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April 2007

Washington Health Policy Week in Review Archive 16cc9ba5-e240-4963-91ec-84792a16496a

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AARP Ramps Up Pressure for Drug Price Negotiating Authority

By John Reichard, CQ HealthBeat Editor

April 3, 2007 – The senior lobby AARP is turning up the heat on senators to give the Health and Human Services secretary authority to negotiate drug prices in Medicare, urging a massive call-in by its members.

AARP appealed to its 38 million members on Wednesday to call their senators to support legislation granting that authority, which Senate Finance Chairman Max Baucus, D-Mont., intends to bring up "as soon as possible after senators return" from recess, spokeswoman Carol Guthrie said.

Baucus hasn't said whether he would go farther and actually require the secretary to use that authority, however.

AARP said in an April 3 press release that its members already have made more than 60,000 calls and sent more than 42,000 e-mail messages in support of giving negotiating authority to the HHS secretary. Under the Medicare overhaul law (PL 108-173)), only private prescription drug plans, HMOs, and other private health plans in Medicare can exercise authority to negotiate pharmaceutical reimbursement levels in Part D of Medicare, the outpatient prescription drug benefit.

AARP supports a House-passed bill (HR 4) that gives the secretary negotiating authority and requires that it be exercised. HHS Secretary Michael O. Leavitt has said he would not willingly exercise such authority if it were granted to him.

AARP is specifically targeting the following senators: Trent Lott, R-Miss.; Norm Coleman, R-Minn.; Lamar Alexander, R-Tenn.; Bob Corker, R-Tenn.; Lindsey Graham, R-S.C.; John Sununu, D-N.H.; Ben Nelson, D-Neb.; and Kay Bailey Hutchison, R-Texas.

It's unclear whether Baucus has the votes to mark up legislation granting negotiating authority. Observers say his delay in trying to move the measure reflects the difficulty he has had drumming up sufficient support. But he might be able to build some momentum for the measure with the help of AARP and other allies.

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Census Bureau Lowers Estimate of Uninsured

By CQ Staff

March 27, 2007 -- The U.S. Census Bureau has lowered its estimate of the number of Americans without health insurance to 44.8 million, down from 46.6 million. The bureau blamed the incorrect higher estimate released last August on some household members being tabulated as uninsured when in fact they reported being covered. Advocates for wider coverage said the change doesn't make the issue less of a priority, arguing that the data still shows the uninsured population has been growing since 2000. "Few people could argue that 44.8 million people people living without insurance is an acceptable number," said Karen Davis, president of the Commonwealth Fund. The latest figure is a 2005 estimate; the number for 2006 is due out in August 2007.

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Center Disputes that Medicare Advantage Cuts Would Harm Minorities

By John Reichard, CQ HealthBeat Editor

April 4, 2007 – The left-leaning Center on Budget and Policy Priorities issued a report Tuesday challenging insurers' arguments that cuts to Medicare Advantage plans would disproportionately harm minorities.

Among other arguments, the center says overpayments to the plans harm millions of minority beneficiaries by raising their monthly Part B Medicare premiums and otherwise ballooning Medicare expenditures.

Debate over how cuts would affect minorities could be a determining factor in how far congressional Democrats will go toward cutting payments to Medicare Advantage plans over the next five years. Advantage plans include HMOs, PPOs, and other types of private plans.

The powerful insurance lobby America's Health Insurance Plans (AHIP) won an important ally recently when it persuaded the National Association for the Advancement of Colored People to oppose Advantage cuts.

But the 11-page report by center analysts Edwin Park and Robert Greenstein says minority and low-income beneficiaries would be better served by other approaches, noting that overpayments run into tens of billions of dollars.

The report cites an estimate by the Medicare Payment Advisory Commission—the panel Congress relies on for impartial advice on payment policy—that Medicare Advantage plans are paid 12 percent more than traditional Medicare for the cost of treating comparable beneficiaries.

