Health Care Update -- What's in the bill? (Updated)

By John Ballard

Thanks to holiday indigestion I was awake at one in the morning to watch the Senate's cloture vote on TV. Surfing about I noticed the proceedings were bumped from C-SPAN I to C-SPAN II, CNN had continuous live coverage with the usual annoyance of talking heads, Fox got on board the last few minutes and the alphabet networks ignored the whole thing. Two more procedural fences remain before the results even get to "reconciliation." Anyone thinking this issue is out of the weeds might still believe in Santa.

Having got that out of the way, I refer the reader to Dr. Timothy Jost at Health Affairs whose close scrutiny of these matters is the most timely and comprehensive I have found. 

Amendments to title I, the health insurance reform provisions of the bill, take up about a quarter of the Manager�s Amendment. This post will discuss these provisions.

The remainder of the Amendment contains:

• 
  * amendments to Medicaid and the Children�s Health Insurance Program (CHIP), including additional funding for CHIP for 2014 and 2015;


• a new program for pregnant and parenting teens and women;


• a number of new Medicare initiatives, with a focus on innovative approaches to provider payment, quality reporting, minority health, and more resources for rural health;


• a change in the name of the Independent Medicare Advisory Board to the Independent Payment Advisory Board and a change in its mandate so that it would now issue reports on slowing the growth of non-federal spending as well as Medicare spending. The IPAB would also have authority to make binding recommendations for cutting Medicare spending in years where Medicare spending exceeded the growth of health care spending generally;


• an expansion of Medicare to cover individuals suffering from exposure to certain environmental health hazards and funding for environmental health hazard screening;
  * public health initiatives including new programs for depression, congenital heart disease, and breast cancer;


• unding for state malpractice reform initiatives; and


• adjustments in the funding provisions of the bill (including elimination of the excise tax on cosmetic surgery and the addition of a 10% tax on indoor tanning).
  
  

After mentioning provisions regarding the public option and abortion, he notes the most bizarre piece of legislative language imaginable to be included in legislation regarding health care and/or insurance reform.

The Manager�s Amendment also (it is hoped) puts to rest the anxieties of those who believe that the real agenda of health reform is to disarm the populace. The legislation prohibits the consideration of lawful gun ownership or use in setting insurance premiums or in wellness or prevention programs, as well as the collection of data concerning gun ownership, storage, or use.

May God protect us from those who need to see this in writing.

Now here is some of the good stuff.

The Manager�s Amendment does not simply address the concerns of conservatives, however. It also improves on the consumer protections offered by the underlying bill. A number of provisions of the Amendment expand or at least clarify the protections of the original bill.

These provisions:

• 
  * Prohibit group health plans and all insurers from imposing lifetime or annual dollar limits after 2014 and permit only �restricted annual limits� prior to that date. The underlying bill allowed �reasonable� annual limits on a permanent basis. The Amendment continues to allow group health plans and insurers to place annual or lifetime limits on specific covered benefits.


• Align the prohibition on discrimination in favor of highly compensated-individuals in insured group plans with those already in place with respect to self-insured plans.


• Extend minimum insurer medical loss ratios to grandfathered plans and increase them from 75 percent to 80 percent for individual insurers and from 80 percent to 85 percent in the large group market. As in the underlying bill, insurers who exceed these ratios must provide rebates to their consumers. States may require higher ratios, but HHS may also lower the ratios in the individual market if the market would otherwise be destabilized. HHS is to enforce the requirement.


• Provide that HHS is supposed to develop external review standards for coverage determinations and claims for self-insured ERISA plans and for insurers in states that do not have external review laws.


• Apply the uniform explanation of coverage provisions to grandfathered plans


• Prohibit pre-existing conditions clauses for children under the age of 19 effective six months after enactment.


