WSJ (Peggy Noonan) — Kaiser Health News — NPR (PhRMA Lobbying) — HR 2844 IH — HR 3074 IH — S 1249 IS


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Common Sense May Sink ObamaCare

By Peggy Noonan, July 24, 2009

It turns out the president misjudged the nation’s mood.

This is big, what’s happening. President Obama appears to have misstepped on a major initiative and defining issue. He has misjudged the nation’s mood, which itself is news: He rose from nothing to everything with the help of his fine-tuned antennae. Resistance to the Democratic health-care plans is in the air, showing up more now on YouTube than in the polls, but it will be in the polls soon enough. The president, in short, may be facing a real loss. This will be interesting in a number of ways and for a number of reasons, among them that we’ve never seen him publicly defeated before, because he hasn’t been. So we may be entering new territory, with new struggles shaped by new dynamics.

His news conference the other night was bad. He was filibustery and spinny and gave long and largely unfollowable answers that seemed aimed at limiting the number of questions asked and running out the clock. You don’t do that when you’re fully confident. Far more seriously, he didn’t seem to be telling the truth…

The White House misread the national mood. The problem isn’t that they didn’t “bend the curve,” or didn’t sell it right. The problem is that the national mood has changed since the president was elected. Back then the mood was “change is for the good.” But that altered as the full implications of the financial crash seeped in. The crash gave everyone a diminished sense of their own margin for error. It gave them a diminished sense of their country’s margin for error. Americans are not in a chance-taking mood…


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New OBAMACARE SHOCKER: More Hospice and Less Senior Care

Friday, July 24, 2009

n1111599162_3668_8789-2Here’s another example of the lies the American People are being thrown about the Obamacare process, especially the part about receiving the same quality medical attention via Obamacare that one receives now.

Folks its no joke, I know no other way of putting it, the Democratic Party wants to kill your Grandparents. If you are a baby-boomer I would worry because you are a target also.

Its nothing personal, just business.  It makes economic sense, its expensive to keep old people alive. That’s why the plan forces young people, who presently don’t have heath care to purchase it.  Keeping them healthy is cheap, the Democrats need them in the plan to help pay for the seniors they are going to let die.

Not only does the Congressional plan include mandatory classes for Seniors on “dying with dignity”  but they have added funds for additional Hospice care. I just received this email news flash from RedState

BREAKING NEWS UPDATE: A RedState source sat behind a top aide to Rep. Paul Tonko (D-NY) and heard the aide admit that “the increase in Hospice care which will solve the prolonging of life issue.” As you know, Democrats have been open about their desire to push seniors toward euthanasia as a cost savings option. In fact, the Democrats already have in the legislation a provision requiring senior citizens to receive instructions every five years on dying with dignity…


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Model’ Health Systems Press Case For Medicare Fix In Reform

By Phil Galewitz, Jul 20, 2009

When talking about his vision for the U.S. health care system, President Barack Obama points to places like the Mayo Clinic in Minnesota and Intermountain Healthcare in Utah, which are known for providing high-quality, low-cost care.

“We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere,” he said last month.

But officials at these institutions, called “integrated” because of the close relationships between hospitals and doctors–say the congressional health overhaul bills, at least in their current form, would do little to reward them or encourage others to follow their lead.

They’re pressing lawmakers to move much more aggressively to revamp the way Medicare pays for care to discourage unnecessary services and reward “value” over volume.

“Unless we get the incentives right, nothing else in health reform really matters,” said Greg Poulsen, senior vice president at Intermountain Healthcare, a nonprofit system of hospitals and doctors in Salt Lake City.

Partly at their behest, members of Congress from Minnesota and Wisconsin last month introduced a bill that would create a Medicare “value index” to change the way doctors are paid, but the legislation so far hasn’t been included in any health overhaul bills.

