news from Capitol Hill
Congress Approves Continuing Resolution
Shortly before Congress adjourned for the November elections, a continuing resolution (P. L. 97-276) was passed. This law extended nearly all Federal programs through December 17. However, a lame duck session was called in November to complete action on remaining appropriations and authorizations of the budget.
The fiscal year (FY) '83 continuing resolution continues aging programs for research, training, and services at current operating levels, rather than funding levels. For some programs, this will mean funding at FV82 appropriation levels, while other programs may enjoy increases.
Lame Duck Session to Complete Work of 97th Congress
With cutting the federal budget being a theme of the 97th Congress, it is ironic that a lame duck session of this congress must be called to iron out the final appropriations and authorizations for the FY ^3 budget. In October, the House Appropriations Committee cleared the path for funding the Departments of Labor, Health and Human Services, and Education. The appropriation is about $5.3 billion above the Administration's FY ^3 budget request and $1.2 billion higher than FV82 appropriation. The Senate Appropriations Committee has to mark up an ^3 Labor/ HHS/ Education appropriations bill during the lame duck session. The following summary reviews action thus far on programs relating to aging research and training:
* Health Care Financing Administration-The $30 million approved by the House Appropriations Committee includes $10 million from trust funds and $20 million in federal funds. This amount is $500,000 above the FY ^2 budget.
* National Institute on AgingThe appropriations bill approved $96. 1 million, an amount that is $ 14.2 more than the FV82 funding level and $1 1.5 million above the Administration's request. Amounts for increased funding are specified as (1) $1.5 million for indirect costs of research projects, (2) $3.3 million for teaching nursing home awards, (3) $4.8 million for additional new and competing research grant awards, (4) $263,000 for additional training awards, and (5) $500,000 for a geriatric training initiative.
* Older Americans Act- Title IV of the Older Americans Act is approved for an appropriation level of $22.2 million. This amount is $1 .9 million above the Administration's budget request and keeps funding at the FY *2 level. The report of the Appropriations Committee calls on the Administration on Aging (AOA) to continue career preparation training at the FY *82 level. The amendment, however, does not require that state training funds continue. Strategists are hopeful that such an amendment will be offered by the Senate Appropriations Committee. The House Appropriations Report also contains strong language about funding the four national minority aging organizations (National Caucus and Center on Black Aged, National Association of Hispanic Elderly, National Pacific/ Asian Resource Center on Aging, and the National Indian Council on Aging).
Arthritis Institute Likely To Be Approved
The Health Research Extension Act (H. R. 6457), which establishes the National Institute of Arthritis, was passed by the House on September 30. The Senate Labor and Human Resources Committee has approved a similar bill, but in its present form it does not include a separate creation of the arthritis institute. Senator Barry Goldwater (R -Ariz.) planned to offer an amendment in the companion bill when the senate considered this bill in late November. Acceptance of the amendment is expected, since a majority of the senate already has sponsored this measure.
The new institute's functions would be severed from the existing National Institute of Arthritis, Diabetes, Digestive and Kidney Diseases. There is some concern that most of the funding for the new institute will go for administration and not research. In addition, the mission of the proposed institute reflects no categorical programs for assuring aging-related research.
1982 Tax Bill Includes Medicare and Medicaid Changes
The most sensational news of the past summer is perhaps the changes in both Medicare and Medicaid programs signed into law in August under the 1982 tax provisions. The marathon reconciliation conference on tax revenues and spending cuts broke old traditions in Medicare/ Medicaid legislation. First, Republicans were forced to the initiative (and therefore responsibility) for reducing Medicare and Medicaid spending, a move that comes fast on the heels of sharp reductions in program spending in 1981 . Second, the Chairman of the Senate Finance Committee, Robert Dole (R-Kans.) spearheaded the move to attach a tax revenueraising proposal and MedicareMedicaid reduction package to an earlier approved House bill (H. R. 496 J). Traditionally, the House Ways and Means Committee considers tax and Medicare measures first. Third, House Ways and Means Committee Democrats refused to propose a Medicare proposal in an election year. The ranking minority member of the health subcommittee, William Gradison (R-Ohio), put together the companion bill to the Senate Finance Committee proposal. Fourth, instead of sending a reconciliation package to the House floor for a vote, the Ways and Means Committee voted to go directly to conference. Finally, Chairman Dole presided over all conference sessions. Normally, the Chairman of the House Ways and Means Committee would have this responsibility.
