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Gazette Opinion

When President Bush and GOP congressional leaders cut a deal to get a tax-cut bill before Memorial Day vacation, they sliced out an amendment that would have helped reduce inequities in how Medicare pays for care.

The Medicare amendment in the Senate tax-cut bill would have reduced disparities between what health-care providers in large urban areas are paid and the lower rates that Medicare historically has paid to the rest of the nation's hospitals and doctors.

The Medicare amendment added by Sen. Charles Grassley, R-Iowa, had bipartisan Senate support. However, House GOP leaders want the rural payment issues addressed later - as part of a bigger Medicare bill. Here's where we rural-state residents should get seriously concerned: The big Medicare bill will focus on providing prescription drug coverage. The Bush administration wants Medicare enrollees to join HMOs or other private managed-care plans, so the administration proposes to entice seniors with better benefits if they go into managed care. However, the overwhelming majority of Medicare enrollees aren't now in managed care plans. Most don't even have the choice. Medicare HMOs don't exist in Montana and Wyoming.

The plan to push managed care would create new inequities for rural seniors. They would have little or no choices in prescription plans, so they wouldn't enjoy the richer benefits. To make the plan work, the government will have to offer managed care companies enough payment for them to satisfy their profit requirements. And that's money that won't be benefiting seniors in this region.

With health-care costs rising, one might think hospitals were raking in big profits. However, that's not the case. Some Montana hospitals are doing OK, but some are in "dire situations" with negative operating margins, according to Bob Olsen, vice president of MHA, an association of Montana health-care providers. Increases in liability insurance premiums, the high costs of hiring temporary nurses to fill staff gaps and a decline in occupancy at hospital-owned nursing homes are among the financial pressures on Montana hospitals.

In an interview last week, Sen. Max Baucus, D-Mont., said Rep. Bill Thomas, chairman of the House Ways and Means Committee, wants to use the rural disparity remedy as leverage in the Medicare bill that will be on the Senate Finance Committee agenda next month. Baucus was adamant that he won't allow Congress to create disparities in prescription benefits. He is hopeful of getting the rural health-care provider provisions into the Medicare bill, too.

The Medicare amendment that Grassley attempted to add to the tax-cut bill includes ideas from a rural health bill that he and Baucus proposed last year. Sen. Conrad Burns, R-Mont., Sen. Craig Thomas, R-Wyo., and Sen. Kent Conrad, D-N.D., are among sponsors of a similar rural health bill introduced this spring. These lawmakers all recognized the problems. Now they must solve them.

If you depend on Medicare or if you expect to be old enough for Medicare one of these years, keep an eye on the summer prescription drug debate. Some Washington, D.C., politicians are getting ready, once again, to make changes that don't reflect the realities of life outside Eastern cities.

7 rural reasons for Medicare reform If Congress doesn't change Medicare this summer:

Starting Oct. 1, base payments for taking care of Medicare patients will be reduced to all U.S. hospitals, except those in cities of 1 million or more.

A desperately needed boost in payments to rural home health agencies will expire.

Labs in small hospitals will continue losing money on Medicare patients because they are paid fees based on the costs of running large-volume urban labs.

Doctors in health professional shortage areas (that's most of rural Montana and Wyoming) will continue to fight red tape to get the 10 percent bonus payment another law offered as an incentive to practice in communities short on doctors.

Rural hospitals that have a high volume of Medicare and Medicaid patients will continue to get paid less for their extraordinary community service than their urban counterparts.

Doctors in rural states will continue to be penalized by a payment system that assumes their costs of running offices are significantly lower than their urban peers.

Hospitals in rural states will continue to get lower Medicare payments that underestimate their labor costs, assuming costs that are unrealistically lower than urban labor costs.