Coming back from an august recess this month, Congress has the arduous task of compromising two versions of legislation that will expand the federal health program to insure low-income children, but could also have far-reaching effects on the renal community.
Expanding SCHIP
The creation of the bills (S. 1893 in the Senate and H.R. 3162 in the House of Representatives) is centered around expanding the $25-billion SCHIP program, which is set to expire on September 30.
Everyone agrees that the current level of funding cannot sustain the SCHIP program. President Bush proposed a $5 billion increase for the program. The Senate bill takes that bit further by adding $35 billion to the program over the next five years. That would increase the number of enrollees to 9.8 million from 6.6 million. The House of Representatives proposed adding $50 billion to SCHIP over the same time period and would increase the number of enrollees to 11 million.
Both versions of the bill look to increase the cigarette tax to fund the program. Cigarettes are currently taxed 39 cents a pack. The Senate would increase that tax to $1 while the House proposed to raise it to 84 cents a pack.
The House, unlike the Senate, used the SCHIP expansion as a vehicle to change other areas of Medicare, such as the ESRD program. President Bush has threatened to veto any version because he sees it as a harbinger of universal healthcare and disagrees with the larger increases in spending.
Changes to Medicare
But the House bill goes well beyond expanding the State Children’s Health Insurance Program. Hidden within the 481 pages of the House’s legislation are cuts to the Medicare Advantage Program, payments for home oxygen equipment and a slew of provisions that could cut funding to the End- Stage Renal Disease Program. The bill would also cancel out a proposed 10 percent cut in physician pay from Medicare by adding a 0.5 percent increase in payments.
The House bill proposed to level payments between Medicare Advantage plans, which pays private insurers to cover extra services, and traditional Medicare. That would reduce Medicare payments by $50 billion during that time period. The House plan would also reduce payments to health maintenance organizations that offer private Medicare coverage by $157 billion over 10 years.
In addition, the House plan proposes to increase subsidies to low-income Medicare beneficiaries for healthcare and prescription drug coverage by $50 billion over 10 years. According to a Congressional Budget Office report, the House bill proposes to cut approximately $3.6 billion from the ESRD program between 2008 and 2017, with $3 billion of those cuts coming between 2012 and 2017. Many of the cuts will come in statutory cuts in anemia drug reimbursements as well as leveling reimbursements between hospital-based dialysis clinics and non-hospital based dialysis clinics. The proposal also calls for programs to increase kidney disease education programs and research into home dialysis options. (See sidebar for all proposed changes to the ESRD program).
The House Ways and Means Committee “Truth Squad” released a statement in late July justifying why the cuts to the anemia drugs were necessary. The document pointed to the recent black-warning placed on all erythropoiesisstimulating agents, their $2 billion price tag and the profitability the drugs can bring dialysis providers. “In May 2006, the Office of the Inspector General documented that while Medicare paid $9.48 per 1,000 units of Epogen in 2006, large dialysis chains were able to buy the drug at $8.55 per 1,000 units.”
“We believe the introduction [of the proposed bill] will have significant impact on sales as it incentivizes dialysis providers to use as little Epogen as possible to maintain hemoglobin levels in the 10 to 12 g/dL range (as opposed to the current system that encourages the opposite),” Credit Suisse analyst Michael Aberman, MD, wrote in a late-July report.
Reaction to the Proposals
With so many specialties affected by the proposals, lobbyists from the oxygen machine industry to pharmaceutical giants like Amgen—not to mention the tobacco companies—are sure to tug at Congress from all directions. Powerful groups such as the American Medical Association and the American Association of Retired Persons are in favor of the House’s legislation. “The House rose to the challenge of making sure that two critical healthcare issues were addressed before the August recess, and while there is work to be done, now millions of low-income children and seniors can know that the House is committed to ensuring that they continue to have access to healthcare,” said Edward Langston, MD, board chair of the AMA.
However, many kidney care groups oppose the legislation because of the potential cuts to the program. “Although the House proposal includes positive education and training provisions, its overall impact would not be positive to the program,” Kidney Care Council President Rob Foreman said in a statement. “Reducing Medicare payments and not providing for an annual update could significantly impact patient access to dialysis care.”
The Kidney Care Partners have also come out against the bill, reminding legislators that the Kidney Care Quality & Education Act is still on the table. “As a community, we are further troubled that members of the House of Representatives are seriously contemplating cuts to a benefit that affects so many poor, elderly and minority patients,” said Edward Jones, MD, chairman of KCP and a practicing nephrologist.
President Bush has already threatened to veto the legislation and, mirroring the sentiment of other Republicans, is worried that it will move the country to a more socialized system of healthcare.
Chances of Becoming Law
President Bush has already threatened to veto the legislation and, mirroring the sentiment of other Republicans, is worried that it will move the country to a more socialized system of healthcare. “To suggest that this is somehow socialized medicine is one of the most far-fetched arguments I have seen on the Senate floor,” Sen. Kent Conrad, D-N.D., told the New York Times. “This care is provided by private physicians, using private insurance companies.”
But before Bush can even get his veto pen out, the House and Senate have to reconcile the legislation before it can be sent to the president. That’s where many of the House’s proposals could be whittled down. The Senate legislation passed August 3 by a vetoproof margin of 68-31. In that, 18 Republicans and two independents joined 48 Democrats in support of the bill. That includes prominent Utah Republican Sen. Orrin Hatch, who helped create the SCHIP program 10 years ago.
However, the House passed its version of the legislation by a vulnerable count of 225 to 204. The vote was largely along party lines with 220 Democrats and five Republicans supporting the bill. Ten Democrats, though, crossed the aisle in opposition of the bill, along with 194 Republicans. Because of their veto-proof margin, Senators can leverage their version of the bill as the two sides come together this month to compromise on the legislation.
ESRD-specific provisions in House version of bill
- Chronic kidney disease demonstration projects to increase education, screening and surveillance
- Medicare-covered kidney disease patient education services
- Required training of dialysis technicians
- Medicare Payment Advisory Commission (MedPAC) must report on the barriers to home dialysis
- Epogen reimbursement will be cut to $8.75 per thousand units for large dialysis organization with more than 300 facilities. If less, it will be reimbursed at 102 percent of the average sales price
- Aranesp reimbursement will be cut to $2.92 per microgram for LDOs, or if less, it will be reimbursed at 102 percent of the average sales price
- Hospital-based dialysis facilities will be reimbursed at the same rate as non-hospital-based dialysis clinics
- A bundled payment system—including erythropoiesisstimulating agents, other drugs and lab tests—will be implemented by 2010 with a reimbursement rate equal to 96 percent of all ESRD payments in an unbundled system
- Quality incentive payments based on measures, such as anemia management and vascular access
