Wednesday, July 29, 2009

Reading the Health Care Bill: Part II

HR 3200 – “America’s Affordable Health Choices Act of 2009”

A Review

Part II: Division B – “Medicare and Medicaid Improvements”

This continues my reading and assessment of HR 3200, the House’s version of Health Care “reform.” My suspicions are immediately aroused just by the title of this division. Anytime the government uses “Improvements” it’s a virtual guarantee things will be getting worse.

After reading through Division B, I must admit to not fully understanding the full implications of the division because it revises Medicare parts A, B, and C. One would have to be an expert in the Social Security Act and/or a medical provider to comprehend the finer details. This difficulty is compounded by the fact that Division B makes up the majority of the bill (pages 216 to 854, or 63% of the bill).

In summary, I see mostly changes that would increase costs, increase government control, and dramatically increase the size of the Medicare/Medicaid component of government. Not to mention the veritable guarantee that taxpayer dollars will be used to provide abortions (see highlighted comments towards the end). There are numerous pilot programs and studies funded with the hope of improving efficiency and quality, but they are only studies and cannot guarantee an outcome. If over 50% of our health care cost increases are due to new technology, that 50% will not be impacted by the studies (unless the studies conclude the use of less technology is a cost savings – which is a likely outcome). Nonetheless, I have pulled out a few excerpts for your reading enjoyment along with my comments:

Section 1101 describes changes to the Social Security Act respecting Medicare Part A. I am not very familiar with the Act, but note from section 1101 that market based percentage changes to payments for rendered medical services will be subject to productivity based adjustments. In other words, if the facility or physician doesn’t improve productivity consistent with other “non-farm industry” it or they will receive lower reimbursements.

(II) The productivity adjustment described in this

subclause, with respect to an increase or change for a fiscal year or year or cost reporting period, or other annual period, is a productivity offset equal to the percentage change in the 10-year moving average of annual economy wide private non-farm business multi-factor productivity (as recently published before the promulgation of such increase for the year or period involved).

Aim low! Section 1112 describes payment adjustments to facilities based on the decrease in “uninsurance.” Payments (for care not paid by the patient – bet you didn’t know the government was already subsidizing health care for the uninsured) would be modified if there is a” significant decrease in the national rate of uninsurance.” They define “significant” for us; let me know if this goal seems a little different than the stated goal of President Obama to insure ALL Americans:

(A) IN GENERAL.—There is a ‘‘significant decrease in the national rate of uninsurance as a result of this Act’’ if there is a decrease in the national rate of uninsurance (as defined in subparagraph (B)) from 2012 to 2014 that exceeds 8 percentage points.

Payments for physician’s services will be escalated at a target growth rate per section 1121. The key point here is that they’re using a “target growth rate” determined by the government; not the actual growth rate. So if technology, or other factors, increases the physician’s costs for rendering health care too bad.

‘‘(ii) FOR SUBSEQUENT YEARS.—For a subsequent year, take the amount of allowed expenditures for such category for the preceding year (under clause (i) or this clause) and increase it by the target growth rate determined under subsection (f) for such category and year.’’

Section 1122 provides a mechanism for the government to re-evaluate [medical billing codes] that are “undervalued.” After a lengthy, expense review process the government, at it’s sole discretion, can change the reimbursement rate for specific codes. Anyone want to wager a guess as to how long doctors would be under compensated for a procedure?

(v) ADJUSTMENTS.—The Secretary shall make appropriate adjustments to the work relative value units under the fee schedule under subsection (b). The provisions of subparagraph (B)(ii)(II) shall apply to adjustments to relative value units made pursuant to this subparagraph in the same manner as such provisions apply to adjustments under subparagraph (B)(ii)(II).

