Kaiser Daily Health Policy Report
Senate Finance Committee Discusses Funding for Health Reform in Final 'Walk Through' Meeting
Senate HELP Committee Approves Bill That Would Allow FDA To Regulate Tobacco
Daschle Playing Role of Adviser, Expert in Health Reform Debate
Department of Justice, HHS Boosts Number of Investigators, Prosecutors Looking at Medicare, Medicaid Fraud
Wall Street Journal Examines Patients' Confusion Over Coverage of Preventive Exams
Health Information Technology Lobby Group Rallies Support for Certification Group; Critics Question Group's Ties
Iowa Gov. Signs Bill That Extends Health Insurance Coverage to More Children
Massachusetts Health Insurance Law Lowered Uninsured Rate, Had 'Marginal' Effect on Spending, Group Says
Recent Releases in Health Policy
Kaiser Family Foundation President, CEO Discusses Public, Experts' Health Reform Beliefs
NEJM Perspective Pieces Examine Physician Involvement in Health Reform, Congressional Progress on Reform
Capitol Hill Watch
Republicans Introduce Health Reform Plan That Would Provide Tax Credits To Purchase Health Coverage, Establish State Insurance Exchanges
[May 21, 2009]
Sens. Richard Burr (R-N.C.), Lamar Alexander (R-Tenn.) and Tom Coburn (R-Okla.) and Reps. Devin Nunes (R-Calif.) and Paul Ryan (R-Wis.) on Wednesday introduced the Patients' Choice Act (S 1099, HR 2520), a counter proposal to Democratic health care reform plans that would create state-based health insurance exchanges and provide U.S. residents tax credits to subsidize coverage premiums, Roll Call reports (Drucker [1], Roll Call, 5/20).
The act would require states to separately establish health insurance exchanges made up of private health insurers through which individuals could pick their coverage. The legislation would provide $5,700 in tax credits to families and $2,200 in tax credits to individuals to subsidize coverage premiums, the Washington Times reports (Washington Times, 5/21). An additional $5,000 tax credit would be provided to low-income families (Budoff Brown, Politico, 5/20). The credits would be funded by taxing employer-provided health benefits (Washington Times, 5/21).
Under the plan, states would be allowed to shift state residents covered by Medicaid into private coverage (Wayne, CQ Today, 5/20). The measure also would establish a system of health coverage auto-enrollment at emergency departments, motor vehicle departments and through employers (Politico, 5/20). The plan does not establish any new government health care programs (Drucker [1], Roll Call, 5/20). According to Politico, the bill's sponsors hope to achieve universal coverage for U.S. residents (Politico, 5/20). According to the bill's sponsors, the plan is budget neutral (Drucker [1], Roll Call, 5/20). Prospects
Burr said he plans to offer the bill as an alternative amendment on the Senate floor to the health care overhaul bills to be proposed by Democrats on the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee. Burr said, "We decided to construct what we decided was the best policy for health care. And then, hopefully, it's obvious," adding, "We're going to introduce it to the American people and let them voice an opinion on whether they want real health care reform. ... If the American people want it, we're in the game" (Drucker [1], Roll Call, 5/20).
According to the Wall Street Journal, the plan "has little chance of passage" because of the Democratic majority in both chambers; however, "it reflects some Republican lawmakers' growing dissatisfaction with a bipartisan effort to fix the health care system" (Adamy, Wall Street Journal, 5/21). Democratic Response
Senate Finance Committee Chair Max Baucus (D-Mont.) said that the GOP plan is "basically what we're doing," adding that the "only difference" is that it would eliminate the tax benefits for employers who provide health coverage. Baucus said, "It would destroy the insurance system in America as you know it" (Washington Times, 5/21).
