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Congress has been extremely busy over the last few weeks introducing and debating various health care reform bills. The following provides a summary of those activities.
Affordable Health Care of America Act (H.R. 3962)
On November 7, 2009, The House of Representatives passed, by a 220 – 215 vote, the Affordable Health Care of America Act (H.R. 3962). A summary of the bill was discussed in the November 2009 Special Edition posting. A summary of the Congressional Budget Office’s (CBO) November 6, 2009 scoring of HR 3962 may be reviewed at: http://www.cbo.gov/ftpdocs/107xx/doc10710/hr3962Dingell_mgr_amendment_update.pdf In an updated analysis, the CBO predicts the Affordable Health Care of America Act would increase national health expenditures by $289 billion over the next decade. The revised cost estimate may be reviewed at http://www.cbo.gov/doc.cfm?index+10741
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Medicare Physician Payment Reform Act of 2009 (H.R. 3961)
On November 19, 2009, the House of Representatives passed the Medicare Physician Payment Reform Act of 2009 (H.R. 3961) by a vote of 243 to 183. This legislation would modify Medicare physician payments to be equal to the gross domestic product (GDP) plus 1 percentage point per year. This is compared to the current rate structure which is equal to the GDP, without any adjustment. Payments for primary and preventative care services would grow at the GDP plus 2% per year. If passed, H.R. 3961 would appeal a 21% fee reduction in physician payment schedules, which is scheduled to go into effect in January 2010. This fee reduction is required by a 1997 formula originally enacted to control costs. The Obama administration and numerous physician organizations have endorsed H.R. 3961. The CBO estimates the cost of the legislation at $210 billion over the next ten years. The CBO’s November 4, 2009 scoring may be reviewed at: http://www.cbo.gov/ftpdocs/107xx/doc10704/hr3961.pdf
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Patient Protection and Affordable Care Act (Substitute to H.R. 3590)
A 2,074 page bill was introduced by Senate Majority Leader Harry Reid on November 18, 2009 (amendment in nature of a substitute to H.R. 3590). The proposed legislation may be reviewed in its entirety by going to: http://democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf The Congressional Budget Office estimates of H.R. 3590 may be reviewed by going to http://www.cbo.gov/doc.cfm?index=10731 In an effort to secure passage of the Patient Protection and Affordable Care Act, the Senate, on December 8, 2009, reported some compromises to the public option and Medicare coverage provisions. These compromises are discussed below.
The Patient Protection and Affordable Care Act of 2009, as originally introduced, would provide for the following:
Immediate Reforms: In 2010, the proposed legislation would: (a) eliminate lifetime and unreasonable annual limits on benefits; (b) prohibit rescission of health insurance policies; (c) provide assistance for uninsured individuals with pre-existing conditions; (d) require coverage for preventative services and immunizations; (e) extend dependent coverage to the age of 26; (f) cap insurance company non-medical, administrative expenditures.
Public Option: The legislation would create a new governmental insurance program to compete with private insurers, however States would be allowed to opt out. The Secretary of HHS would be required to establish the national public option, the Community Health Insurance Option. The legislation would prohibit federal dollars from being used to pay for abortion services.
On December 8, 2009, the Senate agreed to pursue a compromise, to replace the public option with national health benefits plans. Under the compromise, the Office of Personnel Management would negotiate with private insurance companies to offer a national health plan, similar to those offered to federal employees. If these private plans failed to provide affordable coverage to all Americans, the government would then offer a new insurance coverage plan, similar to the public option.
Health Insurance Mandate: Beginning in 2014, individuals would be required to maintain minimum essential coverage or pay a penalty fee of $95 in 2014, $350 in 2015, $750 in 2016 and indexed thereafter. For those individuals under the age of 18, the penalty would be half of the amount assigned to adult individuals. Exceptions to the mandated coverage would be for religious objectors; those who cannot afford coverage and those with incomes less than 100 percent the federal poverty level; Indian tribe members; those who receive a hardship waiver; incarcerated individuals; and those without coverage for less than three months. Individuals and employers who currently have coverage may maintain such coverage under a “grandfather” provision. Employers with more than 50 full-time employees will be penalized if they do not offer coverage or such coverage is deemed unaffordable. Employers with more than 200 employees must automatically provide new full-time employees with health insurance coverage.
Insurance Exchanges: By 2014, each state would establish an Exchange to allow individuals and small employers to obtain health insurance coverage. Refundable tax credits would be available for those with incomes between 100 and 400 percent of the federal poverty line (FPL). Credits would be available for eligible citizens and legally-residing aliens. Undocumented immigrants would be ineligible for premium tax credits. A credit would also assist small businesses that have fewer than 25 workers, with up to 50 percent credit of the employer’s total premium cost.
Expand Medicaid Eligibility: Beginning in 2014, all children, parents, and childless adults who are not entitled to Medicare and who have family incomes up to 133 percent FPL will become eligible for Medicaid.
