By Drew Armstrong, CQ Staff

January 16, 2008 -- House and Senate aides are optimistic that they can craft a far-reaching package of Medicare changes this spring, after leaving many wants and needs on the cutting room floor in December.

The legislation's centerpiece, they said, will probably be an 18-month-long halt to a 10.6 percent cut to Medicare's physician payment rates now scheduled for July 1, according to a Democratic Senate Finance Committee aide.

The legislative action is expected to be driven by the Senate, which also passed a six-month patch to the scheduled physician payment cuts in December. The cuts are mandated by Medicare cost-containment formulas, and Congress has delayed them several times since 2002, when they were first called for. Lawmakers believe that continuing to delay the cuts in physician payments is vital because doctors may stop seeing Medicare patients if the cuts go through.

"We're really hopeful and optimistic that they can get something done," said a House Democratic aide, referring to the Senate. "If they can't—which we'll know by late spring—then we have to figure out what the backup plan is."

According to the Senate Finance aide, such a package would cost between $12 billion and $15 billion over five years.

The proposed Medicare changes were discussed Wednesday morning at a forum on 2008 health care legislation at the Four Seasons Hotel in Georgetown, hosted by the Stanford Group Company, a financial services firm.

With a longer-term patch over the cuts, "we can start getting prepared for much bigger things in 2009," the Finance aide said, referring to Democrats' desires to enact broader health reforms if they win the presidential election.

The Bush administration appears to be on board, at least with the general concept of a longer-term patch. "You cannot go on patching this on a six-month-by-six-month basis," said Health and Human Services Secretary Michael O. Leavitt on Wednesday. "We have to solve this. . . . I expect that will occupy a substantial part of my spring," he said.

But Democrats contend that the White House is part of the reason why there was no longer-term package last December.

Finance Chairman Max Baucus, D-Mont., and Rep. Pete Stark, D-Calif., had lofty goals for a two-year package of Medicare changes, including a delay in the doctor payment cuts, but the White House threatened to veto most of the proposals. The six-month Medicare package that emerged in December was designed to give Democrats another bite at the apple this spring.

The Finance Committee is expected to move quickly in the opening weeks of the new session to hold hearings and a markup.

Election-year politics could intrude, but the Finance aide appeared undaunted. "We're running an anti-conventional-wisdom campaign this year," said the aide. "Certainly the conventional wisdom would be that you don't get much done in an election year."

There is also the question of where lawmakers will find the billions of dollars for the package. "You need a fair amount of offsets to pay for it," said the Finance aide. "Definitely the intention would be to abide by PAYGO," the aide added, referring to the need to offset new spending.

Republicans and the White House would probably oppose one option for those offsets: cuts to private Medicare plans, known as Medicare Advantage. Democrats have longed to reduce payments to the plans, which they see as receiving overly generous subsidies. So far they have been stymied by the White House and a strong lobbying effort by private health insurers.

A Republican aide to Senate Finance reiterated that position. "We can't do wholesale cuts in [Medicare Advantage]. We want something that can be signed into law and we know the President will veto anything that makes wholesale cuts," the GOP aide said in an e-mail message.

But more targeted cuts to the private plans could be possible, the aide said. Reductions in bonus payments to hospitals with teaching programs might be one possibility for cuts, said the GOP aide, as could be so-called private fee-for-service plans, which are more expensive than other types of plans in the program.

Democrats might also push for new restrictions on how the private plans are marketed to seniors. There have been complaints that private insurers and agents have pushed too aggressively for seniors to sign up for the plans.

Baucus "wants to address those issues legislatively," said the Democratic Finance Committee aide, of the marketing issues. Such a proposal would likely generate some savings. The Democratic aide also suggested that Medicare payments to providers of oxygen services—such as breathing assistance and oxygen tanks for use at home by patients—might be cut.

Mary Agnes Carey contributed to this story.

By John Reichard, CQ HealthBeat Editor

January 16, 2008 -- Democratic leaders are discussing the possible inclusion of a temporary increase in federal Medicaid payments in the economic stimulus package they hope to quickly move through Congress and send to President Bush, a congressional aide said Wednesday.

The provisions under discussion are along the lines of temporary federal Medicaid payment increases signed into law by Bush in 2003, the aide said. Bush went along with the temporary increases totaling some $10 billion to obtain congressional approval of an economic stimulus package that included some $350 billion in tax cuts.

