By Mary Agnes Carey and Edward Epstein, CQ Staff

September 28, 2007 -- Department of Health and Human Services Secretary Michael O. Leavitt on Friday reiterated President Bush's promise to veto a $35 billion expansion of children's health insurance just hours after House Speaker Nancy Pelosi, D-Calif., made a personal appeal for the president to sign the bill.

While Bush remains committed to reauthorizing the State Children's Health Insurance Program (SCHIP), the Bush Administration and bill supporters "disagree on the path," Leavitt told reporters Friday afternoon. The White House has said the measure (HR 976) "goes too far toward federalizing health care" and would open the program to families making as much as $83,000 a year, claims that advocates of the bill say are false.

Earlier Friday, Pelosi spoke with Bush and "told him he was in my prayers and said I hoped he would reconsider his decision." White House Press Secretary Dana Perino said Bush told Pelosi, "I'm going to veto this bill and after that, let's see if we can sit down and come to a compromise."

The Senate cleared the SCHIP measure late Thursday with a 67–29 vote, which was sufficient for the two-thirds majority required to override a presidential veto. The 265–159 House vote on Sept. 25 was not, and supporters acknowledge that the measure does not have enough Republican support in the House for an override. But Pelosi said she told Bush she wouldn't give up in her efforts to get the SCHIP program expanded. "We need only 15 Republicans in the House'' to change their stance on the bill and get enough votes for an override, she said.

Leavitt said Bush would sign a stopgap spending bill (H J Res 52 ) that includes $5 billion to fund 13 states' SCHIP programs through Nov. 16. He said he did not know when Bush would receive the SCHIP legislation, but said he would veto it soon after its arrival.

The SCHIP measure would expand the program by $35 billion over the next five years, to $60 billion. The expansion would be financed by tobacco tax increases, including a 61-cent increase in the cigarette tax, to $1 per pack. SCHIP covers about 6 million children who are low-income but not poor enough to qualify for Medicaid. The expansion, a top priority of congressional Democrats, would result in about 5.8 million additional children enrolling in SCHIP and Medicaid, according to the Congressional Budget Office, with two-thirds of them otherwise uninsured.

"Where the major disagreement comes is in how we help those who are in better off income situations, that is to say greater than 200 percent of the poverty line . . . . We think there are ways to be helpful to Americans who have need, but we don't think SCHIP is the way to do that," Leavitt said. Once an SCHIP package is agreed to, Leavitt said the administration would like to discuss with Congress other ways to provide health care coverage to those who need it.

As part of his State of the Union address, Bush proposed tax deductions of $7,500 for individuals and $15,000 for families to help them purchase health insurance—no matter what the cost or type, or whether it is purchased through an employer—but the plan has gained little traction on Capitol Hill. While some lawmakers have accused Bush of holding the SCHIP bill hostage as a way to push other health care initiatives—such as his tax credit proposal—Leavitt said Friday that was not the case.

By Mary Agnes Carey, CQ HealthBeat Associate Editor

September 28, 2007 -- President Bush will sign into law this weekend legislation that would curb a new Medicare rule governing payments for inpatient hospital care, a White House spokesman said Friday.

The Centers for Medicare and Medicaid Services (CMS) said in a proposed rule earlier this year that hospitals will exaggerate how sick patients are when the agency begins adjusting payments next year to tie them more closely to severity of illness, and that a "behavioral offset" is needed to reduce inpatient payments across the board by 2.4 percent to compensate for the overcharges. Hospital groups said the offset would have resulted in a $20 billion cut to their Medicare payments over the next five years.

The health care extenders package (HR 3668) would slice those offsets in half to 0.6 percent in 2008 and 0.9 percent in 2009 but would not address the 2010 offset. The change would restore $2.5 billion over the next two years and $7 billion over the next five. Hospital groups and lawmakers pressed CMS to delay the payment adjustments.

"Yesterday's vote in the Senate and a vote on the same measure in the House recognize that these cuts would adversely affect the ability of hospitals to provide care for our nation's senior citizens," Federation of American Hospitals President Chip Kahn said today in a statement. "Medicare already pays hospitals well below cost to treat Medicare beneficiaries."

The legislation, which both chambers passed by voice vote, would also extend, for three months, two federal health care programs that help low-income individuals obtain health care coverage as well as a federal abstinence education program, all of which expire Sept. 30. The measure also would delay, for six months, a requirement that tamper-resistant prescription pads be used when prescribing outpatient drugs for Medicaid patients.

The delay would give patients, physicians, pharmacists, and others more time to prepare for the change. "The use of tamper-resistant pads should reduce the amount of Medicare fraud. More importantly, the six month delay will minimize any disruptions to patients' access to prescription drugs that would otherwise occur," said Bruce Roberts of the National Community Pharmacists Association in a press release. Roberts is executive vice president and CEO of the organization.

