Key Negotiators Close To Agreement On Medicare Bill, Includes SCHIP Extension

Main Category: Medicare / Medicaid / SCHIP
Article Date: 19 Dec 2007 - 5:00 PDT

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Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) on Monday agreed on a Medicare package that would delay for six months a scheduled 10% reduction in Medicare physician fees, a Republican committee aide said, CQ Today reports. The fee cut is scheduled to take effect on Jan. 1, 2008. The lawmakers previously called for a one- or two-year fix of the physician fee cut, but "difficulty in finding ways to pay for the legislation, along with Senate Republican leadership's demand that the package be able to pass by unanimous consent, forced them to scale back their ambitions," according to CQ Today (Armstrong, CQ Today, 12/17).

The package would cost about $6 billion, but lawmakers, looking to attract Republican support and avoid a presidential veto, will not propose "anything close to the billions of dollars in cuts in payments to Medicare Advantage insurers that many Democrats have backed," the Wall Street Journal reports (Lueck, Wall Street Journal, 12/18).

CongressDaily reports that the legislation is expected to be funded by cuts to MA medical education payments, as well as about $1.5 billion from a "stabilization fund" created under the Medicare prescription drug benefit to attract preferred provider organization plans to underserved areas. Those cuts, which have the approval of the White House, could generate about $10 billion over five years (Johnson, CongressDaily, 12/17).

SCHIP, Other Provisions
In addition to halting the physician fee cut for six months, the legislation would include an SCHIP extension, although it is unclear for how long, CQ Today reports. Republicans want to extend the program until 2009, after the presidential election, but the Republican aide said the situation was "fluid." Democrats have been pushing for an SCHIP extension that would expire in September 2008, "in order to force another debate on what they see as a winning political issue," according to CQ Today. If the bill extends the program into 2009, Democrats still could force additional votes on SCHIP legislation in September 2008 by writing a new bill that would supersede the existing extension, CQ Today reports.

The measure also might include extensions of low-income and rural subsidies, which Baucus and Grassley have been pushing for, and it could extend occupational therapy subsidies, scheduled to expire at the end of the year (CongressDaily, 12/17). In addition, aides on Monday said that an electronic prescribing mandate for Medicare physicians was still part of the Medicare bill. However, the mandate, which is an "effort that almost everyone agrees on," might be cut "simply because lawmakers decide to hold off on 'new policy' until next year," CongressDaily reports (Johnson, CongressDaily, 12/18).

Outlook
The Senate as early as Tuesday likely will try to pass the bill by unanimous consent. The House Rules Committee on Monday approved a measure that will allow the House to consider Medicare or SCHIP legislation on the floor the same day it is received from the Senate. The bill would have to come to the House before Wednesday, which is a "signal that the Senate is expected to act by then," according to CQ Today (CQ Today, 12/17). CongressDaily reports that it is "unclear how House members will react to a Senate physicians' fix bill that would require more action in the spring" but that lawmakers might "be willing to send the short-term patch to the White House rather than risk the ire of the American Medical Association if they do nothing" (CongressDaily, 12/17).

Industry Reaction
American's Health Insurance Plans President and CEO Karen Ignagni said that a 10% cut to indirect medical education payments to MA plans is a "very, very significant hit on beneficiaries," adding, "Many members of Congress perhaps erroneously concluded that an IME cut wouldn't affect them, and that's wrong."

However, another health care lobbyist on Monday said that "there is some skepticism these dollars are passed on to teaching hospitals" and that AHIP "cannot make a firm case that those dollars go to these hospitals." Ignagni said that MA plans are "charged higher rates by academic medical centers."

AMA Board Chair Edward Langston said that "AMA is concerned about the uncertainty for both Medicare patients and physicians if Congress provides only a six-month stop-gap measure" (CQ HealthBeat, 12/17).

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