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107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-544
MEDICARE MODERNIZATION AND PRESCRIPTION DRUG ACT OF 2002 (SECTION 901:
NATIONAL BIPARTISAN COMMISSION ON THE FUTURE OF MEDICAID)
June 26, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
R E P O R T
[To accompany H.R. 4961]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 4961) to establish a National Bipartisan
Commission on the Future of Medicaid, having considered the
same, report favorably thereon without amendment and recommend
that the bill do pass.
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 2
Committee Votes.................................................. 2
Committee Oversight Findings..................................... 5
Statement of General Performance Goals and Objectives............ 5
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Committee Cost Estimate.......................................... 5
Congressional Budget Office Estimate............................. 5
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Constitutional Authority Statement............................... 5
Applicability to Legislative Branch.............................. 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
Dissenting Views................................................. 7
Purpose and Summary
The purpose of H.R. 4961, to establish a National
Bipartisan Commission on the Future of Medicaid, is to analyze
the financial problems currently facing the Medicaid program,
identify both causes and consequences of increasing Medicaid
costs, and make recommendations for resolving these problems.
The Commission will focus particularly on promoting enhanced
efficiencies through the utilization of competitive, private
enterprise models and analyzing the impact of impending
demographic changes on the Medicaid program.
Background and Need for Legislation
Medicaid is a joint state and federal program that provides
health care coverage for 44 million Americans. Last year, total
Medicaid expenditures were approximately $245 billion and they
are projected to increase by 13.4 percent for fiscal year 2002.
As a result of soaring Medicaid costs, coupled with
declining tax revenues, many states are facing serious
budgetary crises. Approximately 40 states are currently facing
budget shortfalls that cumulatively are estimated to be between
$40 and $50 billion. In addition, 28 states are experiencing
shortfalls totaling $7.1 billion in their Medicaid budgets.
Medicaid also faces serious problems due to demographic
changes. As the overall population continues to age, it is
expected that Medicaid will see dramatic increases in spending
for pharmaceuticals as well as the number of recipients who are
eligible for long-term nursing care.
The Committee on Energy and Commerce has not held hearings
on the legislation.
On Wednesday, June 19, 2002, the Full Committee met in open
markup session and favorably ordered reported a Committee Print
on Medicaid, Public Health, and Other Health Provisions by a
roll-call vote of 29 yeas and 20 nays, without amendment, a
quorum being present. Chairman Tauzin then introduced H.R. 4961
to reflect the Committee's action.
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
following are the recorded votes taken on the motion by Mr.
Tauzin to order H.R. 4961 reported to the House, and on
amendments offered to the measure, including the names of those
members voting for and against.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has not held oversight
or legislative hearings on this legislation.
Statement of General Performance Goals and Objectives
H.R. 4961 creates a bipartisan Commission that will analyze
the financial issues currently facing the Medicaid program,
make recommendations regarding necessary structural reforms and
aid in developing a bipartisan consensus in support of reform
to ensure the continuing viability of the program.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
4961, to establish a National Bipartisan Commission on the
Future of Medicaid, would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974, which is
included in the report to accompany H.R. 4984.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the cost estimate provided by the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 is included in the report to
accompany H.R. 4984.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act. The estimate is included in the report to accompany H.R.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 901. National Bipartisan Commission of the Future of Medicaid
Section 901 establishes the National Bipartisan Commission
on the Future of Medicaid. The duties of the Commission will be
to analyze the long-term financial condition of the Medicaid
program, identify causes and consequences of increasing
Medicaid costs, analyze policies to ensure the financial
integrity of the Medicaid program and the provision of
appropriate benefits under such a program, and make
recommendations to promote enhanced efficiencies and for
establishing the appropriate balance between benefits,
payments, state and federal contributions, and recipient cost-
sharing obligations. The Commission will also make
recommendations on the impact of promoting increased
utilization of competitive, private enterprise models and the
financing of prescription drug benefits currently covered under
state Medicaid programs. The Commission will also analyze the
impact of impending demographic changes on Medicaid benefits,
including long term care, and make recommendations about how
best to divide state and federal responsibilities for funding
This section states that the Commission will be composed of
17 members. The ability to select appointees will be divided
among the President, the Senate Majority and Minority leaders,
the Speaker of the House and the House Minority leader. The
President, Senate Majority Leader, and Speaker of the House of
Representatives will jointly appoint the Chairman of the
Commission. Members of the Commission must be appointed by
December 1, 2002. Additionally, the Chairman will appoint an
Executive Director of the Commission, who may appoint such
staff as is considered appropriate.
