Medical Economics Feature - May 2010
What It Means: TMA Analyzes Pros and Cons of Health System Reform Law
Tex Med. 2010;106(5):23-28.
By Ken Ortolon
Congressional passage of health system reform sent physicians and patients scrambling to examine the fine print to determine how the new law will impact health care for all Americans.
While the Texas Medical Association remains concerned that the bill, the Patient Protection and Affordable Care Act (PPACA), doesn't fix the flawed Medicare physician payment system, the task at hand now is to help physicians and patients understand the changes that are to come.
"Frankly, we cannot allow our political views or the new law to get in the way of what medical care is all about: physicians caring for our patients," then-TMA President William H. Fleming III, MD, said shortly after President Obama signed the bill. "Patients and their doctors must work together to take advantage of this change. We cannot waste this opportunity to improve the access and care we provide our patients. We also must keep a constant eye out for opportunities to improve the new law."
TMA launched a massive new education campaign to help Texas physicians and their practices survive and thrive in the new health care environment. And, the association began an extensive, detailed analysis of the measure. That may take weeks to complete, given the more than 2,000 pages in the bill. June's Texas Medicine will have more information on the bill, but here's what we know right now.
TMA's preliminary analysis of the health system reform bill found many items it believes would benefit Texas patients.
First, the bill requires health plans to cover preventive services such as vaccinations and screening tests without charging a copay or deductible.
"Flu shots, childhood immunizations, and cancer screenings will keep us all in better health," Dr. Fleming said. "And, in the end, they keep down the cost of medical care."
Second, uninsured Texans with current illnesses can now get coverage. A new insurance pool will allow the uninsured to buy coverage if they have a preexisting condition.
"It will allow uninsured Texans - even cancer survivors or those with chronic illnesses like diabetes or high blood pressure - to get the coverage they need," Dr. Fleming said. "They will be able to receive care and ensure their health doesn't get even worse."
Third, coverage should be easier to understand. Summaries and simple labels replace volumes of insurance company legal jargon, which should make it easier for patients to determine if certain services or treatments are covered or if they can afford the copay or deductible.
TMA officials say many of the other consumer protections contained in the law (including the ability of parents to retain their dependent children on family plans until age 26), which take effect in September, and new medical loss ratio reporting requirements for health plans should prove beneficial.
Also, $11 billion in federal funding to expand federally qualified health centers and initiatives to promote more prevention in Medicaid also appear positive. Those initiatives include financial incentives for states to cover evidence-based preventive health services among their adult enrollees and a new requirement that states adopt comprehensive smoking cessation coverage for pregnant women in Medicaid.
The bill also establishes a new loan repayment program for pediatric subspecialists, excludes from gross income the money paid to physicians participating in state loan repayment programs, and provides grant money to help states reduce the incidence of teen pregnancy, an area where TMA officials say Texas clearly needs some help.
But TMA officials cautioned that the actual impact of many of the insurance and other reforms may not be known until federal agencies begin the rule-making process that will be necessary to implement the law.
Unfortunately, TMA's preliminary analysis also found a few things the association believes will be bad for Texas patients.
First, the bill failed to fix Medicare's Sustainable Growth Rate formula, which has been forcing down physician payments in that group for nearly a decade. In fact, Congress failed to halt a scheduled 21.3-percent payment cut from taking effect April 1 before it left for its spring recess. (See "Medicare Melting Down.")
Medicare is the largest government health plan, and TMA believes it is the foundation for many of the changes the new law will bring.
"The current system is forcing some doctors to make a horrible choice to stop seeing Medicare patients if they want to keep their practices open in order to see any patients at all," Dr. Fleming said. "We must work together to stop the Medicare meltdown."
Second, TMA is concerned the new law will drastically increase government and insurance company interference with the patient-doctor relationship. One example of this is the quality improvement provisions in the bill that call for the secretary of Health and Human Services to develop quality measures, including outcome measures, for use in federal programs. TMA officials say those quality measures could actually create disincentives to provide good care if they are not developed properly with physician input.
"As the bureaucrats work to implement the new law, TMA will fight to ensure doctors and patients can make health care decisions that are best for our patients," Dr. Fleming said.
Finally, the new law failed to enact meaningful medical liability reforms, and there is concern that the Texas liability reforms passed in 2003 could be in jeopardy.
Dr. Fleming says those reforms made it easier for sick and injured Texans to get the care they need and brought high-risk specialists, such as emergency physicians and obstetricians, to dozens of rural and medically underserved parts of the state that previously had none.
"Physicians who once turned away high-risk patients for fear of a lawsuit are now expanding their practices and offering new lifesaving treatments," he said. "We need to make sure nothing in the new law takes away the tremendous progress we've made in Texas."
Bob Fields, president and chief executive officer of the Texas Medical Liability Trust (TMLT), says his company has two major concerns about the impact health system reform could have on Texas' medical liability law.
First, TMLT believes the new law will lead to federal standards of medical care that could open physicians to liability if they fail to do everything called for in those standards.
Second, TMLT fears federal agencies through rule-making under the law will have the ability to preempt state liability statutes.