• Require all health plans and insurers (and not just qualified health plans in the exchange, as in the underlying bill) to cover emergency services without prior authorization or additional out-of-network cost sharing, to permit pediatricians to be designated as primary care providers for children, and to permit women in plans that cover obstetrical and gynecological care to have direct access to obstetricians and gynecologists.


• Fund �Medical Reimbursement Data Centers� to collect and analyze information from health insurers, provide consumers with information to help them understand provider charges in their area, and develop fee schedules and other database tools.


• Require plans to allow their members to participate in approved clinical trials in relation to the prevention, detection, or treatment of cancer or other life threatening diseases and to cover the routine patient costs of trial participation.


• Permit �qualified direct primary care medical home plans� to participate in the exchange.


• Require exchanges to take �into consideration� excessive or unjustified premium increases in determining whether to certify a health plan for exchange participation.


• Require exchange plans to implement activities to reduce health and health care disparities.
  

Dr. Jost finishes by examining administrative provisions regarding mandates, penalties and maneuvers aimed at closing the "donut hole" (legacy of a prescription drug plan, the now-famous Part D, a convoluted feature of the Bush years insuring that the middle class cough up every penny they can afford before receiving one additional dime of government assistance as they slide in the direction of Medicaid).

"Not all of the regulatory provisions of the bill are consumer friendly, however." he adds. " The provision in the underlying bill allowing states to regulate rates paid to agents and brokers for enrolling individuals and groups in exchange plans has been dropped."  All you states rights people can now stand and applaud. The civil rights movement has taught you nothing.

I give Dr. Jost the last word.

What comes next?

Once it is adopted, the Senate bill will have to be reconciled with the House bill. While the insurance provisions of the Senate bill have real strengths � their transparency provisions for example � the bill also has, from my perspective, great weaknesses. The two most significant, I believe, are its four-year delay in implementation date and its dependence on the states to enact and enforce the federal reforms.

There are other problems with the bill as well, such as its allowing an individual insurance market to continue to exist outside of the exchange, which will surely make the exchange a target for adverse selection. The affordability subsidies in the Senate bill are also less generous for low-income households, those most in need of help, than the House bill. But many of its provisions should bring real improvements in insurance markets.

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As promised, here is a link to Dr. Jost's second post.

Rather than parse his post I leave it to anyone interested in further details to go to the original. Meantime, here is an easy to copy list of ingredients going into the Congressional Sausage Machine...

The simplest, though perhaps most tedious, approach to identifying these provisions of the manager�s amendment is simply to list them. Here is a list, roughly in the order in which they appear in the bill. New or expanded initiatives in the bill include:

• 
  Medicaid coverage for former foster children under the age of 26 who age out of Medicaid.


• Requirements for public notice and comment at both the state and federal level (including public hearings at the state level); periodic evaluation by the Department of Health and Human Services; and reporting to Congress for new Medicaid and Children�s Health Insurance Program section 1115 waivers. These waivers have often been used to make radical and permanent changes in state Medicaid programs with little transparency or public scrutiny.


•  �Balancing payment incentives� to incentivize new program initiatives to encourage the use of Medicaid-funded home and community-based care in states that rely disproportionately on institutional long-term care.
  


• Extended federal funding for the CHIP program for 2014 and 2015.


• Competitive grants to the states for assisting pregnant and parenting teens and women. These grants would go to institutions of higher learning, high schools, and community centers that would offer pregnant and parenting teens and women the support that they need to get an education and to function. Grants would also be made to state attorneys general for improving services to pregnant women who are victims of domestic violence, sexual violence, sexual assault, or stalking.


• Enactment of S. 1790, a bill to improve the Indian Health Care Improvement Act.


• The development of a value-based purchasing program for ambulatory surgical centers.


• A revision to the national quality improvement strategy to mandate quality outcomes measures for doctors and hospitals for 10 acute and chronic diseases in 24 months and 10 primary and preventive care measures within 36 months.


• A public report by HHS on measures for hospital-acquired infections and ongoing studies by the Institute of Medicine on clinical practice guidelines.


