Modern Healthcare: New spending stopgap measure stalls Medicare extenders, DSH delay

The Senate on Monday provided the Children’s Health Insurance Program with long-awaited funding for six years—but the three-week spending stopgap measure to end the federal government shutdown may dim lawmakers’ chances to pass other health measures anytime soon.

Providers saw their Medicare and Medicaid funding lapses fall by the wayside as senators looked to end a three-day government shutdown stemming from political debate over the status of undocumented immigrants who were brought to the U.S. as young children; President Donald Trump announced in September he is ending their protection under the Deferred Action for Childhood Arrivals policy, or DACA. Medicare programs known as Medicare extenders, whose funding expired Oct. 1, and community health centers still wait for Congress to fund appropriations. Medicaid disproportionate-share hospitals expect another delay to the cuts in their federal allotments that technically went into effect in fall 2017, but won’t hit most hospitals until the summer of 2018.

Instead of passing this funding, Congress moved to delay certain health industry taxes from the Affordable Care Act: the medical-device tax, the Cadillac tax and the health insurance tax.

Senators said Monday they hope to move these measures shortly, but no one could comment on when that will happen. It’s also unclear if the next few weeks of spending and immigration negotiations will go smoothly, or whether the two chambers will find an amicable solution.

“We could have another crisis on our hands” in three weeks, said Sen. Chris Murphy (D-Conn.), who opposed the new stopgap even though he called it an important agreement in that it brought Republicans into talks with Democrats.

Medicare extenders and community health centers usually ride with CHIP, the beleaguered program that became a symbol of congressional dysfunction when both sides used it as political leverage to come to a broader agreement on spending and immigration.

Now that Congress has finally agreed to extend CHIP, the next question is how far down the road lawmakers kick the can on the next healthcare package.

Rural hospitals who qualify for enhanced reimbursements through the Medicare-Dependent Hospital Program and Low-Volume Adjustment Program have seen a cut in reimbursements since the last funding expired Oct. 1, as the CMS is processing the cuts instead of holding claims in anticipation of congressional action.

Although a congressional appropriation should retroactively restore the difference, the cut comes at a time when rural hospital closures continue to accelerate.

Disproportionate-share hospitals would see a $2 billion hit in fiscal 2018 and $3 billion in cuts in fiscal 2019, according to the American Hospital Association. States decide how to portion out the DSH allotments to hospitals, so the effect on individual hospitals will vary by state.

The next budget deadline of Feb. 8 means Congress will likely need a fifth stopgap measure before finishing a final spending omnibus bill, Sen. Lamar Alexander (R-Tenn.) said Monday.

This is the likely vehicle for the next healthcare package, hospital lobbyists said.

Democrats won very few concessions from Republicans before they agreed to go along with the GOP stopgap measure to re-open the government. Senate Majority Leader Mitch McConnell (R-Ky.) promised Democrats and moderate Republicans he would make sure the Senate deals with the legal status of DACA recipients by early February and, if not, that he would restore regular order to bring up a bipartisan bill. Even if this happens, the U.S. House of Representatives’ and White House’s responses remain wild cards.

Still, Democrats from the bipartisan group of senators who broke through the Senate logjam over the weekend expressed tempered optimism they can pass the rest of the healthcare measures soon while also landing on an overall budget deal.

“I think a broader spending agreement can be reached now,” said Sen. Bob Casey, a Pennsylvania Democrat who wants imminent action on funding community health centers. “We applied a lot of pressure this weekend—there were Republicans in the room who weren’t willing to go in that room before this weekend,” said Casey, who was not part of the talks.

Sen. Gary Peters, a Michigan Democrat who participated in the talks, said the group considered including the Medicare extenders and community health centers in the stopgap bill, but ultimately agreed to the original House GOP budget patch, albeit one week shorter, and to postpone resolving those measures in order to end the shutdown quickly.

But other Democrats were more openly skeptical of McConnell, whose previous commitments to Sen. Susan Collins (R-Maine) to include cost-sharing reduction payments and reinsurance money in a December budget patch and to Sen. Jeff Flake (R-Ariz.) to resolve the immigration issue in January, ended up going nowhere. But they were confident their pressure as a voting bloc could yield further movement on their priorities.

“I have no trust in Republican leadership, but I’m going to take a deep breath and show some trust in my 12 moderate Republican colleagues who were willing to take a step forward on this,” Sen. Tammy Duckworth (D-Ill.) said, adding that she hopes lawmakers can come to a budget deal in the next three weeks.

Sen. Dianne Feinstein (D-Calif.) concurred. “I trust that because the leadership did it this way, they must know something I don’t.”