National Alliance on Mental Illness
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Background Information on the Senate Finance Committee Medicare Package

November 27, 2007

The major focus of this legislation is an adjustment to the payment rates for physicians to avoid cuts that will occur in 2008 if Congress fails to act.  This creates a unique opportunity to push for improvements to Medicare that NAMI has sought for years and to make progress in stopping regulations that would severely limit how Medicaid pays for important community-based services for people with mental illness.  

Most of these proposals were included in separate legislation that passed the House last summer as part of the “CHAMP Act” (HR 3162).  It is now critical for the Senate to move forward on these proposals before the end of the year. The proposals include:

Parity for outpatient mental illness treatment – This amendment is being pushed by Senators Olympia Snowe (R-ME) and John Kerry (D-MA) and would lower the current 50% cost sharing requirement for outpatient mental illness treatment to 20%, the same as all other outpatient services covered under Medicare as proposed in separate legislation S 1715,

Part D drug benefit improvements – Amendments are expected to codify existing guidance requiring broad coverage on drug plan formularies for medications to treatment mental illness and allow plans to cover benzodiazepines.  The proposal on drug plan formulary requirements is being offered by Senator Gordon Smith (R-OR) and would ensure that Part D drug plans include “all or substantially all” of the medications within certain protected classes (similar to S 1887).  The proposal on coverage of benzodiazepines is being offered by Senator Jay Rockefeller (D-WV) would remove a restriction in the law that bars drug plans from covering this important class of medications prescribed to treat acute mania and severe anxiety disorders (consistent with separate legislation S 2190).

Medicaid Rehabilitation Option regulation moratorium – Last week, 39 Senators signed a letter urging inclusion of a moratorium on regulations recently drafted by the Centers for Medicare and Medicaid Services (CMS) that would restrict the ability of states to use the Medicaid Rehabilitation Option to finance critical mental illness treatment services. 

View additional background information on the proposed CMS regulations, and the Senate letter opposing the regulations.