National Alliance on Mental Illness
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Background on Medicare Improvement for Patients and Providers Act (S 3101)

June 12, 2008

Congress must act by July 1 to extend the current update for payment schedules for physicians under Part B of the Medicare program.  If Congress does not act, the Part B physician payment update will expire and reimbursement rates for physicians will be cut.   The Senate Medicare package is expected to face a veto threat.  In addition, Republican senators have developed an alternative package of Medicare reforms. 

Senate Finance Committee Chairman Max Baucus (D-MT) has drafted a package of reforms (S 3101) includes not only the physician payment adjustment, but also a range of beneficiary improvements that NAMI strongly supports, including:

  1. Section 102 – Senator Olympia Snowe’s Medicare parity proposal to address the current discriminatory 50% cost sharing requirement for outpatient mental health services under Part B, gradually moving cost sharing for outpatient mental health services toward parity with all other medical outpatient services between 2010 and 2014.
  2. Section 176 – Senator Smith’s legislation to create regulatory authority for CMS to ensure broad coverage on prescription drug plan formularies for critical life sustaining medications.
  3. Section 175 – A proposal authored by your colleague Senator Jay Rockefeller to allow drug plans to cover benzodiazepines in clinically appropriate circumstances such as treatment for acute mania in bipolar disorder and severe anxiety disorders.
  4. Section 112 – A proposal to increase the amount of allowable resources for applicants to the Medicare Savings Program (MSP) to the amount specified for full low-income subsidy (LIS) beneficiaries under Part D.
  5. Sections 113 and 114 – Amendments to eliminate barriers to enrollment and the current late enrollment penalty for the LIS program.
  6. Section 116 – A proposal to exempt the value of a life insurance policy and in-kind support and maintenance for LIS eligibility determinations.
  7. Section 121 -- Senator Baucus’s proposal to expand the Medicare rural hospital FLEX program to authorize grants to increase access to mental illness treatment services for veterans in rural and frontier communities (Section 121).  It is critical that Congress provide additional resources for the mental health needs of veterans, particularly National Guard and Reserve troops returning from service in Iraq and Afghanistan.

Read the full summary of the provisions in S 3101.

Read a summary of the Republican alternative Medicare package.