Medicaid: The Federal Medical Assistance Percentage (FMAP)

April Grady
Specialist in Health Care Financing

Medicaid is a health insurance program jointly funded by the federal government and the states. Historically, eligibility for Medicaid was generally limited to low-income children, pregnant women, parents of dependent children, the elderly, and people with disabilities; however, recent changes will soon require coverage for childless adults as well. The federal government's share of a state's expenditures for most Medicaid services is called the federal medical assistance percentage (FMAP). The remainder is referred to as the nonfederal share, or state share. 

Generally determined annually, the FMAP is designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita incomes relative to the national average (and vice versa for states with higher per capita incomes). For FY2011, regular FMAPs—that is, excluding the impact of a temporary increase—range from 50.00% to 74.73%. 

States are currently receiving a temporary FMAP increase that was included in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) and later extended by H.R. 1586 (which was signed by the President on August 10, 2010). It runs for 11 quarters, from the first quarter of FY2009 through the third quarter of FY2011 (i.e., October 2008 through June 2011), subject to certain requirements. The Administration estimates that the original ARRA provision will increase federal Medicaid payments to states by about $91 billion, and the Congressional Budget Office estimates that the six-month extension in H.R. 1586 will provide an additional $16 billion. Although ARRA FMAPs were originally set to end December 31, 2010, about 30 states assumed that a six-month extension would be provided when they planned their SFY2011 budgets (most of which began on July 1). 

The recently enacted Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as amended by P.L. 111-152) also contains a number of provisions that affect FMAPs. Most notably, it provides FMAPs of up to 100% for certain newly eligible individuals. It also provides—subject to various requirements—increased FMAPs for certain disaster-affected states, primary care payment rate increases, specified preventive services and immunizations, smoking cessation services for pregnant women, specified home and community-based services, and health home services for certain people with chronic conditions.


Date of Report: August 11, 2010
Number of Pages: 22
Order Number: RL32950
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The U.S. Infant Mortality Rate: International Comparisons, Underlying Factors, and Federal Programs

Elayne J. Heisler
Analyst in Health Services

The infant mortality rate (IMR)—the number of deaths occurring in the first year of life per 1,000 live births—is a widely used proxy for the health status of a nation, and is commonly used for international comparisons. As of 2006, the U.S. IMR was 6.7, compared to the Organization for Economic Cooperation and Development (OECD) average of 5.2. The relatively high U.S. rate— and the number of infant deaths it indicates—concerns some policymakers. In addition, there is concern that the U.S. IMR has leveled off after four decades of decline. Reducing the U.S. IMR has been—and continues to be—a recognized public health objective. 

Researchers and policymakers debate the various factors that may explain the high U.S. IMR relative to other developed countries and its recent stagnation. Potential factors include international differences in the recording of live births, different rates of low birthweight and short gestational age births, and racial and ethnic disparities. Researchers conclude that international recording differences do not explain the relatively high U.S. IMR. In addition, the data suggest that racial disparities may only partially explain the relatively high U.S. IMR. Instead, researchers suggest that higher U.S. rates of low birthweight and short gestational age births may explain the relatively high U.S. IMR. 

This report examines the U.S. IMR. It identifies the top three causes of U.S. infant death— congenital malformations, disorders related to low birthweight and short gestational age, and sudden infant death syndrome (SIDS). The report focuses on low birthweight and short gestational age, because the United States has relatively high and increasing rates of these births, and research has found that these births can be reduced through policy interventions. 

The U.S. IMR varies geographically and is influenced by a number of factors, including the mother's demographic characteristics (e.g., education, income, or age) and health and health system characteristics. In general, southern states have the highest IMRs, and states in the West and in New England have the lowest. The higher IMRs in southern states may be partially explained by higher rates of low birthweight and short gestational age births in these states. In addition, the racial and ethnic composition of a state's population affects its IMR because of higher IMRs among certain racial and ethnic groups. The IMR is also influenced by health and health system characteristics, including the mother's health behaviors, such as drinking and smoking, and her access to and use of prenatal care. 

A number of federal programs that aim to improve the health status, and the economic and social circumstances of low-income women and children, may reduce the U.S. IMR. These programs include Healthy Start, Maternal and Child Health Services Block Grants, Medicaid, and the State Children's Health Insurance Program (CHIP). Evaluating whether a particular program reduces the IMR is challenging because individuals may be eligible for multiple programs and because programs target those with IMR risk. Given this, it is difficult to determine the effectiveness of a single program, and it is difficult to determine whether findings that a program does not reduce the IMR are due to characteristics of the program or to characteristics of its participants. 

Recently enacted health reform legislation—the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148)—either establishes or expands existing programs to reduce the IMR. For example, the law includes programs to prevent teen pregnancy and requirements to increase reimbursement for smoking cessation among pregnant women enrolled in Medicaid.


Date of Report: August 24, 2010
Number of Pages: 33
Order Number: R41378
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Legal Issues Relating to the Disposal of Dispensed Controlled Substances

Brian T. Yeh
Legislative Attorney

According to the White House Office of National Drug Control Policy, the intentional use of prescription drugs for non-medical purposes is the fastest-growing drug problem in the country and the second-most common form of illicit drug abuse among teenagers in the United States, behind marijuana use. Young adults and teenagers may find their parents' prescription drugs in unsecured medicine cabinets or other obvious locations in the home, or they may retrieve expired or unwanted medication from the trash. It is believed that properly disposing of unwanted medications would help prevent prescription drug abuse by reducing the accessibility and availability of such drugs. Yet throwing prescription medications into the trash or flushing them down the toilet may not be environmentally desirable. In response, many local communities and states have implemented pharmaceutical disposal programs (often referred to as drug "take-back" programs) that collect unused and unwanted medications from patients for incineration or other method of destruction that complies with federal and state laws and regulations, including those relating to public health and the environment. 

Prescription drugs may be categorized as either controlled substance medication or noncontrolled substance medication. Pharmaceutical controlled substances, such as narcotic pain relievers OxyContin® and Vicodin®, are among the most commonly abused prescription drugs. However, community take-back programs usually only accept non-controlled substance medication, in compliance with the federal Controlled Substances Act. This statute comprehensively governs all distributions of controlled substances, and it currently does not allow for a patient to transfer a controlled substance to another entity for any purpose, including disposal of the drug. (Federal regulations provide a limited exception to this general prohibition— local law enforcement may obtain a waiver from the federal Drug Enforcement Administration to collect unused controlled substances from patients and destroy them.) As a consequence, patients seeking to reduce the amount of unwanted controlled substances in their possession have few alternative disposal options beyond discarding or flushing them. 

Several bills have been introduced in the 111th Congress that would create a legal framework governing disposal of controlled substances that have been dispensed to patients. The bills with the most legislative action to date have been the Secure and Responsible Drug Disposal Act of 2010 (S. 3397) and the Safe Drug Disposal Act of 2010 (H.R. 5809). The House Energy and Commerce Committee ordered H.R. 5809 to be reported on July 28, 2010. The Senate passed S. 3397 by unanimous consent on August 3, 2010. The two measures have similar provisions. H.R. 5809 and S. 3397 would amend the Controlled Substances Act to allow a patient to deliver controlled substances to an entity that is authorized by federal law to dispose of them, providing that such disposal occurs in accordance with regulations issued by the Attorney General to prevent diversion of controlled substances. The Attorney General would be required, in developing those regulations, to take into consideration the public health and safety, as well as the ease and cost of drug disposal program implementation and participation by various communities. Also, the Attorney General would have discretion to issue regulations that authorize long-term care facilities to dispose of controlled substances on behalf of patients who reside in those facilities. Other related bills include the Safe Drug Disposal Act of 2009 (H.R. 1191, S. 1336), the Secure and Responsible Drug Disposal Act of 2009 (H.R. 1359, S. 1292), and the Safe Prescription Drug Disposal and Education Act (H.R. 5925).


