Federal Legislation President Bush and Congress Approve Tax Extenders Bill Eliminating Medicare Pay Cut to Doctors
On Dec. 20, President Bush signed the much-debated tax extenders bill (H.R. 6111) that also contains key Medicare provisions, including a zero-percent Medicare physician payment update, meaning doctors will not see lower reimbursement rates next year. The House and Senate approved the bill earlier this month during the week-long lame-duck session. H.R. 6111 would eliminate the promised 5 percent cut in Medicare payments to doctors in 2007. The bill further would create a fund to stabilize physician payments in 2008 and maintain a 1.5 percent bonus incentive payment beginning in July 2007. AMA Board Chairman Cecil B. Wilson applauded lawmakers' efforts to prevent a cut in Medicare reimbursements to doctors in 2007 and avert cuts in 2008, and said AMA would work with Congress to address the "quality reporting framework." "Congressional action to avert next year's 5 percent Medicare physician payment cut will help avert a potentially sharp decline in access for America's seniors," Wilson said in a Dec. 9 release. "If the 2007 Medicare cut had occurred as planned, nearly half of physicians told the AMA the cut would force them to limit the number of new Medicare patients into their practice." The bill faced holds in the Senate late Dec. 8, including a budget point of order raised by Senate Budget Committee Chairman Judd Gregg (R-N.H.) that the health, tax, and trade package was too costly and violated budget rules. Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) successfully moved to waive the point of order, arguing that lawmakers' months of work on the bill should not be tossed out. To help fund the physician payment measure, the legislation included a reduction in the Medicare Advantage stabilization fund, from $10 billion to $3.5 billion. The fund was established to give incentives for Medicare preferred provider organizations to remain in the program. Other key health care provisions in the bill include a package of measures favoring health savings accounts, a 1.6 percent increase in Medicare payments for end-stage renal disease facilities, provisions to promote Medicare program integrity efforts, and a reduction in the maximum allowable Medicaid provider tax rate from 6 percent to 5.5 percent. The text of the legislation and summary descriptions of the bill are available on the House Ways and Means Committee Web site at http://waysandmeans.house.gov/ResourceKits.asp?section=2544. Congressional Aides Predict Busy Year for Health Care Initiatives in '07
Congressional health policy aides predicted 2007 will be a busy year for health care in Congress, with issues such as Medicare's prescription drug benefit, federal funding for embryonic stem cell research, health information technology, and the beginning of debate on the future of federal entitlement programs taking center stage. Aides at a briefing sponsored by the Alliance for Health Reform set out an ambitious health care agenda for the 110th Congress when it convenes next month, but they acknowledged that congressional pay-as-you go rules, requiring new spending to be taken from other programs, likely will hamper passage of sweeping new initiatives. Providing funding for reauthorization of the State Children's Health Insurance Program and for a temporary or long-term fix for Medicare's physician payment system alone will be "really heavy lifts" in 2007, said Senate Finance Committee Republican aide Mark Hayes. It also remains unclear whether President Bush would veto such legislation and whether Congress could muster veto-override votes, the aides said. Early Focus
Democratic aides said that health care will become a focus of lawmakers immediately when the House convenes in early January, with consideration of bills allowing Medicare to negotiate lower drug prices and to increase federal funding for stem cell research.
The Senate is likely to follow the House's lead on these two issues, although quick action is unlikely because the Senate will first hold hearings to craft legislation, aides said. Other health issues likely to receive attention from lawmakers include fixing Medicare's physician payment system; making incremental changes to Medicare's prescription drug program; reauthorization of SCHIP; promoting use of health information technology; prescription drug safety; reducing the number of uninsured Americans; Medicaid oversight; increasing the ability of small businesses to offer health insurance to their workers; allowing prescription drug reimportation; and reauthorization of the Prescription Drug User Fee Act. An examination of Medicare payments to managed care plans also is likely this year, said Bridgett Taylor, Democratic staff aide for the House Energy and Commerce Committee. "It looks like the beginning of what will be a very busy year," said Hayes. The House will begin work as soon as it convenes in early January with work on the Medicare negotiation and stem cell research bills, said Kate Leone, senior health counsel to incoming Senate Majority Leader Harry Reid (D-Nev.). Aides have predicted in the past these bills will quickly pass the House.
GOP Opposition
The content of the Medicare negotiation bill in the Senate will be determined after hearings by the Finance Committee, Leone said. Since incoming Senate Minority Leader Mitch McConnell (R-Ky.) has said he will oppose such a measure, 60 votes likely will be necessary to pass it, she added.
Similar legislation, offered by Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.), passed the Senate in March with 54 votes, and Democrats have since picked up several GOP seats, Leone said. The committee already is canvassing lawmakers for their views on the issue, she added. In addition to allowing Medicare to negotiate lower drug prices, Congress also is likely to examine ways to get more low-income program enrollees coverage under Part D, the Democratic aides said. Lawmakers also could push for other incremental changes to the drug benefit, including the areas of pharmacy contracting, beneficiary open enrollment policies, and the overlap of Part B and Part D drug coverage in outpatient settings, Hayes added.
