Senate panel approves Children’s Health Insurance Bill, House proposes different concept, which includes increase for physician reimbursement rates

With a bipartisan 17-to-4 vote, the Senate Finance Committee approved a $35 billion increase to renew and expand the State Children’s Health Insurance Program (SCHIP), which is set to expire September 30. The panel defied a veto threat from the president. President Bush and U.S. Health and Human Services Secretary Mike Leavitt have repeatedly criticized the proposal, with Leavitt calling the tobacco levy "massive" and "regressive" and advocating instead for a tax break for the buyers of private health insurance. This bill does not address the looming 9.9% physician pay cut called for by the sustainable growth rate (SGR.)

House Democrats would rely less on tobacco taxes than the Senate would and more on cuts to Medicare insurers to pay for a proposed $50 billion expansion of a children's health insurance program. The proposal would also eliminate a 10 percent cut in the reimbursement rate for doctors who treat Medicare patients that is scheduled to take effect Jan. 1. Instead, the legislation would give doctors a 0.5 percent increase in their reimbursement rates each of the next two years when they treat Medicare patients. Democrats would pay for the expansion of the State Children's Health Insurance Program, or SCHIP, through a 45-cent increase in the federal excise tax on a pack of cigarettes and by lowering payments to many insurance plans participating in the Medicare Advantage program over the next four years. The House bill deals with much more than SCHIP. It would eliminate cost-sharing for preventive services in Medicare, such as cancer screenings. In addition, it reduces the co-payment on mental health outpatient services from 50 percent to 20 percent. The bill would also freeze reimbursement rates for some Medicare providers next year; namely, home health agencies, nursing homes and long-term care hospitals.

A planned vote on this House legislation (HR 3162) was postponed this week. While Democrats and many Republicans appear to agree with the underlying goal of the House and Senate versions of SCHIP legislation, both chambers are bracing for a conference committee fight over a cigarette tax increase and cuts to private MA plans. Even if a conference committee is able to reach an agreement on SCHIP legislation, it is unclear how Congress would proceed if President Bush vetoes the measure. HHS Secretary Mike Leavitt has stated that the Bush administration supports SCHIP, but it does not support a huge expansion of the program."

The debate on this legislation will continue, however, it is still imperative that AMCNO physician members voice their concern to Congress about the impending Medicare payment cuts. Write your Congressman today and tell them that they must stop the Medicare payment cuts in 2008. Members may send letters to Congress directly through the AMCNO website - click on the Legislation link then click on Find your legislator/eye on the Statehouse to find a sample letter to Congress or click here