After Republicans announced their proposal, Sen. Charles Schumer (D-N.Y.) and Health Care for America Now unveiled a plan to work jointly to advocate for a public option as part of a comprehensive overhaul. Schumer and HCAN also released a report that said health insurers have a monopoly over the health insurance market and creating a government-run public option is the only solution to the problem. Schumer said, "It's all the evidence we need that consumers must have a public option," adding, "We must make increasing competition our top priority" (Drucker [2], Roll Call, 5/20). Medical Rights Act
In related news, a group of congressional Republicans -- including Reps. Mark Steven Kirk (Ill.) and Charlie Dent (Pa.) -- on Wednesday introduced a bill (HR 2516) that would ban the federal government from interfering in private health insurance except in cases of existing Medicaid, Medicare, veterans or military health care. According to the Times, the bill essentially would void Democrats' overhaul plans (Washington Times, 5/21).
Senate Finance Committee Discusses Funding for Health Reform in Final 'Walk Through' Meeting
[May 21, 2009]
The Senate Finance Committee met Wednesday to discuss potential funding mechanisms for health reform legislation but indicated that no concrete decisions had been reached, The Hill reports. The meeting was the third of three scheduled to "walk through" various aspects of health reform. Previous talks focused on the care delivery system and coverage. Finance Committee Chair Max Baucus (D-Mont.) has said that he hopes for a bill to be approved for full Senate consideration by the end of July. He said of the talks so far, "We've got a lot of work ahead of us," adding, "Soon we have a mark up, soon we have a bill, and that realization is forcing us to make decisions." He also said, "Nothing's pushed off the table. We're looking at it all."
Funding mechanisms discussed Wednesday included taxes on sugary and alcoholic beverages, as well as a limit on the tax-exempt status of employer-provided health insurance (Young, The Hill, 5/20). One proposal would raise the federal alcohol excise tax by 145% for beer, 233% for wine and 20% for hard liquor (Hurt, New York Post, 5/21). The committee also mulled a three-cent tax per 12-ounce container of sugary drinks, which would raise an estimated $50 billion over 10 years (Alonso-Zaldivar, AP/Houston Chronicle, 5/21). Baucus said he supports placing a cap on the employer coverage tax exemption based on income or the cost of premiums, or both. Congress estimates that about $194.2 billion in revenue is passed up each year by forgoing taxes on the insurance plans.
The committee also discussed decreasing Medicare spending on home care, durable medical equipment, medical imaging and prescription drugs, as well as addressing regional disparities in health care costs (The Hill, 5/20). Members also brought up the possibility of charging higher-income seniors higher premiums for the Medicare prescription drug benefit (Wayne, CQ Today, 5/20). Members also discussed introducing new standards for not-for-profit hospitals that would require them to provide more no-cost care and serve more low-income patients in order to keep their tax-exempt status. In addition, they discussed cutting special Medicare payments to teaching hospitals, as well as requiring drugmakers to give larger discounts to state Medicaid programs (Pear, New York Times, 5/21).
Baucus noted "convergence" on some issues, such as the need to include complete funding in a reform package, as well as the need to establish insurance exchanges that would facilitate the purchase of public or private insurance (The Hill, 5/20). Committee ranking member Chuck Grassley (R-Iowa) said, "There was a greater understanding of the issues we have," but there are "a lot of members who still want some more understanding." Grassley also said, "There's just a lot of questions; there are -- I wouldn't say misunderstandings, but there's got to be a lot of understanding about what you're talking about" (CQ Today, 5/20). Chances of Bipartisan Bill
Baucus during a press conference Thursday predicted a 75% to 80% percent chance that his panel will be able to create a bipartisan bill, according to The Hill. When asked what were the chances he would succeed in winning the support of senators from both parties, Baucus responded: "Very high. Very, very high. If you want me to put a percentage on that, I'd say it's about 75, 80 percent. It's very high" (Young, The Hill, 5/21.)
