The Senate Finance Committee Oct. 26 released its bipartisan discussion draft on “Medicare and Other Health and Human Services Extender Provisions.” The draft would permanently repeal Medicare’s annual payment limits (caps) for outpatient therapy services, as well as fund and extend several other provisions including the Medicare-dependent hospital (MDH) program and home health rural add-on, among others. The discussion draft does not indicate how the underlying provisions would be paid for.
Unfortunately, the discussion draft is silent on an extension of the delay of Medicaid disproportionate share hospital (DSH) cuts, scheduled to go into effect Oct. 1. The Medicaid DSH payments are an important source of funding that offsets a portion of hospitals’ uncompensated care costs. The DSH cuts will be $2 billion in 2017 and will increase in the next few years to a total of $43 billion through 2025. The cuts have been delayed via bipartisan Congressional agreements over the past four years. The hospital community is advocating for a two-year delay of the DSH cuts, at minimum.
The bipartisan discussion draft is welcome news, given the failure of both the House and Senate to move forward on many bipartisan health care priorities. For example, the bipartisan deal to continue funding the cost sharing reduction (CSR) payments reached by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the Chair and Ranking Member of the Senate Health Education Labor and Pensions (HELP) Committee, seems to have lost steam following the recent announcement made by Senate Finance Committee Chair Orrin Hatch (R-Utah) and Ways and Means Committee Chair Kevin Brady (R-Texas) that they have developed their own alternative plan to continue funding the CSRs. Their plan, which would also suspend the individual and employer mandates and expand the use of health savings accounts (HSAs), would likely attract more Republican support than the Alexander-Murray proposal. The details and legislative text of the Hatch-Brady plan has not yet been released.
House Republicans and Democrats have also failed to reach a bipartisan agreement to fund the Children’s Health Insurance Program (CHIP). House Majority Leader Kevin McCarthy (R-Calif.) announced Oct. 26 that the House will vote next week on a bill extending funding for CHIP. It is expected that the vote will follow party lines, as Democrats do not support the bill’s offsets which would charge higher premiums to high-income Medicare beneficiaries and cut funding to the Affordable Care Act’s public prevention fund.