Enjoy Your Health

Two days before the U.S. House of Representatives planned to vote on a major health system reform bill, the American Medical Association came out in support of that measure and a companion bill that would address long-term Medicare pay for doctors.

AMA President J. James Rohack, MD, announced the Association's support for the Affordable Health Care for America Act during a Nov. 5 conference call with reporters as House Democratic leaders prepared the legislation for floor consideration. Leaders were aiming for an unusual Saturday vote on the primary reform bill on Nov. 7 but had not yet scheduled a floor debate for the Medicare Physician Payment Reform Act of 2009. That bill would repeal the sustainable growth rate formula that determines doctors' rates.

"These are separate bills but must be passed together," Dr. Rohack said. "Both are essential to achieving meaningful health system reform this year."

But Dr. Rohack stopped short of saying the Association would definitely withdraw its support for the larger health system overhaul bill if the Medicare pay piece did not accompany it. He also noted that the AMA's support for the Affordable Health Care for America Act was not a full endorsement, saying the legislation meets the organization's main principles for health system reform but still needs improvement.

"This legislation isn't perfect, but this debate is not over, and the work is not done," Dr. Rohack said. "The AMA will continue to work constructively with members of Congress and the White House to improve legislation and to make sure the voices of physicians and our patients are heard."

Because of the speed at which the bill was proceeding in the House, the AMA stated its position before the official start of its Interim Meeting, Dr. Rohack said. The AMA's policymaking House of Delegates is scheduled to meet in Houston Nov. 7-10.

The AMA is still seeking changes to the House reform bill, Dr. Rohack said, including a provision to open up more graduate medical education slots in general surgery, childhood and adolescent psychiatry, addiction medicine and other areas where training opportunities are lacking. The current bill expands GME only in primary care.

Dr. Rohack acknowledged that at least two state medical societies, the Texas Medical Assn. and the Illinois State Medical Society, came out against the House system reform legislation before the floor vote. But he also noted that numerous medical specialty organizations have joined the AMA in supporting the House bill.

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Washington The Centers for Medicare & Medicaid Services on Oct. 21 began accepting bids from accredited durable medical equipment, prosthetics, orthotics and supply companies in nine metropolitan areas to decide whether they can participate in the Medicare program.

The round one rebid for the DMEPOS competitive bidding program will be open for 60 days. It initially was launched July 1, 2008, but was halted after only two weeks when lawmakers agreed to an 18-month moratorium, citing patient access concerns raised by suppliers.

Earlier this year, the Obama administration reviewed the program and said it would move forward after making several revisions. The nine metropolitan statistical areas involved in round one are: Cincinnati-Middletown; Cleveland-Elyria-Mentor; Charlotte-Gastonia-Concord, N.C. and S.C.; Dallas-Fort Worth-Arlington; Kansas City, Mo. and Kansas City, Kan.; Miami-Fort Lauderdale-Pompano Beach; Orlando; Pittsburgh; and Riverside-San Bernardino-Ontario, Calif.

Ninety-three percent of all medical equipment suppliers in the country have met Medicare's accreditation requirements, CMS said.

In October, the agency also announced it had made several modifications to the bidding program to help suppliers successfully submit a bid, including:

• An early comprehensive bidder education program to help suppliers understand all aspects of the bid submission and evaluation process.
• A more user-friendly bid submission process that provides a new online system, upgraded instructions and a special process for suppliers to have their financial bid documents reviewed for completeness.
• Enhanced scrutiny of bidders, including up-front licensure verification, accreditation of subcontractors and bidder disclosure of subcontractors.

"We expect that these and other refinements will result in the selection of quality contract suppliers offering a choice of products to beneficiaries at a substantial savings," said Jonathan Blum, director of the CMS Center for Medicare Management.

The bidding program has been staunchly opposed by the American Assn. for Homecare, which represents DMEPOS suppliers. The association said the return of competitive bidding will allow Medicare to contract selectively with a small fraction of equipment suppliers while putting most of them out of business.

