Medicare Reform Hits Snag as Administration Threatens Veto if Physician Pay Cut is Reduced

Health groups want Medicare physicians to use electronic prescribing or face financial penalties
By Kaiser Network - Dec. 6, 2007
The Medicare reform package be shaped in the Senate Finance Committee hit a snag yesterday and the Democratic chairman says he needs to consult with House Democrats before proceeding on the legislation. A major piece of the plan is to roll back the 10 percent pay cuts for doctors that Medicare is set to enforce for 2008. Republicans on the committee were fighting for a short-term roll back of the cut when a letter suddenly appeared from the Health and Human Services Secretary that threatened a Bush veto under certain conditions.

Senate Finance Committee Chair Baucus Cancels Medicare Bill Mark Up, Will Negotiate With House Dem
Senate Finance Committee Chair Max Baucus (D-Mont.) on Wednesday canceled plans for a mark up of Medicare legislation and instead will negotiate directly with House Democrats on the measure, CQ HealthBeat reports. The bill would block a 10% cut in Medicare physician fees.

According to CQ HealthBeat, Baucus has "struggled" with committee Republicans over whether to block the physician cuts for one year or two years, as well as on reductions to Medicare Advantage payments to help fund the physician fee fix. Baucus canceled a mark up one day after the Bush administration threatened to veto any bill that includes cuts to MA plans (CQ HealthBeat, 12/5).

HHS Secretary Mike Leavitt on Tuesday in a letter to the Finance Committee wrote that a veto would be recommended for any bill that "results in a loss of access to health care services, benefits or choices" in the MA program; "raises taxes ... to fund spending increases"; or alters Medicare's fiscal status by overturning administration regulatory decisions (Kaiser Daily Health Policy Report, 12/5). (Read text of Leavitt letter below this news story.)

Finance Committee ranking member Chuck Grassley (R-Iowa) on Wednesday said of the veto threat: "What they're really saying is, 'We don't care if the doctors take a 10% cut'" (CQ HealthBeat, 12/5).

E-Prescribing

A coalition of health care and consumer groups announced support for legislation that would require Medicare physicians by 2011 to use electronic prescribing or face financial penalties, CQ HealthBeat reports. The bill's sponsors include Sens. John Kerry (D-Mass.), Debbie Stabenow (D-Mich.) and John Ensign (R-Nev.), and Reps. Allyson Schwartz (D-Pa.) and Jon Porter (R-Nev.).

Bill Vaughan, senior policy analyst at Consumers Union, on Wednesday in a letter to the Senate wrote that the group wants Congress to implement e-prescribing in Medicare and Medicaid and called for the legislation to be included in the Medicare package. The e-prescribing measure would provide physicians with a bonus for each e-prescription written and provide funding for start-up costs associated with adopting the technology. It also would authorize the HHS secretary to provide physicians with one- or two-year hardship waivers if they have difficulty acquiring the technology.

The Bush administration has asked that health information technology adoption requirements be included in any Medicare legislation that would prevent a physician fee cut.

Kerry said, "E-prescribing will save money, save time, save doctors from piles of paperwork and, most importantly, save lives," adding, "Deaths and injuries from handwritten prescriptions could be nearly eliminated if e-prescriptions were adopted on a wide scale. We need to seize this bipartisan opportunity and make this common-sense reform a reality now" (Carey, CQ HealthBeat, 12/5).

Secretary Leavitt Letter to Senators on Medicare Physician Payment Legislation

Text of letter sent to Sen. Max Baucus, chairman, and Sen. Charles Grassley, ranking Republican, on Senate Finance Committee

“We understand the Senate Finance Committee soon intends to consider draft legislation to block the upcoming statutorily mandated reduction in payments to physicians under the fee-for-service Medicare program. As you know, this 10 percent cut would otherwise occur on January 1, 2008. I write to reiterate the Administration's commitment to strengthen and improve Medicare, and to ensure our Nation's seniors continue to have access to, and choices among, high-quality benefits through this important program.

“The Administration looks forward to working with Congress on appropriately offsetting legislation to mitigate the cut to physician reimbursement rates under Medicare. To that end, we ask that Congress adhere to the following principles for an update to the physician fee schedule.

“Such a bill should:

● Pay for any adjustment to the physician fee schedule formula by responsibly adjusting payments to other providers in the fee-for-service Medicare program.

● Bear in mind the impact on beneficiary premiums of potential increases in Part B spending for physicians, when considering appropriate offsets.

● Condition receipt of a portion of any fee adjustment to adoption of certified electronic health information technology. Physicians who do not adopt appropriate, available technology should receive a lower payment than those who do.

● Implement payment policies to ensure patients receive high-quality care in the most medically appropriate and efficient setting without increasing costs for taxpayers or for Medicare and its beneficiaries.

“Conversely, the President's senior advisors would recommend a veto of any bill that:

● Raises taxes on the American people to fund spending increases.

● Results in the loss of access to health care services, benefits, or choices in the Medicare Advantage program, through which nearly 20 percent of seniors and Medicare beneficiaries with disabilities currently receive their benefits.

● Disturbs, undermines, or overturns the many successes of the new Medicare prescription drug benefit.

● Undermines efforts to promote fiscal solvency in the Medicare and Medicaid programs. For example, legislation should not repeal the Medicare funding warning or erode the programs' fiscal integrity by overturning regulatory policies developed by the Administration.

“We look forward to working with you to produce legislation that the President can sign into law. The Office of Management and Budget advises that from the standpoint of the Administration's program, there is no objection to the transmittal of this letter.”

