Friday, November 16, 2007

SCHIP, Medicare Physician Fee Cuts, and Medicare Advantage--We're Getting Down to Crunch Time

Since September of 2006, I have been pointing to this year-end as the time that would require some big budget decisions impacting SCHIP, the scheduled 10% Medicare physician fee cut, and corresponding Medicare Advantage cuts to health plans to pay for the doc fix.

Guess what? New Year's is just over six weeks away.

For now, each of these issues is bogged down in the overall budget stalemate between Congress and the White House.

Work to get enough Republicans to help the Democrats override the Bush veto of the SCHIP bill is stalled and is not going to be accomplished before Thanksgiving. The problem now is that the Democratic leadership has shown a willingness to toughen up the bill over eligibility and citizenship requirements to please the Republicans only to have the "TriCaucus"--that includes the Congressional Black Caucus, Asian Pacific American Caucus, and Hispanic Caucus--say they won't vote for a SCHIP bill that has given up too much.

Just before the Thanksgiving recess, Democratic leaders made a major push to get an agreement with enough Republicans to override the Bush veto but were not able to find common ground. They will try again in December but the fact that with such great effort they were not able to get it done this week does not bode well.

As I have told you before, the doc fee cut problem and corresponding proposed Medicare Advantage insurer payment cuts are going to be worked out in the Senate Finance Committee. Ignore everyone else, that is where any deal will be done.

This week, Democratic Senate Finance Chair Max Baucus said he is getting ready to release a bill that fixes the 10% physician cut for 2008 and the next scheduled cut of 5% in 2009. To do so, he would cut Medicare Advantage payments by about $20 billion. His bill would also spend more on rural seniors and cut home oxygen providers and home health care.

On the Republican side, ranking Republican Senator Grassley said he would rather see a one-year fix to the Medicare physician fee problem and a smaller Medicare Advantage cut----likely thinking it will be easier to get something that either the White House approves or can be overridden if it is vetoed.

No consensus has yet been achieved--and then there is the White House to deal with.

In the meantime, the SCHIP bill is operating under a continuing resolution (CR) until December 14th--which can be easily extended. However, the longer this goes on the more states that will run short of SCHIP money and have to cut kids--all of which will be on the front page of the local newspapers. The CR money isn't enough to sustain current enrollment levels for long.

The Medicare docs get cut 10% on New Year's day unless a deal can be reached.

There will be a deal in the Congress on the doc cuts and Medicare Advantage and it will occur later in December than earlier. It might even slide into the early part of the New Year with a retroactive effective date to January 1.

Yesterday, the House fell just two votes short of overriding the Bush veto of the Labor/HHS spending bill. It is clear that the Dems have not yet found the combination necessary to get those last few Republican votes to get a SCHIP or budget bill.

The Democrats are now talking about combining all of the ten remaining spending bills into one giant bill. They are saying they would "split the difference" in the total budget disagreement with Bush, pass it, and then fight it out. It is likely that any doc fix and Medicare Advantage cuts will be caught up in that.

On timing, the only thing that is certain is that no member of Congress will miss a holiday dinner. Kids might lose their health insurance though.

The nice thing about the 12-year Republican rule of Congress is that they knew how to run a "railroad." Maybe they spent "like drunken sailors" and kept votes open until 4 am while they beat their people up, but they knew how to enforce discipline in their ranks and get bills passed in time to catch the last plane out of town.

I think I miss Tom DeLay!
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