Healthcare Financial News

Senator Edward Kennedy, chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP), has released his 615-page healthcare reform legislation, which is considered to be the most liberal of the three reform bills that will emerge from the Senate and House, reports the Los Angeles Times. Kennedy’s bill has many similar provisions to those being drafted by the Senate Finance Committee and the three committees in the House, such as rewarding providers for high-quality care and prohibiting insurers from denying coverage to those with pre-existing conditions or charging higher premiums based on health status. But unlike the draft that Kennedy circulated last week, the bill released on Tuesday does not include the controversial option for a government-run health plan or the requirement that employers must provide insurance for their employees—deletions that were made to avoid alienating Republicans who oppose both principles, according to the Times.

Kennedy’s bill would expand Medicaid eligibility to Americans earning up to 150 percent of the federal poverty level and would provide subsidies to people with incomes at 500 percent of the poverty level to allow them to buy insurance. It also includes a federal long-term care insurance program with modest premiums that would allow people to receive care at home, and covers children up to the age of 26 on their parents’ insurance policies. In addition, the bill calls for all insurance plans to provide payment incentives for case management, care coordination, chronic disease management, discharge planning designed to prevent hospital readmissions, evidence-based care processes, and preventive care. Senator Christopher Dodd is leading HELP’s reform efforts while Kennedy receives treatment for brain cancer.

A tax on employer-provided health insurance is likely to appear in the Senate Finance Committee’s health reform bill, which is expected to be released next week, reports The Washington Post. The chairman of the committee, Max Baucus, said that only employer plans that exceed $13,000 in value—the value of the basic health plan offered to federal employees—will be taxed to produce revenue to fund health reform, estimated to cost at least $1 trillion. The new tax would generate $420 billion over a decade, according to the Joint Commission on Taxation. Baucus also confirmed that he is considering other revenue sources, such as limiting medical deductions for wealthy families.

The three U.S. House committee chairmen responsible for healthcare reform—Charles Rangel, Henry Waxman, and George Miller—issued a draft proposal of their bill in order to begin deliberations with the House Democratic Caucus on the details. The four-page outline painted in broad strokes the components of their reform plan.

The bill would replace the Sustainable Growth Rate formula that governs Medicare physician payment and would increase “reimbursement for primary care providers, improve the Part D program, and implement many other MedPAC recommendations.” In addition, federal health programs, including the public plan option, will “reward high quality, efficient care, and reduce disparities” through the use of “innovative payment approaches” and will reduce preventable hospital readmissions for Medicare beneficiaries. Incentives would also be offered to entice health professionals to practice primary care.

The proposal includes a “self-sustaining” public health insurance option to compete on a “level field” with private insurers. The public plan would be offered through a health insurance exchange that will provide a “transparent marketplace” for individuals and businesses to shop for insurance plans. Insurers would also be prohibited from excluding pre-existing conditions or basing premiums on health status, age, and gender.

Individuals would be required to have health insurance, and employers would have to provide it or fund the coverage their workers obtain on their own. The smallest companies would be exempted from the so-called play-or-pay requirement, and other small businesses would receive a tax credit for providing health insurance. Low-income families would receive a subsidy to purchase insurance, and eligibility for Medicaid will be expanded, with higher payment rates designed to improve access to primary care under Medicaid.

Leaders from both sides of the aisle on the powerful Senate Finance Committee told HFMA that healthcare reform must include incentives to providers for better care coordination and quality. Max Baucus, Chairman of the Senate Finance Committee, and Chuck Grassley, the committee’s ranking member, both shared their vision of healthcare reform with with HFMA in new commentaries. In his commentary, Baucus said that reform must achieve the three key goals of lowering health costs, improving medical quality, and guaranteeing affordable health care for every American—or reform will fail. “Guaranteeing access does little if we cannot also guarantee quality,” Baucus said, which can be done in part by creating "incentives for healthcare providers to focus on delivering the best care and closely coordinating with a patient’s other doctors and providers." Baucus reminds readers that ensuring coverage "will make the insurance markets function properly, and costs will go down for all policyholders. And we will surely not be able to sustain our system or see a return on our investment unless we lower costs significantly.” Reform is as much about reducing waste and abuse in Medicare as it is “creating a competitive insurance market where health plans compete on price and quality,” Baucus stated. And in response to Republicans’ opposition to the Democratic proposal to offer a public health plan, Baucus reiterated that reform will preserve an individual’s choice of insurance “and ensure that those who are happy with the healthcare coverage they have now can keep it.”

Grassley’s commentary focused on the principles he says both sides of the aisle must agree on to create a bipartisan bill. He criticized the option of a government-run plan for threatening to “overtake the entire market” by causing employers to stop offering coverage and physicians from refusing to participate in a public plan if payment is modeled on Medicare rates. He emphasized that people must be able to keep their coverage if they are satisfied with it.

In addition to providing affordable coverage, reform must also ensure that people can find primary care physicians to treat them. It is also imperative, said Grassley, to “fix the inefficient ways in which Medicare pays healthcare providers. One of my goals in healthcare reform is to realign the payment incentives in Medicare to reward quality and value rather than the volume of services provided. And we must provide incentives for providers across the entire episode of care to actually coordinate the care of the patient.” Grassley said, however, that he could not support comparative effectiveness research, an initiative that Congress passed in the economic stimulus bill. The government shouldn’t “interfere with a doctor’s ability to practice medicine,” he said. “I’ll continue to raise concerns about any national health board or other federal body that directs health dollars.”