According to the Congressional Budget Office, paying Advantage plans and providers in traditional Medicare the same rates would save $65 billion over five years and $160 billion over 10 years—money Democrats want to spend to increase coverage of uninsured children and to block scheduled payment cuts to physicians.

Health insurance groups have countered the knife-sharpening created by those savings estimates by warning that cuts would disproportionately deny minorities the added benefits and lower out-of-pocket costs available in MA plans.

But the center's report says industry claims are "based on a selective, and distorted, culling of the data."

A key issue in the argument is how best to protect minorities and low-income beneficiaries against the large expenses not covered by the Medicare program.

"Medicaid, not Medicare Advantage, is the main form of supplemental coverage for low-income and minority Medicare beneficiaries," the report says. "The most cost-effective way to help these individuals would be to strengthen the programs within Medicaid on which many of them rely to supplement Medicare coverage and to pay" Medicare premiums.

"It should also be noted that the overpayments are harming millions of beneficiaries—including minority beneficiaries—by raising the Medicare premiums they pay each month," the report continued, with the effect of reducing "the disposable income that tens of millions of seniors and people with disabilities have to live on, including large numbers of minority beneficiaries."

The report also suggested that those overpayments "are deepening Medicare's looming financing shortfalls and creating a need for deeper Medicare cuts (or larger tax increases) than otherwise would be required."

These cuts could increase out-of-pocket costs and cut benefits to low-income and minority beneficiaries, "who can least afford to pay larger amounts for health care out of their own pockets."

The report acknowledges that cutting Advantage payments would lower enrollment projects for the program but says that is "hardly a sound basis for requiring the U.S. Treasury to continue making tens of billions of dollars of excessive payments." According to CBO, equalizing payments would result in Advantage enrollment totaling 6.5 million beneficiaries in 2012, down from 8.2 million now and well below the 12.5 million CBO forecasts for 2012 if the payment law is unchanged.

A more efficient way to assist low-income and minority beneficiaries would be to widen eligibility for the so-called Medicare Savings Programs, which help enrollees pay Medicare premiums and out-of-pocket costs, the center said. Savings also could be used "to expand health insurance coverage more generally."

The Bush administration and many congressional Republicans say the best way to keep Medicare sustainable over the long haul is to encourage the kind of coordinated care offered by Advantage plans, and that current levels of payment are an investment in that type of care that will bring down the Medicare spending curve over the long haul.

Mike Tuffin, AHIP's senior vice president, responded that Medicare beneficiaries with incomes below $20,000 who aren't on Medicaid or don't have employer-provided supplemental coverage are disproportionately reliant on Medicare Advantage. Of minority beneficiaries falling into that category, four of every 10 African American beneficiaries enroll in Medicare Advantage, as do majorities of Latino and Asian American beneficiaries, he said. Tuffin also said that Centers for Medicare and Medicaid Services Administrator Leslie Norwalk testified Feb. 13 that 27 percent of Medicare Advantage enrollees are minorities, compared with 20 percent of the beneficiaries in the traditional Medicare program.

"The data is crystal clear: Low-income minority seniors who are not eligible for Medicaid and don't have employer supplemental coverage are much more likely to choose Medicare Advantage," Tuffin said. " A majority of Latinos, a majority of Asian Americans, and 38 percent of African Americans who fall into this category are enrolled in Medicare health plans."

American Enterprise Institute analyst Joseph Antos said the Center's analysis is "right that the low-income population relies on Medicaid. No one said that's not the case." But he added that low-income beneficiaries who don't qualify for Medicaid or have supplemental employer coverage, "of course" select Medicare Advantage plans. The fair analysis, he said, is to exclude low-income beneficiaries with Medicaid coverage since they already have comprehensive coverage. "If you take duals out . . . the low-income beneficiaries predominantly are the ones who sign up in Medicare Advantage plans."

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Consider This When Designing That Medicare "Pay-for-Performance" Program

By Mary Agnes Carey, CQ HealthBeat Associate Editor

March 29, 2007 -- Efforts to establish a "pay-for-performance" system in Medicare may be complicated by the number of physicians Medicare patients typically see, according to a recent study published in the New England Journal of Medicine.

