Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?
104th Congress                                            Rept. 104-845
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
      MEDICARE ENROLLMENT COMPOSITION WAIVER FOR THE WELLNESS PLAN

                                _______
                                

               September 25, 1996.--Ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                        [To accompany H.R. 4012]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, to whom was referred the bill 
(H.R. 4012) to waive temporarily the Medicare enrollment 
composition rules for The Wellness Plan, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Rollcall Votes...................................................     2
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight.....................     3
New Budget Authority and Tax Expenditures........................     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Inflationary Impact Statement....................................     4
Advisory Committee Statement.....................................     4
Section-by-Section Analysis of the Legislation...................     4
Changes in Existing Law Made by the Bill, as Reported............     4

                          Purpose and Summary

    Section 1876(f) of the Social Security Act prohibits 
Medicare risk-contracting plans from enrolling more than 50 
percent of their participants from the Medicare and Medicaid 
populations. H.R. 4012 provides a waiver of this section of the 
Social Security Act to The Wellness Plan of Michigan through 
December 31, 1999.

                  Background and Need for Legislation

    Under Section 1876(f) of the Social Security Act, Medicare 
risk-contracting plans (managed care plans) are subject to 
rules regarding the enrollment of beneficiaries. One of these 
rules, commonly known as the 50/50 rule, requires that Medicare 
and Medicaid enrollees may not exceed 50 percent of plan 
enrollment. One of the main reasons for the establishment of 
this rule was to serve as a proxy for a plan's quality of care.
    The Wellness Plan (TWP) is a State-licensed and Federally-
qualified health maintenance organization serving several 
counties in Michigan, including the Detroit Metropolitan 
Statistical Area. TWP currently has approximately 155,000 
enrollees consisting of: 141,000 Medicaid enrollees; 12,000 
commercial enrollees, and 2,000 Medicare enrollees. TWP has had 
a Health Care Prepayment Plan (HCPP) contract with Medicare 
since 1993. A HCPP is a Medicare Part B-only cost contract.
    As of January 1, 1996, HCPP enrollment and establishment of 
new HCPP contracts were effectively frozen as a result of the 
Social Security and Technical Corrections Act of 1994. 
Therefore, TWP cannot enroll any more Medicare beneficiaries. 
Many HCPP contractors are converting to a Medicare risk 
contract. TWP is ineligible for this option because of the 50/
50 rule. As noted above, TWP's Medicaid enrollment is well over 
the 50 percent limit. Also, the Health Care Financing 
Administration does not have the authority to grant TWP an 
administrative waiver.
    The legislation will enable TWP to continue to serve 
Medicare beneficiaries.

                                Hearings

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

                        Committee Consideration

    On September 18, 1996, the Committee on Commerce met in 
open markup session to consider H.R. 4012, a bill to waive 
temporarily the Medicare enrollment composition rules for The 
Wellness Plan. A unanimous consent request by Mr. Bliley to 
discharge the Subcommittee on Health and Environment from 
further consideration of H.R. 4012 and to proceed to its 
immediate consideration by the Full Committee was agreed to 
without objection. The Full Committee then ordered H.R. 4012 
reported to the House, without amendment, 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 on amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 4012 
reported. A motion by Mr. Bliley to order H.R. 4012 reported to 
the House, without amendment, was agreed to by a voice vote, a 
quorum being present.

                      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 4012 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 25, 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. 4012, a bill to waive the Medicare enrollment 
composition rule for the Wellness Plan, a health care 
prepayment plan (HCPP) in the Detroit area, as ordered reported 
by the Committee on Commerce on September 18, 1996. This bill 
would permit the Wellness Plan to contract with Medicare on a 
risk or cost basis during contract periods through December 31, 
1999, without being subject to the requirement that persons 
covered by Medicare or Medicaid constitute no more than 50 
percent of the plan's enrollment.
    CBO estimates that waiver of the enrollment composition 
rule would increase Medicare outlays by less than $0.5 million 
per year in fiscal years 1997 through 2002, and by a cumulative 
total of about $1 million through fiscal year 2002. Pay-as-you-
go procedures would apply because the bill could affect direct 
spending.
    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 further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Tom Bradley.
            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. 4012 
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. Waiver of Medicare enrollment composition rules for the 
        Wellness Plan

    Section 1 waives Section 1876(f)(1) of the Social Security 
Act (the 50/50 rule) with respect to the Wellness Plan through 
December 31, 1999.

         Changes in Existing Law Made by the Bill, as Reported

    This legislation does not amend any existing Federal 
statute.