Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

Last night the Senate approved a variety of Medicare and Medicaid policy extenders as part of its version of H.R. 4213, the “Tax Extenders Act."  This legislation builds on the recently-enacted “Temporary Extension Act of 2010” (H R. 4691), which extended 2009 Medicare physician fee schedule rates through the end of March 2010 (in lieu of a 21.2% across-the-board cut previously set to take effect March 1, 2010) and continued the Medicare outpatient therapy cap exceptions process through March 2010.  With regard to Medicare and Medicaid policy, the Senate-approved version of H.R. 4691 would, among other things:

• Extend the current freeze on Medicare physician fee schedule rates through September 30, 2010 (in the absence of Congressional action, the statutory sustainable growth rate formula would require a 21.2% rate cut on April 1, 2010).
• Extend through December 31, 2010: the Medicare outpatient therapy cap exceptions process, add-on payments for Medicare mental health services, increased Medicare rates for ambulance services, the 1.0 floor on the work geographic practice cost index, the authority for independent laboratories to receive direct payments for the technical component for certain pathology services, and the hospital outpatient hold harmless provision for small rural hospitals.
• Exempt certain pharmacies from accreditation standards for suppliers of durable medical equipment, prosthetics, orthotics, and other supplies (DMEPOS).
• Clarify that non-hospital-based physicians and other health professionals who bill Medicare and Medicaid through a hospital may qualify for incentives for use of electronic health records.
• Extend certain legislative relief for Medicare long-term care hospital services.
• Continue the authority of special needs plans, cost plans, and senior housing programs to offer Medicare Advantage plans.
• Extend through June 30, 2011 the increased federal medical assistance percentage (FMAP) funding made available to states under the American Recovery and Reinvestment Act of 2009 (ARRA).

Note that the House approved a different version of the measure in December. It is not clear at this point what the timetable or process will be for reconciling the differences between the two measures.

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The House Energy and Commerce Health Subcommittee has scheduled a hearing for March 10 on "Drug Safety: An Update from the FDA." At the hearing, the FDA will detail its current challenges and successes in the area of drug safety.  Joshua M. Sharfstein, M.D., FDA Principal Deputy Commissioner, is slated to testify. 

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Last night the Senate joined the House in approving H.R. 4691, the Temporary Extension Act of 2010, which President Obama promptly signed into law.  The legislation includes a one-month extension of the Medicare physician fee schedule freeze in lieu of the 21.2% cut that briefly went into effect March 1, 2010 (that is, the law continues to hold payments at 2009 levels through the end of March). The measure also extends the outpatient therapy cap extension process, which had expired at the end of 2009, through March 31, 2010.  In addition, the law extends COBRA insurance premium assistance through March 31, 2010. Note that lawmakers are negotiating a longer-term extension of expiring Medicare provisions, along with an extension of enhanced federal Medicaid matching payments and other health policy revisions, as part of a broader jobs bill, the "American Workers, State and Business Relief Act."

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On March 1, 2010, a 21.2% across-the-board cut in Medicare physician fee schedule (MPFS) payments went into effect under the statutory sustainable growth rate (SGR) formula. While Congress had temporarily blocked the cut and maintained rates at 2009 levels for the first two months of 2010, that authorizing legislation expired February 28, 2010. Lawmakers are working to implement a fee schedule fix as part of job promotion legislation, but while the details of the bill and the timing for enactment still are uncertain, action in the next week is anticipated with reports that extension of the freeze may be continued until September 30, 2010. In the meantime, CMS has instructed its contractors to hold for the first 10 business days of March MPFS claims with dates of service on or after March 1, 2010.  According to CMS, the hold should have a minimum impact on provider cash flow, since current law provides that clean electronic claims are not paid before 14 calendar days (29 for paper claims) after the date of receipt. 

** March 3 update:  In light of Congressional passage of a one-month extension of the physician fee schedule fix, CMS announced it has lifted the hold on MPFS claims. 

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Yesterday President Obama convened a health reform summit in an effort to bring together key members of Congress and administration personnel to discuss ways to move forward on health reform. After a long day of policy debate, however, the summit failed to result in a bipartisan breakthrough on reform legislation.   While isolated areas of agreement were indentified, such as in the area of fraud and abuse efforts and certain aspects of insurance market reforms, the meeting largely highlighted the divisions between the two parties on fundamental aspects of reform. In particular, Democrats and Republicans at the meeting were far apart on such basic questions about how large a role the federal government should play in establishing insurance market rules, whether insurance coverage should be mandated, and how to achieve cost-savings in the health care system, among others. The summit is widely viewed as laying the groundwork for Democratic leaders to forge ahead with comprehensive health reform without Republican support -- if compromise can be reached among Democrats. In particular, Democrats appear to be ready to use a Senate parliamentary procedure known as “budget reconciliation” that would require only 51 Senate votes for passage in order to enact a bill in the coming weeks.   Additional background information on current health reform legislative efforts is available here.  
 

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On February 25, 2010, the House of Representatives approved H. R. 4691, the “Temporary Extension Act of 2010,” by a voice vote. Among other things, the bill would extend current Medicare physician fee schedule rates through the end of March 2010; in the absence of such an extension, Medicare payments will be subject to a 21.2 % across-the-board cut on March 1, 2010 under the statutory sustainable growth rate (SGR) formula. The bill also would extend the Medicare outpatient therapy cap exceptions process – which expired at the end of 2009 – through March 2010.  The bill now moves to the Senate, where its fate is uncertain because at least one Senator is objecting to the legislation's cost not being offset. A vote on the measure therefore may not come until mid-week next week if parliamentary steps (cloture vote) must be taken to move the legislation.  Even if the SGR fix does not occur before March 1, CMS can hold claims for physician services for 14 days before processing them with the 21.2 % fee cut.

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On February 24, 2010, the House of Representatives approved H.R. 4626, the “Health Insurance Industry Fair Competition Act,” by a vote of 406 to 19. The bill, which would repeal the antitrust exemption for health insurance companies provided under the McCarran-Ferguson Act, now moves to the Senate, where it could be considered as part of broader health reform legislation. 

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A number of recent hearings in the House of Representatives have focused on health policy issues, including: 

• An Oversight and Government Reform Federal Workforce Subcommittee hearing on H.R. 4489, the "Federal Employees Health Benefits Program Prescription Drug Integrity, Transparency, and Cost Savings Act." 
• A Science and Technology Committee hearing on "How Can NIST (National Institute of Standards and Technology) Better Serve the Needs of the Biomedical Research Community in the 21st Century?"
• An Energy and Commerce Oversight and Investigations Subcommittee hearing entitled "Anthem Blue Cross Premium Hike." 

In addition, today the House Energy and Commerce Health Subcommittee is holding a hearing on medical radiation, and on March 3, the Senate Homeland Security and Governmental Affairs Committee, Federal Financial Management Subcommittee will review oversight challenges in the Medicare Part D prescription drug program.   Two health care fraud hearings have been scheduled for Thursday, March 4. The House Judiciary Subcommittee on Crime, Terrorism and Homeland Security has scheduled a hearing entitled “The Enforcement of the Criminal Laws Against Medicare and Medicaid Fraud,"  and the House Appropriations Labor-HHS Committee is holding a hearing on "Combating Health Care Fraud and Abuse."

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Today the Obama Administration released an 11-page summary of its health reform proposal in preparation for a bipartisan health reform summit scheduled for February 25, 2010. Among other things, the proposal includes a relatively-detailed discussion how the Administration would promote access to affordable insurance, address health care fraud and abuse proposals, and bridge the differences between the House and Senate reform proposals in other key areas. Items of note include the following:

• Access to Health Insurance – The Administration proposes expanding access to affordable insurance through a series of insurance market reforms, including an insurance purchasing pool; federal premium subsidies; a requirement that individuals buy insurance or pay a penalty (with exceptions); a requirement that employers defray costs employees receiving federal subsidies (with exceptions); expansion of Medicaid; and a new Health Insurance Rate Authority to provide federal assistance and oversight to states in conducting reviews of unreasonable rate increases and other insurance industry practices. There is no mention of establishing a public health insurance plan to compete with private insurers.
• Waste, Fraud and Abuse – The Presidential proposal includes a variety of program integrity provisions, which include: a comprehensive sanctions database; registration and background checks of billing agencies and individuals; expanded access to the Healthcare Integrity and Protection Data Bank; liability of Medicare administrative contractors for claims submitted by excluded providers; strengthened standards for facilities that seek reimbursement as community mental health centers; limiting debt discharge in bankruptcies of fraudulent health care providers or suppliers; expanded use of technology for real-time data review; sanctions for illegal distribution of a Medicare or Medicaid beneficiary identification or billing privileges; a study of universal product numbers/claims forms for selected items and services under the Medicare program; a state Medicaid prescription drug profiling requirement; extrapolation of Medicare Advantage risk adjustment errors to contract payment for a given year; modification of certain Medicare medical review limitations; establishment of a CMS-IRS data match to identify fraudulent providers; and prevention of delays in access to generic drugs.
• Cost-Containment Provisions – While the summary document does not include a detailed discussion of Medicare provider rate changes, it does include a limited number of cost containment/fiscal sustainability provisions, including: an adjustment in Medicare Advantage payments to reflect “unjustified coding patterns”; an excise tax on the most expensive health plans ($27,500 for a family plan) beginning in 2018 for all plans; and new Medicare Hospital Insurance taxes on high-income taxpayers.
• Industry Fees -- The President proposes a $33 billion fee on brand name pharmaceutical manufacturers over 10 years (up $10 billion from Senate plan), beginning in 2011; a $67 billion assessment on health insurers over 10 years beginning in 2014 (with certain exceptions); and an excise tax (rather than fee) on medical device manufacturers, raising $20 billion over 10 years, starting in 2013.
• Quality of Care – Although not discussed in the summary document, a separate description on the White House web site states the President’s plan would provide “incentives for doctors, and hospitals that improve quality while providing for better coordination that helps to reduce harmful medical errors and healthcare-acquired infections.” The plan also includes “innovative payment reforms so providers are rewarded for the quality of care they provide, rather than just additional tests or treatments.” Likewise, it would reward greater coordination of care between primary care providers and specialists.
• Part D Coverage Gap – The President’s proposal fills the Medicare Part D prescription drug "doughnut hole" by providing a $250 rebate to Medicare beneficiaries who reach the coverage gap in 2010, and then phasing down the coinsurance requirement so it is the standard 25 percent by 2020 throughout the coverage gap.
• Medicaid Matching Funds – The President would eliminate the Senate’s proposed enhanced Medicaid matching provision for Nebraska and instead provide additional federal financing for all states to support the expansion of Medicaid.
• CLASS Act – The White House endorses the Community Living Assistance Services and Supports (CLASS) Program, a voluntary, privately-funded long-term services insurance program, but makes a series of changes designed to “improve the CLASS program’s financial stability and ensure its long-run solvency.”

The Administration also has released a variety of background and summary documents on the White House Health Care Meeting website.

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On February 11, 2010, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) released their draft “Hiring Incentives to Restore Employment (HIRE) Act.” In addition to providing tax incentives to spur hiring and extending uninsurance and COBRA health insurance premium subsidies, the legislation would extend a number of Medicare provisions, some of which expired at the end of 2009. As noted above, the legislation would extend until October 1, 2010 the current freeze on Medicare physician fee schedule payments, further blocking the 21.2% fee schedule cut now set for March 1, 2010. The bill also would, among other things: extend the outpatient therapy cap exceptions process; extend certain legislative relief for long-term care hospitals; extend payment provisions impacting mental health providers, ambulance services, certain physician and physician pathology services, rural health providers; extend certain Medicare Advantage policies; exempt certain pharmacies from Medicare supplier accreditation requirements; and clarify eligibility for physician health information technology incentive payments.  Note that after the Finance Committee released its draft bill, however, Majority Leader Harry Reid (D-NV) announced that the Senate will consider job promotion legislation in stages, and the first bill will not include the Finance Committee health provisions.  The Senate is expected to take up the jobs bill later this month. The House approved a separate jobs package in December 2009; differences between the two chambers’ approaches would need to be reconciled before a bill (or bills) could be sent to the President. 

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In an effort to jump-start progress on stalled health reform legislation, President Obama has invited Democratic and Republican lawmakers to a half-day, televised health reform summit on February 25, 2010. The event, announced by the President during a press interview on February 7, is billed as an opportunity for members of both parties to “put the best ideas on the table.”   Republican Congressional leaders have been reluctant to commit to participating in the meeting, however, unless the Democrats set aside the bills approved by the House and Senate in late 2009. In the meantime, Democratic leaders continue to work to resolve differences between the House and Senate approaches to the legislation. Our previous reports on health reform legislative efforts are available here.  

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The House and Senate have approved statutory “pay-as-you-go” (dubbed “PAYGO”) budget rules as part of legislation increasing the public debt limit (H.J.Res. 45). Under the PAYGO rules, future legislation reducing revenues or increasing spending, including entitlement spending, must be offset over five and 10 years by other savings. Certain spending would be exempt from the PAYGO rules, including legislation providing relief from a 21.2% cut in Medicare physician fee schedule payments scheduled to go into effect March 1, 2010 under the statutory Sustainable Growth Rate (SGR) formula. Specifically, the legislation would only count for PAYGO purposes the costs of SGR reforms to the extent that they exceed the cost of a five-year freeze in rates at 2009 levels. While this PAYGO exception does not actually reform the SGR policy, it frees Congress from the obligation of finding offsetting revenue for the full cost of SGR reforms, brightening the prospects for legislative action on this issue. The debt limit bill is now awaiting the President’s signature. Note that a draft Senate Finance Committee jobs bill released February 11 includes a number of Medicare policy “extenders,” including a 7-month extension of the Medicare physician fee schedule freeze (further delaying the 21.2% cut until October 1, 2010). More information on the jobs bill is available in a separate posting.

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After devoting much of the last year to crafting comprehensive health reform legislation, the election of Republican Scott Brown in the Massachusetts special election to fill the late Senator Edward Kennedy’s seat has thrown into doubt the fate of these efforts. While just two weeks ago Democratic leaders reportedly were near agreement on a compromise bill reconciling differences between the House and Senate-approved legislation, they are now scrambling to determine if they have the votes to proceed on this issue in the wake of the loss of their filibuster-proof Senate majority. Options discussed publicly, each of which has political challenges, include: having the House simply vote on the Senate-approved measure, which would not require another Senate vote; House consideration of the Senate bill along with House and Senate votes on a companion package of House amendments using a Senate parliamentary procedure known as “budget reconciliation” that would require only 51 Senate votes for passage; attempting to develop a scaled-down bill that can gain bipartisan support; or shelving the legislation entirely. No timetable has been announced for deciding on a strategy, but given the number of lawmakers now advocating a “go slow” approach to the issue, it does not appear that final action on health reform legislation is imminent. Our previous reporting on this issue, including summaries of the House and Senate bills and links to the legislative documents, is available here.  

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On February 1, 2010, President Obama is scheduled to deliver his proposed federal budget for fiscal year 2011, which is likely to again include provisions that would, if adopted, significantly impact federal health care policies. Congressional panels already have scheduled hearings on the upcoming proposal, including Senate Finance Committee and House and Senate Budget Committee hearings set for February 2, 2010 and House Ways and Means Committee hearings on February 3.  In addition, the Senate Finance Committee is holding a hearing on February 3 to discuss the health policy provisions of the budget proposal with Department of Health and Human Services (HHS) Secretary Kathleen Sebelius.

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The House of Representatives has returned from its winter break to start the second session of the 111^th Congress, and the Senate returns to business next week. At the top of the Congressional agenda is reconciling the differences between the separate health reform bills approved by the House and Senate late last year. While the overarching goals of the two bills are the same – to expand access to high-quality, affordable health care and reduce health care costs – there are numerous differences in the approaches the two chambers take. To highlight just a few issues facing lawmakers, agreement must be reached on, among many other things: whether to include a public health insurance option; whether health insurance exchanges should be state-based or federally administered; the extent to which health insurance premiums should be subsidized; whether expensive health insurance plans should be taxed; how to address coverage of abortion services; whether to repeal the anti-trust exemption for insurers; whether to include an independent Medicare Payment Advisory Board to recommend Medicare savings; how to avert the 21% cut in Medicare physician fee schedule payments that goes into effect March 1, 2010; the extent of Medicare provider payment reductions and Medicare Advantage cuts, along with how such cuts should be structured; how to achieve broader Medicare delivery reforms; and which health care sectors should be subject to industry fees. Rather than convene a formal conference committee, key lawmakers and staff are meeting to reach agreement on the myriad of issues. The tentative plan once final agreement is reached is for the House to consider an amended version of the Senate-approved bill. Assuming House passage, the bill would then be voted on by the Senate; if the Senate then approves the bill without amendment, it would go to the President for signature. Lawmakers hope that this process can be accomplished in the next few weeks, ideally before the President’s (still unscheduled) State of the Union Address, although there are numerous policy and political hurdles that stand in the way of final enactment.

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This morning the Senate approved H.R. 3590, the Patient Protection and Affordable Care Act, by a vote of 60-39.   Congressional leaders must now reconcile differences between the health reform bills cleared by the House and Senate, with a goal of approving a compromise bill before the President's State of the Union address early in the new year.
 

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On December 19, 2009, President Obama signed into law H.R. 3326, the FY 2010 Department of Defense appropriations bill, which includes a 2-month freeze in physician fee schedule payments (instead of the 21.2 percent cut that was set to go into effect January 1, 2010).  The bill is now Public Law No. 111-118.

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As reported this weekend, on December 16, 2009, Senate Majority Leader Harry Reid released his "manager's amendment" to the pending Senate health reform bill, the Patient Protection and Affordable Care Act (H.R. 3590). The amendment reflects a series of agreements negotiated with individual Senators in recent weeks, and its release sets the stage for a possible Senate vote on the underlying health reform measure by Christmas. The amendment cleared the first procedural hurdle early this morning, when a motion to cut off debate and proceed to a vote on the amendment was approved by the needed 60-40 margin.  In other important health policy news, the Senate has joined the House in approving a short-term delay in the looming 21.2% Medicare physician fee schedule payment cut caused by the application of the controversial sustainable growth rate (SGR) formula to the annual fee update. 

