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The American College of Family Physicians works closely with the American Osteopathic Association (AOA) to promote our members’ views regarding their patients’ health priorities to federal and state policymakers. At the state level, ACOFP lobbyists work to ensure that the basic tenets of osteopathic medicine, from educational programs to licensure, are recognized at all levels of state government. These legislative representatives select priority health care topics by following legislative and regulatory trends, and identifying health care issues of importance to the osteopathic family medicine profession and their patients’ needs. Priority issues at the state and federal level include: Medical Malpractice (also known as Professional Liability) insurance: In communities across the nation, citizens are losing access to quality medical care. Skyrocketing liability insurance premiums are leading many doctors to reduce the services they offer, leave litigious states or abandon the practice of medicine altogether. As a result, patients lose access to affordable health care, hospitals close, and families lose doctors they’ve relied on for years Medicare reform: More and more physicians each year elect not to accept Medicare patients in their practice because they are losing money on the reimbursement they receive. Serious discrepancies currently exist between the cost of providing medical services and the current government method for reimbursing physicians for these services. Professional Liability Insurance Reform
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| Professional Liability Insurance Reform |
On May 8, the United States Senate considered the “Medical Care Access Protection Act” (S. 22), introduced by Sen. John Ensign (R-NV) and the “Healthy Mothers and Healthy Babies Access to Care Act” (S. 23), introduced by Sens. Rick Santorum (R-PA) and Judd Gregg (R-NH). Both bills contained the comprehensive reform principles supported by the ACOFP, including a cap on non-economic damages of $250,000 for physicians.
The bills differed from previous bills considered by the Senate and House in regard to provisions limiting non-economic damages in medical liability cases. Both S. 22 and S. 23 used the “trifurcated” cap adopted by Texas in 2003. Under the Texas model, non-economic damages are limited to $250,000 for physicians, $250,000 for a hospital, and $250,000 for a second health care institution—for a total cap of $750,000. Many believed that this model would blunt criticism that $250,000 was an unfair limit on awards.
In the end, both bills failed to secure the 60 votes needed to force consideration by the Senate. The vote on S. 22 was 48-42. 48 Republicans voted in favor of the bill. 39 Democrats and 3 Republicans voted against the bill. 10 Members did not vote. The vote on S. 22 was 49-44. 49 Republicans voted in favor of the bill. 41 Democrats and 3 Republicans voted against the bill. 7 Members did not vote. Of the Members not voting, Senators Burns, Brownback, Coburn, and McCain have supported routinely comprehensive medical liability reform legislation. Their failure to cast a vote prevented the vote total on both bills from reaching the majority margin predicted.
The House of Representatives approved the “Help, Efficient, Accessible, Low-Cost, Timely Health Care Act (HEALTH Act) (H.R. 5) in July 2005.
| Medicare Physician Payment |
As a result of the flawed Medicare physician payment formula, physicians had their reimbursements for 2006 cut 4.4 percent on January 1. However, on February 8, President Bush signed into law the “Deficit Reduction Omnibus Reconciliation Act of 2005” (S. 1932) (Public Law 109-171). The law included provisions that provided a one-year freeze in Medicare physician payments for 2006 at 2005 levels. Since 2001 Medicare physician payments have decreased 5 percent while practice costs have increased 18 percent.
The 2006 cuts were the first of several projected through 2015. On April 7, CMS released its annual report to the Medicare Payment Advisory Commission (MedPAC). In the report, CMS predicts that physician payments for 2007 will be cut 4.6 percent. They also project additional cuts totaling 34 percent through 2015. The 2007 Medicare Physician Fee Schedule proposed rule actually contains a negative 5.1% payment update. They attribute the cut to continued increases in the volume of physician services. Expenditures for physicians’ services in 2005 increased 10% over 2004, according to CMS. Under the SGR formula, increases in physician spending trigger cuts in the out years until total spending falls in line with the SGR target. In 2006, CMS estimates that physician spending increased 8.5 percent.
Congress and the Administration continue to pursue the enactment of programs that would link Medicare physician payments directly to quality-reporting and pay-for-performance programs. Numerous bills have been introduced during the 109th Congress. Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Max Baucus (D-MT) introduced the “Value-Based Purchasing Act of 2005” (S. 1356). The legislation would implement a quality reporting program beginning in 2007 and a full pay-for-performance program in 2008. The bill does not reform the existing Medicare physician payment formula. Instead, the bill funds the new programs through redistribution of existing funds from one set of physicians to another.
Ways and Means Health Committee Chairwoman Nancy Johnson (R-CT) introduced the “Medicare Value-Based Purchasing for Physicians Act of 2005” (H.R. 3617). The legislation provides a 1.5% increase in physician reimbursements for year one and, beginning in year two, replaces the existing sustainable growth rate formula with a payment formula based upon the Medicare Medical Economic Index (MEI). The bill would implement a quality-reporting program in year two and a full pay-for-performance program in year three. Physicians participating in the quality reporting program and, ultimately the pay-for-performance program, are eligible for a full MEI update annually. Physicians not participating in the new program will receive an annual update of the MEI minus 1.
