Thanks to the American Health Lawyers Association for this update 

Healthcare Reform Reconciliation Bill
By Julie Barnes*

Late yesterday, Democratic leaders of the U.S. House of Representatives released the language of a 153-page reconciliation bill that makes several changes to the healthcare reform bill that the U.S. Senate passed on Christmas Eve. Access the reconciliation bill.

The House Rules Committee will meet tomorrow morning to finalize the procedural rules for the vote that is expected to take place on Sunday, March 21, 2010. House Democratic leaders need 216 votes to pass the legislation before the Senate begins its own reconciliation process.

The changes to the Senate healthcare reform bill reflect President Barack Obama's recently announced priorities for the healthcare reform overhaul:

Coverage

Tax credits are increased for middle-income families to buy private insurance; the tax penalty for an individual's failure to purchase insurance is adjusted; the exclusion from gross income for employer-provided health coverage is extended to include adult children up to age twenty-six. The bill is expected to create new avenues to buy and provide new subsidies for private insurance coverage to thirty-two million Americans.

Access

Mandatory funding for community health centers is increased to
$11 billion over five years.

Insurance Reforms

The prohibition of lifetime limits, prohibition on rescissions, limitations on excessive waiting periods is extended, and a requirement to provide coverage for non-dependent children up to age twenty-six to all existing health insurance plans begins six months after enactment. For group health plans, preexisting condition exclusions and annual limits are prohibited beginning in 2014.

Drugs

The underlying 340B expansion to inpatient drugs and exemptions to group purchasing organization exclusion is repealed and orphan drugs are exempt from required discounts for new 340B entities.

Federal Programs

Medicare

A $250 rebate will be given to all Medicare Part D enrollees who enter the coverage cap (donut hole) in 2010 and increases discounts on brand-name drugs gradually to close the donut hole by 2020. Medicare Advantage (MA) payments will be frozen in 2011, and reductions to MA benchmarks will be phased in over time. Medicare disproportionate share hospital cuts are to begin earlier, in fiscal year 2014.

Medicaid

The Nebraska special deal to receive 100% federal matching rate for Medicaid costs of newly eligible individuals is removed and applied to all states until 2016. Medicaid payment rates to primary care physicians will be increased to 100% of Medicare payment rates in 2013 and 2014.

Waste, Fraud, and Abuse

Funding for the Health Care Fraud and Abuse Control Fund will be increased by $250 million over the next decade.

Revenue

The biggest revenue-raiser in the bill is a fixed (rather than adjusted for inflation) Medicare payroll tax on unearned income for joint filers earning $250,000 or more and individuals making more than $200,000. Beginning in 2018, the excise tax on high-cost health plans will be applied to policies that cost more than $10,200 per year for individuals and $27,500 for families. Slightly delayed industry fees include a fee assessed on brand-name pharmaceutical sales, a 2.9% excise tax on medical devices, and a health insurance fee. The bill eliminates a tax credit received by cellulosic biofuel producers for unprocessed fuels known as "black liquor."

*We would like to thank Julie Barnes, Esquire (New America Foundation, Washington, DC), for providing this email alert.

Hot off the press from the American Health Lawyer's Association 

CBO Completes Preliminary Estimate for Healthcare Reform Bill
By Julie Barnes*

This is the week of the "up or down vote" on a comprehensive healthcare reform bill in the U.S. House of Representatives. The Democratic leadership has been eagerly awaiting a "good score" from the Congressional Budget Office (CBO)—meaning that CBO certifies that it will reduce the deficit over the next two decades. With a good CBO score, the more moderate members of the Democratic Party may be persuaded to vote for the bill.

Today the CBO completed a preliminary estimate of the "spending and revenue effects of an amendment in the nature of a substitute to H.R. 4872," otherwise known as the Reconciliation Act of 2010. This estimate is considered preliminary because CBO must review the language of the reconciliation proposal and further refine their budgetary projections.