Other provisions in the legislation would extend a Medicaid asset verification program through 2012 and spend an additional $340 million, over the next five years, for a Medicare program that provides bonus payments to physicians who report on a set of quality measures. In addition, the bill would extend a federal program that pays Medicare Part B premiums for low-income Medicare recipients, and it would extend the Transitional Medical Assistance program that allows families that are moving out of welfare into the workforce to extend their Medicaid coverage for up to four months.

By Marie Horrigan, CQ Staff

September 24, 2007 – As an early proponent of universal health care coverage, Democratic presidential candidate John Edwards on Monday found himself struggling to differentiate his plan from one released last week by New York Sen. Hillary Rodham Clinton, the party's front-runner.

"I should be flattered, I guess," Edwards quipped Monday about the similarities of their proposals. "I think for America this is a good thing that we're having a debate about health care, universal health care, and the differences between the major candidates are fairly nuanced," he added.

Speaking at a health care forum in Washington, the former North Carolina senator found few differences between the policy agendas, but said he would take a vastly different tack from Clinton in working to implement his health care overhaul plan.

"Sen. Clinton appears to believe that ... you can take money from health insurance and drug company lobbyists and sit at the table with them and negotiate a compromise," Edwards said. "I absolutely reject that. That's a classic inside Washington way of thinking."

Instead, Edwards said a policy reformer should create buy-in among Americans by convincing them of "the rightness of the substance of what you want to do," he said. "And that's the way we drive through the entrenched interests of insurance companies and drug companies and lobbyists that are a huge obstacle for reform."

Though rejecting the roll of lobbyists and special interest groups in shaping policy, Edwards was speaking at a Kaiser Family Foundation forum sponsored by the Federation of American Hospitals and Families USA, two organizations that seek to influence the debate on U.S. health care policy. Other presidential candidates are scheduled to appear at the Kaiser Family Foundation over the next few months to discuss their health care plans.

Edwards said the goal of his plan is to create a system in which every American has health care coverage "from birth to death." Part of that policy would include expanded current programs for low-income families and children such as Medicaid and the State Children's Health Insurance Program (SCHIP). Congress is poised to pass a bill to expand SCHIP coverage, but President Bush has vowed to veto the legislation.

Edwards also said his plan would reduce the cost of prescription drugs, calling the 2003 bill to overhaul prescription drug coverage under Medicare (PL 108-173) a "complete give-away to drug companies." Clinton was one of 35 Democrats to vote against the bill.

Edwards said he supported giving the government the power to negotiate with drug companies for lower prices, establishing a system to safely re-import medication from Canada, and controlling drug company advertising on television to the extent that it is constitutionally sound.

Edwards, a former trial attorney, also pushed back against the notion that medical malpractice lawsuits were a significant factor in driving up the cost of health care." The reality is that the costs associated with legal cases are well under 1 percent of our health care system," he said.

He added that lawyers should have to prove that their medical malpractice cases have merit and that attorneys who file three frivolous cases should be barred from filing new ones. "This is something I know something about," he said with a laugh.

Edwards said he would offer a comprehensive health care proposal to Congress on the first or second day of his presidency.

"If I have submitted a universal health care plan to Congress I will never pull it. That will not happen. Not in my administration," Edwards said in an apparent attack on the Clinton administration, which in the face of massive opposition withdrew a health care overhaul policy created largely by then-first lady Clinton.

Three elements of his plan would be non-negotiable, Edwards said: it must be universal, it must establish equality of care, and it must reduce costs.

"I would not compromise on those," he said. "The exact mechanisms for accomplishing it? I would be willing to talk about it—with members of Congress. I would not be negotiating with drug and insurance companies and lobbyists."

By CQ Staff

September 25, 2007 – With health care the top domestic issue among voters as the nation heads into the 2008 elections, the Partnership to Fight Chronic Disease asked presidential candidates Tuesday to focus on ways to prevent, treat, and manage chronic diseases that account for more than 75 cents of every dollar spent on health care.

"We want all presidential candidates to consider our ideas for change as they solidify and provide greater details of their health care proposals," said the group's executive director, Ken Thorpe, in a statement. "While we are encouraged that most candidates who have released health care reform plans included ideas for fighting chronic disease, more needs to be done."

The group will not endorse a party or a candidate but instead will encourage all candidates to address issues related to chronic disease.

According to the group, a coalition that includes organizations representing patients, health care providers, business, and labor unions, chronic disease is responsible for seven out of every 10 deaths in the United States. About two-thirds of the rise in health care spending over the past two decades is due to the rise in the prevalence of treated chronic disease, and only 56 percent of those with chronic disease receive clinically appropriate care.