Because of that and other issues, several integrated systems expressed “significant concerns” about the House bill in a letter last week to Rep. Ron Kind, D.-Wis., one of the sponsors of the value-index legislation. They said the legislation doesn’t meet the goal of “compensating for quality rather than quantity.”

Nicholas Papas, spokesman for the Department of Health and Human Services, said the administration is pleased with the legislation and is “confident there will be opportunities to keep working with the committee leadership to refine the proposals that are emerging.”

Other ideas backed by the integrated health systems—such as “bundling” payments to doctors and hospitals together for a patient’s illness to encourage more efficient care—may get backing only as pilot programs. The Senate Finance Committee bill, which may go further, hasn’t been released yet.

The debate about Medicare, the federal health program for the elderly, is taking on new urgency amid growing questions about whether the health overhaul legislation would meet Obama’s goal of slowing costs, or “bending the curve.” Last week, Douglas Elmendorf, director of the Congressional Budget Office, said that the legislation would add to the federal deficit.

Obama, in his weekly address on Saturday, countered that by improving quality and efficiency, “the reforms we make will help bring our deficits under control in the long term.” And the White House renewed its push for shifting control of Medicare spending from Congress to a proposed independent commission—something it said would restrain costs over time.

Other Hospitals Worry

Medicare accounts for 22 percent of all U.S. health care spending and is often emulated by private insurers. It has enormous influence over how health care is paid for in the U.S.

But it’s unlikely that Congress will restructure its payment system any time soon, experts say. One reason is that the integrated health systems pushing for a rejiggering make up just a sliver of all the nation’s hospitals. Another is that most institutions aren’t ready to be more financially tied to their doctors or fear a payment change would hurt them.

About two-thirds of hospitals lose money on Medicare patients and many hospitals worry “they’ll lose even more money under payment reform,” said Len Nichols, director of the Health Policy Program at the New America Foundation, a Washington think tank.

In most communities, doctors work independently of their local hospitals and are paid by Medicare and most private insurers under fee-for-service arrangements. Hospitals, meanwhile, are typically reimbursed based on patients’ diagnoses, so they get paid for doing less for each patient. The incentives are sometimes at cross purposes, and aren’t based on how well patients do.

By contrast, Mayo doctors are paid salaries, and don’t get paid more for providing more care. And they take a team approach to coordinating care, working to reduce unnecessary tests and office visits and using electronic health records to monitor patients’ outcomes. These steps save money, but Mayo itself doesn’t benefit financially.

Based on their experience, Mayo and others say that “global” or “bundled” payments would prod all hospitals and doctors to improve and streamline their care. Under this idea, providers get a flat fee for treating a patient’s illness or handling a patient’s condition over time. For example, the government would pay a single fee for a patient’s hip replacement to cover the hospital stay, surgery and rehabilitation at home or in a nursing home. The fee would be higher for providers who delivered better care at lower cost.

“By having Medicare make a single payment to a team of providers, you change the culture and changing the culture is what allows the hospital and multiple doctors to act as a team as opposed to acting independently,” said Poulsen of Intermountain Healthcare.

Many hospitals are worried about proposals to “bundle” payments because of the possibility that managed care companies would end up controlling Medicare dollars previously paid directly to them. “Who gets the bundle is the key question,” said Linda Quick, president of the South Florida Hospital and Healthcare Association, which is based in Hollywood, Fla. and represents about 50 hospitals.

Overhaul proposals by the House Democrats and the Senate Health Education, Labor and Pensions Committee call for pilot programs to test new Medicare payment systems, including a new type of provider arrangement called “accountable health organizations,” groups of hospitals and doctors that get paid based on how well they meet cost and quality targets. But the programs don’t go far enough fast enough, the officials from integrated health systems say.

“There is not sufficient attention being paid to the fundamental problem of reforming Medicare,” said Oliver Henkel, chief government relations officer at the Cleveland Clinic. “We don’t yet see enough meat on the bones of Medicare payment reform.”

