The House Ways and Means Committee, meeting yesterday in closed session on a package of Medicare changes, voted to increase Medicare payment rates to hospitals by only 1 percent in 1986.
The 1-percent rise is far below what the hospitals would get if they were given funds to cover all inflation-related cost increases, the customary practice. The administration had requested no increase at all, but the committee rejected that proposal as too harsh.
The whole Medicare package was designed to reduce outlays by a net of $10 billion over the next three years.
In a second major action, Ways and Means killed a proposal by its health subcommittee to impose a special new income-related tax, or premium, on Medicare recipients with income of more than $20,000 a year, or $40,000 for couples. The tax would have constituted the first use of an income test to set payments in Medicare and Social Security.
The start of the committee action on Medicare and several unrelated revenue-raising provisions, such as continuation of the cigarette tax of 16 cents a pack, took place as House and Senate budget conferees struggled to set out broad guidelines for reduction of the federal budget deficit.
The Ways and Means legislation when finished would be part of an overall budget-cutting package. But adjustments could come later if budget conferees decide on different approaches to Medicare and Social Security issues.
Senate Republicans continued working yesterday to break the overall budget impasse, and House Democratic leaders prepared legislation to force the House to live within its own version of the budget, regardless of whether a compromise is reached with the Senate.
That legislation, outlined in a House Democratic caucus and expected to be approved by the full House today, would limit appropriations bills to spending contained in the House-passed budget. Democratic leaders say the budget has deficit savings of $56 billion next year and $259 billion over three years.
House and Senate Republican leaders met yesterday with White House chief of staff Donald T. Regan and Office of Management and Budget Director David A. Stockman in what was described afterward as a constructive but inconclusive meeting. A bipartisan session with President Reagan is planned today on budget and other issues facing Congress before its month-long summer recess starting Aug. 2.
Senate Majority Leader Robert J. Dole (R-Kan.) indicated again that Senate Republicans are groping for new approaches in a compromise they expect to offer to the House sometime this week. "If you can't get it from what's in the pot," he said, "you got to put something else in the pot."
He mentioned again the idea of inflation adjustments for taxes and Social Security every two years, instead of every year, as a way of saving $19 billion over three years. But House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) and House Budget Committee Chairman William H. Gray III (D-Pa.) are chilly to the idea, and even Dole said, "I don't know who's for it."
The new, rejected tax on higher-income Medicare recipients was designed to raise money for cost increases in the doctor-insurance part of Medicare, while holding down the monthly premium charged to lower-income recipients.
Organizations of the aged opposed the income-related tax or premium on grounds that it would be a bad precedent to introduce an income test of any type into Medicare or Social Security.
Because of the defeat of the special premium, any increase needed to support doctor-insurance would come from all recipients. It would be set at a level high enough to collect one-quarter of the cost of the doctor-insurance program.
This means the current premium of $15.50 a month would go to about $16.20 in 1986, to $18.70 in 1987 and $19.50 in 1988.
Other parts of the new Medicare package include:
*Continuing for another year the freeze on Medicare payments to doctors who do not agree to accept the Medicare amount as their full payment. Doctors who do accept the mandated amount as full payment, and thus do not bill the patient for anything additional, would get an increase in fees.
*Agreeing to base half the 1986 Medicare payment on the hospital's own costs and half on a basic federal rate. Previous law said that hospitals over a four-year period should shift from their own rates to federal rates. In 1986, they were supposed to receive payments based 25 percent on their own costs, but the new provision froze the transition at 50-50. The freeze was favored by eastern and midwestern hospitals, which have higher costs.
*Approving the elimination of Medicare payments to for-profit hospitals that had guaranteed them a return on invested capital.
*Requiring the Department of Health and Human Services to pay hospitals that have a disproportionate share of low-income patients up to 16 percent more than other hospitals.