y services. HHS is supposed to issue a further memorandum clarifying the meaning of the Act in November 1998. Under the Act, the above caps would apply during the period January 1, 1999 through January 1, 2001. These caps would increase for each subsequent year by the increase in the Medicare Economic Index (MEI) (an approximate of change in medical costs) rounded to the nearest multiple of $10) (McDermott, Will & Emery 10). Beginning with the federal fiscal year 1998 (September 30, 1998) and continuing until January 1, 1999, Medicare reimbursements for rehabilitation services will be "the lesser of actual charges for the services or the adjusted reasonable costs for the services minus" coinsurance payments and deductibles (McDermott, Will & Emery 10).
According to the American Physical Therapy Association (APTA), Congress did not hold any hearings prior to imposing the $1500 caps so one can only surmise from the general purposes behind the Medicare cuts in the Act its purpose (American Physical therapy Association 1).
The Act was enacted in order to accelerate the time when the nation would reverse the upward trend in the size of the national debt arising out of budget deficits which Lamm and Brown summarize as follows:
1981 $1 Trillion $3 Trillion
1986 2 Trillion 4 Trillion
1992 4 Trillion 6 Trillion
1997 5.4 Trillion 7.8 Trillion (1122)
Because of their importance, by 1997 further progress toward
a balanced budget required reductions in entitlement programs. According to Walker,
from an annual bill of 46 billion in 1960, rising life expectancy and rising medical costs had sent the cost of Medicare to the federal budget spiraling ever upwar
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