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The House has approved a temporary extension of enhanced Medicaid matching funds as part of legislation designed to spur job creation. H.R. 2847, passed on December 16, 2009, would provide $23.5 billion to extend higher federal Medicaid matching fund levels under the American Recovery and Reinvestment Act of 2009 (ARRA) through June 2011. The bill also would provide $12.3 billion to extend from nine to 15 months the 65% COBRA health insurance subsidy for individuals who have lost their jobs. The bill, the “Jobs For Main Street Act of 2010,” now moves to the Senate, where the outlook is questionable given that chamber’s current focus on health reform legislation. 

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On December 16, 2009, President Obama signed into law the conference report to accompany the Consolidated Appropriations Act, H.R. 3288, an omnibus spending bill that combines six of seven unfinished appropriations bills for fiscal year (FY) 2010, including the appropriations for the Department of Health and Human Services (HHS). Among other things, the bill includes increased funding for anti-fraud efforts, combating hospital-acquired conditions, nursing home and medical facilities inspections, health care workforce training, and Public Health Service and National Institutes of Health initiatives.

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Today Senate Majority Leader Harry Reid released his “manager’s amendment” to the pending Senate health reform bill, the Patient Protection and Affordable Care Act (H.R. 3590). The amendment reflects a series of agreements negotiated with individual Senators in recent weeks, and its release sets the stage for a possible Senate vote on the underlying health reform measure by Christmas. Even if adopted, however, lawmakers will still face the difficult task of reconciling the differences between Senate and House approaches to health reform before a bill can reach President Obama’s desk.

The 383-page amendment makes changes throughout the legislation, including changes to provisions addressing various insurance coverage and market reforms, Medicare reimbursement policies, fraud and abuse authorities, and taxes, among many others. According to the Congressional Budget Office, the provisions of the manager’s amendment with the largest budgetary effects include:

• Expanded eligibility for a small business tax credit;
• Increased penalties on certain uninsured individuals;
• Replacement of the proposed public health insurance plan with multi-state plans that would be offered under contract with the Office of Personnel Management;
• Deletion of an increase in Medicare physician payment rates (which is likely to be addressed in a separate vehicle); and
• Increased payroll taxes on higher-income individuals and families.

Other significant changes include:

• Lowering the threshold for Medicare spending growth that would trigger recommendations for spending reductions by the Independent Payment Advisory Board;
• Enhanced Medicare quality of care provisions (including the development of hospital and physician outcomes measures, the development of a framework for public reporting of provider performance information, pay-for-performance requirements for additional Medicare provider types, and value-based purchasing for ambulatory surgical centers);
• Revisions to Medicare payment policy for a wide range of providers, including hospitals, home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, long-term care hospitals, and hospices; expanded Medicare Part D medication therapy management requirements; and an extension of the proposed date by which a physician-owned hospital must have a Medicare provider agreement to quality for the “whole hospital” exception to the Stark law's self-referral prohibition from February 1, 2010 to August 1, 2010;
• Stronger health fraud enforcement provisions, including an extension of the federal health fraud statute to violations in which a person did not have specific intent to commit health fraud, revisions to the federal sentencing guidelines for federal health care offenses, and increased subpoena authority; and
• Modifications to the proposed annual taxes on the medical device and health insurance industries.

Note that the CBO warns that certain Medicare cost-saving provision in the legislation “might be difficult to sustain over a long period of time.”  The CBO expects inflation-adjusted Medicare spending per beneficiary under the legislation would increase at an average rate of less than 2% annually during the next two decades -- about half the rate over the past two decades. According to the CBO, “it is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would be accomplished through greater efficiencies in the delivery of health care or would reduce access to care or diminish the quality of care.”

In other important health policy news, today the Senate joined the House in approving a short-term delay in the looming - and very large - Medicare physician fee schedule payment reductions caused by the application of the controversial sustainable growth rate (SGR) formula to the annual fee update. Specifically, H.R. 3326, the Department of Defense Appropriations Act for 2010, includes a provision that freezes Medicare physician rates at currents levels for January and February 2010, in lieu of the 21.2% cut scheduled to go into effect January 1, 2010. The legislation now goes to the President, who is expected to sign the bill into law.  Note that lawmakers also are working on longer-range solutions to the Medicare physician fee schedule's SGR formula, but as the health reform debate drags out it is seen as increasingly unlikely that a more permanent fix can be adopted before the start of the new year.
 

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On December 16, 2009, the House of Representatives approved a short-term delay in looming - and very large - Medicare physician fee schedule payment reductions caused by the application of the controversial sustainable growth rate (SGR) formula to the annual fee update.  Specifically, the House version of H.R. 3326, the Department of Defense Appropriations Act for 2010, includes a provision that freezes Medicare rates at currents levels for January and February 2010, in lieu of the 21.2 percent cut scheduled to go into effect January 1, 2010.  The legislation is expected to be considered by the Senate before the end of the year.  Lawmakers also are working on longer-range solutions to the Medicare physician fee schedule's SGR formula, but as the health reform debate drags out it is seen as increasingly unlikely that a more permanent fix can be adopted before the start of the new year.

 

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The CMS Office of the Actuary (OACT) has issued its analysis of the Senate Democratic leadership’s health reform plan, the Patient Protection and Affordable Care Act (H.R. 3590), as introduced on November 18.  OACT estimates that the Senate proposal would increase total national health expenditures by $234 billion (0.7 percent) during calendar year 2010-2019.  The increase is attributable primarily to (i) greater utilization of health care service by individuals becoming newly covered or having complete coverage; (ii) lower prices paid to health providers for the subset of those individuals who become covered by Medicaid; and (iii) lower payments and payment updates for Medicare services, together with net Medicaid savings from provisions other than the coverage expansion. The report also discusses the potential impact of the proposed $493 billion in Medicare cuts over 10 years.  In particular, the report charges that the savings associated with annual productivity adjustments for most providers are probably "unrealistic" since it is doubtful most providers could reduce costs to the extent envisioned in the legislation.  OACT simulations project that as many as 20 percent of Part A providers could become unprofitable within 10 years, potentially jeopardizing Medicare beneficiary access to care.

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The full Senate has begun debate on the Democratic leadership’s major health reform plan, the Patient Protection and Affordable Care Act (H.R. 3590). The measure cleared an important procedural hurdle November 21, 2009 when the Senate voted 60-39 in favor of proceeding to consideration of the bill, and the first votes on what is expected to be a long list of amendments took place December 3. The legislation reflects the Senate leadership’s attempts to balance differing measures previously adopted by the Senate Finance Committee and the Health, Education, Labor, and Pensions Committee. On the contentious issue of a public health plan, the leadership plan would establish a non-profit public plan dubbed the “community health insurance option” that would be available to individuals who purchase health insurance through a new insurance “exchange.”   Payment rates under the community health option would be based on negotiations with providers and suppliers, and states would be allowed to “opt out” of offering this option. The voluminous bill also would, among many other things: establish federal subsidies for individuals to reduce the cost of purchasing coverage; expand Medicaid eligibility; establish a mandate for most individuals to obtain health insurance and most large employers to contribute towards the cost of insurance; institute various insurance market reforms; substantially reduce the growth of Medicare payment rates for most services and tie certain payment rates to quality outcomes; establish an independent Medicare Advisory Board to recommend Medicare savings and quality improvement proposals, with the Board's proposals taking effect automatically unless Congress approves alternative policies; establish requirements to promote transparency in financial relationships and reduce health care fraud and abuse; establish annual fees on the pharmaceutical manufacturing sector ($2.3 billion annually), the medical device manufacturing sector ($2.0 billion annually), and the health insurance sector ($6.7 billion annually); and make various other changes to the federal tax code, Medicare, Medicaid, and other programs. The Congressional Budget Office (CBO) estimates that the gross cost of the insurance coverage expansion would be $848 billion over 10 years, but that amount would be more than offset by a combination of other tax and spending changes that would result in a $130 billion net reduction in federal budget deficits over 10 years. The CBO also estimates that the legal nonelderly insured population would rise from about 83% currently to about 94% under the bill. Note that a lengthy Senate floor debate is expected, which could potentially extend beyond Christmas. Once the Senate approves its bill, the next step will be reconciliation with the House bill approved in November.

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On November 19, 2009, the House of Representatives approved H.R. 3961, the Medicare Physician Payment Reform Act, by a vote of 243-183.  The bill would block a 21.2% Medicare physician fee reduction scheduled to go into effect January 1, 2010, and would replace the current sustainable growth rate formula for calculating physician payments with a new update methodology. Most notably, under the House plan, the fee schedule update for 2010 would equal the percentage increase in the Medicare economic index (1.2%). Beginning in 2011, there would be separate target growth rates and conversion factor updates for two categories of service: (1) evaluation, management, and preventive services (updates would be set at the GDP growth rate plus 2 percentage points per year), and (2) all other services (which would be updated by the GDP plus 1 percentage point). The CBO estimates that the bill would increase Medicare payments to physicians by about $195 billion over 10 years. Note that in October, the Senate blocked consideration of a separate bill (S. 1776) to address physician fee schedule payments, so it is uncertain when or if the Senate will consider the new House measure. The Senate health reform plan (discussed above) includes a more limited, one-year fix of the fee schedule, which would provide a 0.5% update for 2010. While Congress eventually is expected to take legislative action to avert the upcoming fee schedule cut for 2010, the timing and the scope of the legislation (permanent reform vs. a temporary fix) is still unclear.

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On November 18, 2009, the House approved H.R. 3014, the Small Business Health Information Technology Financing Act. The bill would create a new Small Business Administration loan guarantee program for the purchase of certain health information technology (IT) by eligible health care professionals in solo and small group practices. Health IT supported by the program would include computer hardware, software, and related technology that supports Medicare’s meaningful electronic health record use requirements. The technology must be purchased by an eligible professional to aid in the provision of health care, including electronic medical records, but it does not include IT whose sole use is financial management, maintenance of inventory of basic supplies, or appointment scheduling. The loan guarantee program would provide a 90% guarantee and loan amounts up to $350,000 for an individual practitioner and $2 million for a group practice. The legislation now moves to the Senate for further consideration.

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A number of Congressional committees have held hearings recently on health policy issues. Among other things, two panels held hearings on H1N1 vaccine supply issues -- the House Energy and Commerce Committee and the Senate Homeland Security and Governmental Affairs Committee. The Energy and Commerce Health Subcommittee also held a hearing on recent breast cancer screening recommendations. Also, the Senate Energy and Natural Resources Committee held a hearing on H.R. 3276, the American Medical Isotopes Production Act of 2009.  Looking ahead, on December 8, the Energy and Commerce Health Subcommittee is holding a hearing entitled "Prescription Drug Price Inflation: Are Prices Rising Too Fast?”

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Today Senate Majority Leader Harry Reid released the Senate health reform plan, the "Patient Protection and Affordable Care Act."  A procedural vote to move forward on the legislation could occur later this week.

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On November 14, 2009, House Republicans released an analysis by CMS’s Office of the Actuary (OACT) that raises questions about the House-approved health reform plan’s potential to control health care spending. The report, which was requested by Ways and Means Ranking Member Dave Camp, found that under H.R. 3962, “America’s Affordable Health Choices Act of 2009”:

• Overall national health expenditures would increase by $289 billion (0.8 percent) for calendar years 2010 through 2019, reflecting the net effect of health service utilization increases and price reductions. OACT projects that the national health expenditure share of gross domestic product would be 21.1 percent in 2019 under the legislation, compared to 20.8 percent under current law.
• Net Medicare spending would be reduced by $571 billion for FYs 2010-2019 (this figure does not include the cost associated with reforming the physician fee schedule formula, which is being considered through separate House legislation). OACT warns, however, that the estimated savings for permanent annual productivity adjustments for Medicare institutional providers such as acute care hospitals, skilled nursing facilities, and home health agencies “may be unrealistic.” Although H.R. 3962’s reductions in Medicare payment updates “would provide a strong incentive for institutional providers to maximize efficiency, it is doubtful that many could improve their own productivity” to the degree envisioned in the legislation. This could result in Medicare payment rates that “grow more slowly than, and in a way that was unrelated to, the providers' costs of furnishing services to beneficiaries.” Medicare providers thus “could find it difficult to remain profitable and might end their participation in the program (possibly jeopardizing access to care for beneficiaries).” While Congress could monitor this policy to prevent beneficiary access problems, “so doing would likely result in significantly smaller actual savings” than projected.
• Other than reduced inflation updates for Medicare providers, “[m]ost of the provisions of H.R. 3962 that were designed, in part, to reduce the rate of growth in health care costs would have a relatively small savings impact.” For instance, promoting comparative effectiveness research, expanding use of prevention and wellness measures, instituting administrative simplification provisions, and enhancing fraud and abuse enforcement efforts would result in a reduction in non-Medicare federal health care expenditures of $2.1 billion, all of which would result from the comparative effectiveness research proposal.
• There are significant questions about the viability of the proposed Community Living Assistance Services and Supports (CLASS) program -- a voluntary national insurance program that would provide cash benefits to assist individuals unable to perform two or more functional activities of daily living to purchase nonmedical services in order to remain in a community setting. According to the report, “voluntary, unsubsidized, and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants.”

OACT is an independent technical advisor to the Administration and Congress. The OACT report includes a disclaimer that the information does not represent an official position of HHS or the Administration.

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On November 7, 2009, the House of Representatives approved H.R. 3962, the Affordable Health Care for America Act, by a vote of 220 – 215. The legislation seeks to expand access to affordable health insurance coverage (including through the creation of a public health insurance option) and institute numerous reforms to the nation’s health care system. The most polarizing issue during the House debate, however, was coverage of abortion services (the House ultimately adopted an amendment prohibiting federal funds for abortion services in the public option and prohibiting individuals who receive insurance subsidies from purchasing a plan that provides elective abortions). Also during floor debate, the House incorporated a “manager's amendment" to the bill that make a number of changes to the version of H.R. 3962 released October 29, addressing such issues as verification of citizenship for health coverage, insurance industry practices, optional state funding for long-term care facility background checks, enhanced oversight of claims for new medical equipment suppliers, Medicaid community support services, and specialty hospitals, among others. The House also approved a “rule” that allows Congress to consider separate legislation, H.R. 3961, the Medicare Physician Payment Reform Act of 2009, which would provide a permanent fix to the Medicare physician fee schedule formula (physicians are facing a 21.2% across-the-board cut in Medicare payments January 1, 2010 in the absence of statutory change). Our previous summaries and updates on the House bill are available here. Legislative action now shifts to the Senate, where leaders have been working to meld bills adopted by the Senate Finance Committee and the Health, Education, Labor, and Pensions (HELP) Committee. The consensus bill being developed is still under wraps while the Congressional Budget Office “scores” its fiscal impact. Senate leadership still hope to release the bill within the next week and to begin what is expected to be a lengthy floor debate on the package before Thanksgiving, although that timeline is subject to change. 

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President Obama has signed into law S. 1793, the Ryan White HIV/AIDS Extension Act of 2009 (P.L. 111-87). The law reauthorizes the Ryan White program for four years, increase authorizations, and makes other revisions to the program.   

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On November 5, 2009, the House of Representatives approved H.R. 3276, the American Medical Isotopes Production Act. The legislation is intended to provide the Department of Energy with new authority and funding to assist private sector projects to establish a steady domestic supply of the medical isotope molybdenum-99.  

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A number of Congressional committees have held hearings recently on health policy issues, including a Senate Health, Education, Labor, and Pensions hearing examining increasing health costs facing small businesses and a House Appropriations Committee “briefing” on the "2009 H1N1 Influenza Pandemic: Examining the Federal, State, and Local Public Health Response." In addition, on November 18, 2009, the House Energy and Commerce Committee has scheduled a hearing on “H1N1 Preparedness: An Overview of Vaccine Production and Distribution.”

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On November 3, 2009, the House Rules Committee posted Rep. Dingell's "manager's amendment" to H.R. 3962, the Affordable Health Care for America Act. The amendment makes changes to a number of provisions of the House bill, addressing such issues as verification of citizenship for health coverage, insurance industry practices, funding for long-term care facility background checks, enhanced oversight of claims for new durable medical equipment suppliers, and Medicaid community support services, among others.  The House Rules Committee is scheduled to meet Friday, November 6, to vote on the parliamentary procedures that will be used by the House when considering H.R. 3962, including the amendments that will be considered during debate. The package is expected to be voted on by the full House as soon as Saturday, November 7.
 

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According to the preliminary Congressional Budget Office (CBO) score of the House health reform legislation released October 29,  the proposed expansions in insurance coverage would cost $894 billion over 10 years.  The bill would be paid for with cuts in Medicare rates, an income tax surcharge on high-income individuals and other tax code changes, and a variety of other offsets.  This price tag does not, however, factor in the cost of legislation to avert an upcoming 21.5% cut in the Medicare physician fee schedule, which is widely expected to be considered before the end of the year.  With regard to insurance coverage, CBO estimates that the share of legal nonelderly residents with insurance coverage would rise from about 83% currently to about 96% under the legislation.

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On October 21, 2009, a Senate effort to block upcoming reductions to Medicare physician fee schedule payments failed on a procedural “cloture” vote that would have ended debate and allowed a vote on the bill. By way of background, under the current statutory “sustainable growth rate” (SGR) formula, Medicare physician payments are expected to be reduced by 21.5% in 2010 and by about 6% more annually for several subsequent years. The bill that came before the Senate, S. 1776, would repeal the SGR formula and permanently freeze the physician fee schedule. In blocking the measure, lawmakers voiced concerns about the proposal's price tag (almost $250 billion over 10 years), which was not paid for under the bill.  Most recently, on October 29, 2009, House leaders released H.R. 3961, the Medicare Physician Payment Reform Act of 2009, which would provide a permanent fix to the physician fee schedule formula.  While Congress is widely expected act before the end of the year to avert the upcoming fee schedule cut for 2010, the timing and the scope of the legislation (permanent reform vs. one or two year fix) still has not been determined.

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On October 20, 2009, the House of Representatives passed H.R. 3763, which would amend the Fair Credit Reporting Act to exclude certain businesses from the “Red Flag” identity theft guidelines, including health care practices with 20 or fewer employees. The bill also would require the Federal Trade Commission to establish a process to allow businesses to apply for an exclusion from the rules. The legislation, which was approved by a 400-0 vote, now moves to the Senate.  Note that while the Federal Trade Commission (FTC) had stated that it will begin enforcing the Red Flag Rules effective November 1, 2009, the agency recently announced it was extending the Red Flag Rules enforcement date until June 1, 2010.

