The Center for Medicare & Medicaid Services (CMS) has proposed a rule that penalizes hospitals for providing efficient treatment to Medicare patients. According to CMS estimates, this policy would reduce payments to hospitals by $1 to $1.9 billion in the fiscal year 2003 alone. We must safeguard Medicare patients against a system that penalizes hospitals for efficient care.

In a letter to Health and Human Services Secretary Tommy Thompson, my colleague Ed Bryant and I expressed our serious concern about the possibility of CMS expanding this "transfer policy" to additional Diagnosis Related Groups (DRGs) that provide care for Medicare hospital patients.

CMS is neither mandated by Congress to expand this provision nor has Congress indicated its interest in seeing the policy expanded. For these reasons, I urge CMS not to carry out this ill-advised expansion.