Running Head: Medicare and CHIP Reauthorization Act of 2015
Medicare and CHIP Reauthorization Act of 2015 Analysis: Group Project Week 8
Adrian Cuellar, Heidi Rosner, & Maria Jorgensen
Concordia University Nebraska
April 22, 2015
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Medicare and CHIP Reauthorization Act of 2015 Analysis
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Medicare and CHIP Reauthorization Act of 2015 Analysis:
Group 4 Project
H.R. 2, The Medicare Access and CHIP Reauthorization Act of 2015 also been referred
to as “Doc Fix” was passed by Congress on April 14th, 2015 and was signed by the President on
April 16th, 2015. Some of the things that this act will do are: to amend title XVII of the Social
Security Act, to repeal the Medicare sustainable growth rate in attempt to strengthen Medicare
access by improving physician payments, and to re-authorize Children’s Health Insurance
Program (“Text of”, 2015).
Overview of the Legislation and Provisions.
This bill repeals the Sustainable Growth Rate (SGR) formula to prevent a 21% cut in
Medicare doctor’s pay in April 2015. This was done to avoid doctor’s refusing to take Medicare
patients because of unstable payment. The Medicare Access and CHIP Reauthorization Act of
2015 also extends the Children’s Health Insurance Program (CHIP) for two more years until
2017. The bill also cuts Medicare spending; the bill decreases funding to supplemental Medicare
plan and requires higher Medicare premiums for seniors who make more than $133,500 starting
in 2018 (“‘Doc Fix’”, n.d.).
The repeal of the SGR is in Title 1, Section 101. Title 2 is the provision that covers
Medicare extenders. Title 3 is the section on CHIP extension of 2 years. Under Title 4 there are
offsets, including limiting Medigap policies for newly eligible Medicare beneficiaries (“Text of”,
2015).
Expected Outcomes. The promises and expected outcomes of the Medicare and CHIP
Reauthorization Act of 2015 are vast. Certain outcomes are well enumerated whereas others will
be relegated to the test of time to determine their progress and feasibility. When examining this
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piece of legislation one is able to easily identify which outcomes have been well outlined and
identified such as the abolishment of the sustainable growth rate theory as the primary method of
determining provider reimbursement for services and extension of the state's’ Children’s Health
Insurance Program through fiscal year 2017. These are both steps that define a remarkable
advancement for our current state of reform and also specifically extend coverage to a
demographic of our population who are in dire need of greater access to care (Guteman, 2015).
Kuhnhenn and Fram identify the monumental nature of this reform in both its immediate
and long term impacts on health care by acknowledging how this article of legislation avoided a
medical crisis (Kuhnhenn & Fram, 2015). Had it not been enacted, it would have resulted in a
twenty-one percent reimbursement reduction, across the board, for all providers rendering
services to Americans with Medicare and thus a very small portion of providers would have been
willing to provide services to these individuals.
The outcomes which will be difficult to gage in the short term are those that involve the
greatest degree of innovation such as the merit based incentive program which rewards providers
for patient health outcomes as opposed to intensity and volume of services rendered. The
authors of this resolution did acknowledge that this merit based incentive program, focused on
patient centered health outcomes, will require the need for standardized metrics which will be
identified by the Secretary of Health and Human Services. These metrics will require the
incorporation of a national electronic medical record system in order to obtain these metrics and
consolidate at the national level to provide the appropriate reimbursement to the provider.
A large emphasis in this act of legislation is placed on reducing fraudulent or
inappropriate reimbursement for services. Medicare clients will carry smartcards to reduce
reimbursements to individuals who are incarcerated or not legally within the borders of the
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United States of America. Additionally, national provider numbers would be required for every
pharmacy claim and medical review would have to be performed prior to providing
reimbursement for chiropractic services.
Costs of and Oppositions to Policy Change.
The Medicare access and CHIP Reauthorization Act of 2015 is a monumental legislation
aimed at reconstructing the Medicare system and replacing outdated concepts with a new
dynamic system, however this legislation does come at a significant cost. Implementation of the
Medicare access and CHIP Reauthorization Act of 2015 will increase direct spending by $145
billion and revenues by $4 billion, which would result in an increase of federal budget deficits to
$141 billion (Elmendorf, 2015).
There is a large amount of support from special interests groups for this piece of
legislation. Two hundred interest groups expressed support of this legislation and six expressed
opposition (Maplight, n.d.). The groups in opposition are the Association of American
Physicians and Surgeons, Club for Growth, Freedom Works, Heritage Action for America, the
Madison Project and Planned Parenthood.
Examination of each of these groups’ statements of opposition reveals that all feel that
the sustainable growth rate for determining physician reimbursement is an outdated concept.
Each of the previously mentioned groups opposed this act of legislation on the basis of cost with
the exception of the Association of American Physicians and Surgeons and Planned Parenthood.
Planned Parenthood opposed this legislation given a component which placed additional
restrictions on elective abortions. The Association of American Physicians and Surgeons
opposed the legislation for several reasons including a requirement for an electronic medical
record which would make patient data available to entities contracted to track metrics of patient
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outcomes, a requirement that a national provider number be required for all pharmacy claims and
a belief that the merit incentive program promotes reimbursement for outcomes that are out of
the physician’s control.