 

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The Senate Judiciary Committee has approved S. 369, the Preserve Access to Affordable Generics Act, which generally would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market. As approved by the Committee, the bill would allow certain settlement agreements between drug companies if they enhance competition, and it would establish penalties for violations of the act. 

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The House Judiciary Committee has passed H.R. 3596, the Health Insurance Industry Antitrust Enforcement Act of 2009. H.R. 3596 would prohibit companies that provide health and medical malpractice insurance from price fixing, bid rigging, or allocating markets while providing coverage for health insurance or medical malpractice claims. The Congressional Budget Office (CBO) estimates that the legislation would have no significant effect on the premiums that private insurers would charge for health insurance, in part because state laws already bar the activities that would be banned under federal law. 

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The House and Senate have approved S. 1793, the Ryan White HIV/AIDS Extension Act of 2009. The legislation would reauthorize the Ryan White program for four years, increase authorization, and make other revisions to the program. The legislation now awaits the President’s signature. 

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On October 21, 2009, the House Commerce Committee approved H.R. 3276, the American Medical Isotopes Production Act. The legislation is intended to provide the Department of Energy with new authority and funding to assist private sector projects to establish a steady domestic supply of the medical isotope molybdenum-99.  

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A number of Congressional committees have held hearings recently on health policy issues, including the following:

• A Senate Judiciary Committee hearing on "Effective Strategies for Preventing Health Care Fraud." 
• A House Energy and Commerce: Subcommittee on Oversight and Investigations hearing on “The High Cost of Small Business Health Insurance: Limited Options, Limited Coverage.”   
• A Senate Homeland Security and Governmental Affairs Committee hearing on "H1N1 Flu: Monitoring the Nation's Response."
• A Senate Veterans' Affairs Committee hearing on a variety of bills to modify health care programs for veterans, including legislation to establish pay-for-performance compensation mechanisms into Department of Veterans Affairs contracts with community-based outpatient clinics. 

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Today House Democratic leaders unveiled the Affordable Health Care for America Act (H.R. 3962), which builds on the legislation approved by three House committees this summer.   The massive, almost 2000-page bill includes a wide range of provisions designed to expand access to health insurance, improve health care quality, and reduce health care costs. Notably, Congressional leaders decided to include a public health insurance option to compete with private health plans, with payment rates based on negotiations between the HHS Secretary and providers (rather than using Medicare rates). Other mechanisms to expand access to insurance include market reforms, an insurance purchasing exchange, premium subsidies, an expansion of Medicaid, and mandates for employers to contribute to workers’ health care costs and individuals to purchase insurance (or pay a penalty). The bill also includes scores of provisions that would impact Medicare reimbursement to providers, such as: bundled payments for acute and post-acute provider; payment reforms to discourage preventable hospital readmissions; reduced payments to Medicare Advantage plans; reduced market basket updates; “productivity adjustments” that reduce rate updates for certain Medicare providers; restrictions on specialty hospitals; and reductions in payment rates for home health and imaging services, among others. Many other reforms could impact a range of providers and manufacturers, such as expanded comparative effectiveness research, new nursing home transparency rules, expanded disclosure requirements regarding financial relationships between manufacturers and providers, numerous fraud and abuse provisions, Part D drug payment provisions, expanded drug rebates, and new payment policies for biosimilar biological products.

The Congressional Budget Office analysis of the bill is expected to be released later today,  and House leaders hope to bring the bill to the House floor for a vote next week. Senate leaders still have not released their combined health reform package, although that document also is likely to be released shortly in hopes of Senate consideration by Thanksgiving. Differences between bills approved by the House and Senate ultimately would need to be reconciled before a final bill could be send to the President for his signature.

In a related development, today House leaders also released H.R. 3961, the Medicare Physician Payment Reform Act of 2009, which would provide a permanent fix to the physician fee schedule through a free-standing bill, rather than using the health reform bill as the legislative vehicle to avert an upcoming 21.5 percent cut in physician fee schedule payments. 

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The three House committees that approved health reform bills this summer have released a committee report, including legislative language and supplemental materials, related to H.R. 3200, the America's Affordable Health Choices Act..   The report is divided into three parts: 

• Part 1 includes the House Energy & Commerce Committee report on H.R. 3200;
• Part 2 is the House Ways and Means Committee report  on H.R. 3200; and
• Part 3 is the House Education and Labor Committee report on H.R. 3200.

 

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The Senate Finance Committee has posted the 1502-page legislative text of the America’s Healthy Future Act.  
 

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On October 13, 2009, the Senate Finance Committee approved the “America’s Healthy Future Act,” representing the last step in the committee process before health reform legislation can move to the full Senate for a vote. The Committee approved the bill by a 14-9 margin, with one Republican (Sen. Olympia Snowe) joining all panel Democrats in supporting the bill. According to the Congressional Budget Office (CBO), the package would cost $829 billion gross over 10 years, but result in a net savings of $81 billion over 10 years. The proposal seeks to expand access to affordable health insurance through insurance market reforms, the creation of insurance exchanges to facilitate comparing and purchasing insurance policies, expanded Medicaid eligibility, and various subsidies (the bill does not include a public health insurance option). All individuals would be required to purchase health insurance, subject to limited exceptions. While employers would not be required to offer health insurance, firms with more than 50 workers that do not offer coverage would be subject to a financial penalty for full-time workers who obtain subsidized coverage through the insurance exchanges. The Congressional Budget Office estimates that the bill would reduce the number of uninsured nonelderly individuals by about 29 million, leaving about 25 million nonelderly residents uninsured. The bill also includes a series of provisions impacting Medicare and Medicaid payment policies, including reductions in annual updates to certain Medicare fee-for-service rates (except physicians would receive a 0.5% increase instead of a scheduled 21.5% cut in 2010), new “productivity” adjustments and other payment policies that have the effect of reducing payments for certain health providers, cuts in payments to Medicare Advantage plans, and health care delivery reforms (e.g., expanded Medicare value-based purchasing, reduced payments for avoidable hospital readmissions, and a pilot program on post-acute bundling). Other reforms include expanded federal comparative effectiveness research, disclosure of certain physician-industry financial relationships, greater investment in the health care workforce, and strengthened efforts to combat health care fraud. Financing mechanisms include an excise tax on high-cost insurance policies and annual fees on the pharmaceutical manufacturing sector ($2.3 billion annually), the medical device manufacturing sector ($4 billion) and the health insurance sector ($6.7 billion). The CBO estimates that the bill would reduce direct spending on Medicare, Medicaid, and CHIP by over $400 billion over ten years. Senate leaders now must merge the Finance package with the health reform bill approved by the Senate Health, Education, Labor, and Pensions (HELP) Committee this summer, and the unified bill could move to the full Senate for a vote this month. In the meantime, the House leadership has been working to meld the health reform bills approved by the Energy and Commerce, Ways and Means, and Education and Labor Committees to enable a unified measure to be brought to the House floor for a vote. 

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On October 13, 2009, President Obama signed into law H.R. 3663, which delays from October 1, 2009, to January 1, 2010 the requirement for pharmacies that supply Medicare durable medical equipment to meet certain accreditation requirements. Note that the legislation does not affect the accreditation requirement for pharmacies to qualify to bid in a Medicare DME, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition area. The National Supplier Clearinghouse (NSC) has issued guidance on the application of the new pharmacy accreditation policy, clarifying that this extension pertains only to pharmacies supplying DME; entities registered with the NSC as DME suppliers with a pharmacist on staff do not qualify for the extension. Moreover, pharmacies that were not accredited prior to the October deadline are not subject to the revocation of Medicare billing privileges. Any pharmacy that wishes to withdraw a previously-submitted voluntary termination request must submit a letter to the NSC by October 23, 2009.  

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On October 14, 2009, the Energy and Commerce Energy Subcommittee approved an amended version of H.R. 3276, the American Medical Isotopes Production Act of 2009. On October 15, the House Committee on Financial Services is scheduled to vote on H.R. 3763, which would amend the Fair Credit Reporting Act to exclude certain businesses from the “Red Flag” identity theft guidelines, including health care practices with 20 or fewer employees. Also on October 15, the House Energy and Commerce Committee will vote on the Ryan White HIV/AIDS Treatment Extension Act; note that the Senate HELP Committee approved its version of this legislation on September 30. In addition, the Senate Judiciary Committee has scheduled an October 15 vote on S. 369, the Preserve Access to Affordable Generics Act, although this vote has been postponed on several occasions.

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A number of Congressional committees have held hearings recently on health policy issues, including the following:

• An Energy and Commerce Health Subcommittee hearing on breast cancer prevention, research, treatment, and quality of care legislation (H.R. 995, H.R. 1691, H.R. 1740, and H.R. 2279).  
• House Oversight and Government Committee hearings on Medicaid pediatric dental services and the Administration's flu vaccine program. 
• A Senate Veterans’ Affairs Committee hearing on the Department of Veterans’ Affairs contracts for health services.
• Senate Aging Committee hearings on how successful health systems keep costs low and quality high, and the cost of federal long-term care insurance.
• A Senate Judiciary Committee hearing on "Prohibiting Price Fixing and Other Anticompetitive Conduct in the Health Insurance Industry," focusing on legislation to repeal a federal antitrust exemption for health insurance and medical malpractice insurance companies.  

In addition, several hearings are scheduled for October 15.  The Senate Small Business Committee is holding a hearing on "Sensible Health Care Solutions for America's Small Businesses." The Senate HELP Committee will examine health care equality for women.  The Energy and Commerce Oversight Subcommittee is holding a hearing on the problem of underinsurance.

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The Congressional Budget Office (CBO) has released its preliminary score of the Senate Finance Committee health reform bill, as amended in committee.   In brief, the CBO concludes that the bill would cost $829 billion gross over 10 years, but result in a net savings of $81 billion over 10 years.  CBO estimates that the bill would would reduce direct spending on Medicare, Medicaid, and CHIP by $404 billion over the 2010–2019 period, and the Medicare and Medicaid provisions would increase federal revenues by approximately $16 billion over this period.  Program savings include $162 billion in reductions to annual updates to Medicare fee-for-service rates (other than physicians’ services), and a $117 billion cut in payments to Medicare Advantage plans.  The number of uninsured nonelderly individuals would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants).  The Finance Committee is scheduled to vote on the bill on October 13, 2009.

 

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The Senate Finance Committee health reform package, as amended during Committee markup, is now available on the Finance Committee website.  The proposal (in the form of a narrative rather than legislative text) is now being scored by the Congressional Budget Office (CBO), and a vote in the Finance Committee is expected October 6. The bill then will be merged with the Senate Health, Education, Labor, and Pensions Committee bill before moving to the full Senate for a vote later this month.

 ** Note that technical corrections to the document subsequently were posted to the website, and the vote has been delayed pending the CBO score.

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The Senate Finance Committee began markup of its health reform legislation on September 22, 2009. The panel has made its way through many of the more than 500 amendments proposed by Committee members, but more work remains to be done when the Committee resumes work on September 29, including debate on the controversial issue of whether or not to include a public health insurance option. Once the Finance Committee completes action, its provisions must be combined with the version adopted by the Senate Health, Education, Labor, and Pensions (HELP) Committee in July. On the House Side, in a highly unusual process, the Energy and Commerce Committee held a markup session on September 23 to adopt additional amendments to the health reform bill, H.R. 3200, the panel already approved in July. Members of the House leadership are now working to meld the Energy and Commerce provisions will the health reform proposals adopted by the House Ways and Means and Education and Labor Committees to enable a unified measure to be brought to the House floor for a vote. The timing of such a vote has not yet been announced.

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A number of Congressional committees have held hearings recently on health policy issues, including the following:

• A House Science and Technology Committee hearing on "The Potential Need for Measurement Standards to Facilitate the Research and Development of Biologic Drugs." 
• A House Veterans Affairs Health Subcommittee hearing on the Veterans Affairs (VA) Department’s pharmaceutical policy, including an examination of formulary, patient safety, and management issues.   
• A Senate Judiciary Committee Terrorism and Homeland Security Subcommittee hearing on "Strengthening Security and Oversight at Biological Research Laboratories." 
• House Energy and Commerce Committee hearings on pandemic flu preparedness, "Solving the Medical Isotope Crisis," and the Ryan White Extension Act of 2009.

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On September 29, 2009, the House Oversight and Government Reform Committee is holding a hearing on the "Administration's Flu Vaccine Program: Health, Safety, and Distribution." On September 30, the Senate HELP Committee is scheduled to vote on the “Ryan White HIV/AIDS Treatment Extension Act of 2009.” Also on September 30, the Senate VA Committee is holding a hearing on VA's contracts for health services, the Aging Committee will examine how successful health systems keep costs low and quality high, and the Senate Homeland Security Committee is holding a hearing on controlled substance abuse in Medicaid. On October 1, the Senate Judiciary Committee is scheduled to vote on S. 369, the "Preserve Access to Affordable Generics Act."

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On September 22, 2009, the Senate Finance Committee is scheduled to begin debating Senator Baucus’s proposed health reform “Chairman’s Mark.”   On September 19, the Finance Committee posted the amendments that will be considered during the health reform markup.  More than 500 amendments have been filed, addressing health care delivery system reform, health care coverage, and financing of comprehensive health care reform.  The Finance Committee is the last Congressional panel to act before health reform legislation is taken up by the full House and Senate.

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Addressing a joint session of Congress last night, President Obama called on lawmakers to adopt a health reform plan featuring insurance market reforms, insurance mandates, Medicare reforms, and a public health insurance option. The President’s remarks came as Senate Finance Committee Chairman Max Baucus released the outline of his proposed health reform framework for consideration by a small group of Senators who have been working to forge a bipartisan agreement. Regardless of whether a bipartisan deal is reached, however, Chairman Baucus announced that his Committee will mark up health reform legislation the week of September 21, 2009.

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Congress returns next week from its August recess, starting a critical period for the fate of health reform legislation. After a turbulent summer of town hall meetings and public wrangling regarding the scope of reform, President Obama will address a joint session of Congress on September 9, 2009 to discuss in more detail his vision for the legislation. In the meantime, a small bipartisan group of Senators is continuing to try to develop a compromise plan by its September 15, 2009 target. If attempts at a bipartisan solution fail, Senate leaders have indicated they may seek to consider reform legislation under “budget reconciliation” rules, which prevent filibuster and allow passage with a simple majority of Senators, but which limit the scope of the legislation that may be considered to provisions that impact spending. On the House side, leaders still must unite the separate bills approved by three different committees before the legislation can be considered by the full House.

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All three House Committees with jurisdiction over health reform legislation now have approved different versions of H.R. 3200, "America's Affordable Health Choices Act." The House leadership now must work to meld the bills approved by the Energy and Commerce, Ways and Means, and Education and Labor Committees into a unified bill for consideration by the full House after Congress returns from its August recess. On the Senate side, while the Senate Committee on Health, Education, Labor, and Pensions approved its health reform plan, the “Affordable Health Choices Act,” in July, high-profile negotiations among a small bipartisan group of Senate Finance Committee members have not yet yielded a compromise bill. In the meantime, the White House has been stepping up efforts to build public support for health reform through a series of town hall meetings and the launch of a new “reality check” website aimed at combating what the White House perceives to be “misinformation” about pending health reform proposals. In light of more vocal public opposition to elements of health reform, however, Administration officials have begun to signal more willingness to compromise on the key issue of establishing a public health plan to compete with private insurers.

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On August 4, 2009, the Senate Appropriations Committee approved an amended version of H.R. 3293, legislation to fund the Departments of Labor, HHS, and Education for FY 2010, which begins October 1, 2009. The bill, which was cleared by the full House on July 24, 2009, now awaits consideration by the full Senate. 

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The Senate Homeland Security and Governmental Affairs Committee has approved S. 372, the "Whistleblower Protection Enhancement Act of 2009." Among other things, the Committee-approved bill would: clarify that federal employees are protected for disclosure of waste, fraud, or abuse made as part of an employee's job duties; clarify that whistleblowers may disclose evidence of censorship of scientific or technical information under the same standards that apply to other disclosures; and create a “Whistleblower Ombudsman” in every Inspector General office.  The panel also approved S.1508, the "Improper Payments Elimination and Recovery Act,” which would strengthen requirements for federal agencies to report and correct overpayment errors.  The bills now await consideration by the full Senate.

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On August 7, 2009, the Senate confirmed Dr. Francis Collins as Director of the National Institutes of Health.

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On August 4, 2009, the Senate Health, Education, Labor and Pensions Committee is holding a hearing "Protecting Patients from Defective Medical Devices." 

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While three Congressional panels have now approved versions of comprehensive health reform legislation, delays in Senate Finance Committee and House Energy and Commerce Committee consideration have made it unlikely that health reform will be considered in the full House or Senate by the August Congressional recess beginning August 7, 2009. The legislative situation is still very fluid, with news of potential compromises vying with continued reports of serious divisions among key groups of lawmakers. Key developments in this process are outlined below.

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On July 15, 2009, the Senate Committee on Health, Education, Labor, and Pensions (HELP) approved its health reform plan, the “Affordable Health Choices Act,” on a party-line 13-to-10 vote. The major features of the legislation are summarized in a previous posting. Note that the HELP Committee does not have jurisdiction over Medicare or Medicaid; provisions impacting those programs will be included in the Senate Finance Committee health reform bill. A group of Finance Committee members are still meeting to agree on a bipartisan bill, but panel members are no longer predicting when the details of a compromise package may be released. After Finance Committee action, the two Committee packages then will be combined for consideration by the full Senate, likely sometime in the fall.

Sept. 2, 2009 update: The HELP Committee has finally released the version of the health reform bill adopted by the panel on July 15, 2009.

 

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As previously reported, on June 17, 2009, the chairmen of the three House committees that share jurisdiction over health policy released a “discussion draft” of their comprehensive health reform plan. A revised version of the bill, the America's Affordable Health Choices Act of 2009 (H.R. 3200), was unveiled on July 14, 2009. In short, the legislation would: create a public health insurance plan to compete with private insurers; expand access to insurance include low-income subsidies, creation of a health insurance exchange, Medicaid expansion, and private insurance market reforms; impose mandates for individuals to purchase insurance and employers to contribute to health care costs (with certain exceptions); and make extensive Medicare and Medicaid policy changes affecting virtually every type of health care entity. On July 17, 2009, the Ways and Means Committee approved H.R. 3200, followed the same day by House Education and Labor Committee approval of an amended version of the legislation. The third House committee with jurisdiction -- Energy and Commerce -- began consideration of the legislation on July 17. Energy and Commerce Committee markup has been suspended, however, while Chairman Henry Waxman negotiates with more conservative Democratic members of the panel concerned with the costs of the bill and other features of the legislation, such as regional disparities in payment levels. Eventually the work of the three committees will be melded into one bill for a House vote, followed by reconciliation with the Senate package later in the year.

