2009-06-25

The debate over health-care reform continues in Washington. In the House of Representatives, the Committees on Education and Labor, Ways and Means, and Energy and Commerce have released the full text of their combined “Tri-Committee” reform proposal (summary). The proposal is comprehensive, addressing issues of coverage, quality of care, public health and costs. The bill would provide for a public insurance option to compete against private insurers, emphasize workforce development in primary care and nursing, make significant changes in Medicare and Medicaid, and invest in public health.

Significantly, the House proposal would eliminate the current sustainable growth rate (SGR) deficit and create two separate conversion factors, one for evaluation, management, and prevention services and another for all other services starting in 2011. The House proposal provides an update in 2010 based on the Medical Economic Index, estimated by the Centers for Medicare & Medicaid Services to be 1.01 percent. In addition, the bill would call for an added 5 percent payment for services provided in an efficient area (a county or equivalent in the lowest fifth percentile of per-capita spending) in 2011 and 2012. Additional reimbursements of 5-10 percent would also be provided to primary care physicians starting in 2011.

Finally, the House bill would initiate a pilot program of Accountable Care Organizations, which would typically be a group of physicians or possibly a hospital that is responsible for the level of spending and quality of care provided to their patients. The specific structure of such pilot organizations would be left to the discretion of the Secretary of Health and Human Services.

In the Senate, Democrats have encountered difficulty with the Congressional Budget Office (CBO), which estimated that a preliminary draft of a proposal introduced by Senator Edward Kennedy (D-MA), Chair of the Senate Committee on Health, Education, Labor, and Pensions, would cost more than $1 trillion over 10 years while still leaving many Americans uninsured. A proposal by Senator Max Baucus (D-MT), chair of the Senate Finance Committee, was scored at an even higher $1.6 trillion price. Democrats have emphasized that the CBO’s estimates are based on draft proposals that lacked key cost-containment provisions at the time they were submitted; however, the unexpectedly high cost has created a political speed bump, and it is unclear what shape final legislation will take in the Senate, or how concerns about cost will affect efforts to fix physician reimbursement under Medicare.

Several Republican legislators have begun releasing their own health reform proposals. The House Republican Tuesday Group's "Medical Rights and Reform Act" would, among other things, repeal the SGR formula and reform medical liability. The Health-Care Solutions Group, which is led by Representative Roy Blunt (R-MO), released an outline of proposed insurance reforms. Details on these proposals remain sketchy, and given Republicans’ minority status in both houses of Congress, it is unclear what effect they will have on the overall debate.

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