Congress Returns to Packed Fall Agenda

As Congress returns from their August recess, a busy legislative season begins with several NAAOP priorities pending.

Just prior to leaving for the recess, the House and Senate approved two different bills with a common goal of reauthorizing the State Children’s Health Insurance Program (SCHIP). The Senate’s $35 billion SCHIP reauthorization bill is funded entirely by a 61 cent increase in tobacco taxes and contains no provisions impacting the Medicare or Medicaid programs. However, the House’s bill would reauthorize the SCHIP program at $50 billion over 5 years through a 45 cent tobacco-tax increase and a nearly $47 billion cut to the Medicare Advantage (managed care) program, as well as significant changes to the Medicare and Medicaid programs.

The House bill – the Children’s Health and Medicare Protection (CHAMP) Act of 2007 – would also eliminate a scheduled 10% Medicare physician payment cut in fiscal year 2008, providing doctors with a 0.5% payment bump each year for the next 2 years. The CHAMP Act finds savings to offset the cost of the physician fee schedule increase through cuts to many Medicare provider groups including hospitals, skilled nursing facilities and home health agencies, but does not target the Medicare O&P fee schedule. If the final bill that is signed by the President similarly does not address the O&P fee schedule, the O&P field will receive a full CPI update on Jan. 1, 2008, worth approximately 2.3% over current fees. However, with the Senate expected to begin drafting a Medicare bill and likely contentious conference negotiations, the O&P fee schedule could still be susceptible to cuts.

A Medicare legislative package this year may represent a threat to the O&P fee schedule, but it also represents an opportunity for NAAOP to enact some of its Medicare-related priorities. Such priorities include further separating O&P from durable medical equipment by more closely linking supplier qualifications to the complexity of O&P care provided.

The Bush Administration has issued a formal veto threat on both the Senate and House legislation on philosophical grounds, asserting that expansion of children’s health insurance represents a step toward government-run health care, but the Administration’s position on Medicare legislation is less clear. Strong bipartisan support in the Senate has rendered its SCHIP bill veto-proof (having more than two-thirds of the vote). However, the House approved its SCHIP/Medicare package by a vote of 225-204, a margin well under a two-thirds majority needed to override a veto. Many expect this means that either or both the SCHIP expansion and Medicare package will only be passed when the last, must-pass legislative items are considered for the year, probably in mid-December.

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