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On July 24, 2009, the House of Representatives approved H.R. 3293, legislation to fund the Departments of Labor, Health and Human Services (HHS), and Education for fiscal year (FY) 2010. Among other things, the legislation would increase funding for: the HHS Health Care Fraud and Abuse Control Program; health professions training; NIH biomedical research programs; CDC public health programs, Substance Abuse and Mental Health Services Administration mental health and substance abuse programs; and healthcare-associated infection reduction efforts. The legislation now moves to the Senate.

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• A Senate Commerce Subcommittee on Consumer Protection hearing on "Competition in the Health Care Marketplace." 
• A House Judiciary Subcommittee on Courts and Competition Policy hearing on "Biologics and Biosimilars: Balancing Incentives for Innovation.” 
• A House Energy and Commerce Oversight Subcommittee field hearing on "Terminations of Health Policies by Insurance Companies: State Perspectives and Legislative Solutions." 
• A House Judiciary Commercial and Administrative Law Subcommittee hearing on "Medical Debt - Is Our Healthcare System Bankrupting Americans?"

In addition, the following hearings and markups currently are scheduled:

 

• The Senate Special Committee on Aging is holding a hearing July 29 on medical research and education.
• On July 29, the Senate Homeland Security and Governmental Affairs Committee is voting on a number of bills, including S. 372, the "Whistleblower Protection Enhancement Act of 2009" and S.1508, the "Improper Payments Elimination and Recovery Act." 

 

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On July 15, 2009, the Senate Committee on Health, Education, Labor, and Pensions (HELP) approved its health reform plan, the “Affordable Health Choices Act,” on a party-line 13-to-10 vote. In addition to significant insurance reforms, including a public health plan option, the legislation addresses a variety of other health policy issues, such as health care quality, health care workforce issues, preventive care, chronic care management, and a regulatory approval process for follow-on biologicals. The major features of the legislation are outlined below.

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On July 2, 2009, the Senate Health, Education, Labor, and Pensions (HELP) Committee released title I of its health reform package, the “Affordable Health Choices Act.” The new title includes insurance market reforms, a health insurance exchange (called the “American Health Benefit Gateway”), and requirements that employers contribute to workers’ insurance costs and most individuals obtain insurance. The plan also includes a new public health insurance plan, called a “Community Health Insurance Option,” under which the Secretary would negotiates with providers for covered benefits and aggregate rates would be capped at the average reimbursement rates paid by health insurance issuers offering qualified health plans through the Gateway. According to a Congressional Budget Office (CBO) estimate of these new provisions, the bill would increase the deficit by $597 billion over the 2010-2019 period— but that does not reflect the costs of the Medicaid expansion, certain low-income subsidies, and other health policy provisions. CBO expects the bill to reduce the uninsured population by about 20 million when fully implemented, but 34 million people would still be uninsured.   The HELP Committee began debating amendments to the legislation in June (called “markup”), and markup continues this week.  

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The three House panels with jurisdiction over health reform -- Energy and Commerce, Ways and Means, and Education and Labor – have held hearings recently on the Tri-Committee health reform plan, and markups are expected this month. In addition, on July 8, 2009, the House Small Business Committee is holding a hearing entitled "The Looming Challenge for Small Medical Providers: The Projected Physician Shortage and How Health Care Reforms Can Address the Problem.” 

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On June 24, 2009, Senate Finance Committee Chairman Baucus announced that the CBO has scored the Finance Committee health reform plan under development as costing under $1 trillion.  The CBO also has determined that the plan makes offsetting cuts and/or raises revenues to fully pay for those new costs.  Note that the text of the Committee's legislation is not yet available; it is expected to be released after the 4th of July Congressional recess.

 

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On June 22, 2009, President Obama signed into law H.R. 1256, the “Family Smoking Prevention and Tobacco Control Act,” as amended. The law gives the Food and Drug Administration (FDA) authority to regulate the advertising, marketing, and manufacturing of tobacco products under the Federal Food, Drug, and Cosmetic Act, funded through user fees on tobacco product manufacturers.

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• An Energy and Commerce Oversight and Investigations Subcommittee hearing on "Terminations of Individual Health Policies by Insurance Companies.”
• A Senate Homeland Security and Governmental Affairs Subcommittee on Oversight hearing on S. 372, the "Whistleblower Protection Enhancement Act of 2009."
• An Energy and Commerce Health Subcommittee hearing entitled "Medical Devices: Are Current Regulations Doing Enough for Patients?"

In addition, on June 24, 2009, the House Small Business Regulations and Healthcare Subcommittee is holding a hearing on "Health Information Technology and the New Challenges Faced by Solo and Small Group Healthcare Practices." Also on June 24, the Senate Homeland Security and Governmental Affairs Committee is holding a hearing on "Type 1 Diabetes Research: Real Progress and Real Hope for a Cure."

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On June 24, 2009, the House Small Business Regulations and Healthcare Subcommittee is holding a hearing on "Health Information Technology and the New Challenges Faced by Solo and Small Group Healthcare Practices."

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Today the Chairmen of the three House committees that share jurisdiction over health policy released their 852-page draft health reform bill. As expected, the legislation would create a public health insurance plan to compete with private insurers, with provider payments based initially on Medicare payment amounts. Other mechanisms to expand access to insurance include low-income subsidies, creation of a health insurance exchange, Medicaid expansion, and private insurance market reforms, coupled with mandates for individuals to purchase insurance and employers to contribute to health care costs (with certain exceptions). The bill also includes extensive Medicare and Medicaid policy changes affecting virtually every type of health care entity. Among many other things, the bill would:

• Reform the physician fee schedule formula, including erasing cumulative shortfalls triggered by the current payment formula, establishing separate updates for evaluation and management and other types of services, and requiring review of potentially misvalued codes;
• Reduce payments to hospitals for a preventable readmissions;
• Bundle payments to hospitals and certain post-acute care providers (SNFs, IRFs, LTCHs, and HHAs) for services provided within 30 days of hospital discharge (the HHS Secretary would be required to study how the readmission policy also could be applied to physicians), and require the HHS Secretary to develop a detailed plan to reform Medicare payment for post-acute care services;
• Reduce Medicare reimbursement for imaging services by increasing equipment utilization factor for advanced imaging from 50% to 75% and increasing the multiple imaging procedure technical component discount from 25% to 50% for second and subsequent imaging studies on the same patient/same day;
• Reduce inflation updates for a variety of providers, revise the skilled nursing facility payment methodology, and incorporate productivity improvements into market basket updates for several types of providers;
• Limit the "whole hospital" exception to the Stark law's self-referral prohibition to those hospitals with physician ownership or investment on January 1, 2009, and add significant new conditions to that exception for existing hospitals with physician ownership;
• Reform graduate medical education payments;
• Reduce Medicare Advantage payments;
• Expand drug rebates in a number of ways (increase the Medicaid drug rebate amount for brand-name drugs from 15.1% to 22.1% of the average manufacturer price, apply the additional rebate to new drug formulations, allow rebates on drugs provided through Medicaid managed care organizations, and require drug manufacturers to provide rebates for certain full premium subsidy eligible individuals under the Part D drug program);
• Expand penalties for various types of health care fraud and abuse, including penalties for hospices that demonstrate substandard quality of care;
• Gradually phase out the Part D coverage gap ("donut hole");
• Establish an accountable care organization pilot program;
• Expand comparative effectiveness research;
• Require reporting of financial relationships between drug and device manufacturers and physicians (with a limitation on the deductions for advertising for failure to file required transparency reports); and
• Require the disclosure of nursing home ownership information and address other nursing home quality issues.

The three House committees -- Ways and Means, Energy and Commerce, and Education and Labor -- have scheduled hearings on the legislation next week, with committee voting expected in July.

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On June 16, 2009, the Congressional Budget Office (CBO) outlined the potential impact of health reform on the federal budget.  In a letter to the Senate Budget Committee, the CBO warns that "without meaningful reforms, the substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it."   Moreover, despite consensus about the need to make changes to make the health sector more efficient, such as paying providers for value, providing incentives for both providers and patients to control costs, and promoting comparative effectiveness information, "little reliable evidence exists about exactly how to implement those types of changes—especially at the level of specificity required for legislation."

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On June 15, 2009, the Congressional Budget Office posted its preliminary analysis of the major provisions related to health insurance coverage in the "Affordable Health Choices Act," which was released by the Senate Committee on Health, Education, Labor, and Pensions (HELP) on June 9, 2009.  Among other things, that draft legislation would establish insurance exchanges through which individuals and families could purchase coverage and would provide federal subsidies to substantially reduce the cost of that coverage for some enrollees.  The CBO estimates that the HELP health reform proposal would increase the federal budget deficit by about $1.0 trillion over the 2010–2019 period. Once fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges; however, because employer-provided insurance and coverage through other sources would decline, the net decrease in the number of people uninsured would be about 16 million. The $1 trillion figure also does not include the costs of a potential expansion of Medicaid eligibility or a public health insurance options, both of which might be added at a later date.  The HELP Committee is scheduled to begin markup of the legislation on June 17.

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On June 15, 2009, the House Ways and Means Committee posted a press release outlining Medicare physician fee schedule reforms being developed by key House lawmakers.  Under current law, known as the sustainable growth rate (SGR) formula, Medicare physician payments are expected to be reduced by 21% in 2010 and by additional amounts in future years.  Under the plan being developed in the House, the SGR formula would replaced with a new formula that:

• Removes items such as drugs and laboratory services not paid directly to practitioners from spending targets;
• Allows the volume of most services to grow at the rate of GDP plus 1 percentage point per year;
• Allows the volume of primary and preventive care services to grow at GDP plus 2% per year; and
• Encourages new Accountable Care Organizations "to be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system."

The press release touts the reforms as costing "less than $300 billion over ten years."

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A House Energy and Commerce Health Subcommittee hearing on June 11, 2009 will focus on a new Federal Trade Commission (FTC) report titled "Emerging Health Care Issues: Follow-on Biologic Drug Competition."  The report will describe findings from an FTC nvestigation into the effects of a follow-on biologics pathway on competition and innovation. In particular, the report will address whether additional incentives, beyond those provided by patents and pricing, are needed to ensure continued innovation in the biologics market.

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Health, Education, Labor and Pensions (HELP) Committee Chairman Edward Kennedy released the Committee's draft health reform legislation, the "Affordable Health Choices Act," on June 9, 2009.  The legislation focuses on insurance market reforms and subsidies, along with other system changes, such as promotion of health information technology, follow-on biologicals (just placeholder-no language) and expanded participation in 340B drug program, long-term care/community living services, preventive care, health care workforce issues, and fraud and abuse provisions. Note that the bill does not address Medicare, because that falls within the Senate Finance Committee's jurisdiction.  A HELP Committee hearing on the bill is scheduled for June 11, followed by markup beginning on June 16. [Markup subsequently delayed until June 17].

Also on June 9, leaders of the three House committees with jurisdiction over health policy released a 4-page outline of their health reform plan. In addition to insurance market reforms and other system changes, the plan includes Medicare reforms (including reform of the physician fee schedule formula, reductions in Medicare Advantage payments, and implementation of other unspecified MedPAC recommendations) and explicitly calls for a public health insurance option.

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On June 8, 2009, House Energy and Commerce Committee Chairman Henry Waxman wrote to President Obama asking "the Administration to consider what steps can be taken under existing authority to prepare and even begin to use a pathway for generic biologics." The letter also requests that the "Administration provide an analysis of long-term savings generated from generic biologics not only for Medicare and Medicaid, but also for businesses, insurers, and families."

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On June 3, 2009, the Energy and Commerce Subcommittee on Commerce, Trade, and Consumer Protection approved H.R. 1706, the “Protecting Consumer Access to Generic Drugs Act,” which would prohibit a brand name drug company from paying a generic drug company to stay off the market as part of a drug patent settlement. The Subcommittee passed the legislation on a 16-10 vote, sending it to the full Committee for further action. In a related development, the Senate Judiciary Committee has scheduled a June 11, 2009 markup of S.369, the "Preserve Access to Affordable Generics Act".

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• A House Small Business Committee hearing on “Common Ground: Finding Consensus on Health Reform, the Small Business Perspective.”
• A Special Committee on Aging hearing on the value of long-term care insurance.
• A House Judiciary Courts and Competition Policy Subcommittee hearing on "Pay to Delay: Are Patent Settlements That Delay Generic Drug Market Entry Anticompetitive?"

In addition, the following hearings are scheduled this month:

• A June 10 House Education and Labor Subcommittee on Health hearing on “Examining the Single Payer Health Care Option."
• A June 11 the Senate Health, Education, Labor and Pensions Committee hearing on health care reform.
• A June 11 House Energy and Commerce Health Subcommittee hearing on "Emerging Health Care Issues: Follow-on Biologic Drug Competition." 
• A June 11 Senate Homeland Security and Governmental Affairs Subcommittee on Oversight hearing on S. 372, the "Whistleblower Protection Enhancement Act of 2009." 
• A June 18 House Energy and Commerce Health Subcommittee hearing entitled, "Medical Devices: Are Current Regulations Doing Enough for Patients?"

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On June 3, 2009, the House Judiciary Courts and Competition Policy Subcommittee is holding a hearing on "Pay to Delay: Are Patent Settlements That Delay Generic Drug Market Entry Anticompetitive?"

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On May 20, 2009, the President signed into law the Fraud Enforcement and Recovery Act of 2009, which includes significant changes to the federal False Claims Act (FCA). Among other things, the new law expands the scope of FCA liability, provide for new investigative tools, and make it easier for qui tam relators to bring and maintain FCA suits on behalf of the government. Although the law is primarily targeted at potential fraud involving recipients of economic stimulus funds in the financial services industry, the FCA provisions also could affect members of the health care industry. A Reed Smith analysis of the Fraud Enforcement and Recovery Act of 2009 is available on Reed Smith’s Life Sciences Legal Update blog.

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On May 18, 2009, the Senate unanimously confirmed Dr. Margaret "Peggy" Hamburg as FDA Commissioner.  Dr. Hamburg was sworn in as the FDA Commissioner by HHS Secretary Kathleen Sebelius on May 22, 2009.

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On May 20, 2009, the Senate Health, Education, Labor and Pensions (HELP) Committee approved an amended version of S. 982, the "Family Smoking Prevention and Tobacco Control Act,” which would provide the FDA with certain authority to regulate tobacco products.  

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• A Senate Judiciary Crime Subcommittee hearing on “Criminal Prosecution as a Deterrent to Health Care Fraud.” 
• A HELP Committee hearing on "Delivery Reform: The Roles of Primary and Specialty Care in Innovative New Delivery Models." 
• A House Oversight and Government Reform Committee hearing on H.R. 1507, the "Whistleblower Protection Enhancement Act of 2009."
• A House Energy and Commerce Health Subcommittee hearing on H.R. 1346, the "Medical Device Safety Act of 2009," which is discussed in greater detail at Reed Smith’s Life Sciences Legal Update blog. 

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Today Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley released a policy paper setting forth options for financing health reform. This is the third and final set of policy options for discussion before the Finance Committee marks up legislation in June. The Finance Committee has scheduled a member "walk through" to discuss the financing policy options on May 20, 2009. The financing options include, among other things: adjusting annual market basket updates and imposing “productivity adjustments” for various Medicare fee-for-service providers; a variety of payment changes impacting hospitals and home health agencies; Part B payment reforms (targeting potentially-overvalued Part B services and utilization of advanced diagnostic imaging services); improvements to promote payment accuracy for durable medical equipment; a variety of reforms pertaining to Medicaid drug rebates; policy options to reduce inappropriate spending variations across and within geographic areas; revisions to beneficiary cost-sharing obligations, including Part D means testing; and a variety of tax code changes involving the exclusion for employer-provided health coverage, changes to the itemized deduction for medical expenses, and excise tax provisions affecting alcohol and sugar-sweetened beverages.  The Finance Committee will accept comments on the health reform financing options through May 26, 2009.

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On May 11, 2009, Senate Finance Committee Chairman Max Baucus (D‐Mont.) and Ranking Member Chuck Grassley (R‐Iowa) released their policy options for expanding health care coverage, including options for designing a government-run public health insurance plan. Members are scheduled to meet to discuss these options on May 14, and public comments will be accepted on the options through May 22, 2009.  An overview of the document is reprinted after the jump.   This is the second of three options papers scheduled for release by the Committee, with the third options paper on financing health care reform planned for release before a May 20 meeting of Finance Committee members.

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Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley released a lengthy policy paper on April 28, 2009 discussing options for reducing health care costs and improving quality in the health care delivery system, including significant Medicare payment reform proposals. Key areas addressed in the paper include the following:  

• Promoting Quality Care – Policy options to promote quality in the Medicare program include: establishing value‐based purchasing programs for hospitals, home health, and SNFs by FY 2012; expanding programs leading to value‐based purchasing for doctors, IRFs, and LTCHs; tying Medicare Advantage payments to quality of care; and restricting utilization of diagnostic imaging services.
• Fostering Care Coordination and Provider Collaboration – Policy options to enhance care management efforts include: establishing Medicare payment incentives for hospitals that reduce preventable hospital readmissions; providing a single bundled Medicare payment for acute and post‐acute episodes of care; establishing Medicare pilot programs of patient‐centered care coordination models for the chronically ill ; making reforms to Medicare physician reimbursement rates.
• Infrastructure Investments – Potential health delivery infrastructure investments include:  additional efforts to support widespread adoption and meaningful use of health information technology (beyond ARRA provisions); the development of quality measures; the establishment of a independent institute to conduct comparative effectiveness research; and improvements to health care workforce training.
• Transparency– Policy options to promote transparency include: requiring drug and device manufacturers to report publicly certain payments to physicians; establishing new restrictions on specialty hospitals; and expanding information for consumers on nursing home quality. 
• Other Health Care Delivery Options – Among other things, the plan calls for various steps to promote primary care (including providing primary care practitioners and targeted general surgeons with a 5% Medicare payment bonus) and expanded efforts to fight Medicare fraud and abuse.

