OCTOBER 7, 2005 -- Capitalizing on the increased scrutiny of federal spending in the wake of Hurricane Katrina, fiscal conservatives are renewing their calls on Congress to repeal or scale back the new drug benefit in Medicare.

At a panel discussion hosted by the Cato Institute, a libertarian think tank, Sen. John McCain and Rep. Jeff Flake, both Arizona Republicans, and Rep. Jim Cooper, D-Tenn., said Congress should repeal or delay implementation of the 2003 law (PL 108-173) that created the Medicare prescription drug benefit. The new benefit goes into effect Jan. 1.

"Congress made a monstrous mistake with good intentions," Cooper said. "Congress needs to address that mistake before it's too late."

The Medicare drug law, which passed the House by 220–215 only after hours of arm-twisting by Republican leaders, was intended to be a hallmark of the Bush administration's social policy platform.

But rising cost estimates and confusion among seniors about the benefit created a backlash among conservatives, who called for a repeal shortly after passage. Their legislation went nowhere after the hard-fought battle to pass the bill.

The three lawmakers speaking Friday said that Hurricane Katrina has now created an opportunity to revisit the drug benefit as more and more conservatives demand steps to curb entitlement spending and make across-the-board cuts in appropriations.

"If there was a silver lining in the storm, it's a new fiscal awareness of the American people," Cooper said.

President Bush and Republican leaders in Congress have repeatedly ruled out any action this year to change the Medicare drug law. Acknowledging that cutting the benefit would be difficult to push through Congress by itself, the critics said they were hopeful that it could be revisited as part of broader spending cuts.

"You can't look at it in a vacuum, it'd be tough to turn back," said Flake. "But you have to look at it in the context of other cuts. This might become the path of lesser resistance than other cuts."

All three members agreed that benefits for low-income seniors provided under the new law are worthwhile, but they balked at the availability of the new entitlement to seniors of all income levels.

"Couldn't we at least delay it?" McCain said. "Couldn't we say to low-income, here's a piece of paper, go and get your prescription. And the rest of you, we're not going to go through this cockamamie" process.

McCain also used the forum to reaffirm his opposition to a $8.9 billion spending proposal—sponsored by Senate Finance Committee Chairman Charles E. Grassley of Iowa—to expand Medicaid coverage to all low-income residents of hurricane-affected areas.

"We've been working to reduce the cost, and to take it out of the $40 billion FEMA still hasn't spent," McCain said.

Grassley has been in talks with opponents to get the Medicaid hurricane relief bill (S 1716) down to about $6 billion, but no agreement has been reached.

OCTOBER 6, 2005 -- Senate Finance Committee Chairman Charles E. Grassley, R-Iowa, accused the White House Thursday of working behind the scenes to scuttle legislation that would expand Medicaid coverage to victims of Hurricane Katrina.

The legislation (S 1716), co-authored by Grassley and the finance panel's ranking Democrat, Max Baucus of Montana, would allow low-income victims of Hurricane Katrina to bypass some of the usual eligibility requirements and join the Medicaid rolls.

A band of fiscal conservatives have blocked the bill on the Senate floor, and Grassley's attempt to win broader support by scaling back the bill has not been successful.

At a hearing Thursday, at which Treasury Secretary John W. Snow was testifying on the administration's tax incentive proposals for rebuilding the Gulf Coast, Grassley argued that Senate opposition to the Medicaid bill could be overcome if the White House backed off from its stance.

"Unfortunately, the White House is working against me behind the scenes, and I resent that considering how much I've delivered for the White House" in recent years, Grassley said.

Baucus agreed, saying that the administration has moved much more slowly to help victims of Hurricane Katrina than it did in the aftermath of the Sept. 11, 2001, terrorist attacks.

"It is slow-walking, it is opposing, it is obfuscating, it is delaying," Baucus said. "What is the difference between New York and the Gulf Coast?"

Snow said he would bring up the issue with Health and Human Services Secretary Michael O. Leavitt.

Moderate Republicans on the Finance Committee, who have balked at cutting Medicaid by $10 billion or more through the budget reconciliation process, are expected to meet Thursday with Senate Majority Leader Bill Frist, R-Tenn., to try to find savings in the program. Frist met Wednesday with GOP members on the panel behind closed doors, though no deal was reached.

OCTOBER 3, 2005 -- The U.S. health care system can be made safer and more effective through the use of information technology as well as an increase in public-private sector initiatives, said panelists at a Monday briefing sponsored by the Alliance for Health Reform and The Commonwealth Fund.

Dr. James J. Mongan, president and CEO of Boston-based Partners HealthCare System Inc., said his company has taken several steps to improve care, including using electronic medical records with a built-in clinical support team to help provide best practice and evidence-based medicine and tracking care on certain ailments against other health care systems and guidelines.

