Health reform bill awaiting House return retools public plan to encourage doctor participation

Physicians who choose to accept patients enrolled in the public plan option would not be tied to Medicare rates.

By David Glendinning — Posted Aug. 10, 2009

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The House left for its summer break without voting on a health system reform bill. But Democratic leaders did move the legislation past a crucial final committee after making numerous revisions to quell an uprising among more conservative members of the party.

The House Energy and Commerce Committee on July 31 voted 31-28 to pass America's Affordable Health Choices Act, clearing the legislation for consideration by the full House after the August break. Versions of the bill had passed two other committees soon after it was unveiled. But Democratic conservatives' concerns raised in the final committee over long-term spending and other issues ensured that the House would miss its deadline and threatened the survival of the reform package itself.

With days to go before the House recess, Energy and Commerce Chair Henry Waxman (D, Calif.) cut a deal with members of the conservative Democratic Blue Dog Coalition that helped seal the panel's passage of the bill by a largely party-line vote. The agreement included a promise that the full House would not vote on the reforms until September at the earliest, giving lawmakers time to brief their constituents. Committee leaders must reconcile the three different versions before the bill can move to a floor vote.

In one of the more significant changes for physicians to the original language, an amendment stipulated that the federal government would negotiate doctor rates directly under a public insurance plan option. The bill initially would have tied public plan payments to Medicare rates. Under the latest version, negotiated physician rates could not be lower than Medicare's, nor higher than the average rates paid by private plans that will compete with the public option in a national health insurance exchange.

The new language also more clearly spells out the process that physicians could use to opt out of the public plan if they didn't want to accept patients who had chosen that option. Both changes were backed by the American Medical Association, which supported the passage of the amended House bill. The legislation retains provisions that would overhaul the Medicare physician payment system to align rates more closely with the costs to doctors of providing care.

"We applaud members of the committee for recognizing that the ability to negotiate payment rates will help ensure physician participation," said AMA President J. James Rohack, MD.

The original legislation also was silent on the topic of medical liability reform. While the final Energy and Commerce version does not include the damage caps sought by physicians, it does include new language providing financial incentives to states to implement alternative liability structures, such as early-offer and certificate-of-merit programs. The AMA also supported this addition.

These concessions are not the only ones Waxman had to make to ensure committee passage. Another amendment established that original manufacturers of biologic drugs would have 12 years of marketing exclusivity before facing generic competition under a new approval pathway. Waxman had written a bill that would provide only up to five years of protection, but brand-name drugmakers and their allies on Capitol Hill argued that would stifle innovation.

A long slog ahead

Although the House missed a deadline imposed by President Obama and Democratic leaders to hold a full House vote on a national reform bill before the August recess, supporters of the legislation said the effort was still in good shape. The three versions of the bill passed by the House committees are similar not only to each other, but also to a measure previously approved by the Senate Health, Education, Labor and Pensions Committee.

"Although the drive to health care reform will no doubt experience various turns and bumps in the road, this drive has now passed a historic milestone," said Ron Pollack, executive director of the consumer group Families USA. "It augurs well for the successful completion of the journey."

But the effort is far from a done deal. House Republicans indicated they would use the August recess to continue hammering away at the fundamentals of the Democratic reforms. They say the legislation would lead to a government takeover of the health care system that would have disastrous economic repercussions.

"With today's vote, Democrats on this committee delivered to Americans more government spending, more federal debt, higher taxes and more government control over their everyday lives," said Michael Burgess, MD (R, Texas). "This is not what health care reform should look like."

Opposition to the pending legislation was evident from the first days of the congressional recess. Several well-publicized town hall meetings and other events organized by Democratic lawmakers and the White House were disrupted by protesters who said they opposed the role the federal government would play in the system overhaul. Administration officials said that some of the incidents appear to have been engineered by conservative groups that are fighting the reform plan.

Opponents of a major overhaul argue that most people who have health coverage are happy with it and do not want to see it upended. But several physician organizations that appeared at a July 30 Capitol Hill event with Senate Democratic leaders -- including the American Academy of Family Physicians, the American College of Physicians and the American Osteopathic Assn. -- insisted that the status quo is not acceptable.

"Family physicians cannot understand why we would ever want to continue a health care system that reduces productivity, accelerates cost increases and promotes inefficiency," said Jim King, MD, AAFP's board chair.

On Aug. 4, Obama took the unusual step of inviting the entire Senate Democratic caucus to the White House to strategize on health system reform. Senate leaders announced well before the House did that they would miss the deadline for voting on a reform bill before the August recess, which for the Senate was to start on Aug. 7.

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The Blue Dog deal

To secure passage of the House health system reform bill, Energy and Commerce Committee Chair Henry Waxman (D, Calif.) cut a deal with conservative Democrats on the panel. The agreement includes several significant changes to the legislation:

Public plan rates: Would require the federal government to negotiate public plan payment rates directly with physicians instead of basing them on Medicare rates.

Health plan co-ops: Would establish nonprofit, member-run health insurance cooperatives that would compete with public and private plans in a national health insurance exchange.

Medicaid spending: Would reduce federal matching payments for Medicaid expansions beginning in 2015.

Coverage credits: Would require people who are offered employer-based coverage but who seek insurance through the exchange to spend more of their incomes on premiums before federal affordability credits kick in.

Employer mandates: Would exempt more small businesses from a tax levied on firms that do not offer their workers health coverage.

Alternative payment models: Would establish a new CMS center to test how differing payment structures affect costs and quality in Medicare and Medicaid.

End-of-life planning: Would provide patients information, through the health insurance exchange, on advance directives and end-of-life care but would not withhold any care or require patients to authorize any directives.

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