The association is pushing a bill introduced Oct. 13 by Rep. Kendrick Meek (D, Fla.) that would repeal the competitive bidding program.

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Physicians in smaller practices may not need to grapple for long with a federal regulation mandating the implementation of an identity theft prevention program. The House on Oct. 20 passed legislation that would exempt most practices from the "red flags" rule, which has an enforcement date of Nov. 1.

The Federal Trade Commission regulation requires entities that regularly extend credit or defer payment for services to implement a formal policy for detecting and preventing identity theft. Despite objections from the American Medical Association and other organizations, the commission counts physician practices as creditors if they bill patients for past services or allow patients to set up payment plans.

But the new legislation, authored by Rep. John Adler (D, N.J.), would amend the definition of a creditor to exclude businesses with 20 or fewer employees, including health care practices. The bill now heads to the Senate for consideration.

Other provisions would exempt entities that:

• Know all of their customers individually.
• Only perform services in or around the residences of its customers.
• Have never experienced incidents of identity theft or are in an industry where such occurrences are rare.

The legislation leaves it up to the FTC to determine whether a particular business meets the criteria for an exemption.

The AMA has not taken a position on the bill but is generally supportive of efforts to remove doctors from the rule's scope. The Association has argued to the FTC and lawmakers its position that physicians are not creditors under the law, and the mandate would unnecessarily burden small physician practices both administratively and financially.

Efforts by organized medicine have resulted in three prior delays of the final enforcement of the red flags rule.

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Washington The House Judiciary Committee on Oct. 21 voted 20-9 to adopt a bill increasing federal oversight of health insurance companies. Three Republicans supported the measure, despite criticism of the bill by the panel's top GOP member.

The bill, the Health Insurance Industry Antitrust Enforcement Act of 2009, would repeal insurers' partial exemption from federal regulation as codified by the McCarran-Ferguson Act of 1945. That act allows insurers to collaborate on the "business of insurance," such as conducting risk assessment of health plan subscribers.

The legislation is sponsored by Judiciary Committee Chair John Conyers (D, Mich.). He said his bill would end such abusive health insurance industry practices as price-fixing and carving up markets to maximize profits. "This measure fixes a mistake sitting on the federal statutes for over 60 years, making an important contribution to the health reform efforts under way in both houses of Congress."

House Speaker Nancy Pelosi (D, Calif.) expressed interest in including the Conyers bill in national health system reform legislation for the House floor. Senate Judiciary Committee Chair Patrick Leahy (D, Vt.) is sponsoring a companion bill.

Karen Ignagni, president and CEO of America's Health Insurance Plans, said in an Oct. 21 letter to Conyers that the McCarran-Ferguson Act's antitrust exemption already is very narrow. Federal and state antitrust laws prohibit the type of anticompetitive activities Conyers cited. "Thus, the bills attempt to remedy a problem that does not exist," she stated.

Rep. Lamar Smith (R, Texas), the House panel's top GOP member, said the current antitrust exemption allows smaller insurers to share information, which helps them compete against larger national firms. "In other words, McCarran-Ferguson promotes competition by making small- and medium-sized underwriters viable."

Smith said states have a long history of regulating health plans. "By inviting federal intervention, this bill might create a dual regulatory system that only confuses the health insurance and medical malpractice industry."

But Rep. Anthony Weiner (D, N.Y.) said allowing more federal regulation of health insurers would open the door wider to regional and national competition in the industry. Also, Congress shouldn't be giving one insurance company an advantage over another, he said.

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Washington -- Advocates of Medicare physician payment reform turned their attention to the House after the late October procedural defeat of a Senate bill that would have repealed the current system and effectively frozen pay rates for the next 10 years.

House Democratic leaders restated a commitment to permanent pay reform soon after Senate Democrats failed on Oct. 21 to secure 60 votes to force floor consideration of the Medicare Physician Fairness Act. The bill, by Sen. Debbie Stabenow (D, Mich.), would have abandoned the current sustainable growth rate formula and set future annual payment updates at zero, a revision that would cost roughly $245 billion over 10 years.

