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Navigate this summary of provisions in the latest health care reform legislation:
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On behalf of the U.S. House of Representatives, and working as one, the Committee on Ways and Means, chaired by Rep. Charles Rangel (D-NY); the Committee on Education and Labor, chaired by Rep. George Miller (D-CA); and the Committee on Energy and Commerce, chaired by Henry Waxman (D-CA), released a joint health care reform legislation discussion draft on June 19. It addresses a number of issues including, physician payment reform, comparative effectiveness research, financial relationships with industry, quality reporting and a public plan option.
Democratic leadership of both the House and Senate are hoping to vote on their respective legislation before the August recess. The Society's Health Policy staff continues to work with other medical societies to analyze the legislation and meet with health care legislators and their staff to provide feedback. If you have any questions about the following summary, please contact Isabelle Le Blanc, Coordinator, Legislative Affairs and Health Policy.
Summary of Provisions in the House Legislation
Physician Payment Reform
The proposed legislation would replace the 21.5 percent fee schedule reduction in 2010 with an update of 1 to 1.5 percent. Beginning in 2011, the flawed Sustainable Growth Rate (SGR) formula would be replace and would group services into two categories and establish separate target growth rates, including:
- Evaluation and management services (including office visits, primary care services, emergency services, consultation and home services), primary care and preventive services, which will increase based on the gross domestic product (GDP) +2 percentage points
- All other services will increase based on the GDP + 1 percentage point
Primary Care Bonus
Primary care physicians (i.e., physicians who specialize in family medicine, general internal medicine, general pediatric or geriatric medicine) will receive an additional 5 percent (of the total allowed charges for primary care services) bonus payments. This provision is not budget neutral within the physician payment formula, therefore payments to specialty physicians should not be directly impacted.
Potentially Misvalued Codes
The legislation would also give the Secretary of the U.S. Department of Health and Human Services (HHS) authority to periodically review potentially misvalued services, such as those with fastest growth, codes that have experienced changes in practice expenses, codes for new technologies, codes that are often billed together or codes that have not been subject to review since the implementation of the Resource Based Relative Value System (i.e., Harvard-valued codes). The Secretary would be entitled to use the existing structure, such as the American Medical Association/Specialty Society Resource-Based Relative Value Scale (RVS) Update Committee, or can choose to create its own process to receive recommendations on the review and appropriate adjustment of potentially misvalued services.
Physician Quality Reporting Initiative
The draft legislation proposes to extend the voluntary reporting in the Physician Quality Reporting Initiative (PQRI) program with annual 2 percent (of the total allowed charges) bonus payments for the years from 2009-2012. It also modifies the program to create a mechanism that will provide timely feedback to health care professionals, upon request, and create an appeal process beginning January 2011.
Market Basket Update
This legislation would reduce the annual inpatient, outpatient, inpatient rehabilitation (IRF), long-term care hospital, psychiatric hospital, skilled nursing facility (SNF) and the home health agency market basket updates by an adjustment for “productivity growth” (currently estimated at 1.3 percent for Fiscal Year (FY) 2010 in each of the next 10 years. In addition, SNF and IRF payments would be frozen for FY 2010, and home health payments would receive a coding adjustment and freeze for a 5.5 percent reduction in 2010.
Reduction of Hospital Readmission
Beginning in FY 2011, hospitals with higher-than-expected readmissions rates would see their Medicare payments adjusted downward for each Medicare discharge. Performance would be evaluated based on the 30-day readmission measures for heart attack, heart failure and pneumonia that will be implemented as part of the Medicare pay-for-reporting program and reported on Hospital Compare beginning this summer. Hospitals with actual readmission rates higher than their Medicare-calculated expected readmission rate would have their Medicare payments multiplied by an adjustment factor that is the greater of:
- Hospital-specific readmissions adjustment factor based on the number of readmissions to the hospital in excess of the hospital’s calculated expected readmission rate; or
- 0.99 in FY 2011, 0.98 in FY 2012, 0.97 in FY 2013, and 0.95 in FY 2014 and beyond
Post-acute providers’ payments also would be reduced when their patients are readmitted to a hospital within 30 days of the discharge.
