By John Reichard, CQ HealthBeat Editor

JANUARY 22, 2009 -- Hospital, insurer, employer, and other lobbyists scrambled Thursday to shape and reshape health care provisions in the House economic stimulus package, urging lawmakers to keep certain provisions, dump others and add still others.

Their efforts came as key House panels approved or verged on approval of the package, leaving lobbyists to increasingly pin their hopes for change on the Senate. Both the House Ways and Means and Energy and Commerce Committees were marking up their provisions of the stimulus package Thursday while on Wednesday the House Appropriations Committee approved its version of the bill.

The provisions approved by the appropriations panel included $3.75 billion for Department of Defense medical facilities, $2 billion more for the National Institutes of Health, another $1.5 billion for renovating university medical labs receiving NIH grant money, $1.5 billion to renovate, expand, or create new community health centers, $1.1 billion for studies comparing the effectiveness of medical treatments, $1 billion for veterans' medical facilities, $900 million for research relating to a pandemic flu vaccine and defenses against chemical and biological weapons, $600 million to train primary care doctors to practice in rural areas or inner cities and $462 million for construction and renovations at the campuses of the Centers for Disease Control and Prevention.

Insurers joined employers in urging that various provisions to strengthen medical privacy protections be dropped. While saying it supports privacy safeguards, the insurance lobby America's Health Insurance Plans (AHIP) said in a letter to House Speaker Nancy Pelosi, D-Calif., that regulations required under the privacy provisions would "restrict information that could be exchanged for health promotion, disease management, and care coordination programs."

Language authorizing state attorneys general to enforce federal privacy standards "will create a '50 state' approach to federal regulatory enforcement that is neither uniform, clear nor cost-effective," AHIP President Karen Ignagni said in the Jan. 21 letter.

"Broadly worded" requirements for notifying consumers and the Health and Human Services Department in cases where medical privacy is breached "could unnecessarily alarm individuals before harm has been established. And new requirements for tracking and disclosing electronic information--even for treatment, payment, or health care operations--likely would discourage rather than encourage use of electronic health records, Ignagni said.

The National Business Group on Health (NBGH), which represents many of the nation's biggest corporations, urged the removal of certain provisions to help laid-off workers keep their health coverage by expanding certain rights under the Consolidated Omnibus Reconciliation Act (COBRA).

NBGH earlier expressed support for language that would help the newly jobless pay the steep premiums associated with coverage maintained under COBRA. But NBGH President Helen Darling emphasized in a letter Thursday to House Ways and Means Committee leaders that her members support temporary subsidies.

The stimulus package would "extend COBRA indefinitely to former employees 55 and older and those with 10 years or more tenure in their jobs until they find a new job or until they are Medicare eligible," Darling noted. The actual cost of COBRA "can be as high as 133 percent to 150 percent of the average per-employee plan costs," Darling wrote. "These costs would significantly increase if people could keep COBRA longer as they approach Medicare eligibility and their health care costs generally increase due to higher medical costs and higher rates of chronic conditions," she said.

If former employees chose to keep their current coverage for extended periods under COBRA, "then employer plans have to keep track of them, collect premiums and process COBRA payments for many years until their long ago employees either relinquish their coverage or it expires." COBRA's "administrative burden for former employees would become permanent . . . at the expense of current employees and their employers."

In a telephone press briefing Thursday American Hospital Association executives urged lawmakers to add language to the stimulus to make it easier to borrow by strengthening a mortgage insurance program at the federal Department of Housing and Urban Development. "Millions as opposed to billions" would be added to the stimulus to finance the changes, including a grant program to help facilities qualify for the program, said AHA lobbyist Michael Rock.

In the briefing, AHA President Richard Umbdenstock called attention to a new survey by the association detailing the impact of the credit crisis on hospitals. Almost half the hospitals responding to the survey said it was "significantly harder" to obtain financing through tax-exempt bonds or philanthropy, and about one-third said it was significantly harder to gain access to capital through equity or venture capital funds, taxable bonds, or banks and financial services companies. Nearly half of hospitals said they were postponing capital projects. Of these, about two-thirds said the postponements affected inpatient services and almost half cited on impact on emergency or urgent care services.

AHA also urged Congress to keep provisions temporarily increasing the federal share of payments for Medicaid and funding investments in health information technology, as well as changing a Medicare inpatient payment regulation eliminating part of the payments received by teaching hospitals for capital costs. The change would place a one-year moratorium on the three-year phase-out of the payments.

