House votes to reduce Medicare's base rate cuts

The U.S. House of Representatives voted yesterday to reduce by half Medicare's planned base rate cuts. The cuts, scheduled to take effect Oct. 1 when the Centers for Medicare & Medicaid Services' (CMS) 2008 fiscal year begins, may be limited to 0.6% in FY2008 and 0.9% in FY2009 and FY2010.

If the Senate passes the bill and it gets President Bush's signature, the overall base rate cuts would be reduced from 4.8% to 2.4%.

Hospital groups lauded the House vote:

Federation of American Hospitals President and Chief Executive Chip Kahn expressed satisfaction that Congress acted before the new Medicare rule took effect on Oct. 1. "We’re getting significant relief," Kahn said.

American Hospital Association Senior Vice President of Federal Relations Tom Nickels estimated the legislation would soften the blow to hospitals to the tune of $7 billion. That would still amount to about $13 billion less for hospitals over the next two years.

Read more about this story in The Hill.

UPDATE: More information on the bill. The Congressional Budget Office stated that the bill would cost Medicare $570 million in FY2008 and $1.85 billion in 2009. Nickels' above estimate by of monetary relief to hospitals may be a bit high.