[House Report 107-547]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-547
======================================================================
MEDICARE MODERNIZATION AND PRESCRIPTION DRUG ACT OF 2002 (SECTION 903:
MEDICAID DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS)
_______
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
ADDITIONAL VIEWS
[To accompany H.R. 4991]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 4991) to amend title XIX of the Social Security
Act to revise disproportionate share hospital payments under
the medicaid program, 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..................................... 4
Statement of General Performance Goals and Objectives............ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 4
Advisory Committee Statement..................................... 4
Constitutional Authority Statement............................... 4
Applicability to Legislative Branch.............................. 5
Section-by-Section Analysis of the Legislation................... 5
Changes in Existing Law Made by the Bill, as Reported............ 5
Additional Views................................................. 7
Purpose and Summary
H.R. 4991 increases Medicaid disproportionate share (DSH)
allotments for States for fiscal year 2003 and beyond.
Background and Need for Legislation
Congress established the Medicaid DSH program in 1981 to
ensure that Medicaid programs provide adequate payments to
hospitals whose patient populations are disproportionately
composed of low income Medicaid and uninsured patients. Recent
analysis demonstrates that despite DSH funding, Medicaid
payments may still fall short of costs incurred by health
facilities in caring for the uninsured and low-income patients.
Due to explosive growth in the Medicaid DSH program,
Congress reduced the federal share of Medicaid DSH spending in
the Balanced Budget Act of 1997 (BBA 97). States were provided
some relief from those cuts in 2000. The Benefits Improvement
and Protection Act (BIPA) provided temporary relief from the
BBA's scheduled reductions for the Medicaid DSH program for the
years 2001 and 2002. However, beginning in fiscal year 2003,
many states would revert back to payment levels consistent with
the 1997 cuts, which would impose a significant reduction in
federal Medicaid DSH allotments. These reductions in DSH
funding could place many safety-net hospitals in severe fiscal
jeopardy and negatively impact the ability to provide care to
indigent and under-served populations.
Hearings
The Committee on Energy and Commerce has not held hearings
on the legislation.
Committee Consideration
On Friday, June 21, 2002, the Full Committee met in open
markup session and favorably ordered reported a Committee Print
on Disproportionate Share Hospital (DSH) Payments by voice
vote, without amendment, a quorum being present. Chairman
Tauzin then introduced H.R. 4991 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 is the record vote taken on an amendment offered on
the measure, including the names of those members voting for
and against. A motion by Mr. Tauzin to order H.R. 4991 reported
to the House, without amendment, was agreed to by a voice vote.
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. 4991 would ensure that states and hospitals receive
increased Medicaid DSH allotments in fiscal year 2003 and
beyond. The legislation would help to lessen the burden that
many state Medicaid budgets are facing with respect to growing
Medicaid costs and impending BBA 97 reductions in DSH
allotments.
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.
4991, to amend title XIX of the Social Security Act to revise
disproportionate share hospital payments under the Medicaid
Program, 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 903. Disproportionate Share Hospital (DSH) Payments
Section 903 would increase DSH allotments for FY 2003 by
setting those amounts at the specified levels in 1923(f)(2) for
FY 2001, increased by the percentage change in the CPI-U for FY
2001. Allotments for FY 2004 and thereafter would be equal to
the allotment for the previous year as calculated by the
committee's provision, increased by 1.7 percent unless the
Secretary determines that the allotment under this provision
will equal (or no longer exceed) the allotment for that state
that would have been in effect under prior law. For those
states, beginning in the first fiscal year that their allotment
would equal or no longer exceed the prior law levels, their
allotment would be equal to the allotment for the previous year
increased by the percentage change in the CPI-U for the
previous year.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) 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 italic, existing law in which no change is
proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
* * * * * * *
ADJUSTMENT IN PAYMENT FOR INPATIENT HOSPITAL SERVICES FURNISHED BY
DISPROPORTIONATE SHARE HOSPITALS
Sec. 1923. (a) * * *
* * * * * * *
(f) Limitation on Federal Financial Participation.--
(1) * * *
* * * * * * *
(3) State dsh allotments for fiscal year 2003 and
thereafter.--
[(A) In general.--The DSH allotment for any
State for fiscal year 2003 and each succeeding
fiscal year is equal to the DSH allotment for
the State for the preceding fiscal year under
paragraph (2) or this paragraph, increased,
subject to subparagraph (B) and paragraph (5),
by the percentage change in the consumer price
index for all urban consumers (all items; U.S.
city average), for the previous fiscal year.]