A Medicare patient seen by the typical physician in the nationally representative study was treated by seven different doctors in four different medical practices in a given year, according to the researchers at the Center for Studying Health System Change and Memorial Sloan-Kettering Center.

Only about 35 percent of beneficiaries' visits were with the doctor held responsible for their care under the most common "pay-for-performance" methodology used to assign patients to physicians. In addition, the assigned physician and practice changed from year to year for a third of beneficiaries.

Because so may different physicians and practices provide care to an individual Medicare patient, it is difficult to identify which provider is responsible for which patient. Physicians also are unlikely to have a critical mass of patients who are their primary responsibility and about a third of the patients they would be held responsible for will switch to a different provider the next year, according to the study, which was published in the March 15 issue of the New England Journal of Medicine.

"The study raises serious questions about how meaningful a Medicare pay-for-performance program would be for patients in the current fee-for-service system where care is so widely dispersed," said Hoangmai H. Pham, the study's lead author and senior health researcher at the Center for Studying Health System Change, a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

"If physicians don't know which patient they have primary responsibility for ahead of time, and Medicare only figures this out after the fact, then it is hard to envision how [pay-for-performance] incentives will motivate physicians to improve the quality of care they deliver," Pham said in a statement.

Many lawmakers and health care analysts say linking Medicare reimbursement to the quality of care delivered would both improve health care services and lower costs. But some physicians have expressed concern over the design of performance measures and how they will be implemented.

In a statement, American Medical Association Board Chair Cecil Wilson said the AMA "is committed to always improving the quality of health care for patients, and as we examine ways to improve, this study adds to the body of knowledge on the challenges of pay-for-performance implementation in Medicare."

Using a variety of different methods to assign patients to physicians or practices, the New England Journal of Medicine study concluded that primary care physicians typically would be held accountable for 39 percent of the Medicare patients they treat and 62 percent of Medicare visits they bill. Medical specialists, who often provide more costly care, would be held accountable for 12 percent of the Medicare patients they treat and 20 percent of the total Medicare visits they bill.

Instead of using claims data to retrospectively assign patients to physicians, the study's authors suggest that Medicare consider prospectively assigning patients to physicians and practices to establish clearly which providers will be held accountable for coordinating patients' care.

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Dingell Introduced Child Dental Bill

By Michael Teitelbaum, CQ Staff

April 2, 2007 – Legislation designed to help deliver dental services to low-income children under Medicaid and the State Children's Health Insurance Program (SCHIP) was introduced last week by House Energy and Commerce Committee Chairman John D. Dingell, D-Mich.

The bill (HR 1781) would expand dental coverage to additional children, provide access to qualified dentists, and allow for better reporting and tracking of dental disease among children. The bill would require dental coverage for any SCHIP benefit package.

"Dental disease is the most common childhood disease—more prevalent than asthma, diabetes, and hay fever. It is also the easiest to prevent," noted Dingell in a statement.

He cited the recent deaths of two young children, in Maryland and Mississippi, as a reason to focus more attention on early access to dental care. "These tragedies have also made it clear that stronger federal oversight is needed," he said.

It would provide financial incentives and planning grants, by authorizing $50 million in fiscal 2008 and each subsequent year, to states to improve the delivery of dental services through the use of developing programs, analyzing data, and educating providers in Medicaid and SCHIP.

The legislation would authorize $40 million annually in grants from fiscal 2008–12 to improve the hiring and retention of dental providers to expand the availability of these providers in medically underserved areas.

The bill would require Health and Human Services Department to develop an oral health initiative focusing on dental awareness and prevention.

The legislation would establish three chief dental officer positions—one in the Health Resources and Services Administration, another within the Centers for Medicare and Medicaid Services, and the other within the Centers for Disease Control and Prevention (CDC) and would authorize $25 million in fiscal 2008 for them.

It also would allow states to use the SCHIP program to provide wraparound coverage for children with private insurance.