The 2003 law (PL 108-27) provided temporary increases in fiscal years 2003 and 2004 in the "FMAP," or federal medical assistance percentage, the term for the federal portion of payments for the federal-state Medicaid program.

Increasing the FMAP moving into a recession would help states maintain Medicaid eligibility levels at a time when more people are likely to become uninsured because of job loss and seek enrollment in the Medicaid program, said David Parrella, the director of the Connecticut Medicaid program and the chairman of the National Association of State Medicaid Directors. Otherwise, Medicaid funding would be at greater risk of budget cuts. "Health care costs are the biggest line item in every state's budget," he noted. "As states enter economic hard times, if you cut any substantial money from state budgets you have to go where the money is."

A proposal to increase federal Medicaid matching rates even temporarily would surely meet with Republican objections, although not necessarily fatal ones. Asked Wednesday his reaction to including temporary Medicaid increases in the stimulus package, HHS Secretary Michael O. Leavitt said, "I don't think Medicaid and Medicare were intended as jobs programs. They were intended to be programs to help those who have serious economic disadvantages and we ought to focus on it as such."

"Increasing Medicaid payments is a great way to expand entitlement spending, but would do little or nothing to actually improve the economy for working Americans," added a House Republican aide. "It is just a simple cash transfer to states, with no connection to the areas of greatest need or any requirements that the money actually be spent in ways that help improve the economy."

The Bush administration has become increasingly aggressive about cracking down on Medicaid spending through regulatory changes and disapproval of certain state expansion plans. However, GOP congressional aides said Wednesday they don't necessarily assume that the White House would veto a package containing temporary Medicaid increases if it were part of an economic stimulus package that included tax cuts.

Temporarily increasing Medicaid payments is "a likely approach to take in the stimulus package," said a Senate Republican aide. Regarding a potential veto, the aide said "that is speculative," noting that the White House did not veto the 2003 economic stimulus package containing tax cuts and temporary Medicaid increases.

By Greg Vadala, CQ Staff

Most doctors are willing to report and share information about medical mistakes but lack adequate systems to do so, according to a recent government study.

The report, funded by the Agency for Healthcare Research and Quality (AHRQ), found that a majority of physicians agreed that reporting mistakes to their hospitals or health care organizations would improve patient safety. But it also found that doctors were more likely to discuss errors with their colleagues in informal settings than to report them to risk management or patient safety programs.

As a result, the study's authors contend, hospitals and health care organizations are left out of the loop when it comes to critical information about the occurrence and prevention of medical mistakes.

"Physicians say they want to learn from errors that take place in their institution to improve patient safety," AHRQ Director Carolyn M. Clancy said in a statement. "We need to build on that willingness with error-reporting programs that encourage their participation."

The study, which was published in the January/February issue of Health Affairs, was based on an anonymous survey of more than 1,000 physicians currently practicing in urban and rural areas in Missouri and Washington state. The 68-question survey, which was conducted between July 2003 and March 2004, asked doctors about their attitudes toward and experience with discussing and reporting mistakes with their colleagues and institutions.

"If you're a physician for long enough, you're going to be involved in an error," Dr. Jane Garbutt, the study's lead author and an assistant professor of medicine at Washington University in St. Louis said.

Fifty-six percent of the doctors surveyed said that over the course of their careers they had been involved with an error that "causes permanent injury or transient but potentially life-threatening harm." In addition, 74 percent were involved with a mistake that "causes harm that is neither permanent nor potentially life-threatening."

While only 27 percent of the respondents received information about mistakes from their hospital, health care organization, or a patient safety program, 68 percent said they received information about errors from fellow doctors.

The authors noted that the study challenges the longstanding notion that doctors are "reluctant partners" in reporting mistakes to the hospitals where they practice. However, they conceded that there are still major barriers to encouraging doctors to use hospital-based reporting systems, including the "culture of perfectionism" in the profession and a fear of negative consequences, such as malpractice litigation or disciplinary action.

Another obstacle to consider is the general lack of awareness about reporting mechanisms, they said. Garbutt said that one of the most striking findings was that 45 percent of doctors did not know if a reporting system designed to improve patient safety even existed at their hospital or health care organization.

About 36 percent of respondents reported access to a reporting system, while 19 percent reported having no access, according to the study.

"What they wanted more than anything else was information about how to prevent the most common errors," Garbutt said. "They want to learn how to improve."

Garbutt cautioned that policy makers looking to address the issue must consider the differences in attitudes and behaviors between surgeons and medical specialists.

