WASHINGTON WIRE

In this issue, you'll find:

• Senate Committee Approves Medicaid, Medicare Cuts
• Ways and Means Approves Budget Reconciliation Program Reductions
• House Committee approve Reconciliation Packages, Medicare Cuts Not Included
• Senate Approves Labor-HHS Spending Bill
• CMS Announced Volunteering Quality Reporting System for Physicians
• Hearings

Top Story

Senate Committee Approves Medicaid, Medicare Cuts

On Tuesday, October 26, 2005, the Senate Finance Committee approved its reconciliation package that would generate $10 billion in savings over the next five years from programs under the committee's jurisdiction. Specifically, the bill would cut $7.6 billion from Medicaid and $18.6 billion from Medicaid. However, the legislation would also provide $3.3 billion in new Medicaid spending and $12.8 billion in new Medicare spending. The panel adopted a manager’s amendment by Grassley that incorporated several minor changes to the bill since the draft was released last week.

Finance Committee Democrats offered a number of amendments which we all ultimately defeated along party lines.
Among the amendments that panel Democrats pressed unsuccessfully were two aimed at expanding Medicaid eligibility for victims of Hurricane Katrina. Both were based on a bill (S1716) sponsored by Grassley and ranking Democrat Max Baucus of Montana. They would have allowed all low-income residents of the affected disaster areas to enroll in Medicaid. To make the amendments more palatable to conservatives, Baucus deleted a provision of the stand-alone bill dealing with Medicaid payments to 29 states unrelated to Katrina. Sen. Blanche Lincoln, D-Ark., also offered two Katrina-related amendments similar to Baucus’ that sought to expand Medicaid eligibility or grant additional funds to providers who treated storm victims.

West Virginia Democrat John D. Rockefeller IV offered three amendments aimed at delaying for six months the deadline for seniors who currently qualify for both Medicaid and Medicare — known as “dual eligibles ” — to choose a new Medicare plan, as the 2003 prescription drug law requires, before being automatically enrolled. Another amendment to require the secretary of Health and Human Services to come up with a plan for reaching out to dual eligibles was withdrawn so that Rockefeller and Grassley could continue to work on it.

Health Care News

Ways and Means Approves Budget Reconciliation Program Reductions

Wednesday, the House Ways and Means Committee approved a budget reconciliation package cutting federal programs for foster care, child support and aid to the disabled. The $8 billion net savings exceeds the $1 billion savings target in the fiscal 2006 budget resolution, but is aligned with a GOP goal of finding a total of $50 billion in net savings in the broad reconciliation measure.

Approval of the package sets up a conference showdown with the Senate Finance Committee, whose spending package includes a net $5.7 billion in cuts from Medicare. Ways & Means did not include any changes to Medicare in the draft considered by his panel, which shares jurisdiction of the program with the Energy and Commerce Committee.

The bill would gradually reduce the federal match that states receive for child support administrative expenses from 66 percent to 50 percent. It also would prevent states from getting a federal match when they spend certain incentive funds on child support costs. The bill requires that children’s eligibility for federal foster care or adoption assistance be based solely on the income of the original homes from which they are removed. Another provision would change the way the Supplemental Security Income (SSI) program distributes monthly income to about 6.9 million disabled people. The bill requires that any lump sum payment exceeding about $1,800 (down from $7200 in current law) be paid in three installments over six-month intervals. The package also includes a measure (HR240) to reauthorize the 1996 welfare law (PL 104-193). Most amendments failed but one that passed would repeal the so-called Byrd amendment, which funnels anti-dumping duties to U.S. companies adversely affected by the unfair trade practices.

House Committee approve Reconciliation Packages, Medicare Cuts Not Included

In a related story, the House Energy and Commerce Committee concluded a marathon mark-up late Thursday night on its reconciliation legislation. The Committee passed a bill estimated to generate almost $10 billion in savings from Medicaid alone, and as with the Ways & Means Committee, leaving Medicare untouched.

Regarding Medicaid, the Chairman's Mark includes provisions to increase and enforce copayments and would impose tougher guidelines on recipients who may be attempting to transfer assets in an effort to qualify for Medicaid coverage. The legislative package would also allow states to restructure their Medicaid programs to reflect the state employee health insurance programs or large private providers. Additionally, the bill would change pharmacy reimbursements for Medicaid-covered prescription drugs.

During the mark-up, several Committee Democrats offered amendments which were mostly defeated along party lines. One such amendment, offered by Congressman Markey (D-MA) aimed to eliminate all Medicaid cuts by striking the entire bill. Another amendment, offered by Congressmen Brown (D-OH) and Allen (D-ME) would have incorporated two Medicare provisions included in the Senate Finance's reconciliation bill - the elimination of the regional Medicare Advantage Stabilization Fund and a phase-out of risk-adjused payments to Medicare providers. Chairman Barton, while opposing the Brown and Allen amendment, indicated that such a provision might be considered in conference.

If both Chambers approve their respective reconciliation legislation next week as expected, a conference committee will face significant challenges in producing legislation on which both the House and Senate can agree, including an agreement on the inclusion of Medicare cuts and spending in the final legislation.

Senate Approves Labor-HHS Spending Bill

On Thursday, October 27, 2005, the Senate approved its fiscal year FY 2006 Appropriations Bill for spending under the Departments of Labor, Health and Human Services (HHS), and Education. The $604 billion package is the last of the FY 2006 Appropriations bill to be considered by the Senate this year.

The bill provides $141.7 billion in discretionary funding and included an emergency spending amendment offered by Senator Harkin (D-IA) that would provide almost $8 billion for development and production of a vaccine for the avian flu. The bill also include an amendment offered by Senator Specter (R-PA), Chairman of the Labor, HHS, Education Appropriations Subcommittee, that would halt implementation of new wheelchair regulations under Medicare.
The House passed its $602 billion version of this spending bill in June. The House's bill would provide $142.5 billion in discretionary spending. To provide additional discretionary funding in his bill, yet remain under the current discretionary cap, Senator Specter used a tactic which would alter certain dates of social security payments in order to move spending into the next fiscal year. It remains unclear if this financing tactic will survive conference committee negotiations.

CMS Announced Volunteering Quality Reporting System for Physicians

On October 28, 2005, Dr. Mark McClellan, Administrator of the Centers for Medicare and Medicaid Services (CMS), announced his agency plans to institute a voluntary quality reporting system for physicians and practitioners reimbursed under Medicare Part B. The program will collect information from physicians on a voluntary basis using 36 evidence-based measures that are the result of collaboration between the agency and a group of physician representatives and quality organizations. The program will not involve any financial incentive for participation at this time.

The complete set of 36 quality measures that CMS has chosen for the program will soon be available on the CMS website, along with a more detailed description of the program and instructions on how it will work. Registration for the program is expected to begin in the early part of December, and the actual data collection will likely occur with the launch of the Quality Net Exchange website in January 2006.

The announcement comes just three days after the Senate Finance Committee approved a reconciliation package that included a "Value Based Purchasing" or "Pay-for-Performance" provision under Medicare. That legislation would phase-in a bonus system for physician participating in quality reporting and improvement efforts. House Ways and Means Health Subcommittee Chairwoman Nancy Johnson (R-CT) has recently introduced a pay-for-performance proposal as well.

Upcoming Events

Hearings

Thursday, November 3, 2005

Committee on Veterans Affairs - Disability Assistance and Memorial Affairs
10:30AM
334 Cannon House Office Building
The Development of the Veterans Benefits Administrations Annual Budget Request
(DATE CHANGE: Originally scheduled to be held on 10/27/05)

For More Information

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