House Approves Medicaid Reform, Digital TV

Proposals were hallmarks of Barton chairmanship

WASHINGTON – The House today approved landmark proposals to save Medicaid and to bring digital television to viewers nationwide, both of which were originally proposed by the Energy and Commerce Committee under U.S. Rep. Joe Barton’s chairmanship.

“The House has now passed two sets of important reforms to telecommunications and Medicaid. Both were complex, long in coming, and dearly needed,” said Barton, R-Texas.

The legislation passed on a vote of 212-206 as the House worked through a final day of debate and votes before adjourning for the Christmas holiday. The digital television provisions and the Medicaid restructuring were contained in a larger budget “reconciliation” bill that also reduced the national deficit.

Barton, who had been released from the hospital earlier Sunday after falling ill on Thursday evening, voted in favor of the bill.

“Legislation that was born in the Energy and Commerce Committee effectively sets February 18, 2009, as the day America goes all digital. The analog television signals that have come into our homes over the air since the birth of TV will end the night before, and a great technical revolution that has been in the making for years will finally be complete,” he said.

“In June 2004, at my first DTV hearing since becoming chairman, I announced that expediting the DTV transition would be a top priority,” Barton noted. “Since June 2004, we have held four more hearings on DTV, including one in May of this year on a staff draft of the legislation. We have heard from government, consumer groups, and many sectors of the communications industry. I believe the legislation we have just passed strikes the right balance on the concerns raised by those witnesses and the members of our committee.

He said that “the DTV legislation brings needed certainty to allow consumers, broadcasters, cable and satellite operators, manufacturers, retailers, and government to prepare for the end of the transition.

“We will have three years to prepare for the transition. That is more than enough time for manufacturers and retailers to move low-cost digital televisions and converter-boxes into the market, for the FCC to complete the channel allocation process, for broadcasters to finalize their digital facilities, and for government and industry to prepare consumers for the transition.”

Barton called the transition “a renaissance of television in America.”

Regarding Medicaid, he pointed out that the program had grown so expansive that it became unsustainable. “The nation’s governors understood the grim future of Medicaid without reform. They told us that Medicaid would begin to bankrupt the states unless some reasonable, common-sense reforms were enacted. Today the House followed the Energy and Commerce Committee’s lead and passed legislation to fix some of the flaws in the Medicaid program to ensure that it can continue to be the safety net that protects our nation's most vulnerable citizens.”

Chairman Barton noted that critics of Medicaid reforms had argued that the changes would harm the poor. “But Medicaid was already hurting the poor,” he countered. “It was perplexing that so many who said they care the most, wanted to do the least. If you wanted Medicaid patients to lose health care, the best thing to do was nothing. I wanted fairness and efficiency from Medicaid, and a vote for reform was a vote to save it. To keep what we have was to cut health care for those who can’t afford it, and certainly can’t afford to lose it.”

Barton pointed out that “between 2002 and 2005, 38 states reduced eligibility; and 34 states reduced benefits. This year, hundreds of thousands of beneficiaries were losing Medicaid eligibility or facing reduced benefits because of state action. Congress could not stand by and do nothing while Medicaid slowly collapsed.”

Specifically the DTV legislation:

• Establishes a February 17, 2009 hard deadline for the end of analog broadcasting, freeing critical spectrum for public safety and wireless broadband use, and is expected to generate at least $10 billion in auction revenues.
• Authorizes the National Telecommunications and Information Administration (NTIA) to create a digital-to-analog converter box program to help over-the-air viewers continue to receive broadcast programming.
  • The bill allocates up to $990 million for the program, which will enable households that make an affirmative request to receive by U.S. mail up to two, $40 converter-box coupons. This will help minimize participation by consumers who do not need a subsidized converter-box.
  • The NTIA may use up to $100 million of the $990 million for administrative costs. Up to $5 million of the administrative funds may be used to educate consumers about the digital television transition and the digital-to-analog converter-box program.
  • If NTIA certifies to Congress that it needs more money to fulfill the program, the overall amount available increases to up to $1.5 billion and the administrative amount available increases to up to $160 million.
• The bill also makes up to $1 billion available for a grant program to help public safety agencies obtain and deploy interoperable communications systems.
• Note: Most consumers should be unaffected by the February 17, 2009 deadline, and will not need an over-the-air converter box.
  • Less than 15 percent of households rely exclusively on over-the-air broadcasts.
  • The remaining 85 percent subscribe to a multichannel video programming distributor (MVPD), such as a cable or satellite operator. Cable and satellite operators can convert digital broadcast programming to analog-viewable format for these households.

