And the debate continues…

We are just beginning to see the shape of how the new administration and the new Congress will deal with critical health issues. Whether it is major health reform or incremental reform, Ascension Health, St.Vincent Health, and our individual ministries have a strong stake in the proposals, the debate and the outcomes.

We intend to educate, inform, and engage our staff and Board leadership to achieve the results that support our mission in Catholic healthcare.

Here’s a start:

SCHIP Legislation

The State Children’s Health Insurance Program (SCHIP), established under the Balanced Budget Act (BBA) of 1997, is a state-federal partnership designed to provide low-income children with health insurance. This program has been extremely popular and Congress continued to pass short term extensions.
 
The current extension was set to expire on March 1, 2009. However, SCHIP legislation approved by the House of Representatives on January 14, 289-139 and by the Senate 66-32 on January 29, reauthorized SCHIP for the next four and a half years. Under the expansion bill, children in families with incomes of up to three times the federal poverty level now qualify for the program. Supporters of the bill say it will raise the number of children covered by SCHIP from about seven million to about 11 million. The measure, which increases SCHIP spending by $31.5 billion over four and a half years, will be funded mainly through a 61-cent-per-pack increase in the federal cigarette tax.

American Recovery and Reinvestment Act (Stimulus Package)

On Feb. 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act. The legislation temporarily increases federal funding for Medicaid by nearly $87 billion and requires states to maintain current program eligibility. In addition, the Act provides subsidies to help the recently unemployed maintain COBRA coverage for up to nine months, and $19 billion through Medicare and Medicaid to help physicians and hospitals (including critical access hospitals) adopt health information technology.

Budget Blueprint: Health Care “Reserve Fund”

The White House FY 2010 budget would create a 10-year, $634 billion “reserve fund” to partially pay for an expansion of the U.S. health care system. Under the budget blueprint, about half of the new “health care reserve fund” would come from limiting the tax break on itemized deductions for families with incomes above $250,000.

The proposal would reduce the value of tax deductions by about 20 percent, a change that would generate about $318 billion over the next 10 years.

An outline of offsets from the Medicare program ($316 billion) follows:

Medicare Advantage (MA)

• $46.8 billion over five years ($177 billion over 10 years) from Medicare Advantage. MA benchmarks established through a competitive bidding process among plans, starting in 2012.

 

Hospitals

• $2.45 billion in over five years from paying hospitals less for readmissions. $2.9 billion over five years ($12 billion over 10 years) from creating a pay-for-performance program for hospitals.

 

Home Health

• Approximately $13 billion (over five years) from reducing payments to home health.

 

Bundling Payment Systems

• Bundled payment for both hospitals/physicians and post-acute providers (beginning in 2013) will generate $950 million over five years and $17.8 billion over 10 years.

 

Medicaid Drug Rebates

• $8.2 billion in five-year savings from increasing the federal Medicaid drug rebate from its current 15.1 percent to 21 percent.

 

Imaging

• Using “private sector” tools to manage the volume of imaging services, generating projected savings of $70 million over five years ($260 million over 10).

 

Specialty Hospitals

• Prospectively banning specialty hospitals.

 

Follow-On Biologics

• Congress will create a pathway for the FDA to approve follow-on biologics, which costs a net $10 million over five years and generates savings of $9.2 billion over 10 years.

 

Means Testing Part D Premium

• The budget envisions requiring high-income seniors to pay higher premiums, the same as they do for physician services currently. This proposal generates $2.4 billion over five years.

Roundtable Discussions and the Development of Health Reform Legislation

The Senate Finance Committee held a series of “round tables” to serve as hearings for health reform legislation drafted by the committee.  The first round table was held on April 21, 2009 and focused on using Medicare to test strategies for reducing waste in the U.S. health care system. Two additional round tables were held on May 5, 2009 and May 13, 2009.  These discussions focused on increasing access to health coverage and health reform financing.
 
Following the round table discussions, panel members began discussions around the various proposals being considered for health reform legislation being developed in the Senate. 
 
The Senate plans to produce a health care reform measure in June, with House legislation following shortly after.  The Senate Health, Education, Labor and Pensions Committee also plans to develop legislation and mark up the bill in June. This bill will likely be combined with the Finance Committee bill once it reaches the Senate floor.