Dr. Gary R. Yates, chief medical officer for Sentara Healthcare, a not-for-profit healthcare system based in Norfolk, Va., also listed several initiatives to improve quality, efficiency, and access to medical care. He promoted the use of electronic hookups that permit remote monitoring by intensivists—physicians specially trained to deal with critical care situations—and teleconferencing with patients and nurses to improve quality of care. Yates said that initiative helped the hospital systems' intensive care units lower their mortality rates by 20 percent over the last five years.

Sentara also has tried to create a culture of safety by looking to other industries, such as the nuclear power industry, for strategies. As a result of several such strategies—such as instilling safe habits for error prevention and encouraging attention to detail when handling prescription drugs and hospital equipment—Sentara has reported a 47.4 percent reduction in serious patient safety events in the past two years.

Also during the briefing, The Commonwealth Fund Commission on a High Performance Health System released a report on the existing gaps in coverage, quality, and efficiency, including recommendations on how to change the health care delivery system.

OCTOBER 5, 2005 -- The Department of Health and Human Services announced a series of proposed regulations Wednesday that would speed the use of electronic prescribing and electronic medical records nationwide.

The proposals include creating exceptions to self-referral laws so that hospitals and certain health care organizations can furnish hardware, software, and related training services to physicians for electronic prescribing and electronic medical records.

Vowing to put the traditional medical clipboard and illegible handwritten drug prescription slips "out of business," Health and Human Services Secretary Michael O. Leavitt said the proposals represent a major step toward meeting President Bush's goal that most Americans have an electronic medical record within the next 10 years.

During a news conference at George Washington University Medical Center, Leavitt also announced a proposed "safe harbor" from the HHS Office of Inspector General to allow the donation of technology for electronic prescribing and electronic health records to be exempt from enforcement action under the federal anti-kickback statute.

Proponents of electronic prescribing and medical records say the practices can reduce costs and improve care, but some privacy and consumer groups say they also might compromise patient privacy.

Paul B. Ginsburg, president of the Washington think tank Center for Studying Health System Change, said the proposed changes "may remove a major impediment to development of these information technologies" by unlocking private funds to help speed their use nationwide.

Physicians, especially those in smaller medical groups, often do not have the money to purchase or maintain electronic health care record systems, so allowing hospitals and other organizations to purchase the equipment is a plus, Ginsburg said.

A recent survey from the Medical Group Management Association found that the cost of installing and maintaining electronic records systems is the biggest barrier to their adoption by medical group practices, particularly for the smallest groups. The study found that 14.1 percent of all medical group practices use such a system and 11.5 percent said an electronic health record system was fully implemented for all physicians and at all practice locations.

Physicians are also reluctant to invest in health information technology because they fear that insurers, rather than doctors, will realize most of the savings.

The proposal to allow hospitals to donate hardware, software, and training to physicians would be somewhat narrow until Leavitt establishes and approves nationwide product certification criteria. The Centers for Medicare and Medicaid Services is also considering imposing a cap on the value of the technology that donors can provide, to reduce the potential for arrangements that would pay physicians for referring patients.

The proposed rules were published in the Oct. 5 edition of the Federal Register and public comments will be accepted for 60 days.

HHS also announced that CMS will soon issue a final rule containing the "foundation standards" for e-prescribing that all Medicare prescription drug plans must support. Officials also announced that, as required by the new drug law (PL 108-173), CMS is awarding $6 million to fund "e-prescribing" pilot programs using the foundation standards and additional clinical standards.

OCTOBER 3, 2005 -- Quality is up but enrollment is down at the nation's highest rated health plans, according to a report released Monday by the National Committee for Quality Assurance.

Based on its ratings of 289 commercial health plans, the NCQA said performance improved on 18 of 22 clinical measures in 2004, saving thousands of lives.

But the 289 plans are almost exclusively HMOs, which have steadily lost enrollment to preferred provider organizations in recent years. Although HMOs charge lower premiums, consumers and employers have drifted away from those plans because they place tighter limits on which doctors and hospitals patients can use.

The latest data show that the year-in, year-out process of measuring performance yields important gains in quality, NCQA President Margaret O'Kane said at a press briefing. NCQA quality measures for treating heart attacks, high blood pressure, and diabetes have saved up to 68,000 lives since 1996, she said.

The most notable improvements in the latest report were in the percentages of people in the health plans whose high blood pressure was under control and in diabetic enrollees whose cholesterol was under control. For the former, the percentage climbed 4.6 percent points to 66.8 percent, the latter 4.4 points to 64.8 percent. Improved blood pressure control stemming from the NCQA rating system is saving between 8,600 and 15,000 lives per year, O'Kane said.

