Position Statement

Existing Government Programs

This Position Statement was developed as an educational tool based on the opinion of the authors. It is not a product of a systematic review. Readers are encouraged to consider the information presented and reach their own conclusions.

With the introduction of Medicare in 1965, the United States virtually eliminated the number of uninsured individuals over the age of 65. While the AAOS believes the Medicare program is in need of significant reform, it also recognizes that Medicare is likely to play a significant role in ensuring that the older and disabled population in the United States maintains health insurance.

However, there is still a significant portion of the U.S. population without health insurance coverage under age 65. In 2006, the number of uninsured individuals in the United States reached 46.5 million or 18 percent of the non-elderly population.¹ While AAOS believes there are several viable approaches to reducing the number of uninsured individuals in America, existing federally funded programs such as Medicaid and the State Children’s Health Insurance Program (SCHIP) will continue to play a role.

To the extent that these programs provide health care coverage for individuals in the United States, the AAOS believes that there are principles that should apply to these programs and that structural changes that we outline below must be made in order for patients to have access to high quality, safe, cost effective medical care in general and specifically to be able to obtain necessary musculoskeletal care.

Universal Coverage

The American Association of Orthopaedic Surgeons (AAOS) believes that in any consideration of changes to the health care financing and delivery system in the United States, the well-being of the patient singularly must be the highest priority.  The AAOS strongly supports providing individuals consistent access to patient centered, timely, unencumbered, affordable, and appropriate health care and universal coverage while maintaining that physicians are an integral component to providing the highest quality treatment.

The AAOS supports prioritizing the coverage of children under the SCHIP program.

Universal Access

The ability of eligible beneficiaries to access care via Medicaid and SCHIP programs is negatively impacted by the number of physicians that choose not to participate in those programs. This occurs because the current Medicaid and SCHIP payment rates make it extremely difficult for physicians to cover their costs of practice, so they are unable to participate in those programs.

The AAOS supports equity in Medicaid and SCHIP payments with Medicare payment rates; this should be structured as a payment floor under which states could not reimburse providers at levels lower than payment under Medicare. Medicare payment to physicians must be structured so that it remains economically viable for physicians to participate, and the flawed SGR must be replaced.

This type of provision would assist in stopping the well-documented flight of physicians from the Medicaid program and help relieve the financial burden placed on the increasingly few providers (physicians and hospitals) that treat Medicaid and SCHIP patients.

In addition, the AAOS believes that patients must be guaranteed their choice of physicians in Medicaid and SCHIP managed care plans.

Accountability

The American Association of Orthopaedic Surgeons believes that physicians, hospitals, patients, and the federal and state governments have a shared responsibility to ensure stability of Medicaid and SCHIPS programs. By participating in these programs, physicians can help to secure access to needed health care services for the most vulnerable populations.

Benefit Package

While the AAOS appreciates the need for flexibility so that states may implement Medicaid and SCHIP programs that are appropriate for their populations, beneficiaries of these programs should have certain minimum benefit guarantees. This is further underscored by the migration of beneficiaries into Medicaid and SCHIP managed care plans.

The American Association of Orthopaedic Surgeons believes that traditional and managed care coverage under Medicaid and SCHIP plans should include a protected minimum benefit package which includes specialty care services.

One major health care insurance coverage topic over the last year has involved the utilization of “defined benefits” versus “defined contributions”. While in particular circumstances, there is value to structuring a plan around defined contributions, the AAOS is concerned about the application of this principle to beneficiaries in the Medicaid and SCHIP programs because these programs cover some of the most vulnerable patients in the United States.

The AAOS believes that rules governing Medicaid and SCHIP provide a “defined benefit” rather than a “defined contribution.”

Continuity of Care

The ability of orthopaedic surgeons to provide the care that Medicaid and SCHIP beneficiaries need is dependent on those individuals being covered by those programs for a reasonable and foreseeable period of time. The manner in which many Medicaid and SCHIP programs are structured can leave patients falling in and out of eligibility several times throughout the course of a single year. This unpredictability can have a serious effect on patient health and the ability of orthopaedic surgeons to carry out a course of treatment.

The AAOS believes that all Medicaid and SCHIP programs should be required to provide “continuous coverage” defined as coverage for one year from the date of eligibility.

In addition, in several states there is a 3 month period of un-insurance in order to be eligible for SCHIP coverage. The AAOS is concerned that this could serve as a significant barrier to care.