According to the study, surgeons were more likely than other specialists to attribute mistakes to the failure of individuals rather than systems and also were more likely to have discussed errors with their colleagues.

In discussing possible solutions, Garbutt cited the example of a Web-based reporting system used by neonatal intensivists from several institutions. She said that the group's use of an e-mail discussion list and interaction through a series of meetings kick-started several improvement projects related to patient safety.

"It's a model that's worth investigating," Garbutt said.

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 18, 2008 -- Three long-term care organizations have proposed a restructuring of the current long-term and post-acute care systems that would, they said, encourage individuals to save for their long-term care needs and ease the financial pressure of long-term care expenditures on federal and state budgets.

"The long-term care system, if you want to call it that, is pretty messed up," said Bruce Yarwood, president and CEO of the American Health Care Association, adding that the current system is extremely fragmented.

The proposal, which would be phased in over the next decade, would create a catastrophic long-term care program for Medicare-eligible individuals age 65 and older who have obtained $100,000 in long-term care insurance in 2007 dollars. Participants could obtain that coverage through federally certified financial products, such as insurance policies and savings accounts. That amount could be adjusted on a sliding scale and low-income individuals would be exempt.

Individuals who qualified for catastrophic federal assistance would receive cash benefits to pay for community-based services, or they would receive skilled nursing facility or assisted living facility services. Enrollment in a Medicare Advantage plan that provides long-term care is another option, according to the plan, which was released Tuesday by the Alliance for Quality Nursing Home Care, the National Center for Assisted Living, and the American Health Care Association.

At Tuesday's news conference, Avalere Health President Dan Mendelson said 90 percent of people age 55 and older have no long-term care insurance coverage, though they may face annual costs exceeding $70,000 and few elderly have adequate assets to handle more than one year of nursing home care. In addition, long-term care accounts for than 35 percent of state Medicaid budgets. In 2004, the nation spent $185.3 billion on nursing home and home care, Mendelson said. Avalere Health assisted in developing the proposal.

States' share of Medicaid payments for long-term care would shift to the federal government under the proposal. States would be required to make payments to the federal government for the costs of long-term care services, with the amount of each state's payment approximately equal the amount of the state's expenditures if it were to continue to pay for long-term care through Medicaid on behalf of dual eligibles.

Other elements of the plan call for a post-acute care patient assessment tool developed by the Secretary of Health and Human Services that the groups said would do a better job that the current system of matching medical services to the patient's individual needs, with equal rates of federal reimbursement. Currently, Medicare reimbursements can vary by facility.

Alan G. Rosenbloom, president of the Alliance for Quality Nursing Home Care, said the presidential campaigns provide a unique opportunity for candidates to discuss the nation's long-term care system. "The timing couldn't be better to have a discussion like this," he said.

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 15, 2008 -- House and Senate Democrats said Tuesday the Centers for Medicare and Medicaid Services (CMS) has no authority to limit states' efforts to extend health coverage to more children through Medicaid.

In a letter sent to Department of Health and Human Services (HHS) Secretary Michael O. Leavitt, the lawmakers wrote that recent actions by CMS regarding several states—including Ohio, Louisiana, New York, Wisconsin, and Oklahoma—will "deny health care to the uninsured children of working families who are lawfully entitled to care at a time when economic pressures on families are high."

In December CMS denied Ohio's state plan amendment to expand coverage to uninsured children through the Medicaid program, applying an Aug. 17 directive to state officials that stops states from extending Medicaid coverage to children in families with incomes above 250 percent of the federal poverty line without first showing that 95 percent of those eligible below 200 percent of poverty have been enrolled in the program. Advocates of wider government coverage of uninsured Americans with modest incomes say that standard is impossible to meet.

Last year, President Bush twice vetoed Democratic attempts to expand the State Children's Health Insurance Program (SCHIP). Democrats were unable to muster the votes to override Bush's first veto and postponed considering an override attempt of the second veto until Jan. 23. Meanwhile, they cleared a short-term extension that will keep the program running until March 31, 2009, signaling that they have little hope of enacting an expansion under Bush.

"Despite repeated warnings about the legality of the Aug. 17, 2007 directive and the absence of a formal rulemaking process, your administration has continued to pursue a policy that is contrary to federal law and that limits children's access to health care," the lawmakers wrote to Leavitt. "Federal law does not authorize CMS to effectively impose an income eligibility cap in [SCHIP] or Medicaid, nor does it require states wanting to cover children at levels higher than 250 percent of poverty [or $43,000 a year for a family of three] to have to use 100 percent state-only funds to do so."

