House Committee Adds Six More Major Changes to Reconciliation Bill

Janice Simmons, March 23, 2010

Before the House approved the reconciliation bill on Sunday, the House Rules Committee added provisions that will affect insurers and payments.

The Senate will debate these changes and the dozens of other provisions in the bill starting today. [Check out an earlier report about other parts of the reconciliation bill.]

Here are six major changes:

Medical devices. Fees for medical device makers would be delayed to 2013 (from 2010). The sector earlier won a reduced industry tax of $20 billion—down from $40 billion. The bill now contains a 2.9% sales tax—rather than an overall industry fee. Certain consumer products, such as eyeglasses and contact lenses, that are found in retail and drug stores are exempt from the tax.

Physician payment expenses. The bill inserts a new section (1108) that accelerates the phase in of Medicare physician practice expense adjustment for areas "with below average practice expense payment rates."

Hospital payment increase. The bill inserts a new section (1109) that provides an additional payment under the Medicare inpatient prospective payment systems to hospitals located in counties in the bottom quartile as ranked "by risk-adjusted spending per Medicare enrollee."

Adult children. Health insurance plans will be required to offer dependent coverage for adult children through the age of 26 years; insurers are prohibited from denying coverage to children because of pre existing health problems, and can no longer put lifetime dollar limits on coverage and cancel policies—except in cases of fraud.

Tax exempt insurers. Tax-exempt insurers, such as Kaiser Permanente and Geisinger, would pay a new fee levied on insurers on half of their premiums.

Senate Bill Adjustment. Last year, to help win the vote of Sen. Ben Nelson (D-NE), the Senate reform bill included $100 million in federal Medicaid assistance only for Nebraska. The House committee removed the provision, subsequently dubbed the "Cornhusker Kickback," from the revision bill.

Janice Simmons Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at
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