Date of Report: August 9, 2010
Number of Pages: 18
Order Number: R40548
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The Americans with Disabilities Act (ADA): Final Rule Amending Title II and Title III Regulations

Nancy Lee Jones
Legislative Attorney

The Americans with Disabilities Act (ADA) has as its purpose "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." On July 26, 2010, the 20th anniversary of the passage of the ADA, the Department of Justice (DOJ) issued final rules amending the existing regulations under ADA title II (prohibiting discrimination against individuals with disabilities by state and local governments) and ADA title III (prohibiting discrimination against individuals with disabilities by places of public accommodations). The new regulations for title II and title III are similar. They both adopt accessibility standards consistent with the minimum guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board (Access Board). In addition, the regulations include more detailed standards for service animals and power-driven mobility devices, ticketing, effective communication, and provide for an element-by-element "safe harbor" in certain circumstances. The effective date for the regulations generally is six months after publication, but where barrier removal is at issue, the effective date is 18 months after publication. These final regulations only address issues that were in the 2008 notice of proposed rulemaking. DOJ has noted that it intends to engage in additional rulemaking in certain areas, including equipment and furniture, next generation 9-1-1, movie captioning and video description, and accessibility of websites operated by public entities or places of public accommodation.


Date of Report: August 23, 2010
Number of Pages: 9
Order Number: R41376
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Health Care Fraud and Abuse Laws Affecting Medicare and Medicaid: An Overview

Jennifer Staman
Legislative Attorney

A number of federal statutes aim to combat fraud and abuse in federally funded health care programs such as Medicare and Medicaid. Using these statutes, the federal government has been able to recover billions of dollars lost due to fraudulent activities. In March 2010, Congress enacted comprehensive health care reform legislation. One focus of this legislation, the Patient Protection and Affordable Care Act (PPACA) as amended, is improved health care fraud and abuse enforcement. PPACA, among other things, creates new health care fraud enforcement tools and expands upon the types of prohibited conduct. This report provides an overview of some of the more commonly used statutes used to fight health care fraud and abuse and discusses some of the changes made to these statutes by PPACA. 

Title XI of the Social Security Act contains Medicare and Medicaid program-related anti-fraud provisions, which impose civil penalties, criminal penalties, as well as exclusions from federal health care programs on persons who engage in certain types of misconduct. PPACA amends these administrative sanctions and authorizes the imposition of several new civil monetary penalties and exclusions. 

Under the federal anti-kickback statute, it is a felony for a person to knowingly and willfully offer, pay, solicit, or receive anything of value (i.e., "remuneration") in return for a referral or to induce generation of business reimbursable under a federal health care program.The statute prohibits both the offer or payment of remuneration for patient referrals, as well as the offer or payment of anything of value in return for purchasing, leasing, ordering, or arranging for, or recommending the purchase, lease, or ordering of any item or service that is reimbursable by a federal health care program. PPACA revises the evidentiary standard under the anti-kickback statute and eliminates the requirement of actual knowledge of, or specific intent to commit a violation of the statute. This amendment may make it easier for the government to prove its case. 

The Stark law and its implementing regulations prohibit physician self-referrals for certain health services that may be paid for by Medicare or Medicaid. Under the Stark law, if (1) a physician (or an immediate family member of a physician) has a "financial relationship" with an entity, the physician may not make a referral to the entity for the furnishing of these health services for which payment may be made under Medicare or Medicaid, and (2) the entity may not bill the federal health care program or any individual or entity for services furnished pursuant to a prohibited referral. PPACA limits certain exceptions to the Stark law. 

The federal False Claims Act (FCA) imposes civil liability on persons who knowingly submit a false or fraudulent claim or engage in various types of misconduct involving federal government money or property. Health care program false claims often arise in billing, including billing for services not rendered, billing for unnecessary medical services, double billing for the same service or equipment, or billing for services at a higher rate than provided ("upcoding"). Civil actions may be brought in federal district court under the FCA by the Attorney General or by a person known as a relator (i.e., a "whistleblower"), for the person and for the U.S. Government, in what is termed a qui tam action. PPACA appears to make it easier for certain relators to bring qui tam actions, thus potentially allowing some FCA actions to proceed that would have been dismissed under prior law.


Date of Report: August 10, 2010
Number of Pages: 14
Order Number: RS22743
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Select Bush Administration Medicaid Rulemakings: Congressional and Administrative Actions

Elicia J. Herz
Specialist in Health Care Financing

Vanessa K. Burrows
Legislative Attorney

This report provides a summary of seven proposed, interim final, and final rules affecting the Medicaid program that were issued by the George W. Bush Administration during 2007 and 2008. These rules addressed Medicaid and graduate medical education, cost limits on public providers, provider taxes, rehabilitation services, case management, school-based administration and transportation services, and outpatient hospital services. Six of the seven rules (excluding the rule on outpatient hospital services) were under a congressional moratorium on further administrative action until April 1, 2009. The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) extended the existing moratorium on the final or interim final regulations on case management services, provider taxes, and school-based administration and transportation services until July 1, 2009. In addition, P.L. 111-5 prohibited all administrative actions to implement the final rule on outpatient hospital services until after June 30, 2009. This law also included a "sense of Congress" that the Secretary of Health and Human Services (HHS) should not promulgate final regulations for the cost limit on public providers, graduate medical education, and rehabilitation services. 

Other actions regarding these rules have occurred since they were first proposed or issued by the Bush Administration. The final rule affecting cost limits on public providers was vacated by a federal judge in May 2008. The Obama Administration has taken additional actions on the remaining rules. The three rules regarding school-based administration and transportation services, outpatient hospital services, and case management have been rescinded in part or altogether. Enforcement of a portion of the rule on provider taxes was delayed until June 30, 2010. Finally, two other proposed rules on rehabilitation services and payments for graduate medical education were withdrawn. These rules were not affected by the health reform legislation that became law earlier this year—the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148), provisions of which were amended by the Health Care and Education Reconciliation Act of 2010 (HCERA, P.L. 111-152). 


Date of Report: July 30, 2010
Number of Pages: 12
Order Number: RL34764
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Coal Mine Safety and Health

Linda Levine
Specialist in Labor Economics

Fatal injuries associated with coal mine accidents fell almost continually between 1925 and 2005. In 2006, however, the number of fatalities more than doubled to 47, which prompted the 109th Congress to enact the Mine Improvement and New Emergency Response Act (MINER, P.L. 109- 236). Fatalities declined in subsequent years and dropped to a low of 18 in 2009. After the deaths of 29 coal miners at Massey Energy's Upper Big Branch (UBB) mine in West Virginia on April 5, 2010, the 111th Congress turned its attention to the issue of mine safety.


Following the methane explosion at Sago mine in West Virginia in January 2006, the Mine Safety and Health Administration (MSHA) was criticized for its slow pace of rulemaking earlier in the decade. MSHA standard-setting activity quickened after enactment of the MINER act in June 2006. The amendment of the Federal Mine Safety and Health Act of 1977 (the Mine act) imposed several rulemaking deadlines on MSHA. The agency published all the requisite final standards except one that required two-way wireless communications systems and electronic tracking systems be part of emergency response plans (ERPs) by June 2009. In January 2009, MSHA issued a letter stating that fully wireless communications technology was not likely to be technologically feasible by the deadline so ERPs should include alternative systems. 

Some Members characterized passage of the MINER act as a first step. In 2008, the House passed the Supplemental Mine Improvement and New Emergency Response Act (S-MINER) as amended. Some of the bill's provisions addressed issues that arose from the Crandall Canyon Mine incident in Utah in August 2007. S-MINER was opposed by the Bush Administration. 

