Senators said many of the measures sought by hospitals will be included in spending bills that Congress will consider after the Christmas recess.

Dec. 22—A last-minute federal government funding bill will not include a long-term extension of the Children’s Health Insurance Program (CHIP)—although it did include a short-term fix.

Hospital advocates had pushed for the bill to include five-year CHIP funding, delays in cuts to Disproportionate Share Hospital (DSH) payments, and elimination of cuts to the 340B discount drug program. Congress passed the end-of-the-year federal appropriations bill this week to keep the government operating through Jan. 19 and avoid a shutdown that would start on Dec. 22.

Sens. Lamar Alexander (R-Tenn.), chairman of the Health, Education, Labor, and Pensions Committee, and Susan Collins (R-Maine) issued a written statement Dec. 20 that the funding bill would many healthcare provisions. Specifically, five-year CHIP funding and two health insurance individual-market stabilization bills will have to be taken up again in 2018, they said.

“It is hard to add our bills to a year-end package that does not yet exist,” Alexander said. “I am confident that after the first of the year members of both houses will be eager to include our legislation in what was to have been the year-end package of bills.”

The short-term funding measure included $2.85 billion to fund CHIP only through March 31.

Hospital advocates had urged inclusion of the long-term CHIP extension in the year-end bill.

“Failure to extend CHIP funding could result in coverage losses for millions of children and increased financial pressure for states that may lead to reductions in eligibility and benefits,” Thomas Nickels, executive vice president of the American Hospital Association, wrote in a letter.

Since funding for CHIP expired at the end of September, the Trump administration has provided stop-gap assistance to state CHIP programs. The Senate Finance Committee approved a five-year extension of funding in early October. However, the bill did not specify how to pay for the extension, and Republicans and Democrats have sparred over how—and whether—to fund it.

The House also passed a five-year extension of the program in early November, but the funding sources—an Affordable Care Act (ACA) public health fund and an increase in Medicare premiums for wealthy enrollees—have drawn Democratic opposition.

Sixteen states had expected to deplete federal funds by the end of January, and another 31 states expected to run out by the end of March, according to a Kaiser Family Foundation report.

If CHIP funding had not been extended, the Centers for Medicare & Medicaid Services (CMS) said in a memo that states that have to end their programs should decide whether the 8.9 million enrolled children were eligible for Medicaid or required coverage through an ACA individual-insurance marketplace plan.

DSH Cuts Still in Place

Hospital advocates also had pushed for late-year passage of a measure to eliminate $2 billion in FY18 cuts to Medicaid DSH payments and $3 billion in FY19 reductions. The ACA required the DSH cuts, which are scheduled to total $43 billion from FY18 to FY25.

Language from separate legislation that would block the Medicaid DSH cuts was left out of the final funding bill.

“The temporary relief Congress gave [CHIP], while appreciated, won’t stop the loss of health care access and jobs that occurs when [DSH] cuts hit with full force Jan. 1,” said Bruce Siegel, MD, president and CEO of America’s Essential Hospitals. “Hospitals cannot sustain these losses without scaling back services or closing altogether, especially as the ranks of the uninsured swell with the end of the Affordable Care Act’s individual mandate.”

Nickels noted that the ACA reduced Medicaid DSH payments under the assumption that hospitals would care for fewer uninsured patients as healthcare coverage expanded.

“However, the projected increase in coverage has not been fully realized and Congress has subsequently delayed the start of cuts that were scheduled to begin in FY 2014,” Nickels said.

Also left out of the final funding bill was a hospital-back provision blocking CMS from implementing a regulation that will cut Medicare payments to many of the hospitals that participate in the 340B drug discount program by nearly 30 percent. Those cuts will begin Jan. 1. 

Marketplace Stabilization

Senate leaders also considered attaching two bipartisan ACA-marketplace stabilization bills to the year-end funding bill, according to published reports. But Alexander and Collins said partisan bickering led those bills to be dropped—for now.

“[I]n order to succeed, our legislation must be bipartisan, and the Senate Democratic leader said on Tuesday that Democrats would not support it in the current environment even though as recently as October he said that all Democrats would,” the Republican senators said. 

The so-called Alexander-Murray legislation would fund cost-sharing reduction (CSR) payments for low-income enrollees in ACA marketplace plans and authorize states flexibility on the coverage provisions insurers must include in their individual market plans. It was backed by 12 Democrat and 12 Republican sponsors. The so-called Collins-Nelson bill would create a $5 billion risk-pool stabilization mechanism.

Both bills were supported by President Donald Trump and Majority Leader Mitch McConnell, said Alexander and Collins.

A Dec. 9 analysis by Oliver Wyman concluded that enactment of both bills “would result in another 700,000 people with coverage in the individual market and premiums that were more than 20 percent lower than if the individual mandate were repealed and the package of provisions was not implemented.”

A separate Dec. 6  Avalere analysis concluded that the bills could lower 2019 premiums by 18 percent and increase enrollment by 1.3 million people.

However, a new analysis by the Council for Affordable Health Coverage, which is a coalition of employers, insurers, and physician organizations, found that implementation of the reinsurance would reduce average premiums by only nine to 11 percent.

Critics of the bills said they would replace too few people who would drop coverage after the ACA’s individual-mandate penalty was eliminated in a tax bill passed Dec. 20. According to the Congressional Budget Office (CBO), this repeal provision is projected to increase the number of uninsured by 4 million in 2019 and 13 million by 2027 because more will choose to forgo insurance.

The late-year spending bill did include a provision to waive congressional “pay-go” rules, without which a $25 billion cut to Medicare would have occurred in 2018. Avoiding that cut was another hospital priority.

Collins said the delay in consideration of her bill could strengthen its market supports.

“This afternoon Speaker Paul Ryan called me and said that the House remains committed to passing legislation to provide for high-risk pools and other reinsurance mechanisms similar to the bipartisan legislation I have introduced,” Collins said. “He pointed out that by waiting until early next year, we will be able to use a new CBO baseline that will result in more funding being available for reinsurance programs that have been proven effective in lowering premiums while protecting people with pre-existing conditions like diabetes, heart disease, and arthritis.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Friday, December 22, 2017