House-Senate conferees last night tentatively approved $12.5 billion in cuts over the next three years in Medicare, Medicaid and welfare programs.
However, they reached an impasse over a House proposal to restore some welfare cuts made last year at President Reagan's request in the program of Aid to Families with Dependent Children (AFDC). House conferees said they had offered to adopt $3.5 billion in cuts on top of the $12.5 billion if the Senate would agree to the AFDC restorations. But they said Senate conferees refused. As a result, the conferees adjourned until today.
More than half the retrenchment approved last night would come from new limits on federal payments to hospitals for services under Medicare, the health program for the elderly and disabled, plus a limit of 9 to 10 percent on how much average payments to a hospital per Medicare patient could rise from year to year.
Eventually under this hospital cost containment section of the bill, the entire system of hospital reimbursement under Medicare would be converted to a so-called prospective one, under which hospitals would be given pre-set amounts to care for Medicare patients, rather than reimbursed as now for whatever the care cost.
Other provisions--part of an effort to contain health care programs that now make up about a seventh of the budget and are one of its fastest-growing parts -- would require employers to keep providing private health insurance to workers who stay on their jobs after age 65 (and make Medicare payments secondary to the private insurance) and put new limits on Medicare payments to doctors, including particularly radiologists and pathologists.
Although they had not reached it last night, it appeared certain the conferees would also vote to impose the Medicare portion of the Social Security tax on federal employes -- now 1.3 percent of the first $32,400 in pay -- while also making federal employes automatically eligible for Medicare benefits.
In other decisions the conferees tentatively killed a plan to allow persons eligible for Medicare to opt out of the system and receive government vouchers instead to buy their own private health insurance. Tentatively approved was a new provision to allow Medicare patients to receive care in hospices with Medicare reimbursement.
The Medicaid section of the bill would allow states to charge low-income Medicaid patients a small fee for some services they now receive free and would increase state power to impose liens on the property of Medicaid patients to recover part of the costs of certain services.
Senate Finance Committee Chairman Robert J. Dole (R-Kan.) cautioned last night that no final decisions had been reached. But House members Barber B. Conable Jr. (R-N.Y.) and Henry A. Waxman (D-Calif.) said they believed the tentative agreement on the hospital reimbursement system and other features would stick.
Still unresolved on the benefit side of the conference last night -- the tax bill is also before the same conference committee -- were disputes over extra unemployment insurance for the long-term unemployed, and the House proposal to restore some of last year's AFDC cuts. Also in dispute were further Medicaid cuts proposed by the Senate.
Currently there is a limit on what Medicare will pay for the room and board portion of a patient's care; that is 108 percent of the average cost for room and board in the area where the hospital is located.
The reimbursement provision passed yesterday would substantially change this system. It would include not only room and board but the rest of the hospital bill -- the so-called ancillary services like X-rays and blood tests which are not controlled now. New limits would be set for all services combined: 120 percent of the average in the area for fiscal 1983, 115 percent for 1984 and 110 percent for 1985.