In 2010, one issue policymakers have focused on is the greatly increased number of citations for violations and related penalty assessments being contested by mine operators. The UBB mine incident brought to the fore the potential implications for miner safety of operators filing appeals with the Federal Mine Safety and Health Review Commission (FMSHRC). Through publication of an interim rule and a notice of proposed rulemaking in spring 2010, FMSHRC intends to speed its civil penalty proceedings and thereby more quickly issue final orders that MSHA can include when determining whether a mine should be placed in pattern of violations (POV) status. In addition, H.R. 5663 as amended and passed by the Committee on Education and Labor on July 21, 2010, changes the POV criteria, allows withdrawal of all persons from coal or other mines in POV status, and raises the number of mandated annual inspections at those mines. It also strengthens whistleblower protections for miners and other workers covered by the Occupational Safety and Health (OSH) Act, and amends civil and criminal penalty provisions in the Mine and OSH acts. On July 29, S. 3671 was introduced. It is similar in most respects to H.R. 5663 as introduced, including amendment of the OSH act. And, the Supplemental Appropriations Act, 2010 (H.R. 4899), signed into law on July 29, provides $3.8 million to FMSHRC to address its backlog and $18.2 million to the Labor Department for such activities as conference litigation related to contested cases and investigation of the UBB mine incident.

Date of Report: August 6, 2010
Number of Pages: 19
Order Number: RL34429
Price: $29.95

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The FDA’s Authority to Recall Products

Vanessa K. Burrows
Legislative Attorney

The Food and Drug Administration (FDA) has fielded increasing numbers of questions regarding recalls of unsafe imports, including jalapeño peppers, pet food, the blood thinner heparin, and toothpaste. Additionally, several domestic drug and food products—such as over-the-counter children's medications, adult pain relief and allergy drugs, spinach, chili, and peanut products— have been voluntarily recalled by businesses in the last few years. Recalls may decrease consumer confidence in the recalling company, food imports, or product safety agencies such as the FDA. The products later subject to a recall may have sickened or killed people or pets. The FDA has the authority to order recalls of four types of products: infant formula, medical devices, human tissue products, and tobacco products. The agency may request that a company voluntarily recall other FDA-regulated products, such as food, drugs, and cosmetics. 

Congress has demonstrated a significant interest in the issue of food safety and recalls, holding several hearings and introducing many pieces of legislation. The 110th Congress passed P.L. 110- 85, the FDA Amendments Act of 2007 (FDAAA), which contained provisions addressing communications and information postings during a food recall. The 111th Congress passed the Family Smoking Prevention and Tobacco Control Act, P.L. 111-31, which provided authority for the Secretary of the Department of Health and Human Services, acting through the FDA, to order a recall of tobacco products if there is a reasonable probability that the tobacco product contains a manufacturing or other defect not ordinarily contained in tobacco products on the market that would cause serious, adverse health consequences or death. 

Additionally, the 111th Congress has introduced several bills that would grant the FDA the ability to order recalls of food and other products, including H.R. 841, the Protect Consumers Act of 2009; H.R. 875, the Food Safety Modernization Act of 2009; H.R. 999, the Keeping America's Food Safe Act of 2009; H.R. 2726, the Counterfeit Drug Enforcement Act of 2009; H.R. 2749, the Food Safety Enhancement Act of 2009; S. 510, the FDA Food Safety Modernization Act; and S. 3690, the Drug Safety and Accountability Act of 2010. H.R. 2749 is a revised version of H.R. 759, the Food and Drug Administration Globalization Act of 2009. 

In July 2009, the House passed H.R. 2749, a comprehensive food safety measure that would provide the FDA with authority to require recalls of food products after issuing an order to immediately cease distribution of a food (either after an opportunity for an informal hearing or on an emergency basis if there is credible evidence that a food presents an imminent threat of serious adverse health consequences or death), require facility food safety plans to describe their procedures for recalling articles of food, and enable the FDA to assess and collect fees from entities for the fiscal year in which the entity is subject to a food recall. S. 510 would similarly enable the FDA to order a recall of a food product and would require the FDA to assess and collect fees to cover food recall activities associated with a recall order. It has been reported by the Senate Committee on Health, Education, Labor, and Pensions and is expected to see floor action this year. 

This report provides an overview of the FDA's statutory authority with regard to the products that the agency can recall, as well as FDA regulations for designating the particular class of recall, publicizing and monitoring the effectiveness of recalls, and carrying out recalls. .


Date of Report: August 4, 2010
Number of Pages: 18
Order Number: RL34167
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The Family and Medical Leave Act: Current Legislative Activity

Linda Levine
Specialist in Labor Economics

Time off to care for one's own health problems or those of family members is not a job-protected entitlement. Thus, employees sometimes have jeopardized their continued employment to be away from the workplace to address health-related matters. With passage of the Family and Medical Leave Act of 1993 (FMLA, P.L. 103-3), Congress mandated in Title I that private employers with at least 50 employees and public employers of any size provide job-protected unpaid leave for 12 workweeks in a 12-month period to employees who meet the length-ofservice and hours-of-work eligibility requirement in order to care for their own, a child's, spouse's, or parent's serious health condition; to care for a newborn, newly adopted, or newly placed foster child; and upon the birth or placement of an adopted or foster child. Employees in the federal government's executive branch generally are covered under Title II of the FMLA, which is administered by the Office of Personnel Management (OPM). 

The Department of Labor, which administers Title I of the act, replaced its 1995 regulation effective January 16, 2009. The final rule contains many changes and addresses regulatory issues raised by enactment of amendments to the FMLA in the National Defense Authorization Act (NDAA) of FY2008. The NDAA provided (1) 12 workweeks of FMLA leave to Title I FMLAeligible employees dealing with issues arising from family members in the Guard or Reserves being called to active duty as a result of a qualifying exigency and (2) 26 workweeks of FMLA leave to Title I and Title II FMLA-eligible employees and next of kin caring for seriously injured or ill service members in the Armed Forces, Guard, or Reserves. Relatedly, in August 2009, OPM proposed regulations about military family caregiver leave for eligible civil service employees. 

In October 2009, the President signed into law the NDAA for FY2010, which contained further changes to the FMLA. P.L. 111-84 extends qualifying exigency leave to FMLA-eligible family members of regular and reserve members of the Armed Forces deployed to a foreign country and extends military family caregiver leave to eligible family members and next of kin of recent veterans of the Armed Forces, Guard, or Reserves. These provisions apply to employers covered by Title I and Title II of the FMLA. 

The Airline Flight Crew Technical Corrections Act was the only other bill to amend the FMLA that advanced beyond committee referral in the 110th Congress. The 111th Congress approved the reintroduced bill, which the President signed in December 2009 (P.L. 111-119). The law recognizes that because the work hours of flight attendants and pilots were for the purpose of FMLA eligibility being calculated based on in-flight time only, full-time flight attendants and pilots usually work less than 1,250 hours and were therefore unable to take leave under the act. 

Other bills introduced during the 111th Congress would, among other things, effectively increase the number of employees eligible to take FMLA leave by such means as changing the hours-ofwork requirement, adding new reasons for time off, and increasing the groups of eligible employees. Bills include H.R. 389, H.R. 626/S. 354, H.R. 824, S. 3680, H.R. 2776, and H.R. 5944.


Date of Report: August 3, 2010
Number of Pages: 18
Order Number: RL31760
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Medicare Durable Medical Equipment: The Competitive Bidding Program

Paulette C. Morgan
Specialist in Health Care Financing

The Medicare Supplementary Medical Insurance Program (Part B) currently covers a wide variety of durable medical equipment, prosthetics, orthotics, and other medical supplies (DMEPOS) if they are medically necessary and are prescribed by a physician. 

Durable medical equipment (DME) is equipment that (1) can withstand repeated use, (2) is used to serve a medical purpose, (3) generally is not useful in the absence of an illness or injury, and (4) is appropriate for use in the home. Examples include hospital beds, blood glucose monitors, and wheelchairs. Prosthetic and orthotic devices (PO) are items that replace all or part of an internal body organ, such as colostomy bags, as well as such items as leg braces and artificial legs, arms, and eyes. Medicare also covers some items or supplies (S), such as disposable surgical dressings that do not meet the definition of DME or PO. 

