SCHIP: 'The pressure is intense'

Friday, August 31, 2007

Because of the politics in the House of Representatives and the Senate and veto threats from President Bush, lawmakers face a difficult job in September when they try to reconcile two very different bills reauthorizing the State Children's Health Insurance Program (SCHIP). In a worst-case--but unlikely--scenario, a final compromise would include deep reimbursement cuts for home respiratory therapy and power wheelchairs.
The House on Aug. 1 passed H.R. 3162, the Children's Health and Medicare Protection Act (CHAMP) Act, by a vote of 225-204, mostly along party lines. The bill would provide coverage for more than 4 million uninsured children in low-income families, spending $50 billion over five years. The House bill is financed by a federal cigarette tax of 45 cents a pack, as well as a series of payment cuts to Medicare managed care plans and healthcare providers, including DME and oxygen.
On the Senate side, legislators passed their CHAMP bill (S. 1893) Aug. 2 by a vote of 68-31. The Senate bill would spend an additional $35 billion over five years, a significantly more modest expansion than its House counterpart. The Senate bill is financed entirely by a tobacco/cigarette tax of 61 cents per pack. The Senate bill contains no Medicare provisions.
The Democratic-controlled Congress will face numerous choices when they begin to reconcile the two bills in conference in September. The main issues are how much to spend on the SCHIP program, how to pay for it and whether to include any or all of the Medicare provisions that are part of the House bill. Overriding all this is whether the Congressional leaders can craft a bill that will avoid a veto by President Bush. The White House has issued statements stating that the President would veto both the House and Senate bills because they cost too much and would increase taxes and federal involvement in health care. The administration has said it wishes to spend about $5 billion for SCHIP reauthorization.
The pressure is intense, with Congress trying to meet a Sept. 30 deadline or the program expires. One thing is certain: Whatever compromise package House and Senate leaders agree on, it will be significantly smaller than what the House has approved. And the smaller the bill gets, the more likely the DME and oxygen cuts will get dropped. Speculation continues, however, that Democrats may decide to allow Bush to veto a SCHIP agreement and let the administration live with that political statement as the 2008 presidential and congressional elections approach. Bush will use his veto threat as part of a strategy to maintain his relevancy and to use it as leverage to obtain a compromise.
Within the oxygen provision, the House bill also includes a requirement that HHS conduct a study on the services provided to beneficiaries. For years, the industry has explained to policy-makers the various services provided to consumers, which are at best ill-defined by Medicare. Now, health policy-makers on Capitol Hill want to understand exactly what services are provided to better understand what services the Medicare program should be paying for. The oxygen provision directs HHS to conduct a study on the provision of services and equipment to beneficiaries requiring home oxygen, due to Congress 18 months after the law is passed.
Regardless of whether the oxygen provision stays in the final approved SCHIP package, lawmakers will continue their pursuit to understand the service component related to providing home oxygen therapy--and quantify it. Absent legislation, committee chairmen often request specific studies of HHS or other government entities. If this happens, expect a study examining the services suppliers provide to oxygen beneficiaries to be inevitable.
Cara Bachenheimer is senior vice president of government relations for Invacare.