NYDN REPORTS PELOSI WILL SEEK RECONCILIATION

Late this afternoon, it was reported by the New York Daily News that Nancy Pelosi is set to announce that the House is going to use the Reconciliation Process to try and pass health care reform. The Reconciliation Process only requires a simple majority to pass a bill. In terms of the Senate, the critical ability of the Senate to filibuster is gone, and only 51 votes would be needed to pass the bill.

The Reconciliation Process is complex and difficult to navigate. Very basically, each of the committees with jurisdiction over Healthcare would need to pass bills, and then the House Budget Committee would merge these into a reconciliation bill and report it to the House floor – needing 218 votes to pass.

Similarly, in the Senate, the Finance and HELP committees would need to report bills that the Budget committee would meld together and then report that product to the Senate floor. Only 51 votes would be needed to begin consideration of it. Debate is limited to 20 hours. Amendments are unlimited but must be germane to the bill.

As long as the bill has been drafted not to violate the budget resolution the Senate can pass the bill with a simple majority. This rule is very difficult to adhere to and would eliminate huge and key elements present in the current reform bills. After the Senate passes their reconciliation bill, they work out differences with the House, if any.

If the reports are true, then we can fully expect a bill – one potentially wrought with rationing concerns. President Obama, speaking to ABC news last night said, “We know that we have to have some form of cost containment because if we don't then our budgets are going to blow up." It is precisely these cost-containment measures that raise rationing concerns. Continue checking back often, since health reform is far from dead.

SENATE VOTE LIKELY ON FUNDING MEDICARE DOCTORS TO TALK WITH SENIOR CITIZENS ABOUT REJECTING TREATMENT

"Senator [Jay] Rockefeller [(D-WV)] . . . has had legislation in place to promote advance care planning . . . [;] his staff has said that he plans to, at the 11th hour, to step in and try to use his influence to put it back into the legislation as an amendment."

Myra Christopher, President, Center for
Practical Bioethics, in October 1, 2009 Kansas City Rotary Club speech

During the summer there was considerable criticism of provisions in the House health care restructuring bill that would reimburse Medicare physicians to discuss "advance care planning" with their senior citizen patients, in the express expectation that many would complete advance directives rejecting life-preserving medical treatment and thus save substantial sums of money, as well as other sections promoting such advance directives. In reaction, neither the bill reported in July from the Senate Health, Education, Labor and Pensions Committee nor that reported in October from the Senate Finance Committee contained similar provisions.

During the Senate Finance Committee deliberations, however, Senator Rockefeller spoke out strongly for their inclusion, and a speech from a long-time advocate reveals that his strategy is to do so "at the llth hour," presumably meaning toward the end of Senate floor consideration of the merged bill developed for submission to the full Senate by Majority Leader Harry Reid (D-NV).

Christopher, a friend of Health and Human Services Secretary (and former Kansas Governor) Kathleen Sebelius, heads a major "bioethics" think tank that has long pushed for advance directives. Her talk left no doubt of the economic motive for promoting advance care consultations.

"The reality is that 9% to 11% of the entire health care budget is spent on end of life care – nearly 27 to 30% depending on whose data you want to believe of the Medicare budget is spent on end of life care," she said. "Conservatively, conservatively, $6.1 billion every year of Medicare is wasted on what we refer to as futile care . . . ."

ALL COMMITTEES HAVE REPORTED BILLS WITH RATIONING CONCERNS - NEGOTIATIONS NOW MOVE BEHIND CLOSED DOORS

Health care restructuring cleared another hurdle when it was voted favorably out of the Senate Finance Committee 14-9 this afternoon. Republican Olympia Snowe (ME) along with every Democrat, voted to move the bill forward. Sen. Snowe, while maintaining that “My vote today is my vote today. It does not predict my vote tomorrow,” ultimately concluded that inaction was riskier than the “imperfect bill.” Several Republican senators continued to warn of the dangers of rationing – with Senator Roberts(KS) in particular noting that the bill contains “robust tools to ration your healthcare.” A good deal of time was spent in committee today by Democrats criticizing an industry-commissioned report by PriceWaterhouseCoopers that found health insurance premiums would increase faster under the Senate's bill than they would without it. Also, Sen. Rockefeller (D-WV) again lamented the lack of inclusion of end-of-life planning. The Senator will likely offer a related amendment on the Senate floor. For more on similar end-of-life planning provisions in the house bill see here.

