Senate-passed health reform bill faces tough negotiations with House

Physician organizations will be pushing for more changes in an effort to minimize future Medicare pay cuts.

By David Glendinning — Posted Jan. 4, 2010

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Discussions between the House and Senate over health system reform legislation are beginning, with Democratic lawmakers attempting to reconcile two substantially different measures while holding onto the razor-thin margin of support each bill has in its chamber.

The Senate approved the Patient Protection and Affordable Care Act by a party-line, 60-39 vote on Dec. 24, 2009, after nearly a month of debate and several procedural barriers that required 60 votes to overcome. Negotiators now must find a consensus between it and the Affordable Health Care for America Act, which the House passed 220-215 on Nov. 7, 2009.

The two bills both would extend health coverage to most Americans through a combination of individual and business mandates, health insurance reforms, and new government coverage subsidies. Democrats predicted they would be able to hammer out a compromise that would garner a majority of support in the House and the 60 votes needed to move to final consideration in the Senate.

But the tight margins of support for the legislation in each chamber forced Democratic leaders to make late concessions to holdouts within their caucuses, changes that could make future negotiations more difficult. The final Senate measure, for instance, dropped a public option -- still present in the House bill -- that has proven to be one of the most divisive issues. Late changes in both bills regarding government coverage of abortion services also nearly stalled the legislation and could torpedo the conference process if a consensus cannot be reached.

Republican lawmakers pledged to try to prevent Congress from sending President Obama a reform measure that is a product of the current versions. Only one Republican voted for the House bill; none voted for the Senate measure.

"This fight isn't over. My colleagues and I will work to stop this bill from becoming law," said Senate Minority Leader Mitch McConnell (R, Ky.). "That's the clear will of the American people, and we're going to continue to fight on their behalf."

Last call for changes

Negotiations between the House and Senate pose the last chance for lawmakers and lobbies to effect revisions. Groups representing physicians, seniors, drugmakers and others supported the legislation but are looking for changes before backing the final product.

The American Medical Association supported passage of both the House and Senate bills but is pushing for key revisions during the conference process. While the Senate vote "closes one chapter of the legislative process, the hard work is not yet done," said AMA President J. James Rohack, MD.

The Senate measure, for instance, includes a provision for an independent Medicare advisory board that the AMA opposes. The board could subject physicians to new spending targets that would lead to additional future payment cuts on top of any already required by Medicare statute.

If negotiators decide to retain the advisory board provision, the AMA is asking for revisions that would more fairly spread out the burden of reducing Medicare spending, permit legitimate spending increases, and ensure the panel is transparent and accountable. The American College of Physicians supports the concept of the panel but also wants revisions to mandate a certain level of physician representation on the board, allow Congress more easily to override the board's mandates and stipulate that savings requirements apply to all Medicare participants.

The AMA is also looking for modifications to a Senate provision that would base Medicare physician pay, in part, on quality and efficiency measures, starting in 2015. The Association is arguing that such measures -- and the risk-adjustment methods needed to make them work -- are not yet well-developed.

Proposals in both bills aimed at banning new physician-owned hospitals will continue to face strong opposition from the AMA and others. "In allowing the attack on physician-owned hospitals to remain in the health care bill, nothing is gained. The only results are incredibly negative economic impact and loss of health care access," said Molly Sandvig, executive director of Physician Hospitals of America.

Physician organizations claimed some success in helping modify the legislation originally released by Senate leaders to the version that finally passed the upper chamber. The California Medical Assn., for instance, initially made a statement of opposition to the Senate bill. But it softened its stance somewhat after bill handlers made several changes, including dropping plans to fund a primary care and general surgery bonus by cutting Medicare pay to specialists, impose a 5% tax on elective cosmetic surgery, and implement a Medicare enrollment fee.

Still, the association is looking for more. "We have serious concerns with the Senate bill, which does not do enough to protect access to care for senior citizens and other California patients," said J. Brennan Cassidy, MD, CMA president.

Neither bill would repeal the Medicare formula that determines physician pay, nor would they implement a temporary patch to avoid upcoming cuts.

Congress has until the end of February to send legislation to the White House preventing a 21.2% cut from taking effect. The House has already passed legislation permanently repealing the sustainable growth rate formula that helps determine physician pay, and physician organizations are calling on the Senate to do the same before March 1.

As part of its conditional support for the Senate health reform bill, the AMA will not back a final bill unless Congress is on track to pass a permanent SGR repeal before the 2010 cut takes effect.

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Possible sticking points

House and Senate negotiators will need to hammer out consensus language in a number of areas of significant divergence between the two versions of health system reform legislation, including:

Public plan

Senate: Would implement multistate private plans sponsored by the federal Office of Personnel Management.
House: Would implement a national health insurance plan offered by the federal government.

Federal taxation

Senate: Would impose a 40% tax on so-called Cadillac health plans for individuals and families.
House: Would impose a 5.4% tax on individuals with incomes exceeding $500,000 and on families with incomes of more than $1 million.

Employer mandate

Senate: Would require larger employers not offering enough coverage to pay a $750 penalty per worker.
House: Would require larger employers not offering enough coverage to pay a tax of up to 8% of payroll.

Individual mandate

Senate: Would require, starting in 2014, individuals to obtain health coverage or pay a phased-in annual penalty of at least $750.
House: Would require, starting in 2013, individuals to obtain health coverage or pay an annual penalty of 2.5% of income higher than a certain amount.

Medicaid expansion

Senate: Would expand Medicaid to cover everyone earning up to 133% of the federal poverty level.
House: Would expand Medicaid to cover everyone earning up to 150% of the federal poverty level.

Abortion funding

Senate: Would bar the use of federal subsidies to pay for abortion coverage but would allow subsidy recipients to choose a plan covering abortion if it were paid for with segregated, private funds.
House: Would bar the use of federal subsidies to pay for abortion coverage but would allow women to purchase separate coverage with their own money.

Source: Affordable Health Care for America Act, Patient Protection and Affordable Care Act

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