By Katie Litvin, CQ Staff

October 22, 2009 -- For the third year in a row, the quality of health care in the United States has not improved, according to the National Committee for Quality Assurance's 2009 report released Thursday.

The group surveyed more than 900 health care plans—that cover 116 million Americans—and determined that the quality of commercial health insurance, Medicare and Medicaid, has not improved.

"The results of health care plans aren't moving forward as they have in the past," said Margaret O'Kane, the president of NCQA, during an event Thursday to release the report. "Everybody deserves to have the best health care. Quality needs to be the foundation of health care reform."

If all health care providers provided the same quality of care as the top 10 percent of plans, 115,300 deaths could be prevented in the United States, according to the report.

The health care quality plateau could be attributed to the struggling economy and budget shortfalls, according to Vernon Smith, a principal at Health Management Associates.

Budget shortfalls "have forced states to focus on keeping their heads above water instead of working on improvement of quality measures," Smith said.

When health care providers focus on cutting costs, they may focus less on improving performance, according to the report. For example, to keep costs down Medicaid this year did not enroll more people in drug and alcohol treatment programs or increase follow-up visits with patients hospitalized for mental illness, the report said.

It also found that although the United States spends twice as much as any other nation on health care, there is little to no connection between health plan spending and quality of care received.

NCQA's evaluation of money spent on areas of care, such as diabetes and asthma, showed that some inefficient plans overspend with varying performance and other plans bring improved performance at a lower cost.

"You can't assume that because you're paying more for a health plan that you're getting a better product," said O'Kane. "This is why we must tie payment to performance."

Instead of increasing costs to improve health care quality, the chief medical officer of one health provider suggested improving the general health of the population, enhancing patient experience and reducing or controlling the per capita cost of health care coverage.

"We need to change the lifestyle habits that largely contribute to chronic disease," said Nancy Van Vessem of Capital Health Plan. "We have to get some consistent message out there, that's the key to improving the health of the country."

Smith warned against federal regulators mandating quality improvement programs from states because states can self-direct these programs and have individual fiscal limits. He said proposals to overhaul health care should envision a greater role for Medicare and Medicaid, and ensure that all spending required in legislation is well spent.

"I do not expect the plateau to continue, because commitment to improvement is solid," he said.

The plateau in health care quality should be addressed in health care overhaul legislation, O'Kane said. NCQA's report found currently 60 percent of Americans are not covered by an accountable health care plan and that health care quality varies widely by geographic region.

The report found that the Deep South and South Atlantic regions of the United States experience worse health care quality levels than the national average. Diabetes care in the South central region of the country is 5.3 percentage points below the national average for health care quality, the report found.

"Vulnerable populations are not seeing the improvements that we'd like to see," O'Kane said.

By Jane Norman, CQ HealthBeat Associate Editor

October 23, 2009 -- More than a dozen House Democrats who have long complained that their regions are shortchanged in Medicare reimbursements lined up Thursday behind a health care overhaul bill (HR 3200) after Democratic leaders agreed to a geographic fix.

"For too long Medicare has rewarded the quantity of medicine performed rather than the quality of medicine provided," said Betty McCollum of Minnesota. "This has penalized our states in particular because they deliver high-quality care at low cost."

The desire to include the fix in the overhaul grew for the members of the Quality Care Coalition as discussions intensified around a government-run insurance plan that would pay providers based on Medicare rates. Norm Dicks of Washington said he was among those Democrats who told leaders that they could not vote for the health care bill unless reimbursement disparity was ended.

"This is non-negotiable. We have to have this reform," Dicks said.

The two-step provision on which Democrats struck a deal could make a dramatic change in the formula for fee-for-service reimbursements, moving the huge Medicare system toward a more value- and outcome-based approach. The Democrats—most from the Midwest or Northwest—said leaders have guaranteed that the fix will be included in the version of the overhaul bill that comes to the floor, and they released legislative language.

The deal also comes at a time when House leaders are working to round up and solidify Democratic votes for the overhaul as they combine three versions approved by committees and iron out details in advance of a floor vote.

Ron Kind of Wisconsin said the lawmakers realize that the models for coordinated, efficient care in their home states might not work everywhere in the country. "What we are saying is that no longer is Medicare health care payment going to be based on just the utilization of the volume of care. It's going to be based on the outcome of care. You providers figure it out," Kind said.

