WASHINGTON WIRE

September 22, 2006
Issue 111

In this issue, you'll find:

• Congress Discusses Physician Payment Fix before Elections
• House Committee Reauthorizes NIH and Ryan White Act
• One Step Closer to New FDA Commissioner
• CMS Announces Part B Premiums for 2007
• Association Health Plan Bill May Reappear in September
• Hearings

Top Story

Congress Discusses Physician Payment Fix before Elections

The House Ways & Means and Energy & Commerce Committees and the Senate Finance Committee have spent the past two weeks discussing the possibility of passing legislation on the proposed 5.1 percent reimbursement cut to the Medicare physician fee schedule in 2007 before adjourning for the elections.

On Thursday, September 15, 2006, House Ways & Means Committee Chairman Bill Thomas (R-CA) recommended a flat update for physicians in 2007. However, beginning in June 2007, doctors who participate in the Centers for Medicare and Medicaid Services (CMS) Physician Volunteer Reporting Program (PVRP) could receive a payment increase of 2.5 to 2.8 percent. In 2008, any physicians not participating in the PVRP would receive the regularly scheduled cuts determined by the sustainable growth rate (SGR). Insiders estimate that Chairman Thomas's plan would cost $3 billion over five years. Effectively, under the Thomas proposal, any physicians not participating in quality reporting would see a payment cut. The proposal was rejected by the American Medical Association (AMA). Chairman Thomas rejected an AMA counter proposal insisting on voluntary reporting attached to a slight bonus payment.

At about the same time, House Energy & Commerce Committee Chairman Joe Barton (R-TX) proposed a three-year SGR fix increasing payments 0.5 percent each year for 2007, 2008, and 2009. Chairman Barton's plan would also provide a 0.25 percent increase in 2008 and 2009 as an incentive for physicians who submit quality data.

Separate from Chairman Thomas, Ways & Means Health Subcommittee Chairwoman Nancy Johnson (R-CT) recommended a compromise plan. Her plan would increase Medicare physician payments by 1 percent in 2007 and an additional 1.5 percent beginning in April 2007 if physicians report quality care data. The Senate Finance Committee has not released the details of their plan but they have mentioned that they are working on a possible bipartisan solution.

If a physician fee fix is not included in legislation before adjournment for the elections, it could be included in a post-election omnibus spending bill.

Health Care News

House Committee Reauthorizes NIH and Ryan White Act

On Wednesday, the House Energy & Commerce Committee passed a reauthorization bill for the National Institutes of Health (NIH).

The reauthorization bill, the first in thirteen years, would create a panel to study the best way to reorganize the NIH and its 27 research centers. While encouraging research across the various centers, the bill would create a "common fund" to fund the research that crosscuts the different Institutes and centers. However, the bill would boost 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 2006, the NIH received $28.5 billion.

In addition to the NIH reauthorization legislation, the House Energy & Commerce Committee also reauthorized the Ryan White Care Act. The bill authorized nearly $2 billion for state and local grants that would assist with medical and social services, as well as supplement drugs. The bill was last reauthorized in 2000. The bill follows through with the goal to provide more resources to rural and other underserved areas.

House leadership has pushed for a floor vote next week before adjourning for the October recess.

One Step Closer to New FDA Commissioner

On Wednesday, September 20, 2006, the Senate Health, Education, Labor, and Pensions (HELP) Committee voted to confirm Andrew von Eschenbach as the next Commissioner of the Food and Drug Administration (FDA), paving the way for full Senate consideration.

The vote was delayed initially by Senators Patty Murray (D-WA) and Hillary Rodham Clinton (D-NY), who blocked a vote on a new commissioner until the FDA released its decision on the over-the-counter sale of the emergency contraceptive pill, "Plan B." In August, the FDA approved over-the-counter sale of the drug to individuals over 18 years old.

However, barriers to the confirmation remain. Two Republican Senators, Jim DeMint (SC) and David Vitter (LA) have stated that they would try to block von Eschenbach's confirmation on the Senate floor until the FDA changes its various policy on RU-486 and drug reimportation.

CMS Announces Part B Premiums for 2007

On Tuesday, September 12, 2006, the Centers for Medicare and Medicaid Services (CMS) announced the Medicare Part B premiums for 2007.

The standard monthly premium in 2007 will be $93.50, a 5.6 percent increase from last year's rate of $88.50. The rising cost of hospital outpatient services was the main contributor to the $5 per month increase. According to CMS, hospital outpatient services are only 13 percent of Part B spending but account for one-third of the increase.

For the first time, a beneficiary's annual income will impact their costs, as mandated by the Medicare Modernization Act of 2003 (MMA). Individual beneficiaries earning $80,001 to $100,000, and couples earning $160,001 to $200,000, will pay a $12.50 surcharge per month. The surcharges will increase as income levels rise, capping at $68.50 per month for individual beneficiaries earning more than $200,000 per year and couples earning more than $400,000 per year.

Association Health Plan Bill May Reappear in September

There is talk in the Senate that Majority Leader Bill Frist (R-TN) is working to advance Senator Mike Enzi's health insurance reform legislation, S. 1955, the "Health Insurance Marketplace Modernization and Affordability Act of 2006" this month.

The legislation would allow small businesses to group together when designing health insurance plans and permit the health insurance companies to bypass state coverage mandates. The legislation would also require insurers to offer a plan matching the benefits offered by the five largest states in the country. Many health insurance commissioners and advocacy groups are opposed to the legislation because of a provision allowing insurance companies to circumvent state coverage mandates.

In May 2006, Senate supporters were unable to secure the 60 votes necessary to stop debate on the legislation and, therefore, the bill was never voted on by the Senate. The legislation was criticized by opponents (primarily Democrats) who feared enactment would decrease access to comprehensive care, especially for those with chronic conditions or people with disabilities. Currently, Senator Ben Nelson (D-NE) is trying to add an amendment that would require insurance coverage for procedures if at least 26 states (just over 50%) required that coverage. Senator Olympia Snowe (R-ME) offered a similar amendment in May.

Upcoming Events

Hearings

Tuesday, September 26, 2006

Safety of Reused Medical Devices
House Government Reform Committee
Full Committee Hearing
10 a.m., 2154 Rayburn Bldg.

Health Savings Accounts
Senate Finance - Subcommittee on Health Care
Subcommittee Hearing
2:30 p.m., 215 Dirksen Bldg.

Wednesday, September 27, 2006

Development of an Artificial Pancreas
Senate Homeland Security and Governmental Affairs Committee
Full Committee Hearing
10 a.m., 342 Dirksen Bldg

Improving Emergency Medical Care
Senate Health, Education, Labor and Pensions - Subcommittee on Bioterrorism and Public Health Preparedness
Subcommittee Hearing
2:30 p.m., 430 Dirksen Bldg.

Thursday, September 28, 2006

Post Traumatic Stress Disorder and Traumatic Brain Injury
House Veterans' Affairs - Subcommittee on Health
Subcommittee Oversight Hearing
10 a.m., 334 Cannon Bldg.

For More Information

For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call (202) 466-6550 and ask for the Legislative Practice Group.

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