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The Ins and the Outs of the Medicare Bill

By John Reichard, CQ HealthBeat Editor

July 11, 2008 -- Even with a presidential veto in the offing, many health care lobbies around Washington remained jubilant Friday about the Senate's lopsided passage earlier in the week of Medicare legislation deceptively described as the "physician payment fix" that in fact would fulfill a host of goals long cherished by health care advocates.

Advocates for the poor celebrated expanded access to Medicare's comprehensive low-income drug benefit, while lobbyists for the mentally ill described the measure as an important contribution to expanded mental health care services in the United States. And the tantalizing promise of health information technology seemed close to fruition with a provision requiring electronic prescribing in the Medicare program.

Those unaccustomed to the taste of lobbying success in recent years could afford to be upbeat going into the weekend amid indications that President Bush might not be able to make his promised veto of the measure (HR 6331) stick in an override vote that could occur next week.

But all was not sweetness and light—and the comments of others were a reminder that lobbying victories in Washington come and go. America's Health Insurance Plans, which has seen big enrollment gains in Medicare's private plans in the Bush administration after years of struggle in the Clinton era, described the bill as stripping away seniors' health care choices. With Democrats possibly poised to make major gains in the November election, Medicare Advantage's roller coaster enrollment may be flattening or even heading downward again in coming years.

Iowa Senator Charles E. Grassley, the Senate Finance Committee's top Republican, warned that "the bill is riddled with problems and missed opportunities." Missing from the package were nursing home reforms and "sunshine" provisions to publicize drug company payments to doctors, Grassley lamented.

"This is desperately needed to highlight the relationship between drug and device companies and doctors, so everyone can see all financial inducements out in the open," he said in arguing against HR 6331 on the Senate floor July 9.

Also missing was language furthering "value based purchasing"—the term describing efforts long urged by many health policy experts to vary payment according to the quality and efficiency of care. Missing too was any funding for comparative effectiveness research, an approach to controlling health care spending increases urged in dozens of speeches by Congressional Budget Office Director Peter Orszag.

Grassley warned about a "little land mine" in the bill he said could do serious damage to Medicare's drug benefit by driving up its cost. He was referring to language that according to an Office of the Medicare Actuary analysis could drive up spending under the benefit by weakening the negotiating clout of drug plans and requiring coverage of more costly drugs.

"When we work together, we catch those little land mines tucked away in House-passed bills," Grassley said. But Democrats instead were "outrageously political," denying Republicans a chance to offer amendments to the bill.

Celebrating a 'Second Chance'
But the mood in lobbyland was more celebratory than not after supporters pushed the bill through to Senate passage by a 69 to 30 margin after failing in June to get the 60 votes needed to get it to the floor. "They say life doesn't give you second chances," observed Bill Novelli, chief executive officer of the senior lobby AARP. "The Senate got a big one this week, and AARP applauds the bipartisan majority" who passed the measure.

"This bill would allow people in Medicare to maintain access to their doctors, improve benefits for low-income, prevention, and mental health programs, and boost quality through national e-prescribing."

Beyond the widely reported provision of erasing a 10.6 percent doctor payment cut in 2008 and a five percent cut in 2009, the bill would make it easier to qualify for the "low-income subsidy" in the Medicare Part D drug benefit. The value of life insurance policies and assistance provided by a family member or a church would be exempted in counting assets to determine eligibility for the benefit. The enrollment process would be simplified by having Social Security offices provide applications and assistance for the Rx low-income subsidy.

Similarly, the bill would ease the assets test for "Medicare Savings Programs," which help low-income beneficiaries pay various out-of-pocket costs not covered by Medicare. As of January 1, 2010, asset levels permitted under the program would be raised to those for people qualifying for the full low-income subsidy for the drug benefit.

The National Council on Aging, a network of some 14,000 organizations that deal with issues concerning aging, praised provisions increasing community resources to find and enroll low-income beneficiaries, translating low-income subsidy applications into other languages, and improving access to preventive benefits.

Preventive Services and Mental Health Care
The bill authorizes the HHS Secretary to cover new preventive services recommended by the U.S. Preventive Services Task Force, which reviews medical literature to determine which services have medical value. The bill also revises the "Welcome to Medicare" physical by waiving the deductible involved and giving seniors a full year after joining Medicare rather than six months to avail themselves of the benefit. Fewer than six percent of new beneficiaries actually use the benefit now.

The National Alliance on Mental Illness hailed provisions lowering out-of-pocket costs for outpatient mental health care as a "tremendous win." Medicare now requires a 50 percent co-payment for such services but the bill would reduce it over six years to the same 20 percent co-payment required for physical health care services. The bill also would expand the Medicare drug benefit to include coverage of benzodiazepines and barbiturates used for mental health treatment.

"The new Medicare provisions will make an important contribution to expanding mental healthcare in America," said Charles Ingoglia, vice president of the National Council for Community Behavioral Healthcare. In addition to its other mental health care provisions, the bill would make community mental health centers eligible for participation in Medicare's telehealth program, providing mental health services "in remote areas where people have little or no access," he said.

The bill also would ease tracking of medical outcomes to see how they vary by sex, race, and ethnicity, said Timothy Gardner, president of the American Heart Association. "This legislation breaks new ground by providing for the collection of Medicare quality data by sex, race, and ethnicity," he said.

Gardner said the bill would provide reassurance to stroke patients that they will continue to have access to rehab services exceeding Medicare dollar caps for outpatient physical, occupational, and speech therapy. The measure extends for 18 months an exceptions process to maintain access to such services for those exceeding the caps.

Drugs and Imaging Services
The bill also uses a carrot and stick approach to fostering adoption of electronic prescribing of drugs by physicians, which is widely expected to prevent many medication errors and save lives and treatment costs as a result. Doctors in Medicare must use e-prescribing systems starting in 2011, a provision enforced by docking their payments up to two percent if they don't comply. The bill creates exceptions for infrequent prescribers and cases of "hardship" in which doctors are unable to use a qualified e-prescribing system.

The e-prescribing language "will now lead to broader adoption of overall health information technology," the Pharmaceutical Care Management Association said in a statement.

Community pharmacists praised the bill for speeding payments for Part D claims and delaying cuts to Medicaid generic prescription drug reimbursement. Bruce Roberts, CEO of the National Community Pharmacists Association, said the bill would help maintain patient access to medications and pharmacy counseling. PCMA said, however, that the prompt payment provision for pharmacies would increase Medicare's costs.

The bill would delay for 18 months a competitive bidding program that just got underway in 10 cities limiting where Medicare patients could go for medical supplies such as wheelchairs and oxygen supplies.

The American Clinical Laboratory Association praised the bill for stopping another competitive bidding program, one for clinical laboratory services. The American College of Radiology, which represents radiologists, lauded provisions requiring accreditation of imaging providers in order to qualify for certain Medicare payments. It similarly praised the bill's requirement for a two-year program testing the use of physician-developed criteria to determine whether imaging services for various conditions are medically appropriate.

The Medical Imaging and Technology Alliance, which represents imaging suppliers, called the provisions "the best approach to addressing proper utilization" of imaging services.

America's Health Insurance Plans said the bill would reduce enrollment in the Medicare Advantage program "by about 2.3 million over the next five years." In fact, the Congressional Budget Office has estimated that the bill would not actually reduce current levels of enrollment but reduce enrollment gains.

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