Healthcare
Reform:
What the new law really
says
Jill Q. Vecchio, MD
Docs 4 Patient Care
June 6, 2010
My Sources:








HR 3590, Reconciliation and Congressional
Research Service Summary
Congressional Budget Office website
Galen Institute research and sources
Meetings with Congressmen and
congressional staffers
Kaiser Foundation “Health News”
Center for Medicare and Medicaid Services
American Medical Association
National Assoc of Health Underwriters
Who are the Uninsured?
Facts…





The US has the best healthcare in the world
No one is refused healthcare in the US
Private insurance and Medicare subsidizes
billions in free care each year
The Healthcare industry accounts for 1/6 of US
economy--IN A GOOD WAY!
Every doctor’s office is a small business
Facts…




What we charge and what we get paid are two very
different amounts!
Reimbursements are based on Medicare and
providers lose money on Medicaid and Medicare in
many cases
Medical reimbursements have been decreasing and
patient volumes are increasing—we are doing more
work for less money every year
Malpractice premiums and risk of lawsuits increase
every year (Ob/Gyn malpractice premiums in
Colorado are over $100,000 per year)
Doctors and Patients
all believe Healthcare
Reform is needed
But is this the right “reform”???
Typical Process Bill to Law




House originates legislation
House passes (simple majority), goes to
Senate (needs 60 votes)
If Senate passes, all done. If Senate
makes own version, goes to
Conference Committee(20 members)
“Cleaned up” bill goes back to House,
then Senate for passage to law
How HR 3590 Bill Became
PPACA Law










Started as housing bill passed by House HR3590
Changed by Senate into healthcare bill
Passed by Senate
Scott Brown elected
House forced to pass Senate bill or no healthcare reform
House passed bill 219/212
House originated Reconciliation Bill to fix HR3590
Senate made changes and passed with simple majority
under “Reconciliation” rule
House passed revised Reconciliation bill
Everyone went home for Easter Break
In Other Words…



This bill (HR 3590) was never meant to
be the LAW
Multiple contradictions
Poorly written by legislative standards
Medicare



Part A: Hospitalization
Part B: Outpt services (in general)
Part C: Medicare Advantage (MA): private
policies subsidizes by fed. govt.



Fed. Payments decrease over next 10 yrs
Part D: Prescription drug coverage
“Medigap”: private insurance, NOT MA, aka:
Medicare Supplement Insur., covers co-pays,
deductibles for Part A
States

Mandate what medical services must
be covered by private and public
health insurance



Each state is different
Insurance premiums reflect these differences
States execute Medicaid

Medicaid paid mostly by states with federal
subsidies
Remember…
ALL new costs are either paid by
taxpayers directly or passed on to
them indirectly!
Cost Recognition
Exercise
States to businesses and taxpayers
Employers to employees
Businesses to customers
Non-taxpayers are employees and customers too
Let’s get to the
Law…
“Immediate Improvements”
Title I- Subtitle A (starts w/in 6 mos.)



No lifetime limits or annual limits
Can’t rescind coverage
Must cover, with no cost sharing/deductibles, for:






Specified preventive svcs
Rec’d immunizations
Rec’d women/children preventive svcs
Dependent coverage up to 26 y/o, married or
unmarried
Hospitals must make public list of charges
Secr HHS to set up review of “unreasonable increases in
premiums”
“Immed. Actions to Preserve and
Expand Coverage”
Subtitle B

Estab. Temporary High risk pool program for
pre-existing cond. Until Jan 2014




but Fed funding to most states for this will run out in
2012
CO already has hi risk pool: Care Colorado
To be replaced by Amer. Health Benefit
Exhange (“Exchange”=“Xchg”)
Sets up Electronic Health Care Transactions
provisions and estab penalties for noncompliance (Fed EMR database)
Healthcare Exchanges
Must be govt agency or nonprofit estab by state
Must offer “qualified plans” only
Must approve premium increases
States can require additional mandates
Requires states to pay costs of addl mandates
Employers can choose which plan to offer their
employees
Employees can choose to get plan thru exchange
rather than thru employer (big penalty to
employer)
“Quality Health Insurance
Coverage for All Americans”
Subtitle C