The Commission may hold hearings, request GAO reports,
obtain CBO and CMS Actuary cost estimates, and obtain any
information directly from any Federal agency that is necessary
to carry out its duties.
Finally, this section states that by March 1, 2004, the
Commission shall submit a report to the President and Congress
that will contain the recommendations, findings, and
conclusions of the Commission.
Changes in Existing Law Made by the Bill, as Reported
This legislation does not amend any existing Federal
H.R. 4961 establishes a Commission to study Medicaid,
modeled after the National Bipartisan Commission on the Future
of Medicare. That former Commission was designed from the start
to provide a predetermined result: privatize Medicare.
We do not wish to see a Medicare Commission process
repeated, and for this reason offered an amendment in Committee
to improve upon the politicized structure and mission statement
of the Commission in the Republican bill.
This amendment diversified the membership of the Commission
to include individuals with disabilities, low-income elderly or
pregnant women--populations for whom Medicaid plays a critical
role. This amendment also added provider representation to the
Commission. Each year Congress gives additional payments to
Medicare providers, but almost never turns its attention to
Medicaid. This is a serious problem, one that many members hear
about frequently at home.
The General Accounting Office (GAO) in a September 2001
report wrote, ``Nationally, low Medicaid physician fees and
participation have been long-standing areas of concern. In a
recent national survey, pediatricians cited low fees as one of
the most important factors in their decision to limit
As an example, New York only relatively recently increased
fees for physician office visits from $7 to $30--the first such
increase in 30 years. As we recognize from the concern voiced
over physician reimbursement in Medicare, cuts in payment or
inappropriately low payment translate directly into problems
with access to care for beneficiaries. This same problem exists
in Medicaid, only worse.
GAO also found in its September 2001 report that in the
four states visited, ``Medicaid fees were consistently lower
than Medicare fees for the same preventive services . . . .''
Adding provider representation to this Commission--nursing
homes, hospitals, federally qualified health centers and
physicians--will enable us to elevate this discussion about
adequacy of payments and access to a level of attention it
The Commission is also flawed because its mission statement
is unbalanced. The Republican bill has the Commission study
virtually only cost containment, without looking at
improvements in quality and access. To be balanced, any
Commission studying Medicaid should also examine ensuring
beneficiary access to the program, improving reimbursement to
providers, protecting patients' rights in managed care,
improving patient safety in nursing homes, and improving
provision of mental health and dental services.
We do need to look into the Medicaid program and we should
take on this responsibility first in this Committee. Medicaid
is a health insurance program of critical importance in this
country. It covers as many people as the Medicare program;
providing health insurance to more than one in seven Americans
or about 40 million people. We can certainly make improvements
in the program such as adding coverage of low-income legal
immigrant families or improving provider reimbursement. This
Committee has passed a number of such improvements in the past
few years--giving states new coverage options for women with
breast or cervical cancer or working disabled.
We do not believe that a program of such importance to so
many should be victimized by a Commission set to provide a
predetermined result. Instead, we should ensure that the
appropriate parties are represented on the Commission and that
critical subjects like provider payment and beneficiary access
to care get the consideration they deserve. The Commission
created in the Republican bill does neither, so we oppose it.
John D. Dingell.
Henry A. Waxman.
Frank Pallone, Jr.
Bobby L. Rush.
Anna G. Eshoo.
Eliot L. Engel.