(A) In general.--The DSH allotment for any
State--
(i) for fiscal year 2003 is equal to
the DSH allotment for the State for
fiscal year 2001 under the table in
paragraph (2), without regard to
paragraph (4), increased, subject to
subparagraph (B) and paragraph (5), by
the percentage change in the consumer
price index for all urban consumers
(all items; U.S. city average), for
fiscal year 2001; and
(ii) for each succeeding fiscal year
is equal to the DSH allotment for the
State for the previous fiscal year
under this subparagraph increased,
subject to subparagraph (B) and
paragraph (5), by 1.7 percent or, in
the case of fiscal years beginning with
the fiscal year specified in
subparagraph (C) for that State, the
percentage change in the consumer price
index for all urban consumers (all
items; U.S. city average), for the
previous fiscal year.
* * * * * * *
(C) Fiscal year specified.--For purposes of
subparagraph (A)(ii), the fiscal year specified
in this subparagraph for a State is the first
fiscal year for which the Secretary estimates
that the DSH allotment for that State will
equal (or no longer exceed) the DSH allotment
for that State under the law as in effect
before the date of the enactment of this
subparagraph.
* * * * * * *
ADDITIONAL VIEWS
In the Balanced Budget Act of 1997, Congress established
limits on payments to the states for Disproportionate Share
Hospitals (DSH). In the case of many states, there was a
precipitous decline in dollars available over the five-year
period. Institutions that are critical to providing services to
low-income Medicaid beneficiaries and uninsured persons have
already absorbed reductions in funding. Public hospitals,
children's hospitals, and private hospitals serving large
numbers of Medicaid and uninsured people cannot weather
additional reductions that are slated to take effect.
This Committee recognized in legislation that passed two
years ago that this decline in available dollars had to be
stopped. We passed legislation that stopped the decline at the
level established for FY 2000, and applied inflationary factors
for the next two fiscal years and beyond. Unfortunately, when
the final legislation was enacted, we ended up with only a two-
year fix, and an intention to resolve the problem before the
original precipitous decline otherwise scheduled for FY 2003
could occur.
We are at the point now where we must act. The situation is
even more dire than we might have anticipated. States are
struggling with budget shortfalls. The effect of unemployment,
loss of revenue because of Federal tax changes, and increasing
health care costs have all put tremendous pressure on state
budgets.
This legislation is a first step, but the relief it
provides is not enough.
We believe that the Committee should continue to build on
the level of funds we established in the legislation of 2000.
To do anything less would have a devastating effect on these
critical DSH institutions and on all the people who depend on
them.
We also believe we should address the issue of ``low-DSH''
states to enable them to provide adequate funding to their
facilities that serve as a critical safety net for poor and
uninsured individuals.
Finally, while we are pleased that the Committee has
decided to take a first step toward addressing the reductions
in DSH payments, we are concerned that the Committee has
neglected other important matters with respect to Medicaid. In
particular, there is bipartisan support in the House for giving
states the option to cover legal immigrant children and
pregnant women under Medicaid and the Children's Health
Insurance Program as well as permanently extending the
transitional medical assistance program (TMA) which provides
health insurance coverage as families transition to the
workforce from welfare. Assistance for low-income Medicare
beneficiaries with incomes between 120% and 135% of poverty is
set to expire this year and should be reinstated as well.
Nearly a million children risk losing health insurance coverage
unless issues within the Children's Health Insurance Program
are addressed this year. This program was passed out of this
Committee with bipartisan support in 1997 and has a funding
shortfall of $3 billion over three years, as well as a formula
for redistributing state allotments which expires at the end of
2002. The Committee should act to preserve the gains in
coverage made under this program.
Due to the offering of Committee Prints on separate
subjects amendments offered by Members were ruled out of order
as being nongermane. This is something, however, that we
believe the Committee and Congress as a whole should take up
this year.
John D. Dingell.
Sherrod Brown.
Henry A. Waxman.
Rick Boucher.
Edolphus Towns.
Gene Green.
Frank Pallone, Jr.
Michael F. Doyle.
Karen McCarthy.
Thomas M. Barrett.
Christopher John.
Bobby L. Rush.
Ted Strickland.
Anna G. Eshoo.
Lois Capps.
Peter Deutsch.
Eliot L. Engel.
Bart Stupak.
Ralph M. Hall.
Jane Harman.
Tom Sawyer.
Diana DeGette.
Bart Gordon.