Among its recommendations, the coalition is encouraging candidates to advance sustainable chronic disease prevention, early intervention, and management models throughout the health care system. Candidates' health care proposals should also promote healthy lifestyles, it said. Policies to improve the quality and availability of health information technology and reduce health disparities should also be top priorities for candidates, the group stated.

Democratic presidential candidate Sen. Hillary Rodham Clinton, D-N.Y, who released her health care overhaul proposal earlier this month, said the group's policy "largely mirrors the approach that I have outlined and heartily endorse."

By Sasha Bartolf, CQ Staff

September 25, 2007 – The National Committee for Quality Assurance (NCQA) on Monday reported that the rate of improvement for American health plans has slowed compared to previous years. While the quality of care for more than 80 million Americans improved in 2006, the gains were smaller than they have been in the past, according to the group's State of Health Care Quality 2007 report.

According to the report, performance slowed for health plans participating in Medicare, and Medicare's managed care plans fared better in just 7 out 21 measures of care. But 44 more Medicare managed plans reported, for the first time, quality data in 2006, which brought the total number of publicly reporting plans to 211.

The NCQA report monitors performance trends over time, tracks variations in patterns of care, and provides recommendations for future quality improvement. The clinical quality, customer experience, and user data upon which the 2007 report was based were voluntarily reported to NCQA by more than 500 health plans.

The report also highlighted improvements in cardiac care, immunization rates, and colon cancer screening. In the area of cardiac care, the report found that in 2006, 99.7 percent of patients received a beta-blocker drug—medication that can reduce the possibility of a second heart attack—compared with 62 percent in 1996.

The percentage of children and adolescents being fully immunized was 80 percent in 2006 for those enrolled in commercial health plans and 73.4 percent for children in Medicaid, the report found. In addition, the percentage of Americans who received recommended screening for colon cancer also rose, from 52.3 percent in 2005 to 54.5 percent in 2006, according to report.

"For the 80 million Americans in accountable plans this is great news. These improvements mean better health and longer lives," said NCQA President Margaret E. O'Kane in a press release.

However, the report also warned that serious gaps in care persist. The group estimates that if the entire health care system were to perform as well as the top 10 percent of accountable plans they measured, between 35,000 and 75,000 deaths could be avoided each year. And in addition to lives saved, the economy would recoup $7.4 billion in lost productivity for the 45 million sick days taken, according to the report.

By John Reichard, CQ HealthBeat Editor

September 24, 2007 – The new head of the Centers for Medicare and Medicaid Services used his first public appearance before a group of managed care executives to warn them that public confidence in Medicare's private health plans hinges on avoiding unscrupulous marketing practices.

"The old saying that a few bad apples spoils the bunch is particularly apt with regard to marketing abuses," said Kerry Weems, recently named acting administrator of the Centers for Medicare and Medicaid Services. "Unless the marketing abuses are nipped in the bud, congressional and public sentiment can easily turn against the entire Medicare Advantage program." Medicare Advantage is the private health plan component of Medicare.

Speaking to attendees of a Medicare and Medicaid conference Monday sponsored by America's Health Insurance Plans, Weems said "this past week we issued civil monetary penalties against two plans for marketing abuses. I want to be clear. Despite the fact that we believed that civil monetary penalties were necessary, they represent a failure for all of us: CMS as well as these plans." Government and industry must work together to prevent abuses in the first place, he emphasized.

Medicare Advantage program overseers have shied away from tough regulatory talk since the program was launched by the 2003 Medicare overhaul law (PL 108-173). And when officials have acted against plans, they've offered few details. But criticism of the marketing practices grabbed press attention this spring when the Senate Aging Committee held a hearing spotlighting marketing abuses. On June 15, CMS officials held a rare press briefing on such violations and announced a suspension of marketing efforts by seven Medicare Advantage plans until their practices were changed.

In his speech Monday, Weems announced he has notified the plans they can resume marketing because they have taken steps to correct abuses. He added that "oversight involves more than shining a light on the problems after they occur. We also need transparency to support better service so problems will not occur. That's why on Nov. 15, we'll post the Medicare Part C and D reports cards on our Web site so the public will have full access to information on plan performance. And on Oct. 1 the full range of corrective action plans issued during 2006 and 2007 will be posted on our Web site." Part D is the prescription drug part of the Medicare program.

Weems did not name the two plans slapped with civil monetary penalties in his speech. In a subsequent e-mail, CMS Spokesman Jeff Nelligan said "CMS imposed penalties of $264,000 on Coventry Health Care, Inc. based on misrepresentations made by sales agents representing Coventry's Advantra Freedom plan. CMS also imposed penalties of $75,000 on Humana, Inc. based on the use of unlicensed sales agents to market their plans to Medicare beneficiaries in Oklahoma."