The the deadline for public comments is May 15, 2009. The document is the first of three sets of potential option papers, each covering a different topic area that members will discuss before a bipartisan “Chairman’s Mark” on comprehensive health care reform is developed. Policy option papers on increasing health care coverage and financing health care reform will be released following future roundtable discussions on those topics. Note that the Finance Committee held its roundtable discussion on access to health care coverage on May 5, 2009, so an options paper on that topic should be available in the near future. In addition, on May 12, the Senate Finance Committee is holding its third roundtable discussion, this one focusing on financing comprehensive health care reform.

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• The Senate Finance Committee held a “roundtable” discussion on "Increasing Access to Health Care Coverage." 
• The Ways and Means Committee held two hearings on health reform, one focusing on employer-sponsored insurance and the other featuring a discussion with HHS Secretary Sebelius on the President’s principles for health care reform. 
• The Senate Health, Education, Labor and Pensions Committee held hearings on "Primary Health Care Access Reform: Community Health Centers and the National Health Service Corps"; “Learning from the States: Individual State Experiences with Health Care Reform Coverage Initiatives in the Context of National Reform"; and on the nomination of Margaret A. Hamburg to be Commissioner of Food and Drugs. 
• The Senate Aging Committee held a hearing on “solutions to stop Medicare and Medicaid fraud from hurting seniors and taxpayers”

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This post was written by Scot T. Hasselman, Andrew C. Bernasconi, and Nathan R. Fennessy.

On April 28, both the U.S. Senate and the U.S. House of Representatives took steps that would provide sweeping changes to the federal False Claims Act ("FCA"). The bills would significantly expand the scope of FCA liability while at the same time make it easier for qui tam relators to bring and maintain FCA suits on behalf of the government.

In short, the bills are answers to a DOJ and relator’s counsel "wish list" that would eliminate 20 years of hard-fought defense jurisprudence. In addition, the House bill, for example, would eliminate the public disclosure jurisdictional bar and defense, which could allow a sworn federal agent to utilize information obtained in the course of official investigations to file FCA lawsuits as a relator, and to receive a portion of any financial recovery. The House bill would also eliminate any basic pleading standards by relators and allow relators’s attorneys to file fishing expeditions without any substantive basis of allegation. 

For additional information, please see Reed Smith's full alert.

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On May 12, 2009,  the Senate Committee on Health, Education, Labor and Pensions has scheduled a markup of the Family Smoking Prevention and Tobacco Control Act.  

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On May 7, 2009, the Senate Health, Education, Labor, and Pensions has scheduled hearings to examine the nomination of Margaret A. Hamburg to be Commissioner of Food and Drugs.

 

 

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• On May 5, 2009, the Senate Finance Committee is hosting a “roundtable” discussion on "Increasing Access to Health Care Coverage."
• On May 6, the House Ways and Means Committee is holding a hearing on "Health Reform in the 21st Century," featuring HHS Secretary Kathleen Sebelius.  
• On May 6, 2009, the Senate Aging Committee is holding a hearing on “solutions to stop Medicare and Medicaid fraud from hurting seniors and taxpayers.”

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On April 21, 2009, the Senate Finance Committee voted to favorably report the nomination of Kansas Governor Kathleen Sebelius to be Health and Human Services (HHS) Secretary.  The 15 to 8 vote was largely upon party lines. The nomination is now pending before the full Senate.

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The Ways and Means Committee has scheduled an April 29 hearing on health reform, focusing on employer-sponsored health insurance.

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On April 20, 2009, Senate Finance Committee Chairman Senator Max Baucus and Senate Health, Education, Labor, and Pensions Committee Chairman Edward M. Kennedy reaffirmed their intention to move forward on major health care reform this year. In a letter to President Barack Obama, Baucus and Kennedy announced that their committees will mark-up comprehensive health care reform legislation in early June.  The text of the Senators’ letter is reprinted after the jump.

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A number of Congressional panels have scheduled hearings on health policy issues, including the following:

• An April 21, 2009 Senate Finance Committee hearings on "Reforming America's Health Care Delivery System”;
• A Ways and Means Committee hearing on April 22 regarding reforming the health insurance market;
• An April 22 Senate Homeland Security and Governmental Affairs Committee hearing on "Eliminating Waste and Fraud in Medicare and Medicaid";
• An April 22 House Transportation and Infrastructure Aviation Subcommittee hearing entitled "Oversight of Helicopter Medical Services"; and
• An April 23 House Education and Labor Health Subcommittee hearing on "Ways to Reduce the Cost of Health Insurance for Employers, Employees and their Families."

In addition, on April 21, 2009, the Senate Finance Committee has scheduled a vote on the nomination of Kathleen Sebelius to be Secretary of Health and Human Services.

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On April 2, 2009, the House and Senate approved separate budget resolutions (H.Con.Res. 85  and S.Con.Res. 13, respectively) that establish nonbinding spending and revenue frameworks for the Congressional committees for fiscal year (FY) 2010. Both bills include deficit-neutral “reserve funds” authorizing committees to adopt health reform measures if offsetting revenues are specified. Such reforms could include, among other things, provisions to make health coverage more affordable, expand access to insurance, improve quality, reduce health care costs, and preserve choice of providers and health plans. In a notable difference, the House bill would allow the Senate to use a procedure called reconciliation to approve health reform legislation by a simple majority, effectively blocking the minority’s ability to force Senate leaders to muster 60 votes in favor of a health reform bill. The House bill also would require the Committees on Ways and Means and Energy and Commerce each to identify $1 billion in health care savings over five years. The Senate adopted an amendment that would prohibit adoption of President Obama’s proposal to change the tax treatment of charitable contributions to pay for health reform. In addition, the House and Senate differ in their approach to fixing the Medicare physician fee schedule formula, which now would trigger an across-the-board payment cut of approximately 21% in 2010. Specifically, the Senate would require that any change to the physician fee schedule be done on a deficit-neutral basis, while the House allocates approximately $87 million over five years/$285 billion over 10 years to reform the formula. The Senate also calls for the importation of prescription drugs approved by the Food and Drug Administration (FDA) from a specified list of countries, and it would establish a deficit-neutral reserve fund to address Medicare and Medicaid reimbursement inequities that lead to access problems in rural areas. Both the House and Senate resolutions also provide up to $311 million for the Health Care Fraud and Abuse Control program for FY 2010. Lawmakers will work to iron out differences between the two measures when Congress returns from recess on April 20, 2009.

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On April 2, 2009, the House approved H.R. 1256, the “Family Smoking Prevention and Tobacco Control Act.” The bill, which was approved on a 298 to 112 vote, would authorize FDA regulation of tobacco products, including allowing for the adoption of tobacco product standards to protect public health, and establish labeling, inspection, and record keeping requirements related to tobacco, among other things. The bill now moves to the Senate.  

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On March 30, the House approved the following health policy measures: H.R. 1246, the “Early Hearing Detection and Intervention Act of 2009”; H.R. 756, the “National Pain Care Policy Act of 2009”; H.R. 20, the “Melanie Blocker Stokes MOTHERS Act,” to address postpartum depression and psychosis; and H.R. 479, the “Wakefield Act,“ to improve emergency medical services for children. On March 31, the House approved H.R. 1253, the “Health Insurance Restrictions and Limitations Clarification Act of 2009,” which would require group health plans to disclose all limitations and restrictions to consumers in a timely and easily understood manner. 

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The Senate Finance Committee held a hearing April 2, 2009 on the nomination of Kansas Governor Kathleen Sebelius to be Secretary of Health and Human Services. At the hearing, Governor Sebelius asserted that if confirmed, health reform “would be my mission – as it is the President’s.” The Committee has not yet scheduled a vote on her nomination.

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• A House Ways and Means Committee hearing on reforming the health care delivery system to encourage better coordination and higher quality care, such as through bundled payments, health information technology, and value-based purchasing.
• House Energy and Commerce hearings on "Institutional Review Boards that Oversee Experimental Human Testing for Profit" (Oversight Subcommittee), "Making Health Care Work for American Families” (Health Subcommittee), and the "Protecting Consumer Access to Generic Drugs Act of 2009," which would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market (Commerce Subcommittee). 
• A House Appropriations Subcommittee on Labor-HHS hearing on “Pathways to Health Reform: Implementing the National Strategy to Reduce Healthcare-Associated Infections.”
• A Senate Health, Education, Labor and Pensions Committee hearing addressing insurance market reform in national health reform.
• A Finance Committee hearing on the "Role of Long-Term Care in Health Reform."
• A Senate Commerce Committee hearing on deceptive health insurance industry practices. 

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On April 1, 2009, the House Appropriations Subcommittee on Labor-HHS is holding a hearing on “Pathways to Health Reform: Implementing the National Strategy to Reduce Healthcare-Associated Infections.”

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On March 31, the House Energy and Commerce Subcommittee on Commerce, Trade, and Consumer Protection is holding a hearing on H.R. 1706, the "Protecting Consumer Access to Generic Drugs Act of 2009," which would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market.

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The Senate Health, Education, Labor and Pensions (HELP) Committee is holding a hearing March 31 on the nomination of Kansas Governor Kathleen Sebelius to be HHS Secretary. The Senate Finance Committee also has scheduled a hearing on the nomination on April 2. 

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The House Energy and Commerce Subcommittee on Oversight and Investigations is holding a hearing March 26, 2009 on "Institutional Review Boards that Oversee Experimental Human Testing for Profit."

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The Senate Commerce, Science and Transportation Committee is holding hearings on March 26 and 31, 2009 entitled “Deceptive Health Insurance Industry Practices – Are Consumers Getting What They Paid For?”

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Congressional leaders have affirmed their commitment to passing comprehensive health reform this year. This ambitious timetable will take a coordinated effort among the many committees in the House and Senate that share jurisdiction over the myriad of issues that could comprise health reform legislation, including insurance market reforms, health care cost containment, and quality improvement, among many others. To that end, the chairmen of the House Committees on Energy and Commerce, Ways and Means, and Education and Labor sent a letter to President Obama on March 11, 2009 vowing to coordinate their committees’ actions so that a House vote can take place before the August recess. Likewise, Senate Finance Chairman Baucus declared March 10 that the Finance Committee is striving to pass a health reform bill by July 4. The Senate Health, Education, Labor, and Pensions (HELP) Committee also is expected to work throughout the spring on provisions within its jurisdiction.

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On March 24, 2009, the Senate HELP Committee will examine addressing insurance market reform in national health reform. On March 25, the Senate Finance Committee has scheduled a hearing on the "Role of Long-Term Care in Health Reform," and the Senate Aging Committee is holding to receive an update from the Alzheimer's Study Group.

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• A House Education and Labor Subcommittee on Health hearing on "Strengthening Employer-Based Health Care";
• House Energy and Commerce Health Subcommittee hearings on “Making Healthcare Work for American Families,” focusing on “Designing a High Performing Healthcare System” and “Ensuring Affordable Coverage”;
• House Ways and Means Committee hearings on “Health Reform in the 21st Century: Expanding Coverage, Improving Quality and Controlling Costs” and the Medicare Payment Advisory Commission's (MedPAC) Report to the Congress on Medicare Payment Policy; and
• Senate Finance Committee hearings on "Workforce Issues in Health Care Reform: Assessing the Present and Preparing for the Future" and “What is Health Care Quality and Who Decides?”; and
• A House Small Business Committee hearing on "The President's FY 2010 Budget and Medicare: How Will Small Providers be Impacted?" 

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On March 11, 2009, President Obama signed into law H.R. 1105, an omnibus spending bill that completes work on the remaining FY 2009 appropriations bills, including funding for the Department of Health and Human Services (HHS). Among other things, the law (PL 111-008) increases funding for the Food and Drug Administration (FDA) by $335 million above 2008 levels to help FDA improve the safety of domestic and imported food and medical products. The measure also includes increased funding compared to FY 2008 levels for the National Institutes of Health (NIH), the Centers for Disease Control and Prevention, community health centers, health professions training, childhood immunizations, and rural hospital programs. Moreover, the act funds a new initiative to reduce hospital and clinic infections and requires national and state plans to combat infections. 

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On March 12, the Senate Finance Committee will hold a hearing on "Workforce Issues in Health Care Reform: Assessing the Present and Preparing for the Future."

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On March 5, 2006, the Senate Judiciary Committee approved an amended version of S.386, the "Fraud Enforcement and Recovery Act." Among other things, the bill would “clarify” that the False Claims Act was intended to extend to any false or fraudulent claim for government money or property, whether or not the claim is presented to a government official or employee, whether or not the government has physical custody of the money, and whether or not the defendant specifically intended to defraud the government. 

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On February 25, 2009, the House of Representatives approved H.R. 1105, an omnibus spending bill to complete work on the remaining FY 2009 appropriations bills, including funding for HHS. Among other things, the bill includes increased funding compared to FY 2008 levels for the NIH, the Centers for Disease Control and Prevention, community health centers, health professions training, childhood immunizations, and rural hospital programs. The bill also funds a new initiative to reduce hospital and clinic infections and requires national and state plans to combat infections. The bill now is pending before the Senate. 

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On March 4, 2009, the House Energy and Commerce Committee approved the following health policy bills: H.R. 1256: Family Smoking Prevention and Tobacco Control Act; H.R. 1259, the Dextromethorphan Distribution Act of 2009; H.R. 1246, the Early Hearing Detection and Intervention Act of 2009; H.R. 1253, the Health Insurance Restrictions and Limitations Clarification Act of 2009; H.R. 20, the Melanie Blocker Stokes Mom's Opportunity to Access Health Education, Research, and Support for Postpartum Depression Act; H.R. 479, the Wakefield Act (addressing emergency medical services for children); H.R. 577, the Vision Care for Kids Act of 2009; H.R. 756, the National Pain Care Policy Act of 2009; H.R. 914, the Physician Workforce Enhancement Act of 2009; and H.R. 307, the Christopher and Dana Reeve Paralysis Act. The legislation now moves to the full House for further consideration. 

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• Senate Health, Education, Labor and Pensions Committee hearings on “Improving Care Through Innovation,” "Principles of Integrative Health: A Path to Health Care Reform," and "Addressing Underinsurance in National Health Reform.”
• A Senate Special Committee on Aging hearing on “Health Reform in an Aging America.”
• A Senate Finance Committee hearing on "Scoring Health Care Reform: CBO's (Congressional Budget Office) Budget Options." 

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On March 10, 2009, the House Education and Labor Subcommittee on Health is holding on "Strengthening Employer-Based Health Care." Also on March 10, the House Energy and Commerce Health Subcommittee will examine “Making Healthcare Work for American Families: Designing a High Performing Healthcare System.” On March 11, the House Ways and Means Committee will hold a hearing on “Health Reform in the 21st Century: Expanding Coverage, Improving Quality and Controlling Costs.”

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This post was written by Karl A. Thallner, Jr., Carol C. Loepere, Debra A. McCurdy, Brad M. Rostolsky, Jacqueline B. Penrod, and Amie E. Schaadt.

On February 17, 2009, President Obama signed into law H.R. 1, the American Recovery and Reinvestment Act (the “ARRA”). The sweeping $790 billion economic stimulus package includes a number of health care policy provisions. Reed Smith's Health Care Memorandum summarizes the major health policy provisions of the Act.

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The Senate Health, Education, Labor and Pensions Committee has scheduled a hearing on February 23 on "Principles of Integrative Health: A Path to Health Care Reform," and a second hearing February 24 on "Addressing Underinsurance in National Health Reform." Also, on February 25, the Senate Finance Committee is holding a hearing entitled "Scoring Health Care Reform: CBO's (Congressional Budget Office) Budget Options."

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On February 13, 2009, the House and Senate approved the conference report to accompany H.R. 1, the American Recovery and Reinvestment Act.  President Obama signed the bill into law on February 17, 2009.  The $790 billion economic stimulus package includes a number of health care policy provisions.  Among other things, the final agreement includes:

• $19 billion to accelerate the adoption of health information technology systems;
• Strengthened federal privacy and security provisions to protect personally-identifiable health information;
• Approximately $87 billion in additional federal matching funds over two years to help states maintain their Medicaid programs in the face of state budget shortfalls;
• $1.1 billion to support comparative effectiveness research;
• $1 billion for a new Prevention and Wellness Fund; and
• Provisions to help unemployed workers maintain health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) law.
• A provision blocking a fiscal year 2009 reduction in Medicare payments to teaching hospitals related to capital payments for indirect medical education;
• A provision blocking a fiscal year 2009 Medicare payment cut to hospice providers related to a wage index payment add-on;
• Technical corrections to the Medicare, Medicaid, and SCHIP Extension Act of 2007 related to Medicare payments for long-term care hospitals;
• A temporary increase in states’ annual disproportionate share hospital allotments;
• An extension of moratoria on Medicaid regulations for targeted case management, provider taxes, and school-based administration and transportation services through June 30, 2009, and a new moratorium on a Medicaid regulation related to hospital outpatient services through June 30, 2009;
• An extension of Transitional Medical Assistance and the Qualified Individual program; and
• Medicaid prompt payment requirements for nursing facilities and hospitals.

Information on the versions of the measure approved earlier by the House and Senate is available here.    

Update:  On February 17, 2009, President Obama signed into law H.R. 1, the American Recovery and Reinvestment Act (the “ARRA”).  Reed Smith's Health Care Memorandum summarizes the major health policy provisions of the Act.

 

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On February 11, 2009, the House of Representatives approved H.R. 448, the Elder Abuse Victims Act of 2009.  The legislation would direct the Attorney General to: (1) study and report to Congress on state laws and practices relating to elder abuse, neglect, and exploitation (including laws requiring reporting of nursing home deaths); (2) develop a long-term plan for elder justice programs and activities; (3) award grants to support and train state and local prosecutors, courts, and law enforcement personnel handling elder justice-related matters; and (4) establish the Elder Serve Victim grant program to facilitate and coordinate programs to provide emergency services to victims of elder abuse.

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On February 4, 2009, President Obama signed into law H.R. 2, the Children's Health Insurance Program (CHIP) Reauthorization Act of 2009. The legislation extends the CHIP program through FY 2013, expands funding to cover an additional 3.9 million uninsured children, and makes a number of reforms to the program. Note that the legislation does not include an earlier House provision that would have limited the "whole hospital" exception to the Stark law's self-referral prohibition to those hospitals with physician ownership or investment on January 1, 2009, and would have added significant new conditions to that exception for existing hospitals with physician ownership. A Senate Finance Committee summary is available here.