Doughnut Hole
Filling the so-called doughnut hole gap in Part D coverage is "on the radar screen for just about every member," Leone said, but she and the other aides said filling it completely would be prohibitively expensive. Hayes said it would cost $400 billion to eliminate the doughnut hole.
But Leone said lawmakers could take steps to begin to fill the hole in coverage, while Hayes added that allowing more low-income individuals to qualify for help by revisiting the assets test could keep more enrollees out of the doughnut hole, since low-income individuals are not subject to the doughnut hole under the Medicare drug law. Crafting a new physician payment system under Medicare also will challenge lawmakers as they consider such issues as whether a new payment formula can be crafted that can control overutilization of services, Hayes said. The Medicare Payment Advisory Commission is expected to issue a report on the issue early in 2007, which will contain reform recommendations lawmakers could draw from, he added. Lawmakers in the waning hours of the 109th Congress passed legislation eliminating a scheduled 5 percent Medicare payment cut for physicians scheduled to be implemented Jan. 1, 2007, and also included a 1.5 percent bonus for physicians reporting quality data.
Quality Reporting
Hayes said lawmakers are likely to revisit the quality reporting issue when they again tackle the physician pay issue, perhaps considering expanding the provision or requiring public comparison of quality measures.
Medicare payments to managed care plans also will be the subject of congressional scrutiny, with hearings on the issue likely in the House Energy and Commerce Committee, Taylor said. Taylor said Democrats are concerned that Medicare is paying managed care plans as much as 119 percent of fee-for-service rates. One troubling federal policy is that Medicare is giving teaching hospitals and managed care plans indirect medical education payments, Taylor said. "Paying the same thing to two different entities is ridiculous," she said. Hayes said improvements could be made in how Medicare pays managed care plans, with a possible model being payments to Part D plans. Under that system, managed care payments are based on bids received by the program, he added.
SCHIP Reauthorization
SCHIP reauthorization likely will consume considerable time in the Energy and Commerce Committee early in 2007, Taylor told those attending the briefing. "The best intentions are to have it done as soon as possible," she said.
The program's 10-year authorization will expire in 2007, and the Congressional Budget Office has assumed its current $5 billion annual funding level will be continued. Taylor said that level is not enough to ensure current and future enrollees will be able to continue to get coverage, but she did not say how much additional funding would be needed. Noting that some uninsured children are from working families without family coverage, Hayes said Congress could give SCHIP the flexibility to pay for adding children to the parents' health care policy. Such an effort could dovetail with congressional moves to increase the ability of small businesses to offer health insurance coverage to their workers, also an issue likely to be broached in the 110th Congress, Hayes said. Taylor also said Congress is likely to investigate Medicaid documentation requirements contained in the Deficit Reduction Act of 2005 and White House interpretations of the law, such as whether newborns born in the United States "may or may not be citizens."
IT Legislation
Congress also is likely to produce health IT legislation in 2007 that is expected to resemble a bill (S. 1418) produced by the Senate in 2005, Taylor said. New legislation is likely to contain federal funding to get providers to use health IT and interoperability requirements allowing the systems of different providers to communicate, Taylor said.
Under the 2003 Medicare drug law, Medicare's trustees must determine whether projected general revenue funding exceeds 45 percent of Medicare financing within the next seven years. If the Medicare trustees make such a determination two years in a row, a Medicare funding warning will be given, mandating that the president propose legislation to respond to the warning in his next budget submission. The law then requires Congress to consider the proposal on a fast-track basis. The trustees issued their first warning earlier this year, and are likely to issue a second one in 2007, triggering the drug law provision and likely a discussion on entitlement spending, Hayes said. Hayes said he hoped the funding warning would "serve as a jumping-off point for the public to see what's really at stake" regarding the growth in entitlement spending. But he said the warning likely will not spur Congress to take any immediate action. Leone said a funding warning "generating any kind of hysteria is probably misplaced," particularly since rising health care costs are plaguing the entire health care system. Democrats and beneficiary advocacy groups in the past have expressed concern the trigger could lead to program cuts and/or increased beneficiary cost-sharing. But repealing the trigger "is not something that will come easily," given the fiscal conservatism of Democrats such as those in the Blue Dog coalition, Taylor said.
Wyden Bill
In a separate development Dec. 13, Sen. Wyden unveiled a proposal providing universal health care for all Americans. The proposed Healthy Americans Act would create a centrally-financed system of private health insurance for all Americans except those enrolled in Medicare or in the military.
The $812 billion bill would mandate coverage at least as comprehensive as coverage now provided to members of Congress and federal employees, according to a summary of the bill produced by The Lewin Group. Under the bill, employers would "cash out" their health plans by terminating existing coverage and the amount saved to their workers in the form of higher wages, Lewin said. Premiums would be paid via annual income tax filings, it added. The bill would provide coverage for nearly 247 million Americans, and would be fully funded in part via premium payments, employer assessments, state and federal share of Medicaid savings, and reduced disproportionate share hospital payments, Lewin said. Health care coverage would be portable under the law, it added. "The legislation provides a guarantee: private coverage--at least as good as members of Congress receive--is a right of all Americans that can never be taken away," said a summary of the bill by Wyden's office. "With this guarantee, there will be universal coverage for no more than America spends as a nation today on health care," it added. |