Medicare generally pays for most DMEPOS on the basis of fee schedules. Unless otherwise specified by Congress, fee schedule amounts are updated each year by a measure of price inflation. However, investigations have shown that Medicare pays above-market prices for certain items of DME. Such overpayments may be due partly to the fee schedule mechanism of payment, which does not reflect market changes, such as new and less-expensive technologies, changes in production or supplier costs, or variations in prices in comparable locations. 

Congress has enacted legislation to establish a Medicare competitive acquisition program (competitive bidding) under which prices for selected DMEPOS sold in specified areas would be determined not by a fee schedule, but by suppliers' bids. The first round of the competitive bidding program began on July 1, 2008, but was halted, due to implementation concerns. DMEPOS suppliers submitted new bids for the first round "rebid" in late October of 2009. The bidding window closed in December of that same year. Under current estimations by the Centers for Medicare and Medicaid Services (CMS), the program will start in January of 2011 in nine metropolitan areas. 

Competitive bidding has been shown to decrease prices for DMEPOS, which could lead to savings for the Medicare program and lower cost sharing for the beneficiaries who use the items and services. Evidence from the competitive bidding demonstration also suggests that competition did not deteriorate beneficiary access to DMEPOS, or the quality and product selection available to them. 

However, opponents may note that the implementation has been problematic, with poor communication and an inadequate bid submission system. It remains to be seen whether new legislative requirements (MIPPA, P.L. 110-275) and administration efforts will result in the effective implementation of the program. Finally, the competitive bidding program will result in fewer suppliers participating with Medicare. In general, Members of Congress often closely scrutinize or fail to support programs that have the potential to adversely affect companies or beneficiaries in their districts. 


Date of Report: August 6, 2010
Number of Pages: 21
Order Number: R41211
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Temporary Federal High Risk Health Insurance Pool Program

Mark Newsom
Analyst in Health Care Financing

This report briefly describes the temporary federal high risk pool (HRP) program established by the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as amended). Under PPACA, the federal HRP program is intended to help individuals with preexisting conditions who have been uninsured for six or more months to obtain health insurance coverage before 2014. States can run the program or elect to have the Department of Health and Human Services (HHS) operate the program in their states. The majority of states (29 states and DC) contracted to operate their own HRPs. HHS administers the HRPs in 21 states, under the Pre-Existing Condition Insurance Plan (PCIP) name. 

To be a qualified HRP, the high insurance coverage must have an actuarial value (the average percentage of expenses that the plan covers) at least equal to 65% of total allowed costs, and out-of- pocket costs cannot exceed $5,950 for an individual in 2010. The premiums must be established at a standard rate for a standard population, and age rating cannot exceed a factor of 4 to 1. Claims and administrative costs will be subsidized by the federal government. 

PPACA appropriates $5 billion of federal funds to support the program, available beginning on July 1, 2010, until the program ends on January 1, 2014. Several observers think this will not be enough to cover the costs of the program. HHS has proposed allocating funds to states by using a combination of factors, including nonelderly population, nonelderly uninsured, and geographic cost as a guide, with the intention of reallocating funds based on actual enrollment and expenditure experiences. The HHS Secretary has the authority to make any program adjustments necessary to eliminate or prevent any deficit. 

This report provides an overview of the temporary federal high risk pool program and will be periodically updated to reflect any legislative or regulatory changes.


Date of Report: July 28, 2010
Number of Pages: 19
Order Number: R41235
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Health Insurance Premium Assistance for the Unemployed: The American Recovery and Reinvestment Act of 2009

Janemarie Mulvey, Coordinator
Specialist in Aging and Income Security

Hinda Chaikind
Specialist in Health Care Financing

Bernadette Fernandez
Analyst in Health Care Financing

As the nation enters its third year of the current economic recession, the unemployment rate is currently near 10%. One consequence of unemployment is that people can lose their employer sponsored health insurance coverage. The 111th Congress has passed legislation that begins to address this problem. The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) includes provisions to subsidize health insurance coverage through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and expand tax credits to unemployed workers through the Health Coverage Tax Credit (HCTC). ARRA includes COBRA premium subsidies of 65% to help the unemployed afford health insurance coverage from their former employer. Initially, the subsidy was available for up to 9 months to those individuals who meet the income test and who are involuntarily terminated on or after September 1, 2008, and before January 1, 2010. On December 19, 2009, the Department of Defense Appropriations Act 2010 (P.L. 111-118) extended the eligibility period for the COBRA subsidy by an additional two months (through February 28, 2010) and the maximum period for receiving the subsidy was also extended an additional six months (from 9 to 15 months). On March 2, the Temporary Extension Act of 2010 (P.L. 111-144) was enacted into law and extended eligibility for COBRA premiums subsidies to individuals who are involuntarily terminated through March 31, 2010. On April 15, the Continuing Extension Act of 2010 (P.L. 111-157) was enacted into law, extending eligibility for the COBRA premium subsidy to individuals who are involuntarily terminated through May 31, 2010. 

Under current law, individuals who are involuntarily terminated after May 31, 2010, would not be eligible for the COBRA premium subsidy. To address this issue, two legislative proposals have been introduced. H.R. 5647 would extend eligibility for the COBRA premium subsidy to those who were involuntarily terminated through September 30, 2010, and S. 3548 would extend eligibility through November 30, 2010. 

In addition, a number of provisions in ARRA make modifications to the HCTC and the Trade Adjustment Assistance (TAA) programs. These include increasing the HCTC from 65% to 80% of the cost of qualified health insurance, and expanding the eligibility criteria for TAA assistance (which, in turn, expands HCTC eligibility) to include service sector and public agency workers. 

Whether the unemployed will benefit from the premium assistance programs in ARRA depends on their individual circumstances. Those that are involuntarily terminated and lose their employer-sponsored health insurance may be eligible for the subsidy. Other individuals, although considered to be unemployed, will not meet the criteria of involuntary termination. This group includes unemployed individuals (1) who were terminated but did not have employer-sponsored coverage to begin with, (2) who voluntarily left their jobs, and (3) who are just entering or reentering the workforce. For those unemployed without health insurance coverage, they either rely on spouses and family members, purchase insurance in the individual market, or remain uninsured. It is estimated that 55% of those who were involuntarily terminated most likely had employer-sponsored coverage prior to being laid off and may benefit from the COBRA subsidies. In addition to those who are unemployed, there are other at-risk groups who are not eligible for the premium assistance provisions in ARRA but may have lost health insurance coverage due to changes in their work status. These groups include involuntary part-time workers and discouraged workers who are no longer seeking employment. .


Date of Report: August 3, 2010
Number of Pages: 15
Order Number: R40420
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The Americans with Disabilities Act: Application to the Internet

Nancy Lee Jones
Legislative Attorney

The Americans with Disabilities Act (ADA) provides broad nondiscrimination protection in employment, public services, public accommodations, and services operated by private entities, transportation, and telecommunications for individuals with disabilities. As stated in the act, its purpose is "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." 

However, the ADA, enacted on July 26, 1990, prior to widespread use of the Internet, does not specifically cover the Internet, and the issue of coverage has not been definitively resolved. The Supreme Court has not addressed this issue, although there are some lower court decisions. The cases that directly discuss the ADA's application to the Internet vary in their conclusions about coverage.


Date of Report: August 5, 2010
Number of Pages: 14
Order Number: R40462
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Health Care: Constitutional Rights and Legislative Powers

Kathleen S. Swendiman
Legislative Attorney

The health care reform debate raises many complex issues including those of coverage, accessibility, cost, accountability, and quality of health care. Underlying these policy considerations are issues regarding the status of health care as a constitutional or legal right. This report analyzes constitutional and legal issues pertaining to a right to health care, as well as the power of Congress to enact and fund health care programs. Following the recent passage of the Patient Protection and Affordable Care Act, P.L. 111-148, legal issues have been raised regarding the power of Congress to mandate that individuals purchase health insurance, and the ability of states to "nullify" or "opt out" of such a requirement. These issues are also discussed. 

