Illinois Hospital Association

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November 26, 2008

Second Economic Stimulus Bill Stalls in Senate but Opportunities Remain for FMAP Relief and Other Hospital Issues

S3689, a Democratic $100.3 billion economic recovery package that included $37.8 billion for an 8% temporary increase in Medicaid’s federal medical assistance percentage (FMAP) for states for 15 months has not moved in the U.S. Senate. The lame duck Congress has now left for the Thanksgiving break. Legislators are expected to return in December to focus on a besieged U.S. auto industry, leaving action on a broader economic recovery package to the next Congress. It has been indicated that a second major economic stimulus package would be among the first issues to be addressed by the next Congress and high on the new administration's list as well. Hospitals are urged to keep health care’s unfinished business in front of our legislators throughout the transition period so they are ready to act quickly in the new Congress.

The U.S. House, on September 26, passed HR7110, a smaller ($60.7 billion) stimulus package (HR7110) which included temporary FMAP increases ranging from 1 to 4 percent.

The nation’s economic problems continue stressing all areas of life, including our health care system. A new economic recovery bill could offer the opportunity to address not only FMAP relief but other key unfinished hospital issues as well.

Action:
Call, fax or e-mail Sens. Durbin and President-elect Obama and your U.S. Representative and urge them to include a temporary increase in the FMAP rate as part of any stimulus package, or other appropriate vehicle, that Congress considers. This measure is vital to helping hospitals provide health care services to the people and communities relying on them. It also is a prime time to remind lawmakers of hospitals’ importance as economic engines for their communities – an especially significant role during stressful economic times. To send a message from IHA’s web site click here. To send a message to President-elect Obama through his transition team web site click here.

Background:
As states and employers trim budgets, programs, and payrolls to cut costs, the number of people losing health care coverage rises. Hospitals, however, by both mission and law, must continue to meet the needs of people and their communities, serving all patients, regardless of ability to pay.

A temporary FMAP increase is critical to helping ensure the ability of our hospitals to continue caring not only for our most vulnerable populations, but all patients. In addition, this assistance is especially important to Illinois because:

  • Illinois currently is at the lowest federal Medicaid matching rate (50%).
  • Illinois serves 4.1% of the nation’s Medicaid beneficiaries, but receives only 3.3% of total Medicaid funding.
  • Illinois ranks 45th among states in federal return of all tax dollars, receiving only 75 cents for each dollar sent to Washington.

    • In addition to the temporary FMAP relief noted, there are several additional steps that Congress can take to help ensure hospitals' ability to continue caring for our patients and communities.

    Key Health Care Issues:

    • Temporary FMAP Increase
      Ask Congress to include an increase in the federal medical assistance percentage (FMAP) rate for states in any new economic stimulus package it considers. This assistance is vital in helping hospitals serve their patients during a struggling economy.
  • Rescind CMS Capital Cuts to Teaching Hospitals
    Enact a moratorium on the provision in CMS’ final IPPS rule that eliminates indirect medical education adjustments to teaching hospitals’ capital payments. These cuts will further strain teaching hospitals’ ability to invest in new medical technology, facility upgrades, and ongoing maintenance, impacting not just Medicare beneficiaries but all patients.
     
  • Enact a Moratorium on Medicaid Outpatient Cuts
    Reverse this CMS rule that narrows the definition and range of services covered as Medicaid outpatient hospital services, and which would also reduce hospital funding nationally by approximately $5 billion over five years.
     
  • Help Protect Employees from Fallout of Credit Crisis
    Protect employees by easing the adverse impact of the credit crisis on employers in meeting obligations of defined benefit pension plans they sponsor.
     
  • Strengthen Federal Hospital Capital Financing Assistance Programs
    Provide access to financial capital for hospitals so they can invest in critically needed facility renovation and maintenance and advances in technology and equipment.
     
  • Ban Self-Referral to New Physician-Owned Hospitals
    Banning physician self-referral to new physician-owned facilities, while grandfathering existing facilities, will help strengthen community care, prevent conflicts of interest, and promote fair competition for community hospitals that treat all patients and emergencies in their community.
     
  • Reauthorize Section 1011
    Reauthorize the Medicare Prescription Drug Improvement and Modernization Act’s Section 1011, which provides for $250 million annually in federal funding to help offset the costs of providing emergency care to undocumented immigrants - as included in the Border Health Care Relief Act (HR6394).
    •