WASHINGTON WIRE
April 27, 2007
Issue Issue 130
Welcome to the Weekly Washington Wire on Health Care Policy!
In this issue, you'll find:
Congress Approves War Spending Bill, Includes Healthcare Provisions
Trustee's Report Triggers Medicare Funding Warning
SCHIP Reauthorization Introduced in Senate
Top Story
Congress Approves War Spending Bill, Includes Healthcare Provisions
This week, the House of Representatives and Senate approved a $124.2 billion supplemental war spending bill and included additional funding for several health care programs, including for veterans' and children's care.
The bill would add $650 million in funding to the State Children's Health Insurance Program (SCHIP) to cover shortfalls expected this year in 14 states. Approximately $3.3 billion would go to Department of Defense health care programs of which $900 million to increase traumatic brain injury and post-traumatic disorder research and treatment.
The bill allocates $625 million to the Department of Health and Human Services (HHS) for pandemic influenza readiness and response and $25 million for a fund to compensate individuals injured by influenza vaccines. A total of $99 million in funds would be shifted from the National Institutes of Health (NIH) to HHS for research on protection against potential bioterrorism attacks and $50 million would go toward the screening and treatment of medical conditions suffered by rescue and recovery workers who responded to the September 11 attacks.
An amendment successfully offered by Senator Durbin (D-IL) would prevent CMS for one year from implementing Medicaid regulations that would reduce reimbursements to local government-run hospitals and cut graduate medical education.
Following approval by both chambers, the supplemental spending bill was sent to the White House where it faces an almost certain veto. Although the President requested the additional funding for the wars in Iraq and Afghanistan, he strongly opposes provisions in the bill that place timelines on troop withdrawal. Following the veto, Congress is expected to remove the timetable language and re-approve the legislation.
Health Care News
Trustee's Report Triggers Medicare Funding Warning
Findings announced in the annual Medicare Trustees report this week require a mandatory proposal from President Bush in early 2008 to reduce Medicare spending.
For the second year in row, the trustees' report has projected that general revenues are is expected to exceed 45% of Medicare financing within the next seven years. If such findings are reported in two consecutive years, a Medicare law is triggered requiring the President to offer a legislative proposal to bring the funding level below 45 percent. This plan must be submitted no more than 15 days after the release of his next budget proposal.
The trustees' report states that Medicare Part A will run out of money in 2019; however, Health and Human Services (HHS) Secretary Leavitt stated this week that the trustees report does not take into account expected legislation to override the scheduled 10% cut in physician payments next year. If such legislation were enacted, the Secretary estimates the 45% level could be exceeded as soon as 2010.
The Bush Administration sought significant Medicare spending reductions in its fiscal year (FY) 2008 budget proposal released last February, suggesting up to $66 billion in cuts over the next five years. However, Congress is expected to reject many of the President's proposed Medicare cuts in the FY 2008 appropriations process.
In light of the trustees' report, some in Congress continue to push changes to reimbursements to Medicare Advantage plans as a way of reducing Medicare costs. Medicare Advantages providers are paid approximately 12 percent more than traditional fee-for-service providers and the Congressional Budget Office estimates that neutralizing the payments could save approximately $65 billion over five years. However, opposition comes from Members representing rural areas where these plans are popular.
Many stakeholders consider the Medicare trigger arbitrary and consider Medicare's funding concerns to be reflective of rising health care costs in general.
SCHIP Reauthorization Introduced in Senate
Legislation to reauthorize the State Children's Health Insurance Program (SCHIP) was introduced this week by Senators Edward Kennedy (D-MA), John Rockefeller (D-WV), and Olympia Snowe (R-ME). The SCHIP Reauthorization Act of 2007 (S. 1224) would reauthorize the joint federal-state healthcare program, set to expire in September 2007, for another five years and nearly double its funding.
Under the proposed reauthorization, enrollment would be expanded by an estimated 6 million over the next ten years by allowing states to cover individuals with household incomes of up to 300 percent of the federal poverty level - up from the previous level of 200 percent. Enrollment would also expand to include pregnant women and children of legal immigrants.
The legislation would revise the formulas used to allocate SCHIP funds to states. Factors such as rising health care costs and population growth would be taken into account in order to prevent states from experiencing SCHIP funding shortfalls in the future.
Although the Congressional Budget Office has not yet scored the legislation, it is expected to cost between $35 and $50 billion over five years. An increase in the federal cigarette tax and a reduction in Medicare Advantage payments have been identified as potential sources of funding to offset the increased cost of the reauthorized program.
The Senate Finance Committee is expected to be the first to markup the bill. No definite dates have been set, but a markup could come as early as May.
Upcoming Events
FDA Mission Women's Health Issues Postpartum Depression Wednesday, May 2, 2007
Fiscal 2008 Appropriations: Labor, HHS, Education Medicare Prescription Drug Benefit Policy on Biosimilar Drugs Efforts to Improve Nursing Homes Adequacy of Dental Programs for Medicaid-Eligible Children Access to Generic Drugs Thursday, May 3, 2007
Medicare Programs for Low-Income Beneficiaries
House Oversight and Government Reform Committee
10 am, 2154 Rayburn
House Energy and Commerce - Subcommittee on Health
10 am, 2123 Rayburn
House Energy and Commerce - Subcommittee on Health
Noon, 2123 Rayburn
Senate Appropriations - Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
9:30 am, 124 Dirksen
Senate Finance Committee
10 am, 215 Dirksen
House Energy and Commerce - Subcommittee on Health
10 am, 2123 Rayburn
Senate Special Aging Committee - Oversight Hearing
10:30 am, 628 Dirksen
House Oversight and Government Reform - Subcommittee on Domestic Policy
2 pm, 2154 Rayburn
House Energy and Commerce - Subcommittee on Commerce, Trade and Consumer Protection
3 pm, 2123 Rayburn
House Ways and Means - Subcommittee on Health
10 am, 1100 Longworth
For More Information
For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call 202.466.6550 and ask for the Legislative Practice Group.
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