The House stimulus package also makes "technical corrections" to previous legislation meant to provide regulatory relief to long-term care hospitals.

Similarly, the National Hospice and Palliative Care Organization is urging lawmakers to keep a House provision that would block regulatory language cutting payments to hospice programs. The provision places a one-year moratorium on the regulation to ensure that hospices receive the same reimbursement rate for wages.

Meanwhile, the AIDS Institute is urging lawmakers to keep language they said would provide an additional $355 million for domestic programs to prevent AIDS, viral hepatitis, and sexually transmitted diseases. Preventing disease "will dramatically reduce future health care costs," said Carl Schmid, the institute's director of federal affairs.

By Alex Wayne and Drew Armstrong, CQ Staff

JANUARY 23, 2009 -- Two House committees approved legislation Thursday to expand Medicaid, extend insurance coverage for people who lose their jobs and provide $20 billion to accelerate the use of electronic medical records.

The health measures were part of a sweeping $825 billion bill that President Obama and congressional Democrats hope will help lift the nation out of economic recession. Republicans have castigated the legislation (HR 598) as a huge expansion of government that will not provide the short-term stimulus Democrats say is their goal.

In a markup session that lasted 12 hours and featured nearly 60 votes on health, energy and broadband expansion, the Energy and Commerce Committee approved the bill by voice vote, substituting it into the shell of another piece of legislation (HR 629). The committee opted to mark up the bill's health titles separately, approving the title on health information technology by voice vote, the titles on Medicaid by 32-11, and the title on insurance assistance for the unemployed by 32-12.

The Energy and Commerce markup actually threatened to go on much longer, but Democrats and Republicans worked out what Chairman Henry A. Waxman, D-Calif., termed a "gentlemen's agreement" to limit debate on each amendment to two minutes per side.

The Ways and Means Committee earlier approved the bill 24-13. The committee adopted two amendments affecting the health provisions of the bill, one by Chairman Charles B. Rangel, D-N.Y., and the other by Pete Stark, D-Calif., chairman of the health subcommittee. Both were adopted by voice vote.

Rangel's amendment made technical changes to the health provisions. Stark's amendment restored two sections of the bill that had been inadvertently deleted when the legislation was referred to the Ways and Means Committee, said his spokesman, Brian Cook. The sections prevent reductions in Medicare payments to hospices, medical students and long-term care hospitals.

The bill would also overhaul a program known as COBRA that allows people to keep their employer-sponsored health insurance when they lose their jobs. COBRA is considered underutilized because many families can't afford the premiums, which can be up to 102 percent of what workers and their employers jointly pay.

Under the bill, the government would subsidize 65 percent of COBRA premiums for up to 12 months. Additionally, people 55 and older or those with 10 years of tenure or more at their jobs would be able to continue COBRA coverage until they either find a new job offering health coverage or reach age 65, when they can enter Medicare.

During the Energy and Commerce markup, Republicans offered dozens of amendments to every title, almost all of which were rejected. One, from ranking Republican Joe L. Barton of Texas, would have put in place an asset and income test for individuals to qualify for COBRA premium assistance. Barton's proposal, which he referred to as "the Lehman Brothers amendment," would have barred people from the premium assistance program if they had more than $100,000 in income or $1 million in assets.

After Barton's amendment was rejected, Rep. Cliff Stearns, R-Fla., offered a similar amendment to bar anybody with an income more than $1 million. Waxman said that as long as there was an easy way to check incomes, he would agree to it.

"I think we just won one," said Stearns. The amendment was approved by voice vote.

One of the more controversial provisions of the bill is a section intended to encourage hospitals and doctors to more quickly adopt electronic medical records. Most health providers still use paper records, out of concern about the cost of going electronic as well as privacy restrictions.

Electronic records are thought to result in both increased efficiency, reducing health care costs, and reduced medical errors. Congress has been debating how to encourage use of what is known as health information technology, or health IT, for several years.

The bill would provide $20 billion for the government to create standards for the technology, implement electronic medical records systems for public insurance programs like Medicare and Medicaid, and pay private hospitals and physicians to do the same.

Taking a cue from the health IT section's Medicare portions, Republicans tried several times to use the bill as a vehicle to reform Medicare's physician payment system, which each year now demands deep cuts to doctors' payment rates as part of a cost-control formula.

