WASHINGTON WIRE

In this issue, you'll find:

• No SGR Fix Until After Elections
• House Passes NIH Reauthorization
• McClellan's Temporary Successor Named
• House Passes Measures on Medical Education and Foreign Doctors
• Health Savings Accounts Legislation Passes Ways & Means Committee
• Congress Will Recess Until November 13, 2006

Top Story

No SGR Fix Until After Elections

On Thursday, September 28, 2006, the House Energy and Commerce (E&C) Committee met to discuss a possible fix to the scheduled 5.1 percent cut to Medicare physician payment in 2007.

E&C Chairman Joe Barton (R-TX) stated that it is time to completely revamp the payment system, which currently relies on the sustainable growth rate (SGR) in determining yearly updates to the payment system. After introduction of multiple competing House and Senate proposals, Chairman Barton and other House leaders stated that they did not think it would be feasible to produce legislation before Congress left to campaign for the November elections. E&C Ranking Member John Dingell (D-MI) stated that health maintenance organizations (HMOs) may have to pay more to cover the costs, a concern echoed by Congressman Charlie Norwood (R-GA).

Separately on Tuesday, September 26, 2006, the Senate Finance Committee announced their plan for fixing the SGR. Chairman Charles Grassley (R-IA) and Ranking Member Max Baucus's (D-MT) plan would give physicians a 0.5 percent increase in 2007 with an additional 1.5 percent increase beginning in July 2007 if doctors report quality data. However, the plan essentially delays the cuts in physician payments to later years with a 12 percent cut in 2009 and 13 percent cut in 2010, all meant to offset the cost of the increase.

Both chambers adjourned for the elections without taking any definitive steps toward fixing the SGR problem with the physician fee schedule.

Health Care News

House Passes NIH Reauthorization

On Tuesday, September 26, 2006, the House passed the National Institutes of Health (NIH) reauthorization bill.

The bill would increase the NIH's annual budget by 5 percent annually over the next three years. (The NIH's budget has increased only 1.5 percent between 2003 and 2006.) In addition, the bill would create a "common fund" to fund research that crosscuts the different Institutes and centers in an attempt to encourage such collaboration. The bill will also create a panel to study possible ways to reorganize the NIH and its 27 research centers.

The Senate Health, Education, Labor, and Pensions (HELP) Committee has not marked up any legislation this year on NIH reauthorization and it is unclear whether the Senate will vote on a reauthorization bill when they return after the November elections.

McClellan's Temporary Successor Named

On Monday, September 25, 2006, the Department of Health and Human Services (HHS) Secretary Michael Leavitt announced the temporary replacement for the Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan who is stepping down in October.

Leslie Norwalk, current deputy administrator at CMS, will become acting chief at CMS beginning October 15. Herb Kuhn, currently the head of the Center for Medicare Management at CMS, will become the acting deputy administrator. The transition will occur a month before the second open enrollment period for the Medicare Part D prescription drug benefit begins.

It is unknown at this time if Norwalk will hold the position long-term or if President Bush will later nominate a permanent replacement.

House Passes Measures on Medical Education and Foreign Doctors

On Thursday, September 28, 2006, the House passed HR 5574, the Children's Hospital GME Support Reauthorization Act of 2006. The bill authorizes $330 million in each fiscal year beginning in 2007 through 2011 for children's hospital graduate medical education (GME) programs. Earlier in the week, the Senate passed identical legislation by voice vote. The bill now goes to the President for his signature.

The previous day, the House Judiciary Committee voted to extend the J-1 visa waiver program for two years. Under the J-1 program, foreign doctors can stay in the United States an additional three years after completing their medical training if they practice in underserved areas.

Originally, the bill allowed foreign doctors to stay indefinitely but an amendment introduced by Congressman John Hostettler (R-IN) limited the stay to two years. The Senate has no legislation on the J-1 program at this time.

Health Savings Accounts Legislation Passes Ways & Means Committee

On Wednesday, September 27, 2006, the House Ways and Means Committee passed legislation that would encourage the use and expansion of health savings accounts (HSAs).

Sponsored by Congressman Eric Cantor (R-VA), the bill would allow individuals to put more money into the tax-free savings accounts used to cover health care costs up to $2,700 for individuals and $5,450 for families. In addition, people would be able to transfer money from flex-spending accounts into HSAs. Individuals with an individual retirement account (IRA) would be able to transfer money from their IRA into an HSA without facing the early withdrawal penalty.

While Senators Jim DeMint (R-SC) and John Ensign (R-NV) have each drafted companion bills to the House legislation, no action has occurred with either Senate bill and it is unlikely that the Senate will address the bills in this Congress.

Upcoming Events

Congress Will Recess Until November 13, 2006.

For More Information

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