The Medicaid reforms are based on recommendations from all 50 governors, Democrats and Republicans alike, and authored by the House Energy and Commerce Committee. They will accomplish the following goals:

1. Give states greater flexibility to provide services - Medicaid covers newborn babies and seniors alike, but state officials are forced to offer a one-size-fits-all program. States will have greater flexibility to better target scarce resources and offer coverage that better meets each patient’s needs. The most vulnerable groups, including children, pregnant women and seniors will see no changes at all.
2. Root out wasteful over spending on pharmaceuticals - The government routinely overpays for prescription drugs for beneficiaries. In fact, Medicaid could pay $5,336 for a prescription that only cost the pharmacist $88 to obtain. The Department of Health and Human Services inspector-general found in 2002 that Medicaid reimbursements exceeded pharmacists' true costs by $1.5 billion. Every dollar wasted on overpayments is a dollar that does not go to treat patients. The bill sets more realistic reimbursement rates for medicines based on the average manufacturers price (AMP). Starting in 2007, the federal government will not pay more than 250 percent of the AMP of the lowest-cost version of a generic drug. For the first time the AMP will be publicly available, which CBO estimates will save taxpayers hundreds of millions of dollars in overpayments, and could also help private health plans negotiate better drug prices.
3. Encourages personal responsibility – Today Medicaid lacks any meaningful co-payment for services, no matter the cost. As a result health care costs predictably take a back seat in today’s “free” system. In a typical example, at one Georgia hospital 29% of emergency room patients were seeking care for common, maladies like ear infections and the flu. That’s roughly 29,000 patients and $5.6 million wasted in 2004 in one ER alone. The legislation lets states enforce a co-payment of as much as 20 percent for a prescription drug or service (but to never exceed 5 percent of a family’s annual income) and allows that amount to be adjusted for inflation. A demonstration program will also allow governors to offer Health Opportunity Accounts modeled after the Health Savings Accounts that are rapidly-growing in the private health care market.
4. No more Medicaid for millionaires - Increasingly middle and upper-income seniors are transferring or hiding assets to appear impoverished and, thus, entitled to Medicaid coverage for long-term care services. The legislation extends the “look-back” period from three to five years to provide greater scrutiny of such “Medicaid planning” financial transactions and bans anyone with more than $750,000 in home equity from Medicaid eligibility altogether. Congress should ensure Medicaid dollars support only the truly needy and encourage long-term care insurance and other options for those who can pay.
5. The bill would also require states to use basic identification documents, like drivers licenses or passports, to better enforce current law and prevent illegal aliens from getting Medicaid coverage.

Other health care issues included these:

Hurricane Katrina Aid – The plan allocates more than $2 billion to help Alabama, Louisiana and Mississippi cover Medicaid expenses. Specifically, the legislation waives the three states’ “match” or share of Medicaid costs incurred between August 28, 2005 and May 15, 2006.

Medicare physician payments – the legislation repeals a scheduled 4.4 percent cut in payments to physicians treating Medicare patients. That cost was offset by reducing payments to Medicare Advantage plans, requiring higher-income Medicare beneficiaries to pay higher premiums, cracking down on the over-use of medical imaging services, lowering payments for home health services and other changes.

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