The several GOP amendments would have either delayed future physician cuts, replaced them with a standard rate of inflation for medical costs or, in the case of an amendment offered by Rep. Michael C. Burgess, R-Tex., required Congress to fix the physician pay problem before doling out the billions of dollars in bonus payments to doctors and hospitals that are part of the health IT language.

"This vehicle is not the right place for fixing physician payments," said Waxman.

"If not this bill, what bill?" asked Rep. Phil Gingrey, R-Ga., arguing the point that Congress has typically waited until the last minute to solve the physician payment issue, adding it to one of a session's final moving pieces of legislation.

Democrats did agree to a "buy American" amendment offered by Rep. Tim Murphy, R-Pa. The amendment would require any health information technology bought with the government funds to be manufactured and sourced from the United States.

Under the health IT provision in the bill, hospitals would be eligible for payments of at least $2 million beginning in fiscal 2011 if they adopt electronic records meeting the federal standard. Individual physicians would receive up to $65,000 for going electronic.

Beginning in fiscal 2016, hospitals and physicians would face reduced Medicare payments if they don't use electronic medical records.

To strengthen privacy protections for patients with electronic medical records, the bill includes increased penalties for improper disclosure and prohibitions on some uses of the records.

Several different industry groups have written the Ways and Means and Energy and Commerce committees in opposition to the health IT provisions of the bill; of the eight Republican health amendments, half concerned health IT.

Many industry groups, including pharmacies and insurers, are particularly concerned that the bill's privacy protections are too restrictive and would prevent what they say are routine uses of medical records aimed at improving the quality of care.

During the Ways and Means markup, an amendment by Rep. Charles Boustany Jr., R-La., to strike the privacy language under the bill's health IT section was among those rejected.

The Ways and Means committee rejected eight health-related amendments offered by Republicans. Among them were proposals to allow seniors to opt out of Medicare and to require health providers to share information about their prices with the government and public.

The bill would also provide nearly $96 billion for Medicaid, including about $9 billion for states to expand the program to cover low-income workers who lose their jobs through 2010. The other $87 billion would be paid to states as increased Medicaid reimbursements, to help them close holes in their budgets.

Medicaid is a joint federal-state health insurance program for the poor; the federal government pays on average about 57 percent of the costs.

The Energy and Commerce markup threatened to turn contentious after Republicans offered amendments on birth control and immigrant eligibility for government programs, but the late hour and an agreement to limit debate seemed to hold any rancor in check.

A proposal by Rep. Joe Pitts, R-Pa., would have required parental notification for any minor that received contraception services under Medicaid, which are provided for in a state grant program in the bill. "I really don't understand what the expansion of family planning services has to do with stimulating the economy," Pitts argued. The amendment failed, 14-29.

"This is contraception, not abortion," Rep. Diana DeGette, D-Colo., argued back.

An amendment by Rep. Nathan Deal, R-Ga., would have kept in place a five-year waiting period for legal immigrants and new citizens to receive services under the State Children's Health Insurance Program, or SCHIP. In an SCHIP reauthorization bill (HR 2) that recently passed the House, Democrats removed the waiting period.

Waxman argued that five years was too long for children and pregnant women to have to wait for coverage. "It's stupid and it's morally wrong," he said. The amendment failed, 12–31.

By Melissa Attias, CQ Staff

JANUARY 23, 2009 -- A new Commonwealth Fund report found that only 9 percent of people who lost their jobs continued their health insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in 2006.

The report, "Maintaining Health Insurance During a Recession: Likely COBRA Eligibility," found that laid-off employees need assistance paying 75 percent to 85 percent of their COBRA premiums in order for their premium contributions to remain at the level they paid while they were working.

"Americans are losing their jobs at an alarming pace and this report clearly shows that many people cannot afford to take on the expense of COBRA just as they lose their income," Commonwealth Fund President Karen Davis said in a news release.

Two House committees on Thursday approved sections of an economic stimulus bill that, among their provisions, would require government to subsidize 65 percent of COBRA premiums for up to 12 months. The Senate Finance Committee's stimulus measure would require the government to subsidize 65 percent of the COBRA premium--the same as proposed by the House--but only for nine months.

According to the Commonwealth report, 66 percent of all current workers will be eligible to extend their health insurance under COBRA if they are laid off. Because COBRA payments are roughly four to six times higher than the amount of money workers contribute to their health insurance while they are employed, however, they would be unaffordable for most.

The analysis finds that millions of the eligible workers could continue their coverage under COBRA if they received assistance paying their premiums, which average $4,704 a year for an individual and $12,680 a year for a family.

