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Senate Budget Resolution Includes Seven Health-Related Features

Although the Senate-adopted budget resolution upholds the 2010 health care overhaul, Republicans added several repeal and oversight provisions through amendment votes on the floor and in committee.

Democrats blocked an amendment to repeal the entire health care law (PL 111-148, PL 111-152), but three smaller repeal measures made their way through. Senate Democrats also added to the resolution (S Con Res 8) adopted last week several provisions that affect the health care law and health entitlement programs.

Here are seven noteworthy health-related aspects of the Senate’s budget resolution, in no particular order:

1. Medicare wage index

By dividing Democrats, Oklahoma Republican Tom Coburn won adoption of an amendment that would eliminate a provision in the overhaul that he says unfairly favors Massachusetts hospitals.

The health care law altered calculations for a wage index used to determine Medicare payments to hospitals. Coburn and Missouri Democrat Claire McCaskill said that change would result in cutting reimbursements for hospitals in every state except Massachusetts by altering the way the administration enforces a budget neutrality requirement. Hospital associations in more than 20 states lobbied for its elimination.

The Senate adopted the amendment, 68-31, with Democrats divided and all Republicans supporting the change. Coburn and McCaskill have introduced separate legislation (S 183) to sunset the law’s change.

2. Flexible spending accounts

The Senate agreed by voice vote to repeal a $2,500 cap on flexible spending accounts established in the law. The amendment, from Mike Johanns, R-Neb., also repealed a requirement that patients have a prescription to buy over-the-counter drugs with money from their flexible spending accounts or health savings accounts.

3. Repeal of device tax

In one of the most surprising budget resolution votes, 79 senators, including 33 Democrats and independent Angus King of Maine, voted to adopt an amendment that would repeal the law’s 2.3 percent excise tax on medical devices.

Utah Republican Orrin G. Hatch and Minnesota Democrat Amy Klobuchar, who have introduced legislation to repeal the tax, said they would continue to work to get a vote on their bill. And Minority Leader Mitch McConnell, R-Ky. — in hopes of forcing Senate Democrats to vote on a bill that, unlike a budget resolution, could actually become law — on Monday called on the House to pass a repeal of the device tax quickly.

4. CBO reports

In its markup of the resolution, the Senate Budget Committee adopted an amendment from Wisconsin Republican Ron Johnson that would require the Congressional Budget Office to report annually on the budgetary effects of Americans losing employer-sponsored insurance and buying insurance through the law’s exchanges. The report would analyze the effects if 30 percent, 50 percent and 100 percent of Americans switched to the exchanges.

The resolution also instructs the CBO to report any changes in direct spending and revenue associated with the overhaul, including its net effect on the deficit.

5. Children’s health

Bill Nelson, D-Fla., incorporated an amendment providing for legislation to support coordinated care and improve health care outcomes for children with complex medical problems who are in Medicaid.

The Senate also adopted by voice vote an amendment from Benjamin L. Cardin, D-Md., to expand access to prevention-based oral health care services for children in Medicaid.

6. Medicare and Medicaid

The Senate budget resolution rejects many of the entitlement program changes contained in the House-passed GOP budget resolution (H Con Res 25), although it does include $265 billion in cuts to Medicare and $10 billion to Medicaid over 10 years.

For Medicare, the budget suggests expanding on delivery system changes in the health care law, including bundled payments and value-based purchasing. It would also end the 2 percent cuts to Medicare plans and providers that happen under sequestration.

The resolution contains an amendment from Debbie Stabenow, D-Mich., that would allow for legislation related to improved access to Medicare benefits, including measures that would prohibit turning Medicare into a voucher program.

7. Medicare doctors’ payment formula

The resolution would allow for a permanent replacement for the sustainable growth rate formula, which dictates reimbursement rates for Medicare physicians. For years, lawmakers have acted to avoid the rate cuts called for by the formula, but so far they have been unable to agree on a replacement.

Melissa Attias contributed to this report.

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