Nothing in the SCHIP statute "affects underlying Medicaid eligibility or states' ability to expand coverage to children using Medicaid funds," the letter states. The lawmakers said the net effect of the administration's actions "is that fewer children will have access to comprehensive health care coverage including fewer children in families earning below $35,000 a year."

The lawmakers, who include Senate Finance Committee Chairman Max Baucus, D-Mont., House Energy and Commerce Committee Chairman John D. Dingell, D-Mich., and House Oversight and Government Reform Committee Chairman Henry A. Waxman, D-Calif., request CMS to reverse its decision immediately and ask Leavitt for a response to the letter by Jan. 31.

By Sara Lubbes, CQ Staff

January 15, 2008 -- Democratic presidential candidates are more in step than their Republican counterparts on what Americans want in a health care system overhaul, said authors of a new voter survey.

The survey, put together by the Commonwealth Fund—a nonprofit group that promotes better public access to health care—shows that more than 80 percent of those surveyed, regardless of their political party, supported the idea that all employers should be required to provide health care to their workers or pay into a government-run fund to provide the care.

The survey, taken of a sample of adults 19 or older from June 2007 to October 2007, also showed the majority of those polled, including 52 percent of Republican voters, say government should require every American to have health insurance, just as all drivers are required to have car insurance.

Study author Sara R. Collins, assistant vice president of the Commonwealth Fund, said the results show that voters agree most with the proposals being pushed by the three leading Democratic candidates for president: former North Carolina Sen. John Edwards, Illinois Sen. Barack Obama, and New York Sen. Hillary Rodham Clinton.

All three candidates would require employers to make some kind of health care contribution or provide health insurance to their workers—the so-called pay or play mandate. Clinton and Edwards also would require all Americans to carry health insurance, while Obama would require families to carry the insurance for their children.

The Republican front-runners, Arkansas Gov. Mike Huckabee, former New York City Mayor Rudy Giuliani, former Massachusetts Gov. Mitt Romney, and Arizona Sen. John McCain, have not called for such reforms yet.

Most have backed the idea that people should be more free to buy their own insurance on the private market and carry that insurance with them from job to job.

"The survey findings are far more in line" with the proposals the Democratic candidates support, Collins said in a press briefing Monday.

Meanwhile, policy experts at conservative think tanks criticized the findings as unrealistic. They said the survey questions were biased because they did not ask voters whether they would support a health care overhaul if those changes led to a tax increase or some people to lose their jobs, two possible consequences critics of the health overhaul predict.

"When you ask people 'do you want everything for nothing,' they're going to say 'yes,' " Grace-Marie Turner, president of the Galen Institute, which promotes free-market-based economic policies, said.

"If you asked people 'do you think you want to be able to have insurance you can take from job to job' " as Republican candidates such as Giuliani are arguing, "people will say 'yes' to that, too," Turner said. "It's totally how you frame the question."

The survey also found that support for the individual mandate that would require everyone to carry insurance "was far strong than I might have expected," Collins said.

About two-thirds of those polled, regardless of their political party, said the government, individuals, and employers should share the health insurance cost burden in America.

About 85 percent of those polled, across party, said the candidates' positions on health care would be "somewhat" or "very" important in their voting decision.

Joe Antos, a health policy expert with the conservative American Enterprise Institute, pointed to a survey finding that 66 to 70 percent of those polled said employers, government, and individuals should share insurance costs—a finding which shows that the majority of Americans think the health care system should not change much, he said.

"This is really a statement that says 'we'd like things to stay about the same,'" Antos said.

He also argued that it's too early in the campaign to know what kinds of health care reforms the eventual Republican nominee will end up supporting. Health care has not been a big issue in the Republican primaries so far because it's not an issue core Republican voters worry about as much as issues such as immigration, Antos said.

"Come the general election, they'll be changing their tune," he said.

Dan Mendelson, president of the public policy strategy Avalere Health and a former head of the Office of Management and Budget's health division under President Bill Clinton, agreed, saying "It's too early to judge the Republican health policy," he said. "They've been silent on it, leaving them a lot of room."

New America Foundation's Len Nichols said the survey's findings confirm what he already believes: that most Americans want employers or the government to provide mandatory insurance. Nichols is director of the Health Policy Program at the foundation, a self-described "post-partisan" public policy think tank.

"These ideas always tend to poll well," and the Democratic plans are tailored to those ideas, Nichols said.