Section 1123 describes a process whereby counties that are “efficient” get an incentive payment paid to its physicians. Sounds good, right? Well, the problem is how efficient is defined: “…lowest fifth percentile of utilization based on per capita spending...” Unlike President Obama, I think most doctors are reputable and honest. However, I can see this section incentivising reduced treatment. Additionally, is this a true measure of efficiency, or a measure of the health needs of people in a particular geographic area? In other words, doesn’t this take money away from counties that may be less healthy and consequently need greater and better care?

Section 1151 supplies provisions for reducing payment to hospitals with “excessive readmissions.” Of course, the exact definition is left up to the Secretary of Health and Human Services. On first review, this might seem reasonable, even necessary, but think about the implications… The hospital is required, by law, to provide care to the individual (even if he or she is “excessively readmitted”); now the government wants to pay those hospitals less for the treatment they are mandated to provide. Seems to me as though they are changing the wrong law. Further down in the section, they also propose a study to determine if the same policy should be applied to physician care.

Section 1157 and 1158 illustrate well how little government understands the free market. Section 1157 provides money and means to initiate a government study on geographic disparities in the number and quality of health care providers. Section 1158 then allows the government to make fund available for areas it deems in greater need of investment in health care. Supposing this actually worked, in a non-government way, the question becomes: what about the next year, or 5 years from now? There is no provision for continuing this study-funding cycle beyond 1 year after the bill becomes law.

(a) IN GENERAL.—The Secretary of Health and Human Services, taking into account the recommendations made in the report under section 1157(d), shall include in the proposed rules published to implement changes to payment systems for physicians and hospitals under sections 1848(e) and 1886(d)(3)(E), respectively, of the Social Security Act, proposals to revise geographic adjustment factors for such payment systems for services furnished under the Medicare program. Such proposed rules shall be published in the rulemaking period immediately following submission of the report under section 1157(d).

Section 1173 again reminds us of the socialist takeover of our country via the medical loss ratio mandated by the government over privately based Medicare Advantage plans. In other words, mandating the maximum profit a health insurance provider can realize:

‘(A) the Secretary shall require the Medicare Advantage organization offering the plan to give enrollees a rebate (in the second succeeding contract year) of premiums under this part (or part B or part D, if applicable) by such amount as would provide for a benefits ratio of at least .85

Is it just me, or does section 1203, regarding income verification related to enrollment in Medicare, seem reminiscent of the ill-fated “stated income” mortgages that contributed to our recent economic demise? Maybe this is the kind of clause that doomed Hawaii’s ill-conceived, 7 month long stint with universal healthcare.

(iii) CERTIFICATION OF INCOME AND RESOURCES.—For purposes of applying this section— ‘‘(I) an individual shall be per16

mitted to apply on the basis of self certification of income and resources; and ‘‘(II) matters attested to in the application shall be subject to appropriate methods of verification without the need of the individual to provide additional documentation, except in extraordinary situations as determined by the Commissioner.

Existing government largesse has met its match in this bill. A study, among many already mentioned in the bill, will be conducted to determine how to pay for language interpreters. Why would you need that? I thought Medicare and Medicaid was limited to U.S. Citizens, and those citizens would have passed the citizenship test which would require a functional understanding of English, right? From section 1221 (section 1222 states that a linguistics demonstration program shall be carried out following the study outlined in section 1221, with no mention of what necessity the study determines for such program):


Human Services shall conduct a study that examines the extent to which Medicare service providers utilize, offer, or make available language services for beneficiaries who are limited English proficient and ways that Medicare should develop payment systems for language services.

I wonder if ACORN has “experience in language access?”

(B) FOR COMMUNITY ORGANIZATIONS.—The Secretary shall give priority to applicants that have developed partnerships with community organizations or with agencies with experience in language access.

What country are we talking about again?

(5) post signage in the languages of the commonly encountered group or groups present in the service area of the organization;

Section 1233, “Advanced Care Planning Consultation,” is where the government mandates the elderly to consult with their physicians on end-of-life issues. There are some good aspects to this, including making people think about these real issues, but why only consult a physician? What about your attorney? I think an attorney is uniquely qualified to put forth the legal paperwork for living wills and durable medical power of attorney documents. This paragraph is a little disconcerting also:

(E) An explanation by the practitioner of the continuum of end-of-life services and supports available, including palliative care and hospice, and benefits for such services and supports that are available under this title.

