Health Care Reform 2009

The Great American Debate and the Massachusetts Experiment

Mario Motta, MDPresident

Alice Coombs, MDPresident-Elect

Federal Health

Care Reform

Federal Legislation

• House Reform Legislation (H.R. 3962)

• Senate Reform Legislation (H.R. 3590)

• House SGR Legislation (H.R. 3961)

Expanding CoverageSenate HouseCovers 31 million additional people (94% covered)

Covers 36 million additional people (96% covered)

Cost: $849 billion by 2019 Cost: $894 billion by 2019

Reduces deficit by $130 billion by 2019

Reduces deficit by $109 billion by 2019

State exchanges Federal exchange

Subsidies up to 400% of poverty Subsidies up to 400% of poverty (Higher premium subsidy than Senate bill)

No mandate

But employers surcharged if employees get coverage through the Exchange (> 50 employees)

Employer mandate

Insurance ReformsSenate HouseProhibit exclusions for pre-existing conditions

Prohibit exclusions for pre-existing conditions

Guarantee issue and renewal (Bans recission)

Guarantee issue and renewal (Bans recission)

No gender discrimination; no lifetime caps

No gender discrimination; no lifetime caps

Report medical loss ratios Report medical loss ratiosHouse limits non-medical expenses; rebates excess to consumers

Physician Sections: House

• Workforce development Initiatives• Loan repayment programs• Strong medical home language• Grants for defensive medicine projects in states

Physician Sections: Senate

• No SGR fix– Replace 2010 cut with one-year 0.5% increase– 10% bonus for primary care and general surgery (half of funds

taken from other specialties)

• Independent Medicare Commission• Introduces value-based payment modifier

– Redistributes Medicare $$$ based on new value-based methodology

– AMA & MMS: Standards not scientifically valid or accurate

• Penalty for failure to participate in PQRI (2015)• Enrollment fee to participate in Medicare ($200)

Public Plan Option (Both Bills)

• Initial funding from federal government• Follow all rules for private insurers• Self sustaining on premium income• Physician participation is voluntary• Physicians negotiate rates (not set to Medicare)• Available only to individuals and small

businesses• Senate bill allows states to opt out

H.R. 3961: The SGR Repeal

• House approved – 243 to 183– Senate rejected similar bill in October

• Repeals the SGR formula and erases past “debt” for prior cuts ($210 billion)

• Establishes new annual payment targets– E&M services: GDP +2%– All others: GDP +1%

• Increases Medicaid primary care rates to Medicare levels by 2012

• Underserved areas get an additional 5%• Likely to be merged into main House bill & negotiated in

conference committee

AMA Advocacy

• AMA House Policy, June 2009:– “Support health system reform alternatives that are

consistent with AMA principles of pluralism, freedom of choice, freedom of practice, and universal access for patients”

• Commitment to engage Congress, the Administration and others in debate

AMA House: Nov. 2009

• Reaffirmed commitment to working with Congress, the Administration, and others on health reform– Coverage for all Americans– Insurance reforms– Health decisions by patients and physicians– Investments in quality improvement, wellness &

prevention– Repeal SGR– Medical liability reforms– Streamline claims and reduce admin. burdens

AMA House: Nov. 2009

• Public plan/health insurance exchange– Self supporting; no special advantages

– Negotiated provider payment rates

– Voluntary provider participation

– No restrictions on pt. use of out-of-network physicians

• Oppose Independent Medicare Commission• Must base payment incentives for outcomes and

quality on valid & accurate measurements• Primary care increases shouldn’t be at the

expense of specialties

Impact on Massachusetts?

Depending on what is passed …• Fewer Mass. residents may qualify for subsidies • Premium subsidies could be lower• More Mass. employers could be exempted from

mandates– House: Exempted if <$500,000 in payroll– Senate: Exempted if <50 employees– Mass.: Exempted if <11 employees

• High-cost “Cadillac” health plans could be taxed– In Senate bill only– 40% excise tax on value of premiums above $8,500 for

individuals and $23,000 for families (Not indexed to inflation)– Could significantly affect Mass. residents

Projected Timeline

• House– Reform bill approved on Nov. 7– SGR repeal approved on Nov. 19

• Senate– Floor debate started this week– Many amendments expected

• Vote by - ?• Conference - ?• President’s Desk - ?

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