Government

Congressional sneak preview: Coming health care attractions

The spotlight shines on a new Congress, which will explore a number of key health themes, from tort reform to Medicare payment.

By David Glendinning , Joel B. Finkelstein — Posted Feb. 7, 2005

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Lawmakers in the 109th Congress face many of the same health issues as their predecessors, but with a few plot twists.

As the legislative session gears up, Republicans are energized by their stronger majorities in both the House and Senate, and by the re-election of President Bush. Democrats, however, haven't been written out of the script, especially in the Senate, where they still have enough votes to influence or block legislation.

This political dynamic is sure to play a role in a host of physician issues. Meanwhile, the hefty federal budget deficit could serve as the antagonist in debates over Medicare, Medicaid and other health topics.

Here's a look at how the action could unfold.

Liability reform grabs center stage

Expect things to heat up on the tort reform scene sooner rather than later.

With Bush and the House and Senate majorities in favor of capping noneconomic damages in medical liability lawsuits, physicians consider this to be one of their best shots at getting federal reforms.

"We have a climate where stars are starting to align," said American Medical Association President John C. Nelson, MD, MPH.

But it still will be an uphill battle to pass reforms that doctors believe are key to stabilizing medical liability insurance rates -- namely the $250,000 noneconomic damages limit.

That was the sticking point in the last Congress, when the Senate failed to pass a bill that the House approved twice. Supporters in the Senate didn't have enough votes to block a Democratic-led filibuster.

The November 2004 election changed the makeup of Congress in physicians' favor on this issue. The measure is expected to pass the House easily this year. But still unclear is whether tort reform backers ultimately will find enough Senate votes to get a bill to Bush's desk.

Although Republicans picked up four Senate seats this term, they are still several votes shy of the 60 needed to block a filibuster.

But with more physicians leaving certain states, eliminating high-risk procedures and retiring early, physicians will push hard for reform that includes the cap. They point to a 2003 Gallup survey showing that 72% of Americans favor limits on noneconomic damages.

Tort reform has been the AMA's highest priority since June 2002 and will continue to top the list in 2005.

"The strategy is to do what is best for patients," Dr. Nelson said. Without tort reform, patients would continue to lose physician access, he said.

At press time, organized-medicine leaders and lawmakers were discussing potential bills, but details were not yet available.

The opposition is planning its strategy, too. Trial lawyers agree that soaring premiums are a problem for physicians. But, they say, liability insurers are the cause, not lawsuits.

The Assn. of Trial Lawyers of America will push for insurance reforms this session. Specifics weren't available at press time, but members of both chambers were working on legislation involving insurance reform, said the group's spokesman, Carlton Carl.

"The American people do not want their rights taken away from them, as the president and others are proposing," Carl said. "Members of Congress should know that if they support the efforts of the president, they are voting against their constituents."

Medicare payment gets big billing

Physicians in Medicare start off the year with a familiar threat looming. Absent legislative action, doctors will see their base Medicare rates decreased by an estimated 5% in 2006, with equivalent cuts in each of the next six years.

But the AMA is already reporting promising signs from the 109th Congress that it will address the issue this year. "Members from both the House and Senate have given indications that something needs to be done about this," said AMA Immediate Past President Donald J. Palmisano, MD.

In past years, lawmakers have staved off Medicare cuts after the Association warned that patients would have difficulty finding doctors who could afford to keep seeing them. Congressional aides from both parties said this warning's impact has carried over into the new year.

"Everyone agrees that [the physician pay formula] is unsustainable in the long run," said Charles Clapton, chief Republican health counsel for the House Energy and Commerce Committee. "That's not going to be able to guarantee Medicare beneficiaries access to high-quality physician care, and it needs to be fixed."

The question is how comprehensive a rate repair lawmakers are willing to pursue. Fixing the Medicare sustainable growth rate, part of the formula that determines doctor pay, could cost $90 billion over a decade, according to the Congressional Budget Office. In the past, Congress has eschewed a long-term solution for 11th-hour adjustments that freeze or increase rates for one or two years.

"Will we be able to do a permanent fix of the physician payment system as a result of its high price tag?" asked Mark Hayes, GOP health policy director for the Senate Finance Committee. "Or will Congress need to look at a temporary fix that makes the problem worse for fixing it down the road?"

Some lawmakers are considering proposals that tinker with the rate formula without completely overhauling it. Clapton said, for instance, that House Republicans have floated an idea to remove Medicare Part B drugs from the physician pay formula, a move the AMA strongly supports.

But even the less drastic measures to bring Medicare pay in line with physician costs might run into resistance from budget hawks on Capitol Hill, who are committed to halving the federal deficit in five years.

Hayes said the deficit move would require Congress to find about $55 billion in Medicare savings over that period. The cost of fixing the physician pay formula would force lawmakers to find even more cuts elsewhere in the program, he said.

Proposals to saddle Medicare players with the cost of reducing deficits recall the Balanced Budget Act of 1997, which slashed rates to physicians and others so much that Congress followed up with several rounds of payment givebacks. Leaders in both houses are wary of cutting Medicare dollars from hospitals, nursing homes and health plans when some of the contractors are not doing as well as they were eight years ago.