The United States Constitution does not set forth an explicit right to health care. While the Supreme Court would likely find that the Constitution provides a right to obtain health care services at one's own expense from willing providers, the Supreme Court has never interpreted the Constitution as guaranteeing a right to health care services from the government for those who cannot afford it. The Supreme Court has, however, held that the government has an obligation to provide medical care in certain limited circumstances, such as for prisoners. 

While the United States Constitution and Supreme Court interpretations do not identify a constitutional right to health care for those who cannot afford it, Congress has enacted numerous statutes, such as Medicare, Medicaid, and the Children's Health Insurance Program, that establish and define specific statutory rights of individuals to receive health care services from the government. As a major component of many health care entitlement statutes, Congress has provided funding to pay for the health services provided under law. Most of these statutes have been enacted pursuant to Congress's authority to "make all Laws which shall be necessary and proper" to carry out its mandate "to … provide for the … general Welfare." The power to spend for the general welfare is one of the broadest grants of authority to Congress in the U.S. Constitution. The Supreme Court accords considerable deference to a legislative decision by Congress that a particular health care spending program provides for the general welfare. 

Recently, Congress enacted comprehensive health care reform legislation, P.L. 111-148, which includes a requirement, effective in 2014, that individuals purchase health insurance, and which significantly expands the Medicaid program. Several lawsuits have been filed challenging the power of Congress to enact an individual mandate under the Commerce Clause of the U.S. Constitution. In addition, several states have passed laws attempting to "nullify" or "opt out" of the federal individual health insurance mandate. Direct conflicts between federal and state laws would raise constitutional issues which are likely to be resolved in favor of the federal law under the Supremacy Clause of the U.S. Constitution. 

A number of state constitutions contain provisions relating to health and the provision of health care services. State constitutions may provide constitutional rights that are more expansive than those found under the federal Constitution since federal rights set the minimum standards for the states.


Date of Report: August 3, 2010
Number of Pages: 17
Order Number: R40846
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Medicare Physician Payment Updates and the Sustainable Growth Rate (SGR) System

Jim Hahn
Analyst in Health Care Financing

Each year since 2002, the statutory method for determining the annual updates to the Medicare physician fee schedule, known as the sustainable growth rate (SGR) system, has resulted in a reduction in the reimbursement rates (or a "negative update"). With the exception of 2002, when a 4.8% decrease was applied, Congress has passed a series of bills to override the reductions. The SGR system was established because of the concern that the Medicare fee schedule itself would not adequately constrain overall increases in spending for physicians' services. While the fee schedule limits the amount that Medicare will pay for each service, there are no limits on the volume or mix of services. The SGR system was intended to serve as a restraint on aggregate spending. If expenditures over a period are less than the cumulative spending target for the period, the update is increased. However, if spending exceeds the cumulative spending target over a certain period, future updates are reduced to bring spending back in line with the target. 

In the first few years of the SGR system, the actual expenditures did not exceed the targets and the updates to the physician fee schedule were close to the Medicare economic index (MEI, a price index of inputs required to produce physician services) in the first two years (2.3% in 1998 and 1999, compared with a MEI of 2.2% in 1998 and 2.3% in 1999). For the next two years, in 2000 and 2001, the actual physician fee schedule update was more than twice the MEI for those years (5.5% update vs. MEI of 2.4% in 2000, 5.0% update vs. MEI of 2.1% in 2001). However, beginning in 2002, the actual expenditure exceeded allowed targets and the discrepancy has grown with each year, resulting in a series of ever-larger cuts under the formula. 

Some criticisms of the SGR system point to purported flaws in the technical details behind the formula, while others have just expressed displeasure with the resultant outcome. Although modifications have been proposed to replace the SGR system, no proposal has garnered sufficient support and almost all proposals would be expensive to implement compared against the current baseline, which necessarily assumes that significant cuts to the fee schedule will occur. 

Legislative activity in the current session of Congress includes several bills. The FY2010 Defense Appropriations Act delayed the implementation of the reductions for two months, through February 28, 2010. The Statutory Pay-As-You-Go Act of 2010 (P.L. 111-139) exempts the amount it would cost to freeze payments for five years from PAYGO rules. H.R. 4691, which became law on March 2, 2010, delayed the payment cuts through March 31, 2010. On April 15, the Senate passed an amended version of H.R. 4851 that extended the payment cut delay through May 31, 2010. The House passed the amended bill, and the President signed P.L. 111-157 into law that day. On June 25, 2010, several weeks after the expiration of the extension created by the Continuing Extension Act, an amended version of H.R. 3962 was signed into law that increases fee schedule payments 2.2% retroactive to June 1 and continuing through November 30, 2010.


Date of Report: August 6, 2010
Number of Pages: 23
Order Number: R40907
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Preexisting Exclusion Provisions for Children and Dependent Coverage under the Patient Protection and Affordable Care Act (PPACA)

Hinda Chaikind
Specialist in Health Care Financing

Bernadette Fernandez
Analyst in Health Care Financing

Under the Patient Protection and Affordable Care Act (P.L. 111-148, PPACA, as amended), a number of provisions directly affect access to health insurance coverage. Hereafter, "PPACA" will refer to PPACA, as amended. This report provides a description of two of the provisions in PPACA that are targeted toward younger individuals, for plan years beginning six months after date of enactment (i.e., the plan year beginning after September 23, 2010). PPACA does not allow preexisting condition exclusions for children under age 19, and the law also requires plans to continue to make dependent coverage available up to age 26.


Date of Report: July 28, 2010
Number of Pages: 9
Order Number: R41220
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Grandfathered Health Plans Under the Patient Protection and Affordable Care Act (PPACA)

Bernadette Fernandez
Analyst in Health Care Financing

The Patient Protection and Affordable Care Act (P.L. 111-148, PPACA),1 as amended, includes provisions for the grandfathering of existing health insurance plans. Given that most Americans had private health insurance coverage on the date of enactment of PPACA, most Americans' health coverage will be affected by the grandfathering provisions. This report describes grandfathered plans and summarizes the PPACA insurance reforms that will affect such plans, including the requirements concerning medical loss ratios, dependent coverage, and preexisting health condition coverage. It also discusses issues addressed during the regulation promulgation process, including the possible loss of grandfathering status.


Date of Report: July 23, 2010
Number of Pages: 8
Order Number: R41166
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Appropriations and Fund Transfers in the Patient Protection and Affordable Care Act (PPACA)

C. Stephen Redhead
Specialist in Health Policy

On March 23, 2010, President Obama signed into law a comprehensive health care reform bill, the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148). The following week, on March 30, 2010, the President signed the Health Care and Education Reconciliation Act of 2010 (HCERA; P.L. 111-152), which amended various health care and revenue provisions in PPACA. 

Among its many provisions, PPACA (as amended by HCERA) restructures the private health insurance market, sets minimum standards for health coverage, creates a mandate for most U.S. residents to obtain health insurance, and provides for the establishment by 2014 of insurance exchanges through which certain individuals and families will be able to receive federal subsidies to reduce the cost of purchasing that coverage. In addition, the new law expands eligibility for Medicaid; reduces the growth in Medicare spending that had been projected under preexisting law; imposes an excise tax on insurance plans found to have high premiums; and makes other changes to the federal tax code, Medicare, Medicaid, and numerous other programs. 

In addition, PPACA (as amended) appropriates or transfers from the Medicare Part A and Part B trust funds billions of dollars to support new or existing grant programs and other activities. This report summarizes those appropriations and fund transfers. They include funding for a temporary insurance program for individuals who have been uninsured for several months and have a preexisting condition, as well as funding for states to plan and establish exchanges. PPACA also provides funding for various Medicare and Medicaid demonstration programs, for the creation of a Center for Medicare and Medicaid Innovation to test and implement innovative payment and service delivery models, and for an independent board to provide Congress with proposals for reducing Medicare cost growth and improving quality of care for Medicare beneficiaries. 

