The 10-month postponement of cuts to Medicare physician payment rates leaves Congress in what some see as its toughest spot to date when it comes to preventing deep pay reductions.
Lawmakers missed a major opportunity to pass a long-term solution to the broken Medicare sustainable growth rate formula. The pursuit of yet another short-term patch makes attaining a permanent fix to the SGR in 2012 significantly more difficult, with the price of a repeal going even higher above the $300 billion mark and the added pressures of competing for legislative attention in a presidential election year.
A payroll tax reduction extension package approved by Congress and signed into law on Feb. 22 by President Obama also freezes Medicare doctor pay rates for the rest of 2012. Medicare pay was set to decrease by 27.4% on March 1 after Congress had postponed the SGR cut for only two months in December 2011. But keeping rates stable only through the end of the year means that pay is scheduled to decrease by an estimated 32% in January 2013.
AMA and CMA have strongly criticized the temporary fix. Organized medicine made a concerted bid for Congress to break the cycle of payment patches by using funds projected to be saved from winding down the wars in Afghanistan and Iraq to eliminate the SGR formula, which has threatened reductions to Medicare rates since 2002. But lawmakers rejected that strategy, instead passing legislation that spends roughly $20 billion to postpone the cut and extend other Medicare pay provisions for only 10 months, while increasing the cost of a permanent solution by about $25 billion.
As part of the most recent Medicare physician pay patch, lawmakers used cuts to hospitals, labs and other areas to offset the $17.3 billion cost of freezing doctor rates for 10 months, as well as the cost of additional Medicare pay extenders in the measure.
As part of the federal health care reform legislation, known as the Patient Protection and Affordable Care Act (ACA), states were instructed to establish American Health Benefit Exchanges and Small Business Health Options Program Exchanges (collectively “the Exchange”). In September 2010, California became the first state to create a Health Benefit Exchange following the ACA’s passage.
California’s Exchange is an independent public entity that is overseen by a five-member board appointed by the Governor and Legislature. The Exchange’s role in health care reform is to create a new insurance marketplace for individuals and small businesses to purchase health coverage. It’s important to note that not all health plans interested in offering a product in the Exchange will be eligible to do so.
Based on criteria yet to be developed, the Exchange Board will select the plans eligible to be offered in the Exchange sometime in 2013. California’s Exchange is poised to have a huge impact on the state’s healthcare landscape in 2014 and beyond, with an estimated 8.3 million Californians eligible to purchase coverage on the Exchange in 2016. This represents an estimated 12 to 34 percent of California’s private insurance market.
One of the most highly publicized provisions of the Exchange has been the “essential health benefits” package (EHB). The EHB is a set of benefits chosen by the state that will establish the scope of services provided by most Exchange-offered plans. Most plans may not impose benefit caps on services in the EHB. Additionally, the value of Exchange-offered plans will be categorized in levels (Platinum, Silver, Gold and Bronze) by their value as a percentage of the value of the state’s EHB.
States are required to select one of four benchmark plan options by September 30, 2012. Preliminary studies suggest that, while covered services across plan choices may not vary greatly, cost-sharing and other coverage limits are likely to differ significantly.
A number of major issues affecting physicians have yet to be decided, including the Exchange Board’s plan standards (higher thresholds are likely to result in fewer Exchange plans being available); how to handle individuals with frequently changing eligibility status (e.g., losing and gaining Medi-Cal eligibility); how to ensure plans offer the required adequate networks of providers; and finally, how the Exchange Board will pull all of this together before its target pre-enrollment date of July 2013. Currently, the Exchange board is still awaiting final federal regulations on the standards and the EHB – with both expected by fall 2012.
Please click here for more information about the California Health Benefits Exchange.
Long-time SFMS member Marcus A. Conant, MD will be honored with the 16th annual Public Health Heroes Award from the University of California, Berkeley School of Public Health along with former president of Ireland Mary Robinson.
Dr. Conant is an honored and respected pioneer, lecturer, physician, and outspoken advocate for people with HIV and AIDS. Among the first physicians to identify AIDS in 1981, he helped create one of the largest private AIDS clinics, was a founder of the San Francisco AIDS Foundation, and his work contributed to development of some of today’s top HIV medications.
