Medicare Provisions in the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, P.L. 106-554)

Publication Date: May 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

Since the passage of the Balanced Budget Act of 1997 (BBA, P.L. 105-33) Medicare spending has set records for low or declining rates of program growth. Congress first addressed the issue of slower rates of growth in Medicare spending with the passage of the Balanced Budget Refinement Act of 1999 (BBRA, P.L. 106113).

However, while part of the slower rates of growth may be attributed to underestimates of the savings derived from the BBA, it is difficult to pinpoint any one factor as the exact cause for this projected decline in spending. Provider groups argue that the BBA reductions have threatened both their economic viability and their ability to provide services for Medicare beneficiaries. However, government studies have indicated that this lower rate of growth has not resulted in inadequate reimbursement rates.

As the Congress debated further amendments to the BBA, the current CBO projections were those released in July, 2000. CBO projected that Medicare would spend about a total of $1.339 trillion over the following 5 years (2001-2005). These figures continued to reflect a downward trend in estimates. Five-year (2001-2005) estimates of Medicare spending were down by $378 billion, or more than 20%, with a concomitant decline in the estimated average annual rate of growth from 9.4% to 7.5% per year.

The FY2001 budget resolution, H.Con.Res. 290, earmarked specific funds for new Medicare spending. The House Commerce Committee (renamed the House Energy and Commerce Committee in the 107th Congress) and Ways and Means Committee, as well as the Senate Finance Committee each developed legislation to increase funding for the Medicare program. Using as a basis the Medicare provisions included in their bills, the three committees developed an agreement, the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, P.L. 106-554). The provisions were designed to increase payments for many of the services covered by the Medicare program, such as hospitals, Medicare+Choice organizations, home health agencies, and skilled nursing facilities. The legislation also included limited expansions of certain preventive benefits and modifies the appeals and coverage processes.