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WASHINGTON (AP) — The White House will support increased Medicare funding for rural hospitals when Congress considers overhauling the federal health care program for seniors.

President Bush made the pledge Thursday in a letter to Sen. Charles Grassley, R-Iowa, who had proposed the Medicare funding boost as Congress hammered out a tax-cut and spending bill.

Senators voted 86-12 last week to approve Grassley's $25 billion proposal, but the measure was stripped when House and Senate leaders worked out a final, $350 billion package.

In his letter, Bush told Grassley they agree on the need to help rural hospitals and doctors, and "you demonstrated your commitment by passing your amendment last week with tremendous bipartisan support, and by pushing hard for it in the conference negotiations.

"I will support the increased Medicare funding for rural providers contained in your amendment as part of a bill that implements our shared goal for Medicare reform," Bush wrote.

At issue are the formulas the government uses to determine the size of checks sent to hospitals for Medicare patients. The rates date to the 1980s and were written with the belief it is cheaper to treat people in rural towns and small cities.

Many lawmakers and hospital administrators say that is no longer the case, as hospitals everywhere compete for the same staff and pay the same for high-tech equipment.

"Those base payments are anachronistic now," said Chip Kahn, president of the Federation of American Hospitals.

Congress equalized hospital Medicare payments for this year. The Senate amendment would have made that fix permanent and increased payments to other sorts of health care providers.

Lawmakers expect to debate Medicare reforms this summer.

Supporters wanted the rural Medicare measure made part of the tax bill in order to speed its way to becoming law, rather than having it tied up with the contentious debate over other Medicare overhauls, according to Sen. Max Baucus, D-Mont.

Sen. Kent Conrad, D-N.D., said the rural Medicare changes are more likely to pass this year as part of a broader reform package. Conrad and Sen. Craig Thomas, R-Wyo., have introduced Senate legislation addressing the hospital payments.

Both welcomed the White House support, which Thomas said Vice President Dick Cheney — a Wyoming native — had pledged to him during a brief meeting Wednesday.

"That's a very significant breakthrough," Conrad said.

Baucus cautioned that House members from urban districts will use the rural-provider provisions as leverage to secure other measures that are less palatable to rural states.

He cited plans to make prescription-drug coverage part of private managed-care plans, which he called unacceptable because those plans do not exist in many rural states.

Baucus said lawmakers had expected the White House to back Grassley's amendment, only to see the support dropped during final negotiations.

"The letter from the White House is great, that's good news," he said. "But you never know."

Copyright © 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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