Congress has recently been confronted with the need to examine carefully the progress toward full implementation of the prospective payment system (PPS) for hospital services under the Medicare program. This review has been undertaken in the context of federal budget deficits that are rising very rapidly. With Medicare expenditures making up such a significant portion of the federal budget, it is difficult to separate the need for federal spending reductions from an objective evaluation of this new Medicare payment policy.
Yet, I believe strongly that there are very compelling reasons for us to pause and take stock of what we have accomplished with the PPS and to determine what, if any, refinements are necessary before full implementation of this system. During the recent deliberations of the Ways and Means Committee, my proposal to extend the scheduled transition period in the PPS for one year was adopted. A bipartisan majority of