In 1989 he created The Conant Foundation, a nonprofit education foundation that provides patients, their caregivers, and the community with educational tools and information regarding diagnosis, treatment, and management of HIV/AIDS and other sexually transmitted diseases. Dr. Conant and the foundation have contributed to more than two dozen clinical trials involving many of today’s leading HIV medications. He continues his strong, passionate and uncompromising demands to give hope to all people with AIDS through state-of-the-art treatment and the assurance they can live with dignity and respect.
Dr. Conant is a SFMS member since 1971, and has been a contributing author to San Francisco Medicine.
The Public Health Hero award was founded in 1996 to recognize innovative leaders who have made meaningful contributions to the protection and promotion of health. Previous award recipients have included actor Rob Reiner, co-founder of the I Am Your Child Foundation; Roe v. Wade attorney Sarah Weddington; and Dr. Paul Farmer, founding director of Partners in Health.
For information about this year’s Public Health Heroes Awards ceremony at Hotel Nikko on March 21, please visit http://www.publichealthheroes.org.
It’s time to take electronic health records to the next level. CMS on Thursday released their second-stage guidelines for “meaningful use” of electronic records, which advocates say have the potential to reduce medical errors and streamline care.
The proposed rules require doctors and hospitals to significantly step up their usage, as well as better engage patients and improve the transferability of records. Under the proposed Stage 2 standards, hospitals as well as eligible professionals—the latter category includes physicians not employed by hospitals—would have to use Computerized physician order entry (CPOE) for more than 60% of medication, laboratory and radiology orders, double the share required under the Stage 1 standards.
The CPOE requirement is one of more than a dozen core objectives that hospitals and EPs would have to meet as part of demonstrating their meaningful use of electronic health-record systems, which would make them eligible to receive federal health IT incentive payments. Other core objectives for both hospitals and EPs include the use of electronic prescribing for more than 50% of prescriptions issued, the recording of demographic data for more than 50% of patients, recording of vital signs in more than 80% of patient encounters and recording smoking status for more than 80% of patients.
In an effort to promote electronic engagement with patients, Stage 2 would require that more than 50% of patients be provided online access to their health information and demonstrate that more than 10% had actually accessed that information. Among the proposed menu objectives for EPs are electronic recording of family health history for more than 20% of patients, successful ongoing transmission of syndromic surveillance data, successful ongoing transmission of cancer case information and successful ongoing transmission of data to a specialized cancer registry. For hospitals, menu objectives include electronic recording of advance directives for more than 50% of patients and the use of electronic prescribing for more than 50% of discharge prescriptions.
Today, in a majority decision, the United States Supreme Court refused to reverse the Ninth Circuit Court of Appeals decision in Douglas v. Independent Living Center of Southern California ("Independent Living Center"). That court has previously sided with physicians and other providers, agreeing that interested parties should have the ability to sue in order to block cuts to California’s Medicaid program, Medi-Cal.
The case will now return to the Ninth Circuit Court of Appeals. The federal Medicaid Act requires that government insured and privately insured patients have equal access to medical care. If the state and federal government continue to cut funding to these programs, physicians will be forced to stop taking new patients, meaning that access to care will be greatly impacted.
“This is a win for physicians and their patients in California,” said James T. Hay, MD, President of the California Medical Association (CMA). “The lower court has previously ruled that interested parties indeed have the right to sue the state and federal government if the federal Medicaid Act is being violated. They will have the opportunity to decide that once again.”
The Supreme Court’s decision will have huge implications for the more than 10 million patients who are currently enrolled in California’s Medicaid program.
“The state cannot continue to propose sweeping cuts to programs for California’s poorest and most vulnerable patients,” Dr. Hay added. “Our hope is that they get the message loud and clear with the U.S. Supreme Court’s decision today.”
Through Medi-Cal, physicians, dentists, pharmacists, adult day health care providers, clinics and hospitals provide health care services to low-income seniors, families, children and people with disabilities. By providing these primary and preventive care services, the state ensures these Californians have access to health care, while at the same time saving money by lowering the chances they will be forced to seek more costly health care, such as emergency rooms or hospital admissions. CMA is a party in the case.