A podcast and video of the press conference are available online at kff.org. Groups Criticize Tax Proposals
Labor unions have begun speaking out against a potential tax on employer-provided health benefits, expressing concern that they would deteriorate the system through which most U.S. residents younger than 65 are covered, the New York Times reports. The National Education Association, United Food and Commercial Workers and the American Federation of State, County and Municipal Employees ran ads in Oregon cities this week stating that Sen. Ron Wyden's (D-Ore.) suggestion to "tax the health care benefits we get at work as if they were income ... doesn't make sense." Baucus defended the tax proposal, saying that the exemption disproportionately benefits people with higher incomes. He said, "It's too regressive" and "just skews the system."
Producers of sodas and alcoholic beverages also spoke out against the tax proposals affecting their products. The Distilled Spirits Council of the United States said the tax would put many jobs at risk, from manufacturers and wholesalers to retailers and food service workers (New York Times, 5/21). Senate HELP Committee's Plan
Sen. Orrin Hatch (R-Utah) on Wednesday said the overhaul bill being developed by the Senate Health, Education, Labor and Pensions Committee, of which he is a member, resembles the "Massachusetts [plan] on steroids." The Massachusetts Health Insurance Law of 2006 requires that everyone obtain health insurance and established an exchange through which residents can select from a menu of public and private health plans, with subsidies provided to eligible individuals. He said of the HELP plan, "I think that it's driven by the White House, and if it is driven by the White House, then it's certainly not going to be very bipartisan." House
The House Ways and Means Committee on Wednesday also met to discuss health reform. Members avoided contentious issues and instead talked about physician shortages and ways to change payment systems to emphasize quality, according to CongressDaily. Although some Democrats said they would not dismiss Republicans' proposals to tax employer health benefits outright, others said they could not support such plans. Rep. Artur Davis (D-Ala.) said, "You talk about sticker shock; that's a tax people are not accustomed to paying. It's very hard to justify the change if people are going to be hurt economically by other things, like the cap-and-trade debate."
Ways and Means Chair Charles Rangel (D-N.Y.) said the panel will focus on completing work on health reform legislation before moving on to climate change initiatives (Edney, CongressDaily, 5/21).
Senate HELP Committee Approves Bill That Would Allow FDA To Regulate Tobacco
[May 21, 2009]
The Senate Health, Education, Labor and Pensions Committee on Wednesday voted 15-8 to approve a bill (S 982) giving FDA authority to regulate tobacco products, the Wall Street Journal reports. Under the bill, FDA could ban certain tobacco products, such as candy-flavored cigarettes, restrict tobacco advertising to black-and-white ads, and prohibit use of the terms "mild" and "low tar" (Yoest/Mundy, Wall Street Journal, 5/21). FDA also could limit the amount of nicotine in tobacco products, as well as enlarge warning labels. To pay for the new regulatory efforts, the bill would require all tobacco companies to pay a fee that would raise nearly $5.4 billion over the first 10 years.
Committee members voted down a number of amendments:
- An amendment by Sens. Richard Burr (R-N.C.) and Kay Hagan (D-N.C.) that would have created a new HHS agency to regulate tobacco that would have less authority than the bill gives to FDA. The amendment also would have banned all print advertisements for tobacco.
- Another amendment by Hagan would have limited cigarette testing to U.S. laboratories.
- An amendment proposed by Sen. Tom Coburn (R-Okla.) would have allowed FDA to regulate medical marijuana (Hunt/Posner, CongressDaily, 5/21).
HELP ranking member Mike Enzi (R-Wyo.) offered amendments to impose larger penalties on tobacco companies that violate the legislation and limit the authorization for legislation to seven years. He later withdrew them after Sen. Chris Dodd (D-Conn.) promised that senators would evaluate the proposals before the bill goes to the floor. Dodd said that the legislation could come to the Senate floor as soon as the first week in June. Dodd indicated that he is confident the bill will pass despite a threat of a filibuster from senators representing tobacco-producing states, such as Burr (Armstrong, CQ Today, 5/20). Similar legislation in the House ( HR 1256) was approved in April; it does not include changes to tobacco products' warning labels ( CongressDaily, 5/21).
