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Senior Citizen Politics
Democrats Offer SCHIP Bill that Increases Cigarette
Tax, Reduces Medicare Advantage Pay
Physician pay also gets increased, more preventive
services in House bill: GOP prepares alternative
July 25, 2007 - House Democrats on Tuesday
introduced legislation that would reduce payments to Medicare Advantage
plans and increase the federal cigarette tax by 45 cents per pack to
fund SCHIP and make revisions to Medicare, the
AP/Houston
Chronicle reports (Freking, AP/Houston Chronicle, 7/24).
The legislation, called the Children's Health and
Medicare Protection Act, would reauthorize SCHIP and increase funding
for the program by $50 billion over five years. The expansion would
allow an additional five million to six million children to enroll in
the program, according to
House Energy and
Commerce Committee Chair John Dingell (D-Mich.) (Johnson [1],
CongressDaily, 7/25).
In addition, the legislation would:
● Delay scheduled Medicare physician payment cuts
totaling 10% in 2008 and 5% in 2009 and replace them with 0.5% increases
in each of the next two years;
● Create a mechanism for physicians to give
feedback on treatment resources compared with their peers for similar
beneficiaries and create a pilot program in which doctors get paid to
provide a "medical home" to coordinate care;
● Increase Medicare benefits for preventive care
and mental health care, raise the value of assets low-income seniors can
have and still qualify for the Medicare prescription drug benefit and
cover more out-of-pocket Medicare costs for lower-income elderly
beneficiaries;
● Equalize payments between MA plans and
Medicare's traditional fee-for-service program by 2011;
● Reduce payments to home health agencies,
skilled nursing facilities, inpatient rehabilitation facilities and
long-term acute care hospitals;
● Eliminate a "trigger" provision in the 2003
Medicare law that requires the president to propose legislation on
reducing Medicare spending if the program's trustees find for two years
in a row that Medicare is projected to draw more than 45% of its funding
from general government revenues;
● Eliminate co-insurance and waive the deductible
for current preventive benefits covered by Medicare;
● Reduce payments for mental health services from
the current 5% copayment to the standard 20%; and
● Give Medicare the authority to use
recommendations by the
U.S. Preventative
Health Services Task Force to add new preventive benefits
without congressional approval (Carey/Reichard,
CQ HealthBeat,
7/24).
The bill is expected to cost about $90 billion. The
tobacco tax increase is projected to raise about $27 billion and MA plan
reimbursement reductions will raise close to $50 billion, according to
House Ways and Means
Health Subcommittee
Chair Pete Stark (D-Calif.).
In addition, savings from reductions in payments to
home health, skilled nursing and rehabilitation providers will be used
to fund the measure (Johnson [1], CongressDaily, 7/25). The reductions
in payments are consistent with recommendations from the
Medicare Payment
Advisory Commission (CQ HealthBeat, 7/24).
SCHIP Eligibility
Under the bill, states would continue to have the
option of applying for waivers to provide SCHIP coverage to adults and
higher-income children, according to House Energy and Commerce
Health Subcommittee
Chair Frank Pallone (D-N.J.) (Johnson [1], CongressDaily, 7/25).
States also would have the option of enrolling in
SCHIP certain low-income pregnant women and documented immigrant
children and pregnant women. In addition, the legislation would give the
states the option to enroll in Medicaid and SCHIP children up to age 24.
States would receive higher payments for following
specific practices intended to increase enrollment and would receive
payment adjustments if they run out of funds enrolling eligible
children. States would have two years to spend the federal allotment
received each year.
The House bill is expected to cover two million
more children than the Senate version of the legislation
approved
last week by the
Senate Finance
Committee but estimates from the
Congressional
Budget Office are not yet available for the House proposal.
Medicare Advantage
The bill would equalize payments between MA plans
and traditional Medicare over five years, reducing federal
reimbursements by close to $50 billion over that time period. The bill
would not change the reimbursement rates in 2008, but in 2009, payment
benchmarks to MA plans would be a mix of two-thirds of the current
private plan payment system and one-third of traditional Medicare rates.
In 2010, payment benchmarks would be a mix of
one-third of the current private plan payment system and two-thirds of
the traditional Medicare rates. Payments would be equalized in 2011,
with plans that fail to bid below the reduced benchmarks barred from
enrolling new members that year.
