The debate in Congress on adding drug coverage to Medicare has largely obscured a parallel fight over whether the bill should cut or add billions of dollars in Medicare payments to hospitals, particularly teaching hospitals. New York has far more money at stake in that struggle than any other state.
Depending on how various House and Senate proposals are resolved, hospitals nationwide could see a net loss of up to $5.4 billion in Medicare payments over 10 years, compared with 2002 levels, $2.1 billion of that in New York, according to an analysis by the Healthcare Association of New York State, a hospital lobbying group. Part of that reduction would come from a cut of roughly 15 percent in payments made only to teaching hospitals, which are most heavily concentrated in New York.
Some Republican lawmakers called those figures exaggerated, but they agreed that the numbers are in the billions and that New York stands to lose the most.
The fight has pitted legislators from rural areas, whose hospitals would be helped most by the proposed changes, against urban colleagues whose hospitals stand to take the biggest cuts. And it has put several Republican congressmen from New York and a few from other Northeast states at odds with their House leaders, with some saying they might be forced to vote against the bill, drug benefit and all. The House passed its version of the bill in June by a single vote, along party lines, so defection by a cadre of Republicans could threaten final passage.
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