Section 1301 describes yet another pilot program designed to compensate “high efficiency” practices or service providers. The program would be used to determine future, Medicare-wide incentive programs designed to “reduce growth of expenditures and improve health outcomes.” Incentives are awarded if spending or growth rates are below an arbitrarily selected target. The question that has to be asked is: would a limited pilot program prove the program’s utility across the entire country? In addition, are you providing incentives for lower cost, or lowering service?

In addition, the program must be…

established in a manner that does not result in spending more for such ACO for such beneficiaries than would otherwise be expended for such ACO for such beneficiaries for such year if the pilot program were not implemented

In other words, some physicians are going to get short-ended compared to their peers. Can you say, “provider shortage?”

Section 1422 describes a pilot program for independently monitoring nursing homes. This paragraph describes the action to be taken based upon the pilot program. I’m not in favor of abuse and fraud at nursing homes, but we all know what happens when the government starts monitoring!

(A) determine whether the independent monitor program should be established on a permanent basis; and (B) if the Inspector General determines that the independent monitor program should be established on a permanent basis, recommend appropriate procedures and mechanisms for such establishment

Title VI attempts to minimize fraud and abuse of the system. This is a good measure considering fraud runs amok in the government programs, but this adds cost, not reduces it. Furthermore, the funding for combating fraud and the severity of penalties might be increasing, but with the expansion of government health care is it really enough?

Section 1704 requires the reduction of Medicare/Medicaid payments to the states. While there is verbiage indicating some reasoning behind the reductions (e.g. increase in utilization of the Health Exchange), this following paragraph describes specific reductions. So what happens if the states still have high Medicare/Medicaid utilizations? That aside, I still haven’t found where the advertised $1 Trillion in savings from Medicare will come from (let’s see…$1.5B + $2.5B + $6.0B = $10.0B, I’m only $990B short)..

(1) IN GENERAL.—The Secretary shall reduce Medicaid DSH so as to reduce total Federal payments to all States for such purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000 in fiscal year 2018, and $6,000,000,000 in fiscal year 2019.

Section 1714, “State Eligibility Option for Family Planning Services,” is sufficiently vague to ensure your tax dollars would cover abortions under this plan. Leave it to liberals to find a way to fund the willful, wanton murder of the most innocent of all life: unborn babies.

(B) by inserting ‘‘, and (XV) the medical assistance made available to an individual described in subsection (hh) shall be limited to family planning services and supplies described in section 1905(a)(4)(C) including medical diagnosis and treatment services that are provided pursuant to a family planning service in a family planning setting’’ after ‘‘cervical cancer’’.

Another cost increase: payment for graduate medical education is disclosed in section 1744.

Section 9511 describe the formation of the “Health Care Comparative Effectiveness Research Trust Fund.” Certain to be another unfunded liability.

The Dems and President continually argue the proposed “government option” for health insurance will be subjected to a “level playing field” compared to the private plans. They would do well to try and explain section 4375 (amended to Chapter 34 of the Internal Revenue Code of 1986).


‘‘(a) IMPOSITION OF FEE.—There is hereby imposed on each specified health insurance policy for each policy year a fee equal to the fair share per capita amount determined under section 9511(c)(1) multiplied by the average number of lives covered under the policy.

‘‘(b) LIABILITY FOR FEE.—The fee imposed by subsection (a) shall be paid by the issuer of the policy.

Okay…so since the issuer (company) pays a new tax for providing a health care plan, certainly the government plan is subject to the same tax, right? Wrong:

‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL PROGRAMS.—In the case of an exempt governmental program, no fee shall be imposed under section 4375 or section 4376 on any covered life under such program.

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