It would make changes in the payments for the Medicare Graduate Medical Education (GME) for dental residency programs by exempting dental residency training from the methodology used to calculate the number of full-time equivalent residents for GME reimbursement.

It would authorize $58 million in fiscal 2008 and such sums as necessary in future years to have the CDC award grants to states and Indian tribes to improve oral health of children and their families.

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Health IT: Slipping on Hill Agenda?

By Mary Agnes Carey, CQ HealthBeat Associate Editor

March 26, 2007 -- While both parties on Capitol Hill maintain a strong interest in passing a health care information technology bill, other legislative priorities and a lack of funding could delay or prevent action this year, congressional aides said Monday.

Reauthorization of the State Children's Health Insurance Program (SCHIP), dealing with a scheduled 10 percent cut in Medicare payments to physicians, and oversight of the Medicare prescription drug benefit are among the health care issues that will likely dominate this year's legislative agenda according to the aides, who asked not to be identified.

Speakers at a Capitol Hill forum sponsored by Erickson Retirement Communities said matters will be further complicated by differences in past House and Senate approaches to the legislation, such as disagreements over anti-kickback language and the time frame for implementation of new health care billing codes known as ICD-10. There also may be splits over whether to provide federal grants encouraging providers to use "health IT" and how to ensure the privacy of consumers' data.

"I'm not sure how far we're going to get moving towards health IT" this year, one aide said, citing time and money as major obstacles. Another aide added, "We remain optimistic Congress can move health IT legislation this year or next year."

A nationwide poll that Erickson Retirement Communities released as part of the event might sway Congress to take action sooner rather than later. Among its findings, the survey found that 70 percent of those polled favored greater use of electronic medical records and nearly two-thirds incorrectly assume their health care providers have adopted electronic technology. Actual estimates suggest that only 10 percent to 20 percent of health care providers use such technology.

Electronic records house a patient's medical history, including past diagnoses, allergies and medications, allowing providers and patients to easily access the information.

In the Erickson poll, consumers' concerns about health IT included identify theft or fraud (68 percent), unauthorized access by marketers (62 percent) and fears that health insurers and employers would use the data without permission (53 percent and 51 percent respectively).

The poll of 800 registered voters conducted Feb. 9-15 also favored electronic records as a easy way to make medical records available in an emergency (73 percent), help doctors coordinate care to prevent drug interactions (71 percent) and prevent medical errors (54 percent).

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House Adopts Budget Resolution

By Steven T. Dennis, CQ Staff

March 29, 2007 -- House Democrats won a narrow but important victory Thursday as the chamber voted 216-210 to adopt a nearly $3 trillion fiscal 2008 budget resolution.

The new majority largely held together, in contrast to a year ago when Republican infighting resulted in failure to adopt a joint budget resolution and a collapse of the appropriations process.

The plan, which Democrats hope to quickly reconcile with the Senate budget resolution, includes a $1.1 trillion cap on discretionary spending, about $25 billion more than President Bush sought. That's enough to allow inflationary increases in most programs plus significant increases in education and veterans' benefits.

The measure also projects a $153 billion surplus in fiscal 2012 by strictly adhering to tough new pay-as-you-go budget rules that require new mandatory spending and tax cuts to be offset.

But the plan puts off tough and divisive decisions on extending tax cuts set to expire after 2010 , as well as how to stem the growing reach of the alternative minimum tax (AMT).

The plan also fails to control the growth of entitlement programs that are projected to swamp the rest of the budget in coming decades as the baby boom generation retires.

With liberals won over by the extra discretionary spending and conservative Blue Dog Democrats pleased by the strict adherence to pay-as-you-go budget rules and full funding of defense spending requests, House Budget Chairman John M. Spratt Jr., D-S.C., managed to unify the usually fractious Democratic caucus.

Among the 12 Democrats who voted against the resolution was Rep. Dennis J. Kucinich, D-Ohio, who objected to the assumption of $195 billion in war funding in fiscal 2008 and 2009—the level requested by Bush. Most of the Democrats voting against the measure were members of the conservative Blue Dog Coalition.

