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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-826
_______________________________________________________________________


 
    MEDICAID TECHNICAL CORRECTIONS RELATING TO PHYSICIANS' SERVICES

                                _______
                                

 September 24, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1791]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 1791) to amend title XIX of the Social Security Act to 
make certain technical corrections relating to physicians' 
services, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Rollcall Votes...................................................     3
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight.....................     3
New Budget Authority and Tax Expenditures........................     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Inflationary Impact Statement....................................     5
Advisory Committee Statement.....................................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6
Additional Views.................................................     8
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. TECHNICAL CORRECTIONS RELATING TO PHYSICIANS' SERVICES.

  (a) Correcting Reference to Unique Identifier System.--
          (1) In general.--Section 1902(a) of the Social Security Act 
        (42 U.S.C. 1396a(a)) is amended, in the paragraph redesignated 
        as paragraph (59) by section 13623(a)(6) of the Omnibus Budget 
        Reconciliation Act of 1993 and inserted by section 
        4752(c)(1)(C) of the Omnibus Budget Reconciliation Act of 1990, 
        by striking ``subsection (v)'' and inserting ``subsection 
        (x)''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall be effective as if included in the enactment of the 
        amendments made by section 4752(c)(1) of the Omnibus Budget 
        Reconciliation Act of 1990.
  (b) Correction in Minimum Qualifications for Billing for Physicians' 
Services to Children and Pregnant Women.--
          (1) In general.--Section 1903(i) of the Social Security Act 
        (42 U.S.C. 1396b(i)) is amended, in the paragraph redesignated 
        as paragraph (12) by section 13631(c)(3) of the Omnibus Budget 
        Reconciliation Act of 1993 and inserted by section 
        4752(a)(2)(B) of the Omnibus Budget Reconciliation Act of 
        1990--
                  (A) in subparagraph (A)(i), by inserting ``or is 
                certified in family practice or pediatrics by the 
                medical specialty board recognized by the American 
                Osteopathic Association'' before the comma at the end;
                  (B) in subparagraph (B)(i), by inserting ``or is 
                certified in family practice or obstetrics by the 
                medical specialty board recognized by the American 
                Osteopathic Association'' before the comma at the end; 
                and
                  (C) in each of subparagraphs (A) and (B)--
                          (i) by striking ``or'' at the end of clause 
                        (v),
                          (ii) in clause (vi), by inserting ``(or 
                        certified by the State in accordance with 
                        policies of the Secretary)'' after 
                        ``Secretary'',
                          (iii) by redesignating clause (vi) as clause 
                        (vii), and
                          (iv) by inserting after clause (v) the 
                        following new clause:
                          ``(vi) delivers such services in the 
                        emergency department of a hospital 
                        participating in the State plan approved under 
                        this title, or''.
          (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to physicians' services furnished on or after 
        January 1, 1992.

                          Purpose and Summary

    H.R. 1791 makes technical corrections to title XIX of the 
Social Security Act relating to payments for physician services 
in the Medicaid program. Because of an unintended omission in 
the Omnibus Reconciliation Act of 1990, osteopathic physicians 
were not included in provisions concerning Medicaid 
reimbursement for medical services furnished to children and 
pregnant women. This bill corrects that omission by adding 
legislative language that Medicaid can expend funds for 
services provided to children and pregnant women by physicians 
certified by the American Osteopathic Association.

                  Background and Need for Legislation

    As part of the Omnibus Budget Reconciliation Act of 1990 
(OBRA 1990), Congress amended title XIX of the Social Security 
Act to include minimum standards that physicians are required 
to meet in order to receive payment for the health care 
services that they provide to pregnant women and children under 
the age of 21 under the Medicaid program. Those standards 
included physicians board certified in pediatrics, family 
practice, and obstetrics by the medical specialty board 
recognized by the American Board of Medical Specialties.
    The physicians captured in these criteria, however, 
included only those in the allopathic (M.D.) profession. 
Osteopathic physicians (D.O.s) receive certification by the 
medical specialty boards recognized by the American Osteopathic 
Association, which was inadvertently omitted from the OBRA 1990 
physicians standards. By favorably reporting H.R. 1791, the 
Committee seeks to rectify this omission.

                                Hearings

    The Committee on Commerce has not held hearings on the 
legislation.