Daschle Playing Role of Adviser, Expert in Health Reform Debate
[May 21, 2009]
Even after withdrawing his nomination as HHS secretary, former Senate Majority Leader Tom Daschle (D-S.D.) has remained involved in the health reform debate, USA Today reports. According to USA Today, his "[m]ost important" action has been participating in private meetings on health reform with members of Congress. Daschle is a co-founder of the Bipartisan Policy Center, which is scheduled to release its own reform plan in June. He also has called "for action in a campaign-like circuit of speeches," wrote an opinion piece supporting a public health plan and was named to the board of General Electric's new initiative to reduce medical costs by $6 billion, USA Today reports.
Daschle works for Alston & Bird, a law firm that lobbies on behalf of more than a dozen health companies, including CVS Caremark, according to Senate lobbying disclosure statements (Fritze, USA Today, 5/21).
Medicare
Department of Justice, HHS Boosts Number of Investigators, Prosecutors Looking at Medicare, Medicaid Fraud
[May 21, 2009]
HHS and the Department of Justice on Wednesday launched the Health Care Fraud Prevention and Enforcement Action Team to detect and prevent fraud in Medicare and Medicaid, the Washington Post reports (Johnson, Washington Post, 5/21). DOJ also plans to establish teams to address fraud in the Medicare Part D program and CHIP (Kennedy, AP/Houston Chronicle, 5/20). Wednesday's announcement also included a recommendation by President Obama's administration to include $311 million in the fiscal year 2010 budget to address health care fraud, which is a 50% increase from FY 2009. According to Attorney General Eric Holder, efforts to combat health care fraud will contribute to the administration's health care overhaul plans (Clark/Weaver, McClatchy/Kansas City Star, 5/20).
The task force, which will include HHS and DOJ staff members, law enforcement agents and prosecutors, will meet biweekly, CQ HealthBeat reports (Norman, CQ HealthBeat, 5/20). Under the plan, existing enforcement teams in Miami and Los Angeles will be expanded and new teams will be established in Houston and Detroit, where officials say suspicious billing patterns have emerged. In addition, the plan will set up task forces in 10 other major cities, which were not named (AP/Houston Chronicle, 5/20). The enforcement teams will increase site visits to durable medical equipment suppliers upon their enrollment. In addition, officials will expand training to help providers identify and prevent fraud or other mistakes (CQ HealthBeat, 5/20). The task force will use electronic claims data to detect "unusual billing problems," according to the Post (Washington Post, 5/21). HHS Secretary Kathleen Sebelius said the task force also intends to simplify billing systems and assist state officials in conducting Medicaid audits (CQ HealthBeat, 5/20). According to Holder, the joint task force will allow officials to share real-time intelligence data on health care fraud by monitoring claims payments, billing patterns and targeted surveillance (AP/Houston Chronicle, 5/20). Money
According to the Miami Herald, health care fraud costs U.S. taxpayers at least $60 billion annually (Clark/Weaver, Miami Herald, 5/20). In the past, the largest sums recovered by the federal government have resulted from DOJ interventions in lawsuits against pharmaceutical companies filed under the False Claims Act. According to attorneys involved with the cases, such settlements are likely to reach record highs in FY 2009 (Washington Post, 5/21). In southern Florida, a task force created in 2007 helped convict 146 defendants and generated $186 million in fines and penalties. In addition, a Los Angeles team established in 2008 charged 37 defendants and generated $55 million for Medicare (CQ HealthBeat, 5/20).
Tony West, head of DOJ's Civil Division, said, "There is an incredible amount of money that can be recovered and returned to the health care trust fund, and that has a real impact" (Washington Post, 5/21). Sebelius said, "For every dollar we invest in fraud prevention and oversight, at least $1.55 comes back for the taxpayer" (CQ HealthBeat, 5/20). West added that health care has the "biggest single impact on the budget," and that pursuing health care fraud cases and recouping losses are "consistent with the president's agenda on health care reform" (Washington Post, 5/21).
