Congress Begins Action on CHIP; 340B Dear Colleagues

October 06, 2017

With health care repeal and replace on pause, Congress finally turned to other issues it must still address this year. One of those issues is funding for the Children’s Health Insurance Program (CHIP). CHIP funding expired September 30 and requires Congressional approval to continue. Some states, like Wisconsin, have not yet fully expended their CHIP funds for this year, but other states will run out of funds in the next few months. The Wisconsin Hospital Association (WHA) strongly urges Congress to act quickly so Medicaid funding and coverage for children continues to be available.

On October 4, the U.S. Senate Committee on Finance voted in favor of legislation extending CHIP funding for five years, but the Committee did not include how to pay for that extension. Also on October 4, the U.S. House Committee on Energy & Commerce voted in favor of extending CHIP for five years, but included a series of pay-fors: adjusting Medicare premiums for seniors making more than $500,000/year; excluding lottery winners from Medicaid; using billions from the Affordable Care Act’s (ACA) prevention fund. In addition to voting in favor of a CHIP extension, the House Committee voted in favor of extending community health center funding.

The two chambers will need to work out their differences on how to pay for the CHIP extension before the legislation can be finalized. During these CHIP conversations, as well as conversations on other must-pass legislation this year, WHA urges Congress to include several important Medicare policies—the Medicare Dependent Hospital and Low Volume Adjustment payments—which expired on September 30.

With respect to the 340B program, two “Dear Colleague” letters from Congress have or will soon be sent to the Centers for Medicare & Medicaid Services (CMS) in response to the agency’s proposed changes to 340B payments to hospitals. Under the proposed 2018 Outpatient Prospective Payment System (OPPS) rule, CMS would make drastic payment cuts to some 340B covered entities billing under the OPPS. WHA strongly objects to these cuts and expressed its concern in a comment letter submitted to CMS September 11.

On September 27, 228 Members of the U.S. House of Representatives sent a jointly signed letter to CMS, urging the agency to “abandon this proposal and redirect its effort toward actions to address the cost of drugs via other policies that would not harm our constituents.” Wisconsin House Members Ron Kind, Gwen Moore, Mark Pocan and Mike Gallagher all signed onto the letter. Read the House 340B letter. A similar letter is still circulating in the U.S. Senate. Wisconsin Senator Tammy Baldwin is one of the lead authors of the letter.

This story originally appeared in the October 06, 2017 edition of WHA Newsletter