Payment Changes Lag

The last major Medicare payment change for hospitals was in 1983, when Medicare switched from paying hospitals a fee for each service to a fee based on a patient’s diagnosis, said Poulsen of Intermountain Healthcare. “That was a great first step, but we’ve yet to make a second,” he said.

Integrated health systems also are taking aim at the tremendous regional variation in Medicare spending. The program spends about $6,600 a year per enrollee in Minnesota compared to about $15,000 in southern Florida. The integrated systems, a number of which are in the Upper Midwest, want those disparities reduced, but such a change would likely draw strong opposition if it came at the expense of high-cost areas like New York and California.

Quick of the Florida hospital group said that her member hospitals expect to get paid less after a health care overhaul, but that she doesn’t expect “at the end of the day anyone will get paid more.”

Both the American Medical Association and the American Hospital Association say they favor additional study of new payment strategies, rather than any major revamping now.

That’s the approach Congress seems to be pursuing. In addition, lawmakers are on track to approve across-the-board federal payment reductions of $155 billion over 10 years for hospitals, reflecting a deal reached recently by major hospital groups, the White House and Senate Democrats. That agreement assumes that the hospitals will see increased revenues as reform legislation results in fewer uninsured Americans, whose care is now a financial burden.

Mayo and similar health systems object to the sweeping cuts. “Across-the-board cuts will be harmful to everyone and we think it is particularly bad to penalize the high-value organizations,” said Jeff Korsmo, executive director of the Mayo Clinic Health Policy Center. “We will have to violate our values in order to stay in business and reduce our access to government patients.”

As a result of low reimbursement rates, Mayo’s Arizona operations in 2007 stopped accepting new Medicare patients seeking primary care. About half of Mayo’s patients are on Medicare. Last year, Mayo said it lost about $840 million by treating Medicare patients, money it had to make up by treating privately insured patients.


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Drug Firms Pour $40 Million Into Health Care Debate

by Andrea Seabrook and Peter Overby

All Things Considered, July 23, 2009

One of the most powerful players in health care is a group called the Pharmaceutical Research and Manufacturers of America, or PhRMA. It represents just 32 brand-name drug companies, but it has so much influence that when Congress passes a bill, PhRMA almost always gets its way. One big reason why: PhRMA and its members have spent millions of dollars lobbying Congress as lawmakers work to overhaul health care.

$40 Million In Lobbying

Any firm that spends significant money lobbying Congress has to file a quarterly report. Monday was the deadline for the second quarter, providing a chance to peer into three critical months in the health care debate: April, May and June. That’s when Congress really got down to business with health care.

In those three months, PhRMA spent just over $6 million, which breaks down to about $2 million a month.

But the reports filed by the companies that belong to PhRMA reveal that during this same period, all but a few of them were running their own lobby shops as well. The drugmaker Pfizer alone spent $5.5 million. Amgen, Eli Lilly and GlaxoSmithKline spent about $3 million each.

Add it all up and you get this: In those three critical months, PhRMA and its member companies spent $40 million lobbying Congress. That’s more than $3 million each week.

PhRMA declined to speak to NPR for this story. Four of its biggest members turned down or did not respond to interview requests.

‘Patients Are Our First Concern’

However, PhRMA is speaking to the public — through advertisements.

“We need good coverage people can afford,” says one ad. “A little more cooperation, a little less politics, and we can get the job done this time.”

And PhRMA’s CEO, the former Louisiana congressman Billy Tauzin, has been out there touting the consortium’s support for a health care overhaul.

“We’re working with groups we never worked with before — Families USA, the American Agenda, labor, health care providers — that never stood together on the same platform,” says Tauzin. “We have every business reason to want to see this happen, and we have every moral reason to see this happen, because our patients are our first concern.”

An Effective, Powerful Lobbying Outfit

“Of course they’re supportive — they’re getting exactly what they want,” says Jerry Avorn, a professor at Harvard Medical School. He, for one, is not shocked to hear that brand-name drug companies spent $40 million in three months.

