Healthcare Reform Talk 6 6 2010

Healthcare Reform: What the new law really says Jill Q. Vecchio, MD Docs 4 Patient Care June 6, 2010

My Sources:
HR 3590, Reconciliation and Congressional Research Service Summary
Congressional Budget Office website
Galen Institute research and sources
Meetings with Congressmen and congressional staffers
Kaiser Foundation “Health News”
Center for Medicare and Medicaid Services
American Medical Association
National Assoc of Health Underwriters

Who are the Uninsured?

Facts…
The US has the best healthcare in the world
No one is refused healthcare in the US
Private insurance and Medicare subsidizes billions in free care each year
The Healthcare industry accounts for 1/6 of US economy--IN A GOOD WAY!
Every doctor’s office is a small business

Facts…
What we charge and what we get paid are two very different amounts!
Reimbursements are based on Medicare and providers lose money on Medicaid and Medicare in many cases
Medical reimbursements have been decreasing and patient volumes are increasing—we are doing more work for less money every year
Malpractice premiums and risk of lawsuits increase every year (Ob/Gyn malpractice premiums in Colorado are over $100,000 per year)

Doctors and Patients all believe Healthcare Reform is needed But is this the right “reform”???

Typical Process Bill to Law
House originates legislation
House passes (simple majority), goes to Senate (needs 60 votes)
If Senate passes, all done. If Senate makes own version, goes to Conference Committee(20 members)
“ Cleaned up” bill goes back to House, then Senate for passage to law

How HR 3590 Bill Became PPACA Law
Started as housing bill passed by House HR3590
Changed by Senate into healthcare bill
Passed by Senate
Scott Brown elected
House forced to pass Senate bill or no healthcare reform
House passed bill 219/212
House originated Reconciliation Bill to fix HR3590
Senate made changes and passed with simple majority under “Reconciliation” rule
House passed revised Reconciliation bill
Everyone went home for Easter Break

In Other Words…
This bill (HR 3590) was never meant to be the LAW
Multiple contradictions
Poorly written by legislative standards

Medicare
Part A: Hospitalization
Part B: Outpt services (in general)
Part C: Medicare Advantage (MA): private policies subsidizes by fed. govt.
Fed. Payments decrease over next 10 yrs
Part D: Prescription drug coverage
“ Medigap”: private insurance, NOT MA, aka: Medicare Supplement Insur., covers co-pays, deductibles for Part A

States
Mandate what medical services must be covered by private and public health insurance
Each state is different
Insurance premiums reflect these differences
States execute Medicaid
Medicaid paid mostly by states with federal subsidies

Remember… ALL new costs are either paid by taxpayers directly or passed on to them indirectly!

Cost Recognition Exercise States to businesses and taxpayers Employers to employees Businesses to customers Non-taxpayers are employees and customers too

Let’s get to the Law…

“ Immediate Improvements” Title I- Subtitle A (starts w/in 6 mos.)
No lifetime limits or annual limits
Can’t rescind coverage
Must cover, with no cost sharing/deductibles, for:
Specified preventive svcs
Rec’d immunizations
Rec’d women/children preventive svcs
Dependent coverage up to 26 y/o, married or unmarried
Hospitals must make public list of charges
Secr HHS to set up review of “unreasonable increases in premiums”

“ Immed. Actions to Preserve and Expand Coverage ” Subtitle B
Estab. Temporary High risk pool program for pre-existing cond. Until Jan 2014
but Fed funding to most states for this will run out in 2012
CO already has hi risk pool: Cover Colorado
To be replaced by Amer. Health Benefit Exhange (“Exchange”=“Xchg”)
Sets up Electronic Health Care Transactions provisions and estab penalties for non-compliance (Fed EMR database)

Healthcare Exchanges
Must be govt agency or nonprofit estab by state
Must offer “qualified plans” only
Must approve premium increases
States can require additional mandates
Requires states to pay costs of addl mandates
Employers can choose which plan to offer their employees
Employees can choose to get plan thru exchange rather than thru employer ( big penalty to employer )

