Congress finds another short-term CHIP budget provision

Congressional leaders have bought themselves time in case they can't come to a deal on the Children's Health Insurance Program before the end of the year. A draft provision for the Dec. 8 continuing budget resolution to keep the government open would retroactively permit the CMS to redistribute CHIP funds to states that have run out of money .

One lobbyist says he suspects this will be the first of a series of short-term fixes before Congress can agree on a three- or five-year funding reauthorization

"It appears that Congress is planning to kick the can further down the road rather than finally approve the bipartisan plan to fund the Children's Health Insurance Program this week," says Joan Alker of Georgetown University's Center for Children and Families.

A GOP leadership aide said House leaders still hope to reauthorize the funding in the December 22 spending deal but that the short-term fix gives Republicans more time on CHIP in case a deal isn't struck before Christmas.

The deal, expected to pass with the continuing budget resolution due Friday, includes the provision by Minnesota Republican Rep. Tom Emmer and Rep. Ryan Costello (R-Pa.) that would free up a state's unused CHIP funds to be reallocated without restriction through December 31. As reported by Modern Healthcare, Minnesota under current law would have to forfeit one-third of its unused funds that the state plans to carry over to cover pregnant women through their nine-month term.

An official from Minnesota's Department of Human Services said the state doesn't yet know how much money the amendment will secure for its program. The state has already finalized its managed care provider contracts for CHIP for 2018, which are part of Medicaid.

A delay without a more permanent authorization could complicate states' contracts with insurers or managed care providers, one Medicaid lobbyist said. Bruce Lesley of the Washington-based children's advocacy group First Focus has said enrollment may drop even as states and hospital groups try to ward off public panic with the expectation that Congress will ultimately come through with the money.

The CMS has distributed more than $600 million since November to cover shortfalls. The recently proposed provision would let the agency continue this practice through early 2018. Agreement on how to pay for a five-year funding extension of CHIP has kept lawmakers in gridlock even as both Republicans and Democrats insist they want to protect the popular, bipartisan program.

Rep. Greg Walden (R-Ore.) on Monday called the measure a "responsible" stopgap. Walden's home state of Oregon will run out of funds in January, according to the latest report from the congressional advisory commission on Medicaid and CHIP. As chair of the House Energy & Commerce Committee, Walden also passed the House CHIP bill out of committee along party lines after the GOP left negotiations on how to pay for the extension of CHIP, community health centers and certain Medicare programs.

According to the leadership aide, the funding mechanism for CHIP isn't an issue: a deal was made in the House Energy & Commerce committee and Democrats asked Republicans to put it on hold.

"Ever since the Sep. 30 deadline, we have tried to negotiate with Democrats multiple times," the aide said.

House Minority Whip Steny Hoyer, a Maryland Democrat, has said Democrats won't agree to the funding proposals Republicans want.

Walden told Modern Healthcare that leaders are also in talks over using the 2% Medicare provider reimbursement cuts to fund CHIP and the extenders or to support raising the budget caps.

Democrats fought against the proposal to use the Affordable Care Act prevention fund and a hike in Medicare premiums for high-earners to fund health programs. But on Monday, Walden and E&C health subcommittee Chair Michael Burgess (R-Texas) made it clear they want their House deal to stand.

"Make no mistake, we are incredibly disappointed that the House's Championing Healthy Kids Act, which passed with bipartisan support, has yet to be considered by the Senate," Walden and Burgess said. "As we continue to work to reach a broader agreement on extending funding for these vital programs, it is imperative that the bipartisan House package be the foundation for what ultimately becomes law."

Some stakeholders are optimistic the provision signals congressional intent to fund the program, even if it does open the door for further delay.

"The technical tweak is to indicate to the states: 'We're working on it, we'll take care of CHIP,'" said Jim Kaufman, vice president of public policy for the Children's Hospital Association. He said he is staying optimistic and keeping his focus on pushing Congress to finish the big authorization before the end of the year.

Yet he concedes states are in a tough position: spending time and money coming up with a contingency plan "they hope to God they won't have to use."

"States are preparing, but have not publicly said what they're doing and when," Kaufman said, noting that children's hospital administrators want to avoid unnecessary disruption by worrying families.

Yet the same day Walden released his emergency provision, Utah announced its CHIP program would end on Jan. 31 if Congress doesn't act. Earlier in the same week, Colorado's Child Health Plan Plus told families to look for other coverage options in case federal funding doesn't come through.