Comparative Effectiveness Research
This discussion draft proposes the establishment of the “Center for Comparative Effectiveness Research” within the Agency for Healthcare Research and Quality (AHRQ), which will conduct, support and synthesize research with respect to outcomes effectiveness and appropriateness of health care services and procedures. The center’s duties include:
- Conduct systematic review of existing research
- Develop rigorous methodology for Comparative Effectiveness Research (CER)
- Encourage the development and use of registries
- Develop strategies to disseminate the findings
- Report to the Comparative Effectiveness Research Commission (CER Commission)
The legislation also creates the CER Commission mentioned above, which will oversee and evaluate the Center’s activities. The Commission will be comprised of the Director of the Agency for Healthcare Research and Quality (AHRQ), the Chief Medical Director of the Centers for Medicare and Medicaid Services (CMS) and 15 additional members. Of the additional members, the number will include at least one member representing each of the following groups: consumers, practicing physicians, employers, public plan, insurance plan and clinical researchers. The duties of the Commission include:
- Determining the national priorities related to CER, in consultation with broad group of stakeholders
- Identify credible research standards and research methods to guide the Center
- Monitor the use of funds appropriated to CER
- Make recommendations for policies to allow public access to results while protecting privacy of the data
- Contract with the Institute of Medicine (within one year of the enactment) to evaluate the standards of evidence
- Appoint a “clinical advisory panel” for each research project to advise the Center on research questions and research methods for such projects
- Make periodic review of previous CER
- Make recommendation to the Center regarding the dissemination strategies
- Report to Congress annually outlining the research progress, the evaluation of the overall cost of research and the fair per capita amount
The bill also outlines the research requirements:
- Agenda and research project should be insulated from inappropriate political and stakeholder influence
- Research methods should be scientifically-based
- Research methods and process should be publicly documented and available to all stakeholders
- The opportunity for public comments will be available throughout the research process
- The research needs to include subpopulation groups and take into account the various responses to treatments of those groups
Within 90 days of the publication, a report (including progress reports, draft final CER review, stakeholder comments, and final report) should be posted on the center and commission’s official website. The results of the research should be comprehensible and useful to patients and providers; the report should discuss the special consideration for subpopulation groups, the research limitation as well as potential additional research to be conducted. The report also needs to assist health information technology (HIT) users by integrating the results into the clinical decision support.
The legislation creates a Health Care Comprehensive Effectiveness Trust Fund (CERTF), which would receive the following amounts:
- FY 2010 —$90 million (including $7 million for the Commission)
- FY 2011 — $100 million (including $9 million for the Commission)
- FY 2012 — $110 million (including $10 million for the Commission)
- FY 2013 and after:
- for Medicare enrollees (part A and Part B) the fair share per capita amount ($2) multiplied by the number of beneficiaries
- For private insurance, the equivalent to the net revenue from the fees imposed on the health care insurances and self insured plans.
- The commission should receive $10 million per year
Quality Measures Development
While soliciting stakeholders’ input (including hospital, physicians, health care quality alliances, health plans, employers, labor unions, federal agencies, pharmaceutical and device manufacturers, credentialing entities and nurses), the Secretary of HHS will develop national quality measures priorities in the areas that:
- Target high cost chronic disease
- Have the greater potential to reduce morbidity and mortality
- Have the greater potential to improve performance
- Have the greater potential to address health care disparities
The Secretary will contract with eligible entities (i.e., public, non-profit or academic organizations with experience in developing such measures) to develop quality measures, which are free of use and collected though HIT system (when appropriate). Such measures will be designed to assess outcomes, safety, effectiveness and timeliness of care; assess coordination of car, and health disparities and improve the efficiency and resource used to provide care. Public review and comments should be allowed.
The Government Accountable Office (GAO) will conduct a periodic review of implementation of data collection process with respect to the relevancy credibility of the data, protection of patients’ health information, and evaluating the direct and indirect cost of conducting such research.
Financial Relationships with Industry
This legislation will mandate that pharmaceutical and medical device companies publicly report all money or gifts given to covered recipients. Examples of such money or gifts include consulting fees, compensation for services other than consulting, honoraria, entertainment, food, travel, education, research and charitable contributions. In this bill, covered recipients include physicians, physician group practices, pharmacy, pharmacy benefit managers, hospitals, medical schools, sponsors of continuing medical education, patient advocacy, health care professional organizations and biomedical researchers.
In accordance with MedPAC recommendations, the House included product samples in the reporting. The information will be available by the fall of 2011 on a searchable public website. The details of the public report will include the following:
- Name of the recipient
- Business address
- Specialty
- Value and nature of the payment
- Date of the payment
- Name of the drug or device (if applicable)
The website will be updated annually on June 30 of each year. The bill proposes a delayed reporting for payment if there are product development agreements and clinical investigations related to a new drug, device or medical supply. This information will be reported after the date of approval/clearance by the U.S. Food and Drug Administration (FDA) or two calendar years after the payment date, whichever occurs earlier.
The legislation also required hospitals to report annually on physicians (or immediate family physicians) who own interest in the hospitals.
The language includes penalties for nonreporting, ranging from $1,00 to $10,000 (but not exceeding $150,000). Payment inferiors at $5 are not required to be reported.