The Finance committee product contains 1. cuts to Medicare, 2. the dangerous "Death Spiral" provision, 3. a grant of nearly unlimited power to the Medicare Commission to reduce Medicare payments to fit with the limits on growth, and 4. verbal promises to consider price controls.

Negotiations will now shift into a closed-door setting. After today’s vote, Sen. Baucus (D-MT), majority leader Reid (D-NV), and Sen. Dodd (D-CT), along with and a handful of top White House officials, will meet to meld the Finance bill alternative bill that Dodd led through the HELP committee in July.

Leaders in the House have been meeting over the past months in an effort to merge three bills passed out of committees and to bring down projected costs. House Speaker Pelosi (D-CA), has said she expects a final version for consideration by the full chamber soon, although she has not provided a specific timetable. While attempting to shave their $1.2 trillion plan down to $900 billion, the final bill is likely to reduce subsidies, place more people into state Medicaid programs, and employ several of the taxes raised in the Senate Finance Committee. However, House leaders have rejected the Senate Finance plan’s tax on high-value plans – the one financing mechanism that would keep pace with the rising resources devoted to health care would be the 40% levy on health insurance premiums. For more on this see here. House leaders are instead relying on a modified version of their original plan to impose a surcharge on higher income Americans.

It has also been reported today by the Washington Post that in order to come in under $900 billion dollars, House Democrats will cut out a provision that ensures that doctors receive their Medicare payment update formula. This would then be addressed in an expensive stand-alone bill. In the Senate version, the billions required to stop those same scheduled cuts in Medicare payments to physicians is only addressed for one year (then docs take a drastic 25% pay cut if no other action is taken). Not addressing this very integral and expensive aspect of healthcare in these comprehensive bills can give the incorrect appearance that the bills are able to be paid for - when that is not the case. And when inadequate financing is present, coupled with the dangerous mechanisms, rationing becomes a very real threat.

How soon floor action will occur in either chamber is unclear- though leadership insists that they mean to act soon.

PRICE CONTROLS REAR THEIR UGLY HEAD

October 1, 2009. The ability of Americans to choose to use their own money to obtain insurance policies less likely to ration in the exchanges to be set up by the health restructuring bill may be in danger. Originally, state-based "exchanges" were designed to allow comparison shopping among all insurance plans that provided the basic benefits. Now, however, a proposal is afoot to authorize states to limit the value of the insurance policies all Americans using the exchanges may purchase, by allowing them to exclude policies government authorities believe "do not offer good value and cost-effectiveness." This would effectively allow the imposition of price controls, limiting consumers’ access to adequate and unrationed health care. People would be limited in their ability to use their own money to save their own lives.

As the Senate Finance Committee consideration of amendments to its health care restructuring bill drew to a close this evening, Senators Jay Rockefeller (D-WV) and Kent Conrad (D-ND) got a commitment from Chairman Max Baucus (D-MT) to attempt to add such a to the bill, as it is melded with the version reported from the Senate Health, Education, Labor and Pensions Committee in July before the product goes to the Senate floor to a vote.

In a similar vein, Senator Maria Cantwell's (D-WA) amendment narrowly passsed earlier in the day. Agreed to by a vote of 12 -11 (with Sen. Blanche Lincoln (D-AR) joining Republicans), Sen. Cantwell's amendment allows states to establish insurance plans and negotiate rates for people earning between 133 to 200 percent of the federal poverty level- removing them from the exchange.

Sen. Cantwell claimed that 75 percent of the uninsured fall into that range. However, the concern is that "government negotiation" is not really negotiation, but in practice, has been shown to be price control. When there is only one buyer, they can set a price much lower than in a competitive market. Many of the details of the Cantwell Amendment are unclear, but it is one example of how people's access to unrationed care will be limited under this bill.

MEDICARE DOCTORS, PATIENTS AFFECTED BY HEALTH BILL PROVISION PENALIZING 1 IN 10 DOCTORS ANNUALLY

[Revised October 23, 2009]

Under the Senate Finance Committee health care restructuring bill, doctors who authorize treatments for their Medicare patients that wind up in the top 10% of per capita cost for a year will lose 5% of their total Medicare reimbursements for that year.[1] In the game of musical chairs, there is always one chair less than the number of players – so no matter how fast the contestants run, someone will always be the loser when the music stops. Similarly, under the penalty provision, a moving target is created – by definition, there will ALWAYS be a top 10%, no matter how far down the total amount of money spent on Medicare is driven.

