Legislative Update: Congress to Consider Entitlements

This is the first of special reports from Columbia's Office of Federal Relations that will appear regularly in the Record:

Congress will return from recess next week to address conferences and votes on a number of appropriations bills and further action on entitlement programs through the budget reconciliation process. This update reviews the status of Medicare, Medicaid, tax issues and Student Aid in the Budget Reconciliation process, the status of the Appropriations bills, and a proposed Science bill.

Budget Reconciliation

Medicare and Medicaid: House Ways and Means and Commerce Committees and the Senate Finance Committee are going through markup, a process of reviewing proposed bills, on the Medicare and Medicaid provisions to reach budget deficit targets. House Ways and Means and Commerce Committees will finish their markups this week. The Senate Finance Committee completed its action on these provisions last week. Both House and Senate Committees recognize the importance of medical education at the graduate level, but proposals will still cause losses for hospitals and medical schools in New York.

The House Ways and Means bill includes a trust fund for graduate medical education, but the indirect medical education adjustment decreases from 7.7% to 5.6% (originally the floor had been stated as 6%).

No provision is included in the bill to carve out medical education payments from Medicare managed care payments. Disproportionate Share payments are reduced by an average of 25%. Reports indicate that Congressman Houghton (R-NY) and Congressman Matsui (D-Ca) will offer amendments to address some of the identified problems at the Tuesday markup.

The Senate Finance Committee markup was completed just last week. In their bill they included very favorable Medicaid provisions for New York and its health care system. Their proposal for indirect medical education would, however, reduce funding over the years to 4.5% (from the current 7.7%). A special "carve out" for graduate medical education and disproportionate share payments is created for the Medicare managed care payments.

New York's Senators have led the way on a number of these provisions. New York House members have also been active in effecting changes in provisions so that one area of the country is not disproportionately affected by payment reductions.

Tax Issues: The House bill would extend Employee Educational Assistance, section 127, but would only include graduate students for 1995. We are working with other universities to address these issues. The House bill will also include proposals on intermediate sanctions for not-for-profit organizations.

Student Aid

The student aid provisions included in the Senate Labor and Human Resources Committee bill and the House Economic and Educational Opportunities bill differ in the methods for reaching a $10 billion reduction in spending. The Senate Committee would a assess a .85% tax on an institution's loan volume; eliminate grace periods for student repayment of loan and increase PLUS loan interest. The House committee would eliminate the Direct Lending Program--a cornerstone of the President Clinton's educational policy--eliminate the grace period, and increase PLUS loan interest. None of these provisions appeal to universities as methods of addressing the need for deficit reduction.

For further information on any of the above items or any other legislative news, please contact Ellen S. Smith at 854-3394 or ess9@columbia.edu.

Columbia University Record -- October 13, 1995 -- Vol. 21, No. 6