AHLAlerts: American Health Line’s Blog

The big story this week was the progress—if slight—toward enacting the so-called “extenders” bill (HR 4213), a large spending package with significant ramifications for health care. The bill would extend subsidies to help laid-off workers purchase health coverage under COBRA and delay a scheduled 21% cut to Medicare physician payment rates. Although progress toward enactment was slow, the actual content of the bill has changed significantly.

As discussed in last week’s “Editor’s Roundup,” the extenders bill was held up because lawmakers in both chambers had concerns about the cost of the legislation, which was nearing $200 billion at the time. Those concerns over cost held true throughout much of this week. As a result, Democrats twice sought to allay those concerns.

In their first attempt, House Democratic leaders on Wednesday released a proposal that would cut the cost of the package from about $200 billion to about $145 billion. The lawmakers achieved the savings by:

• shortening the delay for the cut to physician payments from 2013 to 2012. Under the provision, physicians’ Medicare payment rates would actually have been increased by 2.2% for the remainder of 2010 and by 1% in 2011, before the payment formula is expected to revert to the current formula in 2012.
• abridging the unemployment health benefits and COBRA subsidies, which would have been extended through Dec. 31 under the original bill, Nov. 30.

However, the bill’s cost still did not satisfy members of the House’s fiscally conservative Blue Dog Coalition, jeopardizing enough votes to put passage in question.

As a result, Democrats made a second attempt at lowering the legislation’s cost. House Democratic leaders agreed to cut roughly $31 billion more from the package. The cuts eliminated extensions of COBRA subsidies for unemployed workers and a renewal of additional state Medicaid funding outlined in the 2009 federal economic stimulus package.

The change worked, at least in the House. Friday afternoon, the House passed the “extenders” legislation, but the Senate has already hit the road for its Memorial Day recess. That means as the calendar flips over to June, physicians will experience a 21% reduction in their Medicare reimbursements and the subsidies to help laid-off workers purchase COBRA coverage will expire … unless Congress does something retroactively to alter that fate.

Other major policy news that happened this past week:

• SELLING THE OVERHAUL: The Obama administration continues its PR campaign to sell the new health reform law to the American public. This week, the White House sent mailers to Medicare beneficiaries touting the benefits of the overhaul and announced that it would begin sending $250 checks to beneficiaries who reached the so-called “doughnut hole” in prescription drug coverage. However, the campaign doesn’t seem to be working, according to a poll.
• FIGHTING AGAINST REFORM: While the Obama administration works to ensure that the new health reform law is effective, Republicans continue their efforts to dismantle the overhaul. The GOP on Wednesday asked the Government Accountability Office to examine whether the White House’s mailers are misleading propaganda and an illegal use of taxpayer funds. Republicans argued that the document’s discussion of provisions unrelated to Medicare constitutes a misuse of Medicare funds. Then Republicans finally followed through with their threats and introduced legislation that would, in their parlance, “repeal and replace” the new reform law.
• DEFENDING THEIR TURF: Of course, Democrats weren’t going to take an attack against reform sitting down. HHS on Monday asked a federal judge in Virginia to dismiss a lawsuit that argues that the new health reform law is unconstitutional. One of their more common sense / funny arguments against the lawsuit was that the claim is illegitimate because reform doesn’t take effect until 2014. You can’t sue what isn’t there!

by Anthony Wilson, Editor

TELL US WHAT YOU THINK: What will the Senate think of the House’s new ‘extenders’ proposal? Will lawmakers retroactively extended COBRA subsidies and “fix” Medicare physician payment rates? Who’s getting the best of the post-reform debate — Democrats or Republicans?

Invoking the wise words of General Douglas MacArthur, “Interesting Reads” today features the lax safety rules governing some of most sophisticated biotechnology labs in the U.S., and the nearly two-year-old CMS rule on “never events.”

• “Safety Rules Can’t Keep Up With Biotech Industry“: Biotechnology researchers are highly trained and generally well-paid, but they work in risky places with lax safety standards, according to the New York Times. The Times reports that about 232,000 employees at some of the “most sophisticated” biotech labs in the U.S. work “amid imponderable hazards,” which some observers describe as less regulated than “the typical blue-collar factory.” Even the director of the Occupational Safety and Health Administration, which monitors the biotech industry’s safety standards, admits that OSHA’s safety standards for the biotech industry are lacking (Pollack/Wilson, New York Times, 5/27).

On Oct. 1, 2008, CMS implemented a rule in which hospitals would not be reimbursed for the treatment of certain “conditions that could reasonably have been prevented.”