The score is based on the Senate-passed version and several additional provisions that are White House-driven compromises between the Senate and House bills. The additional provisions are being promulgated through the budget reconciliation process to avoid a filibuster under the U.S. Senate rules of procedure. In its letter to Speaker Nancy Pelosi (D-CA), CBO states that enacting both H.R. 3590, the "Patient Protection and Affordable Care Act" as passed by the U.S. Senate on Christmas Eve (see CBO's score of this bill) and the House's reconciliation proposal would cost $940 billion over ten years, and produce a net reduction in federal deficits of $138 billion over ten years and $1.2 trillion in the second ten years. These scores seem to bode well for efforts by House Democratic leaders to gather enough "yea" votes to feel confident holding a floor vote on the bill, likely to take place this weekend.

In April 2009, the House passed the 2010 Budget Resolution which instructed the House to pass a reconciliation bill with healthcare reform and education reforms in one package this year. Accordingly, the reconciliation bill will not only include comprehensive healthcare reform, but also provisions that will eliminate the role of private lenders in college loans. If this reconciliation bill passes, students will receive their loans directly from the U.S. Department of Education starting July 1, 2010. The education reform legislation means substantial savings to the federal government, which is expected to help convince fiscally conservative Democrats to vote for the reconciliation package who may otherwise have been reticent to vote for the healthcare reform bill.

*We would like to thank Julie Barnes, Esquire (New America Foundation, Washington, DC), for providing this email alert.

Helpful information from the American Health Lawyers Association 

President Obama Signs Into Law a Temporary Fix
to Physicians' Medicare Reimbursement
By Jeffrey Moore**

On December 19, 2009, President Barack Obama signed the Department of Defense Appropriations Act, 2010 (H.R. 3326), into law, which freezes Medicare physician payments for two months, avoiding a 21% payment cut to physicians' Medicare reimbursement scheduled to go into effect
on January 1, 2010. The House previously approved H.R. 3326 on December 16, 2009, while the United States Senate passed H.R. 3326 on December 19, 2009.

Because the Department of Defense Appropriations Act, 2010, is only a temporary fix to the Medicare physician payment issue, Congress will be forced to address this payment issue in early 2010, as the Medicare physician payment cuts are set to go back into effect on March 1, 2010.

**We would like to thank Jeffrey S. Moore, Esquire (Phelps Dunbar LLP, Tupelo, MS), for providing this email alert, and the Regulation, Accreditation, and Payment Practice Group for sharing this email alert with the Physician Organizations Practice Group.

Thanks to the American Bar Association’s Physician Interest Group for the following summary of the “final” Medicare Fee Schedule issued today.   

Unless Congress acts, the 21.2% statutorily mandated reduction of overall physician fees will be implemented effective January 1, 2010.  The “final” regulation contains the following provisions of particular interest to physicians:

 *          Eliminates the use of all consultation codes (inpatient andoffice/outpatient codes for various places of service except for telehealth consultation G-codes) on a budget neutral basis by increasing the work relative value units (RVUs) for new and established office visits, increasing the work RVUs for initial hospital and initial nursing facility visits, and incorporating the increased use of these visits into practice expense (PE) and malpractice RVU calculations.

*          Finalizes the proposal to remove physician-administered drugs from the definition of "physician services" for purposes of computing the physician update formula.  This long-awaited administrative step mitigates the size of future Medicare Part B reductions.

*          Phases in new PE RVUs over four years using revised survey data that will result in significant increases and decreases to the PE values of many codes.

*          Establishes a Physician Quality Reporting Initiative (PQRI) reporting mechanism via qualified electronic health records.

*          Defines the size of a group practice as at least 200 providers for purposes of the new PQRI group-practice reporting option.

 *          Increases the utilization assumption for diagnostic equipment priced at more than $1 million, which will decrease the technical component payment for services performed on this equipment.  This change will be phased in over 4 years.    

The uneasy alliance between the AMA and Senate Democrats is starting to look a bit frayed.  Apparently, Senator Reid took the “doc fix” legislation to a vote based on what he understood to be assurances from the AMA that there were enough Republican votes to get it through.

Oops.  Apparently, the AMA thought it made it clear that there were Republican votes for general health care reform legislation, NOT that particular piece of legislation.  The “doc fix” legislation went down in flames.

Stay tuned as the sitcom continues.