January 1999
Volume 63 |
Number 1
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WASHINGTON REPORT
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| Social Security,
Medicare Reform Await Members of 106th Congress |
Michael
Scott, Director
Governmental and Legal Affairs
By the time this column appears, the 106th Congress will have
formally convened and the President will be preparing a final
draft of his State of the Union address. It takes no crystal ball,
however, to predict that high on the congressional agenda in 1999
will be the serious efforts to reform the Social Security and
Medicare programs. Jockeying between the President and the GOP
congressional leadership on the Social Security issue has already
begun, and the report of the presidentially appointed National
Commission on Medicare is due March 1.
The commission is expected to recommend that the Medicare program
be overhauled and made similar to the Federal Employee Health
Benefits Program (FEHBP). Under the latter plan, the federal government
pays about three-quarters of each employee's medical insurance
premium. Employees may choose from about 300 private plans, with
varying premiums and benefits. Cost-saving to the government is
anticipated from the fact that under FEHBP, the government can
negotiate premiums and benefits with the private plans which,
in essence, are competing for the favor of the approximately 9
million employees covered by the program.
Given the enormity of the Social Security and Medicare issues
in federal budget terms, early consensus of what should be done
on Medicare, and indeed on Social Security, is unlikely. Because
of the Democrats' success at the polls last November, a more likely
item on the new Congress' agenda will be managed care reform.
Readers of this column will recall that the Democratic reform
bill in the House failed by only five votes. With the GOP majority
in that body having markedly shrunk, it is simply logical that
the Democratic leadership will seize the opportunity to hold the
GOP's feet to the fire on this issue.
It came as something of a shock to many observers within the
Beltway that the American Medical Association (AMA) actually endorsed
and worked for the Democratic managed care bill. For anyone who
had compared the principal terms of that bill with the AMA's stated
managed care agenda, however, the AMA support was not particularly
surprising. This was especially so in light of the failure of
the GOP House leadership to develop a consensus bill that contained
any more bite than turkey soup.
As a member of the Patient Access to Specialty Care Coalition,
ASA found it difficult to support either bill because the point-of-service
requirements of both bills were almost nonexistent. The Democratic
bill was also troubling to ASA because it included a provision
prohibiting managed care organizations from discriminating among
providers on the basis of licensure. ASA has consistently said
this provision is unacceptable unless it is made clear that managed
care organizations (MCOs) can discriminate on the basis of education,
experience and outcomes.
ASA Joins AMA Attack on SGR Methodology
Responding to an invitation from the Health Care Financing Administration
in the preamble to its physician payment regulation for 1999,
published November 2, 1998, ASA has joined with AMA and other
medical specialty organizations in offering comments on the new
Sustainable Growth Rate (SGR) formula for determining updates
in the Medicare Fee Schedule.
Adopted by Congress in 1997 as a replacement for the Volume
Performance Standard update system, the SGR requires that a target
rate of spending growth be calculated each year; physician fee
updates are then calculated on the basis of whether actual spending
growth exceeds or falls short of target. An update in any year
can be no greater than inflation plus 3 percent and no less than
inflation minus 7 percent. The Congressional Budget Office has
predicted that application of this update formula between 1998
and 2002 would cause the Medicare conversion factor (to which
the anesthesia conversion factor is keyed) to decline by 11 percent
before adjustment for inflation.
After commenting on the technical problems with applying the
SGR formula, the AMA letter recommends that the SGR legislation
be amended to permit an add-on to the SGR formula to allow for
technological changes in medicine that increase consumer demand,
and an add-on to account for the shifting of many procedures from
inpatient to outpatient or office settings. The letter also recommends
an adjustment from time to time to take into account changes in
characteristics of patients remaining in Medicare fee-for-service
plans. Finally, the letter recommends that the current floor on
negative updates be raised to a more acceptable level.
The importance of these recommendations is dramatized by the
increasing tendency of private health plans to key their reimbursement
schedule to the Medicare Fee Schedule. Without question, the inadequacies
of the SGR formula must be addressed as a part of any Medicare
reform legislation considered in the 106th Congress.
