Medicare Package, SCHIP Extension Could Be Added To Alternative Minimum Tax Legislation

Main Category: Medicare / Medicaid / SCHIP
Article Date: 12 Dec 2007 - 5:00 PDT

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House lawmakers will not add a Medicare package to an omnibus spending bill, but they could try to attach it to alternative minimum tax legislation due on the floor this week, aides said, CongressDaily reports. Lawmakers negotiating the package were in discussions late on Monday and must decide on Tuesday if they will attach the measure to the AMT bill. According to CongressDaily, "Sources described the negotiations as messy, predicting that lack of agreement among members would keep any Medicare package from passing this year" (Johnson, CongressDaily, 12/11).

Democrats during negotiations over the weekend proposed a one-year fix to the scheduled 10% Medicare physician fee cut, along with a 0.5% increase in physician payments. The proposal would reduce Medicare Advantage plan payments by $15.5 billion over five years and by $53.5 billion over 10 years (Armstrong, CQ Today, 12/10). The White House has said that any Medicare package that includes cuts to MA or changes HHS regulations would be vetoed (CongressDaily, 12/11).

SCHIP
The Democrats' plan, which could be added to the AMT bill, also includes a one-year extension of SCHIP. The draft measure would provide $800 million to maintain projected enrollment levels for 2008, CQ Today reports. The funds would be added to SCHIP's $5 billion baseline budget (CQ Today, 12/10).

The Congressional Budget Office on Monday released an analysis that found $800 million would be needed to cover state SCHIP shortfalls in 2008. The figure, which is lower than the earlier estimate of $1.4 billion, takes into account $600 million in projected Medicaid savings because states will not expand Medicaid eligibility if SCHIP funding is available. The SCHIP proposal also includes $3 billion over five years in other Medicaid provisions (CongressDaily, 12/11).

The extension would fund SCHIP through Sept. 30, 2008. A continuing resolution that has been funding the program expires on Friday. According to CQ Today, extending SCHIP funding until September 2008 will make the program an "issue shortly before the November elections" (CQ Today, 12/10). The SCHIP provision on the bill is still "up in the air" and was not discussed on Monday, CongressDaily reports. Republicans have said that they would support a yearlong extension that will prevent states from experiencing shortfalls (CongressDaily, 12/11).

Other Provisions
Other provisions of the Democrats' Medicare package include:

• Creating yearlong extensions of rural and low-income subsidies;
  
  
• Implementing a yearlong extension of transitional Medicaid assistance;
  
  
• Halting for one year changes to the pharmacy reimbursement formula proposed by the Bush administration (CongressDaily, 12/11);
  
  
• Cutting payments to oxygen service companies (CQ Today, 12/10);
  
  
• Reducing payments to inpatient rehabilitation facilities and long-term care hospitals (Johnson, CongressDaily, 12/10);
  
  
• Limiting payments to physician-owned hospitals;
  
  
• Changing the asset test so more beneficiaries would be eligible for more generous coverage under the Medicare drug benefit;
  
  
• Revoking authority of the Joint Commission, formerly the Joint Commission on the Accreditation of Healthcare Organizations, to "deem" hospitals as eligible for Medicare participation; and
  
  
• Mandating Medicare physicians use electronic prescriptions (Reichard, CQ HealthBeat, 12/10).

Prospects
A Senate aide said Republicans made a counteroffer to the Democrats' proposal, but no details were released (CQ Today, 12/10). Republican aides said a Medicare/AMT package would not pass in the Senate. Aides on Monday said that the White House might accept a plan that would stop the physician fee cut for one year by eliminating duplicate medical education payments, which would raise about $11 billion. However, the plan would not provide enough funding for other provisions, such as extending rural and low-income subsidies (CongressDaily, 12/11).

Members of the House Ways and Means Committee on Tuesday will discuss the Democrats' proposal (CQ Today, 12/10). If Congress does not agree on a package before it adjourns or if President Bush vetoes the bill, the physician cut would go into effect Jan. 1, 2008. According to an aide, Congress would have to pass a "bare-bones approach that jettisons any extras" to stop the physician fee cut before the end of the session. But it is "unclear whether that type of fix would win support from Democrats seeking broader Medicare improvements or lawmakers from rural areas," CongressDaily reports. Lawmakers could create a retroactive package early next year to stop the physician fee cut (CongressDaily, 12/10).

Opinion Piece
"Access to primary care for millions" of Medicare beneficiaries "is in peril" as "doctors across the country brace for cuts in payments from Medicare," which might cause "doctors to rethink their commitment to caring for Medicare patients," Wall Street Journal columnist Benjamin Brewer writes. Brewer continues, "Unless there's a reprieve soon, Medicare will reduce payments to doctors by an average of 10.1%," but a deal to stop the cuts "remains possible." Brewer concludes that while the nation is "talking about how to expand health care for the uninsured, ... it's time to fix the Medicare system that's leading many doctors who tend to the basic health care needs of the elderly to reconsider the proposition" (Brewer, Wall Street Journal, 12/11).

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