House Passes Medicare-SCHIP Legislation; President Bush Expected To Sign Bill, HHS Secretary Says

Main Category: Medicare / Medicaid / SCHIP
Article Date: 21 Dec 2007 - 9:00 PDT

email to a friend   printer friendly   opinions  

The House on Wednesday voted 411-3 to approve legislation (S 2499) that would delay for six months a 10% physician fee cut and extend SCHIP through March 2009, CQ Today reports. HHS Secretary Mike Leavitt said that President Bush is expected to sign the measure (Armstrong, CQ Today, 12/19).

The bill would increase Medicare physician fees by 0.5% for six months and would extend several programs that provide higher Medicare reimbursement rates to rural health care providers and hospital laboratories. The measure also would extend SCHIP funding through March 31, 2009. A summary distributed by the Senate Finance Committee showed that the legislation would provide enough funding for states to maintain their current enrollment levels. In addition, the bill would extend for six months rural and low-income subsidies, as well as payments for rehabilitative therapy under Medicare.

The Congressional Budget Office on Tuesday estimated that the measure would cost $5.3 billion over five years. The costs would be offset by $1.5 billion in cuts from a "stabilization fund" created under the Medicare prescription drug benefit to attract preferred provider organization plans to underserved areas; $1.4 billion in reduced payments to hospitals for inpatient rehabilitation services; and $1 billion in reduced payments for drugs administered by physicians rather than taken at home by beneficiaries. In addition, a data reporting requirement for Medicare Secondary Payer should reduce fraud and abuse, creating savings for Medicare. Under the program, Medicare takes over payment liability from private insurers after they have paid to treat certain conditions over a specific period of time (Kaiser Daily Health Policy Report, 12/19).

Medicare Physician Fee Cut Outlook
The legislation does not address future physician fee cuts, which means the 10% reduction will take effect when the delay expires in June 2008 unless additional legislative action is taken (CQ Today, 12/19). House Energy and Commerce Health Subcommittee Chair Frank Pallone (D-N.J.) said that he expects Congress in June 2009 to pass another short-term delay of the fee cut because the White House is opposed to offsets that would stop the cut for a longer period of time (Johnson, CongressDaily, 12/20).

According to CQ Today, the six-month delay will force lawmakers "to deal with the issue again in the midst of a presidential election, when neither party seems likely to budge much on compromises that were difficult enough this time around" (CQ Today, 12/19). The White House has strongly opposed any cuts to Medicare Advantage and raising tobacco taxes to pay for a permanent fix, Pallone said. "You can't raise taxes, even if it's tobacco taxes," Pallone said, adding, "You can't dip into Medicare Advantage because that's a special interest program that the Republicans don't want to cut. What am I going to do? I don't want to cut Medicare" (CongressDaily, 12/20).

SCHIP Outlook
White House spokesperson Dana Perino in a statement said, "With this (SCHIP) bill, we can be assured that children will continue to have coverage, and Democrats won't be able to play election-year politics with children's health" (Neikirk, Chicago Tribune, 12/20).

The measure does not address an SCHIP policy directive announced in August by CMS that states must enroll 95% of children in families with incomes up to 250% of the federal poverty level before expanding eligibility, The Hill reports. Acting CMS Administrator Kerry Weems said that the Bush administration would not require states to disenroll children from the program despite the requirement. House Energy and Commerce Committee Chair John Dingell (D-Mich.) said that Weems' statement contradicts the policy, adding, "Perhaps CMS officials are reading their directive differently than the rest of us."

An analysis by the Georgetown University Health Policy Institute's Center for Children and Families found that 14 states provide SCHIP coverage to children in families with incomes greater than 250% of the poverty level and that they "will likely be forced to roll back their eligibility levels at some point before August 2008 or assume new coverage costs with state funds." Democratic Caucus Chair Rahm Emanuel (Ill.) on the House floor Wednesday said, "Because of the president's executive order, kids in those states will actually come off the rolls in August." The National Governors Association on Monday sent a letter to Congress asking it to "address the issue raised in the ... guidance issued by CMS" (Young, The Hill, 12/20).

Emanuel said SCHIP will be addressed this summer, when the new rules take effect. He said, "What we can't resolve, the American people will resolve in November," adding, "This will be the first thing a Democratic president will get done. We don't need March '09" (Johnson, CongressDaily, 12/19).

Broadcast Coverage
C-SPAN's "Washington Journal" on Wednesday included a discussion with Rep. Tom Price (R-Ga.), a member of the House Education and Labor Subcommittee on Health, Employment, Labor and Pensions, about the SCHIP provisions in the bill ("Washington Journal," C-SPAN, 12/19). Video of the segment is available online.

NPR's "All Things Considered" on Wednesday also reported on the bill. The segment includes comments from Reps. Roy Blunt (R-Mo.), Emanuel and Pete Stark (D-Calif.) (Rovner, "All Things Considered," NPR, 12/19). Audio and a partial transcript of the segment are available online.

Reprinted with kind 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.

• Additional
• References
• Citations