Senate Passes Medicare Bill With Kids’ Health Extension
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 the State Children's Health Insurance Program 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).
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.
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).
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 (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).
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.
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.