“ Quality Health Insurance Coverage for All Americans” Subtitle C
Discusses “grandfathered plans”
most of allowances for these were eliminated in the Reconciliation
All plans must contract w all providers—no PPOs
Limits cost-sharing of premiums by employers
Universal Mandates “essential health benefits package”—will eventually apply to self-insured as well
All employers will eventually be required to enroll all employees in govt-sponsored long-term care plan

“ Qualified Health Plan” Subtitle D
ALL plans must include:
emergency svcs
hospitalization
maternity and newborn care
mental health
substance abuse
prescription drugs
preventive and wellness services
chronic disease mgmt
pediatric services
oral and vision care
Limits cost-sharing and deductibles

Abortion
“ Permits” states to prohibit abortion coverage in Xchg plans
“ Prohibits use of federal funds for abortion services”
But fed subsidy used for Xchg plans???
Requires separate accounts for payment of abortion services
Bottom line: tax dollars can be used to fund Abortion

“ I’m ready for my free healthcare now”

Cost Comparison for Plans sources: CBO, Heartland Institute, Galen Institute
Plan costs by 2016: (all plans have same coverage) CBO
“ Bronze”@ 60% actuarial: $5000/ 12500
“ Siver”@75% $5800/15200
“ Gold”@85% (most empl) $7800/19200
“ Platinum” @90% (not scored)
As of 2005:
All plans: $4024/10880
HSA + hi-deductible: $2772/6955
Mass. Care policy 2010
Avg policy for family 4 $15-20000

“ Affordable Coverage Choices for all Americans” Subtitle E
Allows refundable tax credit for low income households to help pay premiums
Allows for reduced out-of-pocket expenses for low income
Secr HHS to “estab program to determine eligibility of applicants for participation… based on citizenship or immigration status” and “provides for confidentiality of applicant information”
“ Prohibits any federal payments, tax credit or cost-sharing reductions for indiv who are not lawfully present in US” (doesn’t say they can’t participate, doesn’t prohibit state funding)

“ Individual Responsibility” Subtitle F
“ Imposes penalty for failure to maintain coverage beginning in 2014 ($95 2014 to $695 by 2016 or 2.5% of income)”
“ EXCEPT for certain low-income indiv who cannot afford coverage, members of Indian tribes, and indiv who suffer hardship. EXEMPTS…indiv who object to health care coverage on religious grounds, [illegal immigrants] and incarcerated.”
ISN’T THIS THE POINT OF THIS WHOLE EXERCISE???
Insureds will continue to subsidize these pts.

Insurance Companies
Must accept pre-existing conditions
can’t charge higher premium for these indiv
Can’t drop anyone from coverage
Must issue coverage to anyone who requests it at any time
Can’t raise premiums without govt approval

Mass. Experience with Individual Mandate
Indiv choose to pay penalty rather than premiums
When they get sick, they are guaranteed issue of “insur”
When they are well again, they drop insur
Insur co. are only insuring those who are hi-risk/already sick
Premiums skyrocket—no risk sharing to be had
Those responsible folks and employers w insur can’t afford premiums—drop insurance
Insurance cos. request premium increase from govt
Govt says “no”
Insur co. go out of business
Govt steps in with “single payer” system

Mass Experience cont’d
Expansion of Medicare/Medicaid to cover all indiv
Reimbursement to providers doesn’t cover costs
Providers stop participating in MM
Pts can’t find provider or have very long wait times
No co-pay for ER visits
Pts go to ER instead, even for routine care
ER costs are higher than routine visit costs
ER visits incr 30%
Healthcare costs increase 27%
Govt requires providers to accept whatever reimbursement they offer as a requirement for licensure
Romneycare Expenses shared by state/fed 50/50—not w/ Obamacare

Massachusetts Utilization
Mass has the most doctors of any state in the U.S. AND the longest wait times to see a physician in the U.S.