The report also shows that only 38 percent of low-wage workers are eligible to receive COBRA benefits because they are uninsured, do not receive health insurance through their jobs or work for small firms that are not required to offer COBRA.

To enable these low-wage workers to support their families, the authors of the report recommend extending Medicaid and the State Children's Health Insurance Plan (SCHIP) eligibility to unemployed, low-income adults with assistance for premium shares.

"The number of uninsured Americans could grow markedly during this recession unless we take action to help unemployed Americans keep their health care coverage," Davis said in the news release.

The House Ways and Means Committee approved legislation (HR 598) that would require government to subsidize 65 percent of COBRA premiums for up to 12 months. Additionally, people 55 and older or those with 10 or more years of tenure at their jobs would be able to continue COBRA coverage until they either find a new job offering health coverage or reach age 65, when they can enter Medicare.

In a letter Thursday to Ways and Means leaders, the National Business Group on Health (NBGH), which represents many of the nation's biggest corporations, voiced support for temporary subsidies but expressed concern that the House legislation goes too far in extending COBRA eligibility.

NBGH President Helen Darling said in the letter that long-term extensions of COBRA are likely to significantly raise health costs for employers and those still employed, as well as increase the administrative burden on employer plans.

"COBRA is the wrong vehicle to assist the uninsured on a permanent basis," Darling said in the letter. "Rather, NBGH believes that Congress should focus on improving the quality of care and offering more affordable health care choices to reform our nation's broken health care system."

The House Energy and Commerce Committee approved a measure (HR 629) that would require that an employee only pay for 35 percent of the premiums, instead of the usual 100 percent. The benefit would last up to 12 months for workers who have been involuntarily terminated and would apply to their families as long as they elect to get COBRA coverage. Any COBRA-eligible workers 55 years old and older, or who have worked for an employer for at least 10 years, would be able to keep their COBRA coverage at their own expense until they become Medicare eligible at age 65 or secure coverage through a new employer.

By John Reichard, CQ HealthBeat Story

JANUARY 23, 2009 -- States are making steadfast efforts to cover uninsured children in public programs but their ability to preserve recent gains hinges on congressional efforts to expand the State Children's Health Insurance Program and boost federal Medicaid spending, according to a new report.

Based on a 50-state survey carried out in summer and early fall of 2008, researchers from the Kaiser Commission on Medicaid and the Uninsured and the Center on Budget and Policy Priorities found that 19 states increased access to health coverage by uninsured children and parents in families of modest means while 10 states enacted at least one measure to restrict coverage. The most common restriction was to add or increase premium charges for coverage under SCHIP.

When states adopted their budgets for the fiscal year that began July 1, 2008, many were able to fund expansions of children's coverage, but with the severity of the downturn, state budget shortfalls are expected to total $350 billion for the period that includes the remainder of fiscal 2009 and extends through fiscal 2011, the study said. Even as projected shortfalls grew, states in some cases planned to go ahead with kids' coverage expansions but others put those plans on hold because of factors such as the unresolved reauthorization of SCHIP and the impact of the Aug. 17, 2007 federal directive placing new limits on SCHIP expansions.

Researchers who study child coverage trends say parents without health care benefits are more likely to sign up their uninsured offspring in public programs if they too can get coverage. But the study found that it continues to be more difficult for a low-income parent to qualify for health coverage than for a child. The median income at which children qualify for Medicaid or SCHIP is 200 percent of the federal poverty line, they said. But for working parents the median eligibility level maxes out at 68 percent of the federal poverty line and for jobless parents the level is just 41 percent, or $601 a month for a family of three in 2008.

"In 28 states, a parent in a family of three, working full-time at the minimum wage, earning on average, $1,082 per month, cannot qualify for Medicaid," the study added.

States can ease eligibility requirements and simplify procedures to maintain access to health coverage in a downturn, according to the study. States for example could choose to disregard unemployment compensation payments in cases where that money would put applicants over the income limit for Medicaid. Or they could pare back paperwork requirements or rescind requirements for face to face interviews as ways to simplify the enrollment process, the study said.

Pending SCHIP reauthorization and economic recovery proposals "could provide an essential boost that would enable states to sustain the coverage gains they have achieved and give families hard-hit by the recession the confidence that assistance with health coverage will still be available," the study concluded.