Health Care Marketplace
Wall Street Journal Examines Patients' Confusion Over Coverage of Preventive Exams
[May 21, 2009]
As employers increasingly offer no-cost preventive care as a means of controlling health costs, some people under such plans are being charged for services not deemed preventive by the insurer, the Wall Street Journal reports. According to Watson Wyatt Worldwide, 72% of large employers in 2009 cover 100% of preventive care -- such as physicals, colonoscopies or mammograms -- for employees, an increase from 55% of large companies in 2008. The Journal reports that the charges often result from billing errors or from a physician's office being unaware of an insurer's procedures. Charges that are the result of billing errors often can be reversed. However, others -- such as a test or treatment not being defined by the insurer as preventive -- force some patients to "wage a protracted battle" to get the charges reversed, according to the Journal.
When unexpected charges appear on patients' bills, physicians and employers often receive complaints but they have little control over how insurers classify treatments. The Journal reports that patients can prevent being charged for preventive services by checking with their insurer before seeking care; asking for specific, covered screenings and treatments at physicians' offices; reviewing explanation of benefits forms supplied by insurers; asking supervisors at insurers to review disputed claims; and seeking help from employees in company human resource departments (Wilde Mathews, Wall Street Journal, 5/21).
Coverage & Access
Health Information Technology Lobby Group Rallies Support for Certification Group; Critics Question Group's Ties
[May 21, 2009]
The Healthcare Information and Management Systems Society has asked HHS to give the Certification Commission for Healthcare Information Technology authorization to determine which electronic health records systems can receive funding from the economic stimulus package, the Washington Post reports. In a letter dated April 27 to HHS officials, HIMSS officials wrote, "To ensure continuity, recognize CCHIT as the certifying body" of EHRs.
Some health care industry officials have raised issue with giving CCHIT the responsibility of certifying EHR products because of the commission's associations with various IT and health care companies, the Post reports. CCHIT has ties with HIMSS, which played a role in its inception in 2004 and is now managed by Mark Leavitt, the former chief medical officer of HIMSS. In 2005, the commission received a three-year, $7.5 million contract from HHS.
According the Post, Internal Revenue Service tax documents show that HIMSS technically paid Leavitt's salary through 2008, which was reimbursed by CCHIT. However, Leavitt said he is accountable only to CCHIT's board members and he "was not supervised by HIMSS." He said he expects CCHIT will be "the body or one of several certifying bodies that are recognized" by HHS in part because it already is tasked with certifying health IT products. According to Leavitt, some of the commission's critics are IT vendors who have failed to meet CCHIT's standards.
The Post reports that the provision in the stimulus package that requires health care providers to demonstrate "meaningful use" of health IT has become an issue because federal officials, IT systems vendors, and physicians and patient advocates have not been able to reach a consensus on the definition of meaningful use. Under the provision, providers must demonstrate meaningful use of health IT in order to receive Medicare and Medicaid incentive payments for adopting the technology (O'Harrow, Washington Post, 5/21). Blumenthal
In related news, National Coordinator for Health IT David Blumenthal on Wednesday at a Brookings Institution seminar said the incentive payment and financial assistance provisions in the stimulus package will play a "critical" role in the success of health IT adoption, CQ HealthBeat reports. Blumenthal said, "If we can show physicians and hospitals that they can be better at their basic work with this technology than they could ever be without it, if we can show the value that it provides day in and day out in the provision of patient care, if we can show that same thing to the American public, then I think the money will be a sweetener but not a determinant of adoption" (Reichard, CQ HealthBeat, 5/20).
State Watch
Iowa Gov. Signs Bill That Extends Health Insurance Coverage to More Children
[May 21, 2009]
Iowa Gov. Chet Culver (D) on Tuesday signed into law a health care bill (SF 389) that among other provisions increases income eligibility for Hawk-I, the state's CHIP program, from 250% to 300% of the federal poverty level, the Des Moines Register reports. The law requires parents to enroll children who are eligible but does not impose any immediate penalty for failing to do so.