Discusses “grandfathered plans”





most of allowances for these were eliminated in the
Reconciliation
All plans must contract w all providers—no PPOs
Limits cost-sharing of premiums by employers
Universal Mandates “essential health benefits
package”—will eventually apply to self-insured as
well
All employers will eventually be required to enroll all
employees in govt-sponsored long-term care plan
“Qualified Health Plan”
Subtitle D
ALL plans must include:
emergency svcs
hospitalization
maternity and newborn care
mental health
substance abuse
prescription drugs
preventive and wellness services
chronic disease mgmt
pediatric services
oral and vision care
Limits cost-sharing and deductibles
Abortion


“Permits” states to prohibit abortion coverage
in Xchg plans
“Prohibits use of federal funds for abortion
services”



But fed subsidy used for Xchg plans???
Requires separate accounts for payment of
abortion services
Bottom line: tax dollars can be used to fund
Abortion
“I’m ready for
my free
healthcare now”
Cost Comparison for Plans
sources: CBO, Heartland Institute, Galen Institute

Plan costs by 2016: (all plans have same
coverage) CBO





As of 2005:



“Bronze”@ 60% actuarial:
$5000/ 12500
“Siver”@75%
$5800/15200
“Gold”@85% (most empl)
$7800/19200
“Platinum” @90% (not scored)
All plans:
HSA + hi-deductible:
Mass. Care policy 2010

Avg policy for family 4
$4024/10880
$2772/6955
$15-20000
“Affordable Coverage Choices for
all Americans”
Subtitle E




Allows refundable tax credit for low income households
to help pay premiums
Allows for reduced out-of-pocket expenses for low
income
Secr HHS to “estab program to determine eligibility of
applicants for participation… based on citizenship or
immigration status” and “provides for confidentiality of
applicant information”
“Prohibits any federal payments, tax credit or costsharing reductions for indiv who are not lawfully present
in US” (doesn’t say they can’t participate, doesn’t
prohibit state funding)
“Individual Responsibility”
Subtitle F




“Imposes penalty for failure to maintain coverage
beginning in 2014 ($95 2014 to $695 by 2016 or 2.5%
of income)”
“EXCEPT for certain low-income indiv who cannot
afford coverage, members of Indian tribes, and
indiv who suffer hardship. EXEMPTS…indiv who
object to health care coverage on religious
grounds, [illegal immigrants] and incarcerated.”
ISN’T THIS THE POINT OF THIS WHOLE EXERCISE???
Insureds will continue to subsidize these pts.
Insurance Companies
Must accept pre-existing conditions
can’t charge higher premium for these
indiv
Can’t drop anyone from coverage
Must issue coverage to anyone who
requests it at any time
Can’t raise premiums without govt
approval
Mass. Experience with Individual
Mandate










Indiv choose to pay penalty rather than premiums
When they get sick, they are guaranteed issue of “insur”
When they are well again, they drop insur
Insur co. are only insuring those who are hi-risk/already sick
Premiums skyrocket—no risk sharing to be had
Those responsible folks and employers w insur can’t afford
premiums—drop insurance
Insurance cos. request premium increase from govt
Govt says “no”
Insur co. go out of business
Govt steps in with “single payer” system
Mass Experience cont’d











Expansion of Medicare/Medicaid to cover all indiv
Reimbursement to providers doesn’t cover costs
Providers stop participating in MM
Pts can’t find provider or have very long wait times
No co-pay for ER visits
Pts go to ER instead, even for routine care
ER costs are higher than routine visit costs
ER visits incr 30%
Healthcare costs increase 27%
Govt requires providers to accept whatever reimbursement
they offer as a requirement for licensure
Romneycare Expenses shared by state/fed 50/50—not w/
Obamacare
Massachusetts Utilization
Mass has the most doctors of any
state in the U.S. AND the longest
wait times to see a physician in
the U.S.
“Employer Responsibilties”
Must provide notice about option of Exchange, avail. of
tax credit
Employer is fined if an employee opts for Xchg while it
offers its own plan-- $2000 per total number of
employees!!!
Employer cannot penalize, discharge or discriminate ag.
an employee that opts for Xchg
Seasonal and part-time empl. counted in total number of
employees (small vs. large employer)
Extensive reporting required—1099, monthly reporting
“Miscellaneous Provisions”
Subtitle G

Requires HHS Secr. to publish on HHS
website list of all authorities provided to
Secr. under this Act—STILL WAITING!!