                        Committee Consideration

    On September 19, 1996, the Committee on Commerce met in 
open markup session and ordered H.R. 1791, a bill to amend 
title XIX of the Social Security Act to make certain technical 
corrections relating to physicians' services, reported to the 
House, as amended, by a voice vote, a quorum being present.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 1791 
reported or in adopting the amendment. The voice votes taken in 
Committee are as follows:
    Bill: H.R. 1791, a bill to amend title XIX of the Social 
Security Act to make certain technical corrections relating to 
physicians' services.
    Unanimous consent request: Unanimous Consent Request by Mr. 
Bliley to discharge the Subcommittee on Health and Environment 
from further consideration of H.R. 1791 and to proceed to its 
immediate consideration by the Full Committee.
    Disposition: Agreed to, without objection.
    Amendment: Amendment in the Nature of a Substitute offered 
by Mr. Barton.
    Disposition: Agreed to, by a voice vote.
    Motion: Motion by Mr. Bliley to order H.R. 1791, as 
amended, reported to the House.
    Disposition: Agreed to, by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee has not held 
oversight or legislative hearings on this legislation.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

               New Budget Authority and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of Rule XI of the 
Rules of the House of Representatives, the Committee states 
that H.R. 1791 would result in no new or increased budget 
authority or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 403 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 403 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 23, 1996.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1791, as ordered reported by the Committee on 
Commerce on September 19, 1996. The bill would designate as 
Medicaid providers for children and pregnant women physicians 
certified by the American Osteopathic Association or by a state 
(in accordance with the policies of the Secretary of Health and 
Human Services) and physicians delivering services in an 
emergency department of a hospital participating in a state 
plan. CBO estimates that H.R. 1791 would have no budgetary 
impact.
    Under current law, certified Medicaid providers for 
children and pregnant women are doctors who are certified by 
the American Board of Medical Specialties, work at a Federally-
qualified health center, are members of the National Health 
Service Corps, have a consultation and referral arrangement 
with a Medicaid provider, hold admitting privileges at 
participating hospitals, or are certified by the Secretary as 
qualified. In regulations, the Secretary has defined doctors 
licensed by their state as qualified providers. This provision 
would have no budgetary impact because osteopaths and 
physicians in emergency rooms must be licensed by their state 
to practice and consequently are already Medicaid-qualified 
providers.
    This bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4) and would impose no costs on state, local, 
or tribal governments.
    If you wish for further details on this estimate, we will 
be pleased to provide them. The CBO staff contact is Jean 
Hearne.
            Sincerely,
                                         June E. O'Neill, Director.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that H.R. 1791 
would have no inflationary impact.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

             Section-by-Section Analysis of the Legislation

   Section 1. Technical Corrections Relating to Physicians' Services

    Under current law, Federal Medicaid matching funds are not 
available for State spending for any Medicaid services 
delivered by physicians to children under 21 years of age, or 
to pregnant women, unless the physician meets at least one of a 
number of specified criteria in addition to licensure by the 
State.
    With respect to services to children under 21, the 
physician must meet any one of the following criteria: (1) hold 
admitting privileges to a hospital participating in Medicaid; 
(2) be certified in family practice or pediatrics by an 
appropriate specialty board; (3) have a formal consultation and 
referral arrangement with a certified pediatrician or family 
practitioner; (4) be employed by, or affiliated with, a 
Federally-qualified health center; (5) be a member of the 
National Health Service Corps; or (6) be certified by Secretary 
of Health and Human Services (HHS) as qualified to deliver care 
to children.
    With respect to services to pregnant women, the physician 
must meet any one of the following criteria: (1) hold admitting 
privileges to a hospital participating in Medicaid; (2) be 
certified in family practice or obstetrics by an appropriate 
specialty board; (3) have a formal consultation and referral 
arrangement with a certified obstetrician or family 
practitioner; (4) be employed by, or affiliated with, a 
Federally-qualified health center; (5) be a member of the 
National Health Service Corps; or (6) be certified by the 
Secretary of HHS as qualified to deliver care to pregnant 
women.
    The Committee bill clarifies that, for purposes of 
physician qualifications for serving Medicaid-eligible children 
and pregnant women, certification in family practice or 
pediatrics or obstetrics can occur if granted by a medical 
specialty board recognized by the American Osteopathic 
Association, not just by a board recognized by the American 
Board of Medical Specialists.
    The Committee bill also adds to the list of qualifying 
criteria. If a physician meets none of the current qualifying 
criteria, Federal Medicaid funds would still be available for 
services provided to children under 21 years of age, or to 
pregnant women, if the physician delivers such services in the 
emergency department of a hospital participating in Medicaid.
    Finally, the bill provides that services delivered by 
physicians to children or pregnant women may qualify for 
Federal matching payments if the physician is certified by the 
State in accordance with policies of the Secretary of HHS. The 
Committee intends that these policies be developed with input 
from practitioners as well as consumers, and that they be 
designed to prevent the exposure of children and pregnant women 
to substandard care.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                          SOCIAL SECURITY ACT