• A requirement that HHS develop a strategic framework for collecting, aggregating, and reporting data on provider performance.


• New provisions for testing payment and delivery system innovation models by the Center for Medicare and Medicaid Innovation.


• Provision for additional payment models for the Medicare shared-saving (accountable care organization) program. ACOs are encouraged to participate in similar arrangements with private payers.


• Provision for expansion of the national Medicare pilot program for payment bundling if it proves successful.


• A pilot program for continuing care hospitals, which combine rehabilitation, skilled nursing facility, and long-term care services with acute care.


• Further extension of the rural community hospital demonstration project.


• A study, to be followed by a demonstration project, of revising the home health prospective payment system to assure access to care and accommodation of patient severity of illness.


• A quality reporting program for psychiatric hospitals.


• A pilot study for a pay-for-performance programs for psychiatric, rehabilitation, long-term care, and cancer hospitals and for hospices.


• Incentive payments for doctors who participate in maintenance of certification programs more often than is required for their board certification.


• Targeted Medication review programs for Part D drug plans.


• Development of a physician compare website with information on outcomes, patient safety, patient satisfaction, and continuity of care.


• Demonstration projects on providing incentives to Medicare beneficiaries to choose high quality providers


• Provision for access to Medicare data for researchers with appropriate safeguards.


• A program for community-based collaborative care networks involving a hospital and federally qualified health centers to provide comprehensive services to law income populations.


• The creation of a Deputy Assistant for Minority Health in HHS and creation of offices of minority health in the CDC, HRSA, SAMHSA, AHRQ, the FDA, and CMS. This provision is, in my mind, long overdue.


• A requirement for a national diabetes report.


• Provision for $200 million in grants to small businesses for wellness programs.


• Creation of a new national center for excellence in depression research and a national center on congenital heart disease.


• A new program for breast cancer education and prevention for younger women. (I wonder where this came from?)


• Provision for a prospective payment system for federally qualified health centers by 2014.


• Additional funding for training nurse practitioners, rural physicians, and preventive health and public health specialists.


• Six billion dollars in new funding over 5 years for community health centers.


• A 3-year demonstration project for 10 states to provide comprehensive care to the uninsured at reduced fees.


• Provisions for amending the federal sentencing guidelines to increase criminal sanctions for fraud and amending the criminal health care fraud statute to clarify that a provider need not have actual knowledge of the prohibition or intent to violate the fraud statute to be convicted of fraud.

And finally, another closing statement or two from Dr. Jost.

While there is much to like in titles II through IX of the manager�s amendment, I will close with a mention of the two features in amendment that I find disagreeable. First the bill provides a �cures acceleration program� to fund research for �high need cures� for which incentives in the commercial market are unlikely to result in timely development. The Food and Drug Administration, the National Institutes of Health, and a new Cure Acceleration Network Board are supposed to work together to facilitate the discovery of such cures and to translate them from bench to bedside. Grants can be made under the project of up to $15 million a year to eligible entities such as academic medical schools, biotech companies, and drug companies, who need only meet a $1 to $3 matching requirement. $500 million is appropriated for this program for 2010.

This is all well and good and a great idea. But nothing that I can see in the legislation gives the taxpayer any stake in this investment. A drug or biotech company that in fact discovers a blockbuster drug or biologic through the federal government�s investment (perhaps for an off-label use) owes nothing in return. Shouldn�t we the taxpayers get some return on our investment, or at least the promise of reasonable prices? [ed. JB This is an echo of the sweetheart deal drug makers already have with NIH whereby important discoveries resulting from research paid for by tax dollars there is sold "wholesale" to the for-profit private sector for a few years before any generic competitor is permitted.]

The final issue is a small one. The original bill required charitable hospitals to charge persons eligible for financial assistance �the lowest amount charged� insured patients. The amendment requires that they charge �the amount generally charged.� Merry Christmas, Ebenezer.