“ Employer Responsibilties”
Must provide notice about option of Exchange, avail. of tax credit
Employer is fined if an employee opts for Xchg while it offers its own plan-- $2000 per total number of employees!!!
Employer cannot penalize, discharge or discriminate ag. an employee that opts for Xchg
Seasonal and part-time empl. counted in total number of employees (small vs. large employer)
Extensive reporting required—1099, monthly reporting

“ Miscellaneous Provisions” Subtitle G
Requires HHS Secr. to publish on HHS website list of all authorities provided to Secr. under this Act—STILL WAITING!!
Secr. HHS is APPOINTED, not elected
Doesn’t penalize any entity that provides assistance for the death of an individual such as by assisted suicide, euthanasia or mercy killing

“ Role of Public Programs” Subtitle A
Expands Medicaid
Fed govt pays for new enrollees, but only from 2014 to 2016, then subsidy decreases
“ Allows” states to expand Medicaid further at their own expense
Prohibits a state from requiring applicants for Medicaid to enroll in employer’s sponsored coverage (hence, employers are fined again)

READY FOR THIS??? It just keep getting better…

“ Improving the Quality and Efficiency of Health Care” Title III, Subtitle A—”Transforming the Health Care Delivery System” Pt. I —”Linking Payment to Quality Outcomes…”

“ Improving the Quality and Efficiency of Health Care” Title III, Subtitle A—”Transforming the Health Care Delivery System” Pt. I —”Linking Payment to Quality Outcomes…”
Extends and expands “Quality reporting system” for hospitals and providers and establishes penalties
Establishes a “value-based payment modifier” under physician fee schedule based upon the “quality of care furnished compared to cost”
Subjects hospitals to “penalty adjustment to payments for high rates of hospital-acquired conditions”

“ National Strategy to Improve Health Care Quality”
Directs Secr HHS, “thru a transparent collaborative process” to use “ Comparative Effectiveness ” data
E.g. UK uses $44,000/yr of expected life remaining to determine whether a given tx is cost-effective for pt
Directs President and Secr. HHS to develop outcome and measurement criteria for all providers for any given program or medical condition

Cont’d
CMMS to test “innovative payment and service delivery models” to reduce costs, such as Payment Bundling during an episode of care around a hospitalization
Hospital receives total bundle payment and distributes proceeds to various provider entities

Improving Medicare for Patients and Providers Subtitle B
Cert Nurse Midwife reimb increases from 65% to 100% of physician reimbursement
Decreases over time Medicare benefits including: long-term care, inpt rehab, inpt psych, dx lab, dx imaging, home health, skilled nursing and nursing home care, hospice, surg center coverage, dialysis, hospitalization for low income seniors…
Allows for bonus reimb payments to rural/underserved area providers and facilities for 2-5 yrs
Increased taxes on brand pharmaceuticals
Increases number of and access to community health centers

Provisions Related to Medicare Part C Subtitle C
Medicare Advantage
Decreases federal subsidy significantly over time
Decreases coverage for multiple services

“ Medicare Part D Improvements for Prescription Drug Plans…” Subtitle D
Requires drug manufacturers to participate in the “Medicare coverage gap discount program”
Allows Secr of HHS to assign or reassign individuals to a drug plan different from that in which they are enrolled
“ Requires Part D enrollees who exceed certain income thresholds to pay higher premiums”. IRS to disclose information.

“ Health Care Quality Improvements” Subtitle F
“ Agency for Heathcare Research and Quality (AHRQ) to conduct or support research on the development of tools to facilitate adoption of best practices that improve the quality, safety, and efficiency of health care delivery services.”
These are the same folks that gave us the 2009 Mammography Screening Guidelines that would reduce the number of pts getting screening mammograms by more than 60%.

