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Congress Adjourns for August Recess

Update on Recent Congressional Action

For Immediate Release, August 6, 2001
Contact: Chris Marshall

In a flurry of last minute activity prior to its month long summer recess, Congress acted late last week on a range of bills of concern to children and adults with severe mental illness and their families. Congress will not be returning to Washington until the week of September 3. In the meantime, most members of Congress will be in their state and district offices meeting with constituents and making public appearances. This "district work period" affords NAMI advocates an important opportunity to meet with their elected representatives to discuss legislative issues affecting the needs of people with severe mental illness and their families. Later this week, the NAMI policy staff will be forwarding, through the NAMI E-News, a comprehensive set of materials and advocacy papers that NAMI advocates can use in their meetings with members of Congress - whether in their local offices or in public appearances (e.g., town meetings or radio call-in programs).

Included below are updates on action taken by the House and Senate late last week, including the most important development, the Senate Health, Education, Labor and Pensions (HELP) Committee approval of S 543, the Mental Health Equitable Treatment Act. Please see NAMI E-News, Volume 02-5, August 1, 2001 on the NAMI Web site at

Senate Committee Stalls Family Opportunity Act

On August 2, the Senate Finance Committee abruptly postponed action on a measure authorizing supplemental state funding for the Temporary Assistance to Needy Families (TANF) program (S 942). This decision by Committee Chairman Max Baucus (D-MT) was due in part to a dispute over Senator Charles Grassley's (R-IA) expressed intention to offer the Family Opportunity Act (S 321) as an amendment to the TANF bill. While Chairman Baucus has expressed support for the Family Opportunity Act (FOA), he opposed acting on it as part of the TANF bill. Moreover, a number of Democratic senators on the Finance Committee refused to support FOA until the Committee first acted on a separate $28 billion proposal to expand health coverage for the uninsured.

The result of last week's wrangling in the Senate Finance Committee is that expected action on S 321 was stalled, despite the fact that a majority of senators on the Committee are already cosponsors of the bill. In fact, FOA now has 71 cosponsors, more by far than any piece of health care legislation now before the Finance Committee.

NAMI strongly supports FOA and is disappointed that this dispute over timing of legislative activity has temporarily derailed efforts to address the health care needs of families of children with severe disabilities (including children and adolescents with severe mental illnesses). FOA would allow states to establish Medicaid buy-in programs for families that are at risk of relinquishing custody of a child with a severe disability or facing economic ruin as a result of the cost of caring for their child at home. More information on FOA is available on the NAMI Web site at

House and Senate Pass VA & HUD Budgets

On August 2, the Senate completed action on its version of the FY 2002 VA-HUD-Independent Agencies Appropriations bill (S 1216/HR 2620). The House cleared its version of the same measure on July 30. The VA-HUD bill contains the budgets for the Departments of Veterans' Affairs and Housing and Urban Development (HUD) for the federal fiscal year that begins on October 1. After Congress returns from its summer recess, a House-Senate Conference Committee will have to resolve differences between the two bills. A complete NAMI E-News analysis of the provisions in HR 2620/S 1216 affecting veterans with severe mental illnesses and HUD programs of concern to adults with severe mental illnesses is available at

This NAMI E-News message contained an action item related to an amendment authored by Representatives John LaFalce (D-NY) and Barbara Lee (D-CA) to transfer $122.6 million within the bill to ensure adequate funding for renewal of expiring operating subsidies for HUD permanent supported housing programs that serve homeless individuals with severe disabilities. These programs (Shelter Plus Care and SHP permanent supportive housing) predominantly serve homeless people with severe mental illnesses and co-occurring substance abuse disorders. NAMI strongly supported the LaFalce-Lee amendment. Unfortunately, the full House rejected the amendment by a 124-300 vote. This lopsided margin was largely the result of strong bipartisan support for the HUD program that Representatives LaFalce and Lee proposed taking the money from ($100 million was proposed to be taken from the Bush Administration's new program for downpayment assistance for first-time homebuyers), rather than opposition to Shelter Plus Care and SHP. In any event, funding for renewal of Shelter Plus Care and SHP rent subsidies is certain to be an issue in upcoming House-Senate negotiations as the Senate bill contains $99 million, and House bill contains none.

House Clears Patient Bill of Rights

As was widely reported in the press, the House on August 2 passed its version of a Patients' Bill of Rights (HR 2563) that incorporated a Bush Administration backed amendment put forward by Representative Charlie Norwood (R-GA). The Norwood Amendment was strongly supported and President Bush made clear that he would be willing to sign a Patients' Bill of Rights that included its provisions. The debate on the Norwood amendment produced sharp partisan exchanges on the House floor and in the end the measure passed by only a 5-vote margin, 218-213.

The Norwood amendment was limited in its scope to the liability provisions in the bill, i.e. the legal standards and rules governing lawsuits brought against health plans in both state and federal court. The rest of the protections in HR 2563 - authored by Representatives Greg Ganske (R-IA) and John Dingell (D-MI) - remain in place in the bill. These include substantive protections related to access to care such as curbs on the use of restrictive prescription drug formularies, access to specialists, emergency room care, coverage of routine care associated with participation in clinical trials, etc. HR 2563 also authorizes independent third-party review of all health plan decisions to deny coverage of treatment. Many of these protections were stronger in HR 2563 than in a rival measure that was put forward by Representative Ernie Fletcher (R-KY).

In the end, however, it was the liability protections in the Norwood Amendment that was the focus of the House debate and that are certain to be the key difference between the House and Senate bills when the two sides meet to negotiate in a conference committee this fall. The Senate-passed bill (S 1052) contains a much broader right to sue health plans in state court for monetary damages for wrongly denied treatment. By contrast, the House-passed bill (and the Norwood Amendment) contain several important limitations on lawsuits in both state and federal court against health plans. First, patients must exhaust all internal and external reviews before being able to file a suit.

Second, under the House bill, if a patient loses at the external review stage, the health plan's decision to deny care is presumed correct in court (i.e., the patient must overcome this presumption in court in order to prevail). The Norwood Amendment caps so-called non-economic damages (e.g., pain and suffering) at $1.5 million. Punitive damages would be allowed, up to a $1.5 million limit, but only if a health plan refused to follow the decision of an external review panel. Finally, the Norwood Amendment preempts all state laws that have stronger patient protections or that create separate causes of action in state courts (including laws in California, New Jersey and Texas).

AHP Amendment Passed by House

During the debate on August 2, the House, by a 236-194 margin, passed an amendment to vastly expand multi-employer Association Health Plans (AHPs). The Senate bill (S 1052) does not contain an AHP proposal. NAMI opposes AHPs on the basis of the impact they would have on the 33 state mental illness parity laws (Illinois last week became the 33rd state). This AHP proposal, contained in an amendment authored by House Ways and Means Committee Chairman Bill Thomas (R-CA), would allow these AHPs to form under the federal ERISA law that exempts such plans from state regulation (including state parity laws). While AHPs are intended to further the worthy goal of expanding coverage for the uninsured, there are several studies demonstrating that most employers seeking to participate already offer coverage (thereby shifting workers and families out of plans subject to state parity laws, rather than expanding coverage to the uninsured). In addition, several independent analyses of AHPs in recent years have shown that they are prone to failure as result of being undercapitalized.