Unintended Consequences. The long term implications of this act of legislation are far
reaching and will require an extensive amount of preparation given there will likely be many
unanticipated consequences. Perhaps the most challenging aspect of this act of legislation is a
transition to a merit based incentive program that requires a national-scale electronic medical
record in order to enhance the quality of medical care delivered and provide a system of metrics
that will be utilized to measure patient outcomes.
As the Association of American Physicians and Surgeons emphasizes, the challenge is
establishing standardized patient outcomes that can be utilized to determine these incentives and
secondly, avoiding penalties for physician reimbursements for outcomes that are not within the
physician’s control (Maplight, n.d.). Additionally, the establishment of a national electronic
medical record will be utilized to determine the quality of care delivered and thus will require
evaluation by entities contracted by Medicare to assess these outcomes. This enhances the
potential for violations of private health information.
All parties involved recognize the additional costs that will be associated with the
adoption of the Medicare access and CHIP Reauthorization Act of 2015. Although Elmendorf, in
his report to the Congressional Budget Office, makes strong assertions as to projected costs
associated with the changes imposed by this legislation, the fact remains when incorporating
reports from groups in opposition that the forecasted costs will range between $145 to $500
billion (Elmendorf, 2015).
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Recommendations for the Bill.
The organizations directly impacted by this bill and its policy changes are heavily
opposed to the changes. The bill will work to repeal the Medicare sustainable growth rate,
improve physician payments and extend CHIP funding (“Text of”, 2015). This bill provides
excellent benefits to the social health care programs available to the population but they come at
a cost to the nation. Developing this bill further to make social programs such as Medicare and
CHIP more sustainable for the future would help the longevity of the programs the agencies offer
and the services that are provided to individuals seeking care.
By extending access to treatment facilities in low income areas that have heavy reliance
on these programs, a healthier patient base can be created and develop a less costly system
overall. This healthy patient base concept is reinforced by the merit base policy regarding health
outcomes from treatment facilities. The bill should have also created a funding base to increase
the number of health care facilities in low income areas. Providing easier access to quality care
will help to develop a healthier nation that in the end, after the initial spending blows, will cost
less due to a better health status.
Success of the Bill.
Though the bill has its opposition, many support its efforts. The bill was a bipartisan
effort that was signed into effect immediately by the President to ensure doctor’s pay was not cut
in the meantime. Due to the support from both parties in the House of Representatives the public
is more likely to approve of this bill and provisions. Having support for policy despite party lines
creates a united front for the legislation and a more likely end result of a positive public response
to the changes in place. The bill has heavy support from special interests groups as well. With
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two hundred groups supporting versus the six opposed it seems the bill reaches the needs of most
of these groups and reinforces a vanishing system.
I think that this bill will see revisions in the future with additional provisions added on to
create an all encompassing system that provides the greatest coverage available to low income
groups. However, considering the current revisions, this bill creates many solutions to an
outdated and expired system and extends coverage to the population group most in need.
Conclusion.
The Medicare Access and CHIP Reauthorization Act of 2015, passed by Congress April
14, 2015, was developed and passed to address a system that required changes to be more
effective. Some of the changes made include: amend the title XVII of the Social Security Act,
repeal the sustainable growth rate, improve physician payments and authorize funding for the
Children’s Health Insurance Program to continue(“Text of”, 2015). This bill kept physician pay
from being cut 21% from Medicare patients and makes doctors more likely to see these patients.
Without the bill, those on Medicare, would have a very difficult time seeking treatment due to
the decreased payouts for physicians.
This bill comes with large amounts of support from the President, both parties in
Congress, interest groups and as a result the nation. The HR2 keeps the structures of Medicare
and CHIP alive, when otherwise, due to funding and lack of physicians to treat patients, would
have dissolved leaving millions without health insurance coverage.
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References
"Doc Fix" Medicare Access and CHIP Reauthorization Act of 2015 - Obamacare Facts. (n.d.).
Retrieved from http://obamacarefacts.com/doc-fix-medicare-access-and-chipreauthorization-act-of-2015/
Elmendorf, D. W. (2015) Cost estimate and supplemental analysis for H.R. 2, the Medicare
access and CHIP Reauthorization Act of 2015. Congressional Budget Office.
Retrieved from https://www.cbo.gov/sites/default/files/cbofiles/attachments/hr2.pdf
H. R. 2.-Medicare Access and CHIP reauthorization act of 2015. (n.d.) Retrieved from
http://maplight.org/us-congress/bill/114-hr-2/6637655/contributions-by-vote?interestssupport=&interests-oppose=J1100
Kuhnhenn, J. , & Fram, A. (2015). Obama signs overhaul of how Medicare pays doctors. U.S.
News & World Report. Retrieved from
http://www.usnews.com/news/business/articles/2015/04/16/governmentpaying-most- doctors-full-medicare-fees
S Guteman. (2015, April 15). With SGR repeal, now we can proceed with medicare payment
reform. [Web log post]. Retrieved from
http://www.commonwealthfund.org/publications/blog/2015/apr/repealing- thesgr
Medicare and CHIP Reauthorization Act of 2015 Analysis
Text of the Medicare Access and CHIP Reauthorization Act of 2015. (2015, April 14).
Retrieved from https://www.govtrack.us/congress/bills/114/hr2/text
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