          * * * * * * *

      TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

          * * * * * * *

                   state plans for medical assistance

  Sec. 1902. (a) A State plan for medical assistance must--
          (1) * * *
          * * * * * * *
          (59) maintain a list (updated not less often than 
        monthly, and containing each physician's unique 
        identifier provided under the system established under 
        subsection [(v)] (x)) of all physicians who are 
        certified to participate under the State plan;
          * * * * * * *

                           payment to states

  Sec. 1903. (a) * * *
          * * * * * * *
  (i) Payment under the preceding provisions of this section 
shall not be made--
          (1) * * *
          * * * * * * *
          (12) with respect to any amount expended for 
        physicians' services furnished by a physician on or 
        after January 1, 1992, to--
                  (A) a child under 21 years of age, unless the 
                physician--
                          (i) is certified in family practice 
                        or pediatrics by the medical specialty 
                        board recognized by the American Board 
                        of Medical Specialties for family 
                        practice or pediatrics or is certified 
                        in family practice or pediatrics by the 
                        medical specialty board recognized by 
                        the American Osteopathic Association,
                          (ii) is employed by, or affiliated 
                        with, a Federally-qualified health 
                        center (as defined in section 
                        1905(l)(2)(B)),
                          (iii) holds admitting privileges at a 
                        hospital participating in a State plan 
                        approved under this title,
                          (iv) is a member of the National 
                        Health Service Corps,
                          (v) documents a current, formal, 
                        consultation and referral arrangement 
                        with a pediatrician or family 
                        practitioner who has the certification 
                        described in clause (i) for purposes of 
                        specialized treatment and admission to 
                        a hospital, [or]
                          (vi) delivers such services in the 
                        emergency department of a hospital 
                        participating in the State plan 
                        approved under this title, or
                          [(vi)] (vii) has been certified by 
                        the Secretary (or certified by the 
                        State in accordance with policies of 
                        the Secretary) as qualified to provide 
                        physicians' services to a child under 
                        21 years of age; or
                  (B) to a pregnant woman (or during the 60 day 
                period beginning on the date of termination of 
                the pregnancy) unless the physician--
                          (i) is certified in family practice 
                        or obstetrics by the medical specialty 
                        board recognized by the American Board 
                        of Medical Specialties for family 
                        practice or obstetrics or is certified 
                        in family practice or obstetrics by the 
                        medical specialty board recognized by 
                        the American Osteopathic Association,
                          (ii) is employed by, or affiliated 
                        with, a Federally-qualified health 
                        center (as defined in section 
                        1905(l)(2)(B)),
                          (iii) holds admitting privileges at a 
                        hospital participating in a State plan 
                        approved under this title,
                          (iv) is a member of the National 
                        Health Service Corps,
                          (v) documents a current, formal, 
                        consultation and referral arrangement 
                        with an obstetrician or family 
                        practitioner who has the certification 
                        described in clause (i) for purposes of 
                        specialized treatment and admission to 
                        a hospital, [or]
                          (vi) delivers such services in the 
                        emergency department of a hospital 
                        participating in the State plan 
                        approved under this title, or
                          [(vi)] (vii) has been certified by 
                        the Secretary (or certified by the 
                        State in accordance with policies of 
                        the Secretary) as qualified to provide 
                        physicians' services to pregnant women; 
                        or
          * * * * * * *
           ADDITIONAL VIEWS OF REPRESENTATIVE HENRY A. WAXMAN