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A number of Congressional panels have held hearings recently on health policy issues, including the following:

• The Senate Health, Education, Labor and Pensions (HELP) Committee has held hearings on "Crossing the Quality Chasm in Health Reform" and “Implementing Best Patient Care Practices.” The HELP Committee also has scheduled a hearing for February 17 on “Improving Care Through Innovation.”  
• The House Small Business Committee held hearings on health care reform, the employer-provided health care outlook, and the impact of DMEPOS competitive bidding on small businesses. 
• The Senate Budget Committee held a hearing on “Key Issues and Budget Options for Health Reform.” 

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The House and Senate currently are drafting major economic stimulus legislation that include a number of health care provisions. Although the details of the House and Senate versions vary, both the House and Senate packages would provide, on a temporary basis, approximately $87 billion additional federal matching funds to help states maintain their Medicaid programs during the economic downturn. Both plans also would expand federal health information technology efforts, including providing increased Medicare and Medicaid payments to certain providers using certified health information technology and establishing new privacy and security protections for health information, and increase federal funding of comparative effectiveness research, among many other things. The House of Representatives is set to vote on the bill this week. Senate panels are currently marking up various titles of the Senate package. Details on the Senate Finance Committee’s health-related provisions are available here. 

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On January 14, 2009, the House approved H.R. 2, the Children's Health Insurance Program (CHIP) Reauthorization Act of 2009. The legislation would extend the CHIP program through FY 2013 and expand funding to cover an additional 4 million uninsured children. The House bill also would limit the "whole hospital" exception to the Stark law's self-referral prohibition to those hospitals with physician ownership or investment on January 1, 2009, and add significant new conditions to that exception for existing hospitals with physician ownership. The version of the CHIP reauthorization bill approved by the Senate Finance Committee and currently being debated by the full Senate does not include specialty hospital provisions. 

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On January 29, 2009, the HELP Committee is holding a hearing entitled "Crossing the Quality Chasm in Health Reform."

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On January 27, the Senate Judiciary Committee is holding a hearing on “Health IT: Protecting Americans' Privacy in the Digital Age.” The hearing will be webcast.

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On January 27, 2009, the Senate Health, Education, Labor and Pensions Committee is holding a hearing on access to prevention and public health for high risk populations. 

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On January 6, 2009, the House of Representatives approved a package of rules for the 111^th Congress that, among other things, suspends for two years a provision of the Medicare Modernization Act of 2003 that requires expedited consideration of Medicare funding legislation when general revenues cover less than 45 percent of overall Medicare costs. 

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On January 8, 2009, the Senate Health, Education, Labor and Pensions Committee held a hearing on the nomination of former Senate Majority Leader Tom Daschle to be Secretary of Health and Human Services in the Obama administration. 

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The Senate Health, Education, Labor and Pensions Committee has scheduled a hearing on "Investing in Health IT: A Stimulus for a Healthier America" on January 15, 2009.  

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On January 8, 2009, the Senate Health, Education, Labor and Pensions Committee is holding a hearing on the nomination of former Senate Majority Leader Tom Daschle to be Secretary of Health and Human Services in the Obama administration. 

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On December 10, 2008, the House approved S. 3712, a bill to make a technical correction in the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343). The legislation would clarify the effective date applicable to group health plan maintained pursuant to collective bargaining agreements. The legislation, which was approved by the Senate on November 20, is now awaiting the President’s signature.

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On December 10, 2008, the Senate Health, Education, Labor, and Pensions Committee held a hearing on “Prevention and Public Health: The Key to Transforming our Sickcare System.” 

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On November 20, 2008, the Senate approved S. 3712, a bill to make a technical correction in the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343). The legislation would clarify the effective date applicable to group health plan maintained pursuant to collective bargaining agreements. The House has not yet considered the bill. 

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On November 19, 2008, Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley released a discussion draft of legislation that would establish a value-based purchasing program for Medicare inpatient hospital care. Under the plan, Medicare payments would be linked to hospital performance -- rather than just reporting -- on certain quality measures. The initial performance measures focus on treatment of heart attacks, heart failure, pneumonia, and surgical care. The budget-neutral plan would be phased in over five years, beginning in FY 2012, with full implementation beginning in FY 2016. Comments on the draft will be accepted through December 15, 2008. 

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On November 19, 2008, the Senate Finance Committee is hosting a hearing on “Health Care Reform: An Economic Perspective.” A witness list is available on the Finance Committee website.  

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On November 12, 2008, Senate Finance Committee Chairman Max Baucus released a white paper entitled "Call to Action: Health Reform 2009." The document details Senator Baucus’ goals for health care reform in the broad areas of coverage, quality, and cost. Highlights of the lengthy plan include the following.  

• Ensuring Health Coverage for All Americans. The Baucus plan seeks universal health insurance coverage by supplementing the current employer-based system with a nationwide insurance pool called the Health Insurance Exchange. Premium subsidies would be available to qualifying families and small businesses. While the Exchange is being created, individuals aged 55 to 64 could buy in to Medicare, and access would be expanded to Medicaid and the State Children’s Health Insurance Program (CHIP). Once affordable health insurance options are available, all individuals would be required to have insurance coverage. 
• Improving Value by Reforming the Health Care Delivery System. Among other things, the plan calls for strengthening the role of primary care and chronic care management; refocusing payment incentives toward quality and value; and encouraging providers in different settings to collaborate in a way that improves quality and saves money (e.g., gainsharing). As part of the payment reforms, Baucus calls for overhaul of the Medicare physician fee schedule formula, greater surveillance of high-growth services, expanded use of pay-for-performance methodologies, and global payments for services provided to a patient during hospitalization and post-discharge. The Baucus plan also seeks to improve the health care infrastructure by supporting comparative effectiveness research through a new Health Care Comparative Effectiveness Research Institute and by promoting the adoption of health information technology. 
• Financing a More Efficient Health Care System. The Baucus plan seeks to prevent Medicare fraud, waste, and abuse through: more stringent enrollment criteria; enactment of payment methodologies that discourage waste (such as the DMEPOS competitive bidding program); encouraging provider and supplier compliance; vigilant government oversight of government health programs; and strong punishment for program abuses. The plan also seeks to increase transparency in the health system by mandating disclosure of gifts and other transfers of value made by drug and device companies to physicians and other health care professionals; increasing scrutiny of physician self-referrals (including a focus on physician-owned hospitals); and requiring public reporting and disclosure of health care price and quality information. With regard to private plans in Medicare, the Baucus plan also would address overpayments to Medicare Advantage (MA) plans, promote performance measures for Part D prescription drug plans and the application of pay-for-performance principles to these plans, and extend Medicaid price discounts to the drugs used by the dual-eligible population in the Part D program. In addition, the plan addresses long-term care reforms, including policies to continue to shift care from institutional settings to home and community settings, malpractice reform, and reforms of the tax code designed to make incentives more efficient, distribute benefits more fairly, and promote smarter consumer spending of health care dollars.

Health care reform promises to be a high-profile issue for the new Congress and the incoming Obama Administration. The broad scope of the Baucus white paper suggests that Congress intends to focus beyond access to insurance or the immediate problem of fixing the Medicare physician fee schedule and examine fundamental policy questions concerning how to promote quality and value throughout the health system at a time of limited federal resources.

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On October 21, 2008, the Senate Finance Committee held a field hearing in Montana on "High Health Care Costs: A State Perspective." 

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President Bush recently signed into law the following health policy bills:

• S. 3560, the “QI Program Supplemental Funding Act,” which authorizes an additional $45 million for the Medicare Qualifying Individuals (QI) program, which helps certain low-income individuals pay their Medicare Part B premiums. The legislation also includes provisions to modify the patent protections applicable to antibiotics and clarify the ability of generic drug companies to gain approval of and market generic antibiotics. In addition, the bill expands education activities under the Medicaid Integrity Program (MIP) and extends funding for the Medicare Improvement Fund to make improvements under the original Medicare program.  
• H.R. 6353, the “Ryan Haight Online Pharmacy Consumer Protection Act,” which prohibits the sale of controlled substances over the Internet without a valid prescription and subjects on-line pharmacies to a series of new restrictions.
• H.R. 1343, the "Health Care Safety Net Act of 2008," which reauthorizes the Department of Health and Human Services Health Centers, National Health Service Corps, Rural Health Care, State Loan Repayment, and Primary Dental Workforce programs. 
• H.R. 6469, the "Stephanie Tubbs Jones Organ Transplant Authorization Act of 2008," which authorizes an increase in funding for the Organ Procurement and Transplantation Network.
• S. 2932, which reauthorizes the poison center national toll-free number, provides grants for poison centers, and expands poison prevention education efforts.
• Several measures aimed at expanding disease research and information resources: H.R. 1157, which authorizes grants for the development and operation of research centers for the study of environmental factors that may be related to the etiology of breast cancer; H.R. 1532, which reauthorizes the Preventive Health Services Regarding Tuberculosis program; H.R. 5265, which promotes research into the causes and treatments of various forms of Muscular Dystrophy; S. 1810, to authorize the HHS Secretary to collect and disseminate information regarding Down syndrome or other prenatally or postnatally diagnosed diseases and to coordinate the provision of support services for those who receive a diagnosis of one of those diseases; and S. 1382, which authorizes funding for the establishment of a national registry for the collection and storage of data on amyotrophic lateral sclerosis (ALS).  

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On October 3, 2008, President Bush signed into law the “Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008” as part of the broad Emergency Economic Stabilization Act of 2008 (H.R. 1424). The measure prohibits health plans that offer mental health coverage from imposing more restrictive financial requirements or treatment limitations for mental health and addiction benefits than are applied to comparable covered medical and surgical benefits.  

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On September 30, 2008, President Bush signed into law H.R. 2638, which funds the Department of Health and Human Services and other federal agencies at FY 2008 levels through March 6, 2009 (or until enactment of the applicable regular appropriations bill, which ever comes first). 

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The Senate recently joined the House in approving H.R. 6353, the “Ryan Haight Online Pharmacy Consumer Protection Act,” which would prohibit the sale of controlled substances over the Internet without a valid prescription and subject on-line pharmacies to a series of new restrictions. Likewise, the Senate approved H.R. 6469, which would increase funding for the Organ Procurement and Transplantation Network. Both bills now await the President’s signature. In addition, President Bush has signed into law S. 1760, which reauthorizes the Healthy Start Initiative to provides grants to reduce infant mortality and improve maternal health.

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There has been a flurry of recent legislative activity as the 110^th Congress prepares to adjourn in the coming days. Congress has taken action on a wide range of health policy bills, addressing such issues as FDA drug and device approvals, internet pharmacy regulation, health care workforce issues, insurance coverage, and medical treatment, and patent protection for antibiotics.   Specifically, the following legislation has been approved by the House and Senate and now await the President’s signature:

• H.R. 6353, the “Ryan Haight Online Pharmacy Consumer Protection Act,” which would prohibit the sale of controlled substances over the Internet without a valid prescription and subject on-line pharmacies to a series of new restrictions.
• S. 3560, the “QI Program Supplemental Funding Act,” which would authorize an additional $45 million for the Medicare Qualifying Individuals (QI) program, which helps certain low-income individuals pay their Medicare Part B premiums. The legislation also includes provisions to modify the patent protections applicable to antibiotics and clarify the ability of generic drug companies to gain approval of and market generic antibiotics. In addition, the bill would expand the education activities under the Medicaid Integrity Program (MIP) and extend funding for the Medicare Improvement Fund to make improvements under the original Medicare program. 
• Several measures aimed at expanding disease research and information resources, including: H.R. 1157, which would authorize grants for the development and operation of research centers for the study of environmental factors that may be related to the etiology of breast cancer; H.R. 1532, which would reauthorize the Preventive Health Services Regarding Tuberculosis program; H.R. 5265, which would promote research into the causes and treatments of various forms of Muscular Dystrophy; S. 1810, to authorize the HHS Secretary to collect and disseminate information regarding Down syndrome or other prenatally or postnatally diagnosed diseases and to coordinate the provision of support services for those who receive a diagnosis of one of those diseases; and S. 1382, which would authorize funding for the establishment of a national registry for the collection and storage of data on amyotrophic lateral sclerosis (ALS).

 

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The House and Senate both passed mental health parity legislation on September 23, 2008, but the fate of the initiative still is in doubt for procedural reasons.   Both versions of the measure would prohibit health plans that offer mental health coverage from imposing more restrictive financial requirements or treatment limitations for mental health and addiction benefits than are applied to comparable covered medical and surgical benefits. While the House passed H.R. 6983, the “Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008” as a freestanding bill, the Senate approved its version of the measure as part of a larger energy and tax package, H.R. 6049. The same bill must be approved by the House and Senate before Congress adjourns for the year -- which could come as early as this week -- in order for it to be sent to the President for his signature.

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Numerous recent Congressional committee hearings have focused on health policy issues, including the following:

• On September 24, 2008, the Senate Aging Committee examined "ways to respect Americans' choices at the end of life.” The panel also held a hearing September 17 on direct-to-consumer medical device advertising.
• House Ways and Means Health Subcommittee held a hearing September 23, 2008 on problems in the private health insurance market, with a focus on the need for reforms in the non-group or individual market. The panel also met September 11 to examine on Medicare physician payment policy reform. 
• On September 23, 2008, the House Oversight and Government Reform Domestic Policy Subcommittee held a hearing on Medicaid pediatric dental care reform. The full Committee also held a hearing September 16 on HIV prevention.
• The House Energy and Commerce Subcommittee on Health held a hearing September 18, 2008 on health reform, as did the House Small Business Committee.
• The Senate Finance Committee held a hearing September 16, 2008, on health care delivery system reform, focusing on creating a patient-centered model of care and supporting primary care. On September 23, 2008, the Committee held a hearing on insurance market reform, highlighting health insurance exchanges that connect individuals, small businesses and those eligible for premium subsidies to available health insurance plans.
• The Senate Special Committee on Aging held a hearing September 11, 2008 on Medicare information issues.  

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On September 10, 2008, the Senate Finance Committee approved an amended version of S. 1070, the “Elder Justice Act of 2008.”  The legislation includes a number of provisions aimed at protecting residents of nursing facilities, including a requirement that crimes occurring in federally-funded long-term care facilities be reported to law enforcement agencies; increased funding for training of long-term care ombudsmen and surveyors investigating allegations of abuse, neglect, and misappropriation of property in long-term care facilities; notification and planning requirements in the event of an impending nursing facility closure; and incentives for individuals to train for employment as direct care providers in long-term care facilities. The panel also approved an amended version of S. 1577, the “Patient Safety and Abuse Prevention Act of 2008,” which would, among other things, expand requirements for background checks employees of long-term care facilities with direct patient access. Separately, on September 11, the Senate Judiciary Committee approved S. 2838, the "Fairness in Nursing Home Arbitration Act"; which would render unenforceable pre-dispute arbitration agreements between long-term care facilities and residents. The House Judiciary Committee approved its version of the measure, H.R. 6126, on July 30, 2008

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On September 9, 2008, the House Energy and Commerce Subcommittee on Health held a hearing entitled the “NIH Reform Act of 2006: Progress, Challenges and Next Steps.”  Also on September 9, the Senate Finance Committee held a hearing on health care quality, including quality improvement initiatives in the private sector.  On September 11, 2008, the Senate Special Committee on Aging is holding a hearing on Medicare information issues.  Also on September 11, the House Ways and Means Health Subcommittee held a hearing on Medicare physician payment policy.

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On September 16, 2008, the Senate Finance Committee will examine health care delivery system reform, focusing on creating a patient-centered model of care and supporting primary care. On September 23, 2008, the Committee will hold a hearing on insurance market reform, highlighting health insurance exchanges that connect individuals, small businesses and those eligible for premium subsidies to available health insurance plans. 

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On July 30, 2008, the House of Representatives approved by a 326 to 102 vote an amended version of H.R. 1108, the “Family Smoking Prevention and Tobacco Control Act,” which would give the FDA the authority to regulate tobacco products.  The bill now moves to the Senate. Note that the President has threatened to veto the House version of the bill. 

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On August 1, 2008, the Senate approved H.R. 6432, the “Animal Drug User Fee Amendments of 2008,” which would to revise and extend the FDA’s animal drug user fee program, establish a program of fees relating to generic new animal drugs, and make certain technical corrections to the Food and Drug Administration Amendments Act of 2007. The House approved the measure on July 30, and it now awaits the President’s signature.

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Congressional committees have held several hearings on health policy issues recently, including the following: 

• A Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing on consolidation in the Pennsylvania health insurance industry;

• A Senate Special Committee on Aging hearing on aging in rural America, focusing on access to health care; and

• A House Small Business Committee hearing on “Cost and Confidentiality: The Unforeseen Challenges of Electronic Health Records in Small Specialty Practices." 

 

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On July 15, 2008, the House and Senate overrode the President's veto of H.R. 6331, the “Medicare Improvements for Patients and Providers Act of 2008” (MIPPA).  The law rescinds a 10.6% cut in physician payments and delays a controversial medical equipment competitive bidding program, both of which temporarily went into effect July 1, 2008, and makes numerous other Medicare and Medicaid policy changes.  Highlights of the law include the following:

• Physician Payments: MIPPA cancels a 10.6% Medicare physician fee schedule cut that was triggered on July 1, 2008 and provides a 1.1% increase for 2009 (rather than the forecasted 5.4% cut).  The law also expands the Physician Quality Reporting Initiative, promotes electronic prescribing, and requires non-hospital advanced imaging providers to be accredited by 2012.

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On July 24, 2008, the House approved H.Res. 1368, which blocks for the remainder of the year a Medicare Modernization Act provision requiring Congress to consider Medicare funding legislation on an expedited basis if the Medicare Trustees estimate for two consecutive years that more than 45% of total Medicare spending will be derived from general revenues within a seven-year window. The Bush Administration had submitted legislation to Congress in February 2008 responding to the first such warning by the Medicare Trustees.

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On July 21, 2008, the Senate approved S. 901, the Health Care Safety Net Act of 2008. Among other things, the bill would reauthorize the Community Health Centers program, the National Health Service Corps, and rural health care delivery programs.

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On July 23, 2008, the House Committee on Energy and Commerce approved H.R. 6357, the “Protecting Records, Optimizing Treatment, and Easing Communication through Healthcare Technology Act of 2008.” The legislation seeks to promote nationwide adoption of a Health Information Technology (HIT) infrastructure and encourage the use of an electronic health record for each person in the United States by 2014. H.R. 6357 would: make permanent the Office of the National Coordinator for Health Information Technology; establish incentives for exchanging health information electronically; and provide safeguards to protect the privacy of an individual’s health information. The bill also would extend federal privacy law to entities that do business with providers, such as quality review organizations and entities that store and manage a provider’s electronic health information.