The AAOS believes that un-insurance waiting periods should be eliminated as an eligibility requirement from SCHIP programs.

Cost Containment

The Medicaid program is severely underfinanced. This must be addressed at both the federal and state level to ensure that beneficiaries are able to access care, and this can be partially accomplished by bringing a focus in the Medicaid program back to medical services.

The AAOS believes that the primary cost containment focus in the Medicaid program should focus on the increased spending associated with long-term care services and not on reducing coverage or eligibility associated with Medicaid acute care benefits.

In addition, the inequity between the state/federal matching rates for SCHIP and Medicaid programs should be addressed. When SCHIP was first created in 1997 and states needed an incentive to dedicate the resources to the creation of the program, a higher matching rate was reasonable. However, SCHIP programs currently exist in every state.

The AAOS believes that the rationale for a higher state/federal matching rate for SCHIP no longer exists, and the inequity between Medicaid and SCHIP matching rates should be eliminated.

External Reforms

The need for medical liability reform should be a part of any package related to health care reform and existing government programs. Given the inadequate provider reimbursement rates in Medicaid and SCHIP programs, the need for medical liability reform could provide policy makers with a mechanism for providing an incentive to physicians to participate in the program. Congress and policymakers should continue to explore medical liability reform in the context of the need for physicians to participate in the Medicaid and SCHIP programs.

The AAOS encourages the federal government to enact tort reform legislation and to consider several tort reform options that have proven effective in some states.

In order to have a cohesive health insurance system that ensures continual patient access to care, public and private programs must partner to ensure that there are no gaps in coverage.

The AAOS believes that SCHIP beneficiaries should be allowed to purchase private insurance with their SCHIP dollars if

• there are minimum benefit guarantees; and
• there is a SCHIP option available for those that do not chose private programs.

Infrastructure and Administration

There is a significant population of eligible Medicaid and SCHIP recipients that have not been enrolled in the programs.

The AAOS supports efforts to increase outreach and education to ensure that those who are currently eligible for the program are enrolled. This includes mechanisms such as “express lanes” or enrollment assistance programs, whereby individuals eligible for other public assistance programs with compatible eligibility criteria (such as the Women, Infants, and Children (WIC) or school lunch programs) would be automatically enrolled in SCHIP.

A major obstacle to improving the care delivered to patients that are covered by Medicaid and SCHIP programs is the lack of data on quality and access. The beneficiaries of both programs deserve at least the same level of health information technology (HIT) investment as other insurance programs, and Medicaid and SCHIP programs have fallen behind. Providers need assistance with procuring the IT that will help improve the quality of health care for their patients. In addition, the ability of policymakers to identify quality and access issues in both programs will lead to better outcomes for patients and more financially stable programs.

The AAOS believes that federal and state governments should provide significant investments in HIT within Medicaid and SCHIP for the benefit of the patients enrolled in these programs.

Over the past several years, policymakers have debated the impact of immigration on the Medicaid and SCHIP programs. One focal point of the immigration debate has been citizenship documentation. In this and other areas, federal policy makers should delegate immigration issues to those who are best-situated to deal with those issues: immigration and homeland security experts.

The AAOS supports Medicaid and SCHIP provisions that make it clear that physicians should not be required to act as immigration agents by restricting care only to citizens and that they should be appropriately reimbursed for all medically necessary care that they deliver to all individuals.

Quality of Care

The AAOS believes that educational standards are important and that patients are best served when their care is directed by physicians.

The AAOS supports a requirement that Medicaid and SCHIP programs and care be directed by physicians.²

Currently, there are no sufficient reporting mechanisms that provide data on the quality, status, and function of Medicaid and SCHIP beneficiaries.

The AAOS supports the creation of Medicaid and SCHIP initiatives that:

• Establish state reporting requirements on access information indicators;
• Create a national database that would collect utilization information;
• Include access measures as an indicator of quality;
• Align Medicaid and SCHIP quality initiatives with Medicare quality initiatives; and
• Create an advisory council similar to the Medicare Payment Advisory Commission (MedPAC) that would focus on SCHIP and Medicaid quality and access issues.

References:

1. Kaiser Family Foundation, The Uninsured: A Primer, Key Facts About Americans Without Insurance, October 2007.
2. Licensed and practicing physicians as defined by the American Medical Association.

March 2008 American Association of Orthopaedic Surgeons.

This material may not be modified without the express written permission of the American Association of Orthopaedic Surgeons.

Position Statement 1174

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