House SCHIP Reauthorization Bill Would Send Millions Of Dollars Annually To About 40 'Favored' Hospitals With Boosted Medicare Payments, NY Times Rev.

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Public Health
Article Date: 15 Aug 2007 - 13:00 PDT

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The House has "quietly funneled hundreds of millions of dollars to specific hospitals and health care providers" under the SCHIP reauthorization bill passed earlier this month, the New York Times reports (Pear, New York Times, 8/12). The House SCHIP bill would reduce payments to Medicare Advantage plans and increase the federal cigarette tax by 45 cents per pack to increase funding for SCHIP by about $50 billion over five years. The bill also would make a number of revisions to Medicare (Kaiser Daily Health Policy Report, 8/9).

According to a Times review of the legislation, the House bill would "direct millions of dollars a year to about 40 favored hospitals by increasing their Medicare payments," mostly "at the request of Democratic lawmakers." Many of the earmarks would reclassify suburban hospitals as located in urban areas, which generally receive higher Medicare reimbursements to cover higher wages for hospital workers, according to the Times. Although Democrats have promised greater transparency of earmarks and other projects, the bill describes the hospitals "in cryptic terms, so that identifying a beneficiary is like solving a riddle," the Times reports.

House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) said that increasing payments to some hospitals is a way for Congress to improve "the equity and fairness" of Medicare reimbursements. Under Medicare, "you are basically setting prices, and the system is clumsy," Stark said.

Health Subcommittee ranking member Dave Camp (R-Mich.) criticized a proposed adjustment that would reclassify Bay Area Medical Center -- located on the border of Wisconsin and Michigan -- as located in Chicago. Camp called the provision "absurd on its face," adding, "Every hospital in America would like to be reclassified" into a labor market with higher wages.

Nadeam Elshami, spokesperson for House Speaker Nancy Pelosi (D-Calif.), said, "It's easy to criticize individual provisions of large, complex bills," but "the focus should be on the huge number of uninsured children who will be eligible for life-saving health care under our bill" (New York Times, 8/12).

2008 Campaign
Efforts to pass SCHIP legislation provide "a glimpse into the emerging 2008 campaign strategies of Republicans and Democrats" and illustrate "some of the problems House Republicans face in their first election cycle as the minority party," the Times reports.

A proposal in the House SCHIP bill that would reduce payments to MA plans provides Republicans "an irresistible opening to go after Democrats," according to the Times. Former Speaker J. Dennis Hastert (R-Ill.) said, "When seniors find out what is really going to happen [if payments to MA plans are cut], they are not going to be happy." However, analysts and others "suggest this could be a tough sell for Republicans" because Democrats "have accumulated decades of credibility on Medicare while Republicans, until recent years, were identified more as foes of the program," the Times reports.

In addition, Democrats "believe they can easily paint Republican opponents of the measure ... as being against helping poor sick kids," according to the Times. Democrats also are "getting important political cover" from AARP, which supports expanding SCHIP, according to the Times (Hulse, New York Times, 8/11).

"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.