In the wake of the November elections and Republican losses in the House, Republicans in the 98th Congress may be less eager to initiate and take responsibility for program cuts. Senator Dole already has reversed an earlier decision on making recommendations to change the Social Security program. He suggested a Social Security blue ribbon panel of the Administration delay making recommendations until the Democrats present their views.
Regardless of the legislative and political maneuvering, a number of changes in both Medicare and Medicaid emerged from the conference committee. The major provisions are summarized below:
Medicare- The bulk of the Medicare savings from program changes are directed at providers.
* Reimbursement to hospitals is revised, saving $6.02 billion over the next three years. The existing "Section 223" limits on hospital reimbursement would be expanded to include ancillary costs - laboratory tests and x-rays. Under 1981 current law, Medicare limited reimbursement on a patient's room and board at 108% of the average daily room and board costs for other hospitals in the same general location. The new limit on all costs will be 120% in FY '83, 115% in FY ^4, and 110% thereafter. In addition to these limits, hospitals will be required to control overall rate increases for Medicare patients by imposing target rates at slightly above the marketbasket (the marketbasket is estimated by the Congressional Budget Office at 8.7% in FY ^3, so the target rate or cap would average 9.7% - marketbasket plus one). The Department of Health and Human Services (HHS) also is directed to develop proposals for prospective payments to hospitals, skilled nursing facilities (SNFs), and other providers.
* The routine nursing salary cost differential is repealed. The current 5% differential factor paid to hospitals and SNFs for inpatient routine nursing salary was based on the theory that older patients require more care than younger patients. Conferees decided this differential was no longer necessary because sicker patients are shifted from general routine care areas to special care units. The estimated savings to the Medicare program is $330 million over the next three years.
* Reimbursement of providerbased physicians (pathologists, radiologists, and anesthesiologists) is restricted so that these specialists could receive Part B reimbursement only for those services personally rendered. Other services would be reimbursed under Part A in payments to hospitals. Estimated savings would be $220 million by 1985.
* Costs incurred by a hospital or SNF in fulfilling their Hill-Burton free care obligation would not be reimbursable. An estimated savings of $52 million is expected.
* The existing Professional Standards Review Organization (PSRO) is repealed and replaced by the Utilization and Quality Control Peer Review program. Under the new program HHS is directed to: (1) contact for performance-based utilization and quality control peer review and (2) consolidate previously established geographic areas for PSRO. Priority consideration for review groups is given to physiciansponsored groups. The reviews will focus on ( 1 ) the necessity and reasonableness of care, (2) quality of care, and (3) the appropriateness of the setting. A $50 million savings is expected over three years.
* Employers are required to offer 65-to-69-year-old workers and their spouses the same health insurance benefits available to younger workers. Currently, Medicare is generally the first payer of benefits in dual-coverage situations. The alterations would make Medicare the secondary payer for covered health services provided to employees aged 65 to 69 years. Employers could opt for either Medicare or private coverage as the primary payer. Estimated three-year savings is $1.48 billion.
Provisions Affecting Beneficiaries
* The Medicare Part B premium that Medicare enrollers pay for Supplemental Medical Insurance (SMI) would be set and maintained at 25% of the SMI program costs. The premium, now $1 2.20 per month (until June 30, 1983), would increase $.60 per month for enrollers for 1 9831984 and $1.30 per month for 19841985. The estimated three-year savings is $765 million.
