Capitol Hill's year ahead: Medical issues old and new

The 2006 legislative session swings into full gear this month, and lawmakers once again are prepared to do battle over health care. In the background, seniors are trying out new Medicare benefits, and physicians are readying the fight to accomplish longstanding legislative priorities.

Although some familiar issues are sure to make it onto the House and Senate floors, others appear to be headed toward taking a back seat. And at least one influential lawmaker on the health policy scene will say goodbye to Capitol Hill when 2006 comes to a close.

Here's a look at what may make headlines this year.

Medicare's déjà vu

Once again, physicians face a Medicare cut that will take effect at the beginning of next year unless they can procure a rate fix sometime this session.

The American Medical Association and other physician groups won't be content merely to update reimbursements for a year or to freeze them at current levels, as Congress decided to do last year. They are heartened by signs that lawmakers have heard the call for a more lasting solution, said AMA President J. Edward Hill, MD.

"We've done a tremendous job raising awareness of the issue, both on Capitol Hill and with patients," he said. "We plan to build on the momentum from 2005 to make a strong push to replace the payment formula with one based on practice costs in 2006."

But a minefield of complications could get in the way of this goal. The already massive price tag for aligning reimbursements with the cost of providing care grows with each year of inaction. Medicare spending on such basic physician services as office visits and imaging procedures also continues to grow at rates that have drawn the attention of federal officials.

In addition, proponents of permanent physician payment reform are dealing with a short time frame to attain their goal. With the midterm election season starting in earnest in early fall, any major legislation needs be far enough along by lawmakers' August recess to have a good chance of staying above the fray, congressional aides said.

Centers for Medicare & Medicaid Services Administrator Mark McClellan, MD, PhD, suggested in a recent AMNews interview that physicians might need to make more of a showing in quality reporting programs, the precursor to pay-for-performance, before Congress will respond with a Medicare payment system overhaul. Many physicians worry that untested and misdirected pay-for-performance proposals will accompany any attempt to pay doctors more appropriately.

Before the legislative year even started, much attention to Medicare was fixed on the opening days of the program's drug benefit, during which patients and pharmacists complained about glitches that prevented seniors from getting their covered drugs. The Bush administration and the benefit's supporters on Capitol Hill thus far have been successful in resisting efforts to reopen the Medicare drug statute to change, but opponents say they will ramp up their efforts if widespread problems arise.

If lawmakers determine that they need to make technical adjustments to the statute, critics of the original reforms might try to make more fundamental changes to the drug benefit during floor consideration. Some have called for an extension of the May deadline for seniors to choose a plan for 2006 or a provision to allow direct government negotiation of drug prices.

Tort reform as legacy

Much of the expectation about what Congress will do about medical liability reform revolves around one lawmaker who is on his way out.

Senate Majority Leader Bill Frist, MD (R, Tenn.), is not running for re-election this fall but instead will retire from the upper chamber for what many believe will be a 2008 run for the White House. Dr. Frist has made little secret of the fact that he hopes comprehensive federal liability reform will be one of the legacies of his time at the Senate's helm.

As in recent years, the House passed legislation last session that, in part, would cap noneconomic damages in medical malpractice lawsuits at $250,000. But the Senate leadership's plans to bring up the measure and finally break the deadlock moved to the back burner last fall after Congress shifted its attention to the aftermath of Hurricane Katrina.

The skyrocketing growth in liability insurance premiums for many doctors cooled off somewhat last year, and about a half-dozen additional states passed damage caps of their own, bringing the total number of states that have caps to just over 30. Some opponents of large-scale efforts to limit lawsuit payouts pointed to the developments as indications that federal legislation is no longer necessary.

Some lawmakers continue to craft alternative legislation with the hopes of forming consensus on the issue. One example is a measure authored by Sens. Hillary Rodham Clinton (D, N.Y.) and Barack Obama (D, Ill.) that aims to avoid legal action by promoting physician apologies and confidential compensation negotiations in the event of a perceived medical error.

