The Balanced Budget Act of 1997: A Look at the Current Impact on Providers and Patients: Hearing Before the Subcommittee on Health and Environment of ... Sixth Congress, Second Session; July 19,

Excerpt from The Balanced Budget Act of 1997: A Look at the Current Impact on Providers and PatientsHospitals have been among the most vocal providers in seeking relief from the bba, m part because so many of their operations were affected by provisions of the law. For inpatient services covered by the prospective payment system, the bea froze base payments in fiscal year 1998 and reduced updates in subsequent years, instituted a new policy for transfer cases, lowered the a 'ustment for indirect med ical education (ime) to teaching hos itals, lowered the a justment received by hos pitals that treat a disproportionate s are (bsh) of low-income patients, and reduced capital payment rates. For outpatient services, the bba eliminated the so-called for mula driven overpayment, extended reductions in payments for capital and services paid on a cost basis, and directed the Secretary to implement a prospective pa ent system for services still being paid at least partially on the basis of costs. Ollec t1vely, these provisions were intended to slow Medicare spending growth, brin in patient payments in line with costs, and move payments for outpatient services m a cost-based system to mmspective one.