"Basically, we are reinventing Medicare," said Jay Inslee of Washington. "We are doing it by not just changing what we pay physicians and hospitals but how we pay physicians and hospitals."

In the approach, part of which was announced earlier in concept, the Institute of Medicine would conduct a one-year study of the current system and make payment recommendations. Bruce Braley of Iowa said the institute, which is part of the National Academies, already has extensive research available on reimbursement disparity, including ideas on how to motivate better care.

A plan for action then would be developed by the institute over 16 months and submitted by the secretary of Health and Human Services to the administration and then to Congress, Kind said. It could be killed only through a joint resolution that gains the votes of two-thirds of each chamber. All action would be completed by the time the "public" insurance option is made available for consumers.

No scoring has been done by the Congressional Budget Office because the formula does not yet exist, but Kind said it's anticipated that major cost savings will be achieved. Changing Medicare and bending its cost curve will also have an impact on private health care costs, he said.

Separately, $8 billion over two years is included in the overhaul to provide a better floor for Medicare reimbursements in regions that receive less.

Dicks said House leaders have promised to fight for the Institute of Medicine provisions in a House–Senate conference committee on the overhaul. "I hope that the other body—you know who I'm speaking of—will not see that this reform requires them to protect certain areas of the country that have strong patrons, if you know what I mean," he said.

Omission of the fix in the overhaul would be "a deal breaker," said Rep. Earl Blumenauer, D-Ore. But he and others also praised House Speaker Nancy Pelosi, D-Calif., and other leaders for coming up with a solution.

House Appropriations Chairman David R. Obey, D-Wis., said he thinks it can work and the two-step process will be one of the most important changes in health care.

"There is nothing tougher to deal with in Congress than a formula fight," Obey said. "I think this has been structured in a way that will avoid that kind of a bloody fight, and in the end you will have Medicare that reimburses on the basis of substance rather than on the basis of how many votes each faction has on the House or Senate floor."

House members and senators historically have battled over reimbursement rates based on what's best for their own districts, often pitting certain cities and regions against predominantly rural and small-town areas with lower medical costs.

Some members whose districts benefit from higher rates contend that their patients are sicker and poorer. But the Dartmouth Institute for Health Policy and Clinical Practice reports that patients' economic status and health accounts for only a small portion of the reimbursement disparity.

The institute says patients in the highest-spending regions spend more time in the hospital, have more frequent physician visits and undergo more MRI procedures and CT scans. "These findings are supported by previous research showing that discretionary decisions by physicians seem to account for most of the regional variation in spending," institute researchers said in a study published in September in The New England Journal of Medicine.

McCollum said the House Democrats formed the Quality Care Coalition five months ago to work on the issue and held some 20 meetings. Peter A. DeFazio, D-Ore., said the movement gained speed when serious talks began about the public option.

DeFazio said the House is moving in a direction of a public option that pays providers 5 percent more than Medicare reimbursements. "No matter how good the rest of the plan was, if we based it on the faulty Medicare reimbursement rates of today, those of us who represent efficient, low-cost states would find many of our citizens now had a great new public plan option which no doctor would be willing to take," DeFazio said.

Dicks said that providers in places like McAllen, Texas, which was recently cited in a New Yorker magazine article for its high per-patient reimbursement rates, are paid thousands of dollars more than providers in his Washington district. "This is wrong and it was done on a political basis and it was sustained for 40 years," Dicks said. "It was very difficult because people are protecting their areas, their vested interests."

The Institute of Medicine would be directed to study geographic variation and growth in volume and intensity of services in per capita health care spending among the Medicare, Medicaid, privately insured and uninsured populations.

It would look, for example, at the extent to which variation can be tied to differences in input prices, health status, practice patterns, access to medical services and socio-economic factors including race, ethnicity, gender, age, income and educational status.

The institute, which would be appropriated $10 million for the study, would hold public hearings and provide an opportunity for public comment.

By Drew Armstrong, CQ Staff

October 21, 2009 -- Legislation that would stop cuts to Medicare's physician payment rates over the next decade failed to surmount a procedural test in the Senate Wednesday, sending Democratic leaders back to the drawing board.

By 47–53, the Senate failed to limit debate on the motion to proceed to consideration of the Medicare payment bill (S 1776). That was 13 votes short of the 60 needed to invoke cloture and call up the bill.