Physician Reimbursement Changes
Under the bill, a scheduled cut in Medicare
payments to physicians would be reversed and physicians would receive a
0.5% increase in fees for each of the next two years.
In addition, the bill would make revisions to the
system that sets spending targets for Medicare outlays for physicians'
care. Rather than setting a single spending target for all Medicare
care, the system would sort outlays into six different categories with
different spending targets for each category.
The categories include: primary and preventive
care; other evaluation and management services; anesthesia; imaging;
major procedures; and minor procedures.
Outlays that surpass spending targets must be
offset in following years in the form of payment reductions. The
reimbursement revisions are "meant to increase incentives for doctors
not to overprescribe tests, visits and procedures," according to CQ
HealthBeat.
The bill also provides for a "bundled payment"
system for dialysis facilities to encourage proper dosage of anemia
drugs to dialysis patients. The reimbursement revision provision also
creates a mechanism to provide physicians with feedback on the level of
treatment resources they prescribe as compared to peers who treat
similar beneficiaries (CQ HealthBeat, 7/24).
Senate Republican Alternative Bill
In related news, Senate Minority Leader Mitch
McConnell (R-Ky.) circulated a letter to Senate Republicans announcing
his plans to offer a "comprehensive" alternative to the bipartisan SCHIP
legislation when the bill moves to the Senate floor, CQ HealthBeat
reports.
The Republican version would cost less than the
Senate and House proposals and would increase the use of health savings
accounts and small-business health insurance purchasing pools, according
to the letter (Reichard, CQ HealthBeat, 7/24).
The bill would limit eligibility to children in
families with incomes at 200% of the federal poverty level or lower.
Children who currently are enrolled in the program and are in families
with incomes greater than that level would continue to receive coverage
until income redistributions are made, according to aides familiar with
the plan.
The bill would not allow states to seek federal
waivers to provide coverage for nonpregnant adults and would bar states
from disregarding portions of income when determining eligibility. The
proposal would cost an estimated $9 billion over five years, according
to CongressDaily (Johnson [2], CongressDaily, 7/25).
McConnell said other Republican senators were
concerned about "the size of the plan that came out of the Finance
Committee and what that may portend for the future in terms of an entire
government takeover of American health care and, in essence, a
single-payer system down the road" (Pear,
New York Times,
7/25).
The Republican bill "will likely not stop the
bipartisan bill from getting the 60 votes needed to cut off a
filibuster," although it will "attract support from many Republicans,"
according to CongressDaily (CongressDaily, 7/25).
Impact
SCHIP reauthorization and expansion "serves as a
warm-up for a future debate on how best to revamp the entire U.S. health
care system," provide coverage to the uninsured and "rein in climbing
medical costs," the Wall Street Journal reports. The differences between
House and Senate versions of the legislation put the two chambers "on a
collision course with" each other and with President Bush, who has
proposed providing an additional $5 billion over five years for SCHIP,
the Journal reports.
The House bill "shows how difficult it can be to
make any changes to health programs, as powerful industries lobby hard
for payment increases or to ward off big cuts," according to the
Journal. Sen. Chuck Grassley (R-Iowa) said that a $35 billion increase
for the program is the limit for Republican lawmakers and that while
Senate Democrats "might want something bigger, ... I think we went as
far as we can as Republicans" (Lueck, Wall Street Journal, 7/25).
In addition, the combination of a "potentially
difficult vote for some Democrats," the "prospect of a presidential veto
and rough ride in the Senate" has led some "to question the point of
moving forward" with the legislation, according to CongressDaily.
Lawmakers must reauthorize the program by Sept. 30th or it will expire
(Johnson, CongressDaily, 7/24).
Opinion Piece
"Reauthorizing the SCHIP state-federal partnership
this fall is a good idea" but "[i]nviting more and richer adults into a
children's welfare program is not," Rep. Joe Barton (R-Texas), ranking
member of the House Energy and Commerce Committee, writes in a
Washington Times
opinion piece.
Barton writes that "practical ways" to "fix health
care" include "allowing small employers to consolidate their purchasing
power so they can offer health insurance without losing their shirts";
making "health costs transparent and empower consumers to shop"; and
reducing "the threat of ... gotcha malpractice suits" so that "health
care inflation can cool" (Barton, Washington Times, 7/25).
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