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December 14, 2017

DSH cut delay, CHIP funding, and more: Inside the House GOP's year-end spending measure

Daily Briefing

    House Republicans on Wednesday introduced a short-term spending bill (H.J. Res 124) that would fund most of the federal government through Jan. 19 and includes House-approved language to reauthorize CHIP for five years.

    Medicare 101: Cheat sheets for Parts A through D

    The measure is intended to keep the federal government funded beyond Dec. 22 to avoid a partial government shutdown and give congressional leaders more time to work on longer-term legislation. However, Senate Democrats have threatened to oppose the new short-term bill. Until new Senator-elect Doug Jones (D) is sworn in, Republicans control 52 seats in the Senate, meaning they currently need at least eight Democratic senators to support the measure to pass.

    Bill details

    The short-term funding bill would fully fund the Department of Defense (DOD) for the entire 2018 fiscal year (FY), while funding other federal agencies through Jan. 19.

    The bill would provide nearly $100 billion in CHIP funding over five years, but after two years it would gradually phase out the Affordable Care Act's (ACA) 23 percentage point funding bump for CHIP. The bill would provide:

    • $21.5 billion for FY 2018;
    • $22.6 billion for FY 2019;
    • $23.7 billion for FY 2020;
    • $24.8 billion for FY 2021; and
    • Two semi-annual payments of $2.85 billion for FY 2022.

    The bill includes several funding offsets that Democrats have opposed, such as:

    • Allowing states to remove lottery winners from Medicaid;
    • Bolstering Medicaid's third-party liability policy to make it easier for state Medicaid programs to not cover certain medical costs if they could be covered by another private plan or government program; and
    • Increasing Medicare premiums for higher-income beneficiaries.

    The short-term spending bill also includes funding for community health centers for two years and would alter the implementation timeline for scheduled cuts to disproportionate share hospital payments.

    Currently, $43 billion in DSH payment cuts from FY 2018 through FY 2025 are scheduled to take effect on Oct. 1—beginning with $2 billion in cuts in FY 2018 and growing to $8 billion in cuts in FY 2025. The House bill would maintain the same total amount of cuts over the FY 2018 to FY 2025 time frame, but it would delay the cuts scheduled for FY 2018 and FY 2019 to later years.

    Bill's outlook uncertain amid Democratic opposition

    While the bill must be signed into law by Dec. 22 to avoid a partial federal shutdown, House and Senate Democrats have criticized the bill for funding only the DOD for the entire fiscal year, Politico reports.

    In a letter to Senate Majority Leader Mitch McConnell (R-Ky.), Senate Democrats on Tuesday said they "will oppose" the bill in its current form.

    Senate Minority Leader Chuck Schumer (D-N.Y.) further said GOP leaders should move quickly on the bill so that, if the Senate defeats the measure, Congressional leaders will have time to adjust it before the Dec. 22 deadline. He urged House Speaker Paul Ryan (R-Wis.), "Do it now, not at the eleventh hour."

    President Trump on Tuesday urged congressional Democrats "to drop their shutdown threats." He said, "Now Congress must finish the job by eliminating the defense sequester and passing a clean appropriations bill. I think it's going to happen."

    However, even some Republican lawmakers said it is unlikely Democrats would back off the issue. Rep. Tom Cole (R-Okla.) said, "They seem to think that Democrats will roll over on this. I'm not convinced they will," adding, "I'm not convinced all the Republicans in the Senate are on board with it" (Bresnahan et al., Politico, 12/13; Reuters, 12/13; King, Washington Examiner, 12/13; Legislative text, accessed 12/13).

    Medicare 101: Cheat sheets for Parts A through D

    Download our cheat sheets to learn how each of the four parts of Medicare works, and why they’re so important for provider organizations:

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