Majority Leader Harry Reid, D-Nev., indicated Democrats now will settle for the same solution Congress has adopted almost every year—a "patch" to spare doctors a scheduled 21 percent reduction in their Medicare payments next year. Any broader fix, he said, will have to wait until after the Senate passes its comprehensive health care overhaul bill.

Reid vowed, "We're going to make sure that ... Medicare patients have the ability to go to a doctor. We'll take this up again when we finish health care. ... Right now we only have a one-year fix" in the Senate Finance Committee's overhaul bill.

While Democrats control 60 votes, some of their moderates balked at the roughly $245 billion cost of the payments bill, which would essentially eliminate a Medicare cost control formula that each year demands deep cuts to physician pay. The cost would not be offset.

Debbie Stabenow, D-Mich., the bill's sponsor, argued that it "would allow us to do away with a very flawed process," which has seen Congress step in virtually every year for the past decade to stop cuts scheduled under a Sustainable Growth Formula set in a 1997 deficit reduction law.

She said the broad health care overhaul Democratic leaders and the White House are assembling from the Finance bill (S 1796) and a separate measure (S 1679) approved by the Health, Education, Labor and Pensions Committee would help adjust Medicare's payment structure and incentives for the future. "But right now, this needs to be changed," she said.

Reid said too many doctors already decline to take new Medicare patients because of low payment rates. He blamed Republicans for not supporting the bill, calling it "another effort to slow down, divert and stop what we're trying to do with health care and everything else."

Several Republicans said they would support some type of payment fix to spare doctors a scheduled 21 percent cut in their Medicare payments next year, but not without any offsets.

Republicans want to offer amendments to any payment bill that makes it to the floor, including an attempt to limit medical malpractice litigation—a longtime GOP objective. Republicans want to cap punitive and non-economic damage awards, encourage settlements and take other steps to limit malpractice lawsuits. Too many doctors, they say, practice defensive medicine, ordering unnecessary tests and procedures to protect themselves against lawsuits.

Another proposal Republicans would like a vote on would divert funds from the Troubled Assets Relief Program to help offset part of the cost of stopping cuts in Medicare payments.

But Reid and Senate GOP Leader Mitch McConnell of Kentucky failed to reach any agreement on amendments that could be offered to the payment fix legislation.
"I'm going to vote against this deficit-expanding bill because enough is enough," McConnell declared.

Moderate Democrats said they would support a shorter payment fix that was fully offset.

Joseph I. Lieberman, I-Conn., who caucuses with the Democrats, warned against simply adding to the national debt by hundreds of billions of dollars.

"The road to an unsustainable national debt is paved with good programs with good intentions," he said. "We can't have, no matter how good or how worthwhile, programs that we are not prepared to pay for."

Lieberman advocated another temporary one-year patch for the doctor payments, as included in the Senate Finance Committee's version of the health care overhaul (S 1796). "I just think one year is enough—one year paid for," he said.

"All of us want to keep this cut from happening," McConnell said. "But the American people don't want us to borrow another cent to pay for it. And they don't want Democrats in Congress to pretend that this quarter of a trillion dollars isn't part of the cost of health care reform—because it is."

By Charlene Carter, CQ Staff

October 21, 2009 -- The House Judiciary Committee approved a bill that would partially repeal a 60-year-old exemption from antitrust law for health insurers.

The panel voted, 20–9, on Wednesday to approve the bill (HR 3596), which is sponsored by Judiciary Chairman John Conyers Jr., D-Mich. Leading congressional Democrats want to roll back the exemption—an effort the industry views as another in a series of attempts by President Obama and his party to paint insurers as villains in the health care overhaul debate.

The bill would authorize the government to prosecute insurers for violations of antitrust law if they are found to be engaged in "price fixing, bid rigging or market allocations."

"No one on this committee believes that price fixing or carving up markets by health insurers or malpractice carriers is a good thing," Conyers said.

The Senate and House Judiciary committees have held hearings over the past month on the legislation. Senate Judiciary Chairman Patrick J. Leahy, D Vt., has offered a companion bill (S 1681). Such a measure eventually could be joined with broader health care overhaul legislation now being written by Democratic leaders.

Republicans Dan Lungren of California, Louie Gohmert of Texas and Tom Rooney of Florida joined the House panel's Democrats in voting for the bill Wednesday.

