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Bush to Sign Health Extenders Package

By Mary Agnes Carey, CQ HealthBeat Associate Editor

September 28, 2007 -- President Bush will sign into law this weekend legislation that would curb a new Medicare rule governing payments for inpatient hospital care, a White House spokesman said Friday.

The Centers for Medicare and Medicaid Services (CMS) said in a proposed rule earlier this year that hospitals will exaggerate how sick patients are when the agency begins adjusting payments next year to tie them more closely to severity of illness, and that a "behavioral offset" is needed to reduce inpatient payments across the board by 2.4 percent to compensate for the overcharges. Hospital groups said the offset would have resulted in a $20 billion cut to their Medicare payments over the next five years.

The health care extenders package (HR 3668) would slice those offsets in half to 0.6 percent in 2008 and 0.9 percent in 2009 but would not address the 2010 offset. The change would restore $2.5 billion over the next two years and $7 billion over the next five. Hospital groups and lawmakers pressed CMS to delay the payment adjustments.

"Yesterday's vote in the Senate and a vote on the same measure in the House recognize that these cuts would adversely affect the ability of hospitals to provide care for our nation's senior citizens," Federation of American Hospitals President Chip Kahn said today in a statement. "Medicare already pays hospitals well below cost to treat Medicare beneficiaries."

The legislation, which both chambers passed by voice vote, would also extend, for three months, two federal health care programs that help low-income individuals obtain health care coverage as well as a federal abstinence education program, all of which expire Sept. 30. The measure also would delay, for six months, a requirement that tamper-resistant prescription pads be used when prescribing outpatient drugs for Medicaid patients.

The delay would give patients, physicians, pharmacists, and others more time to prepare for the change. "The use of tamper-resistant pads should reduce the amount of Medicare fraud. More importantly, the six month delay will minimize any disruptions to patients' access to prescription drugs that would otherwise occur," said Bruce Roberts of the National Community Pharmacists Association in a press release. Roberts is executive vice president and CEO of the organization.

Other provisions in the legislation would extend a Medicaid asset verification program through 2012 and spend an additional $340 million, over the next five years, for a Medicare program that provides bonus payments to physicians who report on a set of quality measures. In addition, the bill would extend a federal program that pays Medicare Part B premiums for low-income Medicare recipients, and it would extend the Transitional Medical Assistance program that allows families that are moving out of welfare into the workforce to extend their Medicaid coverage for up to four months.

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