• “Who Pays for Medical Complications“: Since the rule was enacted, the list of the so-called “never events” has grown to include several new complications, Times medical columnist Pauline Chen writes. Chen notes that some of the new complications might not actually be preventable, based on a study released this year. Chen writes that the study found that some pre-existing conditions “rendered patients more susceptible to certain complications no matter how much the physician intervened, and “with mathematical modeling [the study was] even able to predict the degree of susceptibility.” As a result, some physicians “may be tempted to ‘cherry pick’ patients, opting to work with only the healthiest” patients to avoid the risk of treating complications that are ineligible for reimbursements, she writes (Chen, New York Times, 5/27).

by Santosh Rao, staff writer

According to a recent Kaiser Family Foundation study, the federal government will shoulder almost the entire cost of the Medicaid expansion included in the new health reform law. The findings counter concerns that the expansion would harm states’ fiscal health, which some governors and state officials have in part used to justify lawsuits against the overhaul. The study found that the overall federal share of the Medicaid expansion will be between 92% and 95% from 2014 through 2019.

Igor Volsky of “The Wonk Room” thinks states should zip it and start being able to “recognize a good deal when they see one.” He writes that “[t]hroughout the debate, states have complained that the federal government does not completely fund the state portion of the program.” However, he writes that the report finds that “increases in state spending are small compared to increases in coverage and federal revenues [are] relative to what states would have spent if reform had not been enacted.”

Speaking of Medicare, physician Rob Lamberts — who, by the way, wears an awesome hat — writes in “The Health Care Blog” that the program’s prescription drug benefit still has some flaws that are “just plain stupid.” He asks, “Why does the government not allow patients with Medicare part D to use pharmaceutical discount cards?” He continues, ” I know there are probably reasons having to do with discounts not being allowed that are not extended to all Medicare participants, but isn’t that a little silly?” He adds, “As long as the discount is available to all Medicare participants, why can’t they receive help from the pharmaceutical industry?” He continues with, “Come on, you government goof-balls!” He’s folksy, folks.

by Matthew Wayt, staff writer

House Democratic leaders on Thursday, after failing to reach a compromise with members on the cost and provisions of the so-called “extenders” bill (HR 4213), agreed to cut roughly $31 billion more from the $145 billion package in an attempt to secure enough votes for its passage before members leave for the Memorial Day recess on Friday, CQ Today reports. The latest version of the bill would eliminate extensions of COBRA subsidies for unemployed workers and a renewal of additional state Medicaid funding outlined in the 2009 federal economic stimulus package (Rubin/Schatz, CQ Today, 5/27).

On Wednesday, the leadership released a scaled-back bill that includes abridged extensions to expiring jobless benefits, including subsidies to help unemployed residents obtain coverage through COBRA, and would delay until 2012 a 21% cut to physicians’ Medicare payments. The changes cut the bill’s cost from nearly $200 billion to $145 billion, according to Congressional Budget Office estimates (American Health Line, 5/27).

However, Wednesday’s changes were not enough to garner enough votes for passage. Members of the fiscally conservative Blue Dog Coalition refused to sign on to the bill unless further cuts were made. Blue Dogs did not offer specific ideas on how to reduce the cost of the bill, according to CQ Today.

The COBRA subsidies are set to expire on June 1 and the 21% cut to Medicare physician payments will take effect June 2, unless Congress acts (Bolton, The Hill, 5/27).

House Vote Likely on Friday; To Be Held in Two Phases

House Democratic leaders plan to schedule a vote on the new version of the bill on Friday, even though prospects for Senate consideration of the bill before the Memorial Day recess have “vanished,” CQ Today reports (CQ Today, 5/27). House sources say that members plan to hold the vote in two phases: First, a package that includes the unemployment benefits and tax extenders, and second, a 19-month delay to the pending cut to physicians’ Medicare payments.

The two-phase approach would give lawmakers with concerns about approving spending that is not offset the chance to express their disapproval and also support the so-called “doc fix,” which legislators agreed to exempt from pay/go rules earlier this year, CongressDaily reports.

The House would then send the combined package to the Senate, where the bill is expected to remain untouched until members return from the Memorial Day recess (Cohn, CongressDaily, 5/27). Senate Majority Leader Harry Reid (D-Nev.) confirmed the chamber would consider after the recess whatever the House passes on Friday.