"By inviting federal intervention, this bill might create a dual regulatory system that only confuses the health insurance and medical malpractice industry," said ranking Republican Lamar Smith of Texas. "It's doubtful that this legislation will do anything beneficial for the customer."

The legislation's Democratic supporters say it would prevent behaviors that could drive up health care costs. But insurers say they are not engaged in the kinds of behaviors the bill seeks to prevent and have called the bill frivolous.

In a letter to Conyers and Leahy dated Oct. 8, Karen Ignani, president and CEO of the industry group America's Health Insurance Plans, argued that the antitrust exemption does not preclude regulation of the industry.

The legislation strikes at a foundation of the insurance industry. In 1944, the Supreme Court ruled for the first time that insurers were engaged in interstate commerce and so could be regulated by the federal government.

But Congress—seeking to protect states, which stood to lose revenue if the federal government assumed responsibility for regulating insurers—responded by passing a law, known as McCarran-Ferguson, that granted insurers an exemption from federal antitrust law as long as they were regulated by states.

The exemption is most valuable to property insurers, which share data on losses in different geographical areas so they can more accurately price their policies. Congress has periodically considered repealing McCarran-Ferguson, most recently after Hurricane Katrina, when insurers were criticized for attempting to avoid paying claims related to storm damage.

The panel also adopted, by voice vote, an amendment by Lungren to clarify that insurers may still collect historical loss data.

The bill also would partially repeal the antitrust exemption for insurers who write medical malpractice policies for doctors, hospitals and other health providers.

Alex Wayne contributed to this story.

By Edward Epstein and Alex Wayne, CQ Staff

October 23, 2009 -- Now that senators are open to a health care compromise that would include a public insurance option, Speaker Nancy Pelosi is feeling less of a need to include a far-reaching government insurance plan in the bill she plans to bring to the House floor in the coming weeks.

Pelosi, D-Calif., an ardent supporter of the so-called robust public option, has been having trouble corralling the 218 votes needed to advance the plan. She has said repeatedly that, in addition to supporting the public plan on its merits, she views it as a way of giving the House the strongest hand possible in an eventual conference with the Senate.

But that reasoning was based on the belief that the Senate would not include any kind of public option in the compromise it is expected to pass. Recent signals from a group of moderates that they would, in fact, accept some form of a public plan could lessen the need for the House to go to conference with a bill that includes the robust option.

Pelosi's Plan
The "robust" plan Pelosi favors would pay most health care providers the same rates as does Medicare, the government's entitlement program for seniors and the disabled. Physicians would get 5 percent more than Medicare pays but would be required to accept patients in the public plan if they also see Medicare beneficiaries.

"The atmosphere has changed," Pelosi said Oct. 23, after a House Democratic Caucus meeting during which leaders canvassed members about their support for the "Medicare Plus 5" formula.

"When we felt the Senate would have nothing, we felt we needed the robust public option. But now the Senate is discussing a public option," she said. "Since that is now a strong possibility, I have to begin discussing with my colleagues what is the best approach to a public option."

The other major idea, which many of Pelosi's fellow liberals oppose, is a public plan in which the government would negotiate reimbursement rates with health care providers. Providers would not be compelled to participate in the plan. That would cost more than the robust option, but some Democrats say it would be fairer to doctors, hospitals and others in the health care delivery system.

Last-Minute Caucus
Pelosi's comments indicate that she is trying to make the best of a tough situation. Majority Whip James E. Clyburn, D-S.C., was surveying members this week about whether they would support the robust option but apparently came up short of the necessary 218 votes.

On Oct. 22, all House Democrats were told to report to a "mandatory" caucus in the Capitol's basement at 9:30 a.m. the next day. Some members said such a hastily arranged meeting was a sure sign that leaders didn't have the votes for Pelosi's preferred public option alternative.

"A group does not have these meetings if they have the votes to run the bill," Earl Pomeroy, D-N.D., who opposes the robust option, said after the caucus.

Through the caucus room's closed doors, the voice of Caucus Chairman John B. Larson of Connecticut could be heard calling the names of members alphabetically. Everyone present was asked to say if he or she would support a bill with a robust public option.

The result was inconclusive, members said afterwards. Some members were absent and others said that, although they might support the public option, they still had other problems with the overhaul bill.

"The ones who didn't say yes get to go to the Speaker's office," said Gene Green, D-Texas, half-jokingly.