As one editorial puts it:

Forget results. This provision makes no account for the results of care, its quality or even its efficiency. It just says that if a doctor authorizes expensive care, no matter how successfully, the government will punish him by scrimping on what already is a low reimbursement rate for treating Medicare patients. The incentive, therefore, is for the doctor always to provide less care for his patients for fear of having his payments docked. And because no doctor will know who falls in the top 10 percent until year's end, or what total average costs will break the 10 percent threshold, the pressure will be intense to withhold care, and withhold care again, and then withhold it some more. Or at least to prescribe cheaper care, no matter how much less effective, in order to avoid the penalties.[2]

In committee debate, Senator Kent Conrad (D-ND) said,

"As I try to put my feet in the shoes of a doctor, I don’t know how you separate out overutilization that is really overutilization. There is no way of knowing when you go through the year, what you are going to do at the end of the year."

He expressed concern there could be unintended consequences, adding that the penalty “leaves me cold.”

In a September 21, 2009 letter to Chairman Max Baucus (D-MT), the American Medical Association attacked its wisdom, noting, "Private and state insurance programs have experienced serious problems with the accuracy and validity of episode grouper methodologies to ‘profile’ physicians."

Civil libertarian columnist Nat Hentoff has written,

"Medicare doctors will not be the only losers. As the doctors struggle to keep abreast of the continually falling limit of the money they can authorize for their contingent of patients, consider what those patients will lose in the quality of their treatment."[3]

Senator Jon Kyl (R-Az) is expected to offer an amendment after the bill comes to the Senate floor (presently expected during November 2009) to strike the penalty provision, similar to one he unsuccessfully offered in the Senate Finance Committee, which was endorsed by the Alliance of Specialty Medicine. The Alliance is a coalition of 11 national medical specialty societies representing more than 200,000 physicians.

NOTES:
[1] The provision is (from language available at the Senate Finance Committee website) in "SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM." Beginning on page 683, the bill reads:

“(b) INCENTIVES FOR AVOIDING EXCESS UTILIZATION.—Section 1848(a) of the Social Security Act (42 U.S.C. 1395w–4(a)), as amended by section 3002(b), is
amended by adding at the end the following new paragraph:

9) INCENTIVE FOR AVOIDING EXCESS UTILZATION.—
(A) IN GENERAL.—With respect to physicians’ services furnished by an applicable physician on or after January 1, 2014, the fee schedule amount for such services furnished by the applicable physician during the year (including the fee schedule amount for purposes of determining a payment based on such amount) shall be 95 percent of the fee schedule amount that would otherwise apply to such services under this subsection (determined after application of paragraphs (3), (5), (7),
and (8), but without regard to this paragraph).

(B) APPLICABLE PHYSICIAN.—In this paragraph: (i) IN GENERAL.—The term ‘applicable physician’ means a physician which the Secretary determines is at or above the 90th percentile of resource use (or, if applicable, the standard measure
of utilization specified under subparagraph (C))with respect to a composite measure per individual, such as the composite measure under the methodology established under subsection (n)(9)(C)(iii).

While these adjustments may reduce the degree to which physicians are disproportionately penalized if they have sicker patients or work in high-cost areas, they do not change the fundamental danger of this provision, which (as explained above) is to create continual pressure on doctors to make ever-increasing reductions in the treatments and tests they order for their
patients so as to avoid being in the penalized top 10%. The Congressional Budget Office rates this as taking almost $1 billion from Medicare payments over a period of 6 years. See CBO 10/07/09 letter to Chairman Baucus, Table, page 3 of 9.

[2] Washington Times, September 25.

[3] Nat Hentoff column.

SENATE FINANCE COMMITTEE AFFIRMS DEATH SPIRAL IN PARTY LINE VOTE; CONRAD SUGGESTS HE MAY VOTE AGAINST IT ON FLOOR WITH DIFFERENT OFFSET

September 30. An amendment proposed by Senator Jon Kyl (R-AZ) to get rid of a 5% penalty for Medicare doctors who order treatments and tests for their patients that wind up in the 10% most expensive per patient over a year was defeated 13-10 in the Senate Finance Committee this evening, with all committee Republicans voting to end the penalty and all committee Democrats voting to keep it.