But the improvements noted by the report only apply to 64.5 million Americans, the number enrolled in publicly reporting plans, NCQA said. That's only about 20 percent of the U.S. health system and "represents a decline of 4.5 million from a year ago, largely due to shifting enrollment patterns," the organization said in a press release.

"Enrollment in PPOs and high deductible health plans is up sharply; with few exceptions, these plans tend not to measure or report on their performance," the release said.

Employers took the lead in pressuring HMOs to gather and report data on quality of care, but they need to apply the same kind of pressure on PPOs, said NCQA Vice President for Public Policy Richard Sorian.

"The new mantra for health care purchasers needs to be, 'Show us your data,'" O'Kane said. "Why trust your family's health to an organization that operates behind closed doors?"

NCQA hopes that a new venture with U.S. News & World Report will fuel consumer and employer demand for quality ratings from health plans. The magazine, noted for picking the nation's best hospitals, released its first-ever ratings of "America's Best Health Plans" in its October 10 issue using the NCQA data. Top ranked: Harvard Pilgrim Health Care, which operates in Massachusetts and Maine.

Sorian added that Medicare's adoption of quality measures for PPOs could spur the employer community to apply the same measures to PPOs. Medicare plans will begin reporting the data in 2007 based on 2006 data.

Wide Quality Variations
Gaps between recommended and actual use of best treatment practices lead to between 39,000 and 83,000 avoidable deaths per year, the report added.

"The missed opportunities are staggering and heartbreaking," said Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission. Hackbarth, who said he was expressing his own views and not necessarily those of the commission, said the wasted opportunities reflect the primacy in the U.S. health system of the values of patient choice and physician autonomy. The health system needs to give equal weight to a third value—accountability, he said.

Dartmouth College medical researcher Elliott Fisher noted another problem in the system: sharply varying geographic rates of surgery that he said suggest a failure to inform patients about their treatment choices and their relative risks and benefits. Better informed patients are more likely to try non-surgical approaches, he said.

For example, a Medicare enrollee in Fort Wayne, Ind. is five times more likely to get a spine fusion than a similar enrollee in Terre Haute, despite sketchy data showing the procedure's value for lower back pain, Fisher said.

Fisher praised plans by NCQA to develop measures of how often plan doctors inform patients of treatment options.

While speakers at the briefing said measurement and reporting should be universal, they were reluctant to advocate mandates.

"There's more than one way to skin a cat," said O'Kane, urging "payment for performance" as a way to boost use of measurement. Fisher said the first step is voluntary reporting and the second is payment for performance. If that doesn't work, mandates should be considered, he said.

OCTOBER 4, 2005 -- A study published Tuesday concludes that creating a new Medicare "Part E" would eliminate the need for beneficiaries to pay more for supplemental coverage and would ease confusion over the new drug benefit.

The proposal also would give employers a more affordable alternative to current retiree health plans, according to the study paid for by The Commonwealth Fund, a health care think tank. The study goes on to say the federal government would not be burdened with any additional cost because "Medicare Extra" would be financed by monthly premiums costing less than beneficiaries now pay for supplemental Medigap coverage.

"Medicare Extra would create greater simplicity, efficiency, and value for beneficiaries and for Medicare," Commonwealth Fund President Karen Davis, lead author of the study, said in a news release. "With more affordable cost-sharing, Part E has the potential to reduce barriers to essential care for beneficiaries."

The study was published Tuesday as a Health Affairs "Web exclusive."

Davis and her co-authors say "Part E" would provide better drug coverage than the new Part D benefit because it would have no gap in coverage and would include a $3,000 cap on total out-of-pocket expenses, including prescription drugs. The new drug benefit requires beneficiaries to pay $3,600 out-of-pocket before catastrophic drug coverage takes effect.

Bush administration officials have said Medicare beneficiaries will have a wide array of choices for drug and health plan coverage under the new law. And last week they assured beneficiaries they would have access to prescription drug plans that fill the so-called "doughnut hole" in coverage—one of the most criticized aspects of the prescription drug law (See CQ HealthBeat, Sept. 30).

The "Medicare Extra" proposal would contain the same package of benefits generally featured in employer plans, particularly those in the Federal Employees Health Benefits Program. Medicare beneficiaries now enrolled in Medigap plans would save $357 per year and typical out-of-pocket costs would drop to $873 from $933 a year.

And "Medicare Extra" would offer employers a package of benefits that would have lower administrative costs—about 2 percent compared with the 10 percent to 15 percent of administrative costs for retiree plans—which could give employers an incentive to continue to offer retiree health coverage, the authors wrote.