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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 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [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.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     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.

                                Hearings

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

                        Committee Consideration

    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.

                            Committee Votes

    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 
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 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. 
4984.

                      Advisory Committee Statement

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

                   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 
these benefits.
    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 
statute.

                            DISSENTING VIEWS

    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 
participation.''
    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 
deserves.
    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.
                                   Sherrod Brown.
                                   Henry A. Waxman.
                                   Rick Boucher.
                                   Edolphus Towns.
                                   Gene Green.
                                   Frank Pallone, Jr.
                                   Mike Doyle.
                                   Karen McCarthy.
                                   Tom Barrett.
                                   Chris John.
                                   Bobby L. Rush.
                                   Ted Strickland.
                                   Anna G. Eshoo.
                                   Lois Capps.
                                   Peter Deutsch.
                                   Eliot L. Engel.
                                   Bart Stupak.
                                   Tom Sawyer.
                                   Diana DeGette.
                                   Bart Gordon.