Before the vote, however, Senator Kent Conrad (D-ND), said, "We’d be well advised ... to drop the penalty. I want to commit to working with Senator Kyl to find [another] offset before we go to the floor." This was in line with Conrad’s remarks on September 29 when Senator Kyl first brought up the amendment and temporarily withdrew it in order try to work out an alternative way of paying for the elimination of the penalty, which is scored by the Congressional Budget Office as cutting Medicare payments by $1 billion over ten years. The senators and their staffs were unable to agree on such an alternative during the intervening 24 hours, but, as Senator Conrad’s remarks indicate, will continue to try to agree on one so as to be able to support a jointly acceptable amendment by the time the measure goes before the full Senate for a vote.

Of course, even if Senators Conrad and Kyl agree, that is no guarantee that an amendment they both support will in fact be adopted when offered on the Senate floor. "Those concerned with the grave danger that Medicare doctors will be induced to ration more and more each year by this ‘musical chair’ penalty need to redouble their efforts to convince their Senators in the short weeks before the Senate votes on health care restructuring," said Burke J. Balch, director of National Right to Life’s Powell Center for Medical Ethics.

“DEATH SPIRAL” IN TROUBLE? NEGOTIATIONS BEHIND THE SCENES CONTEMPLATED

September 29. This evening in the Senate Finance Committee, Senator Jon Kyl (R-AZ) offered his amendment to strike from the health care restructuring bill a provision imposing a 5 % penalty on one in ten Medicare physicians yearly, those whose costs per senior citizen wind up in the top 10%. However, he agreed temporarily to withdraw it at the request of Senator Kent Conrad (D - ND), who spoke out strongly against the penalty provision but sought modifications in the offset originally proposed by Senator Kyl. The temporary withdrawal raises the prospect that an agreed method might be worked out to strike the penalty provision.

The National Right to Life Committee strongly supports the Kyl Amendment and opposes the penalty provision. Senator Kyl quoted Executive Director David N. O'Steen, Ph.D., "This provision creates a cruel death spiral. By financially penalizing Medicare providers, the Baucus bill sets up the cruelest and most effective way to ensure that doctors are forced to ration care for their senior citizen patients. Instead of bureaucrats directly specifying the treatment denials that will mean death and poorer health care for older people, it compels individual doctors to do the dirty work."

Under the bill as it stands, any physician treating Medicare patients who ordered treatments and tests whose cost turned out to be in the highest ten percent per capita would have to pay back to the federal government five percent of all the Medicare reimbursements the physician had received for that year. Senator Kyl warned this would force a "race to the bottom." He said, "If we’re focused on evidence-based criteria, how can we in good conscience simply take an arbitrary number? Ten percent will take a hit regardless of results." He warned that it would create a "conflict of interest" for doctors who would be deterred from ordering what is in the best interests of their patients for fear that they might end up among the 10% of doctors who would face a hefty financial penalty each year. Kyl noted that the Alliance of Specialty Medicine, a coalition of 11 medical organizations representing 200,000 doctors, has endorsed his amendment.

Senator Conrad remarked, "As I try to think about putting … my feet in the shoes, of a doctor who might be treating Medicare patients facing this construct, it is one thing to have the feedback, I think we should absolutely… I think we should do that. But I think this putting in a penalty, that really leaves me cold. I don’t know how you separate out overutilization that is really overutilization from those doctors who may have a group of patients who require more treatment than another group of patients and when you’re put in the position of, there is no way of knowing as you go through the year what is going to happen at the end of the year. And so what do any doctor who wants to avoid being in this penalty box have to do? …I think this is one part of this that I think we should think long and hard about. There is no way of knowing when you go through the year, what you are going to do at the end of the year. . . . I think this is something we would get down the road and we’d regret."

Committee Chairman Senator Max Baucus (D-MT), although he emphasized what he saw as the need to reduce "overutilization," said, "Maybe Senator Kyl has a point here" and offered to "see what modification we can make to address his concern."