Republicans offered a more austere plan that pays for tax cut extensions by cutting Medicare, Medicaid and other entitlement programs by $279 billion over five years and by freezing domestic discretionary spending.

Although Republicans unanimously opposed the Democratic blueprint, moderate Republicans voted against their own party's alternative, which was defeated 160-268.

GOP leaders accused Democrats of assuming a massive tax increase and failing to deal with the nation's long-term fiscal problems, although their alternative budget also assumes revenue from the creeping impact of the AMT on tens of millions of Americans after 2007.

Ranking budget panel Republican Rep. Paul Ryan of Wisconsin hammered the Democratic plan as allowing "the largest tax increase in American history" while calling the lack of an entitlement overhaul "irresponsible."

But House Majority Leader Steny Hoyer, D-Md., ripped the Republican plan, noting that it proposed deep spending cuts that they never proposed when they held the majority, and that Republican control had turned surpluses into deep deficits.

"Your party could not agree with one another," Hoyer noted, despite controlling both Houses and the presidency. Democrats would show the way back to a balanced budget, he said. "When you had it all, why couldn't you do it?"

Democrats dismissed the charge that their plan included a tax increase, arguing that their budget merely assumes current law written by Republicans. Tax cut extensions are allowed under the budget plan, as are new mandatory entitlement programs such as a potential $50 billion expansion of children's health care and $20 billion for farm programs, but only if they are offset. To that end, the budget plan talks of extending tax cuts for the middle class, but does not say how it should be offset.

Spratt argued that Congress will have up to three years to decide which tax cuts to extend and how to pay for the extensions, adding that he hoped the looming expiration dates would prompt a serious effort to overhaul the tax code.

However, Democrats will have to decide later this year how to pay for another "patch" to the AMT, which would cost $50 billion for 2007 alone. Although Democrats insisted that their budget plan does not include any tax increases, offsetting AMT relief for the middle class will almost certainly result in tax increases on wealthier taxpayers, although Democrats have yet to agree on plans to do so.

Spratt also has said that pay-as-you-go rules could be waived to extend tax cuts for the middle class if surpluses return.

But more than the numbers themselves, the importance of the budget plan is that there is one at all, given that Congress has failed to adopt a joint budget resolution in three of the past five years, and the new Democratic majority is eager to show they can govern.

Focus now shifts to a conference with the Senate budget plan, with Democrats aiming for a swift conference agreement so they can move forward with appropriations bills.

Although the Senate plan was amended on the floor to spend all of a projected fiscal 2012 surplus on various tax cut extensions and children's health care, Spratt said that he wanted to keep a large surplus in 2012 to protect against the vagaries of the economic cycle and to start paying down the national debt.

Spratt noted that the fastest-growing portion of the federal budget has been interest on the national debt, which he called a "debt tax" on future generations.

In addition to the Republican alternative, two liberal plans also were defeated on the House floor.

A proposed budget alternative from the Congressional Black Caucus that would repeal tax cuts for the wealthy and dramatically increase domestic spending failed on a 115-312 vote.

An alternative from progressive Democrats that would repeal tax cuts and shift funding from defense and war spending to domestic programs failed on an 81-340 vote, with Kucinich voting "present."

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It's On: American Enterprise's Thomas Upbraids AMA's Langston for 'Stonewalling'

By John Reichard, CQ HealthBeat Editor

April 3, 2007 -- The verbal exchanges at American Enterprise Institute gatherings are usually spicy, but it appears they'll become even hotter now that former House Ways and Means Chairman Bill Thomas is part of the mix.

Minus his gavel, Thomas nevertheless dominated the policy debate at an AEI forum on physician payment Tuesday, standing in the audience during a question-and-answer portion and sternly lecturing Edward L. Langston, the chairman-elect of the American Medical Association, for resisting quality-based payment.

Thomas' message, delivered as if he were still in Congress and Langston were a recalcitrant child: Forget an overhaul of the Medicare physician payment formula if doctors delay a performance-based payment strategy.