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Studies say Texas lags in health care access

With high number of uninsured, state ranks 49th in one study
By JASON ROBERSON and ANGELA SHAH - The Dallas Morning News - Thursday, June 14, 2007

To many people, Texas has a strong reputation for quality health care.

Retirees who move to the state cite good hospitals as a key attraction. Dallas' Baylor University Medical Center and UT Southwestern Medical Center are renowned for churning out top-notch doctors. The University of Texas M.D. Anderson Cancer Center in Houston attracts patients from around the world.

But among the 50 states, Texas' health care system ranges from average to poor,

according to two reports released this week.

Industry experts say

the low rankings are explained largely by the widening gap between Texans who have health insurance and those who don't.

The large immigrant population and a high number of small businesses that don't offer health benefits to employees make Texas highest in the nation in the percentage of uninsured residents.

That helped rank Texas 49th out of 50 states and the District of Columbia for the overall performance of its health care system, in a study by the Commonwealth Fund, a nonprofit health care advocacy group. The study measured access to health care, quality of health care, avoidable hospital costs and deaths per 100,000 residents.

"We have too much pride in this state, and too much good economy, for us to sit back and tolerate this kind of rating," said Ladon W. Homer, immediate past president of the Texas Medical Association.

If Texas improved to the level of Hawaii, the best-performing state in the Commonwealth study, 2.7 million adults and 900,000 children would be insured, and the state would save $250.3 million a year, the study's researchers concluded.

A study released Monday by the U.S. Department of Health and Human Services pegged the state as average for health care quality, based on 129 indicators.The department began publishing the annual study in 2005 as a way to help state health leaders better recognize their strengths and weaknesses in providing quality care.

"Texas on overall quality is about average," said Ed Kelley, supervisor of the department's study.

"There are some things Texas is doing well and challenges that can be improved."

For example, the study found that Texas scored strongly for early colorectal cancer diagnoses and having a low percentage of nursing home residents who are depressed or anxious but poorly in areas such as full vaccination of children and avoidable hospitalizations for diabetes.

In both studies, Midwestern and Northeastern states such as Wisconsin, Minnesota, New Hampshire, Vermont and Maine performed the best. Those states have higher percentages of residents with health insurance and don't have the same impact from immigration as Texas does.

Many uninsured

In a state with 23.5 million people, more than 5.5 million – including 1.4 million children – lack health insurance,

according to the Texas Medical Association. Texas'

uninsured rates are about 1.5 times the national average.

Texas stands out for the ethnic makeup of its uninsured,

said Anil Kumar, an economist with the Federal Reserve Bank of Dallas.

Hispanics make up a third of the state's population – much larger than the 13 percent for the U.S. as a whole. More than half of the uninsured in Texas are Hispanic, compared with 25 percent for the nation.

Many Hispanics, particularly laborers, work at small businesses, said Roger C. Rocha Jr., state director of the League of United Latin American Citizens.

"Low-income people who cannot afford health insurance are in jobs that don't offer health insurance,"

he said.

"And then with CHIP programs being cut or not being funded adequately, there is a big segment out there not covered."

Only 55 percent of Texans have access to employer-sponsored insurance, below the national average of 63 percent, according to the Texas Medical Association. For small businesses – which provide about half the state's nonfarm, private-sector jobs – coverage drops to 37 percent.
...
Strain on hospitals

The strain of supporting uninsured Texans pressures hospitals financially and in the quality of care, experts say.

Total uncompensated care – including bad debt from people who can't pay their bills and charity care that hospitals agree to provide – increased 78 percent, from $5.6 billion in 2001 to $10.1 billion in 2005,

according to the Texas Hospital Association.

Uninsured patients are more likely than their insured counterparts to forgo or delay treatment for acute illnesses or injuries, to go without needed treatment for chronic conditions or illnesses and to die prematurely.

Besides the dangers to those who go without insurance, the situation also creates a drag on the state's economy,

said Nancy Williams, president of the Health Industry Council of the Dallas-Fort Worth Region.

Uninsured patients create higher health care costs for everyone as a result of the inherent cost shifting.

"The uninsured is an issue because the insured can't handle it,"

Ms. Williams said.

A study by Families USA, a Washington-based nonprofit group that advocates for universal health care, found

in 2005 that employer-sponsored family coverage in Texas costs $1,551 more per year as a result of the uninsured.

The problem of the uninsured is again getting attention from politicians. Presidential candidates are floating proposals to increase the ranks of insured Americans and even to provide universal health coverage.

Massachusetts is rolling out a plan that will cover nearly all of its residents. Politicians in California, New York and Pennsylvania are talking about doing the same.

In Texas, solutions have come in a more piecemeal fashion.

In the recent legislative session, lawmakers restored many of the funding cuts made in 2003 to the Children's Health Insurance Program. CHIP is designed for children of families who earn too much for Medicaid but not enough to buy private health insurance.

Since the cuts, CHIP enrollment had dropped from a high of 529,000 in May of 2002 to 300,800 this month,

according to the Texas Health and Human Services Commission.

Lawmakers also agreed to settle a Medicaid-related lawsuit by spending $707 million to increase dentists' payments by 50 percent and physicians' 25 percent, and to dispatch up to 40 mobile labs into inner-city neighborhoods and impoverished colonias.

Mr. Homer, the former TMA president, said

the state was funding two-thirds of the actual cost of Medicaid – "which means many physicians opt out of this program, which means more people don't have access to health care."

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