January 2001

Relief From Balanced Budget Act Signed Into Law


Congress recently passed an omnibus appropriations bill that included the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), which provides relief from the effects of the Balanced Budget Act (BBA) of 1997. The bill, signed into law on December 18, 2000, will restore about $35 billion to Medicare, Medicaid and the State Children’s Health Insurance Program (SCHIP) payments during the next five years. "As a result of the passage of this bill, Catholic Health Initiatives’ market-based organizations will gain more than $22 million in reimbursement from Medicare, Medicaid and SCHIP," said Colleen Scanlon, senior vice president of advocacy for Catholic Health Initiatives. "This legislation is very important to the protection of health care services for the communities we serve. Congress was persuaded to act because of the large number of constituents, including many of our market-based and national leaders, who contacted them about this issue. The passage of the bill makes this an excellent time for all of us to further build relationships with members of Congress by sending them notes to thank them for their efforts." Some of the provisions of the BBA relief bill include:
  • A full marketbasket (inflation) update for inpatient hospital services for fiscal year 2001, and an update of marketbasket minus .55 percent for 2002 and 2003.
  • A full inflation update for hospital outpatient prospective payments for fiscal year 2001.
  • An increase in reimbursement for Medicare bad debt, from 55 to 70 percent.
  • An increase in Medicare payments to safety net hospitals.
  • An increase in payment to hospitals for indirect medical education expenses.
  • A full marketbasket update for skilled nursing facilities for fiscal year 2001, and an update of marketbasket minus .5 percent for 2002 and 2003.
  • Postponement of a 15 percent across-the-board cut in home health payments until fiscal year 2002, plus a full marketbasket update for 2001.
  • An increase in the minimum rate for payments to Medicare managed care plans.
Detailed summaries of the bill’s many provisions are available in the BBA Relief 2000 section of the Advocacy Resource Group public folder on the Catholic Health Initiatives e-mail system.