“It’s not surprising to learn this, because the pharmaceutical industry for years has been one of the most effective and powerful lobbying outfits in Washington, and it explains why we have a lot of drug policies in the U.S. that don’t look like drug policies in any other industrialized country,” says Avorn.

Avorn wrote a book about drugs and health care called Powerful Medicines. He compares the current fight to the one in 2003, when Congress last made a major health care change by adding prescription drug coverage to Medicare. Avorn says PhRMA’s lobbying efforts were so vast and so intense that the result is now written into the law.

Today the government is empowered to negotiate how much it pays doctors, hospitals, laboratories — almost anyone who does business with Medicare. Anyone except pharmaceutical companies. Avorn points out that negotiating drug prices is illegal in the United States.

Paying To Remove Issues?

If you want to know what PhRMA is getting this time, Avorn says just look at what’s not on the table during the debate:

Drug re-importation from Canada? Off the table.

Government-negotiated drug prices? Off the table.

“A lot of those seem to have been resolved even before the public discussion begins,” says Avorn. “And usually, as with the other interest groups involved, they seem to have been resolved in favor of the interest groups, rather than in favor of the public.”

More Lobbyists Than Congress Members

There’s something else drug companies bought with that $40 million: people.

PhRMA alone has 29 people lobbying for it. In the graphic on this page, you can dig into the reports, and you’ll find that PhRMA also hired 45 different Washington, D.C., lobbying firms to represent it in those three months of the second quarter.

Most of the drug companies that belong to PhRMA are running their own lobby shops as well, plus the biggest ones have also hired dozens of D.C. lobbying firms.

So think about it this way: There are far more people in Washington representing one party of the debate — the big drug companies — than there are members of Congress working on the health care bill.

This is not to pass judgment on the merits of PhRMA’s arguments, but rather to show just how much money and lobbying it uses to back them up — and the winning streak in Congress that follows.

Related NPR Stories


Brand-Name Drugmakers: A Prescription For Access

More than 300 lobbyists work Washington for the brand-name prescription drug industry. The trade group Pharmaceutical Research and Manufacturers of America alone spent $6.15 million on lobbying in the second quarter, from April 1 to June 30, this year.


[Interactive: Brand-Name Drug Makers: A Prescription For Access]

Data / Links From This Graphic:

NOTE: Not included in this graphic: $35 million spent by PhRMA’s member corporations, and unknown sums spent on grass-roots lobbying and advertising. Source: Lobbying disclosuresCredits: Jessica Deahl, Alyson Hurt and Peter Overby / NPR


Medicare Payment Improvement Act of 2009 (Introduced in House)

HR 2844 IH

111th CONGRESS

1st Session

H. R. 2844

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

IN THE HOUSE OF REPRESENTATIVES

June 12, 2009

Mr. KIND (for himself, Mr. BRALEY of Iowa, Mr. BLUMENAUER, Mr. WALZ, and Mr. INSLEE) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Payment Improvement Act of 2009′.

SEC. 2. VALUE INDEX UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

(a) In General- Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph:

`(6) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each fee schedule area. The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that fee schedule area.

`(B) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or fee schedule area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall take into account the following:

`(I) Hospital readmission rates.

`(II) Hospital emergency department utilization for ambulatory care-sensitive conditions.

`(III) Hospital admissions for ambulatory care-sensitive conditions.

`(IV) Mortality amenable to health care.

`(V) Other items determined appropriate by the Secretary.

`(iii) ESTABLISHMENT- The quality component for each fee schedule area shall be the ratio of the quality score for such area to the national average quality score.

`(iv) APPLICATION- In the case of a fee schedule area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State fee schedule area shall be the quality component for the entire State.

`(C) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the fee schedule area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among fee schedule areas.

`(ii) ESTABLISHMENT- The cost component for a fee schedule area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.’.

