Wednesday, December 19, 2007 Capitol
Hill Watch
Senate Approves Medicare Bill That Would Delay
Physician Fee Cut, Extend SCHIP Through March 2009
The Senate on Tuesday by voice vote
approved a "bare-bones" Medicare bill (S
2499) that would delay for six months a 10% physician fee cut and
would extend SCHIP through March 2009, CQ Today reports.
House Majority Leader Steny Hoyer (D-Md.) said the House will take up the
measure on Wednesday.
The legislation 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. However, the legislation does not
address future physician fee cuts, which means the 10% cut will go back
into effect after the six months without additional legislative
action.
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 (Armstrong, CQ
Today, 12/18). In addition, the bill would extend for six months
rural and low-income subsidies, as well as payments for rehabilitative
therapy under Medicare (Johnson, CongressDaily, 12/18).
Other Provisions
The bill also would:
- Bar Medicare Advantage special needs plans from
expanding service areas through Dec. 31, 2009, and prevent new SNPs from
entering the program until that time;
- Place a "limited" moratorium on new long-term
acute-care hospitals and establish new facility and medical review
requirements to ensure patients receive appropriate levels of care at
the facilities;
- Extend a system in which physicians report
quality-of-care data;
- Extend through June 30, 2008, a Medicaid
program that helps low-income seniors and individuals pay their Medicare
premiums;
- Extend the current abstinence-only education
program until June 30, 2008; and
- Extend through June 30, 2008, a transitional
medical assistance program that helps low-income individuals move from
welfare to work by maintaining health insurance for children
(Carey/Reichard, CQ HealthBeat, 12/18).
Costs
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 (CQ Today, 12/18).
The
bill would maintain current payment system for teaching hospitals.
Republicans had proposed funding the measure by eliminating some payments
for medical education, but House Ways and Means Committee Chair Charles Rangel
(D-N.Y.) opposed the idea because he said the cuts would
disproportionately hurt urban areas (CongressDaily,
12/18).
CBO estimated that the physician fee patch would cost $1.5
billion over five years and $6.4 billion over 10 years. Extending SCHIP
would cost $800 million over 10 years. According to CBO, the legislation
would save the government $100 million over five years and would be cost
neutral over 10 years (CQ Today, 12/18).
Future of SCHIP
Extending SCHIP until 2009 would be a
"victory for Republicans," according to CQ Today. Democrats
had aimed to extend the program for a shorter period of time to make it a
main issue during the 2008 presidential campaign. However, the "longer
extension also offers a chance to secure Republican cooperation in
expanding the program to cover more uninsured children," CQ
Today reports (CQ Today, 12/18).
Finance
Committee Chair Max Baucus (D-Mont.) said that the extension does not
limit when SCHIP can be discussed again, saying, "We can still bring it up
and try to do (children's health) legislation before" funding expires (Reuters, 12/18). In addition, the legislation
does not address a CMS
rule that prohibits states from expanding SCHIP income eligibility limits
to higher income levels if they have not covered 95% of low-income
children, so "any problems that develop as a result of it will give
lawmakers an excuse to revisit SCHIP in the summer,"
CongressDaily reports (Johnson, CongressDaily,
12/19).
However, The Hill reports that supporters
of SCHIP "might have to wait for the next president and the 111th Congress
to get a result." According to The Hill, that "could be
risky, since in 2009 SCHIP could well be subsumed by much larger debate
over the future of the U.S. health care system if the focus of
presidential candidates on health care issues holds steady" (Young,
The Hill, 12/19).
Comments
The American Medical Association said that the six-month fix
creates uncertainty for Medicare beneficiaries and the physicians who
serve them. AMA said Congress should do away with the funding formula that
created the cuts altogether. In addition, AARP and other groups "described
the Medicare legislation that passed the Senate as woefully inadequate,"
hoping that "Congress would substantially lower payments" to MA plan
providers "to pay for other programs that they wanted," the AP/Houston Chronicle reports.
Finance Committee ranking member Chuck Grassley (R-Iowa) said,
"This is a disappointment for many of us," adding, "The purpose of moving
forward with a six-month package now is to provide the opportunity for the
Finance Committee to address these priorities next year" (Freking,
AP/Houston Chronicle, 12/18). Senate Budget
Committee ranking member Judd Gregg (R-N.H.) said of the Medicare
physician fees, "There's a geometric progression which makes it worse each
year," adding, "So what we ought to do is correct it permanently, take the
hit and deal with it" (CongressDaily, 12/18).
House Energy and
Commerce Committee ranking member Joe Barton (R-Texas) said, "If the
House extends SCHIP, the next logical move is to convene a committee
hearing and begin an honest, bipartisan exploration of how to improve
children's health insurance" (The Hill, 12/19).