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On July 15, 2008, the House Judiciary Subcommittee on Commercial and Administrative Law approved H.R. 6126, the “Fairness in Nursing Home Arbitration Act of 2008,” which would render unenforceable pre-dispute arbitration agreements between long-term care facilities and a residents.  The full Committee approved an amended version of the bill July 30.  The Senate Judiciary Committee is scheduled to vote July 31 on the Senate companion bill, S.2838.

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On July 16, 2008, the House Judiciary Committee approved H.R. 4854,  the "False Claims Act Correction Act of 2007.” In addition to making technical amendments, the legislation addresses several judicial decisions that the bill’s sponsors believe have weakened the False Claims Act. During Committee markup, the panel amended the bill to drop a provision authorizing government employees to bring qui tam actions.

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On July 16, 2008, the House Energy and Commerce Committee approved amended versions of H.R. 6432, the "Animal Drug User Fee Amendments of 2008," and H.R. 6433, the "Animal Generic Drug User Fee Act of 2008." 

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Congressional committees have held numerous hearings on health policy issues recently, including the following: 

• The House Oversight and Government Reform Committee held a hearing July 24, 2008, entitled, "The Medicare Drug Benefit:  Are Private Insurers Getting Good Discounts for the Taxpayer?" At the hearing, the Committee released a staff report that charges that prices paid for drugs used by the dual eligible beneficiaries under Medicare Part D are significantly higher than Medicaid prices for the same drugs. According to the report, the higher prices for the top 100 drugs resulted in a windfall of $1.7 billion for drug manufacturers in 2006 and $2 billion in 2007.   Separately, on July 24, the Joint Economic Committee held a hearing entitled "Small Market Drugs, Big Price Tags: Are Drug Companies Exploiting People With Rare Diseases?" 

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Several hearings are scheduled for July 31. The Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights is holding a hearing on consolidation in the Pennsylvania health insurance industry. The Senate Special Committee on Aging will examine aging in rural America, focusing on access to health care, and the House Small Business Committee is holding a hearing on “Cost and Confidentiality: The Unforeseen Challenges of Electronic Health Records in Small Specialty Practices."

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On July 15, 2008, the House and Senate overrode the President's veto of H.R. 6331, the  "Medicare Improvements for Patients and Providers Act of 2008” (MIPPA).  The law rescinds a 10.6% cut in physician payments and delays a controversial medical equipment competitive bidding program, both of which went into effect July 1, 2008, and makes numerous other Medicare and Medicaid policy changes. The vote was 70-26 in the Senate and 383-41 in the House, following the President's veto earlier in the day. 

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On June 25, 2008, the House Energy and Commerce Subcommittee on Health approved H.R. 6357, the “Protecting Records, Optimizing Treatment, and Easing Communication through Healthcare Technology Act of 2008” or the PRO(TECH)T Act. The legislation is designed to promote the nationwide adoption of an HIT infrastructure and encourage the use of an electronic health record for each person in the United States by 2014. H.R. 6357 makes permanent the Office of the National Coordinator for Health Information Technology. It also would establish incentives for doctors, hospitals, insurers, and the government to exchange health information electronically, such as grants and loans to facilitate the widespread adoption of qualified health information technology. Additionally, it would provide safeguards to protect the security and privacy of an individual’s health information, including requiring notification when personal health information is breached.

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On June 26, 2008, the Senate Appropriations Committee approved its version of the fiscal year 2009 Labor, Health and Human Services, Education and Related Agencies appropriations bill. Among other things, the bill would: increase National Institutes of Health spending by $1.025 billion; increase Centers for Disease Control and Prevention funding by $76 billion; increase funding for health centers, autism programs, and nursing education programs; provide more than $38 million for colorectal cancer prevention efforts; and allocate $507 million to prepare for and respond to an influenza pandemic. The bill also includes $198 million for Health Care Fraud and Abuse Control activities. More information is available here.

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On June 24, 2008, the House Energy and Commerce Committee held a hearing on H.R. 3014, the "Health Equity and Accountability Act of 2007," to improve the health of minority individuals.  Also on June 24, the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security held a hearing on "Online Pharmacies and the Problem of Internet Drug Abuse", and the Senate Committee on Health, Education, Labor, and Pensions held a hearing on the “Emergence of the Superbug:  Antimicrobial Resistance in the U.S.”  On July 9, the Senate Homeland Security and Governmental Affairs Investigations Subcommittee held a hearing on "Medicare Vulnerabilities:  Payments for Claims Tied to Deceased Doctors," focusing on fraud, waste, and abuse in the Medicare program in connection with the payment of claims containing the physician identification numbers of doctors who had died at least one year before the prescription was filled. On July 15, the House Ways and Means Health Subcommittee has scheduled a hearing on "Instability of Health Coverage in America."  On July 16, the House Budget Committee will hold a hearing entitled "Getting Better Value in Health Care". In addition, on July 17, the Senate Judiciary Committee will vote on S.2838, the "Fairness in Nursing Home Arbitration Act." 

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On July 9, 2008, the House Energy and Commerce Subcommittee on Health approved H.R. 6432, the "Animal Drug User Fee Amendments of 2008," and H.R. 6433, the "Animal Generic Drug User Fee Act of 2008." Additional information is available here.

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On June 30, 2008, President Bush signed into law a supplemental appropriations bill (H.R. 2642) that provides emergency funding for the Iraq and Afghanistan wars and a number of domestic priorities. Among other things, the new law, P.L. 110-252, imposes a moratorium on implementation of a number of Medicaid regulations through April 1, 2009. The rules affected by the legislation involve: payments to public safety net institutions; coverage of rehabilitation services; school-based administrative and specialized medical transportation services for children; graduate medical education payments; case management services; and state provider tax laws. To finance the moratorium, the bill extends an electronic asset verification demonstration for Medicaid applicants and beneficiaries, and reduce balances in the Physician Assistance and Quality Improvement (PAQI) Fund. The law also provides an additional $150 million for Food and Drug Administration food and medical product safety efforts, and increases funding for Medicaid anti-fraud activities. The law does not include restrictions on physician ownership of hospitals, as had been included in an earlier Senate version of the measure.

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As previously reported, on June 6, 2008, Senate Finance Committee Chairman Max Baucus introduced the “Medicare Improvements for Patients and Providers Act of 2008” (S. 3101). The legislation would block a 10.6 percent cut in Medicare physician payments scheduled to go into effect July 1, 2008 and make numerous other Medicare policy changes. The Senate held a procedural vote on the measure on June 16, 2008, but Senate Democratic leaders failed to muster the 60 votes needed to proceed with consideration of the bill.  On June 20, 2008, the House Ways and Means Committee released its proposed amendments to S. 3101.   The House could consider this amended version the week of June 23 in an attempt to avert the upcoming physician payment cut. 

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Key members of Congress are seeking to delay CMS’s controversial program to implement competitive bidding for certain categories of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The first round of the program is scheduled to go into effect in 10 geographic areas on July 1, 2008, followed by bidding in 70 additional areas later this year. There have been widespread concerns, however, about the way the bidding process was handled, the adequacy of beneficiary and supplier education efforts, and the potential impact of the program on beneficiary access to DMEPOS. As a result, a bipartisan legislation has been introduced by the Chairmen and Ranking Republicans on the Senate Finance Committee and House Ways and Means Health Subcommittee to delay the program, institute offsetting fee schedule reductions, and make a series of reforms to the program.  Continue Reading...

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On June 19, 2008, the House of Representatives approved a modified version of emergency Iraq and Afghanistan appropriations legislation (H.R. 2642) that also includes funding for a number of domestic priorities. Among other things, the bill would extend a current moratorium on implementation of certain Medicaid regulations and block additional rules through April 1, 2009. The rules affected by the legislation involve: payments to public safety net institutions; coverage of rehabilitation services; school-based administrative and specialized medical transportation services for children; graduate medical education payments; case management services; and state provider tax laws. To finance the repeal, the bill would extend an electronic asset verification demonstration for Medicaid applicants and beneficiaries, and reduce balances in the Physician Assistance and Quality Improvement (PAQI) Fund. The bill also provides an additional $150 million for Food and Drug Administration food and medical product safety efforts, and $25 million annually for Medicaid anti-fraud activities.  The bill does not include restrictions on physician ownership of hospitals, as had been included in an earlier Senate version of the measure. The White House has announced its support for the House bill, although it is unclear at this time whether the Senate will adopt this version or propose additional revisions.

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On June 11, 2008, the House Judiciary Committee approved H.R. 1783, the “Elder Justice Act," which would, among other things, require long term care facility personnel to report reasonable suspicions of crimes occurring in the facility, expand notification requirements regarding a facility's impending closure; and provide grants to long-term care facilities for training and purchase of standardized clinical health care informatics systems.

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On June 11, 2008, the Senate Judiciary Committee held a hearing on “Short-change for Consumers and Short-shrift for Congress? The Supreme Court’s Treatment of Laws that Protect Americans’ Health, Safety, Jobs and Retirement."  On June 18, 2008, the Senate Judiciary Antitrust, Competition Policy and Consumer Rights Subcommittee and the Senate Aging Committee held a joint hearing on S. 2838, the "Fairness in Nursing Home Arbitration Act," which is intended to provide that a pre-dispute arbitration agreement between a long-term care facility and a resident (or anyone acting on the resident's behalf) shall not be valid or specifically enforceable. This follows a June 10 House Judiciary Committee hearing on the House version of the measure, H.R. 6126. On June 19, the House Judiciary Courts, the Internet, and Intellectual Property Subcommittee and Commercial and Administrative Law Subcommittee held a joint hearing on H.R. 4854, the "False Claims Act Correction Act," to revise requirements and procedures governing civil actions for false claims brought by private persons. On June 24, 2008, the House Energy and Commerce Committee is holding a hearing on H.R. 3014, the "Health Equity and Accountability Act of 2007," to improve the health of minority individuals.   Also on June 24, the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security is holding a hearing on "Online Pharmacies and the Problem of Internet Drug Abuse."

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On June 6, 2008, Senate Finance Committee Chairman Max Baucus introduced the “Medicare Improvements for Patients and Providers Act of 2008” (S. 3101).   Most notably, the legislation would block a scheduled cut in Medicare physician payments, extend certain expiring health care provisions, and make numerous other Medicare and Medicaid payment and coverage changes. 

Continue Reading...

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The House and Senate have approved a conference agreement on S. Con. Res. 70, the fiscal year 2009 budget resolution, which sets forth the annual spending and revenue framework for the Congressional committees. The budget blueprint authorizes Congressional committees to address certain health policies if offsetting revenues are specified, including legislation to: promote health information technology; encourage comparative effectiveness research; improve Medicare Part D; and block certain recent Medicaid rules. The resolution does not call for steep cuts in Medicare and Medicaid funding, as had been proposed in the President’s budget.

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On June 10, the Senate Finance Committee is holding a hearing on access to health insurance entitled "47 Million & Counting: Why the Health Care Marketplace is Broken."   Also on June 10, the House Ways and Means Health Subcommittee will hold a hearing on disparities in health and access to care as part of the panel's on-going health reform hearing series.  On June 12, the House Energy and Commerce Oversight and Investigations Subcommittee is holding a hearing entitled "American Lives Still at Risk: When Will FDA's Food Protection Plan Be Fully Funded and Implemented?"

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On May 22, 2008, the Senate approved a version of the fiscal year (FY) 2008 emergency supplemental appropriations bill, H.R. 2642. The Senate bill would extend a current moratorium on implementation of certain Medicaid regulations and block additional rules through April 1, 2009. The rules affected by the legislation involve: payments to public safety net institutions; coverage of rehabilitation services for people with disabilities; outreach and enrollment in schools and specialized medical transportation to school for children covered by Medicaid; graduate medical education payments; coverage of hospital clinic services; case management services; state provider tax laws; and appeals filed through HHS. In addition, the bill would eliminate, for new hospitals with physician ownership, the "whole hospital" exception to the Stark law's referral prohibition, and would add, for existing hospitals with physician ownership, significant additional conditions to that exception. The version of the measure approved by the House does not include specialty hospital provisions. The two versions will need to be reconciled before being sent to the President, who has threatened to veto both the House and Senate versions. 

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On June 3, 2008, the Senate Finance Committee is holding a hearing on "Rising Costs, Low Quality in Health Care: The Necessity for Reform." On June 4, 2008, the House Energy and Commerce Health Subcommittee is holding a hearing on Committee Chairman John Dingell’s draft legislation designed to encourage the adoption of health information technology and strengthen privacy protections for patients. 

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On May 15, the House of Representatives approved an supplemental spending bill (H.R. 2642)  that would extend a current moratorium on implementation of certain Medicaid regulations and block additional rules through April 1, 2009. The rules affected by the legislation involve: payments to public safety net institutions; coverage of rehabilitation services for people with disabilities; outreach and enrollment in schools and specialized medical transportation to school for children covered by Medicaid; graduate medical education payments; coverage of hospital clinic services; case management services; state provider tax laws; and appeals filed through HHS. The bill also would provide $25 million annually to fund Medicaid anti-fraud activities. To finance the legislation, the bill would extend an electronic asset verification demonstration for Medicaid applicants and beneficiaries, and temporarily borrow money from the Physician Assistance and Quality Improvement (PAQI) Fund. The Senate Appropriations Committee also has approved a version of supplemental spending legislation that would likewise block the various Medicaid rules, and in addition would eliminate, for new hospitals with physician ownership, the "whole hospital" exception to the Stark law's referral prohibition, and would add, for existing hospitals with physician ownership, significant additional conditions to that exception.  The full Senate is expected to consider a revised version of the legislation this week; the two versions of the bill would need to be reconciled before being sent to the President, who has expressed opposition to the House version of the bill.

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The House Energy and Commerce Committee has approved the following measures: H.R. 1343, the “Health Centers Renewal Act”; H.R. 5669, the “Poison Center Support, Enhancement, and Awareness Act ”; and H.R. 1553, the “Deborah Pryce Walker Conquer Childhood Cancer Act.” The legislation now awaits consideration by the full House.

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A number of Congressional panels have held hearings recently on health care issues, including the following:

• House Energy and Commerce Subcommittee on Oversight and Investigations hearings entitled "Direct-to-Consumer Advertising: Marketing, Education, or Deception?" and “In the Hands of Strangers: Are Nursing Home Safeguards Working?" In addition, the Health Subcommittee held hearings on the device and cosmetic safety provisions of the draft “Food and Drug Administration (FDA) Globalization Act,” along with hearings on stem cell science, on breast cancer research, and on the “Protecting Children’s Health Coverage Act” (H.R. 5998). Details are available here.
• A House Oversight and Government Reform hearing entitled “Should FDA Drug and Medical Device Regulation Bar State Liability Claims?".
• A House Ways and Means Subcommittee on Health hearing on health savings accounts and consumer driven health care and a Subcommittee on Income Security hearing on the use of psychotropic drugs for children in the foster care.
• House Small Business Committee hearings on "Medicare Physician Fee Cuts: Can Small Practices Survive?," “The Impact of CMS Regulations and Programs on Small Health Care Providers,” and DMEPOS competitive bidding.
• A Senate Health, Education, Labor and Pensions Committee hearing entitled "Cancer: Challenges and Opportunities in the 21st Century".
• A Senate Special Aging Committee hearing on the future of Alzheimer's disease.

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• On May 22, the Senate Special Committee on Aging will hold a hearing on improving Medicare for the most vulnerable.

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On May 1, the House of Representatives gave final approval to H.R. 493, the Genetic Information Nondiscrimination Act, which is designed to protect individuals from discrimination by health insurance providers and employers based on genetic information or genetic predisposition to disease or chronic conditions. The legislation was approved by the Senate on April 24, and now awaits the President’s signature. 

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On April 23, the House of Representatives approved H.R. 5613, the "Protecting the Medicaid Safety Net Act of 2008,” by a vote of 349 to 62. The bill would extend a current moratorium on implementation of certain Medicaid regulations and block additional rules through April 1, 2009. The rules affected by the legislation involve: payments to public safety net institutions; coverage of rehabilitation services for people with disabilities; outreach and enrollment in schools and specialized medical transportation to school for children covered by Medicaid; graduate medical education payments; coverage of hospital clinic services; case management services; state provider tax laws; and appeals filed through HHS. The bill also would provide $25 million annually to fund Medicaid anti-fraud activities. To finance the legislation, the bill would extend an electronic asset verification demonstration for Medicaid applicants and beneficiaries, and temporarily borrow money from the Physician Assistance and Quality Improvement (PAQI) Fund. The legislation next moves to the Senate. Note that the Bush Administration has threatened to veto the bill. For more information, click here.

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On April 23, the House Energy and Commerce Health Committee approved the following measures: H.R. 1343, the “Health Centers Renewal Act of 2007”, H.R. 5669, the “Poison Center Support, Enhancement, and Awareness Act of 2008”, H.R. 1553, the “Conquer Childhood Cancer Act of 2007”; and H.R. 3112, the “Prenatally Diagnosed Condition Awareness Act of 2007." For more information, click here.

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Congressional negotiators have dropped hospital ownership restrictions from options currently under consideration to pay for a pending farm bill (a previous proposal was discussed in the last issue of Washington Watch).

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A number of Congressional panels have held hearings recently on health care issues, including the following:

• The House Energy and Commerce Subcommittee on Oversight and Investigations held hearings on FDA’s foreign drug inspection program, and the Health Subcommittee meet to discuss Chairman Dingell's draft legislation, the "Food and Drug Administration Globalization Act". Likewise, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a hearing entitled "Restoring FDA's Ability to Keep America's Families Safe".
• The House Oversight and Government Reform Committee held a hearing on hospital emergency surgery capacity; hearings continue May 7.
• The House Ways and Means Health Subcommittee held a hearing on implementation of the upcoming Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program. At the hearing, CMS stated that it expected to announce the names of the winning bidders next week. 
• The Senate Finance Committee held a hearing entitled “Seizing the New Opportunity for Health Reform”.

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On May 6, the House Judiciary Committee is scheduled to vote on H.R. 1783, the “Elder Justice Act," which would, among other things, require long term care facility personnel to report reasonable suspicions of crimes occurring in the facility, expand notification requirements regarding a facility's impending closure; and provide grants to long-term care facilities for training and purchase of standardized clinical health care informatics systems. For more information, click here. On May 8, the Energy and Commerce Subcommittee on Oversight and Investigations is holding a hearing on "Direct-to-Consumer Advertising: Marketing, Education, or Deception?", and the HELP Committee is holding a hearing entitled "Cancer: Challenges and Opportunities in the 21st Century". The House Small Business Committee also is holding a hearing May 8 entitled "Medicare Physician Fee Cuts: Can Small Practices Survive?".

