10/18/2007
NAAOP Government Relations Update
Senate to Consider Medicare Bill Later this Year
The Senate Finance Committee is currently working to assemble what many believe will be a large Medicare package with the primary goal of addressing a scheduled 10 percent Medicare physician payment cut in 2008.
In July, the House approved the Children's Health and Medicare Protection ("CHAMP") Act of 2007 – which would reauthorize the State Children's Health Insurance Program (SCHIP) as well as eliminate the Medicare physician payment cut in 2008, providing doctors with a 0.5 percent payment bump each year for the next two years. The CHAMP Act would have paid for the changes through an increase in the tobacco tax and cuts to Medicare managed care and many Medicare provider groups including hospitals, skilled nursing facilities, and home health agencies. (Notably, no cuts to the Medicare Orthotic and Prosthetic fee schedule were included.) At the same time, the Senate approved an SCHIP reauthorization bill funded entirely by a tobacco tax increase. The Senate bill contained no provisions impacting the Medicare program.
The compromise SCHIP sent to the President in early October closely resembled the Senate's SCHIP package and all Medicare provisions were dropped at the insistence of Senate leaders. The President promptly vetoed that SCHIP bill on philosophical grounds, stating that a sizable expansion of the program represents a step toward government-run healthcare, and House leaders were unable to garner the necessary votes to override the President's veto.
Now, as Congress considers their SCHIP options, they must also consider their options for Medicare legislation this year. The House will likely not "re-pass" another Medicare bill, but, instead, use the Medicare provisions included in the CHAMP Act to conference with any Medicare legislation the Senate approves this year. The CHAMP Act primarily funded its Medicare provisions with cuts to the Medicare Advantage program (Medicare managed care) and included no cuts to the Medicare orthotic and prosthetic fee schedule. If the final bill similarly does not address the O&P fee schedule, the O&P field will receive a full CPI update on January 1, 2008, worth approximately 2.3% over current fees.
However, because several key Senate Finance Committee members are adamantly opposed to Medicare Advantage cuts, Senate leaders may be forced to look to other Medicare provider groups to pay for a physician payment fix. At this point, the O&P fee schedule will be at risk of being targeted, along with all other Medicare providers.
The Finance Committee is expected to hold its first Member-level meeting the week of October 15th and stakeholders predict that a draft may be available by late October or early November. NAAOP, as well as the other O&P groups that form the O&P Alliance, will be busy over the next several weeks defending the Medicare O&P fee schedule, and also trying to take advantage of opportunities that the Medicare bill will offer.
NAAOP will keep you updated as developments occur.Congress to Debate Controversial Spending Bills
The SCHIP bill may not be the only veto that President Bush issues this year. The President has threatened to veto any appropriations bills that go beyond his recommended discretionary spending cap.
With the debate over the war in Iraq occupying Congress' attention this year, not one of the 12 annual spending bills have reached the President's desk, and, in fact only five have been passed by both the full House and Senate. As the new fiscal year began on October 1, 2007, Congress approved a short-term continuing resolution (CR) to allow continued funding of discretionary programs until their appropriations work is completed.
One of the most controversial spending bills –Labor, Health and Human Services, and Education – has been passed by the House and is expected to be debated by the full Senate this week. The House Labor-HHS-Education spending bill would provide $151.7 billion in discretionary spending for fiscal year (FY) 2008. This is $7.1 billion or 4.9 percent above the FY 2007 level and $10.8 billion more than the President's request. The Senate Appropriations Committee's spending bill would fund the Departments at $149.9 billion in FY 2008.
At this late point in the year and with a looming veto threat, it is becoming more likely that the Labor-HHS-Education spending bill will have to be combined with one or more other spending bills in an omnibus spending package. But with partisan tensions escalating in Congress as a result of the pending 2008 Presidential elections, passage of controversial spending measures is not likely to be easy.
Compiled by Peter W. Thomas, NAAOP General Counsel, and
Emily A. Niederman, Legislative Director, Powers, Pyles, Sutter and Verville, P.C.
