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S. 2499, Medicare, Medicaid and SCHIP Extension Act

Key Points:

The 110th Congress, with significant bipartisan support, has been fighting all year to provide health care coverage for 10 million children through strengthening the State Children’s Health Insurance Program (SCHIP). Unfortunately, President Bush has twice vetoed a bill that would provide these 10 million children coverage.

Supporters of the bipartisan SCHIP bill are disappointed that today, due to the President’s two vetoes, all that the House is considering is a bill that just provides an extension of the current SCHIP program through March 31, 2009 -- which protects coverage for currently enrolled children but does not make headway in reducing the number of uninsured.

Despite the longer-term extension, supporters of the bipartisan SCHIP bill will continue fighting throughout 2008 until a bill is enacted that strengthens the SCHIP program and ensures health care coverage for 10 million children.

Back on August 1, the House passed the CHAMP Act (Children’s Health and Medicare Protection Act), which included critical provisions to make needed improvements in Medicare, including significant reform of the Medicare physician payment system, improving benefits for low-income seniors, adding preventive benefits, making critical investments in rural health care and protecting Medicare against privatization.

Democrats are disappointed that the Medicare provisions today are drastically scaled back from what the House passed in August. The numerous needed improvements to Medicare are not included because the Bush Administration and Congressional Republicans objected to improving traditional Medicare by increasing benefits for low-income seniors and adding new preventive services, and blocked efforts to reform Medicare and reduce Medicare’s overpayments to HMOs (Medicare Advantage plans).

Indeed, it is unfortunate that the Bush Administration has been blocking efforts to reduce Medicare’s substantial overpayments to HMOs (Medicare Advantage plans) despite the fact that these reductions have been strongly recommended by the nonpartisan Medicare Payment Advisory Commission (MedPAC)).

Today’s package is simply a short-term extension of expiring provisions, coupled with minor reforms that ensure the legislation is fully paid for. Negotiations will continue on more comprehensive legislation in the next session.

On Wednesday, the House is considering, under suspension of the rules, S. 2499, Medicare, Medicaid and SCHIP Extension Act. The Senate passed the bill on Tuesday afternoon by unanimous consent. The bill extends SCHIP through March 31, 2009 and provides additional funding to ensure that no children currently enrolled will be dropped from their coverage. The bill also blocks the scheduled 10.1% percent cut in Medicare physician payment scheduled for January 1, 2008 and replaces it with a 0.5% increase through June 30, 2008. In addition, the bill imposes a six-month moratorium on the implementation of the Bush Administration’s proposed Medicaid regulations on rehabilitation services and school-based services, which – if allowed to go into effect would cut nearly $6 billion from Medicaid services for vulnerable children and people with disabilities. Below are highlights of some of the bill’s provisions.

SCHIP Provisions

Extending SCHIP funding through March 31, 2009. The bill extends the State Children’s Health Insurance Program (SCHIP) through March 31, 2009. It also provides additional funding for the states for the purpose of ensuring that no children currently enrolled are dropped from coverage. However, Democrats were disappointed that the bill fails to include provisions to replace the Administration’s damaging August 17th directive to state Medicaid directors with more appropriate and realistic provisions for ensuring that the lowest-income children in a state are enrolled first.

Medicare Provisions

Blocking scheduled cut in Medicare physician payments. The bill ensures that seniors and people with disabilities can continue to see the doctors of their choice by blocking a scheduled 10.1% payment cut to doctors on January 1, 2008 and replacing it with a 0.5% increase through June 30, 2008.

Extending provisions that benefit rural providers. The bill extends through June 30, 2008 provisions that help physicians practicing in physician shortage areas, and other assistance for rural doctors and hospitals.

Inpatient Rehabilitation Facilities. The bill provides relief for inpatient rehabilitation facilities from the so-called “75 percent rule,” which limits the type of patients they can serve, and freezes the market basket update between April 1, 2008 and the end of FY 2009.

Long-term care hospitals. The bill provides regulatory relief for three years to ensure payment stability for long-term hospitals, while also imposing a limited moratorium on the development of new long-term care facilities. The bill also establishes new facility criteria and medical review requirements to ensure patients are receiving appropriate levels of care at these facilities and freezes the market basket update for the last quarter of rate year 2008. In addition, it requires the Department of Health and Human Services to conduct a study on long-term care hospital facility and patient criteria.

Extending therapy caps exceptions process and other provisions. The bill ensures continued access to care by extending both the exceptions process to therapy caps and the payment system for brachytherapy through June 30, 2008. It also extends Medicare Advantage cost contracts and Special Needs Plans (SNPs) with provisions to limit enrollment in SNPs until Congress can enact needed reforms.

Medicare beneficiary assistance. The bill provides $15 million to State Health Insurance Assistance Programs and $5 million for Area Agencies on Aging and Aging Disability Resource Centers for beneficiary outreach and assistance and helping seniors sort through the confusing Part D private insurance plans pushed on them by the Bush Administration.

Medicaid and Other Provisions

Extending the Qualified Individual (QI) program that provides assistance to low-income Medicare beneficiaries. The bill extends through June 30, 2008 the Qualified Individual (QI) program that provides assistance through Medicaid for low-income seniors and people with disabilities who need help affording their Medicare premiums.

Imposing a six-month moratorium on implementing certain proposed damaging Medicaid regulations. The bill imposes a six-month delay on implementation of the Bush Administration’s proposed Medicaid regulations relating to rehabilitation services and school-based services. The effect of the proposed rehabilitation services regulation would be to deny needed Medicaid funding for rehabilitative care for people with disabilities. The effect of the proposed school-based services regulation would be to deny needed Medicaid funding for outreach and enrollment in schools. This moratorium effectively blocks a $6 billion cut to Medicaid services for vulnerable children and people with disabilities. (Democrats were disappointed that the bill fails to also impose a moratorium on implementation of certain other proposed damaging Medicaid regulations.)

Extending Transitional Medical Assistance and abstinence education programs. The bill extends through June 30, 2008 the Transitional Medical Assistance program, which helps low-income individuals transition from welfare to work by maintaining health care for their children. The bill also extends through June 30, 2008 the current abstinence-only education program.

Extending special diabetes program. The bill extends the Special Diabetes Program through September 30, 2009 to fund type 1 diabetes research, as well as type 2 diabetes treatment and prevention for Native Americans and Alaska Natives.

Improving data collection. The bill provides an additional $10 million to improve data collection on the uninsured by the Census Bureau.