CMA Summary of Additional Points: The House Tri-Committee Health Reform Discussion Draft

CMA Summary of Additional Points: The House Tri-Committee Health Reform Discussion Draft

This summary of additional points should be read only after reading the Summary of the House Tri-Committee Health Reform Proposal prepared by congressional staff. Below are additional details of interest to physicians. The House Draft Bill is a long (852 pages) complex document. CMA is seeking clarification on several issues and will prepare a definitive summary and analysis.

Additional Detail Not Included in the House Tri-Committee Summary

Health Insurance Exchange (See House Committee Summary for a More Comprehensive Discussion)

In addition to the insurance reforms listed in the summary, the bill requires insurers to dedicate 85 percent of revenue to direct medical care. Insurers who do not meet this requirement must provide a rebate back to “consumers.”

Requires insurers to have adequate provider networks.

Implements fair marketing requirements, and grievance and appeals processes.

Establishes an external medical review process.

Requires prompt payment consistent with Medicare timelines of 30 days.

Public Plan Option: Would create a public health insurance option to be operated by HHS that would compete with the private health insurance plans in the newly established health insurance exchange.

• It must meet the same requirements applicable to the private plans.
• Must be financially self-sustaining.
• The Committee Summary states that physician participation would be mandatory for all Medicare participating physicians. However, the bill language does not include such a requirement. Physicians participating in the public plan would be paid the NEW Medicare rates (with a floor of 1 percent for annual updates ) plus a 5 percent incentive payment.
• The HHS secretary also authorized the use of innovative payment mechanisms such as medical homes, accountable care organizations, bundling, capitation, direct contracting with providers, performance or utilization-based payments.

Expands Medicaid to 133 percent of the FPL to cover more low-income families.

Increases Medicaid reimbursement for all primary care services as follows:

• 80 percent of the New Medicare rates in 2010.
• 90 percent of the New Medicare rates in 2011.
• 100 percent of the New Medicare rates in 2012.

These Medicaid fee-for-service rate increases would be used to develop Medicaid managed care rates.

The federal government would cover 100 percent of the cost to expand coverage and increase provider reimbursement rates. No state matching funds are required. However, states are required to meet a maintenance of effort requirement for all eligibility, methods, and procedures in place as of June 16, 2009.

It increases matching funds to states that are in the upper 50th percentile of reducing the numbers of uninsured.

Medicare Provisions

Physician update in 2010: Medicare Economic Index.

Eliminates the current SGR in 2011 by wiping out the $300 billion in projected cuts to physicians.

Establishes two new SGR service categories:

• Service Category #1: E&M services
• Service Category #2: all other services

Removes the drugs provided in physician offices from Medicare Part B (physician services) and moves these drug expenditures to Part D. This will reduce the expenditures in Part B, which will help physicians avoid hitting the two new SGR spending caps.

Updates for the service categories:

• E&M Service Category #1: gross domestic product + 2 percent
• All Other Services Category #2: gross domestic product + 1 percent
• (Note: The GDP has averaged 3.1 percent over the last decade; the MEI has averaged 2.5 percent.)

CMA is analyzing the impact of the language on the service categories to determine the future update projections in these two new SGR categories. We have asked congressional staff to share the CBO budget impact projections.

Additional 5 percent bonus payment for E&M services for new and established patient office visits, primary care services, emergency department visits, consultations and home services.

Additional 5 percent “efficiency” bonus payment for physicians practicing in counties that are within the lowest 5 percentile of utilization based on per capita Medicare spending. (CMA continues to seek an amendment to this provision to ensure the calculation is cost-adjusted because California has some of the highest cost-of-living areas in the country.)

Bonuses for the Physician Quality Reporting Initiative are extended through 2012. CMA has asked for significant reforms to the PQRI program. This bill includes some of those reforms including a meaningful physician feedback mechanism and an appeals process.

