Senate negotiations generate new health reform bill, but not consensus

Senate Finance legislation includes a one-year Medicare pay patch, a primary care bonus and a ban on new physician-owned hospitals.

By Chris Silva — Posted Sept. 21, 2009

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The chief of the Senate Finance Committee, the only panel with health reform jurisdiction that has yet to approve legislation, on Sept. 16 introduced a bill that he hoped would attract enough GOP support to hit the coveted 60-vote threshold to end floor debate. But several key Republicans and at least one Democrat on the committee said they would not support the legislation without major revisions.

For months, Sen. Max Baucus (D, Mont.) has tried to craft consensus legislation with a bipartisan group of five other Finance senators. Baucus said the legislation, which he planned to begin marking up in committee Sept. 22, is the final product of those negotiations and the best chance for a compromise. America's Healthy Future Act aims to cover all Americans with a combination of individual mandates, insurance reforms and new government assistance.

But none of the three GOP members of the committee's "Gang of Six" negotiators said they could support the $856 billion, 10-year package as currently written.

The legislation does not propose a public insurance plan option championed by Democratic leaders and President Obama. Instead, it would implement member-owned health insurance cooperatives that would operate at the state level. The proposal also does not include a long-term solution to the Medicare physician payment formula, though it does call for replacing next year's scheduled 21.5% cut with a 0.5% increase.

The American Medical Association applauded Baucus for introducing the bill but said it would continue working with the committee to strengthen the measure. "The AMA continues to call for permanent repeal of the current Medicare physician payment formula that threatens seniors' access to care," said AMA President J. James Rohack, MD. "The House has already recognized the importance of this action by including it in pending legislation."

Baucus said he had no doubt the Senate would put a multiyear doctor pay solution in separate legislation this year. Medicare pay "is really not part of health care reform," he said.

The Baucus bill contains many other provisions. Among them:

  • Primary care doctors and general surgeons practicing in shortage areas would receive a 10% Medicare payment bonus on selected services for five years. Half of the cost of the bonuses would be offset through an across-the-board reduction of about 0.5% for all other services.
  • Doctor-owned hospitals that do not have a Medicare provider agreement in place before Nov. 1 would be banned from accepting Medicare patients referred by physician owners.
  • The Dept. of Health and Human Services would be required to identify Medicare physician services that are over- or undervalued and adjust relative value units accordingly.
  • Physicians would be required to participate in the Medicare Physician Quality Reporting Initiative by 2011 or face a payment penalty.
  • Beginning in 2011, Medicare would cover a health risk assessment and annual wellness visit with a primary care doctor for all beneficiaries.

Deep divisions

The attempt by Baucus to take the controversial public option off the table did not have the desired effect of gaining Republican support.

"I'm disappointed, because it looks like we're being pushed aside by the Democratic leadership so the Senate can move forward on a bill that, up to this point, does not meet the shared goals for affordable, accessible health coverage that we set forth when this process began," said Sen. Charles Grassley (Iowa), the top-ranking Republican on the Finance Committee.

After Baucus released a bill framework earlier in the month, Republican negotiators had pressed the senator to add provisions explicitly banning public coverage of illegal immigrants, prohibiting federal money for abortions, revising Medicaid expansion plans and reforming the medical liability system, among other changes. The few revisions Baucus made in those areas were not sufficient for the GOP.

In addition, dumping the public plan option caused the bill to lose the backing of at least one Democratic member of the Finance Committee. "The way it is right now, there is no way I can vote for the Senate package for many reasons, and the lack of a public option is one of them," said Sen. Jay Rockefeller (D, W.Va.).

In his Sept. 9 address to Congress, Obama had reiterated his strong preference for health reform legislation that includes a public option, but he left open the door for possible compromise on the hot-button issue. "Its impact shouldn't be exaggerated -- by the left, the right, or the media," Obama said. "It is only one part of my plan and should not be used as a handy excuse for the usual Washington ideological battles."

Sen. Olympia Snowe (R, Maine), one of the Gang of Six members, had offered a compromise under which the government would provide a public plan option only if private insurers failed to provide affordable coverage. The trigger idea could re-emerge during the legislation markup, but the concept might not fly with public plan option supporters.

Experience with triggers has shown "they are generally designed so that they won't be pulled or won't work if they are pulled," said Jacob S. Hacker, PhD, a political science professor at Yale University. "The trigger is just another way of saying no to a true public health insurance plan."

The issue of medical liability reform also remains a sticking point.

In his address to Congress, Obama said he would direct HHS Secretary Kathleen Sebelius to move forward and implement demonstration projects in individual states to test liability reform concepts. The AMA hailed the president's acknowledgement of the problem. But the Finance bill includes only a nonbinding resolution saying states should be encouraged to explore liability alternatives.

Dr. Rohack sent a Sept. 8 letter to President Obama and Congress outlining several critical elements the AMA has identified as essential to improving the current health system, including medical liability reform.

If the Finance Committee is able to pass a bill after the markup, it must be merged with legislation approved by the Senate Health, Education, Labor and Pensions Committee before the full Senate can consider a final bill. Senate Democratic leaders have said that if they cannot obtain the 60 votes needed to end debate, they will pursue a parliamentary tactic called reconciliation to move the legislation with only 51 votes.

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The co-op compromise?

Sen. Max Baucus (D, Mont.) proposes health insurance cooperatives instead of a public plan option. To be eligible for federal funds, a co-op must:

  • Be nonprofit and member-owned.
  • Not have been an insurer before July 16.
  • Not be sponsored by any state or local government.
  • Exist only to offer individual and small-group plans in its state or states.
  • Use any profits to lower premiums and improve benefits.

Source: Senate Finance Committee

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Study finds doctors back public plan option

Sen. Max Baucus (D, Mont.) is trying to move health reform legislation without a public insurance plan option. But a new national survey of more than 2,000 physicians concludes that most doctors support the concept in combination with private insurance options. Primary care physicians are slightly more likely than surgeons to be on board with the public plan.

Public and private options Private only Public only
All physicians 62.9% 27.3% 9.6%
Primary care physicians 65.2% 23.9% 10.8%
Medical subspecialists 64.7% 25.0% 10.1%
Surgeons 59.4% 33.2% 7.3%
Other specialists 57.4% 33.7% 8.8%

Source: "Doctors on Coverage -- Physicians' Views on a New Public Insurance Option and Medicare Expansion," New England Journal of Medicine, Sept. 14 (link)

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