Challenges to Senate Passage Continue

CQ Today reports that some Senate Democrats could complicate matters for the bill’s prospects. Some senators have proposed significant changes to a provision related to a tax increase on businesses and venture capitalists, which would force the House to hold a revote. According to CQ Today, House Speaker Nancy Pelosi (D-Calif.) “seemed disinclined” to accept any Senate changes to the provision (CQ Today, 5/27).

Meanwhile, a senior Senate Democratic aide said that Senate Democrats are planning to offer a 14-day extension to the expiring unemployment benefits, COBRA coverage subsidies and freeze on the physician payment cut, The Hill reports. However, Senate Republicans are expected to reject the proposal, as it would add $4 billion to the federal deficit. Republicans plan to make a counterproposal for a short-term solution that would be covered by surplus funds from the 2009 federal economic stimulus package. However, the Democratic aide said that Democrats would reject the proposal because they contend those extra funds should be spent on job creation (The Hill, 5/27).

Lawmakers, Industry Groups Express Mixed Reactions to New Bill

Rep. Raul Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, on Thursday said that the bill had been scaled back to the point that he and other liberal House members might reconsider their support, CongressDaily reports. Grijalva said he welcomed the extension of physician payments but called the proposed elimination of COBRA and Medicaid subsidies “embarrassing and short-sighted.” He said, “We’re Democrats. We’re supposed to stand up for the little guy” (CongressDaily, 5/27).

Meanwhile, representatives for several physician and labor groups continued to lobby lawmakers on Capitol Hill for swift passage of the extenders bill. Some group officials said that further delay on approving the bill would impact hundreds of thousands of U.S. residents who depend on the unemployment subsidies and coverage. Physicians faced with sharp cuts to Medicare reimbursement rates also could be forced to limit the number of Medicare patients they treat or stop accepting Medicare altogether, CQ Today reports (Ethridge, CQ Today, 5/27).

– Santosh Rao

Four months after British investigators concluded that researcher Andrew Wakefield had provided false information in a controversial study that linked childhood vaccines with autism, and he’d shown a “callous disregard” for the children in the study, Wakefield was banned from practicing in the UK. In February, The Lancet medical journal, which published the study in 1998, cited the investigation’s conclusion for its decision to formally retract the study.

On Monday, during an appearance on NBC’s “Today” Show to discuss the UK’s General Medical Council’s decision to ban him, Wakefield defiantly rejected GMC’s decision. He stood by his original findings, even in light of numerous other studies that failed to replicate them, and vowed to continue his research.

http://www.msnbc.msn.com/id/32545640

Other Related Coverage

Earlier this month, “In Case You Missed It” featured the “The Vaccine War,” a 56-minute special on PBS’ “FRONTLINE” that examined the fears of those who believe that childhood vaccine recommendations are out of control and causing various health conditions, and the argument by those who believe that such views are misguided and put the health of the larger community at risk.

More on GMC’s decision: BBC News | PBS’ “Need to Know | American Health Line

by Santosh Rao, staff writer

NIH Director Francis Collins last week proposed a new rule requiring federally-funded investigators to disclose payments they receive from the medical industry if they are above $5,000, instead of the previous $10,000 limit. The “important new rule changes” mark the “first time financial reporting requirements have been overhauled since 1995,” Maggie Mahar opines on “The Health Blog.” Although the new rule “is just the latest in the government’s crusade to being more transparency to biomedical research and medicine, Mahar cautions that the “connections between industry, professional associations, physicians and biomedical researchers are too complex to be unraveled any time soon.” She continues that “frankly, the money provided by industry for research is irreplaceable in the current budget climate.” However, “by strengthening the disclosure process, the government is adding a layer of accountability that could help curb at least the most blatant abuses,” Mahar writes.

In other health news, an editorial in the Canadian Medical Association Journal argues that the ban on blood donations from men who have sex for men “no longer makes sense” and should be lifted, the Los Angeles Times‘ “Booster Shots” reports. While the ban was necessary early in the HIV epidemic, “rigorous screening tests now exist, and rules permit people in stable, monogamous relationships to donate blood even though HIV infection now occurs in a broad swath of people, both homosexuals and heterosexual,” according to “Booster Shots.” The editorial argues that the “current policy is counterproductive in terms of loss of donors, loss of good will, student protests, donor boycotts and lawsuits, among other negative effects.”

by Brittany Hackett, staff writer

In today’s “Interesting Reads,” we look at two very different aspects of physician practices. On one side, we learn that health care providers increasingly are looking to expand and modernize their practices and services with the help of the government. On the other side, we learn how the demands placed on the profession forced one former physician to leave her specialty field.

