Medicare Package, SCHIP Extension Could Be Added To Alternative Minimum Tax Legislation

Armen Hareyan's picture

House lawmakers will notadd a Medicare package to an omnibus spending bill, but they could try toattach it to alternative minimum tax legislation due on the floor this week,aides said, CongressDaily reports. Lawmakers negotiating thepackage were in discussions late on Monday and must decide on Tuesday if theywill attach the measure to the AMT bill. According to CongressDaily,"Sources described the negotiations as messy, predicting that lack of agreementamong members would keep any Medicare package from passing this year"(Johnson, CongressDaily, 12/11).

Democrats during negotiations over the weekend proposed a one-year fix to thescheduled 10% Medicare physician fee cut, along with a 0.5% increase inphysician payments. The proposal would reduce Medicare Advantage plan paymentsby $15.5 billion over five years and by $53.5 billion over 10 years (Armstrong,CQ Today, 12/10). The White House has said that any Medicarepackage that includes cuts to MA or changes HHS regulations would be vetoed (CongressDaily,12/11).


The Democrats' plan, whichcould be added to the AMT bill, also includes a one-year extension of SCHIP. Thedraft measure would provide $800 million to maintain projected enrollmentlevels for 2008, CQ Today reports. The funds would be added toSCHIP's $5 billion baseline budget (CQ Today, 12/10).

The Congressional Budget Office on Monday released an analysis thatfound $800 million would be needed to cover state SCHIP shortfalls in 2008. Thefigure, which is lower than the earlier estimate of $1.4 billion, takes intoaccount $600 million in projected Medicaid savings because states will notexpand Medicaid eligibility if SCHIP funding is available. The SCHIP proposalalso includes $3 billion over five years in other Medicaid provisions (CongressDaily,12/11).

The extension would fund SCHIP through Sept. 30, 2008. A continuing resolutionthat has been funding the program expires on Friday. According to CQToday, extending SCHIP funding until September 2008 will make theprogram an "issue shortly before the November elections" (CQToday, 12/10). The SCHIP provision on the bill is still "up in theair" and was not discussed on Monday, CongressDaily reports. Republicanshave said that they would support a yearlong extension that will prevent statesfrom experiencing shortfalls (CongressDaily, 12/11).

Other Provisions

Other provisions of theDemocrats' Medicare package include:

  • Creating yearlong extensions of rural and low-income subsidies;

  • Implementing a yearlong extension of transitional Medicaid assistance;

  • Halting for one year changes to the pharmacy reimbursement formula proposed by the Bush administration (CongressDaily, 12/11);


  • Cutting payments to oxygen service companies (CQ Today, 12/10);

  • Reducing payments to inpatient rehabilitation facilities and long-term care hospitals (Johnson, CongressDaily, 12/10);

  • Limiting payments to physician-owned hospitals;

  • Changing the asset test so more beneficiaries would be eligible for more generous coverage under the Medicare drug benefit;

  • Revoking authority of the Joint Commission, formerly the Joint Commission on the Accreditation of Healthcare Organizations, to "deem" hospitals as eligible for Medicare participation; and

  • Mandating Medicare physicians use electronic prescriptions (Reichard, CQ HealthBeat, 12/10).


A Senate aide saidRepublicans made a counteroffer to the Democrats' proposal, but no details werereleased (CQ Today, 12/10). Republican aides said a Medicare/AMTpackage would not pass in the Senate. Aides on Monday said that the White Housemight accept a plan that would stop the physician fee cut for one year byeliminating duplicate medical education payments, which would raise about $11billion. However, the plan would not provide enough funding for otherprovisions, such as extending rural and low-income subsidies (CongressDaily,12/11).

Members of the House Ways and Means Committee on Tuesday will discuss theDemocrats' proposal (CQ Today, 12/10). If Congress does not agreeon a package before it adjourns or if President Bush vetoes the bill, thephysician cut would go into effect Jan. 1, 2008. According to an aide, Congresswould have to pass a "bare-bones approach that jettisons any extras"to stop the physician fee cut before the end of the session. But it is"unclear whether that type of fix would win support from Democrats seekingbroader Medicare improvements or lawmakers from rural areas," CongressDailyreports. Lawmakers could create a retroactive package early next year to stopthe physician fee cut (CongressDaily, 12/10).

Opinion Piece

"Access to primarycare for millions" of Medicarebeneficiaries "is in peril" as "doctors across the country bracefor cuts in payments from Medicare," which might cause "doctors torethink their commitment to caring for Medicare patients," WallStreet Journal columnist Benjamin Brewer writes. Brewer continues,"Unless there's a reprieve soon, Medicare will reduce payments to doctorsby an average of 10.1%," but a deal to stop the cuts "remainspossible." Brewer concludes that while the nation is "talking abouthow to expand health care for the uninsured, ... it's time to fix the Medicaresystem that's leading many doctors who tend to the basic health care needs ofthe elderly to reconsider the proposition" (Brewer, Wall StreetJournal, 12/11).

Reprinted with permission from Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat The Kaiser Daily HealthPolicy Report is published for, a free service of The HenryJ. Kaiser Family Foundation.