Because the House of Representatives failed to override the President's veto of legislation to reauthorize and expand the Children's Health Insurance Program (CHIP) Medicare reform has once again become the focus of congressional attention. The House-approved Children's Health and Medicare Protection Act (CHAMP) combined a $50 billion reauthorization and expansion of CHIP with a $40 billion package of changes to Medicare. Unlike the House, the Senate did not include Medicare provisions in its $35 billion CHIP legislation. The final legislation, which was vetoed by President Bush, excluded any Medicare provisions. The Senate Finance Committee is currently considering a Medicare package that includes reductions in reimbursement to Medicare Advantage plans and a “fix” to the scheduled 10% cut in Medicare physician payments. They are also expected to include changes to the Medicare ESRD program. It is likely that the committee's ESRD provisions will include “bundling” and a reduction in the reimbursement rate to hospital-based facilities so that it equals the payment to free-standing facilities. The committee is also considering an increase in the composite rate in 2008 and the development of a statutory update mechanism. The ESRD provisions in the House bill did not provide a statutory mechanism for an annual update, nor an increase in 2008. The House bill reduces federal funding for ESRD by $3 billion over 10 years. The Finance Committee provisions may be budget neutral, and not cut any funds from the ESRD program. Without congressional intervention physicians will have their Medicare payments reduced. This is unacceptable to a majority of the House and Senate, who are concerned that physicians will leave the Medicare program and consequently, that patients will have diffi culty receiving timely and adequate care. The extension, which was approved by the Ways and Means Committee and the full House with no controversy, is drawing signifi cant opposition in the Senate. Insurance companies and large employers are seeking to eliminate the MSP extension from the Medicare package. The kidney community, on the other hand, is unified in its efforts to include this provision in the Senate Medicare package as a means of paying for improvements in the program. It is estimated that the MSP extension will generate a modest savings for Medicare, less than $50 million in 2008 and almost $400 million over five years. According to the most recent U.S. Renal Data System report, only 5,100 of the almost 400,000 patients with ESRD fall within the population who would be affected by a change in MSP. Based on this estimate, experts conclude that the MSP extension would have little or no impact on private health insurance premiums. It is widely assumed that the Finance Committee Medicare package will become the Senate legislation and, because of time constraints, will not be considered on the floor. The Committee package will likely be the basis for future Senate and House discussions. The House-passed ESRD package included a number of provisions being considered by the Finance Committee. The House bundling provision directed CMS to create a bundled payment system for dialysis services and established quality outcome incentive payments and performance standards. It also lowered erythropoiesis stimulating agent payments for large dialysis organizations. While the timeline for final Congressional action is unclear, both the House and Senate leadership are committed to moving a Medicare package to the president before the beginning of 2008. One of the driving forces this year, as in the past, is that without congressional intervention physicians will have their Medicare payments reduced by 10%. This is unacceptable to a majority of the House and Senate, who are concerned that physicians will leave the Medicare program and consequently, that patients will have diffi culty receiving timely and adequate care. Until the final gavel falls on this session of the 110th Congress, the kidney community will be focused on key House and Senate members and the fate of the ESRD program. Patients, providers, suppliers, and other interested parties have much to gain and much to lose, depending upon the outcome of the policy decisions that have been under discussion for much of the year.