• “Experts Worry: Could Government Loans To Doctors Raise Health Costs?“: Private and independent health care providers under pressure to modernize and expand their practices and services turned to the government for assistance, tapping into more than $2.5 billion of the $19.6 billion in federal loan money that the Small Business Administration distributed in the past year. The loans program was one of the provisions of the federal economic stimulus package. The stimulus law also made it easier and less costly for providers to receive the loans, which SBA officials said have helped spur the economy. However, some policy health experts have expressed concern that the provision of billions of dollars in loan money could raise the overall costs for health care, because some studies have shown that regions with more hospitals, specialists and diagnostic services tend to have higher health care costs. Recipients of the loans disagree, and say consumers will benefit (Galewitz, Kaiser Health News, 5/26).
• “A Doctor On Why She Left Pediatrics“: In this Newsweek opinion piece, former pediatrician Karen Li explains why she decided 11 years ago to hang up her white coat after 10 years of “making a difference in the lives of children.” Li writes that when the concept of managed care “hit hard,” she and her colleagues no longer had the time or ability to “spend with our patients … prescribe the best medication … send our patients to the best specialist or hospital” or “order all the necessary tests to make a diagnosis.” To Li, “No longer did medicine make any sense,” she writes, adding, “Why would a businessman or, worse yet, the HMO secretary with a treatment algorithm on her desk have any right to tell us what was best for our patients? After all, who had the medical training?” (Li, Newsweek, 5/25).

Meanwhile, the hot health policy issue in Congress right now is the so-called “extenders” bill (HR 4213), which would extend subsidies to help laid-off workers purchase health coverage through COBRA and delay a scheduled 21% cut to Medicare physician reimbursement rates.

• “How The Tax Bill Would Affect Medicare, Medicaid And COBRA Subsidies“: This Kaiser Health News clip examines how the extenders bill, has been in congressional limbo because of lawmakers’ opposition to its cost, would affect these three health care programs (Villegas, Kaiser Health News, 5/26).

by Santosh Rao, staff writer

The federal government will shoulder almost the entire cost of the Medicaid expansion established in the new health reform law, according to a recent Kaiser Family Foundation study, the Washington Post reports. The findings counter concerns that the expansion would harm states’ fiscal health, which some governors and state officials have used to partially justify lawsuits against the overhaul.

The expansion — set to begin in 2014 — would increase the nationwide eligibility threshold for the program to 133% of the federal poverty level, which is $14,400 for a single adult or $29,300 for a family of four. The law states that the federal government will pay 100% of the cost of covering all newly eligible people through 2016 and pay 90% through 2020.

The study forecasts that the overall federal share of the Medicaid expansion will be between 92% and 95% from 2014 through 2019. According to the study, federal spending on Medicaid overall will increase by 22% during those years, while state spending on the program will increase by just 1.4%. The study also found that states that have previously limited Medicaid enrollment will see dramatic increases to their Medicaid population, but the federal government will mostly cover the cost of these newly eligible residents. For example, Texas’ Medicaid enrollment is predicted to increase by 45%, but the state’s spending on the program is expected to go up by just 3%. Conversely, states that have worked to expand Medicaid in recent years will see little change under the new law.

The study assumed a relatively low enrollment rate by those who will be eligible in 2014. However, the study also included projections assuming larger enrollment and found that higher participation in the program still would produce only small increases in state spending.

Study co-author John Holahan said the small increase in state costs also could be canceled out by savings from no longer needing to subsidize the care of uninsured people. Therefore, he said, complaints from states about the financial burden of the expansion are “absurd.” He said states mostly “come out ahead” under the expansion.

Alan Weil, executive director of the National Academy for State Health Policy, said some states might be contesting the expansion because they are trying to hold down all spending and because they might be less committed to Medicaid in general. According to the Post, Weil provided an allegory: if a man is offered a $200 pair of shoes for $20, he will accept them only if he likes the shoes and only if he has $20 (MacGillis, Washington Post, 5/27).

– Matthew Wayt

On Monday, HHS attorneys asked a federal judge in Virginia to dismiss a lawsuit filed by state Attorney General Ken Cuccinelli (R) challenging the constitutionality of the new health reform law. Some bloggers make the case for HHS’ case.

Igor Volsky on “The Wonk Room” notes, “Constitutional scholars have warned that the state-based lawsuits will have to overcome two very significant hurdles: 1) the lack of standing and 2) the Tax Injunction Act, which forbids courts from ‘restraining the assessment or collection of any [federal] tax.’” According to Volsky, “If the Court accepts these arguments, the state’s case is in grave jeopardy.”

