Liability Reform, Medicaid
Relief, But No Provider Payments in Senate Drug Debate
August 2, 2002 - The Senate July 31 completed a two-week
debate and passed 78 - 21 prescription drug legislation, the
"Greater Access to Affordable Pharmaceuticals Act of
2002" (S.
812). The legislation amends the federal Food, Drug, and
Cosmetic Act to provide greater access to affordable pharmaceuticals
through generics. During the debate several amendments pertaining
to a Medicare prescription drug benefit, Medicaid relief and
medical liability reform were offered, with Medicaid relief
being the only successful amendment. While there was much
"behind the scenes" discussion of offering an amendment
to increase Medicare provider payments for hospitals, physicians
and other providers, such an amendment was never offered.
The legislation was primarily used as a vehicle to debate
expansion of a prescription drug benefit under Medicare. Several
Medicare drug benefit amendments were offered throughout the
two weeks; however, none garnered the 60 votes necessary to
waive the existing rules governing debate.
Another amendment that failed (S.A.
4326) would have added medical liability reforms to S.
812. Offered by Sen. Mitch McConnell (R-Ky.), the "Health
Care Liability Reform and Quality Assurance Act of 2002"
contained several provisions outlined in the AAMC-supported
"Help Efficient, Accessible, Low-Cost, Timely Healthcare
Act" (HEALTH Act) (H.R.
4600). However, the amendment did not include a cap on
non-economic damage awards. Six Republicans - Sens. George
Allen (Va.), Michael Crapo (Idaho), Richard Shelby (Ala.),
Gordon Smith (Ore.), Arlen Specter (Pa.), and Fred Thompson
(Tenn.) - joined the Senate Democrats and Sen. Jim Jeffords
(I-Vt.) in tabling the amendment, 57 - 42.
Sen. Edward Kennedy (D-Mass.) was highly critical of the
McConnell amendment for protecting the "entire healthcare
industry" from being held accountable for their actions.
Sen. Kennedy also opposed the amendment for allowing states
to take half of a patient's punitive damages award to fund
the investigation and discipline of providers, among other
purposes. Sen. Thompson opposed the amendment for federalizing
what he felt should remain a state issue. Sen. McConnell reminded
Sen. Thompson that the federal government is the largest healthcare
purchaser, thereby making medical liability a federal issue.
During his remarks, Sen. Trent Lott (R-Miss.) mentioned that
the rise in malpractice insurance premiums is hampering physician
recruiting efforts by the University of Mississippi Medical
Center and other medical centers.
During the liability reform debate, Sen. John Ensign (R-Nev.),
who introduced a Senate companion bill to the HEALTH Act (S.
2793) on July 25, did not fault Sen. McConnell for failing
to include caps on awards for non-economic damages; however,
he did speak to their importance. According to Sen. Ensign,
assuring physicians a $50,000 cap on awards for "pain
and suffering" was essential to re-opening the Level
I trauma center at Nevada's University Medical Center.
The Medicaid amendment that ultimately passed in the Senate
(S.A.
4316) temporarily increases states' Medicaid federal medical
assistance percentage (FMAP) by 1.35 percent in the third
and fourth calendar quarters of FY 2002 and each calendar
quarter of FY 2003. Intended as short-term fiscal relief for
states, S.A. 4316 also allows states that had FMAP reductions
in FY 2002 to revert to their 2001 levels in the third and
fourth quarters of FY 2002. Any state scheduled for an FMAP
reduction in FY 2003 may freeze its medical assistance percentage
at 2002 levels for one year.
The amendment was offered by Sen. John Rockefeller (D-W.Va.)
and passed by unanimous consent. To qualify for the FMAP increase,
a state's Medicaid eligibility guidelines may not be more
restrictive than they were in January 2002. Certain exceptions
are available to states that have implemented more restrictive
guidelines. The FMAP provisions total an estimated $6 billion
in state relief. In addition, S.A. 4316 provides $3 billion
in social services block grants to states. Senators Rockefeller
and Gordon Smith (R-Ore.) had introduced similar legislation
earlier this year (S.
2221), as had Sens. Susan Collins (R-Maine) and Ben Nelson
(D-Neb.) (S.
2570). Earlier this year, the AAMC expressed support for
temporary FMAP increases.
The Senate also accepted an amendment to allow pharmacists
and wholesalers to re-import prescriptions drug from Canada.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Office of Governmental Relations
ldavisboyle@aamc.org
(202) 828-0526
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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