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On April 8, the House of Representatives approved the following health policy bills: H.R. 1198, the "Early Hearing Detection and Intervention Act of 2007"; H.R. 2464, the "Wakefield Act" (emergency medical services for children); H.R. 1237, the "Cytology Proficiency Improvement Act of 2007"; H.R. 3701, the "Keeping Seniors Safe From Falls Act of 2007" (cleared for the President); H.R. 2063, the "Food Allergy and Anaphylaxis Management Act of 2007"; H.R. 3825, the "Newborn Screening Saves Lives Act of 2007" (cleared for the President); and S. 793, "Reauthorization of the Traumatic Brain Injury Act" (the Senate approved the House-passed version on April 10, clearing it for the President).  For more information about the measures, see http://thomas.loc.gov/.

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Hospital ownership restrictions are being considered as a way to help pay for a pending farm bill.  According to a Senate Agriculture Committee document, $2.4 billion in savings could be achieved from "limitations on exemption to the prohibition on certain physician referrals".

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On April 16, the House Energy and Commerce Committee approved an amended version of H.R. 5613, the "Protecting the Medicaid Safety Net Act of 2008," which would extend certain moratoria and impose additional moratoria on certain Medicaid regulations through April 1, 2009.  The rules affected by the legislation involve:  payments to public safety net institutions; coverage of rehabilitation services for people with disabilities; outreach and enrollment in schools and specialized medical transportation to school for children covered by Medicaid; graduate medical education payments; coverage of hospital clinic services; case management services; state provider tax laws; and appeals filed through HHS.  The approved version of the legislation also would provide $25 million annually to fund Medicaid anti-fraud activities.   To fund the legislation, the bill would extend an electronic asset verification demonstration for Medicaid applicants and beneficiaries, and temporarily borrow money from the Physician Assistance and Quality Improvement (PAQI) Fund.  The legislation next moves to the full House, although the Bush Administration has threatened to veto the bill.  For more information, click here. 

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A number of Congressional panels have held hearings recently on health care issues, including the following:

• A House Oversight and Government Reform Committee hearing regarding "Healthcare Associated Infections: A Preventable Epidemic";
• A House Ways and Means Health Subcommittee hearing examining the instability of health coverage;
• A Senate Aging committee hearing entitled “Caring For Our Seniors: How Can We Support Those On The Frontlines?"; and
• A Senate Finance Committee hearing on Children's Health Insurance Plan policy.

In addition, three hearings have been scheduled to examine FDA food and drug safety policy.  On April 22, the House Energy and Commerce Committee will hold a hearing on the FDA's foreign drug inspection program, while the Health Subcommittee will meet April 24 to review Chairman Dingell's draft legislation, the "Food and Drug Administration Globalization Act".  In addition, the Senate Committee on Health, Education, Labor, and Pensions has scheduled an April 24 hearing entitled "Restoring FDA's Ability to Keep America's Families Safe".

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The House and Senate have approved their budget resolutions for FY 2009, which set forth spending and revenue frameworks for the Congressional committees.  The budget blueprints include a series of deficit-neutral “reserve funds” authorizing Congressional committees to address certain health policies if offsetting revenues are specified, including funds to:  promote health information technology; encourage comparative effectiveness research; improve Medicare Part D; and block certain recent Medicaid rules.  The measures also call for increased Medicare anti-fraud funding.  For details on the House bill (H.Con.Res. 312), see budget.house.gov; for details on the Senate bill, S. Con. Res. 70, see budget.senate.gov.

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On April 1, the Senate approved an amended version of S. 980, the "Ryan Haight Online Pharmacy Consumer Protection Act." The legislation would amend the Controlled Substances Act to, among other things: bar the sale or distribution of a controlled substance via the internet without a valid prescription; impose registration and reporting requirements on online pharmacies distributing controlled substances; and increase penalties for certain controlled substance offenses.

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On April 3, the Senate Judiciary Committee approved an amended version of S. 2041, the “False Claims Act Correction Act of 2007.” As discussed in the last edition of Washington Watch, in addition to making technical amendments, the legislation addresses several judicial decisions that the bill’s sponsors believe have weakened the False Claims Act. For more information, click here. Separately, on April 2, the House Energy and Commerce Committee approved H.R. 1108, the "Family Smoking Prevention and Tobacco Control Act," which authorizes the FDA to regulate tobacco products. In addition, the Subcommittee on Health has approved the following measures: H.R. 1198, the "Early Hearing Detection and Intervention Act of 2007"; H.R. 2464, the "Wakefield Act" (emergency medical services for children); H.R. 1237, the "Cytology Proficiency Improvement Act of 2007"; H.R. 3701, the "Keeping Seniors Safe From Falls Act of 2007"; H.R. 2063, the "Food Allergy and Anaphylaxis Management Act of 2007"; H.R. 3825, the "Newborn Screening Saves Lives Act of 2007"; and H.R. 1418, the "Reauthorization of the Traumatic Brain Injury Act." For more information, click here. In addition, the Senate Health, Education, Labor, and Pensions Committee recently approved a series of health policy bills: S. 579, the “Breast Cancer and Environmental Research Act of 2007”; S. 999, the “Stroke Treatment and Ongoing Prevention Act of 2008,” S. 1042, the “Consistency, Accuracy, Responsibility and Excellence (CARE) in Medical Imaging and Radiation Therapy Act”; S. 1760, the “Healthy Start Reauthorization Act of 2007”; and S. 1810, the “Prenatally and Postnatally Diagnosed Conditions Awareness Act.” For more information, click here. 

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The House Ways and Means Health Subcommittee held a hearing on the 2008 Medicare Trustees report (see related discussion below). In addition, the House Education and Labor Health Subcommittee held a field hearing on H.R. 2833, the "Preexisting Condition Exclusion Patient Protection Act of 2007". The House Energy and Commerce Health Subcommittee also held a hearing on H.R. 5613, the "Protecting the Medicaid Safety Net Act of 2008," which to extend certain moratoria and impose additional moratoria on certain Medicaid regulations through April 1, 2009. On April 9, the Senate Finance Committee is holding a hearing entitled “Covering Uninsured Children: The Impact of the August 17 Children's Health Insurance Plan Directive”.

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On March 5, 2008, the House of Representatives approved H.R. 1424, the Paul Wellstone Mental Health and Addiction Equity Act. The legislation would prohibit health plans that offer mental health coverage from imposing more restrictive financial requirements or treatment limitations for mental health and addiction benefits than are applied to comparable covered medical and surgical benefits. It also would specify the range of illnesses that must be covered, and incorporate provisions of the Genetic Information Non-discrimination Act (H.R. 493). To help finance the bill, the House-approved measure includes two controversial provisions involving drug rebates and hospital ownership restrictions. First, the bill would increase the base manufacturer Medicaid drug rebate percentage for brand drugs from 15.1% to 20.1% for 2009 through 2015. Second, the bill includes restrictions on hospital ownership similar to those in the “CHAMP” Act approved by the House last summer (H.R. 3162). In short, H.R. 1424 would restrict the “Stark” physician self-referral act whole hospital and rural provider exceptions to hospitals that, on the date of enactment (rather than July 24, 2007 in the CHAMP bill), have a Medicare provider agreement in effect and have physician ownership. Moreover, grandfathered facilities would be required to meet a series of new requirements within 18 months of enactment, including: a prohibition on expansion of beds (unless an exception were granted as noted below); disclosure and other requirements designed to prevent conflicts of interest; a series of conditions to demonstrate a bona fide investment including a limit on physician ownership equal to 40% of the total value of the investment and a 2% cap on individual physician investment interest; and certain patient safety provisions. In a notable change to the CHAMP bill, H.R. 1424 would require the Secretary of the Department of Health and Human Services (HHS) to establish a process allowing hospitals to apply for a limited exception to the expansion prohibition in certain circumstances. The Senate approved a very different mental health parity bill last year, S. 558. Note that the Bush Administration, which supports S. 558, has issued a statement raising a series of objections to the House bill. Congressional leaders have not yet announced their plans for addressing the differences between the two bills.

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The House and Senate Budget Committees have approved separate versions of budget resolution for fiscal year (FY) 2009, which set forth spending and revenue frameworks for the Congressional committees. The budget blueprints include a series of deficit-neutral “reserve funds” that authorize Congressional committees to revise certain health care policies if offsetting revenues are specified, including reserve funds to:  promote health information technology;encourage comparative effectiveness research; make improvements to Medicare (including Part D policies and physician payments); block a series of Bush Administration Medicaid regulations; improve the SCHIP program; and permit the reimportation of Food and Drug Administration (FDA)-approved prescription drugs and authorize FDA user fees (Senate version). The resolutions also call for a $198 million increase in funding for Medicare anti-fraud efforts. With regard to overall Medicare spending, the House and Senate both rejected the steep cuts included in the Bush Administration’s proposed budget. For more information on the House bill (H.Con.Res. 312), see budget.house.gov. Details regarding the Senate bill, S. Con. Res. 70, are available at budget.senate.gov.  The bills are being considered by the full House and Senate this week.

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The Senate Judiciary Committee has scheduled a March 13 vote on S. 2041, the “False Claims Act Correction Act of 2007.” In addition to making technical amendments, the legislation addresses several judicial decisions that the bill’s sponsors believe have weakened the False Claims Act. For instance, the bill would remove the requirement that false claims be directly presented to a government official, instead tying the liability directly to government money and property. The legislation also would effectively eliminate the public disclosure bar as a jurisdictional defense, instead limiting its use to cases in which the government decides to affirmatively seek dismissal of the complaint on public disclosure grounds. The bill also would permit government employees to bring False Claims Act cases based on information learned in the course of their employment, extend the statute of limitations for all False Claims Act cases, and expand the right of action for whistleblowers who suffer retaliation as a result of efforts to deter violations of the False Claims Act. For more information about the legislation, click here. 

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On March 11, the House Energy and Commerce Subcommittee on Health approved H.R. 1108, the "Family Smoking Prevention and Tobacco Control Act," which authorizes the FDA to regulate tobacco products.   In addition, the Subcommittee is scheduled to vote March 13 on the following bills: H.R. 1198, the "Early Hearing Detection and Intervention Act of 2007"; H.R. 2464, the "Wakefield Act" (emergency medical services for children); H.R. 1237, the "Cytology Proficiency Improvement Act of 2007"; H.R. 3701, the "Keeping Seniors Safe From Falls Act of 2007"; H.R. 2063, the "Food Allergy and Anaphylaxis Management Act of 2007"; H.R. 3825, the "Newborn Screening Saves Lives Act of 2007"; and H.R. 1418, the "Reauthorization of the Traumatic Brain Injury Act." For more information, click here. 

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A number of Congressional panels have held hearings recently on health care issues, including the following:

• A Senate Health, Education, Labor, and Pensions Committee hearing entitled “The Broken Pipeline: Losing Opportunities in the Life Sciences”.
• A Senate Aging Committee hearing entitled "Under the Influence: Can We Provide Doctors An Alternative To Biased Drug Reviews".
• A House Ways and Means Health Subcommittee hearing on MedPAC’s annual report to Congress (see related discussion below).
• A Senate Finance Committee “roundtable discussion” regarding Medicare hospital value-based purchasing.
• A House Judiciary Committee hearing on corporate deferred prosecution agreements and non-prosecution agreements, with a focus on the role of independent monitors of such agreements.
• A Senate Judiciary Committee hearing entitled “Generation Rx: The Abuse of Prescription and Over-the-Counter Drug".

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On February 15. HHS transmitted to Congress a legislative package designed to address a Medicare funding warning that was triggered when the Medicare trustees estimated for two consecutive years that more than 45 percent of total Medicare spending will be derived from general revenues within the current or following six years.  The main components of the package (which are designed to be adopted in addition to the President's FY 2009 budget proposal) are as follows: 

• Title I would authorize the HHS Secretary to introduce principles of value-based health care in the Medicare program by increasing provider efficiency and encouraging beneficiaries to be wise health-care consumers. This could include: improved health information technology; transparency of quality and pricing information; and incentives for providers to deliver, and beneficiaries to choose, high-quality, low-cost health care. The Secretary also would be required to base a portion of Medicare payments for some providers on quality and efficiency, beginning first with settings with existing, well-accepted measures.
• Title II would implement the President's medical liability reform agenda.
• Title III would provide for income-relating the Part D premium.

A summary of the package is available here; the legislative text is posted here; and the transmittal letter to Congress is here. The legislation has been introduced in Congress as H.R. 5480/S. 2662. Under the MMA, Congress is required to consider the measure on an expedited basis.

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During consideration of S. 1200, the Indian Health Care Improvement Act Amendments on February 14, the Senate approved an amendment by Senator Mel Martinez to increase civil and criminal penalties for Medicare fraud and abuse. In short, the amendment would double maximum civil penalties, quadruple maximum criminal fines to $100,000, and double the maximum sentences for felonies. Note that an earlier version of the amendment also would have increased the amount of the surety bond required for DMEPOS suppliers from $50,000 to $500,000, but that provision was subsequently dropped. Also during debate on S. 1200, the Indian Health Care Improvement Act Amendments, the Senate approved an amendment offered by Sen. Barbara Mikulski that would block implementation of CMS’s December 4, 2007 interim final rule on Medicaid targeted case management services until April 1, 2009. The Senate approved S. 1200 on February 26; it now awaits House consideration.

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The House of Representatives has approved H.R. 4848, which would extend until December 31, 2008 mental health parity provisions, which require group health plans to treat equally mental health benefits and medical and surgical benefits for purposes of lifetime limits or annual limits on benefits covered by the plan. The Senate approved a different mental health parity bill in the fall (S. 558).

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On March 5, the Senate Committee on Health, Education, Labor and Pensions (HELP) will vote on the following bills: S.1810, the "Prenatally and Postnatally Diagnosed Conditions Awareness Act"; S. 999, the "Stroke Treatment and Ongoing Prevention Act of 2007"; S. 1760, the "Healthy Start Reauthorization Act of 2007"; H.R. 20, the "Melanie Blocker-Stokes Postpartum Depression Research and Care Act"; and S. 1042, the "Consistency, Accuracy, Responsibility, and Excellence in Medical Imaging and Radiation Therapy Act of 2007." For details, click here.

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A number of Congressional panels have held hearings recently on health care issues, including the following:

• The Senate Special Committee on Aging held a hearing entitled "Surgeons for Sale? Conflicts and Consultant Payments in the Medical Device Industry";
• The Senate Judiciary Committee met to consider "The False Claims Act Correction Act (S. 2041): Strengthening the Government's Most Effective Tool Against Fraud for the 21st Century";
• A number of Congressional panels have examined the Bush Administration’s proposed FY 2009 budget for HHS;
• The Senate Budget Committee held a hearing on "Health Care and the Budget: Information Technology and Health Care Reform";
• The Senate Finance Committee held two days of hearings on marketing and sales practices of Medicare private plans, and the House Ways and Means Health Subcommittee held a hearing to examine the structure, costs, and oversight of the Medicare Advantage program;
• The HELP Committee examined “Healthcare Workforce Issues for the Future";
• The House Energy and Commerce Subcommittee on Health held a hearing on “Covering Uninsured Kids: Reversing Progress Already Made”;
• The House Small Business Committee reviewed the role of the Small Business Innovation Research Program in advancing medical breakthroughs"; and

• The House Oversight and Government Reform Committee held a hearing on “Myths and Facts about Human Growth Hormone, B 12, and Other Substances”.

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A number of Congressional panels have held hearings recently on health care issues, including the following:

• A Senate Budget Committee hearing on “The Long-Term Outlook and Sources of Growth in Health Care Spending.”
• A Senate Finance Committee hearing on "Private Fee for Service Plans in Medicare Advantage."
• A House Energy and Commerce Health Subcommittee hearing on health coverage for uninsured children, and an Oversight and Investigations Subcommittee hearing on "Science and Mission at Risk: FDA's Self-Assessment."
• A House Oversight and Government Reform Committee hearing on the National Breast and Cervical Cancer Early Detection Program. 

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On February 6, the Senate Finance Committee has scheduled a hearing on the President’s FY 2009 HHS budget proposal.  Read the statements here.

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On February 7, the Finance Committee will examine “Selling to Seniors: The Need for Accountability and Oversight of Marketing and Sales by Medicare Private Plans."  Read the hearing statements here.

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On January 16, the House Energy and Commerce Subcommittee on Health held a hearing entitled “Helping Families with Needed Care: Medicaid’s Critical Role for Americans with Disabilities.” Looking forward, on January 29, the full Energy and Commerce Committee will examine health coverage for uninsured children, and the Subcommittee on Oversight and Investigations will hold a hearing entitled "Science and Mission at Risk: FDA's Self-Assessment". The House Oversight and Government Reform Committee also has scheduled a hearing on the National Breast and Cervical Cancer Early Detection Program. 

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On January 23, the House of Representatives again failed to override President Bush’s veto of another State Children’s Health Insurance Program (SCHIP) expansion bill (H.R. 3963).  Note that the SCHIP program has been funded through March 31, 2009 as part of the Medicare, Medicaid, and SCHIP Extension Act of 2007.

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On December 29, 2007, President Bush signed into law S. 2499, the "Medicare, Medicaid, and SCHIP Extension Act of 2007.” As discussed in the last edition of Washington Watch, the bill makes numerous changes to Medicare policy, including providing a 0.5 percent increase in physician fee schedule payments (instead of the scheduled 10.1 percent cut) through June 30, 2008. In light of this change, CMS is extending the Medicare physician enrollment period through February 15, 2008. Reed Smith is preparing a client memo summarizing the legislation. In the meantime, additional information about the measure is available here. Separately, on December 26, the President signed H.R. 2764, the Consolidated Appropriations Act of 2008, which funds HHS for FY 2008 and includes a number of health policy provisions.

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The House and Senate have approved different versions of military personnel tax relief legislation (H.R. 3997) that include a provision extending the current mental health parity law through 2008. Differences between the two versions of the bills must be resolved before enactment. For more information, click here. 

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On January 3, the second session of the 110^th Congress convened. Note that legislation introduced during the first session in 2007 carries over into the second session and does not need to be reintroduced.

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