Secr. HHS is APPOINTED, not elected
Doesn’t penalize any entity that
provides assistance for the death of an
individual such as by assisted suicide,
euthanasia or mercy killing
“Role of Public Programs”
Subtitle A

Expands Medicaid



Fed govt pays for new enrollees, but only from 2014
to 2016, then subsidy decreases
“Allows” states to expand Medicaid further at
their own expense
Prohibits a state from requiring applicants for
Medicaid to enroll in employer’s sponsored
coverage (hence, employers are fined
again)
READY FOR
THIS???
It just keep getting better…
“Improving the Quality
and Efficiency of
Health Care”
Title III, Subtitle A—”Transforming the Health
Care Delivery System”
Pt. I—”Linking Payment
to Quality
Outcomes…”
“Improving the Quality and Efficiency of
Health Care”
Title III, Subtitle A—”Transforming the Health Care Delivery
System” Pt. I—”Linking Payment to Quality Outcomes…”



Extends and expands “Quality reporting
system” for hospitals and providers and
establishes penalties
Establishes a “value-based payment
modifier” under physician fee schedule
based upon the “quality of care furnished
compared to cost”
Subjects hospitals to “penalty adjustment to
payments for high rates of hospital-acquired
conditions”
“National Strategy to Improve
Health Care Quality”

Directs Secr HHS, “thru a transparent
collaborative process” to use “Comparative
Effectiveness” data


E.g. UK uses $44,000/yr of expected life remaining to
determine whether a given tx is cost-effective for pt
Directs President and Secr. HHS to develop
outcome and measurement criteria for all
providers for any given program or medical
condition
Cont’d

CMMS to test “innovative payment and
service delivery models” to reduce
costs, such as Payment Bundling during
an episode of care around a
hospitalization

Hospital receives total bundle payment and
distributes proceeds to various provider
entities
Improving Medicare for Patients
and Providers
Subtitle B





Cert Nurse Midwife reimb increases from 65% to 100% of
physician reimbursement
Decreases over time Medicare benefits including: longterm care, inpt rehab, inpt psych, dx lab, dx imaging,
home health, skilled nursing and nursing home care,
hospice, surg center coverage, dialysis, hospitalization
for low income seniors…
Allows for bonus reimb payments to rural/underserved
area providers and facilities for 2-5 yrs
Increased taxes on brand pharmaceuticals
Increases number of and access to community health
centers
Provisions Related to Medicare Part C
Subtitle C

Medicare Advantage


Decreases federal subsidy significantly over
time
Decreases coverage for multiple services
“Medicare Part D Improvements for
Prescription Drug Plans…”
Subtitle D



Requires drug manufacturers to participate in
the “Medicare coverage gap discount
program”
Allows Secr of HHS to assign or reassign
individuals to a drug plan different from that
in which they are enrolled
“Requires Part D enrollees who exceed
certain income thresholds to pay higher
premiums”. IRS to disclose information.
“Health Care Quality Improvements”
Subtitle F

“Agency for Heathcare Research and Quality
(AHRQ) to conduct or support research on
the development of tools to facilitate
adoption of best practices that improve the
quality, safety, and efficiency of health care
delivery services.”

These are the same folks that gave us the 2009
Mammography Screening Guidelines that would
reduce the number of pts getting screening
mammograms by more than 60%.
“Modernizing Disease Prevention and Public
Health Systems”
Title IV, Subtitle A


Establishes multiple councils, advisory groups,
public health funds, media campaigns,
federal website tools…
Requires Director of AHRQ to convene the
Preventive Services Task Force “to review
scientific evidence related to the
effectiveness, appropriateness, and costeffectiveness of clinical preventive services
for the purpose of developing
recommendations for the health care
community”
“Creating Healthier Communities”
Subtitle C


Authorizes Secr HHS to contract exclusively
with vaccine manufacturers for purchase
and delivery of vaccines for adults.
Retail food chains of more than 20 locations
must disclose on the menu/menu board:




No. calories in menu item
Suggested daily caloric intake
Availability of addl nutritional information
Includes vending machine operators
Physician Workforce


Currently operating an annual deficit of
physicians of 10,000 (35,000 retiring, only
25,000 graduating)
Up to 45% of practicing PCPs would
retire or quit practice if HR3590 was put
into effect (IBD poll)
Investors Business Daily
“Increasing the Supply of the Health Care
Workforce”
Title V, Subtitle C

Multiple new and revised programs to
encourage public health education,
peds, primary care, nursing, dentistry,
geriatrics, social work, psych, nursemidwifery, family nurse practitioners.
 No
mention of specialty MD
training!
“Supporting the Existing Health Care
Workforce”
Subtitle E



“Revises the allocation of funds to assist
schools in supporting programs…in health
professions educ for underrepresented
minority individuals”
Incentives for gen surgeons and
PCPs/providers that work in underserved
areas
Reconciliation increases reimb for Medicaid
services by PCPs to 100% of Medicare for 2013
and 2014
“Physician Ownership and Other
Transparency”
Subtitle A



Prohibits physician-owned hospitals that do
not have a provider agreement by Dec. 31,
2010 to participate in Medicare (some
exceptions)
Requires drug, device, biological and med
supply manuf to report to HHS “transfers of
value” made to a provider as well as info on
physician ownership or investment interest.
Establishes penalties.
Prohibits physician self-referrals
“Patient-Centered Outcomes
Research”
Subtitle D



Establishes Patient-Centered Outcomes
Research Institute
“Prohibits Secr. HHS from using evidence and
findings from the institute to make a
determination regarding Medicare coverage
unless such use is through an iterative and
transparent process…”
Establishes w/in IRS the “Patient-Centered
Outcomes Research Trust Fund” w/ funds
from Medicare Trust Fund
Revenue Provisions
Title IX, Subtitle A—Revenue Offset Provisions





Imposes excise tax of 40% on “Cadillac” plans—
exceeding $10,200/27,500 starting in 2018
 Reconciliation bill incr. the original amts and delayed
implementation to 2018, which will decr. Govt
revenue by 80% from orig bill
 Labor unions are exempt
Increases HSA penalty for distribution from 10% to 20%
Limits annual salary reduction contributions to $2500 per
year for HSAs
Imposes annual fees on manuf of drugs, medical
devices and insur companies
Eliminates tax deduction for expenses for employers
who offer Medicare Part D coverage (Caterpillar, ATT)
Cont’d



Increases hospital insurance tax rate by 0.9% for
individual taxpayers earning over $200,000/250,000 after
12/31/2012.
Reconciliation adds 3.8% “net investment” income tax
included in Medicare taxable base for $200,000/250,000
Allows “50% tax credit for investment in any qualifying
therapeutic discovery project…” (but physician
ownership or investment in drug, device biological or
medical supply manuf is monitored and must be
reported to HHS)
Cont’d

U.S. Sentencing Commission to
increase federal health care offense
levels


“Provides that a person need not have
actual knowledge…nor specific intent to
violate [health care law] in order to commit
health care fraud.”
Expands the scope of violations constituting
an offense
Cont’d
 Authorizes
Secr. HHS to
adjust reimbursements to
providers based upon
“quality measures”
Something to look forward to…

Over 250,000 pages of new regulation
resulting from this law.

16,000 new IRS agents to monitor and
enforce coverage mandates and
additional taxes/fees
Tort Reform
 Prohibits
limits on Punitive
Damages
 Prohibits limits on Lawyer fees
Oh yeah…

Amends Internal Revenue Code to
impose a 10% excise tax on indoor
tanning services beginning July 1, 2010
Reconciliation
Education and Health
Title II

Moves management and collections of
govt grants for higher education to
Dept of Education (feds)



Increases revenues to fed by removing from
private institutions
Revenues used to defer costs of PPACA
Entities servicing these grants must be nonprofit
Congressional Budget Office
 Assumes
that everyone will
“play by the rules”
 Please…This
IS America!!
159 new agencies,
programs, grants, funds,
task forces, commissions,
boards…
Want to know how the
Congressional Budget office scored
these new entities?
$0
“Unintended” Consequenses


