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Health reform summer expected to be eventful
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The two Senate committees that share jurisdiction over health care issues report that they are coordinating with each other to bring forward health reform bills that both committees can agree on, or at least bills that share enough common features to serve as a starting point for the health reform debates that lie ahead.
The Senate Finance and the Senate Health, Education, Labor and Pensions (HELP) committees are each expected to mark-up and vote on health reform bills later this year.
Senate finance
The Finance Committee document is likely to include provisions that will:
- Bundle hospital payments with post-acute care services, and potentially with physician services, in a comprehensive episode of care;
- Encourage greater care coordination, moving away from the current fee-for-service environment;
- Include delivery system reforms (which could include accountable care organizations or primary care bonuses); and
- Reform Medicare Advantage payments, potentially Medicare Advantage competitive bidding.
HELP
The HELP bill is expected to address Sen. Edward Kennedy’s goals of:
- Expanding health insurance coverage;
- Improving the quality of care and how it is delivered;
- Improving public health and prevention;
- Better identifying fraud and abuse;
- Retooling the way long-term care is financed; and
- Making it easier to obtain health insurance, including subsidies for low- and middle-class families, and mandates for individuals and employers to purchase or provide health insurance.
Pay-fors
Ultimately, one of the toughest issues facing comprehensive health reform will be determining how to pay for the provisions in the bills. Capitol Hill staffers have said health care providers with positive margins can expect payment reductions as part of the financing effort. Some Republican proposals have included taxing health benefits, an idea the Obama administration has not supported. In addition to some of the proposals already mentioned, other options for financing health reform have included:
- Reducing disproportionate share hospital payments;
- Reducing payments to Medicare Advantage plans; and
- Part D means-testing (although this idea has been discussed, Senate Finance staffers report that such a proposal would have to be offset by improvements elsewhere in the program, for example, by addressing the doughnut hole, low-income subsidies or by making other changes to the Medicare prescription drug program).
Sustainable growth rate reform
Each year since 2003, physicians have managed to avoid mandated cuts to their Medicare payment rates because of last-minute action by Congress that provided minimal increases to the payment rate or froze payments at their current levels. However, the cumulative effect of those actions will result in a 21% payment cut beginning Jan. 1, unless another temporary fix or more comprehensive reform to the sustainable growth rate (SGR) formula is included in a bill that is signed into law before the end of the year. Some estimates for enacting comprehensive reforms that would replace the SGR with another system have exceeded $300 billion over the next 10 years.
- Chandra N. Branham, JD, can be reached at Arnold & Porter LLP, 555 12th St. NW, Washington, DC 20004; 202-942-5659; e-mail: chandra.branham@aporter.com.