Among other provisions, the new health reform law appropriates funding for health workforce and maternal and child health programs, and establishes three multi-billion dollar funds. The first fund will provide a total of $11 billion over five years in supplementary funding for community health centers and the National Health Service Corps. (A separate appropriation provides $1.5 billion for health center construction and renovation.) The second fund will support comparative effectiveness research through FY2019 with a mixture of appropriations and fund transfers. The third fund, which is funded in perpetuity, is to support prevention, wellness, and other public health-related programs and activities authorized under the Public Health Service Act.


Date of Report: June 28, 2010
Number of Pages: 13
Order Number: R41301
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Health Insurance: State High Risk Pools

Bernadette Fernandez
Analyst in Health Care Financing

In an effort to expand the options for health coverage, 35 states have established high risk health insurance pools. These programs target individuals who cannot obtain or afford health insurance in the private market, primarily because of preexisting health conditions. Also, many states use their high risk pools to comply with the portability and guaranteed availability provisions of the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191). 

In general, state high risk pools tend to be small and enroll a small percentage of the uninsured. In 2008, a total of 199,418 individuals were enrolled in the 34 high risk pools in operation that year. State-established nonprofit organizations typically run these pools, with private insurance companies handling day-to-day operations. Although benefit packages vary across states and plans, they generally reflect health benefits that are available in the private insurance market. The majority of high risk pools cap premiums between 150% to 200% of market rates, and pools are subsidized through insurer assessments and other funding mechanisms. 

The Trade Act of 2002 (P.L. 107-210) appropriated a total of $100 million for FY2003-FY2004. With the expiration of authorizing legislation for federal funding of state pools, the 109th Congress took up this issue. The House passed H.R. 4519, the State High Risk Pool Funding Extension Act of 2006, which reauthorized federal grants to state high risk pools through FY2010, and changed the funding formula used for such grants. The Act authorized $15 million for seed grants and $75 million for operational and bonus grants for FY2006. The Senate passed H.R. 4519 without amendment, and it was signed into law (P.L. 109-172) on February 10, 2006. 

As part of the budget reconciliation process, the Senate passed S. 1932, the Deficit Reduction Act of 2005 (DRA) conference agreement, which provided appropriations for the grants authorized under H.R. 4519. The measure also included conforming language on enactment of H.R. 4519. The House agreed to the Senate-amended DRA bill, and it was signed it into law (P.L. 109-171) on February 8, 2006. The Centers for Medicare and Medicaid Services (CMS) awarded grants to 31 states that experienced operational losses in 2005. Of those 31 states, 25 also received bonus grants. In 2006, CMS awarded seed grants to five states, and to another five states in 2007. 

The 110th Congress took up the issue of extending the federal grant program by making funding available pursuant to the Consolidated Appropriations Act of 2008 (P.L. 110-161). The grant funding totaled $49,127,000. In July 2008, CMS announced that 30 states received operational and bonus grants totaling $49,126,500. 

The 111th Congress provided $75,000,000 in appropriations for grants to state high risk pools under the Omnibus Appropriations Act of 2009 (P.L. 111-8). In May of 2009, CMS announced the availability of these grants. To date, the grant awards have not been posted by CMS. 

The Patient Protection and Affordable Care Act (P.L. 111-148, PPACA) was signed into law on March 23, 2010. On March 30, 2010, PPACA was amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152). PPACA requires the Secretary of Health and Human Services to establish a temporary high risk pool program, no later than 90 days after enactment, to provide health insurance coverage to eligible individuals. To date, the Secretary has issued letters to governors and insurance commissioners to survey state interest in participating in this new high risk pool program.


Date of Report: June 23, 2010
Number of Pages: 15
Order Number: RL31745
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Child Nutrition and WIC Reauthorization: Issues and Legislation in the 111th Congress

Joe Richardson
Specialist in Social Policy

A comprehensive congressional review ("reauthorization") of the primary laws governing child nutrition and WIC programs (the Richard B. Russell National School Lunch Act and the Child Nutrition Act) was scheduled for 2009 (the last reauthorization was in 2004). Congress did not meet the September 30, 2009, deadline for comprehensive reauthorization. Instead, a one-year extension (through September 30, 2010) was included in the FY2010 Agriculture Department appropriations measure to give Congress time to consider a full reauthorization bill. The delay in child nutrition/WIC reauthorization was primarily due to a lack of agreement on how to fund any new child nutrition initiatives subject to congressional "pay-go" rules. The Administration had proposed spending $10 billion over the next 10 years on expanding child nutrition efforts to "end childhood hunger by 2015," but did not offer specific policy changes or spending/revenue offsets. In 2010, Congress has moved to begin the process of enacting the most sweeping changes in child nutrition and WIC programs since the 1970s. 

In May, the Senate Agriculture, Nutrition, and Forestry Committee reported the Healthy, Hunger- Free Kids Act of 2010 (S. 3307; S.Rept. 111-178). It makes substantial changes in child nutrition and WIC programs (most importantly, increasing federal financing for school lunches) that are estimated to cost just under $5 billion over the next 10 years. It also included spending reductions in other programs that offset this cost—most significantly, reduced payments under the Agriculture Department's Environmental Quality Incentive Program (EQIP) and a long-term cut in spending for the nutrition education component of the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp program). On August 5, 2010, the Senate approved an amended version of S. 3307. It differs from the Committee-reported version of the bill in that it replaces savings from the EQIP offset with spending reductions achieved by reducing future benefits under the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp program). 

In July 2010, the House Education and Labor Committee approved the Improving Nutrition for America's Children Act (H.R. 5504, as amended in committee). This bill includes provisions that are much the same as the Senate initiative, but the anticipated cost is larger because it includes some provisions expanding child nutrition efforts beyond those in the Senate's bill and there are only relatively minimal offsets. 

Although the Senate and House bills have now placed an extensive menu of policy changes on the table, how to pay for them is still the overriding issue. Little time is left on the congressional calendar for enactment of a comprehensive child nutrition/WIC reauthorization measure. If there is no reauthorization bill enacted before September 30, 2010, another extension (as was done in 2009) is most likely.


Date of Report: August 6, 2010
Number of Pages: 21
Order Number: R41354
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The Global Fund to Fight AIDS, Tuberculosis, and Malaria: U.S. Contributions and Issues for Congress

Tiaji Salaam-Blyther
Specialist in Global Health


The Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund, or the Fund) was established in 2002 as a public-private partnership that could provide significant financial support for global responses to HIV/AIDS, tuberculosis (TB), and malaria. As of May 28, 2010, the Global Fund has committed to grant roughly $19.3 billion for related programs in 144 countries. These funds have been used to treat more than 2.5 million HIV-positive people, about 6 million people infected with active TB, and 107.8 million cases of malaria, saving nearly 5 million lives. 

The United States has strongly supported the Global Fund since making a founding pledge in 2001, serving on several Global Fund boards, donating more to the Global Fund than other country, and increasing those contributions annually since FY2005. Donors will meet on October 4, 2010, to make their pledges for the Global Fund over the next three years. Should the United States provide 25% of the Global Fund's budget, as it has done on average since the Global Fund was founded, annual U.S. donations would reach between $3.25 billion and $5 billion in each year from 2011 through 2013. Many urge Congress to meet the Global Fund's budget request, in large part because key donors have begun to follow the lead of the United States in setting their annual contributions. Although the 111th Congress has continued to support the Fund, it has begun to consider other factors that might affect appropriations levels. Such issues include the following: 

• Priorities of the Obama Administration—When President Barack Obama announced the Global Health Initiative (GHI), he expressed his intent to reshape U.S. global health policy so that global health efforts were better integrated and coordinated. The GHI also emphasizes other health priorities, such as neglected tropical diseases and maternal and child health. The FY2011 budget request for GHI includes a $50 million decrease for the Global Fund from FY2010-enacted levels and a 3% increase for bilateral and multilateral HIV/AIDS programs. 

