WASHINGTON WIRE

September 9, 2005
Issue 69

In this issue, you'll find:

Congress Acts to Fund Hurricane Relief Efforts
Administration Flexes Health Program Requirements in Response to Hurricane
Hurricane, Supreme Court Vacancies to Impact Reconciliation Legislation
Hearings

Top Story

Congress Acts to Fund Hurricane Relief Efforts

On Friday, September 2, 2005, Congress approved an emergency supplemental appropriations bill providing $10.5 billion in aid to the areas impacted by Hurricane Katrina. Additionally, on Thursday, September 8, 2005, Congress passed legislation that will appropriate $51.8 billion more for emergency relief efforts. Approximately $50 billion will be appropriated to the Department of Homeland Security as part of the "Disaster Relief" program and $1.4 billion will be appropriated to the Department of Defense under the Military's "Operations and Maintenance" account. Finally, $400 million will be appropriated to the Corps of Engineers under its "Operations and Maintenance" and "Flood Control and Coastal Emergencies" accounts. There is speculation that relief efforts could surpass $300 billion over the long term.

Also on Thursday, Senators Mary Landrieu (D-LA) and Harry Reid (D-NV) introduced the "Temporary Medicaid Disaster Relief Act of 2005" which would expedite and simplify the process of enrolling hurricane victims into the Medicaid program. The bill proposes that the federal government pay 100% of the Federal medical assistance percentage (FMAP) for six months to help states with the additional costs they are currently incurring due to the influx of hurricane evacuees. At the moment, the states are covering the additional Medicaid expenditures for displaced, currently enrolled, beneficiaries.

The bill would also provide Medicaid coverage for anyone in the impacted areas in Louisiana, Alabama, and Mississippi as well as coverage for individuals who have lost their job as a result of the hurricane. For the impacted states, the bill would suspend the Medicare Part D "clawback" which will require states to pay the federal government a large potion of the saving expected to be gained as Medicare takes over Medicaid coverage of prescription drugs for those participating in both programs. Finally, the bill would temporally halt the transition onto Medicare Part D for those dually eligible for Medicaid and Medicare, in order to prevent victims from losing drug coverage

Health Care News

Administration Flexes Health Program Requirements in Response to Hurricane

On Tuesday, September 6, 2005, the Centers for Medicare and Medicaid Services (CMS) in the Department of Health and Human Services (HHS) announced that many of the programs run by the agency will be relaxing normal operating procedures in an effort to serve the hundreds of thousands impacted by Hurricane Katrina.

The emergency declaration waives certain restrictions under Medicare, Medicaid, State Children's Health Insurance Program (SCHIP), and the Health Insurance Portability and Accountability Act (HIPAA) for Florida, Mississippi, Alabama, Louisiana, and Texas, where the agency has declared a federal public health emergency.

Specifically, the agency is allowing individuals to receive medical care regardless of Medicare or Medicaid eligibility documentation. Additionally, the agency will allow programs to reimburse facilities for providing dialysis to patients with kidney failure in alternative settings; waive the prior authorization and out-of-network requirements for Medicaid, Medicaid and SCHIP managed care plans; lift restrictions requiring physicians to be licensed in the state of emergency in which they are currently practicing; and flex hospital billing restrictions with regard to patient diagnoses, including a relaxation of the 75% Rule for rehabilitation hospitals and units.

Hurricane, Supreme Court Vacancies to Impact Reconciliation Legislation

Congress was expected to come back from its August recess to face a legislative agenda which included reconciliation legislation targeting Medicaid reform and possibly Medicare changes as well. However, the emergency in the Gulf Coast as well as the death of Chief Justice Rehnquist will undoubtedly impact the Congressional agenda.

By Friday, September 16, 2005, Congressional committees with jurisdiction over entitlement programs were expected to provide the House and Senate Budget Committees with legislative language to find savings from the targeted programs over the next five years.

The House Energy and Commerce Committee and the Senate Finance Committee were expected to find up to $10 billion in savings over the next five years from the Medicaid program. Despite opposition from Democrats and moderate Republicans to making $10 billion in cuts to Medicaid, Committee Chairmen had remained optimistic that they would still be able to enact such legislation. However, due to the impact of Hurricane Katrina, many in Congress and observers are questioning whether any cuts to programs that provide services to the poor will be politically feasible.

On Tuesday, September 6, 2005 Finance Committee members Olympia Snowe (R-ME), Gordon Smith (R-OR), Jeff Bingaman (D-NM) and Blanche Lincoln (D-AR) submitted a letter to Chairman Grassley requesting an indefinite delay of any proposed entitlement cuts in the reconciliation bill. The Senators stated that in light of the current situation and the greater need of persons affected by the hurricane, a legislative package cutting Medicaid should not move forward.

However, during a House Energy and Commerce Committee hearing on Thursday, Committee leaders indicated that they will be moving forward with plans to find savings in the Medicaid program. While Finance Committee Chairman Grassley has stated his plans to proceed with reconciliation, he has indicated that to achieve bipartisan approval, the Finance Committee's legislation will likely include Medicare cuts as well.

The deadline for reconciliation legislation has been delayed for several weeks.

Upcoming Events

Hearings

Monday, September 12, 2005

Committee on the Judiciary
12:00PM
325 Russell Senate Office Building
Nomination hearing for John G. Roberts, Jr. to be Chief Justice of the United States Supreme Court

Wednesday, September 14, 2005

Committee on Homeland Security and Governmental Affairs
10:00AM
342 Dirksen Senate Office Building
Recovering from Hurricane Katrina: The Next Phase

Thursday, September 15, 2005

Committee on Homeland Security - Subcommittee on Prevention of Nuclear and Biological Attack
1:00PM
TBA
Biological Weapon Threat Assessment

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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