According to Andrew Cohen of Politics Daily, “The standing argument is a strong one for the feds.” Cohen says that it gives the U.S. Supreme Court “an ‘out’ should they wish to dispose of this litigation without actually resolving the substance of the dispute over the constitutionality of the legislation.” After that argument, the “feds next moved to their main line of constitutional defense — the Commerce Clause of the Constitution, which has been interpreted over the years to broadly permit federal regulation over commerce affecting more than one state,” Cohen writes, adding that they then “closed with a more general argument” that “the new law is constitutional as a valid exercise of the executive branch’s constitutional power to ‘lay and collect taxes’ and ‘provide for the common defense and general welfare.’” According to Cohen, HHS argument is essentially that “Virginia shouldn’t butt into the relationship between the Congress and its constituents.”

– by Julia Moss, staff writer

Democratic leaders in the House and Senate on Tuesday continued their efforts to corral enough votes to ensure passage of the so-called “extenders” bill (HR 4213) before Congress adjourns for the Memorial Day recess on Friday, CQ Today reports. The bill includes extensions to unemployment benefits, including subsidies to help unemployed U.S. residents help purchase coverage through COBRA (Rubin/Schatz, CQ Today, 5/25). It also would delay a 21% cut to Medicare physician reimbursement rates, scheduled to take effect on June 1, and increase physicians’ payments by nearly $60 billion over the next three years (American Health Line, 5/21).

House Ways and Means Committee Chair Sander Levin (D-Mich.), who negotiated a compromise on the bill with the Senate Finance Committee, said House Democrats are waiting for the Congressional Budget Office to release final analysis of the package before confirming their support. In the Senate, Majority Leader Harry Reid (D-Nev.) said the chamber would remain in session until work on the bill had been completed, even though some Democrats and Republicans remain undecided about the bill, CQ Today reports (CQ Today, 5/25). “We’ll have the votes” to pass the bill, Reid said (Cohn, CongressDaily, 5/25).

Cost, Deficit Increase Remain Key Issues

The bill’s cost, reportedly about $200 billion, has become a top concern for many lawmakers, Roll Call reports. Last week, a CBO analysis found that the bill would add nearly $134 billion to the deficit over 10 years (Pierce/Dennis, Roll Call, 5/25). Although the bill complies with the pay/go rules enacted earlier this year, a large portion of the bill’s spending has not been offset because it has been declared as emergency spending or is exempt under the pay/go law.

According to CQ Today, many conservative and first-year Democrats are “wary” about the cost and the potential increase to the deficit. In addition, moderate Republican Sen. Olympia Snowe (Maine), who is a likely supporter of the bill, said she had concerns about the lack of offsets. “At some point you draw lines on some of these issues,” she said (CQ Today, 5/25).

Other Lawmakers Look at Less Costly Payment Fixes

Senate Finance Committee Chair Kent Conrad (D-N.D.) and other lawmakers are reportedly pushing for a two-year delay to the scheduled physician payment cuts, The Hill‘s “On the Money” reports. Proponents of the two-year delay say their plan would cost $27 billion less than a three-and-a-half year delay (Heflin/Pecquet, “On the Money,” The Hill, 5/25).

Other lawmakers have said that a shorter term fix to Medicare physician payment cuts, such as delaying the scheduled cut through December, would save about $57 billion. Those lawmakers noted that a bipartisan deficit commission will be created by the new health reform law at the end of the year could then decide the future of the payments. However, other lawmakers and observers have noted that delaying a permanent solution to the payment issue would make it more costly to resolve at a later time (Cohn, CongressDaily, 5/26).

However, such shorter term solutions would “keep the issue as a political hot potato for future” sessions of Congress, “On the Money” reports. Meanwhile, the scaled-back propositions have “set off a lobbying battle” involving AARP and physician groups, which have been pushing for a long-term fix. On Tuesday, the groups issued warnings that failing to support a long-term provision could result in a loss of votes in the upcoming midterm elections (“On the Money,” The Hill, 5/25).

Back-Up Plans Discussed Privately

CQ Today reports that Democrats are not publicly discussing any back-up plans for the legislation if they are unable to secure enough votes for passage. However, Senate Republicans are preparing for a short-term extension of the bill’s health care and unemployment benefits, which could be offset by surplus funding from the 2009 federal economic stimulus package (CQ Today, 5/25). House Majority Leader Steny Hoyer (D-Md.) has acknowledged that a one-month extension of the expiring programs could be a last resort (CongressDaily, 5/26).

– Santosh Rao