WASHINGTON WIRE

March 31, 2006
Issue 93

In this issue, you'll find:

House Committee Approves Budget Resolution
HHS Releases Katrina Aid to 32 States
CMS Outlines Plan to Combat Medicaid Fraud
Hearings

Top Story

House Committee Approves Budget Resolution

On Wednesday, March 23, 2006, the House Budget Committee completed its markup of a $2.8 trillion Fiscal Year (FY) 2007 budget plan.

The House budget resolution resembles the President's February budget proposal in that it would cap discretionary spending at $873 billion in FY 2007. However, despite the President's calls for $65 billion in cuts to the Medicare and Medicaid program over the next five years, the House budget would not require such cuts. Although the Budget Committee included reconciliation instructions to find $4 billion in savings over the next five years for the House Ways & Means Committee, which has partial jurisdiction over Medicare, House leaders indicate that the savings will not come from the Medicare program.

During the markup, Congresswoman Rosa DeLauro (D-CT) offered an amendment that would have provided an additional $7 billion in discretionary appropriations to the Departments of Labor, Health and Human Services, and Education. An indentical amendment sponsored by Senators Specter (R-PA) and Harkin (D-IA) was approved in the Senate budget debate.

In an effort lead by Represenative Castle (R-DE), many moderate Repubicans have indicated they plan to block the budget from final passage unless more funds are allocated to health care and education. On Thursday, March 30, 2006, Majority Leader John Boehner (R-OH) stated that he was in talks with the moderate Republicans but had no plans to increase discretionary spending.

The full House is expected to begin debate on the budget package as early as next week.

Health Care News

HHS Releases Katrina Aid to 32 States

On Monday, March 27, 2006, Health and Human Services Secretary, Michael Leavitt, released $1.5 billion to 32 states to assist with the medical costs associated with care for Hurricane Katrina evacuees.

In February, the President signed into law the Deficit Reduction Act of 2005 (DRA) which included $2 billion for HHS to cover such medical costs. Following the Hurricane, many evacuees were granted emergency Medicaid eligibility in 32 states and the majority of these new funds will be directed toward those state Medicaid programs. The remaining balance will be used to cover future costs associated with evacuee medical care.

States will be allowed to claim a total of $4.5 billion in federal matching funds, primarily through the Medicaid program. However, those states with the greatest number of Katrina evacuees will be able to receive grants for providers who offered care to non-Medicaid recipients who were unable to pay for their medical costs.

CMS Outlines Plan to Combat Medicaid Fraud

On Tuesday, March 28, 2006, Dennis Smith, Director of the Center for Medicaid Services at the Centers for Medicare and Medicaid Services (CMS), announced to the Senate Homeland Security Subcommittee on Financial Management, that CMS is currently developing a new system to combat and prevent Medicaid fraud and abuse. Mr. Smith stated that the system should be ready for implementation in approximately six weeks.

The program, funded by the Deficit Reduction Act of 2005 (DRA), will provide federal oversight to Medicaid providers. Additionally, it will increase state oversight of operating systems that provide training and best practices guidelines. Currently, states monitor their own Medicaid systems and audit the program every seven to eight years. Most states house programs to control fraud within the same department that pays Medicaid claims.

Chairman of the subcommittee, Senator Tom Coburn (R-OK), stated that Medicaid fraud could cost the government $39 billion over the next 10 years unless measures are taken to prevent further abuse.

Upcoming Events

Hearings

Wednesday, April 5, 2006

Hazards Medical Response
Senate Health, Education, Labor and Pensions - Subcommittee on Bioterrorism and Public Health Preparedness
Subcommittee Hearing
10 a.m., 430 Dirksen Bldg.

Medical Imaging
National Electrical Manufacturers Association
News Conference/Briefing
11 a.m., HC-5 Capitol Bldg.

'Whatever Happened to Gene Therapy?'
Joint Steering Committee for Public Policy
News Conference/Briefing
12 p.m., 2325 Rayburn Bldg.

Thursday, April 6, 2006

Fiscal 2007 Appropriations: Labor, HHS and Education
House Appropriations - Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
Subcommittee Hearing
10 a.m., 2358 Rayburn Bldg.

Health Care Coverage for Small Businesses
Senate Finance Committee
Full Committee Hearing
10:30 a.m., 215 Dirksen Bldg.

Project Bioshield Reauthorization
House Energy and Commerce - Subcommittee on Health
Subcommittee Hearing
1 p.m., 2123 Rayburn Bldg.

Information Technology in Health Care
House Ways and Means - Subcommittee on Health
Subcommittee Hearing
2 p.m., 1100 Longworth 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.

Powers Pyles Sutter & Verville P.C. is a full service law firm specializing in health care and education law and located at 1875 Eye St., NW 12^th Floor, Washington DC 20006