Group Negotiation Bill Draws Physician Support
Because of its introduction rather late in the 105th Congress,
a bill (H.R. 4277) sponsored by Representative Tom Campbell (R-CA),
authorizing groups of physicians to negotiate with health plans,
received only limited attention. Representative Campbell has said,
however, that he plans to introduce the bill in the 106th Congress,
and ASA anticipates joining other medical groups to provide active
support.
As the law stands currently, physicians may commonly negotiate
only if they merge their practices together into one unit or,
within limits, integrate their practices into a network in which
each physician shares substantial financial risk. The clear trend
among anesthesiologists in recent years, under pressure from hospital
administrators, has been to merge their practices into a single
integrated group, which in turn has negotiated contracts and fees
with the hospital and third-party payers. In contrast to the market
power of many MCOs, these single-hospital groups enjoy virtually
no economic power and, of course, the single nonintegrated anesthesiologist
rarely has any power at all.
The Campbell bill would permit physicians and physician groups
to negotiate collectively with managed care organizations, not
only as to fees but as to all terms of the contractual relationship.
Its adoption would clearly do much to restore some kind of balance
to the health care marketplace. There is no doubt that the bill
will face severe opposition, not only from the hospital and insurance
industries, but also from nonphysician provider groups. This bill
will be among those that participants in the ASA Legislative Conference
will be asked to discuss with their legislators next April.
ASA, HCFA Discuss TEFRA Refinements
On December 15, ASA President John B. Neeld, Jr., M.D., and
Economics Committee Chair L. Charles Novak, M.D., met with several
representatives of the Health Care Financing Administration (HCFA)
to discuss possible future refinements in the Medicare medical
direction reimbursement rules and possible changes in descriptive
modifiers to permit more accurate reporting of the nature and
extent of medical direction.
The discussion principally focused on HCFA's request in its
November 2 rule-making for additional comments on ASA's earlier
proposal that a generic exception be created for performance of
other services during medical direction, on the condition that
performance of those services would not cause the physician to
violate any of the several medical direction requirements. Current
HCFA policy specifies six types of services that may be performed
during medical direction, e.g., performing an epidural to ease
labor pain, treating an emergency of short duration. HCFA policy
is not clear, however, whether its list of six types of services
is exclusive or merely representative of the types of services
that may be performed.
Although no conclusions were reached, it was apparent that HCFA's
attitude toward some kind of generalized exception language could
be affected by the precision with which the medical direction
rules define "immediate availability" of the medically directing
anesthesiologist during non-key portions of the procedure and,
possibly, definition of the frequency with which the physician
is required to check on the patient during these non-key periods.
On a related subject, ASA was advised during the meeting that
a letter would be forthcoming from HCFA, making clear that the
November 2 rule-making was not intended in any way to change existing
HCFA policy defining the services that could be performed during
medical direction. Because of an incomplete reference to prior
HCFA rule-making that was contained in the November 2 HCFA rule,
some ASA members had expressed concern that HCFA had made its
policy more restrictive. This is not the case.
The parties also explored means by which the reimbursement rules
in the case of "interrupted" medical direction, e.g., where the
medically directing physician monitors the patient during a lunch
break for the nurse anesthetist, could be made clearer. ASA offered
a number of possible alternatives, and HCFA agreed to review and
comment on these suggestions.
Discussion finally centered on a recent, widely published HCFA
letter to a practice manager, appearing to indicate that
an anesthesiologist could not be reimbursed for medical direction
unless the nurse also participated in the preanesthesia evaluation
of the patient. ASA representatives expressed the view that this
requirement made no practical sense in Òthe real worldÓ of an
operating suite, and HCFA agreed to take this matter under advisement
as well.
And So, What Else Is New?
It will come as no news at this point that the House of Representatives
on December 19 voted two Articles of Impeachment against the President,
for perjury and obstruction of justice. Nor will it come as news
that Speaker-elect Bob Livingston (R-LA) announced his resignation
shortly before the vote, nor that Denny Hastert (R-IL) - a speaker
at ASAÕs Legislative Conference last June - is expected to be
elected the new Speaker early in 1999. The impeachment process
now, of course, moves to the Senate, where some form of censure-based
compromise is widely expected. What is of major concern to all
those with business before Congress is how long it will take to
reach a compromise: the matter has become so divisive and will
consume so much attention in the Senate that the normal legislative
enviroment as been knocked askew, and business is not as usual.
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