Jim McGovern, D-Mass., said the caucus meeting was an indication that crunch time has come. Pelosi wants to unveil a bill as soon as this week and wants the House to pass it before Thanksgiving. She and Senate Majority Leader Harry Reid, D-Nev., want to send President Obama a bill before Christmas.

"This is decision time. We've been arguing for months on this bill. It's time to make decisions and see where people stand," McGovern said.

Clyburn and Pelosi are mulling the results of the Oct. 23 caucus and other efforts to gauge where members stand.

Pelosi said that while the House bill definitely will have some form of a public insurance option, she wants to see how Senate negotiators progress. "I could argue it either way," she said, referring to negotiated rates vs. "Medicare Plus 5."

"A lot of it depends on progress in the Senate," she added.

Senate moderates are discussing a public plan that would let states create their own public insurance programs, but would also give them the option of leaving health insurance to private companies. A group of states could also band together to form regional plans.

By Jane Norman, CQ HealthBeat Associate Editor

October 23, 2009 -- An array of public option possibilities in the health care overhaul now confronts House Democrats, who just a short time ago saw the concept nearly scuttled after a tumultuous August recess.

Democrats debated as many as four paths for a public option in HR 3200 during a closed caucus on Friday morning. Meanwhile, Senate Majority Leader Harry Reid is dropping hints that the Senate might include a public option in the merged legislation that he's shaping if there's a way for states to opt out, though Senate liberals don't care much for that idea.

Suddenly, a public option that would compete with private insurers in the health exchanges is back in the center ring, along with the headlines and strong emotions it inspires.

But instead of a debate over whether a government-sponsored plan will open the floodgates to a government takeover of health insurance, House Democratic leaders said they are hashing out in caucus the best position to take in anticipation of a conference committee fight.

The "robust" option that would pay providers based on Medicare rates—except for physicians, who would get 5 percent more for the first three years—may no longer be the favored route, and it was unclear if it could ever get the 218 votes needed. Physicians would have to sign up for the "robust" public option if they took Medicare patients.

Democratic moderates favor the weaker versions of a public option, which would involve negotiated rates and wouldn't force physicians to participate if they accept Medicare.

Both House Speaker Nancy Pelosi and Clyburn said at a press conference Friday that no decision has been made on the form of public option the caucus might back, robust or otherwise, and they said they want to take their time.

"Part of the decision is not just about votes," said Pelosi, who sounded much less wedded to the "robust" version she had favored and the caucus appears to be spurning. "Part of it is the end game of conference."

Pelosi said "the atmosphere has changed" since earlier in the year, when House leaders perceived that it wouldn't be possible for the Senate to have enough votes for a bill with any public option. "It became really important to go with the most muscle for the middle class with a robust public option," she said.

Now that there is a "strong possibility" of a public option in the Senate bill very similar to the House Energy and Commerce version, "then I have to discuss again with my colleagues, what's the best approach for conference," she said.

"If we think it's negotiated rates at the end of the day, would we like to shape that outcome but with our own negotiated rates? Or do we still think it's better to go to the table with that? So this is about the end game now."

There's no philosophical difference in the public options under study, only the cost, she said. "Sometimes I could argue either way and a lot of it depends on the progress the Senate has made," said Pelosi.

She and Clyburn also seemed to have little problem with the Senate idea of allowing states to opt out. "We're trying to get competition in to the market," said Clyburn. "I can't imagine any state saying to its citizens we are going to expose you to less competition or no competition."

Clyburn told reporters that Democrats are looking at variations such as starting out the public option with negotiated rates and a trigger. If the rates negotiated with insurers don't produce enough in savings, Medicare rates plus 5 percent for physicians could be implemented. Yet another hybrid would include negotiated rates and an expansion of Medicaid.

The discussion may mean that House Democrats might have to abandon their hopes of bringing a merged bill to the floor as soon as next week.

"We'll see," Pelosi said when asked about the timetable for bill introduction, following the press conference, at which she announced enhanced prescription drug benefits for seniors in the House legislation. "The wonderful thing about this is we know we will have a bill. It's just a question of when and how soon."

Clyburn said it's a big change. "When we got back here after Labor Day, I remember the headlines, 'Health Care Reform Dead,'" he said. Now, it's "whether we will get this form of public option or that form of public option," he said.