WASHINGTON WIRE

In this issue, you'll find:

• House Looks to Reconciliation Negotiations
• MedPAC Unveils Draft Payment Recommendations
• Avian Flu Preparedness Funding Finds Key Supporter
• Hearings

Top Story

House Looks to Reconciliation Negotiations

Members of the House returned this week to begin the negotiation process on reconciliation legislation to reduce mandatory spending over the next five years.

Before the recess began, the House and Senate approved two vastly different reconciliation bills. One of the largest issues of disagreement between the two chambers is the inclusion of Medicare provisions in the Senate bill. Unlike the Senate Finance Committee, House Committees left Medicare untouched and focused on reductions to Medicaid.

Until this week, it remained unclear as to whether or not the House of Representatives and the White House would be willing to consider any Medicare language in the conference report. However, it now appears that both the White House and House Ways and Means Committee Chairman, Bill Thomas (R-CA), are at least considering the possibility. Both are said to be drafting Medicare language they could accept in negotiations.

Such a concession would be good news for Medicaid advocates who have been supporting inclusion of Medicare cuts in reconciliation legislation as a way to alleviate some of the pressure on Medicaid. However, the Chairman of the National Governors Association (NGA) met with House leaders this week to state strong support for most of the Medicaid provisions currently included in the House bill as many of the these proposals mirror NGA Medicaid recommendations sent to Congress earlier in the process. Medicaid supporters claim the House provisions will limit access to services for recipients.

The Senate returns on Monday, December 12th.

Health Care News

MedPAC Unveils Draft Payment Recommendations

On Thursday, December 8, 2005, the Medicare Payment Advisory Commission (MedPAC) considered draft recommendations to Congress that would increase hospital payments for inpatient and outpatient departments in 2007 by the market basket minus 0.45 percent. The Commission also proposed recommendations to freeze Medicare payments to long-term care hospital payments, home health agencies and skilled nursing facilities in 2007.

However, for inpatient rehabilitation facilities (IRFs), MedPAC recommended an update in Medicare payments in 2007 by half of the projected market basket, translating into a payment increase of about 1.8%. This recommendation is based on an expected volume decrease as a result of implementation of the so-called 75% Rule. The rule confines 75% of admissions to IRFs to patients with one of thirteen diagnoses.

MedPAC is also considering recommendations to update freestanding dialysis facility payments by the market basket increase, or about 3.2%, less 0.45% to adjust for productivity and 0.4% as an audit adjustment. The Commission will vote on these recommendations in January.

Avian Flu Preparedness Funding Finds Key Supporter

On Thursday, December 8, 2005, Senate Majority Leader Bill Frist (R-TN) announced strong support for legislation to prepare for an outbreak of the avian flu.

During his speech, the Senator reported Congressional Budget Office (CBO) estimates on the national economic impact of a potential pandemic, citing a 5% or $675 billion decline in the gross domestic product (GDP).

The Majority Leader unveiled a "public health prescription" that appears very similar to the plan released by the Bush Administration in November. Frist's priorities include investments into research and development and expansion of antiviral stockpiles.

Senator Frist expressed confidence that flu preparedness legislation would pass this year, although it remains unclear as to the legislative vehicle. Two main options appear obvious - the Defense Appropriations Bill and the Labor, HHS, and Education Appropriations Bill. The former is more likely, as it is a must-pass spending bill for Congress.

Upcoming Events

Hearings

Tuesday, December 13, 2005

Committee on Energy and Commerce - Subcommittee on Oversight and Investigations
1:00PM
2123 Rayburn House Office Building
Safety of Imported Pharmaceuticals: Strengthening Efforts to Combat the Sales of Controlled Substances Over the Internet

Committee on Ways and Means - Subcommittee on Oversight
3:00PM
1100 Longworth House Office Building
To Review the Response by Charities to Hurricane Katrina

Thursday, December 15, 2005

Committee on Veterans Affairs - Subcommittee on Oversight and Investigations
10:00AM
334 Cannon House Office Building
The Department of Veterans Affairs' (VA) Flu Vaccination Program, and Preparations for a Possible Avian Flu Pandemic

Committee on Energy and Commerce - Subcommittee on Oversight and Investigations
1:00PM
2322 Rayburn House Office Building
Oversight and Administration of the 340B Drug Discount Program: Improving Efficiency and Transparency

For More Information

For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call (202) 466-6550 and ask for the Legislative Practice Group.

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