    As introduced, H.R. 1791 clarified that certification by a 
medical specialty board recognized by the American Osteopathic 
Association would be sufficient to qualify a family 
practitioner, pediatrician, or obstetrician to receive Medicaid 
reimbursement for delivering care to children under 21 or 
pregnant women, respectively. In addition, H.R. 1791 as 
introduced would have clarified that physicians delivering care 
to children or pregnant women in the emergency departments of 
hospitals participating in Medicaid could qualify for Medicaid 
payments. These clarifications were thoughtful, constructive, 
and consistent with the prudent expenditure of Federal funds.
    During Committee consideration, a provision was added 
allowing physicians serving children and pregnant women also to 
qualify for Medicaid payments so long as they are ``certified 
by the State in accordance with policies of the Secretary.'' 
This provision was adopted to avoid disruption in 
implementation of the underlying provision. In adopting this 
provision, I posed a question to the majority to receive 
assurance that this action in no way was intended to weaken the 
quality protections of current law. I received assurances that 
this was the case. Therefore, it is clear to me that, in 
implementing this option, the Secretary should assure that the 
policies established meet the basic goal of the underlying 
provision: assuring quality services for children and pregnant 
women.
    Historically, in order to participate in Medicaid, a 
physician (other than one excluded for fraud or abuse) was only 
required to be licensed in the State in which he or she 
practiced. The assumption was that State licensure would 
protect Medicaid beneficiaries from poor quality providers. As 
a result of oversight hearings conducted in the 101st Congress 
by the Government Operations Subcommittee chaired by the late 
Ted Weiss, we learned that this assumption was not always well-
founded. The Weiss Subcommittee hearings demonstrated how 
``Medicaid mills'' thrived financially (mostly at Federal 
expense) by providing poor quality care even though staffed by 
licensed physicians.
    In order to protect children and pregnant women from poor 
quality physicians, whether in Medicaid mills, managed care 
plans, or other settings, and in order to prevent Federal 
Medicaid funds from financing substandard care in these 
settings, this Committee in 1990 authored a provision that set 
a higher standard than State licensure for physician 
participation. Specifically, the Committee required that, in 
order for Federal Medicaid matching funds to be made available 
for payment for services provided by a physician to children 
under 21, the physician must meet just one of the following 
criteria: (1) hold admitting privileges to a hospital 
participating in Medicaid; or (2) be certified in family 
practice or pediatrics by an appropriate specialty board; or 
(3) have a formal consultation and referral arrangement with a 
certified pediatrician or family practitioner; or (4) be 
employed by, or affiliated with, a Federally-qualified health 
center; or (5) be a member of the National Health Service 
Corps; or (6) be certified by the Secretary as qualified to 
deliver care to children.
    Similarly, in order to protect pregnant women from 
substandard physicians, the Committee required that, in order 
to qualify for Federal Medicaid matching funds, physician 
services delivered to pregnant women had to be delivered by 
practitioners who meet just one of the following criteria: (1) 
hold admitting privileges to a hospital participating in 
Medicaid; or (2) be certified in family practice or obstetrics 
by an appropriate specialty board; or (3) have a formal 
consultation and referral arrangement with a certified 
obstetrician or family practitioner; or (4) be employed by, or 
affiliated with, a Federally-qualified health center; or (5) be 
a member of the National Health Service Corps; or (6) be 
certified by the Secretary of HHS as qualified to deliver care 
to pregnant women.
    These minimum Federal quality standards were sensible then 
and remain sensible now.
    This bill merely corrects an oversight--failure to 
explicitly acknowledge that certification by a specialty board 
recognized by the American Osteopathic Association should 
qualify an osteopath to be treated like a physician for 
Medicaid purposes. This, in fact, is HCFA's practice, and the 
Committee wanted to confirm the view that osteopaths provide 
the same quality care as physicians.
    The bill also recognizes that emergency room physicians 
need separate recognition because of their unique 
circumstances.
    Finally, in regard to inclusion of State certification in 
accordance with the Secretary's policies, I fully expect the 
Secretary to carry this out in such a way as to maintain the 
intent of assuring quality that forms the basis for the current 
law and to fashion policies that will assure that children and 
pregnant women do not receive poor quality care at the hands of 
licensed physicians practicing in Medicaid mills or substandard 
managed care plans that are financed with Federal taxpayer 
funds. To do otherwise would be contrary to the intent of this 
Committee in adopting this legislation.
                                                   Henry A. Waxman.