Dr. practices already selling out to
hospitals
Disincentives to develop new drugs,
medical devices, technologies


90% of drugs, medical devices and
technologies are developed in U.S.
Where will the world go for their
healthcare???
European/Canadian
Experience





Longest wait times for diagnosis and care
Poorest cancer survivorship
Single payer system can’t keep up with needs
Private sector provides crucial backup
(Canada doesn’t offer private option)
Now having multinational
conferences to re-establish private
insurance industry
Germany



World Socialist Web Site 3/18/2010 :
Doctors working 70-80 hrs/wk
“Mandatory overtime” w/ no xtra pay




Doctors paid on avg $17/hr, much less than
other skilled workers
22,000 drs voted to strike (doctor union)
No support from govt. officials
Doctors can’t unionize in US
Center for
Medicare and
Medicaid Services
CMMS covers over 100 million
Americans, has an annual $800 billion
budget (before PPACA), larger than the
defense department's and is the 2nd
largest insurance company in the world
Donald Berwick, MD
Obama’s Choice for CMMS




Recently “knighted” by Queen Elizabeth II for his role in UK’s
National Healthcare System
"I am romantic about the NHS. I love it."
"The chronically ill and those toward the end of their lives are
accounting for potentially 80% of the total health care bill out
there. There is going to have to be a very difficult democratic
conversation that takes place. The decision is not whether or
not we will ration care. The decision is whether we will ration
with our eyes open."
"There needs to be global budget caps on total healthcare
spending for designated populations (ie-rationing)"
Berwick, cont’d.


"Any healthcare funding plan that is just,
equitable, civilized and humane, must
redistribute wealth from the richer among
us to the poorer and the less fortunate.
Excellent healthcare is by definition
redistributional".
"The simplest way to reach these goals is
with a single payer system."
As of 5/17/2010…



20 States have legislation pending arguing
against the individual mandate or state obligations
arising from PPACA
CBO has increased estimated costs (which are
already massively underestimated) to over $1
Trillion, thus eliminating the original estimation of
a “deficit reduction”
Still no permanent “Dr. Fix” to SGR—as of today,
this would add $246 Billion to pricetag, by 2015-$500B
As of 5/28/2010 (Kaiser Health
News)



House approved $22B 19-mo. Temp fix to
Medicare providers (Dr. fix), Senate will
address after June 7
HHS sent out brochure to Medicare pts:
new law will “preserve and strengthen”
Medicare
House Republicans intro’d bill to repeal
PPACA. Prob’ly won’t go to vote
Kaiser Health News

661 businesses surveyed:
 94% say PPACA will incr. their costs
 88% plan to pass costs on to
employees
 74% will decrease benefits
Lawsuits

20 states in process






Individual Mandate
Massive increase in state obligations for funding and
oversight of programs
Commerce Clause/Tenth Amendment
Union exemptions of tax on “Cadillac” plans
Roe v Wade—doc-pt privacy
NO SEVERABILITY CLAUSE!!
American Medical Assoc


They only represent 17% of physicians
AMA has a blatant conflict of interest




o
Govt granted Monopoly on publication of code books used
for billing
Code books generate $111M
member dues/fees only $20M
AMA “sold us out” by endorsing Obamacare
They weren’t the only ones! AHA, Insurance Cos.
(backfire), multiple professional societies
Where are the doctors????





Haven’t needed much representation in the
past
“Above politics”
“I’m too busy for politics”
“These changes only apply to Medicare and
Medicaid and I can just stop seeing those
patients”
Some of them think this is a great idea!

Have they read this???
This is our last
chance!
If Republicans do not take the
House in November, 2010 PPACA
will become our REALITY!!
Why Republicans?

Majority party wins Chairmanships of
House and Senate Committees and
Subcommittees



Defund after 2010
Repeal 2013
Replace 2013
“What are you
prepared to
do?”
Sean Connery
“Untouchables”
Get Involved!!

Educate, educate, educate!!!

Friends, neighbors, doctors, employers

Vote, vote, vote!!!

Donate to Candidates around the country!
 Join
Docs 4 Patient Care!!!
THANK YOU!!
Keep up the fight!!
Pass the word!!
Let’s ALL be “Community Organizers”!