• Funding trends for HIV/AIDS—Health experts have long debated the appropriate balance of funding for HIV/AIDS prevention and treatment efforts. The debate has been reignited, as evidence indicates that international goals to ensure universal access to AIDS prevention, treatment, and care will not likely be met. Some question whether the massive funds spent on AIDS treatment would be better spent on less expensive health efforts that keep those living with HIV healthy. HIV/AIDS advocates warn that divestment from AIDS treatment will lead to colossal death tolls, as seen in the early years of the epidemic. 

• Role of the Global Fund in U.S. global health policy—When the Global Fund was established, U.S. bilateral investments were relatively small. Since then, U.S. bilateral investments in HIV/AIDS and malaria programs have grown significantly, particularly through the President's Emergency Plan for AIDS Relief (launched in 2003) and the President's Malaria Initiative (launched in 2005). As U.S. investments in these programs continue to grow, some question what role the Global Fund will play in U.S. global health policy. 

This report provides background information on the Global Fund, summarizes key findings on the Global Fund's progress through 2009, outlines U.S. funding for the Fund, and analyzes issues Congress might consider as it debates the appropriate level of support to provide the Fund.


Date of Report: August 3, 2010
Number of Pages: 41
Order Number: R41363
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Form 1099 Information Reporting Requirements as Modified by the Patient Protection and Affordable Care Act

Carol A. Pettit
Legislative Attorney

Edward C. Liu
Legislative Attorney

Under § 6041 of the Internal Revenue Code (IRC), persons engaged in a trade or business who make payments totaling at least $600 to another person in a single year are required to file an information return (typically a Form 1099) with the Internal Revenue Service (IRS) and to provide the payee with a copy. For payments made after December 31, 2011, § 9006 of P.L. 111- 148, the Patient Protection and Affordable Care Act (PPACA), expanded the information reporting requirements contained in IRC § 6041. Under the amended provision, most payments to corporations will no longer be exempt from reporting and the types of payments that can trigger the reporting requirement will include gross proceeds and amounts received by a payee in consideration for property. 

A payer's failure to file a timely and accurate information return with the IRS can result in monetary fines; criminal sanctions may be applicable where such failure is willful. Payers may also be penalized for failing to provide a timely and accurate copy of an information return to their payees. 

In the 111th Congress, several bills and amendments have been introduced that would repeal the modifications made to IRC § 6041 by PPACA § 9006. Both versions of the Small Business Paperwork Mandate Elimination Act, S. 3578 and H.R. 5141, would repeal PPACA § 9006 entirely. Similar provisions have also been proposed in Senate amendments to H.R. 5297 and in § 1 of H.R. 5982. 

Legislation has also been proposed to require landlords to file information returns for payments made with respect to their rental properties and to increase the penalties for failing to file an information return. The House passed such a provision in H.R. 4849. A provision with similar language was passed by the Senate in its consideration of a different bill, H.R. 4213. However, this language was ultimately struck by a House amendment in the nature of a substitute while resolving differences with the Senate.


Date of Report: August 6, 2010
Number of Pages: 9
Order Number: R41359
Price: $29.95

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

April Grady
Specialist in Health Care Financing

Medicaid is a health insurance program jointly funded by the federal government and the states. Historically, eligibility for Medicaid was generally limited to low-income children, pregnant women, parents of dependent children, the elderly, and people with disabilities; however, recent changes will soon require coverage for childless adults as well. The federal government's share of a state's expenditures for most Medicaid services is called the federal medical assistance percentage (FMAP). The remainder is referred to as the nonfederal share, or state share.

Generally determined annually, the FMAP is designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita income relative to the national average (and vice versa for states with higher per capita incomes). For FY2011, regular FMAPs—that is, excluding the impact of the temporary FMAP increase included in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5)—range from 50.00% to 74.73%.

The temporary FMAP increase in ARRA is available for nine quarters, subject to certain requirements. The Administration has estimated that the provision will increase federal Medicaid payments to states by more than $90 billion. The ARRA FMAPs end December 31, 2010, but many states assumed that a six-month extension would be provided when they planned their SFY2011 budgets (most of which began on July 1).

Although H.R. 4213 had been the recent vehicle for a six-month extension of ARRA FMAPs, the House and Senate ultimately agreed to a version of the bill that excluded it. In June, two cloture motions that would have cleared the way for another Senate floor vote on a straight extension (S.Amdt. 4369 to H.R. 4213) and a scaled-back extension (S.Amdt. 4386 to H.R. 4213) failed. The scaled-back version would still provide a six-month extension, but it would reduce the across-the-board FMAP increase provided under ARRA from 6.2 percentage points to 3.2 in the second quarter of FY2011 and 1.2 in the third quarter. This scaled-back version is currently slated for another cloture vote as part of S.Amdt. 4567 to H.R. 1586.

The recently enacted Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as amended by P.L. 111-152) also contains a number of provisions that affect FMAPs. Most notably, it provides FMAPs of up to 100% for certain newly eligible individuals. It also provides—subject to various requirements—increased FMAPs for certain disaster-affected states, primary care payment rate increases, specified preventive services and immunizations, smoking cessation services for pregnant women, specified home and community-based services, and health home services for certain people with chronic conditions.


Date of Report: July 30, 2010
Number of Pages: 23
Order Number: RL32950
Price: $29.95


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Legal Issues Relating to the Disposal of Dispensed Controlled Substances

Brian T. Yeh
Legislative Attorney

According to the White House Office of National Drug Control Policy, the intentional use of prescription drugs for non-medical purposes is the fastest-growing drug problem in the country and the second-most common form of illicit drug abuse among teenagers in the United States, behind marijuana use. Young adults and teenagers may find their parents' prescription drugs in unsecured medicine cabinets or other obvious locations in the home, or they may retrieve expired or unwanted medication from the trash. It is believed that properly disposing of unwanted medications would help prevent prescription drug abuse by reducing the accessibility and availability of such drugs. Yet throwing prescription medications into the trash or flushing them down the toilet may not be environmentally responsible. In response, many local communities and states have implemented pharmaceutical disposal programs (often referred to as drug "takeback" programs) that collect unused and unwanted medications from patients for incineration or other method of destruction that complies with federal and state laws and regulations, including those relating to public health and the environment.

Prescription drugs may be categorized as either controlled substance medication or noncontrolled substance medication. Pharmaceutical controlled substances, such as narcotic pain relievers OxyContin® and Vicodin®, are among the most commonly abused prescription drugs. However, community take-back programs usually only accept non-controlled substance medication, in compliance with the federal Controlled Substances Act. This statute comprehensively governs all distributions of controlled substances, and it currently does not allow for a patient to transfer a controlled substance to another entity for any purpose, including disposal of the drug. (Federal regulations provide a limited exception to this general prohibition— local law enforcement may obtain a waiver from the federal Drug Enforcement Administration to collect unused controlled substances from patients and destroy them.) As a consequence, patients seeking to reduce the amount of unwanted controlled substances in their possession have few alternative disposal options beyond discarding or flushing them.

The 111th Congress has been interested in developing ways for patients to dispose of unused or unwanted pharmaceuticals that are efficient, legal, and environmentally friendly. Several pieces of legislation have been introduced that would amend the Controlled Substances Act to create a framework governing disposal of controlled substances that have been dispensed to patients, with regulations to be promulgated by the Attorney General, including the Safe Drug Disposal Act of 2009 (H.R. 1191, S. 1336), the Secure and Responsible Drug Disposal Act of 2009 (H.R. 1359, S. 1292), the Secure and Responsible Drug Disposal Act of 2010 (S. 3397), and the Safe Drug Disposal Act of 2010 (H.R. 5809). The House Energy and Commerce Committee ordered H.R. 5809 to be reported on July 28, 2010, while the Senate Judiciary Committee approved S. 3397 on July 29, 2010. This report describes the provisions of the Controlled Substances Act and its implementing regulations that relate to patient disposal of unwanted prescription medication, as well as provides an analysis of the pending legislation.


