Although federal lawmakers failed to reach a compromise this week on legislation that could lead to drastic cuts in nursing home funding, there might be some light at the end of the tunnel for providers.

First, a short-term extension of the existing children’s federal insurance program is being mentioned as a likely scenario. Modification of the program is what’s threatening the long-term care funding. Senate Finance Committee Chairman Max Baucus (D-MT) said he expects House and Senate negotiations to run right up until the Sept. 30 deadline.

Second, House Energy and Commerce Health Subcommittee Chairman Frank Pallone Jr. (D-NJ) acknowledged that some Medicare provisions might have to be dropped from his chamber’s bill to get a deal done. “I’m willing to sacrifice parts of the House bill,” Pallone said, without specifying which parts could be scrapped.

House negotiators otherwise have been staunch about holding firm. Their bill includes payment cuts that would take about $2.7 billion from providers, according to the American Health Care Association. A Senate-passed version does not include the funding cuts.