The "sustainable growth rate" formula, known as the SGR, sets doctors up for years of payment cuts because Medicare outlays have exceeded the rate established by the physician spending formula in Medicare.

"I don't know whether you wrote your comments or someone wrote them for you, but what I heard was the same old story and that is, you say there is high quality," said Thomas, delivering what he said would be a comment that would "obviously" be followed by a question. "You need to make sure patients have high quality. You have no measurements to determine whether that occurs or not.

"We tried for years to put in measurements for high quality," Thomas said, but added he had heard "a degree of threat" from the AMA that cost-cutting would mean patients would lose service.

"You've indicated you'd be willing to move to other considerations once SGR is repealed," Thomas told Langston, apparently referring to quality-based payment. "Let me underscore this . . . it isn't going to happen."

Thomas went on to stress the need for quality-based payments, saying they are also cost-effective, and accused Langston of not following suggestions.

"As recently as December you were stonewalling in terms of accepting quality measures to get that payment," Thomas said. "Do you understand that the solution to your problem with the SGR lies in your ability to accept the changes that a number of folk have continued to tell you are necessary? You accept them, you bring them to Congress, we can move them, and we can work with the administration to make them happen, but the choice is really yours. Do you accept it?"

Langston calmly replied that doctors have developed scores of quality measures and began doing so before Medicare began moving to tie measures to payment. Getting the measures accepted within the medical profession has been important because it promotes physician "buy-in," he told Thomas.

With Thomas out of Congress, his views on the subject may seem unimportant. But Congress needs all the ideas it can get on how to change the formula.

Doing so will be extremely expensive and require bipartisan support, and no Republican has stepped forward in Congress to replace Thomas as the leading GOP thinker on Medicare payment issues.
Aside from Thomas' comments from his spot in the audience, the actual speakers at the forum offered various strategies for getting a handle on physician spending.

Former Medicare and Medicaid Director Gail Wilensky said SGR should only be replaced if payments for doctor services are "bundled." That would entail setting a fixed payment for a number of services used to treat a chronic condition rather than continuing the system of separate payments for each individual service.

Wilensky also endorsed bundling payments to consortiums of doctors and hospitals, encouraging them to work cooperatively on high-volume, high-cost procedures. A fixed payment shared by both types of providers would encourage them to keep costs well below the payment level, thus boosting profits while holding down Medicare spending, Wilensky suggested.

Bruce Steinwald, an official with the Government Accountability Office, recapped testimony given March 6 previewing the soon-to-be-released results of a study on the feasibility of comparing efficiencies among doctors in the Medicare program.

The study concluded that Medicare has enough data to allow valid comparisons of how many tests and procedures an individual physician orders compared with others to get the same medical outcome for a given condition.

A first step would be to share these data with the doctor to encourage adoption of more efficient care, Steinwald said. Another possible step would be to set payments in a way that rewards efficient providers and penalizes inefficient ones. Widespread adoption of this approach could begin to rein in Medicare doctor spending growth, Steinwald said.

Thomas put the matter more forcefully after the forum. Inefficient providers should not get paid, he said. "Why should taxpayers pay for something that isn't effective?"

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Medicare Drug Negotiation Could Save Billions, Study Says

By Michael Teitelbaum, CQ Staff

April 4, 2007 – A new study by two left-leaning groups says the government could save as much as $30 billion a year if Medicare were allowed to negotiate drug prices, though the Congressional Budget Office issued a letter earlier this year saying savings would be nominal.

The study, released Wednesday by Campaign for America's Future (CAF) and the Center for Economic and Policy Research (CEPR), noted that about $10 billion of the savings would come in the form of cheaper prices for prescription drugs, while roughly another $20 billion would be a result of Medicare being able to negotiate for the same prices the Veterans Affairs Department already receives because of its bulk purchasing power.