Date of Report: July 30, 2010
Number of Pages: 17
Order Number: R40548
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Reducing Teen Pregnancy: Adolescent Family Life and Abstinence Education Programs

Carmen Solomon-Fears
Specialist in Social Policy

In 2009, 46% of students in grades 9-12 reported that they had experienced sexual intercourse; about 20% of female teens who have had sexual intercourse become pregnant each year. In recognition of the often negative, long-term consequences associated with teenage pregnancy, Congress has provided funding for the prevention of teenage and out-of-wedlock pregnancies. This report discusses three programs that exclusively attempt to reduce teenage pregnancy. The Adolescent Family Life (AFL) demonstration program was enacted in 1981 as Title XX of the Public Health Service Act, and the Abstinence Education program was enacted in 1996 as part of the welfare reform legislation. Also, since FY2001, additional funding for community-based abstinence education programs has been included in annual Department of Health and Human Services (HHS) appropriations.

P.L. 111-117, the Consolidated Appropriations for FY2010 (enacted December 16, 2009), includes a new discretionary Teen Pregnancy Prevention (TPP) program, identical to the one proposed in the President's FY2010 budget, which would provide grants and contracts on a competitive basis to public and private entities to fund "medically accurate and age appropriate" programs that reduce teen pregnancy (much of the money would be used to replicate programs that were proven effective through rigorous evaluation, and some of the money would be used to develop, refine, and test additional models and innovative strategies). The new TPP program is funded at $110 million for FY2010.

Although no abstinence-only education funding was appropriated in P.L. 111-117 (the Consolidated Appropriations for FY2010; enacted December 16, 2009), P.L. 111-148 (the Patient Protection and Affordable Care Act (PPACA); enacted March 23, 2010) restored funding to the Title V Abstinence Education formula block grant to states at the previous annual level of $50 million for each of FY2010-FY2014 ($250 million over five years).

In addition, P.L. 111-148 established a new state formula grant program and appropriated $75 million annually for each of FY2010–FY2014 to enable states to operate a new Personal Responsibility Education program ($375 million over five years). The new Personal Responsibility Education program is a comprehensive approach to teen pregnancy prevention that educates adolescents on both abstinence and contraception to prevent pregnancy and sexually transmitted diseases, and it also provides youth with information about several adulthood preparation subjects (i.e., healthy relationships, adolescent development, financial literacy, parent-child communication, educational and career success, and healthy life skills).

(For information on the Obama Administration's and Congress' new approach to teen pregnancy prevention, see CRS Report R40618, Teen Pregnancy Prevention: Background and Proposals in the 111th Congress.)


Date of Report: July 30, 2010
Number of Pages: 11
Order Number: RS20873
Price: $29.95


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Child Nutrition and WIC Reauthorization: Issues and Legislation in the 111th Congress

Joe Richardson
Specialist in Social Policy

A comprehensive congressional review ("reauthorization") of the primary laws governing child nutrition and WIC programs (the Richard B. Russell National School Lunch Act and the Child Nutrition Act) was scheduled for 2009 (the last reauthorization was in 2004). Congress did not meet the September 30, 2009, deadline for comprehensive reauthorization. Instead, a one-year extension (through September 30, 2010) was included in the FY2010 Agriculture Department appropriations measure to give Congress time to consider a full reauthorization bill. The delay in child nutrition/WIC reauthorization was primarily due to a lack of agreement on how to fund any new child nutrition initiatives subject to congressional "pay-go" rules. The Administration had proposed spending $10 billion over the next 10 years on expanding child nutrition efforts to "end childhood hunger by 2015," but did not offer specific policy changes or spending/revenue offsets.

In 2010, Congress has moved to begin the process of enacting the most sweeping changes in child nutrition and WIC programs since the 1970s. In May, the Senate Agriculture, Nutrition, and Forestry Committee reported the Healthy, Hunger-Free Kids Act of 2010 (S. 3307; S.Rept. 111- 178). It makes substantial changes in child nutrition and WIC programs (most importantly, increasing federal financing for school lunches) that are estimated to cost just under $5 billion over the next 10 years. It also includes spending reductions in other programs that offset this cost—most significantly, reduced payments under the Agriculture Department's Environmental Quality Incentive Program (EQIP) and a long-term cut in spending for the nutrition education component of the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp program). In July 2010, the House Education and Labor Committee approved the Improving Nutrition for America's Children Act (H.R. 5504, as amended in committee). This bill includes provisions that are much the same as the Senate initiative, but the anticipated cost is larger because it includes some provisions expanding child nutrition efforts beyond those in the Senate's bill and there are only relatively minimal offsets.

Although the Senate and House bills have now placed an extensive menu of policy changes on the table, how to pay for them is still the overriding issue. Little time is left on the congressional calendar for enactment of a comprehensive child nutrition/WIC reauthorization measure. If there is no reauthorization bill enacted before September 30, 2010, another extension (as was done in 2009) is most likely.


Date of Report: August 2, 2010
Number of Pages: 21
Order Number: R41354
Price: $29.95


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Coal Mine Safety and Health

Linda Levine
Specialist in Labor Economics

Fatal injuries associated with coal mine accidents fell almost continually between 1925 and 2005. In 2006, however, the number of fatalities more than doubled to 47, which prompted the 109th Congress to enact the Mine Improvement and New Emergency Response Act (MINER, P.L. 109- 236). Fatalities declined in subsequent years and dropped to a low of 18 in 2009. After the deaths of 29 coal miners at Massey Energy's Upper Big Branch (UBB) mine in West Virginia on April 5, 2010, the 111th Congress turned its attention to the issue of mine safety.

In the wake of the methane explosion at Sago mine in West Virginia in January 2006, the Mine Safety and Health Administration (MSHA) was criticized for its slow pace of rulemaking earlier in the decade. MSHA standard-setting activity quickened after enactment of the MINER act in June 2006. The amendment of the 1977 Mine act emphasized factors thought to have played a role at Sago and other recent incidents, and imposed several rulemaking deadlines on MSHA. The agency published all the requisite final standards except one: the MINER act required that, by June 15, 2009, two-way wireless communications systems and electronic tracking systems be part of emergency response plans (ERPs). In January 2009, MSHA issued a letter stating that "because fully wireless communications technology is not sufficiently developed at this time, nor is it likely to be technologically feasible by June 15, 2009 ... [n]ew ERPs and revisions to existing ERPs should provide for alternatives to fully wireless communication systems."

Some Members characterized passage of the MINER act as a first step. In 2008, the House passed the Supplemental Mine Improvement and New Emergency Response Act (S-MINER) as amended. Some of the bill's provisions addressed issues that arose from the Crandall Canyon Mine incident in Utah in August 2007. S-MINER was opposed by the Bush Administration.

In 2010, one issue policymakers have focused on is the greatly increased number of citations for violations being contested by mine operators. The UBB mine incident brought to public attention the potential implications for miner safety of operators appealing to the Federal Mine Safety and Health Review Commission (FMSHRC) penalty assessments proposed by MSHA. Through publication of an interim rule and a notice of proposed rulemaking in spring 2010, FMSHRC intends to speed its civil penalty proceedings and thereby more quickly issue final orders that MSHA can include when determining whether a mine should be placed in pattern of violations (POV) status. The Miner Safety and Health Act of 2010 (H.R. 5663), introduced on July 1, includes provisions changing POV criteria as well as withdrawing all persons from coal or other mines in POV status and doubling the number of mandated inspections at those mines. The bill also strengthens whistleblower protections for miners and other workers covered by the Occupational Safety and Health (OSH) Act, and amends civil and criminal penalty provisions in the Mine and OSH acts. H.R. 5663's amendment of the OSH act is similar to provisions in the Protecting America's Workers Act (H.R. 2067, S. 1580). The Committee on Education and Labor held a hearing on H.R. 5663 on July 13, 2010. It passed the renamed Robert C. Byrd Miner Safety and Health Act, with a few amendments, on July 21.


Date of Report: July 22, 2010
Number of Pages: 18
Order Number: RL34429
Price: $29.95


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