Passage of Medicare
Prescription Drug Bill Caps Otherwise Modest First
Session of 108th Congress
Michael Scott, J.D., Director
Governmental and Legal Affairs
By the time this column is published, the fact that
Congress in late November narrowly passed the Medicare
prescription drug bill (H.R.1) will have become stale
news. Congress will have finally adjourned the first
session of the 108th Congress, and the outlook for
early action in the second session on health-related
matters — or indeed any pending major legislative
matters except possibly the energy bill — is
not promising. 2004 is a presidential election year,
and if political history is an accurate guide, little
serious work can be expected from our federal legislators
until the 109th Congress is seated in January 2005.
Notwithstanding this bleak assessment for the immediate
future, the end of a congressional session is an appropriate
point at which to take stock of the Society’s
recent legislative priorities and to begin to form
judgments as to whether those priorities should be
modified or replaced. For such a review, the position
papers developed by ASA in connection with its Legislative
Conference last May probably represent an appropriate
collective starting point:
Medicare reform. ASA’s May
2003 position paper on Medicare called for
repealing
the sustainable growth rate (SGR) Medicare reimbursement
update formula and replacing it with a formula based
upon changes in the Medicare Economic Index; that
is, reimbursement would be allowed to increase as
the cost of delivery of care increased.
As all ASA members are aware, this change was not
a feature of the Medicare prescription drug bill,
which instead merely guaranteed 1.5-percent positive
reimbursement updates in 2004 and 2005. Because of
its cost, estimated at some $100 billion to $120 billion
over 10 years, repealing the SGR was not given the
time of day in development of the House Medicare bill,
and indeed the Senate bill contained no substantive
provision on physician reimbursement at all.
Medicine nonetheless rejoiced when the Medicare conferees
approved the 1.5-percent positive update guarantee
contained in the House bill, even though this guarantee
was made possible in budgetary terms only by
postponing
until 2006 the impact of the SGR formula. Unless Congress
takes further action before 2006, physicians face
an estimated reimbursement cut on January 1 of that
year of more than 10 percent. Given the recent substantial
increases in federal spending, it is simply not reasonable
to expect, also given the price tag, that the SGR
is going to be repealed any time soon.
As I have noted in a prior column, several ASA members
have excoriated the ASA leadership for being willing
to beg for the “peanuts” represented by
the recent congressional action on reimbursement and
have urged that the leadership develop some “backbone.”
(Just so we are all clear, “backbone”
in this context is a code word for “ASA-led
illegal Medicare boycott.”) What is very clear,
however, is that the situation with respect to Medicare
reimbursement promises to get worse before it gets
better, and the 2005 challenge for ASA leadership
— not to speak of all of medicine — is
going to be formidable indeed. More “peanuts”
may look pretty good toward the end of 2005.
Liability reform. Last May ASA’s
position paper called for Senate approval of legislation
paralleling the House-passed Help Efficient, Accessible,
Low-Cost, Timely Health Care Act of 2003 bill (H.R.
5), the terms of which were closely based on California’s
successful Medical Injury Compensation Reform Act
(MICRA) principles, including a $250,000 cap on noneconomic
damages. Despite a major lobbying campaign by organized
medicine, however, the Senate leadership fell 11 votes
short of gaining the 60 required to invoke cloture
on a similar, but not identical, liability reform
bill (S. 11).
In the weeks immediately following defeat of S. 11,
Senate proponents of liability reform announced the
intention to bring a series of “single specialty”
reform bills to the floor — starting with obstetrics
and followed by emergency care — in the hope
of forcing a vote on liability limits for these critical
services. Disputes began to emerge within organized
medicine as to the wisdom of this approach and to
the actual terms of the draft obstetrics bill. In
the end, the Senate leadership decided to postpone
the effort until the second session, but even proponents
express pessimism concerning the chances for passage.
This having been said, there is no doubt that liability
reform will represent the major issue for organized
medicine in 2004 and beyond. The professional liability
situation grows ever more critical in those states
where, for constitutional or other reasons, adequate
legislation such as California’s MICRA has not
been put in place. Not only can ASA be expected to
lobby vigorously for a federal solution, but the ASA
Political Action Committee will be doing its utmost
to support 2004 candidates for Senate seats who can
be counted on to support reform.
Patient safety. ASA’s May 2003
position paper on patient safety applauded passage
by the House of H.R. 663, pursuant to which a new
federal voluntary medical error reporting system would
be established. The legislation contemplated the recognition
of “patient safety organizations” for
confidential receipt and analysis of medical error
information, and ASA visualized the structure as a
valuable adjunct to its already existing process for
analyzing closed claims.
After lengthy negotiations in July, the Senate Committee
on Health, Education, Labor and Pensions favorably
reported S. 720, a medical error reporting bill similar
but not identical to that passed by the House. Although
the bill was reported ready for floor action in the
Senate toward the end of the session, time ran out
before it could be placed on the calendar. It is not
unreasonable, however, to expect the Senate will take
up this bill in early 2004, and because it has only
limited political significance, a successful conference
on the two bills is not beyond the realm of possibility.
Antitrust reform. Last May ASA supported
H.R. 1120, a bill designed to provide antitrust relief
for self-employed physicians, principally by easing
the antitrust standards applicable to negotiations
between a health plan and two or more physicians.
By the end of the session, only 17 Representatives
had sponsored the bill, and no hearings were held
by the House Judiciary Committee. Chances for action
on this legislation in 2004 are modest at best.
Pain Care Policy. ASA’s final
stated legislative objective this past May was to
gain support for H.R. 1863, the National Pain Care
Policy Act. Among other things, the act would establish
a center for pain and palliative care research within
the National Institutes of Health. Disappointingly
the bill gained only 18 sponsors during the first
session, and no hearing has been scheduled.
Almost without doubt, ASA will redouble its efforts
on this bill in 2004 and will seek to push for a hearing
with other pain-related groups. In this regard, ASA
members will be interested to know that last spring,
ASA sought to join the Pain Care Coalition —
which represents a large number of pain care practitioners
— but unfortunately, the coalition failed to
act on ASA’s application, allegedly out of concern
that given its size, ASA might dominate the coalition’s
legislative agenda.
In sum, leaving aside the Medicare reform bill, the
track record of ASA’s 2003 legislative priorities
in the first session of the 108th Congress has not
been exemplary. Before any conclusion is drawn from
this assessment, however, one must keep in mind that
few legislative priorities reach fruition in a single
session or even a single Congress, and the ASA leadership
will certainly have this fact in mind as it analyzes
priorities for 2004 and, for that matter, 2005.
However one may feel about the overall wisdom of the
Medicare drug bill, moreover, there is much in that
bill that should generate satisfaction. Although the
success in avoiding a reimbursement cut came about
only because Congress deferred dealing with the fundamental
problem of the SGR, a cut was avoided for 2004 and
2005 to the tune of $150 million more for anesthesia
services.
Beyond that, the bill contains regulatory reform provisions
sought by organized medicine for the past three years,
a program for voluntary (not mandatory) use of carefully
developed e-prescribing techniques, avoidance of various
draconian proposals for cutting Medicare payments
for outpatient drugs and the easing of the rules by
which reimbursement for locum tenens physicians’
services may be obtained. In short there are a few
cashews and walnuts among the peanuts.
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