"There are other areas of the bill that give protection against preemption," Mr. Fields said. "But they would not do it in these areas. And the mere fact that in the bill there is protection against preemption in other areas will give the trial attorneys an advantage over us."
The Continuing Analysis
TMA officials were still analyzing the new law in late March, but several other provisions in the bill could significantly impact physicians and patients. The jury was still out, however, on just how beneficial some of those provisions will be.
One of the most significant provisions is the creation of state health insurance exchanges, which is the major new insurance product provided under the law.
Qualified health plans could offer coverage through a state exchange if they meet a minimum level of "essential benefits." Those would include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drug coverage, laboratory services, and more.
Plans in the exchange would be classified as bronze, silver, gold, or platinum depending on the actual value of the benefit being provided.
The exchanges, however, will not be implemented until 2014.
Lee Spangler, JD, TMA vice president for medical economics, says the new law also includes some significant changes in the Medicare fee schedule specifically related to the geographic practice cost index. TMA was still analyzing those changes, but it is believed they could provide higher fees for some physicians in Texas. Those changes are retroactive to Jan. 1.
Another provision that could have a positive impact requires large group health plans to spend at least 85 percent of their premium dollars on health care services. Smaller group plans would have to spend 80 percent of those dollars on health care.
While those provisions begin immediately, an additional provision that takes effect in 2011 requires plans to make refunds to employers or policyholders if they fail to spend the required amount on health services. The refund would equal the difference between the required level and actual expenditures.
Also included in the law is a provision requiring the secretary of Health and Human Services to create a Physician Compare Internet Site on physicians enrolled in Medicare that would rate their quality and efficiency.
The site would use Physician Quality Reporting Initiative measures, as well as outcomes assessments, efficiency measures, patient satisfaction measures, and assessments of safety and effectiveness of care.
Data in the physician ratings must include care not only for Medicare patients but also for those covered by other payers. Physicians will be able to review their ratings before they become public.
The law directs that the site be launched by Jan. 1, 2011, with information on physicians in the Medicare program. And the secretary must implement a plan by Jan. 1, 2013, to make information on physician performance available to the public.
Another provision of the new law allows health plans to offer coverage across state lines but only if they are part of a health insurance exchange. Insurers who offer such plans must be licensed in each state involved and must meet all requirements of state laws that are not inconsistent with federal law.
TMA was still analyzing how this provision could impact coverage, but at a minimum it seems clear the law will add to insurance companies' regulatory burden because they will have to meet both federal and state requirements. Also, the law allows states to require plans in the health exchanges to cover services not required by federal rules, but states would have to pay the additional premium for their citizens to receive that coverage.
Also under the law, health plans cannot exclude nonphysician providers, such as chiropractors, from their networks based solely on the type of health care license they hold. That provision takes effect Jan. 1, 2014.
While TMA worked on its in-depth analysis of the health system reform law, other organizations were doing the same. The Washington, D.C.-based National Partnership for Women & Families says the new law has important coverage for women, including screening services such as mammograms and Pap smears, coverage of maternity care, and expanded coverage for low-income adult women under Medicaid.
But coverage expansions contained in the new law will not come without a price.
The political newsletter Texas Weekly reported discrepancies over estimates on how much health system reform will cost Texas.
Texas Health and Human Services Executive Commissioner Tom Suehs has estimated that reform would cost the state more than $27 billion between 2014 and 2024, a $3 billion increase over his previous estimate. The Congressional Budget Office, however, put the cost at $1.4 billion between 2010 and 2019. Texas Weekly said Austin's Center for Public Policy Priorities estimates the federal reform would increase the state's insurance rolls by 1 million adults, but cost Texas next to nothing until 2017.
Meanwhile, an analysis of the law done for the Associated Press by RAND Health concluded that insurance premiums for Americans younger than 35 likely will rise 17 percent, or about $42 per month. That is primarily because the new law limits how much insurers can charge older Americans, leaving younger customers to pick up the difference, RAND says.
And, legal challenges were springing up across the country.
More than a dozen state attorneys general, including Texas Attorney General Greg Abbott, have joined a lawsuit in Florida that challenges the constitutionality of provisions requiring Americans to purchase health insurance.
The lawsuit contends the new law infringes upon Americans' constitutionally protected individual liberties, encroaches upon the state's constitutionally guaranteed sovereignty, forces states to spend billions of additional dollars on entitlement programs, imposes an unconstitutional tax, and violates the Tenth Amendment to the U.S. Constitution, which says all powers not granted to the federal government are reserved to the states.
"No public policy goal - no matter how important or well-intentioned - can be allowed to trample the protections and rights guaranteed by our constitution," Attorney General Abbott said in a news release.
The Virginia attorney general filed a similar lawsuit. And, the Association of American Physicians and Surgeons (AAPS) became the first medical society to sue to overturn the newly enacted health care bill.
"If the PPACA goes unchallenged, then it spells the end of freedom in medicine as we know it," said Jane Orient, MD, AAPS executive director. "Courts should not allow this massive intrusion into the practice of medicine and the rights of patients."
The AAPS suit seeks to enjoin the government from promulgating or enforcing insurance mandates.
Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by e-mail at Ken Ortolon.
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