“ Modernizing Disease Prevention and Public Health Systems” Title IV, Subtitle A
Establishes multiple councils, advisory groups, public health funds, media campaigns, federal website tools…
Requires Director of AHRQ to convene the Preventive Services Task Force “to review scientific evidence related to the effectiveness, appropriateness, and cost-effectiveness of clinical preventive services for the purpose of developing recommendations for the health care community”

“ Creating Healthier Communities” Subtitle C
Authorizes Secr HHS to contract exclusively with vaccine manufacturers for purchase and delivery of vaccines for adults.
Retail food chains of more than 20 locations must disclose on the menu/menu board:
No. calories in menu item
Suggested daily caloric intake
Availability of addl nutritional information
Includes vending machine operators

Physician Workforce
Currently operating an annual deficit of physicians of 10,000 (35,000 retiring, only 25,000 graduating)
Up to 45% of practicing PCPs would retire or quit practice if HR3590 was put into effect (IBD poll)

Investors Business Daily

“ Increasing the Supply of the Health Care Workforce” Title V, Subtitle C
Multiple new and revised programs to encourage public health education, peds, primary care, nursing, dentistry, geriatrics, social work, psych, nurse-midwifery, family nurse practitioners.
No mention of specialty MD training!

“ Supporting the Existing Health Care Workforce” Subtitle E
“ Revises the allocation of funds to assist schools in supporting programs…in health professions educ for underrepresented minority individuals”
Incentives for gen surgeons and PCPs/providers that work in underserved areas
Reconciliation increases reimb for Medicaid services by PCPs to 100% of Medicare for 2013 and 2014

“ Physician Ownership and Other Transparency” Subtitle A
Prohibits physician-owned hospitals that do not have a provider agreement by Dec. 31, 2010 to participate in Medicare (some exceptions)
Requires drug, device, biological and med supply manuf to report to HHS “transfers of value” made to a provider as well as info on physician ownership or investment interest. Establishes penalties.
Prohibits physician self-referrals

“ Patient-Centered Outcomes Research” Subtitle D
Establishes Patient-Centered Outcomes Research Institute
“ Prohibits Secr. HHS from using evidence and findings from the institute to make a determination regarding Medicare coverage unless such use is through an iterative and transparent process…”
Establishes w/in IRS the “Patient-Centered Outcomes Research Trust Fund” w/ funds from Medicare Trust Fund

Revenue Provisions Title IX, Subtitle A—Revenue Offset Provisions
Imposes excise tax of 40% on “Cadillac” plans—exceeding $10,200/27,500 starting in 2018
Reconciliation bill incr. the original amts and delayed implementation to 2018, which will decr. Govt revenue by 80% from orig bill
Labor unions are exempt
Increases HSA penalty for distribution from 10% to 20%
Limits annual salary reduction contributions to $2500 per year for HSAs
Imposes annual fees on manuf of drugs, medical devices and insur companies
Eliminates tax deduction for expenses for employers who offer Medicare Part D coverage (Caterpillar, ATT)

Cont’d
Increases hospital insurance tax rate by 0.9% for individual taxpayers earning over $200,000/250,000 after 12/31/2012.
Reconciliation adds 3.8% “net investment” income tax included in Medicare taxable base for $200,000/250,000
Allows “50% tax credit for investment in any qualifying therapeutic discovery project…” (but physician ownership or investment in drug, device biological or medical supply manuf is monitored and must be reported to HHS)

Cont’d
U.S. Sentencing Commission to increase federal health care offense levels
“ Provides that a person need not have actual knowledge…nor specific intent to violate [health care law] in order to commit health care fraud.”
Expands the scope of violations constituting an offense

Cont’d
Authorizes Secr. HHS to adjust reimbursements to providers based upon “quality measures”

Something to look forward to…
Over 250,000 pages of new regulation resulting from this law.
16,000 new IRS agents to monitor and enforce coverage mandates and additional taxes/fees

Tort Reform
Prohibits limits on Punitive Damages
Prohibits limits on Lawyer fees

Oh yeah…
Amends Internal Revenue Code to impose a 10% excise tax on indoor tanning services beginning July 1, 2010

Reconciliation Education and Health Title II
Moves management and collections of govt grants for higher education to Dept of Education (feds)
Increases revenues to fed by removing from private institutions
Revenues used to defer costs of PPACA
Entities servicing these grants must be non-profit

Congressional Budget Office
Assumes that everyone will “play by the rules”
Please…This IS America!!

159 new agencies, programs, grants, funds, task forces, commissions, boards… Want to know how the Congressional Budget office scored these new entities?

