain nothing gets done in conference that undermines rural health-care needs," said Sen. Ben Nelson (D-Neb.).

Although both the House and the Senate tried to take care of rural hospitals, doctors and patients, their approaches diverged, and critics say the House bill falls short of actually protecting rural interests.

Both versions provide more money for rural caregivers and eliminate a longtime provision under which Medicare paid rural hospitals less than urban ones.

But while the Senate bill requires Medicare to act as a safety net if private health plans refuse to operate in rural areas, the House measure does no such thing.

On the contrary, the House bill provides that the government would heavily favor private insurance companies in its health-care payments beginning in 2010. Some fear that could lead to the dissolution of Medicare, which they say would leave rural regions stranded.

A group of Democrats complained vigorously that the House bill would leave people in outlying areas with few choices and no Medicare safety net.

"This Republican plan transforms Medicare into Maybe-care," said Rep. Tom Allen (D-Maine).

But House Republicans said their approach simply injects competition into the health-care system, and they insisted that Democratic leaders were adopting political scare tactics. They said they would adjust the plan in coming years if it proved necessary.

"Will it work? I believe it will," said Rep. Jim Nussle (R-Iowa), a leader in boosting Medicare payments to rural areas. "Does that mean I'm going to stop worrying about it, watching it and monitoring it? Absolutely not."

In the Senate, leaders of both parties said the strong rural health provisions were critical to passage.

"That was imperative for people like me who represent predominantly rural states," said Sen. Olympia Snowe (R-Maine), an early critic of Bush's original Medicare reform plan.

And Senate Minority Leader Tom Daschle (D-S.D.) said before the vote that the Senate's protection of rural needs was the primary reason he was likely to vote for the bill, which he did.

Under Bush's initial proposal, senior citizens would have received bigger prescription benefits only if they agreed to enter private health plans and forsake Medicare's fee-for-service system. But Snowe and others quickly denounced this approach, saying insurance companies frequently abandon rural areas, leaving patients in the lurch.

Although that proposal was dropped, the president proclaimed Friday he was "pleased" at Congress' action.

"A stronger Medicare system that gives our seniors more choices and better benefits has been a central priority of my administration," Bush said in the Rose Garden. "I urge the Congress to reconcile their differences and to get a bill to my desk as quickly as possible."

Lawmakers also changed what they said was an inequity in the Medicare law, which provides a greater reimbursement to doctors and hospitals treating Medicare patients in urban areas than in rural settings.

Both bills would now provide the same reimbursement to doctors and hospitals regardless of geography, adding almost $8 billion to the cost of the legislation.

Grassley persuaded Bush to go along with equalizing payments earlier this year. He said Iowa and other rural states have a harder time recruiting and retaining physicians and other health-care providers because of the lower Medicare payments.

"Why would a newly minted physical therapist, nurse practitioner or family physician choose to open up shop or join a clinic in Iowa if they can get paid a lot more for the same work in another state?" Grassley asked in a recent column he writes for Iowa newspapers.

House Republicans touted their plan, saying they would start helping rural hospitals and doctors in 2004, a full year ahead of the Senate. Rep. Collin Peterson (D-Minn.) announced at a Republican pep rally Thursday that the aid to rural areas was the catalyst behind his vote.

"We in the rural areas have been having a hard time keeping our hospitals open and attracting doctors," Peterson said. "This is a very good bill for rural America."

But Rick Pollack, executive vice president of the American Hospital Association, said there still are big differences between the House and Senate hospital reimbursement packages and that the House version falls far short, in his view.

"The House takes with one hand and gives with another," he said.

The Senate would provide $18 billion to rural hospitals over the next decade, while the House would provide $17 billion.

But the House also would reduce existing increases tied to inflation for all hospitals. That would effectively cut $9 billion from rural hospitals, Pollack said, leaving only $7 billion over the next decade.

In Illinois, the Senate bill would increase payments to the state's 170 hospitals by $400.9 million over the next 10 years, with the bulk of that increase going to rural hospitals. The House bill, on the other hand, would reduce payments by $114.8 million, according to Pollack.

But Nussle disputed that, saying the House plan would not cut payments at all but would simply calculate increases at a rate slightly less than the rate of inflation.

"There's no one, absolutely no one, who can make the claim they're being cut," Nussle said. "For anyone to suggest an increase is actually a cut is absolutely nuts. That's just what happens in Washington."


(c) 2003, Chicago Tribune. Distributed by Knight Ridder/Tribune News Service.

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