Comments on H.R. 2626

A bill has been proposed which would establish a National Commission on Hospital Costs for: encouraging voluntary efforts to contain hospital costs, providing for the orderly development of State hospital cost containment programs, encouraging philanthropic support for nonprofit hospitals, and other purposes. The bill would establish a program to fund State hospital cost containment programs and change the reimbursement policy to disregard donor restricted funds as deductions to operating costs. GAO questioned this change because the current policy based on the double payment rationale seemed reasonable. The bill would also remove the present requirement that in order to receive reimbursement under Medicaid or Medicare, a hospital must have distinct beds which are dedicated to providing for "skilled nursing facility" or "intermediate care facility" care. GAO believed that this would negate much of the savings anticipated from the enactment of another proposed bill and would provide little incentive to convert or close unneeded hospital beds because hospitals would be paid, under Medicare and Medicaid, on the basis of their total allowable costs regardless of the covered level of care provided. While it would be preferable to delete the section dealing with reimbursement under Medicaid and Medicare, suggestions for changes in the language of that section were made should it be adopted.