“ Unintended” Consequenses
Dr. practices already selling out to hospitals
Disincentives to develop new drugs, medical devices, technologies
90% of drugs, medical devices and technologies are developed in U.S.
Where will the world go for their healthcare???

European/Canadian Experience
Longest wait times for diagnosis and care
Poorest cancer survivorship
Single payer system can’t keep up with needs
Private sector provides crucial backup (Canada doesn’t offer private option)
Now having multinational conferences to re-establish private insurance industry

Germany
World Socialist Web Site 3/18/2010 :
Doctors working 70-80 hrs/wk
“ Mandatory overtime” w/ no xtra pay
Doctors paid on avg $17/hr, much less than other skilled workers
22,000 drs voted to strike (doctor union)
No support from govt. officials
Doctors can’t unionize in US

Center for Medicare and Medicaid Services CMMS covers over 100 million Americans, has an annual $800 billion budget (before PPACA), larger than the defense department's and is the 2nd largest insurance company in the world

Donald Berwick, MD Obama’s Choice for CMMS
Recently “knighted” by Queen Elizabeth II for his role in UK’s National Healthcare System
"I am romantic about the NHS. I love it."
"The chronically ill and those toward the end of their lives are accounting for potentially 80% of the total health care bill out there. There is going to have to be a very difficult democratic conversation that takes place. The decision is not whether or not we will ration care. The decision is whether we will ration with our eyes open."
"There needs to be global budget caps on total healthcare spending for designated populations (ie-rationing)"

Berwick, cont’d.
"Any healthcare funding plan that is just, equitable, civilized and humane, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent healthcare is by definition redistributional".
"The simplest way to reach these goals is with a single payer system."

As of 5/17/2010…
20 States have legislation pending arguing against the individual mandate or state obligations arising from PPACA
CBO has increased estimated costs (which are already massively underestimated) to over $1 Trillion, thus eliminating the original estimation of a “deficit reduction”
Still no permanent “Dr. Fix” to SGR—as of today, this would add $246 Billion to pricetag, by 2015--$500B

As of 5/28/2010 ( Kaiser Health News)
House approved $22B 19-mo. Temp fix to Medicare providers (Dr. fix), Senate will address after June 7
HHS sent out brochure to Medicare pts: new law will “preserve and strengthen” Medicare
House Republicans intro’d bill to repeal PPACA. Prob’ly won’t go to vote

Kaiser Health News
661 businesses surveyed:
94% say PPACA will incr. their costs
88% plan to pass costs on to employees
74% will decrease benefits

Lawsuits
20 states in process
Individual Mandate
Massive increase in state obligations for funding and oversight of programs
Commerce Clause/Tenth Amendment
Union exemptions of tax on “Cadillac” plans
Roe v Wade—doc-pt privacy
NO SEVERABILITY CLAUSE!!

American Medical Assoc
They only represent 17% of physicians
AMA has a blatant conflict of interest
Govt granted Monopoly on publication of code books used for billing
Code books generate $111M
member dues/fees only $20M
AMA “sold us out” by endorsing Obamacare
They weren’t the only ones! AHA, Insurance Cos. (backfire), multiple professional societies

Where are the doctors????
Haven’t needed much representation in the past
“ Above politics”
“ I’m too busy for politics”
“ These changes only apply to Medicare and Medicaid and I can just stop seeing those patients”
Some of them think this is a great idea!
Have they read this???

This is our last chance! If Republicans do not take the House in November, 2010 PPACA will become our REALITY!!

Why Republicans?
Majority party wins Chairmanships of House and Senate Committees and Subcommittees
Defund after 2010
Repeal 2013
Replace 2013

“ What are you prepared to do?” Sean Connery “Untouchables”

Get Involved!!
Educate, educate, educate!!!
Friends, neighbors, doctors, employers
Vote, vote, vote!!!
Donate to Candidates around the country!
Join Docs 4 Patient Care!!!

THANK YOU!! Keep up the fight!! Pass the word!! Let’s ALL be “Community Organizers”!

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Healthcare Reform Talk 6 6 2010

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Healthcare Reform Talk 6 6 2010 — Presentation Transcript