Government
Funding pools OK'd for Medicare doctor pay, SCHIP
■ Congress still must pass appropriations bills that would authorize the actual spending.
By David Glendinning , Doug Trapp — Posted June 11, 2007
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Washington -- Congress adopted a $2.9 trillion budget blueprint late last month with provisions to allow lawmakers to prevent Medicare physician reimbursement cuts more easily and to double spending for the State Children's Health Insurance Program.
The May 17 House and Senate votes on the fiscal 2008 budget resolution -- which serves as a guide to congressional spending but does not provide funding -- fell mainly along party lines. Many Republicans objected to the measure, not because of its health care provisions, but because it would let some tax cuts expire.
The budget resolution establishes a reserve fund that lawmakers could use to boost physician reimbursement rates or provide financial incentives for doctors to improve the quality of their care. A dedicated fund would prevent opposition lawmakers from using congressional budget rules to block legislation that would accomplish these goals.
The provision does not set a limit on how much money lawmakers can set aside for the fund when they develop actual appropriations legislation. Preventing next year's roughly 10% cut alone is expected to cost billions.
But the physician payment set-aside is budget neutral, meaning that it will be dropped if its appropriations legislation would increase the federal deficit. This condition, combined with the Democratic leadership's commitment to following "pay as you go" rules on new federal spending, forces Congress to find other places to cut Medicare to cover the cost of preventing the physician payment cuts.
The budget resolution also includes similar budget-neutral funds that are intended to leave room for allowing direct government negotiation of Medicare drug prices, making the Part D benefit more generous, boosting Medicare hospital reimbursements, promoting health information technology and covering the uninsured.
Preserving SCHIP
The budget resolution established a reserve fund of $50 billion for SCHIP over five years -- a doubling of the existing budget and $20 billion more than President Bush's budget proposal. But it did not identify a source for that funding. The program will expire Sept. 30 without reauthorization.
SCHIP provides health coverage to about 6 million children and about 600,000 adults who don't qualify for other public health programs.
But between 7.5 million and 10 million children remain uninsured. Of those, approximately 2 million are eligible for SCHIP, various estimates say.
The initial Senate version of the budget resolution, which was adopted in March, called for a $46 million, 61-cent cigarette tax increase to fund the program. But the tax language wasn't included in the final measure.
That's because two leaders in the budget resolution process wanted to give more funding flexibility to the committees expected to hear SCHIP legislation this summer, said a spokesman for one of the leaders, House Budget Committee Chair John Spratt (D, S.C.).
The 61-cent cigarette tax, introduced by Sen. Gordon Smith (R, Ore.), has attracted backing. Five days after Congress passed the resolution, a coalition of 68 physician, hospital, patient advocacy and other organizations -- including the American Medical Association -- sent a letter supporting the tax increase to four leading senators -- two senators from each party.
The AMA, as a member of the Health Coverage Coalition for the Uninsured, supports full SCHIP funding to cover all eligible children and refundable, advanceable tax credits for buying health insurance.
All potential SCHIP funding sources are on the table, including the cigarette tax, according to an aide to Sen. Max Baucus (D, Mont.), chair of the Senate Finance Committee. Baucus has supported a $50 billion SCHIP reauthorization, as has Rep. John Dingell (D, Mich.), chair of the House Energy and Commerce Committee. Dingell has expressed reservations about a cigarette tax increase, but he does not specifically oppose it, a Dingell spokeswoman said.