03/30/2010  –  Health Reform Letter from Florida Medical Association President

Message From James B. Dolan, MD, President, Florida Medical Association

March 29, 2010

As I write this 32nd President’s Report, it occurs to me that although the health care system reform bill has passed, the conversation is far from over. With 3,000-plus pages of legislation, including the glitch bill, there’s plenty to digest. Because of the bill’s constant changes and the haste in which it was written, there’s already a lively debate about its meaning.

As I stated last week, however, the bill’s passage is a done deal. Rest assured that the FMA will do everything it can to help members not only understand the legislation, but also manage the changes it will bring to the way we practice medicine.

As most of you know, the rumored extension of the SGR reprieve until October didn’t happen. In fact, Congress adjourned for two weeks without doing anything about the cuts scheduled to take effect on Thursday, April 1. Meanwhile, CMS has issued the following statement:

“The Centers for Medicare and Medicaid Services (CMS) is working with Congress, health care providers and the beneficiary community to avoid disruption in the delivery of health services and payment of claims for physicians, non-physician practitioners and other providers of services paid under the Medicare Physician Fee Schedule (MPFS.) As you are aware, the Temporary Extension Act of 2010, enacted on March 2, 2010, extended the zero-percent update to the MPFS through March 31, 2010.

CMS believes Congress is working to avert the negative update that will take effect April 1. Consequently, CMS has instructed its contractors to hold claims containing services paid under the MPFS (including anesthesia services) for the first 10 business days of April. This hold will only affect claims with dates of service April 2010 and forward. In addition, the hold should have minimum impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (20 days for paper claims) after the date of receipt.”

Of course, the health care legislation Congress passed has to be implemented by yet-to-be promulgated rules and regulations. Additionally, the legislation’s provisions are phased in over a 10-year period. I have looked for timelines explaining how the provisions are phased in, and many of them range from overly simplistic to mind-numbingly complex. Coy Irvin, MD, e-mailed me a timeline that achieves a happy medium. I’ve reproduced it below.

Within the first year:

• Provides a $250 rebate to Medicare prescription drug plan beneficiaries whose initial benefits run out.

• Provides a two-year temporary credit subject to an overall cap of $1 billion to encourage investment in new therapies to prevent, diagnose and treat acute and chronic diseases. The credit would be available for qualifying investments made in 2009 and 2010.

90 days after enactment:

• Provides immediate access to high-risk pools for people who have no insurance because of pre-existing conditions.

 Six months after enactment:

• Bars insurers from denying people coverage when they get sick.

• Bars insurers from denying coverage to children who have pre-existing conditions.

• Bars insurers from imposing lifetime caps on coverage.

• Requires all group health plans in the individual market to provide first dollar coverage for preventative services.

• Requires insurers to allow young people to stay on their parents’ policies until age 26.

2011

• Requires individual and small group market insurance plans to spend 80 percent of premium dollars on medical services. Large group plans would have to spend at least 85 percent of premium dollars on medical services.

2012

• Encourages physicians to form “accountable care organizations” to gain efficiencies and improve quality.

• Establishes a hospital value-based purchasing program for acute care hospitals.

• Directs CMS to track readmission rates for certain high-cost conditions and implements a payment penalty for hospitals with the highest readmission rates.

2013

• Increases the Medicare payroll tax and expands it to dividend, interest and other “unearned” income for singles earning more than $250,000 and joint filers making more than $250,000.

• Alters the Medicare physician payment formula (SGR) to include a new value-based payment modifier.

• Establishes a national pilot program on payment bundling for hospitals, doctors and post-acute care providers.

2014

• Provides subsidies for families earning up to 400 percent of the poverty level — or under current guidelines, about $88,000 a year — to purchase health insurance.

• Requires most employers to provide coverage or face penalties.

• Requires most individuals to obtain coverage or face penalties.

• Institutes additional insurance market reforms, including limitations on pre-existing health condition exclusions and rating rules (only vary on age, geography and family size).

• Increases Medicaid eligibility to 133 percent of poverty for all non-elderly individuals.

• Continues the second phase of the small business tax credit for qualified small employers.

• Requires certain providers — including long-term care hospitals, in-patient rehabilitation facilities, PPS-exempt cancer hospitals and hospice providers — to implement quality measure reporting programs.

2015

• Establishes the Independent Payment Advisory Board (IPAB).

2018

• Imposes a 40-percent excise tax on high-end insurance policies.

2019

• Expands health insurance coverage to 32 million people.

I must add this disclaimer: I’m hearing and reading in the news that the legislation’s intention may be subject to interpretation of the language — particularly regarding removing exclusions for pre-existing conditions in insurance coverage for children. Plus, it has to be translated into regulations. We have a long way to go with a lot of twists and turns ahead, so this timeline is no more than an estimate.

For those of you who want an even simpler breakdown, the New York Times has provided an interactive guide to what the health care legislation means for you.

I have received numerous e-mails from FMA members who are considering opting out of Medicare. Unfortunately, it’s not as easy as calling someone or sending a letter that says, “I quit.”

Opting out of Medicare requires that notice be given 30 days prior to the beginning of the next quarter. In other words, if you “quit” now, you’d still be in the program until July 1. Opting out is a two-year commitment as well, so if a real SGR fix were implemented, you wouldn’t be able to come back into the program for two years. If you are out of the Medicare program but see patients who are enrolled, there are still rules and limits on what you can charge for your services.

The FMA has an outline containing the contract forms you will need if you continue to see Medicare beneficiaries, and we’re also working on a FAQ sheet about opting out of Medicare. You can obtain these and receive answers to your questions by calling FMA Medical Economics Specialist Susan Franz at (850) 224-6496.

Finally, a Medical Group Management Association (MGMA) study validates what many physicians have suspected for some time. As recently as 2005, more than two-thirds of medical practices were physician-owned, and that proportion had been steady for decades. But as of 2008, that proportion had dropped to less than 50 percent, and the analysis shows the slide continuing.

Another New York Times article discusses the trend of physicians turning away from private practice in favor of employment with hospitals or health systems.

That’s it until next week. As we Help Physicians Practice Medicine, I remain,

James B. Dolan, MD
President, Florida Medical Association