Under the rules regulating amendments in the committee, any amendment that strikes a provision "scored" by the Congressional Budget Office (CBO) as cutting costs must include a measure that cuts the same amount in some other way. The CBO scored the penalty provision as cutting Medicare by $ 1 billion over ten years, and as proffered Senator Kyl’s amendment offset that by taking a corresponding amount from funding for the cooperative plans designed by Senator Conrad, and included in the bill proposed by Chairman Baucus, as a replacement for the much-debated "public plan."

Whether the Kyl Amendment to strike the "death spiral" provision, with a different offset, will be brought back with broad support, or whether it will face a closely divided vote, the next day or so is likely to show. Chairman Baucus has expressed his hope that the Senate Finance Committee will complete its consideration of amendments and take a final vote on approving the bill as amended by the end of the week.

“DEATH SPIRAL” RATIONING IN THE SENATE FINANCE BILL – DRIVING DOCTORS TO DENY CARE TO SENIOR CITIZENS

This is the cruelest and most effective way to ensure that doctors are forced to ration care for their senior citizen patients. It takes the telltale fingerprints from the government: instead of bureaucrats directly specifying the treatment denials that will mean death and poorer health for older people, it compels individual doctors to do the dirty work. It is an outrageous way to "reform" health care – by taking it away from America’s senior citizens.

National Right to Life Committee Executive Director David N. O’Steen, Ph.D.


Senate Finance Committee Chairman Max Baucus’s “Mark,” released September 16 and due to be considered in committee beginning Tuesday, September 22, contains a provision penalizing doctors based on how much medical treatment they direct for senior citizens on Medicare. It establishes that for at least five years (2015-2020), Medicare physicians who authorize treatments for their patients that wind up in the top 10% of per capita cost for a year will lose 5% of their total Medicare reimbursements for that year.

This means that all doctors treating older people will constantly be driven to try to order the least expensive tests and treatments for fear that they will be caught in that top 10%. Note that this feature operates independently of any considerations of quality, efficiency, or waste – if you authorize enough treatment for your patients, however necessary and appropriate it may be, you are in danger of being one of the 1 in 10 doctors who will be penalized each year.

Moreover, the penalty for Medicare doctors creates a moving target – by definition, there will ALWAYS be a top 10%, no matter how far down the total amount of money spent on Medicare is driven. Say that in 2015 the top 10% is anything over $10,000 per patient. In 2016 most doctors will scramble to hold down the treatments they authorize to avoid breaking that limit – with the result that the total amount spent will drop, so that the top 10% might then be, say, anything over $9,500. As the process repeats, the next year it might be anything over $9,000, the year after that anything over $8,000, and so on.

It's like a game of musical chairs, in which there is always 1 chair less than the number of players -- so no matter how fast the contestants run, someone will always be the loser when the music stops.

The disincentive to provide treatment for senior citizens the penalty creates is determined purely by cost, without any assessment of balancing cost with benefit. It will create a constant sense of uncertainty in doctors, since none can know in advance precisely what the cutoff for a given year will be – resulting in ever-increasing pressure to limit treatment and diagnostic tests to the bare minimum.


The provision to which this blog entry refers is as follows ( from documents available at http://finance.senate.gov/sitepages/legislation.htm ).

On pages 80-81, in the "Expansion of Physician Feedback Program" in Title III, Subtitle A, Part I; specifically, at the top of page 81: "Beginning in 2015, payment would be reduced by five percent if an aggregation of the physician's resource use is at or above the 90th percentile of national utilization. After five years, the Secretary would have the authority to convert the 90th percentile threshold for payment reductions to a standard measure of utilization, such as deviations from the national mean."

On page 80, the Chairman's Mark states, "In preparing feedback reports, the Secretary would be required to make appropriate data adjustments to (1) account for differences in the demographic characteristics and health status of individuals so as not to penalize those physicians who tend to serve less healthy individual [sic] who may require more intensive interventions, and (2) eliminate the effect of geographic adjustments in payment rates."

While these adjustments may reduce the degree to which physicians are disproportionately penalized if they have sicker patients or work in high-cost areas, they do not change the fundamental danger of this provision, which (as explained above) is to create continual pressure on doctors to make ever-increasing reductions in the treatments and tests they order for their patients so as to avoid being in the penalized top 10%.

CBO rates this as taking $1 billion from Medicare payments over a period of 6 years. See CBO 9/16/09 letter to Chairman Baucus, Table, page 3 of 7.