Senate Finance Bill

Six Senators on the Senate Finance Committee – Chairman Max Baucus (D-MT), Ranking Minority Member Chuck Grassley (R-IA), Kent Conrad (D-ND), Jeff Bingaman (D-NM), Mike Enzi (R-WY) and Olympia Snowe (R-ME)– are engagted in talks to produce a bipartisan bill with a rough deadline of September 15.

It is generally believed that these talks hold the best prospect of producing a bill that could garner the 60 votes necessary in the Senate to prevent a filibuster. However, it remains uncertain whether a bill can be agreed upon by the mid-September deadline, and Democratic leaders have suggested that if it fails, they will bring a bill to the floor through a procedure called “reconciliation” under which the bill would require only a majority to pass.

To understand “reconciliation” it is first necessary to know the difference between “authorizing” legislation which is supposed to establish programs, and typically is adopted to be in effect for a number of years, and “appropriations” bills, which are adopted annually to fund these programs, and collectively make up the federal budget.

Technically, a “reconciliation” is the process by which the underlying authorizing legislation is adjusted to incorporate changes necessitated by the budget.

Because it is recognized that a budget must be passed annually to keep the federal government running, the Senate rules prevent filibusters on reconciliation legislation, which means there is no need for 60 votes to impose cloture in order for it to be passed. Early on, it was recognized that this could permit the inclusion or attachment of whatever provisions could garner 51, but not 60, votes in order to avoid the need for cloture. To prevent this, the Senate adopted the “Byrd Rule,” named after Senator Robert Byrd (D-WV), under which a point of order may be raised against any portion of or amendment to a reconciliation bill that does not legitimately relate to the budget process by retrenching expenditures, and it requires 60 votes to waive such a point of order. Consequently, a health care restructuring bill put forth through the reconciliation process would have to exclude a number of key provisions.

The staffs of Senators Grassley and Enzi have been working to limit the danger of rationing in the Senate Finance Bill. As a result of negotiations with the staff for Chairman Baucus, Senator Conrad, and the Administration, it has been agreed to incorporate in the portion of the bill relating to comparative effectiveness, if reported, the following language:

Agreed Language Relating to Comparative Effectiveness for Senate Finance bill:

Add the following language to the section titled “Limitations on the Use of Comparative Effectiveness Research by the Secretary”:

(1)The Secretary shall not use comparative effectiveness evidence in determining coverage, reimbursement or incentive programs for a treatment in ways that treat extending the life of an elderly, disabled, or terminally ill patient as of lower value than extending the life of a person who is younger, non-disabled, or not terminally ill.

Rule of construction: This limitation shall not be construed to prevent the Secretary from using CE evidence in determining coverage, reimbursement or incentive programs based upon comparing the difference in the effectiveness of alternative treatments in extending a patient's life due to that patient's age, disability, or terminal illness.

(2) The Secretary shall not use comparative effectiveness evidence in determining coverage, reimbursement, or incentive programs in ways that preclude, or with an intent to discourage, patients from choosing treatments based on how they value the tradeoffs between extending the length of their life and the risk of disability.

Rule of Construction: This limitation shall not be construed to limit the application of differential copayments based on factors such as cost or type of service. Nothing in this legislation shall be construed to limit comparative effectiveness research or any other research, evaluation, or dissemination of information concerning the likelihood that a treatment will result in disability. In addition, this limitation shall not be construed to prevent the Secretary from using CE evidence in determining coverage, reimbursement or incentive programs based upon comparing the difference in the effectiveness of alternative treatments in extending a patient's life due to that patient's age, disability, or terminal illness.

(3) The Institute shall not develop or employ a dollars per quality adjusted life year (or similar measure that discounts the value of a life because of a person’s disability) as a threshold to establish what healthcare is cost-effective or recommended. The Center for Medicare and Medicaid Services shall not utilize a dollars per quality adjusted life year (or similar measure that discounts the value of a life because of a person’s disability) as a threshold to determine coverage, reimbursement, or incentives programs.