Health reform final package ensures more funding for primary care

A newly enacted package of amendments will boost Medicaid rates and provide more community health center funding, but physician leaders say more help is needed.

By Doug Trapp — Posted April 5, 2010

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Physicians who provide primary care to patients are among those the federal government will single out for more support under the final health system reform package that is now the law of the land.

On March 30, President Obama signed a package of amendments to the main health reform law, the Patient Protection and Affordable Care Act. The House and Senate on March 25 adopted the amendments to address a number of concerns House members had with the underlying Senate-authored law.

Physician organizations, including the American Medical Association, supported the reform provisions boosting primary care. For example, the amendments package increases Medicaid primary care pay to 100% of Medicare rates in 2013 and 2014 and boosts funding for community health centers. The main reform law provides a 10% Medicare bonus from 2011 to 2015 for certain primary care and major surgical procedures provided by doctors in health professional shortage areas.

The law also takes the first necessary steps toward breaking the link between pay and volume of services, said Frederick E. Turton, MD, chair of the American College of Physicians' Board of Regents. "The patient-centered medical home has the possibility of saving real money."

But the health reform law still needs further improvement, said Lori Heim, MD, president of the American Academy of Family Physicians. The law does not address Medicare's sustainable growth rate formula, nor does it significantly bolster medical liability reform.

Dr. Heim also noted that the 10% Medicare bonus applies only to some physicians -- those with 60% of their Medicare billing in primary care. This requirement could exclude many rural physicians, she said.

Also, the Medicaid primary care pay increase ends in 2015, as the program begins covering 16 million more people. "The increase in pay for primary care physicians is not going to make the difference that it needs to make," Dr. Turton said, though he expressed hope that the law would serve as the basis for incremental improvements.

The AMA is pushing Congress to make some significant revisions to the law, including changes to a new Medicare Independent Payment Advisory Board that the Association says could mandate doctor pay cuts starting in 2015 that would undermine access to care.

"We will be relentless in our pursuit of permanent repeal of the Medicare physician payment formula, corrections to IPAB, medical liability reform and other important actions," AMA President J. James Rohack, MD, said in a statement.

Selling the new law

With final health reform enacted, Obama and congressional Democrats face two more difficult tasks: Implementing the sweeping law and convincing a skeptical public that the changes are in the country's best interest.

"The health insurance reform bill I signed won't fix every problem in our health care system in one fell swoop," Obama said at the signing ceremony for the amendments package March 30 at Northern Virginia Community College in Alexandria, Va. But the law will increase Americans' sense of security concerning their health coverage, he added.

Many of the law's big changes take effect in 2014, when states are expected to establish health insurance exchanges offering subsidized coverage. That year the law also ends health plans' preexisting condition exclusions, requires individuals to have health insurance and expands Medicaid eligibility nationwide.

"Physicians see firsthand the pain and heartbreak that being uninsured causes in the lives of America's patients. Today, we move forward to start to ease that pain," Dr. Rohack said. The law is expected to reduce the number of uninsured in the U.S. by 32 million by 2019, leaving 23 million uninsured, or about 8% of the population.

But Republicans -- none of whom voted for the final bill or the amendment package -- warned that Democrats will suffer election defeats in November because they ignored Americans' concerns about the law's size and cost.

"Never before has such a monumental change to our government been carried out without the support of both parties," House Minority Leader John Boehner (R, Ohio) said. Boehner earlier had described the day the House approved the main reform package as "Armageddon."

Obama derided Boehner's rhetoric while promoting the health reform law at a March 25 visit to the University of Iowa. "After I signed the bill, I looked around to see if there were any asteroids falling or some cracks opening up in the earth. It turned out it was a nice day."

Dealing with disputes

Opponents already have started pointing to perceived flaws in the new reform statute.

Obama said that by September, the main reform law will prohibit health plans from denying coverage to children with preexisting conditions. But Health and Human Services Secretary Kathleen Sebelius acknowledged on March 29 that although the law as written prevents health plans from dropping kids' coverage due to an illness, it may not prevent health plans from denying coverage due to preexisting conditions.

"I am preparing to issue regulations in the weeks ahead ensuring that the term 'preexisting conditions exclusion' applies to both a child's access to a plan and to his or her benefits once he or she is in the plan," Sebelius wrote in a March 29 letter to Karen Ignagni, president and CEO of America's Health Insurance Plans. Ignagni responded on March 30 that AHIP members will comply with the regulations Sebelius described.

Boehner and other Republicans also said the law will not reduce the federal debt if one considers the spending needed to maintain access to care.

The Congressional Budget Office estimated that the health reform and amendments laws will reduce federal spending by $143 billion over a decade. But that estimate does not include preventing Medicare physician pay cuts, which could cost more than $200 billion over a decade.

The law will spend about $900 billion over 10 years to expand Medicaid and subsidize coverage through health insurance exchanges. But a significant portion of the spending will be offset by Medicare cuts, including $196 billion in pay cuts to private Medicare plans. About $100 billion will be offset by a combination of an excise tax on high-cost insurance plans, penalties on people who remain uninsured and required employer contributions.

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Rolling out reform

Some key provisions of the Patient Protection and Affordable Care Act and its package of amendments will not be implemented for a few years.


  • Starts to close the Medicare drug benefit coverage gap to eliminate it by 2020.
  • Creates the Medicare Independent Payment Advisory Board.
  • Extends the Medicare Physician Quality Reporting Initiative through 2014.
  • Provides higher Medicare pay to certain areas over two years, through the geographic practice cost index.

6 months after enactment (September 2010)

  • Prohibits health plans from canceling coverage for people who get sick and from placing lifetime caps on benefits.
  • Tightens restrictions on annual coverage limits.
  • Extends health insurance eligibility for dependents to age 26.

By the end of 2010

  • Begins greater investments in primary care physician training and community health centers.
  • Prohibits physician-owned hospitals without a Medicare provider agreement by Dec. 31 from participating in the program.


  • Reduces Medicare practice expense payments for certain diagnostic imaging services.
  • Eliminates co-pays and deductibles for Medicare preventive care.
  • Requires health plans to spend minimum premium amounts on care.
  • Provides a 10% Medicare health shortage area pay bonus until 2015 for certain services.


  • Increases Medicaid physician primary care pay to 100% of Medicare rates for two years.


  • Prohibits health plans from denying coverage based on preexisting conditions.
  • Expands Medicaid eligibility to 133% of the federal poverty level.
  • Creates health insurance exchanges in states that have none.
  • Subsidizes low-income individuals' coverage in the insurance exchanges.
  • Requires individuals to have a minimum level of coverage or pay penalties.
  • Implements a coverage mandate for most larger employers.

Sources: House Energy and Commerce Committee, Senate Democratic Policy Committee

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