(b) Conforming Amendments- Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended–

(1) in subparagraph (b)(1)(C), by striking `geographic’ and inserting `geographic and value’; and

(2) in subsection (e)–

(A) in paragraph (1)–

(i) in the heading, by inserting `AND VALUE’ after `GEOGRAPHIC’;

(ii) in subparagraph (A), by striking clause (iii) and inserting the following new clause:

`(iii) a value index (as defined in paragraph (6)) applicable to physician work.’;

(iii) in subparagraph (C), by inserting `and value’ after `geographic’ in the first sentence;

(iv) in subparagraph (D), by striking `physician work effort’ and inserting `value’;

(v) by striking subparagraph (E); and

(vi) by striking subparagraph (G);

(B) by striking paragraph (2) and inserting the following new paragraph:

`(2) COMPUTATION OF GEOGRAPHIC AND VALUE ADJUSTMENT FACTOR- For purposes of subsection (b)(1)(C), for all physicians’ services for each fee schedule area the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area.’; and

(C) by striking paragraph (5) and inserting the following new paragraph:

`(5) PHYSICIAN WORK VALUE ADJUSTMENT FACTOR- For purposes of paragraph (2), the `physician work value adjustment factor’ for a service for a fee schedule area, is the product of–

`(A) the proportion of the total relative value for the service that reflects the relative value units for the work component; and

`(B) the value index score for the area, based on the value index established under paragraph (6).’.

(c) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each fee schedule area available to the public by not later than January 1, 2011.

(d) Effective Date- The amendments made by this section shall apply to the Medicare physician fee schedule for 2012 and each subsequent year.


Medicare Payment Fairness Act of 2009 (Introduced in House)

HR 3074 IH

111th CONGRESS

1st Session

H. R. 3074

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician hospital service and for inpatient hospital services.

IN THE HOUSE OF REPRESENTATIVES

June 26, 2009

Mr. ELLISON introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician hospital service and for inpatient hospital services.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Payment Fairness Act of 2009′.

SEC. 2. VALUE INDEX UNDER THE MEDICARE PHYSICIAN HOSPITAL SERVICE.

(a) In General- Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph:

`(6) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each fee schedule area. The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that fee schedule area.

`(B) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or fee schedule area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall take into account the following:

`(I) Hospital readmission rates.

`(II) Hospital emergency department utilization for ambulatory care-sensitive conditions.

`(III) Hospital admissions for ambulatory care-sensitive conditions.

`(IV) Mortality amenable to health care.

`(V) Other items determined appropriate by the Secretary.

`(iii) ESTABLISHMENT- The quality component for each fee schedule area shall be the ratio of the quality score for such area to the national average quality score.

`(iv) APPLICATION- In the case of a fee schedule area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State fee schedule area shall be the quality component for the entire State.

`(C) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the fee schedule area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among fee schedule areas.

`(ii) ESTABLISHMENT- The cost component for a fee schedule area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.’.

(b) Conforming Amendments- Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended–

(1) in subparagraph (b)(1)(C), by striking `geographic’ and inserting `geographic and value’; and

(2) in subsection (e)–

(A) in paragraph (1)–

(i) in the heading, by inserting `AND VALUE’ after `GEOGRAPHIC’;

(ii) in subparagraph (A), by striking clause (iii) and inserting the following new clause:

`(iii) a value index (as defined in paragraph (6)) applicable to physician work.’;

(iii) in subparagraph (C), by inserting `and value’ after `geographic’ in the first sentence;

(iv) in subparagraph (D), by striking `physician work effort’ and inserting `value’;

(v) by striking subparagraph (E); and

(vi) by striking subparagraph (G);

(B) by striking paragraph (2) and inserting the following new paragraph:

`(2) COMPUTATION OF GEOGRAPHIC AND VALUE ADJUSTMENT FACTOR- For purposes of subsection (b)(1)(C), for all physicians’ services for each fee schedule area the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area.’; and

(C) by striking paragraph (5) and inserting the following new paragraph:

`(5) PHYSICIAN WORK VALUE ADJUSTMENT FACTOR- For purposes of paragraph (2), the `physician work value adjustment factor’ for a service for a fee schedule area, is the product of–

`(A) the proportion of the total relative value for the service that reflects the relative value units for the work component; and

`(B) the value index score for the area, based on the value index established under paragraph (6).’.