* The three-day prior hospitalization requirement for SNF care is eliminated when HHS determines that the change would not (1) alter the acute nature of the benefit, and (2) cause an increase in program costs. No savings are expected.
* The current 100% reimbursement rate for radiologists and pathologists is eliminated. Instead, Medicare will reimburse these services at 80% of reasonable charges after a $75 deductible has been met. Other physician services are reimbursed at the same rate. The estimated savings to 1985 is $620 million.
* Hospice services for terminally ill beneficiaries are covered for the first time under Medicare. A broad benefit package is available including nursing care, therapies, medicalsocial services, homemaker-home health aide services, physician services, short-term inpatient care, and outpatient drug therapy for pain relief. Benefits would be available for two periods of 90 days and one period of 30 days. A 5% copayment on respite care and drugs is required. A $13 million savings is estimated because certain hospice-type services could be reimbursed when provided by hospitals, nursing homes, home health agencies, and other providers.
Medicaid - The agreement on a package of Medicaid changes totals $860 million over three years. This amount is considerably less than the Administration had requested. The agreement marks the second year that Congress has enacted drastic changes in the health program for the poor. The major changes follow.
* States are permitted to impose nominal copayments on all Medicaid recipients for nearly all services except for (1) patients in SNFs and ICFs; (2) children under 18 years; (3) services related to pregnancies, emergencies, and family planning; and (4) categorically needy who are enrolled in HMOs.
* States have increased power to place liens on the property of Medicaid recipients. Generally, states can impose liens on real property (including a home) of Medicaid recipients who are permanently institutionalized in a long-term care facility or nursing home. States may deny Medicaid coverage to people who transfer a home for less than market value.
Tax Components Affecting Health Care - Several provisions of the tax law relate to health care.
* Federal employees, including postal workers, are now subject to the Medicare Health Insurance (HI) tax, beginning in 1983. This provision may be the foot in the door to cover federal employees under Social Security's retirement, survivor, and disability benefits. This provision will add an estimated $2.4 billion in tax revenues.
* The medical and dental allowable deductions by individual taxpayers would increase from a current 3% to 5% of adjusted gross income. The conferees also knocked out the current law, which allowed taxpayers to claim one-half of their medical insurance premiums up to $150. Estimated three-year revenue is $3.7 billion.
* The federal excise tax on cigarettes is increased from $.08 per pack to $.16 per pack. The estimated increased tax revenue is $5 billion.
Moratorium Placed on Nursing Home Survey and Certification Rule
As part of the 1982 Tax Law, Congress adopted a six-month moratorium on HHS' controversial proposed regulations for nursing home surveys and certification. In late May, the Department of HHS had proposed regulations that would allow SNFs and ICFs with consistent compliance records to be surveyed less frequently than once a year. Members of the Senate Aging Committee, chaired by Sen. John Heinz (R-Pa.), unanimously rejected the proposed regulations in a July hearing. The provision inserted into the reconciliation package circumvented creation of a National Commission on Regulation of Nursing Homes and a two-year moratorium on HHS' proposed regulations.
HCFA Approves Swing-Bed Usage
The Health Care Financing Administration (HCFA) approved a provision that allows small, rural hospitals to use inpatient facililties to offer skilled nursing facility (SNF) services to Medicare and Medicaid beneficiaries. The final regulations authorize swing-bed usage for ICF services to Medicaid beneficiaries. HCFA said the swing-bed provision is designed to encourage greater efficiency and effective usage of hospital beds for delivering both acute care and SNF/ ICF care.
Senior PAC Endorses Candidates
In the recent November 1982 elections, older adults had their own political action committee (PAC) watching over their interests. Senior PAC is the only older people's group that can endorse candidates or contribute to campaigns of candidates who share their views. Robert Samuel is the 35-year-old founder and treasurer of Senior PAC. For the 1982 elections, Senior PAC focused on states that had a larger than average percentage of older citizens. Selection of endorsements was based on Senior PACs analysis of congressional votes on Social Security and Medicare issues.