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.