Congress Passes Medicare
Legislation
June 27, 2003 - The Senate and the House passed their
respective Medicare prescription drug bills, S.
1 and H.R.
1 in the early hours of June 27. The Senate overwhelmingly
passed its version of Medicare reform legislation by a margin
of 76-21 after two weeks of debate and a slew of amendments.
The House vote took place early morning June 27 after six
hours of debate and consideration of two alternative amendments.
H.R. 1 was passed 216-215, mostly along party lines.
H.R. 1 is an amalgam of legislation passed June 17 and 19
by the House Ways and Means Committee and Energy and Commerce
Committee, respectively, and is based on H.R.
2473. The hospital market basket, standardized amount,
wage index, and unused residency slots provisions; the 2-year
physician payment relief provisions; and the regulatory relief
provisions remain included in H.R. 1 [see Washington
Highlights, June 20].
H.R. 1 does not contain relief from the Medicare Indirect
Medical Education (IME) payment reductions.
An important addition to the House bill is an increase in
the level of Medicaid Disproportionate Share Hospital (DSH)
relief for FY 2004 and beyond. While no score is available
yet, the new provisions in H.R. 1 are expected to greatly
exceed the $1 billion over 10 years in Medicaid DSH spending
agreed to by the Energy and Commerce Committee [see Washington
Highlights, June 20].
In its Statement of Administration Policy, the Bush Administration
commented that "the provision increasing the current
sufficient Medicaid DSH payments…would allow funds to
be diverted to other unrelated purposes" and "should
be removed."
On the Senate side, Senators Kay Bailey Hutchison (R-Texas)
and Ted Kennedy (D-Mass.) negotiated with Senate Majority
Leader Bill Frist (R-Tenn), Senate Finance Committee Chairman
Charles Grassley (R-Iowa), and Ranking Member Max Baucus (D-Mont.)
to include a small level of IME relief in the final Senate
bill with a commitment to work to increase the IME adjustment
in the House-Senate conference.
One amendment to S. 1, offered by Sen. Jeff Bingaman (D-N.M.)
and accepted by voice vote, would require the Medicare Payment
Advisory Commission (MedPAC) to study the issue of carving
out Medicare Disproportionate Share Hospital payments from
payment rates to Medicare Plus Choice and Medicare Advantage
plans. The amendment had originally required the DSH costs
to be carved out from the rate and paid directly to eligible
hospitals when they treat managed care enrollees. A last minute
score of the original amendment required that the amendment
be changed to the study. Currently, teaching hospitals directly
receive Medicare DGME and IME payments when they treat Medicare
Plus Choice enrollees, but they do not directly receive DSH
payments associated with Medicare Plus Choice enrollees. Medicare
DSH payments were not carved out of the rates when the DGME
and IME payments were carved out in 1997.
Also accepted by voice vote June 26 were Sense of the Senate
resolutions, offered by Sens. Jon Kyl (R-Ariz.) and Arlen
Specter (R-Pa.), urging Congress to fix the sustainable growth
rate formula for Medicare physician payments.
The bills' differences will be negotiated in conference,
which will begin after Congress returns from the July 4 recess.
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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