(c) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each fee schedule area available to the public by not later than January 1, 2011.

(d) Effective Date- The amendments made by this section shall apply to the Medicare physician hospital service for 2012 and each subsequent year.

SEC. 3. VALUE INDEX UNDER THE INPATIENT HOSPITAL PROSPECTIVE PAYMENT SYSTEM.

(a) In General- Section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) is amended by adding at the end the following new paragraph:

`(14) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each hospital service area. The value index shall be the ratio of the quality component under subparagraph (C) to the cost component under subparagraph (D) for that hospital service area.

`(B) PAYMENT ADJUSTMENT- Notwithstanding any other provision of this title, the payment amount made to a subsection (d) hospital under this subsection or section 1814(b)(3) for discharges during a fiscal year, after all other adjustments and add-ons effected under this title, shall be adjusted by multiplying such amount by the value index determined under subparagraph (A) for the hospital service area in which the discharges occur.

`(C) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or hospital service area basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall take into account quality measures reported by hospitals under subsection (b)(3)(B)(viii)(III) and shall, to the extent feasible, add additional measures relating to outcomes in hospitals.

`(iii) ESTABLISHMENT- The quality component for each hospital service area shall be the ratio of the quality score for such area to the national average quality score.

`(iv) APPLICATION- In the case of a hospital service area that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State hospital service area shall be the quality component for the entire State.

`(D) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under parts A and B for the hospital service area. The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among hospital service areas.

`(ii) ESTABLISHMENT- The cost component for a hospital service area shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.

`(E) HOSPITAL SERVICE AREA- In this paragraph, the term `hospital service area’ means such an area as the Secretary shall define. In defining such areas, the Secretary shall use a methodology similar to that used in the establishment of the Dartmouth Atlas of Health Care.’.

(b) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1886(d)(14)(B) of the Social Security Act, as added by subsection (a), for each hospital service area available to the public by not later than January 1, 2011.

(c) Effective Date- The amendments made by this section shall apply to the discharges occurring on or after October 1, 2012.


Medicare Payment Improvement Act of 2009 (Introduced in Senate)

S 1249 IS

111th CONGRESS

1st Session

S. 1249

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

IN THE SENATE OF THE UNITED STATES

June 11, 2009

Ms. KLOBUCHAR (for herself, Ms. CANTWELL, and Mr. GREGG) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to create a value indexing mechanism for the physician work component of the Medicare physician fee schedule.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Payment Improvement Act of 2009′.

SEC. 2. VALUE INDEX UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

(a) In General- Section 1848(e)(5) of the Social Security Act (42 U.S.C. 1395w-4(e)) is amended by adding at the end the following new paragraph:

`(6) VALUE INDEX-

`(A) IN GENERAL- The Secretary shall determine a value index for each hospital referral area (as defined by the Secretary). The value index shall be the ratio of the quality component under subparagraph (B) to the cost component under subparagraph (C) for that hospital referral area.

`(B) QUALITY COMPONENT-

`(i) IN GENERAL- The quality component shall be based on a composite score that reflects quality measures available on a State or hospital referral area (as so defined) basis. The measures shall reflect health outcomes and health status for the Medicare population, patient safety, and patient satisfaction. The Secretary shall use the best data available, after consultation with the Agency for Healthcare Research and Quality and with private entities that compile quality data.

