House Democrats Propose Offsetting Mental Health Parity Legislation Costs With Ban On Physician-Owned Specialty Hospitals

Main Category: Mental Health
Also Included In: Health Insurance / Medical Insurance;  Primary Care / General Practice;  Public Health
Article Date: 05 Mar 2008 - 10:00 PDT

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House Democrats plan to send to the floor a mental health parity bill (HR 1424) financed by limits on the growth of physician-owned specialty hospitals, CQ Today reports. The legislation, sponsored by Reps. Patrick Kennedy (D-R.I.) and Jim Ramstad (R-Minn.), would require most health insurers to provide equal levels of coverage for physical and mental illnesses. Under the bill, health insurers could not require larger copayments or implement lower reimbursement caps for mental illnesses. The legislation also would require health insurers to cover a number of mental illnesses.

According to CQ Today, Kennedy and Ramstad "carefully shepherded" the bill through committee last year, but House leaders delayed a floor vote on the legislation until the lawmakers could develop a proposal to offset the cost of about $4 billion over 10 years. Kennedy and Ramstad have proposed to finance the bill in part with a provision under which physicians could not refer patients to hospitals in which they have a financial interest. In addition, they have proposed a provision that would increase the rebates pharmaceutical companies must provide state Medicaid programs to help finance the legislation.

Conservative Republicans oppose the specialty hospital provision. The provision would limit the "development of a new source of consumer choice and medical innovation," according to a memo issued on Monday by a Republican Study Committee. However, supporters of a ban on referrals to specialty hospitals believe it would reduce the number of medical procedures being performed, which would result in savings, CQ Today reports.

The House Rules Committee on Tuesday plans to combine three earlier versions of the legislation approved by different committees into one bill (Armstrong, CQ Today, 3/3). The full House likely will pass the legislation (Mulligan, Providence Journal, 3/3).

Business Coalition Opposes Bill
A business coalition led by the National Retail Federation has lobbied against the bill, according to CongressDaily. The coalition has listed a vote in favor of the legislation as a "key vote" against businesses and has targeted 10 House Republicans for "special attention." The targeted House Republicans are those who "might be tempted to vote for the bill," although the coalition is "urging its members to contact all lawmakers," CongressDaily reports (Johnson, CongressDaily, 3/4).

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