Senator Urges Debt Panel To Avoid Making Cuts to Federal Prevention Fund

Last week, Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-Iowa) sent a letter to the debt panel asking it not to cut the Prevention and Public Health Fund created by the federal health reform law, National Journal reports (McCarthy, National Journal, 10/12).

Details on Debt Panel, Public Health Fund

As part of the federal budget agreement, the 12-member panel -- also known as the "supercommittee" -- must develop and pass by the end of November $1.5 trillion in federal spending cuts over 10 years. Failure to do so would trigger a series of across-the-board cuts (California Healthline, 9/13).

A provision in the federal health reform law provides $15 billion over 10 years for the fund, which supplies grants for preventive care and public health issues.

Republicans have said the program is so nonspecific that it permits HHS to use the funding for questionable purposes (California Healthline, 4/14).

Details of Harkin's Letter

Harkin wrote that the fund will make U.S. residents healthier and help reduce the national debt (Pecquet, "Healthwatch," The Hill, 10/12).

He added that the panel should protect health benefits in its deficit-reduction recommendations rather than make more cuts.
He wrote, "I strongly urge you not to target programs that serve as the foundation for these historic reforms, like the Prevention Fund, funding for states to build insurance exchanges or cost-sharing subsidies that allow the previously uninsured to purchase affordable coverage" (National Journal, 10/12).

The letter contradicts President Obama's recommendation that lawmakers reduce the $15 billion fund by $3.5 billion ("Healthwatch," The Hill, 10/12).

Harkin recommends that the panel find savings by easing the development process for generic versions of biologic drugs and by expanding a drug discount program for hospitals that treat low-income patients.

According to National Journal, Rep. Henry Waxman (D-Calif.), ranking member of the House Energy and Commerce Committee, has a similar request in a draft letter he is circulating that asks the panel to preserve health benefits rather than cut them (National Journal, 10/12).

Debt Panel Wants To Consider SGR

In related news, sources familiar with the debt panel's discussions indicate that members have a "strong interest" in fixing the sustainable growth rate formula that determines Medicare reimbursement rates for physicians, Reuters reports (Smith, Reuters, 10/12).

Since 2002, Congress annually has passed a series of short-term bills to block scheduled cuts to Medicare reimbursement rates under the SGR.

The most recent "doc-fix" bill, enacted in December 2010, is scheduled to expire on Jan. 1, 2012, at which point physicians face a 29.4% payment rate cut (California Healthline, 10/7).

If the panel seeks a 10-year fix for the SGR, it would need to make up the $300 billion cost through additional spending cuts or tax increases on top of its original spending goals (Reuters, 10/12).

Senators Consider Recommendations for Panel

Meanwhile, senators are looking for bipartisan consensus on cost-cutting strategies that they can recommend to the debt panel (Norman, CQ HealthBeat, 10/12).

House and Senate committees must submit their deficit-reduction recommendations to the panel by the end of this week (Winfield Cunningham, Washington Times, 10/11).

Lawmakers at a Senate Special Committee on Aging hearing on Wednesday discussed recommending means testing for higher-income Medicare beneficiaries. Sen. Bob Corker (R-Tenn.) said he believes means testing will have to be among the ideas considered by the panel.

He asked members of the aging committee to send him lists of additional strategies for achieving savings in the Medicare program that could be supported by both Democrats and Republicans (CQ HealthBeat, 10/12).