These developments do not mean the original damage caps legislation is no longer needed, Dr. Hill said in a recent speech.

"In a handful of places, reform laws have contained insurance costs and protected patient access. But many states have sunk into crisis because the legislature has failed to act or an activist court has nullified reforms," he said. "Because of that, a uniform federal approach to resolving this crisis is needed urgently."

Health IT gains followers

The issue of health information technology promises to capture more attention on Capitol Hill in 2006 as an increasing number of experts attest to its potential to streamline care and improve quality.

The Senate made one of the first moves toward establishing a federal commitment to outfitting doctors with electronic medical record technology. Legislation that would establish an annual funding stream of more than $100 million in the form of both direct and indirect grants to doctors unanimously passed the upper chamber last year.

Just before adjourning for the year, the House started the ball rolling. Rep. Phil Gingrey, MD (R, Ga.), introduced legislation that would allow new tax deductions by physicians for the purchase of health IT and tax credits for the operation of an EMR system. House leaders said the Senate-passed bill might be combined with Dr. Gingrey's legislation or another measure when the chamber considers it.

But lawmakers and many physicians continue to hold off on making a big financial commitment to health IT until the Bush administration gets further along in drafting rules for how all the different systems will operate with each other, said Patrick Smith, senior vice president of government affairs at the Medical Group Management Assn. With the typical cost of even a small practice going digital running tens of thousands of dollars, doctors are wary of investing in the wrong product.

"There is a mental understanding of the connection between the development of the standards and the funding issue, and there have been more public statements recently by officials about the cost burden on physicians, but talk is cheap," Smith said. "In the grand scheme of things, the federal investment so far has been relatively small."

David Brailer, MD, the national coordinator for health IT, continues to oversee the naming of contracts to private firms that will help develop standards for EMRs and certify which products fit the bill.

Many physicians, meanwhile, got their first taste of an interoperable electronic medical record while taking care of Hurricane Katrina victims last year. With the approval of the federal government, the AMA and other organizations helped launch an unprecedented Web site containing prescription drug records for hundreds of thousands of evacuees, which could be accessed by their doctors in any part of the country.

Dr. Brailer said the effort demonstrated that the government can work in tandem with the private sector to harness the potential of health IT.

Taking a breather on Medicaid

The big push for Medicare reform on Capitol Hill is unlikely to be mirrored by a similar effort on Medicaid.

"Congress may not come back to Medicaid for a while but may, in effect, turn the ball over to the states," said John Rother, AARP director of health policy. "I don't see them revisiting a very contentious issue in an election year now that they've just made a lot of changes in that area."

Last year Congress approved several unprecedented changes to the federal-state health entitlement for low-income and disabled people. The alterations included giving states the flexibility to raise cost-sharing for beneficiaries and to negotiate deeper discounts from drugmakers.

Although proponents of the 2005 reforms note that the changes will only reduce the steep growth of Medicaid by about 1% over the course of five years, the measure underwent a bruising fight in both chambers that pushed final consideration into the new year -- and that could take away some lawmakers' appetite to repeat the struggle so soon.

The National Governors Assn. expects that state legislatures will start making program changes that could affect both mandatory and optional beneficiaries once lawmakers give final approval to the federal legislation, according to a spokesman for the group. Such moves could include raising co-payments on some beneficiaries or dialing back some benefits that are not required by federal law.

A White House spokesman would not rule out the possibility that President Bush would call for additional budget deficit reduction this year that would target entitlement programs such as Medicaid. The president will send his proposed fiscal year 2007 budget to Capitol Hill in early February.

Even if Medicaid reform falls off Washington's radar screen for the bulk of the year, it will likely receive some renewed attention in December, when the federal Medicaid commission is expected to release its recommendations on a comprehensive overhaul of the system. Out of the 15 non-voting members of the panel, four are physicians, including AMA Immediate Past President John C. Nelson, MD, MPH.