The Reconciliation Act, H. R. 4872, has been posted on the House Rules Committee Web site. This would be the act that has amendments to the Senate health care reform bill passed last December. Both measures may be voted on this weekend. The 153-page text of the Amendment in the Nature of a Substitute includes the following amendments:

Coverage

--Affordability: Changes the financing for premiums/cost sharing for individuals with incomes up to 400% of the federal poverty level. Tax credits are improved to make premiums more affordable as a percent of income. Starting in 2019, constrains the growth in tax credits if premiums are growing faster than the consumer price index.

--Individual responsibility: Modifies the assessment for those individuals who choose not to obtain insurance by (a) exempting the income below the filing threshold, (b) lowering the flat payment from $495 to $325 in 2015 and from $750 to $695 in 2016 and (c) raising the percent of income as an alternative payment amount from 0.5 to 1.0% in 2014, 1.0 to 2.0% in 2015, and 2.0 to 2.5% for 2016 and subsequent years.

---Employer responsibility: The assessment payment calculation for employers with 50 or more full-time equivalent workers (FTE) will be assisted by allowing the first 30 full time employees to be subtracted from the payment calculation. The applicable payment amount for firms with more than 50 FTEs that do not offer coverage is changed from $750 to $2,000 per full-time employee.

--Income definitions: Modifies the definition of income that is used for purposes of subsidy eligibility and the individual responsibility requirement to information that is currently reported on the Form 1040 (modified adjusted gross income) and to the present-law income tax return filing thresholds.

---Implementation funding: Provides $1 billion to Health and Human Services for financing the administrative costs of reform implementation.

Medicare

-- Medicare Part D "doughnut hole" fix: Provides a $250 rebate for all Medicare Part D enrollees who enter the doughnut hole in 2010. Will close the doughnut hole by 2020 with progressive discounts on brand-name and generic drugs up to 75%.

--Medicare Advantage payments: Freezes Medicare Advantage payments in 2011 and in 2012 reduces Medicare Advantage benchmarks relative to current levels. An incentive system is created to increase payments to high quality plans by at least 5%. CMS authority is extended to adjust risk scores in Medicare Advantage for observed differences in coding patterns relative to fee for service.

--Disproportionate share hospital (DSH) payments: The start of cuts in Medicare to disproportionate share hospital cuts begins fiscal year 2014 but the ten-year reduction is lowered by $3 billion.

--Physician-ownership referral: Prohibition of self-referrals to physician-owned hospitals would begin December 31, 2010 rather than August 1.

--Payment for Imaging Services: The assumed utilization rate of advanced diagnostic imaging services is set at 75 percent.

Medicaid

--Federal funding for States: Removes the Medicaid matching funding for Nebraska. Provides federal Medicaid matching payments to newly-eligible individuals at the following rates in all states (except expansion states): 100% in 2014, 2015, and 2016; 95% in 2017; 94% in 2018; 93% in 2019; and 90% thereafter. For expansion states, the state share of the costs of covering childless adults is reduced by 50% in 2014, 60% in 2015, 70% in 2016, 80% in 2017, 90% in 2018.

--Payments to primary care physicians: Medicaid payment rates to primary care physicians for furnishing primary care services will be no less than 100% of Medicare payment rates in 2013 and 2014. The Federal medical assistance percentage to a state for primary care services will be 100%.

--Disproportionate share hospital payments: The federal Medicaid DSH payment reduction is lowered from $18.1 billion to $14.1 billion, which will begin in 2014.

--Delay in Community First Choice Option: the date of the option for State Medicaid programs to cover attendant care services is delayed until October 1, 2011.

Reducing Fraud, Waste, and Abuse

--CMS-IRS data match to identify fraudulent providers: Allows the Secretary of Treasury to share IRS data with HHS to help screen and identify fraudulent providers, or providers with seriously delinquent tax debts.

--Funding to fight fraud, waste and abuse: Funding for the Health Care Fraud and Abuse Control Fund is increased by $250 million over the next decade.

--90-day period of enhanced oversight for initial claims of DME suppliers: HHS may withhold payment and conduct enhanced oversight for a 90-day period in cases where a significant risk of fraudulent activities among DME suppliers has been identified.

Revenues

--High-cost plan excise tax: A reduction in revenue by delaying the application of the tax until 2018, increasing the dollar thresholds to $10,200 for single coverage and $27,500 for family coverage, excluding stand-alone dental and vision plans from the tax; and permitting an employer to reduce the cost of the coverage when applying the tax if the employer's age and gender demographics are not representative of the age and gender demographics of a national work force.

--Delay of the annual limitation on contributions to a health FSA: Delayed until 2013.

--Brand name pharmaceuticals: Delays the industry fee on sales of brand name pharmaceuticals to 2011.

--Excise tax on medical device manufacturers: Excise tax of 2.9 percent on first sale for use of medical devices is delayed by two years to 2013; some devices are exempt including eyeglasses, contact lenses, hearing aids and other generally purchased by the general public at retail for individual use.

--Health insurance providers: Delays the industry fee by three years to 2014.

Other

--Insurance Reforms: Insurance reforms including prohibition of lifetime limits, prohibition on rescissions, limitations on excessive waiting periods, and a requirement to provide coverage for non-dependent children up to age 26 is applied to all "grandfathered" existing health insurance plans commencing six months after enactment. For "grandfathered" group health plans, prohibition of pre-existing condition exclusions begin in 2014, prohibition on annual limits begin six months after enactment, and are prohibited starting in 2014.

--Community Health Centers: Increases mandatory funding for community health centers to $11 billion over 2011 - 2015.

The Reconciliation Act may be accessed at: http://www.rules.house.gov/

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