Transitions all California payment localities to Metropolitan Statistical Areas (MSAs). Starting in 2011, 14 California counties will receive payment increases. The bill establishes a hold harmless to prevent physicians in other counties from receiving payment reductions for five years until 2016. San Benito 13 percent+; Santa Cruz 8.6 percent+; Marin 7.6 percent+; Monterey 6.5 percent+; Sonoma 6.2 percent+; San Diego 4 percent+; Santa Barbara 4 percent+; El Dorado 2.7 percent+; Placer 2.7 percent+; Sacramento 2.7 percent+; Yolo 2.7 percent+; Riverside 0.7 percent+; San Bernardino 0.7 percent+; San Luis Obispo 0.3 percent+. This is a CMA-sponsored provision except the hold harmless was reduced to five years. The CMA-sponsored bill has a permanent hold harmless. Several years ago, the House Medicare bill included a California GPCI fix with only a three year hold harmless.

Changes the imaging practice expense formula.

Requires the secretary of HHS to reduce hospital readmissions through payment reductions to hospitals.

Requires the secretary of HHS to develop a plan to reform payment for post-acute services, such as implementing bundled payments for physician and inpatient services.

Extension of the physician fee schedule for the mental health add-on.

Establishes a review process for misvalued relative value units and codes.

Establishes accountable care organization demonstration projects. Per CMA policy the ACOs must be physician-led and do not require the involvement of a hospital. It allows physicians who share HIT and report on quality to collaborate and share in the hospital savings achieved by reducing unnecessary hospitalizations. The legislation gives the Secretary broad flexibility to develop innovative ACOs at the local level.

Requires the secretary to establish medical home demonstration projects.

Requires the secretary to establish methods to allow physician groups to contract directly with Medicare on a capitated basis.

Increased penalties for fraud and abuse and it requires providers to adopt programs to reduce waste, fraud and abuse.

Requires ambulatory surgery centers to submit cost data.

Bans future physician-owned hospitals.

Administrative Simplification: Most notably, it would require HHS to adopt standardized operating rules and companion guides for using and processing electronic healthcare transactions.

Requires the secretary to reduce healthcare disparities by studying the availability of language services and to recommend payment reforms for language services. It requires the study of the feasibility of on-site interpreters as well as the feasibility of Medicare contracting with agencies to provide telephone and video interpreter services. Finally, it requires the Secretary to make grants to fund increased reimbursement for services provided to Limited English Proficient patients. CMA helped to develop this provision with Congressman Becerra.

Requires CMS to provide information to beneficiaries for end-of-life planning. CMA-sponsored bill several years ago.

Prohibits Part D pharmaceutical plans and Medicare Advantage plans from changing the prescription drug formulary mid-year.

Payment reductions to hospitals, skilled nursing facilities, home health and Part D prescription drug plans.

Reduces Medicare Advantage payments over time.

Medicaid (See Health Insurance Exchange Section)

Codifies the California State Family Planning Presumptive Eligibility Program. CMA-sponsored provision.

Provides public health clinics access to vaccines for children program vaccines. CMA-sponsored legislation would also provide VFC vaccines for the SCHIP-Healthy Families program.

85 percent medical loss ratio for Medicaid managed care plans.

Comparative Effectiveness Research

Establishes a center to perform clinical effectiveness research to assist physicians in making appropriate medical decisions with their patients. Establishes a commission that includes physicians; however, does not include the explicit prohibition against the use of the information to curb payment or coverage.

Graduate Medical Education

To address the need for increased residency positions, the bill authorizes the redistribution of unused GME positions with preference to hospitals that emphasize primary care training. It also increases training in non-institutional settings and establishes demonstration projects for primary care training.

Prevention and Wellness (See the House Summary)

Public Health Workforce and Health Professions Training

Public health workforce augmentation, training, and loan-repayment assistance.

Scholarships for students with disadvantaged backgrounds to ensure a diverse healthcare professional workforce.

Culural and linguistic competence training for healthcare professionals.