WASHINGTON WIRE

In this issue, you'll find:

• "Health Week" Legislation Defeated in the Senate
• House Committee Discussed Children’s GME Cuts
• Medicare Allows Part D Enrollment Flexibility for Low-Income Beneficiaries
• Medicare Proposes Payment Increase to IRFs
• Hearings

Top Story

"Health Week" Legislation Defeated in the Senate

Although Senate leaders had labeled this week "Health Week," the three primary pieces of health-related legislation to be considered never had the opportunity for a floor vote.

On Thursday, May 11, 2006, Senator Mike Enzi’s health insurance reform legislation, S. 1955, the “Health Insurance Marketplace Modernization and Affordability Act of 2006” did not obtain the necessary 60 votes to stop debate and, thus, were never voted on by the Senate.

The legislation was defeated despite amendments meant to gain support from opponents (primarily Democrats) who feared the legislation would decrease access to comprehensive care, especially for those with chronic conditions or people with disabilities. For example, Senator Olympia Snowe (R-ME) introduced an amendment that would add coverage requirements that at least 26 states (just over 50%) enact and limit the ability of insurers to preempt state laws.

Earlier in the week, the Senate debated two medical malpractice bills. Senator John Ensign (R-NV) had introduced S. 22, the “Medical Care Access Protection Act of 2006,” which would generally cap non-economic damages at $750,000. The legislation would have protected states’ rights and maintained current medical liability laws, allowing states to replace any new federal caps on damages with their own. Senator Rick Santorum (R-PA) introduced S. 23, the “Healthy Mothers and Healthy Babies Act,” which specifically targeted medical malpractice lawsuits against obstetricians and gynecologists. However, neither of the bills received the 60 votes necessary to close debate and, therefore, were not voted on by the Senate.

Health Care News

House Committee Discussed Children’s GME Cuts

On May 9, 2006, the House Energy & Commerce Committee held a hearing on the proposed cuts to and restructuring of children’s Graduate Medical Education (“GME”) payments in the President’s budget. Witnessed included Kerry Nesseler of the Health Resources and Services Adminsitration, Patrick Magoon of Children's Memorial Hospital in Chicago and Bill Considine of Akron Children's Hospital in Ohio.

Annual appropriations for children's GME is approximately $300 million, with an estimated one-third of the money going to direct GME payments (DME) and two-thirds going to indirect GME payments (IME). However, under the President's proposal, funding would be cut to $99 million annually and the split in the funds would be altered so that 40% goes towards DME payments and 60% goes towards IME payments.

Several members of the Committee espressed concern with the President's proposed changes, fearing that with already scarce funds, patient care would be compromised. Additionally, witnesses from the hospital community testified that the reductions were simply inapporpriate and that making cuts to children’s GME funding while retaining steady adult GME funding could increase the current shortage of pediatric physicians, and negatively impact the need for physician training for pediatric care.

Medicare Allows Part D Enrollment Flexibility for Low-Income Beneficiaries

On Tuesday, May 9, 2006, facing significant pressure from consumer and Congressional advocates, the Centers for Medicare and Medicaid Services (“CMS”) announced that they would not impose late Medicare Part D enrollment penalties to beneficiaries that qualify for low-income subsidies for their prescription drugs.

The current deadline to enroll in the Medicare Part D prescription drug benefit is Monday, May 15, 2006 and a penalty for late enrollments will be equal to 1% of the monthly premium for each month after the deadline. Many stakeholders have expressed concern the Medicare beneficiaries are currently unaware of the pending deadline and state that CMS should extend the enrollment period. Consumer advocates have been particularly concerned about low-income beneficiaries who may not be able to afford the penalty.

As a result of this pressure, CMS announced that it will give low-income beneficiaries until December 31, 2006 to enroll in the Part D program without penalty. To qualify for low-income subsidies, single beneficiaries must have an income under $14,700 and total assets under $11,500 and couples must have an annual income under $19,800 and total assets under $23,000. Currently, approximately half of the 5.7 million senior citizens who have not registered for the Part D prescription drug plan are eligible for the low-income subsidies.

Medicare Proposes Payment Increase to IRFs

On Monday, May 8, 2006, CMS announced a proposed rule that would change Medicare payments for inpatient rehabilitation facilities (“IRFs”).

The rule, to be published in the May 15 Federal Register, would increase Medicare payments to IRFs by about $40 million in fiscal year 2007 with the payment rate increasing by 3.4%. Payment rates for high-cost patient outliers would also increase from $5,129 to $5,609.

In addition, the proposed rule responds to language in the Deficit Reduction Act of 2005 (“DRA”). The DRA delayed further implementation of the "75% Rule," which states that gradually 75% of IRFs patients must meet one of thirteen medical diagnoses to qualify for payment at the Medicare IRFs rate. Under the DRA, IRFs are held at the 60% level for an additional year before the threshold increases to 65% and then to 75%.

Many provider groups believe that the 75% Rule prevents patients from receiving proper rehabilitative care.

Upcoming Events

Hearings

Tuesday, May 16, 2006

Medical Outreach: An Instrument of U.S. Diplomacy
House International Relations - Subcommittee on Africa, Global Human Rights and International Operations
Subcommittee Hearing
2 p.m., 2172 Rayburn Bldg

Strategy for Response to Pandemic Flu
House Homeland Security Committee
Full Committee Hearing
2 p.m., 311 Cannon Bldg.

Wednesday, May 17, 2006

Physician-Owned Specialty Hospitals
Senate Finance Committee
Full Committee Hearing
10 a.m., 215 Dirksen Bldg.

Pending HELP Committee Business
Senate Health, Education, Labor and Pensions Committee
Full Committee Markup
10 a.m., 430 Dirksen Bldg.

Accelerating the Adoption of Health Information Technology
Senate Commerce, Science and Transportation - Subcommittee on Technology, Innovation, and Competitiveness
Subcommittee Hearing
10 a.m., 562 Dirksen Bldg.

Planning for Long-Term Care
House Energy and Commerce - Subcommittee on Health
Subcommittee Hearing
2 p.m., 2123 Rayburn Bldg.

RU-486 Standards for Women's Health
House Government Reform - Subcommittee on Criminal Justice, Drug Policy and Human Resources
Subcommittee Hearing
2 p.m., 2203 Rayburn Bldg.

Thursday, May 18, 2006

Physicians for Underserved Areas Act
House Judiciary - Subcommittee on Immigration, Border Security and Claims
Subcommittee Hearing
2 p.m., 2141 Rayburn Bldg.

Friday, May 19, 2006

Fiscal 2007 Appropriations: Labor/HHS/Education
Senate Appropriations - Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
Subcommittee Hearing
9 a.m., 192 Dirksen 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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