The law also includes provisions to give state administrators more flexibility to subsidize private health insurance premiums for families who qualify for public insurance and to streamline eligibility requirements for public insurance programs. In addition, the bill allows children in families with moderate incomes to receive dental coverage through Hawk-I, even if they have a private health plan (Leys, Des Moines Register, 5/19).
The state will spend $5.7 million on the expansion and another $2 million on dental coverage (AP/Omaha World-Herald, 5/19).
Efforts are under way to identify uninsured children who are eligible for state programs, such as through a question on state income tax forms (Des Moines Register, 5/19). State Sen. Jack Hatch (D) said lawmakers next year will examine ways to expand coverage for adults and improve mental health coverage (AP/Omaha World-Herald, 5/19).
Massachusetts Health Insurance Law Lowered Uninsured Rate, Had 'Marginal' Effect on Spending, Group Says
[May 21, 2009]
The Massachusetts Health Insurance Law of 2006 has allowed the state to have the lowest uninsured rate in the country while having a "marginal impact" on state spending, according to a report by the Massachusetts Taxpayer Association, the AP/Boston Globe reports. MTA was among the groups supporting the bill's original passage. The report shows that health care spending will increase by $707 million from fiscal year 2006 to FY 2010. Half of that increase would be covered by the federal government, so the annual cost increase for the state would be $88 million, according to MTA. It noted that many workers who had chosen not to purchase employer-provided insurance before the law took effect now have done so, which has resulted in about $750 million in additional costs for businesses each year (AP/Boston Globe, 5/20).
A summary of the report is available online. The full report also is available on the same page (.pdf).
Recent Releases in Health Policy
Kaiser Family Foundation President, CEO Discusses Public, Experts' Health Reform Beliefs
[May 21, 2009]
"The Experts vs. The Public on Health Reform," Kaiser Family Foundation: In the column, Kaiser Family Foundation President and CEO Drew Altman explores the "wide gulf on basic beliefs about what is behind the problems in the health care system and key elements of reform, especially delivery reform" between the public and experts. According to Altman, the differences "matter because key elements of health reform which elected officials expect to resonate with the public could get a decidedly less enthusiastic reception than expected if more is not done to close the gap in basic premises and beliefs between experts and the public." The column is the latest installment of a Foundation series, titled "Pulling It Together ... from Drew Altman" (Kaiser Family Foundation release, 5/19).
NEJM Perspective Pieces Examine Physician Involvement in Health Reform, Congressional Progress on Reform
[May 21, 2009]
- "Achieving Health Care Reform -- How Physicians Can Help," New England Journal of Medicine: In a perspective piece, Elliott Fisher, a professor of medicine and of community and family medicine at Dartmouth Medical School and associate director for Population Health and Policy at the Dartmouth Institute for Health Policy and Clinical Practice; Donald Berwick, a professor at the Harvard University School of Public Health Department of Health Policy and Management and president and CEO of the Institute for Healthcare Improvement; and Karen Davis, president of the Commonwealth Fund, call on physicians to "lead the change our country needs" on health reform. They suggest several areas for physicians to become involved, saying that physicians should "first help to create a shared vision that could overcome doctrinal divides" and that they also must "recognize that achieving savings sufficient to cover the cost of expanded coverage need not impose a hardship on patients or providers." Finally, physicians also must help with a health reform deal that "all stakeholders can support," the authors say (Fisher et al., NEJM, 5/21).
- "Congressional Action on Health Care Reform," NEJM: John Iglehart, national correspondent for NEJM, reviews recent congressional action on health reform. He notes that House lawmakers have pledged to pass a reform measure by July 31, which is similar to a Senate timeline for reform. He discusses provisions that are expected in reform plans being crafted by three House panels and two Senate committees. He also notes that "finding the money to finance reform is the most formidable hurdle facing Democrats," adding, the "GOP will undoubtedly attack [Democrats] for adding untold billions to the mounting federal deficit and leading down a road to socialism" (Iglehart, NEJM, 5/21).
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