WASHINGTON WIRE

In this issue, you'll find:

• Senate Approves Reconciliation Bill: Legislation Returns to the House
• Congress Approves Final Spending Bills
• Stem Cell Legislation Signed into Law
• Senate Approves Mental Health Parity Law
• Congress has Adjourned for the Year

Top Story

Senate Approves Reconciliation Bill: Legislation Returns to the House

Early Monday, December 19, 2005, the House approved a reconciliation conference report (S. 1932) by a vote of 212-206. On December 21, 2005, the Senate approved the reconciliation conference report by a vote of 51 to 50, with Vice President Cheney casting the tie-breaking vote. Republican Senators Smith (OR), Collins (ME), Snowe (ME), Chafee (RI), and DeWine (OH) voted with all the Democrats against the legislation, but the bill passed nonetheless.

However, the Senate leadership was not able to garner the 60 votes needed to override a point of order raised by Budget Committee Ranking Member Kent Conrad (D-ND). The point of order identified three provisions included in the conference report which violate a Senate rule known as the "Byrd Rule" which provides Senators the opportunity to remove provisions unrelated to the main legislation. In this case, the provisions did not provide any budgetary impact - the goal of the bill. With passage of this point of order, the conference report was amended and now goes back to the House for final passage. From many people's prospective, the point of order was raised against these provisions to stall final passage of the bill and stress Democratic annoyance at being left out of the process.

The conference report would reduce mandatory spending over the next five years by $39.7 billion. Net Medicare spending would be reduced by $8.3 billion over five years and net Medicaid spending would be cut by $4.7 billion.

With regard to Medicare, the reconciliation conference report would freeze physician Medicare payments at the current level for one year at a cost of more than $7 billion. Under the current sustainable growth rate (SGR) payment formula, physicians were scheduled to receive a 4.4% cut in Medicare payments in 2006.

The conference report also includes a provision that targets Medicare's 75% Rule on inpatient rehabilitation hospitals. The legislation would freeze the required percentage of admissions with one of thirteen diagnoses at the 60% level for an additional year, ending June 30, 2007. The extension pushes the implementation dates for the 65% to July 1, 2007 and the 75% would take effect July 1, 2008. Conversely, the Senate reconciliation bill included a provision that would have stopped implementation of the rule at the 50% level for two years - a proposal widely supported by disability and provider organizations.

With regard to Medicaid, the conference report includes increases in patient co-payments and premiums, producing savings of $1.9 billion over five years and $10.1 billion over ten years. Additionally, the legislation includes provisions aiming to prevent individuals in need of long-term care from transferring their assets in order to qualify for Medicaid services.

The House is expected to approve the amended legislation upon its return in January.

Health Care News

Congress Approves Final Spending Bills

On Wednesday, December 21, 2005, the Senate approved the two remaining Appropriations bills for fiscal year (FY) 2006 - Labor-Health and Human Services-Education and Defense - and adjourned for the year. After a short procedural session in the House Thursday afternoon, both bills now await the President's signature.

Earlier on Wednesday, it appeared that passage of the Defense Appropriations Bill was in jeopardy, as the Senate leadership failed to garner the 60 votes needed in invoke cloture, which would cut off debate and move the bill to a final vote. Senate Democrats and a handful of moderate Republicans opposed the conference agreement on the defense spending bill because of the inclusion of a provision that would have allowed oil drilling in the Arctic National Wildlife Refuge (ANWR). Contentious in and of itself, ANWR was also controversially added to the defense spending bill during conference negotiations - a move which many felt violated Senate rules. Following the filibuster attempt, Senators began several hours of negotiations which resulted in the 48-45 adoption a resolution to remove the ANWR provision from the spending bill and a 93-0 vote to approve the defense spending bill.

The Defense Appropriations bill provides $29 billion in funding for hurricane relief efforts, including an extra $2 billion for some states to cover health care costs for low-income hurricane survivors by offsetting higher Medicaid costs and compensating private hospitals that have treated more uninsured patients as a result of the hurricane. The defense spending bill also includes $3.8 billion in flu pandemic preparedness funding, half the President's request.

Also on Wednesday evening, the Senate adopted the Labor-Health and Human Services (HHS)-Education spending bill (HR 3010) by voice vote. The bill includes $142.5 billion in discretionary spending for FY 2006. This legislation has been described as one of the most austere Labor-HHS-Education spending bills in recent history, as it implements an overall $1.5 billion cut to discretionary programs under the three departments.

Within the Department of Health and Human Services, the National Institutes for Health (NIH) will receive $28.6 billion in funding in FY 2006 - a 1% increase over FY 2005 funding levels. Additionally,the Centers for Disease Control and Prevention (CDC) will receive $5.9 billion in FY 2006, including $1.6 billion for terrorism preparedness and response. This level represents a funding cut of $61 million from FY 2005.

Following Thursday's final approval from the House, the spending bills now head to the President for his signature, wrapping up the Appropriations process for FY 2006.

Stem Cell Legislation Signed into Law

On Tuesday, December 20, 2005, President Bush signed into law the "Cord Blood Stem Cell Act of 2005."

The law authorizes $79 million in federal funds for the harvesting and storage of umbilical cord blood from newborns for use in treatment and research as well as establishes a database to help physicians and researchers access the cells and bone marrow.

Senate Approves Mental Health Parity Law

On Thursday, December 22, 2005 the Senate passed by voice vote legislation that would extend for one year a limited mental health parity law.

Under the legislation, health insurers cannot place caps on annual or lifetime mental health benefits unless they place similar caps on medical and surgical benefits. The House approved this legislation to extend this 1996 law earlier in December.

Upcoming Events

Congress has Adjourned for the Year

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