But Jay E. Berkelhamer, an Atlanta-based pediatrician who recently served as president of the American Academy of Pediatrics, told a Kaiser-sponsored briefing Friday on the findings that policies easing access to Medicaid coverage do not by themselves assure access to health care. Pediatricians are forced to cap the number of Medicaid covered children they treat because of low payment levels, he said.

By Bart Jansen, CQ Staff

JANUARY 23, 2009 -- Majority Leader Harry Reid predicted Friday that the Senate would approve an expansion of children's health insurance by the end of next week, despite some GOP opposition to immigration-related provisions.

"It's about taking care of children," the Nevada Democrat said at a news conference with Sen. John D. Rockefeller IV, D-W. Va., and a dozen youths. "We're going to start working on this Monday and pass this bill next week."

The Finance Committee approved the bill Jan. 15. It aims to expand the State Children's Health Insurance Program (SCHIP), a Medicaid program for children in poor families, by providing care to 4 million more children, for a total of 11 million. The $31.5 billion expansion would be funded by a 61-cent-per-pack tax on cigarettes.

As approved by the committee, the measure also would allow states to begin offering dental insurance under SCHIP.

In the Finance markup, Republican complaints focused on providing care to the children of illegal immigrants. The bill would loosen citizenship and residency requirements for eligibility. A Rockefeller amendment adopted by the panel would allow legal immigrants and new citizens into the program without the standard five-year waiting period.

"Any time you talk about immigration, the red flags start waving," Reid said. But he vowed that the Senate would complete the bill by the end of the week, because debate will begin Feb. 2 on economic stimulus legislation (S 1).<?p>

Floor debate is scheduled to begin Monday after a 6 p.m. vote on nominee Timothy F. Geithner to become Treasury secretary.

By Alex Wayne, CQ Staff

JANUARY 23, 2009 -- Senate Democrats are proposing about $132 billion in new spending for Medicaid and Medicare, electronic health records and health insurance for the unemployed as part of the emerging economic stimulus package.

The health measures are included in a $455 billion portion of the stimulus package that the Senate Finance Committee is expected to approve Jan. 27. While the health provisions of the bill (S 1) are similar in a general sense to those House Democrats have included in their economic recovery measure, they differ in several important respects.

That could complicate negotiations between the two chambers on a final bill.

House Democrats have proposed allowing states to expand their Medicaid programs to cover low-income unemployed workers through 2010, at a cost of nearly $9 billion. Senate Democrats have no similar provision in their bill, instead proposing only to extend Medicaid coverage for families who become ineligible for the program because their income increases. That would cost $1.3 billion over 10 years.

Senate Democrats also propose a more modest expansion of so-called COBRA health insurance coverage for people who lose their jobs.

Under the Senate bill, the government would subsidize 65 percent of the COBRA premium--the same as proposed by the House--but only for nine months, instead of a year as in the House bill.

House Democrats have also proposed allowing people 55 or older, or those with at least 10 years' tenure in their jobs, to continue their COBRA coverage indefinitely, until they either get a new job offering health coverage or reach age 65 and qualify for Medicare. There is no such provision in the Senate bill.

The House and Senate proposals to increase use of electronic medical records by doctors and hospitals are very similar. Most health providers still use paper records, out of concerns over the expense of electronic records systems, their interoperability with other providers' systems, and privacy. There is general agreement that electronic records would improve the efficiency and safety of medicine, but Congress has been unable to agree on a national policy regarding health information technology, or health IT.

Both bills would provide $17.9 billion to help physicians, hospitals and other health care providers cover the costs of the necessary computers and software. The incentive payments available to doctors and hospitals vary slightly--the Senate bill would provide doctors up to $44,000 under Medicare, or $75,000 for doctors and nurses with many Medicaid patients. The House bill would provide up to $41,000 under Medicare and $75,000 for providers with many Medicaid patients.

Under both bills, the hospital incentive payments are based on complex formulas that make the maximum payment difficult to calculate. House aides say the maximum payment under their bill would be about $11.6 million; Senate aides say there is theoretically no maximum under their bill, but most hospitals would be paid between $3 million and $6 million.

The House bill would begin penalizing doctors and hospitals who do not adopt electronic records with reduced Medicare payments in fiscal 2016. Under the Senate bill, the penalties would begin in fiscal 2015.

The House bill includes a variety of stringent new privacy protections for electronic medical records. The bill released by the Finance Committee does not include any privacy protections; aides said that the Senate Appropriations Committee, which has not yet released its version of the bill, would address that issue.