Lobbying heavyweights such as the AARP and the health insurance industry will continue to battle this week over sweeping Medicare and children’s health legislation headed for floor votes, but other groups are also jumping into the fray.

The debate over the reauthorization and expansion of the State Children’s Health Insurance Program (SCHIP), which could involve a hike in cigarette taxes and reductions in Medicare spending, has taken on a strongly partisan and ideological tone. 
Reauthorizing SCHIP is one of the Democratic leadership’s top priorities for the year, as the program is set to expire on Sept. 30. President Bush has threatened to veto the House and Senate SCHIP bills, and the GOP leadership in both chambers is aggressively pulling out the stops to keep its members in line against the measures.

Powerful interest groups have been drawn into the battle, with organizations such as the AARP and the American Medical Association pressing to enact the House measure, which includes $20 billion to block a 10 percent cut in Medicare reimbursements to doctors’ pay. Tobacco companies and America’s Health Insurance Plans are pushing on the other side against provisions harmful to their interests.
Meanwhile, several relatively obscure, but still influential, classes of healthcare companies to do business with Medicare are staging smaller fights.

In the House, Democrats finance most of their $50 billion expansion of SCHIP with cuts to managed-care plans in Medicare Advantage and a 45-cent per-pack tax on tobacco. 

The Energy and Commerce and Ways and Means Committees, however, approved reductions or freezes in Medicare payments to other providers. In some cases, such as payments for home oxygen equipment, these cuts are borrowed from President Bush’s budget and past Republican-authored proposals, and they serve to help offset the cost of expanding SCHIP.

The Rules Committee is set to combine the two panels’ bills for floor consideration before Congress aims to adjourn for recess at the end of the week, but many of the provisions remain in play.

Meanwhile, the Senate is set to debate a $35 billion SCHIP expansion, which is mostly financed through a 61-cent tobacco tax increase.

Because the Senate Finance Committee did not include Medicare provisions analogous to the provision in the House bills, the conference committee process could offer Medicare providers further opportunities to get their cuts stripped from the legislation.

Medical equipment, home health and nursing home companies may not have the same clout as health insurance or tobacco firms, but their efforts to forestall these detrimental provisions could continue to complicate the Democratic leadership’s arduous task of moving the SCHIP-Medicare bill through the House.

Companies that rent and service home-oxygen equipment are counting on their champions in Congress to prevent the latest attempt by lawmakers to reduce Medicare spending on those items.

The Energy and Commerce Committee’s version of the bill would reduce the rental period for oxygen equipment from 36 months to 18 months, with federal savings of $2.8 billion over five years and $8.2 billion over 10 years. 

Some Democratic and Republican lawmakers alike have sought this policy change to slow down the growth in federal spending for oxygen equipment. According to a federal study released last year, 36 months of renting this equipment costs $7,215, while purchasing it outright would cost just $587.

The oxygen suppliers maintain that this analysis ignores the cost of servicing the equipment. They argue that shortening the rental and service period would leave beneficiaries with the burden of paying for service after that period ends.

The oxygen equipment industry, represented by the American Association for Homecare and the Council for Quality Respiratory Care, has been successful in the past at scaling back congressional attempts to cut their payments. In 2005, pressure from Ohio-based oxygen suppliers spurred Republican House members from that state to convince their leadership not to cap rentals at 13 months.

This year, Rep. Kendrick Meek (D-Fla.) sought to curtail the oxygen provisions during the Ways and Means Committee markup. A spokesman said that Meek is concerned about the impact of the changes on the 125,000 Medicare beneficiaries in Florida who use oxygen equipment.

Some of these same medical equipment companies also are trying to block a cut in Medicare spending on power wheelchairs, totaling $600 million over five years and $900 million over 10 years.

The kidney dialysis industry also faces substantial cuts in the House legislation. Driven by historical increases in Medicare spending on end-stage renal disease patients, and particularly on the anti-anemia drug known as EPO, lawmakers have been eyeing dialysis services for several years. 

In addition to the budgetary concerns, lawmakers such as Ways and Means health subcommittee Chairman Pete Stark (D-Calif.) believe that Medicare payment policies for EPO promote excessive use of the medication that may harm patients.

The House bills would reduce spending on dialysis largely by “bundling” payments for EPO, services and other costs into a single fee. These provisions would save $600 million over five years and $3.4 billion over 10 years.

The dialysis facilities, represented by the Kidney Care Council, maintain that the bundling proposal would reduce their profit margins to a point where many providers could not stay in business. Medicare pays for about 85 percent of all dialysis treatments because any patient with end-stage renal disease is entitled to Medicare benefits, regardless of age. The facilities also note that Medicare does not automatically adjust their payments for inflation each year, as it does for other medical providers.

Amgen, which makes the brand-name EPO drug Epogen, also strongly opposes the payment policy changes and has a formidable lobbying presence.

Other providers are involved in similar lobbying campaigns. 

The nursing home industry, mainly represented by the American Health Care Association, wants to stop a reduction in their payments that would cost the industry $2.7 billion over five years and $6.5 billion over 10 years.

Likewise, the National Association for Home Care and home health providers seek to prevent a freeze in their Medicare payments that would reduce spending by $2.6 billion over five years and $7.2 billion over 10 years.