Reform law rollout forges ahead despite GOP budget threats

The parts of the statute subject to annual appropriations are most vulnerable to rollback efforts.

By Doug Trapp — Posted Feb. 14, 2011

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With an outright repeal of the national health system reform law blocked by the Senate, congressional Republicans aim to make 2011 a year of rolling back individual parts of the statute. However, key portions of the law are expected to take effect or move forward significantly this year despite any GOP efforts to cripple it.

At this article's deadline, the Dept. of Health and Human Services was preparing to unveil rules governing accountable care organizations, one major aspect of the reform package for physicians. And new federal panels are beginning work on comparative effectiveness research and examining new ways of delivering and paying for health care.

Several other health reform law provisions took effect on Jan. 1, including Medicare bonus payments for some primary care physicians and general surgeons, Medicare benefit expansions and a rule requiring insurers to spend at least 80% of premiums on actual health care.

"It's going to be an extraordinarily busy year," said Robert Doherty, American College of Physicians senior vice president for governmental affairs and public policy.

Some of the reform law's programs could fall victim to House Republican-directed cuts, or to their unwillingness to continue funding at levels called for in the statute, Doherty said. Possible targets for cuts include loan forgiveness programs for physicians working in underserved areas and Medicare primary care bonus payments. Billions in incentives for the adoption of electronic medical records under the 2009 economic stimulus package also could be threatened.

"Congress doesn't have to fund them," Doherty said. "Quite a few of them might be on the chopping block."

The White House was expected to release its fiscal 2012 budget on Feb. 14. House GOP leaders already had announced plans to push their own budget proposals that contain no discretionary health reform implementation dollars.

Fiscal 2011 funding for the federal government expires on March 4 under a continuing resolution adopted by Congress in December 2010. Congress must act before then to keep the government operating.

House Budget Committee Chair Paul Ryan (R, Wis.) on Feb. 3 called for a 4%, $6.6 billion cut to funding for the Depts. of Labor and Health and Human Services for the rest of fiscal 2011, which ends Sept. 30. The new House Republican majority adopted rules in January allowing Ryan -- as chair of the budget panel -- to set annual discretionary spending limits. Republican leaders have pledged to adopt similar cuts for fiscal 2012.

However, the Senate -- still controlled by Democrats -- may be unwilling to accept some or all of the House-proposed cuts. A government shutdown could follow if leaders of each chamber are unwilling to compromise. During the 2010 elections, several Republican candidates threatened a government shutdown if Democrats would not agree to deep spending cuts, and Senate Minority Leader Mitch McConnell of Kentucky in late January declined to take the option of a government shutdown off the table.

The American Academy of Family Physicians is encouraging its members to stay in touch with their congressional representatives about the importance of maintaining health reform law provisions that shrink the disparity between primary care and specialty pay, said AAFP President Roland Goertz, MD.

In addition to the law's 10% Medicare primary care bonus payments that started this year, reforms in 2013 and 2014 will increase Medicaid primary care fees to match Medicare rates, assuming funding is not cut off. All of these increases are "a step in the right direction" and must not only be maintained but also augmented, Dr. Goertz said.

New delivery models

The health reform law's signature provisions take effect in 2014, including coverage expansions, a ban on all preexisting condition exclusions and an individual insurance mandate.

Key panels and programs created by the reform law are getting off the ground this year, including the Center for Medicare & Medicaid Innovation, announced in November 2010. The center will receive $10 billion in funding over a decade to study care delivery models and implement models that improve quality and lower costs on a wider scale, said Centers for Medicare & Medicaid Services Administrator Donald M. Berwick, MD.

"Payment systems often fail to reward providers for coordinating care and keeping their patients healthy," he said.

Along similar lines, accountable care organizations have the potential to shift the way CMS pays for health care on a fundamental level, Doherty said. ACOs are expected to break down payment divisions in Medicare by allowing physicians and hospitals to share in savings generated by new partnerships that improve patient care. CMS could expand successful ACO models nationwide in relatively short order, he said.

"There is a sense in policy circles that the ACO model is one of the most promising approaches to begin to bend the cost curve," Doherty said. However, the American College of Physicians is concerned that ACOs could increase the trend of hospitals buying small physician practices.

The AAFP is hoping the patient-centered medical home model will gain traction as part of ACOs and through the innovation center's research, Dr. Goertz said.

A Medicaid pilot program that took effect Jan. 1 will reward care provided in medical homes starting this year. CMS will pay 90% of the cost of services provided in these homes to Medicaid enrollees with multiple chronic conditions, including mental health and substance abuse disorders. States must request a Medicaid plan amendment, and the medical homes must meet federal standards.

Another organization created by the health reform law will focus on the care choices faced by physicians. The Patient-Centered Outcomes Research Institute will study the effectiveness of medical treatments, devices and drugs. PCORI met for the second time in January.

Doherty said PCORI could be a target for Republican repeal attempts because some GOP members believe its recommendations will lead to health care rationing. However, the health reform law prohibits the institute from setting practice guidelines, payment recommendations or coverage decisions.

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Health reform law in 2011

Although the bulk of the major portions of the health reform law don't occur until 2014, a number of physician-related provisions take effect this year. They include:

  • 10% Medicare pay bonuses for select primary care services provided by certain types of primary care physicians. The bonuses will be paid automatically on a quarterly basis and last through 2015.
  • 10% Medicare pay bonuses for major surgical procedures performed by general surgeons who practice in designated health professionals shortage areas. The bonuses will be paid automatically on a quarterly basis and last through 2016.
  • 50% reduction in pay for the second and following ultrasound, CT, or MRI imaging service(s) provided on a single date of service for the same patient.
  • 50% discount on brand-name prescription drugs for Medicare beneficiaries who reach the Part D coverage gap.
  • Medicare coverage of an annual physician visit so beneficiaries can develop a personal preventive care plan.
  • The elimination of co-payments, coinsurance and deductibles for most Medicare-covered preventive services.
  • The first redistribution of unused Medicare residency slots since 2003. The redistribution is scheduled to take effect on July 1 and could affect up to 1,000 slots.

Sources: American College of Physicians, Kaiser Family Foundation, Assn. of American Medical Colleges

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