The language will require the Secretary to produce an annual report to Congress outlining aggregated information for each manufacturer, description of any enforcement and a description of type and prevalence of financial arrangement between physicians and hospitals.
Accountable Care Organization Pilot
An accountable care organization (ACO) will be an organized group of physicians that meet the following criteria. An ACO:
- has a legal structure to allow the group to receive and distribute incentive payments
- includes sufficient number of primary care physicians
- reports quality measures
- will contribute to best practice network or website sharing quality improvement strategies
- utilizes a patient-centered process of care
Hospital can be included in an ACO. The base amount of payment will be the average total charges under part A and part B for the services furnished by the ACO over a period of time, which will be determined by the Secretary.
The Secretary will develop a methodology with its own expenditure targets and updates for physician participating in ACOs and will do so no later than January 1, 2012).
Medical Home Pilot
The Secretary will establish a five-year medical home pilot to evaluate the feasibility of such models. The pilot will enroll patients whose numbers and severity of chronic illness places them in the upper 50 percent of the Medicare beneficiaries. Two models will be studied:
- Independent Patient-Centered Medical Home (PCMH) — providing direct, on-going, coordinated care by a team of individual in the practice or institutional settings led by a primary care, a main physician or a nurse practitioner. The care will be based on evidence based guidelines. The Secretary will establish certification standards for institution to become a PCMH. Payment for service rendered will be under the form of a monthly fee taking into account the amount a care provided, the capabilities of the independent PCMH and the use of appropriate risk adjustment
- Community-based Medical Home (CBMH) — a non-profit community or state based an organization that provides medical home services under the supervision of a main physician, primary care physician or nurse practitioner. The organization will employ nurses, non-physician practitioner to assist the main physician in the management of chronic care activities (such as self-care skills for managing chronic illnesses, mediation therapy management). The Secretary of HHS will establish certification criteria for CBMH. Payments will be divided into two monthly payments: one for the CBMH and one for the primary care physician. The amount will be based on the amount of care delivered and the use appropriate risk-adjustment
At the end of the pilot, the Secretary will evaluate the program to determine if the program improved quality and coordination of care, reduced health disparities, prevented readmissions, reduced emergency room (ER) visits, improved health outcomes, improved the efficiency of care (such as reduction of duplicate of test) and reduced health care expenditures. Depending on the results of the pilot, the Secretary (in consultation with CMS) can establish a permanent medical home program. The pilot will receive $6 millionannually for the fiscal year 2010 to 2014.
Imaging
The legislation will require a 75 percent — not 50 percent —rate of utilization. It also increases multiple procedure payment reduction from 25 percent to 50 percent.
Public Plan
This legislation proposes the creation of a public plan option which will be self-sustaining and will comply with the same rule as the private insurers. Initially the payments will be at the Medicare rate with the goal of moving to another payment methodology in the near future.
While the House bill does not explicitly require physicians to participate in the public plan, the Secretary must establish conditions of participation to ensure that the provider network is strong enough. Therefore, the Secretary could require physicians to participate to meet the conditions.
In order to encourage participation, the legislation provides a 5 percent bonus for the first three years to providers who participate in both Medicare and the public plan option.
Workforce Issues
The legislation addresses health care professional workforce issues by strengthening existing scholarship, loan repayment, and training grant programs to address the need for primary care (including physician assistants and dental workforce), nursing, and public health professionals.
The provisions related to primary care workforce are:
- Increase funding for National Health Service Corps to address workforce shortages in high-need areas
- Allow flexibility for part-time service
- Create a new scholarship and loan repayment program for health care providers in areas of need
- Enhance student loan and faculty loan repayment programs for primary care providers
- Strengthen grant programs for primary care training institutions
- Expand general and pediatric dentistry, dental hygienists, and dental health program
- Expand training for primary care physicians, encourage training outside the hospital setting where most primary care is practiced, and ensure that physicians are trained with the skills needed to practice health care in the 21st century
The provisions related to nursing workforce (including primary care nursing) are:
- Expand education, practice, and retention programs for nurses
- Enhance existing student loan, scholarship, and loan repayment programs
- Enhance development of advanced practice nurses, including those who deliver primary care services
- Expand existing loan repayment programs to increase number of nursing faculty
- Adapting workforce to evolving system needs
- Strengthen existing programs to promote diversity in the health workforce
- Authorize grants to promote interdisciplinary and community-based training
- Establish broad interdisciplinary commission to examine workforce issues
- Establish a study center to gather better data on workforce needs
As noted, the Society's Health Policy staff continues to work with other medical societies to analyze the legislation and meet with health care legislators and their staff to provide feedback. If you have any questions about the above summary, please contact the Society's Health Policy department.
