Ways and Means Committee Reports H.R. 4954, the "Medicare
Modernization and Prescription Drug Act of 2002"
On June 19, 2002, the Ways and Means Committee approved H.R.
4954, the "Medicare Modernization and Prescription Drug Act of
2002," by a vote of 22-16. The bill would provide a voluntary
prescription drug benefit as an entitlement to Medicare
beneficiaries.
Following are descriptions of provisions in the bill that may
affect SSA.
Collection of Premiums
- Would provide that, at a beneficiary's option, premiums for
the prescription drug plan would be deducted from the
beneficiary's Social Security benefit.
Premium and Cost-Sharing Subsidies for Low-Income Individuals
and Eligibility Determinations
- Would provide that individuals whose incomes are less than 150
percent of poverty would have their prescription drug plan premium
fully subsidized and their cost-sharing limited to no more than $2
per prescription for generic drug and $5 per prescription for
non-preferred drug. Individuals with incomes between 150-175
percent of poverty and resources below twice the SSI resource
limits would be eligible for a sliding scale reduction in their
prescription drug plan premiums and reduced cost-sharing.
- Would require States to make such income determinations under
State Medicaid plans as a condition of receipt of Federal finances
for their Medicaid programs. Also provides that SSA make the
income determinations. (The amendment language is not clear as to
when or how SSA would make the determinations. Explanatory
material from the Subcommittee says that the bill would provide
"Medicare beneficiaries the option of having low-income subsidy
eligibility determination made by SSA.")
- Would authorize appropriations for "such sums as necessary"
for SSA to make low-income eligibility determinations.
Beneficiary Outreach Demonstration Program
- Would require the Secretary of Health and Human Services (HHS)
to establish a 3?year demonstration project where Medicare
specialists who are HHS employees would be placed in at least six
SSA offices to advise and assist Medicare beneficiaries. The
Secretary would be required to evaluate the project with respect
to beneficiary utilization, beneficiary satisfaction, and cost
effectiveness, and recommend whether the demonstration should be
established on a permanent basis.
Transfer of Responsibility for Medicare Appeals
- Would require SSA and the Secretary of HHS to develop a plan
by 10/1/03 to transfer the functions of Administrative Law Judges
(ALJs) responsible for hearing Medicare cases from SSA to HHS. GAO
is to evaluate the plan within 6 months of its receipt and report
to Congress. Transfer of adjudicative authority is to be
implemented between 7/1/04 and 10/1/04 (i.e., by the end of FY
2004).
- Other provisions would require that the:
- Secretary of HHS is to assure the independence of the
transferred ALJ functions from CMS and its contractors;
- Secretary shall provide an appropriate geographic
distribution of judges;
- Secretary shall have the authority to hire ALJs to hear
cases giving priority to judges with experience hearing Medicare
cases (subject to amounts provided in advance in appropriations
act); and amounts payable to SSA for ALJs for performing the
transferred functions shall be payable to the Secretary;
- Secretary and SSA will make arrangements with respect to the
transferred functions to share office space, support staff, and
other resources, with the appropriate reimbursement from the HI
and SMI trust funds;
- Would authorize increased appropriated funds from the HI/SMI
funds to the Secretary necessary for FY 2004 (the year the
transfer is to take place) and future years to increase the number
of ALJs, improve education and training opportunities, and
increase staff at the Departmental Appeals Board.
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