Energy and Commerce Ranking Member John Dingell (D-MI) introduced the “Patients Access to Physicians Act of 2006” (H.R. 5916). The bill calls for a minimum update for physicians’ services for fiscal years 2007 and 2008. The update to the single conversion factor will not be less than MEI plus 1 percentage point for each respective year.
Rep. Michael Burgess, M.D. (R-TX) introduced the “Medicare Physician Payment Reform and Quality Improvement Act of 2006” (H.R. 5866). The legislation reforms the Medicare Physician Payment Formula by eliminating the use of the SGR formula. The new payment mechanism would be MEI minus 1 percentage point. The bill establishes a voluntary quality reporting program for physicians beginning as soon as January 1, 2009. H.R. 5866 requires the Secretary of HHS to report on growth in volume for physician services. The bill authorizes balanced billing for physicians participating in the Medicare program. In addition, a one-year delay in the implementation of adjustments in payments for imaging services.
| Medicare Physician Payment – Rural Payment Policies |
The ACOFP continues to support the “Medicare Rural Health Providers Payment Extension Act” (H.R. 5118), introduced by Reps. Greg Walden (R-OR) and Earl Pomeroy (D-ND). The bill aims to address numerous rural payment provisions that have expired or are scheduled to expire in 2006. Many of the provisions originated in the Medicare Modernization Act, which was enacted into law in December 2003. The ACOFP has historically supported the provisions aimed at increasing reimbursements for physicians practicing in rural areas. The bill would extend the Medicare incentive payment program for physicians practicing in designated physician scarcity areas through 2011. Under current law, physicians practicing in designated physician scarcity areas are eligible for a 5 percent add-on payment for services provided to Medicare beneficiaries. This provision originated in the Medicare Modernization Act and is set to expire on December 31, 2007. The bill also extends the 1.0 floor on Medicare work geographic adjustment applied to physician payments through 2011. Under current law the work geographic adjuster under the physician fee schedule is 1.0. This provision originated in the Medicare Modernization Act and is set to expire on December 31, 2006. Prior to the MMA, the work geographic adjustment varied based upon the cost indices for various geographic areas. The other segments of the physician fee schedule (practice cost and professional liability) continue to be subjected to cost indices based upon geographic areas.
In addition, the “Rural Equity Payment Index Reform Extension Act of 2006” (S. 3516) was introduced by Sen. Jeff Bingaman (R-NM). This bill would amend title XVIII of the Social Security Act to permanently extend the floor on the Medicare work geographic adjustment under the fee schedule for physician services.
| Graduate Medical Education |
The ACOFP continues to support legislation that would clarify existing Centers for Medicare and Medicaid Services (CMS) regulations, which are limiting the training of resident physicians in non-hospital settings. The “Community and Rural Medical Residency Preservation Act of 2005” (H.R. 4403/S. 2071) clarifies that, for Medicare payment purposes, the phase “all or substantially all” of the costs of training in nonhospital settings means resident salaries and benefits and other amounts, if any, as determined by the hospital and the nonhospital setting. The legislation explicitly states that hospitals are not required to pay nonhospital settings any amounts other than the amounts determined by the parties.
The ACOFP, along with coalition partners, also continues to work with the Centers for Medicare and Medicaid Services (CMS) to reach a compromise on this issue. CMS continues to interpret “all or substantially all” of the training costs as requiring hospitals to pay physicians who train residents in nonhospital settings, regardless of the intent of the parties. The agency has made no substantive changes to 2004 regulations or confusing agency guidance released in April 2005. The coalition continues to urge CMS to acknowledge that when a teaching hospital pays resident stipends and benefits and other training costs, if any, as agreed to by the parties, the hospital has incurred “all or substantially all” of the costs of the program and is entitled to count the residents for GME payment purposes.
| Health Information Technology |
On May 24 the Ways and Means Health Subcommittee reported favorably the “Health Information Technology Promotion Act of 2006” (H.R. 4157) to the Ways and Means Committee. The Ways and Means Committee will consider the legislation in June. The bill also has been referred to the Energy and Commerce Committee. It is unclear if the Energy and Commerce Committee will mark up the legislation before being approved by the full Ways and Means Committee.
The Senate approved the “Wired for Health Care Quality Act” (S. 1418) on November 18, 2005.
| Health Professions Programs |
The “Health Information Technology Promotion Act of 2006” (H.R. 4157) was approved by the House of Representatives on July 27th 270-148. The bill codifies the Office of the National Coordinator for Health Information Technology. The bill establishes safe harbors for the adoption and implementation of health information technology and training services provided for physicians and other health care professionals. The bill also updates and increases the number of procedure and billing codes from ICD-9’s to ICD-10’s by 2011. The bill does not affect the scope, substance, or applicability of the Health Insurance Portability and Accountability Act of 1996.
The Senate approved the “Wired for Health Care Quality Act” (S. 1418) on November 18, 2005.