The report, completed by the Institute for America's Future, the research arm of CAF, cited a Families USA study that assumed the government is covering two-thirds of all prescription drug spending, with seniors taking care of the other third. Based on those numbers, the total gross prescription drug spending for Medicare enrollees will be approximately $78 billion in 2008. The report also said $5 billion in excess administrative costs could be cut if seniors were able to get their benefits directly from Medicare, instead of picking among private company plans offering the prescription drug benefit.

The Institute's report noted that the savings could go toward eliminating the " doughnut hole" in Part D coverage or toward funding SCHIP.

CBO challenged the premise that the House bill would drive down drug prices. In a Jan. 10 letter to Energy and Commerce Chairman John D. Dingell, D-Mich., the office said that bill, "would have a negligible effect on federal spending."

Senate Finance Chairman Max Baucus, D-Mont., is expected to introduce and try to mark up Medicare drug price negotiation legislation after the April recess. It is possible his bill could scale back House-passed legislation (HR 4) simply by removing an existing negotiations prohibition from the 2003 Medicare overhaul law but not adding a requirement as the House would that the secretary engage in such talks.

Senate Finance member Debbie Stabenow, D-Mich., said she "does not think the votes are there in committee to approve the House bill," and that it would be a challenge to get it out of committee or passed on the floor. "We may get less than what we would like. But it would be a step in the right direction." She acknowledged that if the bill does not require the secretary to engage in drug price negotiations, "it is very clear there would be floor amendments."

She also noted that the committee's ranking Republican, Charles E. Grassley of Iowa, opposes the legislation and would filibuster it, and a further challenge could be the need to override a likely presidential veto.

The House bill, passed Jan. 12, would prohibit the Health and Human Services secretary from establishing a formulary, or restrictive list of covered drugs, which would leave him without the bargaining leverage to freeze a particular drug out of the Medicare benefit.

CEPR co-director Dean Baker said CBO assumes HHS would be ineffective in getting lower prices and said an aggressive secretary could get lower prices. Stabenow agreed. "If the industry knows the bill is not going to help lower drug prices, then why not let it pass?" she asked. "The behavior does not match the rhetoric."

The two groups also announced that a new grassroots campaign by a coalition of progressive advocacy groups called Change America Now is urging members of the Senate to back legislation that calls for Medicare prescription drug price negotiation.

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More Than One Approach Suggested to Make Health IT Work for Small Providers

By Mary Agnes Carey, CQ HealthBeat Associate Editor

March 28, 2007 -- A multi-faceted strategy of federal grants, tax credits, loans and additional Medicare payments could be the ticket to enticing physicians and other health care providers to adopt and use health information technology, witnesses and lawmakers said at a House hearing Wednesday.

"We believe it is absolutely essential for Congress, as a first step, to begin to offer targeted financial assistance programs to fund (health information technology) in solo and small medical practices," American College of Physicians President Lynne M. Kirk told the House Small Business Subcommittee on Regulation, Health Care, and Trade.

Few physician practices can afford the costs of installing and maintaining the technology, Kirk said, citing a 2006 review by the Robert Wood Johnson Foundation that found only between 13 percent and 16 percent of solo practitioners were able to adopt health IT. Aside from cost, one obstacle to physician adoption stems from concerns that systems will be quickly outmoded. Another concern revolves around protecting patients' privacy and determining who should have access to the data, witnesses said.

Subcommittee Chairman Charlie Gonzalez, D-Texas, said he plans to reintroduce legislation he sponsored in the 109th Congress that would provide tax incentives, grants and subsidized loans to help small health care providers install and maintain health IT as part of their practices.

Electronic records house a patient's medical history, including past diagnoses, allergies and medications, allowing providers and patients to easily access the information. Proponents of health IT say it could improve the quality of medical care delivered and save the health care system billions.

Gonzalez said his measure would help defray start-up costs of purchasing and installing an electronic health records system, which he said can cost more than $32,000 per physician, with maintenance exceeding $1,200 per month. Kirk said depending on the size of the practice and its applications, acquisition costs on average are $44,000 per physician and the average annual ongoing costs are about $8,500 per physician.