Medicare Costs: Beginning in 2012, hospital payments will be adjusted based on the dollar value of each hospital’s percentage of potentially preventable Medicare readmissions. Also, in fiscal year 2013 Medicare hospital payments will be linked to quality performance on common high-cost conditions such as cardiac, surgical, and pneumonia care. Long-term hospitals, inpatient rehabilitation facilities, and hospice providers will participate in value-based purchasing with quality measure reporting starting in fiscal year 2014. There will be incentives for physicians to report Medicare quality data. Penalties will be imposed for non-participating providers. HHS will develop a voluntary pilot program — encouraging hospitals, doctors, and post-acute providers to improve patient care and achieve savings through bundled payments.
Rural hospitals will see an increase in Medicare provider fees to ensure that beneficiaries have access to care. The legislation would extend the Rural Community Hospital Demonstration Program for two years and expand eligible sites to additional states and hospitals.
Home health care payments will be adjusted based on the current mix of services and intensity of care provided to patients. HHS will also update Disproportionate Share (DSH) payments to better account for hospital uncompensated care costs. Medicare Advantage payments will be based on the average of the bids submitted by insurance plans in each market.
The legislation would establish a 15-member Medicare Advisory Board to present Congress with proposals to reduce costs and improve quality care for beneficiaries. The Board would not make proposals that ration care, raise taxes, adjust beneficiary premiums, or change Medicare benefit, eligibility, or cost-sharing standards.
On December 8, 2009, the Senate, in an emerging agreement, called for Medicare to be opened to uninsured Americans beginning at age 55. The CBO, as of this posting, has not released its cost analysis of the potential expansion of the Medicare program.
Public Health and Chronic Disease Initiatives: The proposed legislation would authorize new programs related to preventative care and services, such as school-based health clinics. Co-payments and deductibles would also be waived for annual wellness visits and most preventative services. The Centers for Disease Control will provide grants to states and large local health departments to conduct pilot programs in the 55 to 64 year old population, to evaluate chronic disease risk factors, conduct evidence based public health interventions, and ensure that individuals identified with chronic diseases or at risk for chronic diseases receive clinical treatment to reduce health risks.
Health Care Workforce: H.R. 3590 would establish a national commission to review current and projected health care workforce needs, and to provide comprehensive information to Congress and the Administration to align workforce resources with national needs. The federal student loan program will be modified to ease criteria for schools and students, shorten payback periods, and make the primary care student loan program more attractive. The funding of the Nursing Student Loan Program would be increased. Loan forgiveness would be offered to public health students and workers in exchange for working at least three years at a federal, state, local, or tribal public health agency, as well as to allied health professionals employed at public health agencies or in settings located in Health Professional Shortage Areas, Medically Underserved Areas, or with Medially Underserved Populations. Beginning in 2011, HHS may redistribute unfilled resident physician positions by redirecting those slots for the training of primary care physicians. The proposed legislation would also provide expanded funding for federally qualified health centers and award grants to states and medical schools to support the expansion of emergency medical services to children needing trauma and critical care treatment.
Fraud and Abuse Integrity Programs: The proposed legislation would seek to combat fraud and abuse in public and private programs. Physician-owned hospitals that do not have a Medicare provider agreement in place prior to February 2010 will not be able to participate in Medicare. H.R. 3590 would require physicians to inform patients who are referred for imaging services (in writing), that such imaging services may be provided by providers other than to those whom they were referred. Skilled nursing facilities would be required to implement compliance and ethic programs. The Secretary of HHS may reduce civil monetary penalties for facilities that self-report and correct deficiencies. There is expected to be new penalties for providers who knowingly do not return overpayments. Each violation would be subject to a fine of up to $50,000. The HHS Secretary would have the authority to disenroll a Medicare physician or supplier who fails to maintain and provide access to: written orders or requests for payments for durable medical equipment, certifications for home health services, or referrals for other items and services.
States would be required to terminate individuals and entities from their Medicaid programs if those individuals and entities are terminated from Medicare or another state’s Medicaid program. Medicaid programs would be required to exclude an individual or entity if the entity or individual owns, controls, or manages an entity that: (a) failed to repay overpayments; (b) is suspended, excluded, or terminated from participation in any Medicaid program; or (c) is affiliated with an individual or entity that has been suspended, excluded, or terminated from Medicaid.
Community Living Assistance Services and Supports (CLASS): The proposed legislation would establish a voluntary, self-funded long-term insurance program for the purchase of community living assistance services for individuals with functional limitations. The benefit plan would allow for a five year vesting period, as well as provide a cash benefit of not less than an average of $50 per day. The CBO’s analysis of the budgetary effects of the CLASS Program may be reviewed at: http://www.cbo.gov/doc.cfm?index=10768 and http://www.cbo.gov/doc.cfm?index=10769
Excise Taxes on Insurance Plans: H.R. 3590 would impose a 40 percent excise tax on insurance companies that provide plans with an annual premium above the threshold of $8,500 for single coverage and $23,000 for family coverage. The tax would apply to self-insured plans and plans sold in the group market, but not to plans sold in the individual market. As for non-profit BCBS organizations, in order to take advantage of the special tax benefits they receive, they must have a medical loss ratio of 85 percent or higher. The CBO’s analysis of the health care premiums may be reviewed at: http://www.cbo.gov/doc.dfm?index=10781