"Medicare often bears the brunt of a lot of deficit reduction packages," said Liz Fowler, chief Democratic health counsel for the Senate Finance Committee. "But having just given out a lot of money to providers, I'm not sure Congress is going to be too excited to start taking a lot of the money off the table."

Medicaid: A struggling production

Medicaid reform is also likely to attract much attention this year. Although Medicaid spending has grown more slowly than other areas of the health care system, the sheer size of the program means that even slow growth equals a big rise in expenditures. With Bush promising to halve the budget deficit in five years, Medicaid could be a prime target for conservatives' cost-containment strategies.

But the effort will meet stiff resistance. The first volley was fired by the National Governors Assn., which made a preemptive call to preserve federal Medicaid funding.

"We agree that maintaining the status quo in Medicaid is not acceptable. However, it is equally unacceptable in any deficit reduction strategy to simply shift federal costs to states, as Medicaid continues to impose severe strains on state budgets," they wrote in a letter to Bush and Congress.

At a recent press briefing, Democratic congressional staffers said their leadership also would oppose reform proposals that attempt to reduce Medicaid funding.

"The Democrats are already gearing up for a fight, in that there is no support for any sort of movement toward block grants or even consideration of major cuts to the programs," said a Democratic Senate staffer.

Although the Bush administration floated a proposal to change the Medicaid financing structure early last year, it received such a bad reception that there has been no follow-up.

But the Health and Human Services Dept. is pursuing other ways to reduce the federal government's Medicaid spending. It's focusing mainly on cutting waste, fraud and abuse.

There were reports last year that some states have been using complex funding schemes to pull down extra federal money, which they then shifted to transportation and other non-health related budgets. "Medicaid dollars should certainly be used appropriately to pay for health care services for the low-income beneficiaries," said a Republican House staffer. "I don't think anyone can justify diverting those dollars for other state expenditures."

Some lawmakers, however, are calling for more oversight of HHS' efforts. State officials have complained that the agency is interpreting Medicaid regulations differently than in the past, presenting them with a moving target for structuring their programs' financing.

Patient safety makes a comeback

In contrast to the impending battle over Medicaid, patient safety legislation might have a good shot at bipartisan support and passage this year. Medical-error reporting bills passed the House and Senate last year but got hung up over minor differences at year's end.

"We fully expect that we will be back working again at patient safety for next year, and that's our hope -- that we can get a patient safety bill passed sometime early in the new year," said a Republican staffer from the House Energy and Commerce Committee.

Passage of such legislation is one of the AMA's top priorities for this year.

The Association was very disappointed that last year's measures ultimately failed despite overwhelming support in both the House and Senate, said the AMA's Dr. Palmisano. "Those bills will definitely be reintroduced," he said.

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ADDITIONAL INFORMATION

Likely up for debate

Medicare Modernization Act: Lawmakers will carefully follow implementation of the Medicare drug benefit leading up to its January 2006 launch. While the GOP majority has pledged to reject major amendments to the benefit this year, some lawmakers have suggested that technical corrections could be necessary to ensure that the process goes smoothly.

Drug reimportation: Public demand is making it politically uncomfortable for lawmakers who still oppose legalizing reimportation. Movement on legislation seems inevitable this year. Proponents have the numbers, if they can get a floor vote.

Health insurance reform: The uninsured are already proving a hot button issue, with Republicans eager to pass such reforms as individual tax credits, health savings account expansions and association health plans. Democrats are likely to propose expanding current public programs.

Health information technology: The Bush administration vaunted HIT as an important way to make the health care system run more smoothly, but it largely fell off the radar by the end of last year when 2005 funding for the national coordinator got axed. Proponents could try to add back money this year, although it seems likely to fall short of what experts say is needed to jump-start national implementation.

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About the cast

House Senate
Party breakdown
Republicans 232 55
Democrats 201 44
Independents 1 1
Vacancy 1 0
Demographics
Average age 56 60
Female 68 14
Black 42 1
Hispanic 26 2
Education levels of the House and Senate
Law degree 228
Medical degree 17
Doctoral degree 19
Master's degree 141
Bachelor's degree 494

Source: U.S. House and Senate; C-Span

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Starring roles

Congressional committee chairs help drive the agenda. Here's what the leaders of some committees dealing with health issues have identified as priorities.

Senate Budget: New Chair Judd Gregg (R, N.H.) plans to focus on deficit reduction, and that could spell trouble for physicians. No specific plans yet, but Medicare and Medicaid dollars are high on the hit list.

Senate Finance: Chair Charles Grassley (R, Iowa) says Congress can approve prescription drug reimportation legislation that ensures patient safety and lowers costs. Grassley also plans to continue serving as one of Capitol Hill's most aggressive watchdogs on overseeing federal health agencies.

Senate Health, Education, Labor and Pensions: New Chair Michael Enzi (R, Wyo.) wants to ensure rural physician supply and plans to reintroduce a bill to boost community health center numbers in underserved areas. He has proposed an "early offers" system as a malpractice litigation alternative and supports medical errors legislation.

House Energy and Commerce: Chair Joe Barton (R, Texas) wants to address next year's Medicare payment cut, which he views as unsustainable for physicians. He also plans Medicaid reform hearings.

House Ways and Means: Chair Bill Thomas (R, Calif.) has voiced support for discussing Medicare pay-for-performance strategies. He has also been said to back measures to allow people to roll over cash from flexible spending accounts at year's end.

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