Gonzalez said that without changes in the way health IT is promoted, "small physician practices will be left behind the technological curve and as a result, patients will fail to benefit from the quality of care electronic health records provide."

While health IT legislation has bipartisan support in both chambers, it could be pushed aside this year as other legislative priorities—such as reauthorization of the State Children's Health Insurance Program (SCHIP) or finding a way to prevent a scheduled 10 percent reduction in Medicare physician payments—dominates lawmakers and staff attention, congressional aides said at a March 26 forum. Gonzalez said Congress must move forward "to at least start the government encouragement for adoption of health IT . . . We can't continue to wait."

But the government should make sure the assistance provided does not complicate matters, said the panel's ranking Republican, Lynn Westmoreland of Georgia.

"Remember when the government gets involved in stuff it tends to screw it up," Westmoreland said to chuckles in the hearing room. "When we think we're helping you sometimes we're not."

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Report Examines Prospects for Universal Coverage

By CQ Staff

April 6, 2007 -- After years of wrestling with how to provide health care coverage to millions of Americans who do not have it, policymakers and politicians may be coming to a consensus around proposals requiring most Americans to buy private insurance with public assistance.

A CQ Researcher report published March 30 details how state governors in California and Massachusetts back such plans, as does former Sen. John Edwards, the first presidential hopeful to announce a universal coverage proposal as part of the coming 2008 election.

Approximately 45 million Americans—about 15.3 percent of the population—lack health insurance, usually due to job loss, student status, early retirement, or because they have entry-level jobs or work in a service industry or in a small business that does not provide health insurance.

Rising health care costs may cause more Americans to become uninsured, putting even more pressure on the federal and state governments to finds ways to provide coverage to those who do not have it. If health premiums continue rising at their current rate, about 56 million Americans are predicted to be uninsured by 2013—11 million more than today, according to a University of California at San Diego study.

A major obstacle to providing universal health coverage is funding. Among thorny financial issues are questions over who is going to pay for the coverage, how can affordable access be ensured for all, and how overall health care costs can be reduced.

Options for financing include asking employers to contribute to a general pool, with the amount varying by companies' line of business and geographical location. Some lawmakers have advocated tax subsidies to help individuals purchase their own coverage rather than having it tied to their place of employment, though purchasing health care coverage in the individual market can be difficult and expensive.

Noting such difficulties, analysts say that regardless of whether they succeed completely, state initiatives provide models and impetus for future national efforts and may help break the political gridlock that has stopped Congress from acting on the issue.

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Rockefeller, Snowe Announce SCHIP Reauthorization Plan

By CQ Staff

March 30, 2007 -- Senate Finance Committee members John D. Rockefeller, D-W.Va., and Olympia J. Snowe, R-Maine, announced a plan Friday to reauthorize the State Children's Health Insurance Program that would more than double state allotments to cover children while streamlining the eligibility process.

The proposal also would ease requirements to document citizenship and improve benefits.

The two senators released a summary of the proposal Friday, saying they would introduce the actual reauthorization legislation the week after the April recess. The plan aims to maintain SCHIP coverage for those now enrolled while also covering the 6 million children who are eligible but not enrolled.

To that end, it would establish an "Express Lane" eligibility option permitting states to rely on financial information gathered from other low-income programs such as the Women, Infants and Children (WIC) program that provides supplemental nutrition as well as school lunch programs.

The measure would establish a mechanism to ensure funding for successful outreach programs and for states experiencing strong Medicaid enrollment growth. The proposal also would give states flexibility "to determine the best way to establish citizenship," according to a summary. The senators said there is growing evidence that eligible children are being denied Medicaid coverage because of "onerous" documentation requirements.

In addition, the legislation would give states the option to cover pregnant women and children who are legal immigrants and more discretion to cover children of state employees.

Among other provisions, the bill also would strengthen standards to ensure mental health coverage in SCHIP programs and make dental coverage a guaranteed benefit. The Senate budget resolution calls for expenditures of $50 billion over five years to fund SCHIP expansion, the senators noted.

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