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Legislative Counsel Announcement

To: Ann Huston
From: Peter Thomas and Jeremy Allen
Date: October 19, 2001
Re: Energy and Commerce Health Subcommittee Marks Up Regulatory Reform Bill

On Wednesday, October 17, the House Energy and Commerce Subcommittee on Health marked up H.R. 3046, the Medicare Regulatory, Appeals, Contracting and Education Reform Act of 2001. This legislation was introduced by Reps. Pat Toomey (R-PA) and Shelley Berkley (D-NV), the authors of the Medicare Education and Regulatory Fairness Act of 2001, introduced earlier this year. This bill is considered to be another iteration of that popular bill, which has 244 cosponsors in the House.

This bill is different in several ways from the bill introduced by Ways and Means Health Subcommittee Chair Nancy Johnson (R-CT) and ranking member Fortney "Pete" Stark (D-CA) and recently approved by the full Ways and Means Committee. For example, the Ways and Means bill creates a Medicare Provider Ombudsman to assist providers in complying with Medicare regulations. The Ways and Means bill also places limits on the use of extrapolation to recoup overpayments made to providers. Both bills limit the ability of the Secretary to promulgate regulations - the Ways and Means bill only permits regulations to be issued on a quarterly basis, while the Energy and Commerce bill permits those regulations to be issued once a month.

However, both bills provide for increased flexibility in contracting with Medicare administrative contractors, revise the Medicare appeals process, and make improvements in education and outreach.

During the markup, Rep. Richard Burr (R-NC), offered an amendment in the nature of a substitute. Rep. Burr highlighted some of the important aspects of it, including:

· Limitations on recoupment of payments by contractors until a qualified independent contractor has issued a reconsideration of the appeal;
· A change in the standard administrative contractors must obey in order to avoid liability (changes the standard to "gross negligence or intent to defraud the United States" from "gross negligence, recklessness, or knowledge, or intent to defraud the United States); and
· The creation of a process for exceptions to national coverage determinations under special medical circumstances.

The amendment in the nature of a substitute was adopted unanimously. Two other members offered amendments, although they were immediately withdrawn. Rep. John Shadegg (R-AZ) offered an amendment to revise EMTALA based on recommendations made by the HHS Office of Inspector General and the General Accounting Office.

Rep. Charlie Norwood (R-GA) discussed several amendments. Although he withdrew his amendments, he said he would offer the amendments and force a vote at the full committee mark up if his concerns were not addressed in the manager's amendment. His amendments are as follows:

· An amendment limiting the ability of the Centers for Medicare and Medicaid Services to use extrapolation to recover payments from providers;
· An amendment that would clarify that only appropriately qualified physicians could review decisions related to medical necessity made by another physician;
· An amendment to strike language in the legislation allowing Medicare contractors to be prosecuted under the False Claims Act in their dealings with providers;
· A dentist-specific amendment; and
· An amendment that would permit physicians to treat their relatives and get reimbursed by Medicare (a practice that is currently prohibited).

The amendment in the nature of a substitute and the overall bill passed subcommittee unanimously by voice vote. The full Energy and Commerce Committee will likely consider the bill next week, although the recent anthrax scares on Capitol Hill could delay the markup.