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President Barack Obama, Vice President Joe Biden, and senior staff, react in the Roosevelt Room of the White House, as the House passes the healthcare reform bill, March 21, 2010. Official White House Photo by Pete Souza

AAOS Now

Published 4/1/2010
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Nick Piatek; Mary Ann Porucznik

Obama gets his wish

House Democrats pass Senate version of healthcare reform

In a late-night vote—and without a single Republican supporter—the U.S. House of Representatives passed the Patient Protection and Affordable Care Act (HR 3590), the healthcare reform bill that the Senate had passed on Dec. 24, 2009. The final tally was 219 to 212.

The vote sent the bill to the White House for President Obama’s signature.

Although many provisions of HR 3590 are in line with the principles of healthcare reform promoted by the American Association of Orthopaedic Surgeons (AAOS), other portions of the bill are problematic. As a result, the AAOS was one of several medical groups that could not endorse the measure as a whole. The Alliance for Specialty Medicine, a coalition of national medical societies representing specialty physicians, has also consistently argued for changes.

“Although the final legislation included several provisions that conformed to the AAOS principles, ultimately, we could not support it because of the issues it did not address,” said Peter J. Mandell, MD, chair of the AAOS Council on Advocacy. Even the American Medical Association (AMA), which endorsed the bill and labeled its passage “historic,” noted the need for “additional important changes,” many of which parallel AAOS concerns. (See “Concerns surrounding HR 3590.”)

Indeed, almost immediately after the historic vote, House members voted on a reconciliation package that would retroactively change parts of the bill, to bring provisions more in line with the original House-passed bill.

“Regardless of how the final bill turns out,” said AAOS President John J. Callaghan, MD, “the AAOS will continue to fight for changes that improve health care for our patients and address the concerns of our members.”

Background
Healthcare reform was a major campaign promise for President Obama, and the debate over the provisions has consumed much of the first year of his presidency. The decision to allow Congress to develop a bill resulted in several versions being proposed and amended during marathon sessions in committee hearings, back rooms, and floor votes. As a result, the ability of Congress to pass any other major legislation was severely limited.

With the death of Sen. Ted Kennedy (D-Mass.) and the subsequent election of Republican Scott Brown to replace him, the Democrats lost their filibuster-proof majority in the Senate, forcing them to seek alternative ways to pass healthcare reform. Without enough votes in the Senate to adopt the House version of healthcare reform—a bill more favorable to the AAOS, Democrats were forced to rely on the House to pass the Senate version.

Enough House Democrats eventually agreed to the measure, but not without significant reservations. Hence, the almost-immediate passage of a reconciliation bill.

Positive provisions have immediate impact
Several provisions of HR 3590 advance the cause of healthcare reform and improve the ability of patients and their physicians to achieve better health outcomes. The following provisions, which are consistent with AAOS principles, may have the greatest impact on patients in the near term:

  • New insurance policies must allow adult children to stay on their parents’ healthcare policies until they turn 26.
  • Small businesses with fewer than 25 employees and average annual wages of up to $50,000 will receive tax credits to offset the cost of buying employee insurance coverage.
  • Lifetime caps on health insurance benefits will be eliminated.
  • New private plans and Medicare will be required to cover preventive services with no copayments, and preventive services will be exempt from deductibles.
  • Medicare drug benefits will be expanded, with a 50 percent discount on brand-name drugs that fall into the “donut hole” for low-income elderly individuals, beginning in 2011.
  • A new, federally subsidized, high-risk program will be established to provide healthcare coverage to people whose medical conditions have prevented them from obtaining health insurance.

“These are positive steps that will benefit patients,” said Dr. Callaghan. “In addition, the bill includes provisions that support prevention and wellness programs and promote comparative effectiveness research. Those provisions will help reduce the burden of musculoskeletal disease and improve both the quality of health care provided and the outcomes we and our patients will see.”

Possible alterations
The Health Reform Reconciliation Bill would make several changes to HR 3590. At the time of this writing, the Senate parliamentarian is determining which of these revisions can proceed under the reconciliation process. If any are changed, the measure will return to the House for another vote.

For physicians, the most significant proposals in the reconciliation bill are the following:

  • Government payments to Medicare Advantage plans would be cut back significantly—by $132 billion over 10 years, compared to the proposed $118 billion cutback in the original legislation.
  • Medicaid payments for primary care doctors would be increased to equal Medicare payments, beginning in 2013 and 2014. This provision, however, would not apply to specialists such as orthopaedic surgeons.
  • The cut off date for self-referral to physician-owned hospitals is Dec. 31, 2010. After this date, physicians can no longer self refer to hospitals they own. The bill, however, does allow for limited expansion of current facilities and includes an exemption for physician-owned hospitals that have a high threshold of Medicaid patients.
  • The 2011 fee schedule would increase the utilization rate assumption for expensive imaging equipment to 75 percent.
  • Although the Independent Payment Advisory Board (IPAB) would continue, it would not be expected to produce as much in savings.

Long-term impact
Taking the reconciliation amendments into consideration, HR 3590 would provide health insurance coverage for 32 million additional Americans over 10 years, at an estimated cost of about $938 billion while reducing the federal deficit by $143 billion during that same period, according to the Congressional Budget Office.

“Extending health coverage to more of the uninsured is a positive step,” said Dr. Mandell, “and a goal that the AAOS supports. But the legislation misses the opportunity to permanently fix the flawed sustained growth rate formula. Nor does it take advantage of the substantial savings in healthcare costs that could be achieved with comprehensive medical liability reform.”

In addition, the AAOS is concerned that expanding coverage will not translate into an expansion of healthcare services to individuals. In fact, some of the cost-cutting provisions in the bill may result in less access to care and less care being provided.

“The President continues to talk about making sure more people are covered. But that doesn’t mean more people will get care,” noted Sen. John A. Barrasso, MD (R-Wyo.), the only orthopaedic surgeon serving in the Senate. “And there’s a fundamental disconnect when he says he’s going to solve this by putting 15 million more people on Medicaid.”

Orthopaedic surgeon and Congressional representative Tom Price, MD, (R-Ga.) agrees. “The public is rightly concerned because the Democrats’ plan puts Washington in charge instead of patients, families, and doctors. As a result, Americans will pay higher premiums and higher taxes in exchange for decreased access to care.”

Even the AMA admits that “The current IPAB framework could result in misguided payment cuts that undermine access to care and destabilize health care delivery.”

Whatever the result of the upcoming debate, one thing is certain. The healthcare delivery landscape is changing significantly. The AAOS will continue to review the legislative proposals and to follow their progress. Watch for ongoing updates through the electronic media Advocacy Now and Headline News Now, and in upcoming issues of AAOS Now.

Medicare cuts go into effect
On March 26, the Senate recessed without taking action to postpone the 21.2 percent cut in Medicare physician payments. As a result, the cuts will go into effect on April 1.

A 30-day extension had been included in HR 4851, which had already passed the House and extended certain government programs set to expire at the end of March. Sen. Tom Coburn, MD (R-Okla.), however, objected to the bill’s consideration, saying that it should not be considered emergency spending that would be exempt from budgetary offsets. As a result, the Senate recessed without passing the measure, allowing the payment cuts to go into effect.

The Centers for Medicare & Medicaid Services will likely delay payment for claims submitted during the first 10 days of the month. Congress returns from recess on April 12.

The AAOS maintains that measures that fall short of repealing and replacing the flawed SGR formula are unacceptable. The AAOS office of government relations will monitor the situation and provide updates through AAOS Advocacy Now.

For more information on healthcare reform and AAOS advocacy efforts, visit the government relations Web site.