But Republicans and a handful of Democrats opposed to increasing the federal deficit by passing the legislation with no offsets defeated the motion. The final tally was 47-53.

Despite the setback, House Democratic leaders say they are strongly committed to passing a payment solution in conjunction with statutory "pay-as-you-go" legislation, which would require most new federal spending to be offset going forward. "We are confident that we will enact the payment reform this year," they said in an Oct. 21 statement.

The separate track

Three House panels approved separate 10-year plans to overhaul Medicare physician pay by scrapping the SGR formula and replacing it with one that more closely aligns rates with physician costs.

But at this article's deadline, the chamber was taking steps to strip that language from national health system reform bills and introduce it in November as a stand-alone bill. That would have the effect of lowering the cost of the larger reform bill.

The separate pathway to passage for a pay overhaul bill could become very difficult if the health system reform bill ends up being one of the few measures Congress passes this year. Senate leaders plan to include a one-year patch as part of their bill, but that would do nothing to eliminate planned pay cuts in 2011 and beyond.

"The most likely we are going to get is a two- or three-year patch. However, if we get some momentum in the House, perhaps there will be additional support for the Senate to look at this again," said Lori Heim, MD, president of the American Academy of Family Physicians.

But the House is stuck, because leaders promised conservative Democrats they wouldn't consider the doctor pay bill unless they find offsets or the Senate passes statutory pay-as-you-go, said Erin Kanoy, director of House relations for the Heritage Foundation, a Washington, D.C., conservative think tank. "I'm not sure anyone knows how to move forward at this point."

The developments in the Senate and House also imperil physician endorsement of broader health system reform efforts. Without a Medicare pay solution, the AMA would need to consider closely whether it could continue backing reform legislation, said AMA President J. James Rohack, MD.

"If the final bill harms physicians and their relationships with patients, then it will be difficult for us to support that," he said. "There is an urgency in dealing with this. Doctors will have to start making decisions in November and December about whether or not they will keep participating in the Medicare program."

Senate Majority Leader Harry Reid (D, Nev.) on Oct. 26 said the Senate's reform version would include a public health insurance option that allows states to opt out of participation. The public option poses a new payment issue for physicians, because Democratic leaders hope to base the plan's rates on what Medicare pays.

"The AMA firmly believes that physicians should be able to negotiate payment rates if a new public option is created," Dr. Rohack said. "Medicare's physician payment system is far too unstable to serve as the foundation for a new health insurance program."

Pushing a multiyear solution

The Senate vote demonstrated the challenge that a stand-alone Medicare physician pay bill with no offsets faces from fiscal conservatives as a planned 21.5% doctor cut nears on Jan. 1. Every Republican voted against proceeding to the Stabenow measure, and 12 Democrats and one independent joined them.

On the Senate floor, Reid said that "we were told by the American Medical Association and others that we would get help from the Republicans" to push the motion over the 60-vote margin. At a later news conference, Reid quantified that promised help as 27 Republican votes. But the AMA disputed Reid's statement, saying the projected Republican support did not refer to a stand-alone SGR overhaul.

"The reference to 27 votes was made well before [the Stabenow bill] was introduced and in the context of bipartisan health reform legislation," Dr. Rohack said.

Reid said the Senate might revisit the doctor pay issue if leaders prevail on the broader reform bill. Until then, however, physicians likely would receive only a one-year patch, he said.

But such short-term fixes have increased the size of the problem, as well as the cost of funding health reform, Dr. Rohack said. "It's leaving the impression that this is a strategy that Congress wants to limit patients' access to physicians so that they can decrease utilization of services."

AAFP's Dr. Heim said Congress must at least extend the patch beyond 2010. "They've got to stop doing this year to year."

The print version of this content appeared in the Nov 9, 2009 issue of American Medical News.