Washington Health Policy Week in Review

Washington Health Policy Week in Review is a weekly newsletter that offers selected stories from the daily newsletter CQ HealthBeat.

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'Plenty of Time' to Pass IT Bill Before Break, Deal Says

By John Reichard, CQ HealthBeat Editor

September 8, 2006 -- There may not be much time left before lawmakers adjourn to campaign for midterm elections, but House Energy and Commerce Health Subcommittee Chairman Nathan Deal, R-Ga., apparently intends to make the most of it.

Deal said Thursday that there is "plenty of time" left for Congress to pass legislation fostering the adoption of health information technology, adding that he also expects House passage of legislation reauthorizing the Ryan White CARE Act, which provides a safety net to Americans living with HIV, within two weeks.

Deal also said he's hopeful that Congress will pass legislation that would block a scheduled 5.1 percent cut in Medicare payments to physicians.

House Republican leaders announced Thursday that their goal is to have their last votes before recessing on Sept. 29. A lame-duck session is scheduled to begin in the House on Nov. 13. The Senate is expected to follow a similar schedule.

Interviewed after a speech Thursday to the Bush administration's Medicaid Commission, Deal said, "I wish I could tell you" whether a House-Senate conference to resolve differences between health information technology bills (HR 4157, S 1418) will occur before or after the election. But he added that Congress has "plenty of time" to get it done. "There are not that many differences on it."

One sticking point, however, is whether to preserve House language that would exempt hospital donations of information technology to physician practices from prosecution under federal anti-kickback laws. Deal expressed concern that dropping that language would mean the final legislation would do little to speed adoption of technology. "If we do that, we may have a very hollow bill," he said.

Insurers, however, are lobbying for the removal of the House language. In a Sept. 1 letter to House and Senate leaders, health insurance lobby America's Health Insurance Plans (AHIP) said the language is not needed because the Department of Health and Human Services recently issued final regulations addressing the issue.

The lobby objects to the language on the grounds that it does not require technology donated by a hospital to a physician's office to be compatible, or "interoperable," with that used by other hospitals. Thus, a doctor's office might receive a system that allows it to exchange a patient's medical records electronically with one hospital system, but not with another.

"As a result, the physician could be forced to funnel his or her patients to a particular hospital or hospital system to the exclusion of other appropriate treatment options," according to a legal memo prepared for AHIP by the D.C. law firm Epstein Becker and Green. Other hospitals would not be able to compete effectively in the marketplace, potentially violating antitrust law and driving up the cost of care, the memo said.

AHIP President Karen Ignagni said in the letter that if Congress does include exemption language in the final bill, it should be "accompanied by interoperability requirements to improve communication and the flow of information throughout the health care system."

AHIP also objects to two other provisions in the House-passed legislation, those requiring the adoption of a new set of diagnosis and procedure billing codes—the so-called ICD-10 codes—by October 2010 and those providing an expedited process for revising other IT standards. The ICD-10 deadline is "unrealistic," and the expedited process would not allow for public comment, potentially leading to unworkable standards, AHIP said.

Physician Payments

On the physician payment issue, Deal said in the interview that "we will do something" this year, but suggested that it would be a limited fix because of the high costs of doing something long term. "I would prefer to get it done before the election," he added.

The current payment formula sets physicians up for several consecutive years of cuts, but Congress will be hard-pressed to pay for more than a one-year fix. Deal indicated that the five-year cost of erasing the 5.1 percent cut and keeping payments the same in 2007 as they are in 2006 would be $13 billion.

Asked how Congress would pay to erase the cut, Deal said a $10 billion fund to keep managed care plans in Medicare "is always a target." He added "there are not a lot of identifiable funding sources out there." It would be hard to go to sources other than the stabilization fund "without stepping on toes."

Deal indicated that the payment fix would be contingent on the reporting of data by physicians on the quality of their care.

A "budget brief" released Thursday by the Congressional Budget Office put the five-year cost of increasing physician payment rates by one percent in 2007 at $13 billion and at $6 billion over 10 years. The estimate assumes the payment update would not be treated as a change in law or regulation.

If it were treated as such a change, the five-year cost also would be $13 billion, but the 10-year cost would be $31 billion. If physician payment rates were allowed to increase at the rate of medical inflation, the five-year cost would be $58 billion and the 10-year cost $218 billion.

Medicaid Changes

Asked what further changes he'd like to see relating to Medicaid program, Deal expressed support for creating a permanent federal advisory commission for Medicaid along the lines of the Medicare Payment Advisory Commission.

He told the Bush administration Medicaid Commission that he'd like to see financial incentives for families to take care of elderly or disabled members who otherwise would be treated in nursing homes. Doing so with proper safeguards to prevent families from misusing funds could save the government money, he said. Deal also expressed support for tax-free withdrawals from Individual Retirement Accounts to pay premiums for long-term care insurance policies.

Deal also backed charging higher co-payments to Medicaid patients who go to emergency rooms for non-emergency care and protecting hospitals from liability if their emergency rooms direct patients to other less costly sources of care if they are accessible and medically appropriate.

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