`(ii) ADVISORY GROUP-

`(I) IN GENERAL- Not later than 60 days after the date of enactment of the Medicare Payment Improvement Act of 2009, the Secretary shall establish a group of experts and stakeholders to make consensus recommendations to the Secretary regarding development of the quality component. The membership of the advisory group shall at least reflect providers, purchasers, health plans, researchers, relevant Federal agencies, and individuals with technical expertise on health care quality.

`(II) DUTIES- In the development of recommendations with respect to the quality component, the group established under subclause (I) shall consider at least the following areas:

`(aa) High variation and high cost per capita utilization of resources, including rates of hospitalizations, number of visits and subspecialty referrals, and number of procedures (as determined by data under this title).

`(bb) Health outcomes and functional status of patients.

`(cc) The continuity, management, and coordination of health care and care transitions, including episodes of care, for patients across the continuum of providers, health care settings, and health plans.

`(dd) Patient, caregiver, and authorized representative experience, quality and relevance of information provided to patients, caregivers, and authorized representatives, and use of information by patients, caregivers, and authorized representatives to inform decision making.

`(ee) The safety, effectiveness, and timeliness of care.

`(ff) The appropriate use of health care resources and services.

`(gg) Other items determined appropriate by the Secretary.

`(iii) REQUIREMENT- In establishing the quality component under this subparagraph, the Secretary shall–

`(I) take into account the recommendations of the group established under clause (ii)(I); and

`(II) provide for an open and transparent process for the activities conducted pursuant to the convening of such group with respect to the development of the quality component.

`(iv) ESTABLISHMENT- The quality component for each hospital referral area (as so defined) shall be the ratio of the quality score for such area to the national average quality score.

`(v) QUALITY BASELINE- If the quality component for a hospital referral area (as so defined) does not rank in the top 25th percentile as compared to the national average (as determined by the Secretary) and the amount of reimbursement for services under this section is greater than the amount of reimbursement for such services that would have applied under this section if the amendments made by section 2 of the Medicare Payment Improvement Act of 2009 had not been enacted, this section shall be applied as if such amendments had not been enacted.

`(vi) APPLICATION- In the case of a hospital referral area (as so defined) that is less than an entire State, if available quality data is not sufficient to measure quality at the sub-State level, the quality component for a sub-State hospital referral area shall be the quality component for the entire State.

`(C) COST COMPONENT-

`(i) IN GENERAL- The cost component shall be total annual per beneficiary Medicare expenditures under part A and this part for the hospital referral area (as so defined). The Secretary may use total per beneficiary expenditures under such parts in the last two years of life as an alternative measure if the Secretary determines that such measure better takes into account severity differences among hospital referral areas.

`(ii) ESTABLISHMENT- The cost component for a hospital referral area (as so defined) shall be the ratio of the cost per beneficiary for such area to the national average cost per beneficiary.’.

(b) Conforming Amendments- Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended–

(1) in subsection (b)(1)(C), by striking `geographic’ and inserting `geographic and value’; and

(2) in subsection (e)–

(A) in paragraph (1)–

(i) in the heading, by inserting `AND VALUE’ after `GEOGRAPHIC’;

(ii) in subparagraph (A), by striking clause (iii) and inserting the following new clause:

`(iii) a value index (as defined in paragraph (6)) applicable to physician work.’;

(iii) in subparagraph (C), by inserting `and value’ after `geographic’ in the first sentence;

(iv) in subparagraph (D), by striking `physician work effort’ and inserting `value’;

(v) by striking subparagraph (E); and

(vi) by striking subparagraph (G);

(B) by striking paragraph (2) and inserting the following new paragraph:

`(2) COMPUTATION OF GEOGRAPHIC AND VALUE ADJUSTMENT FACTOR- For purposes of subsection (b)(1)(C), for all physicians’ services for each hospital referral area (as defined by the Secretary) the Secretary shall establish a geographic and value adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the value adjustment factor (specified in paragraph (5)) for the service and the area.’; and

(C) by striking paragraph (5) and inserting the following new paragraph:

`(5) PHYSICIAN WORK VALUE ADJUSTMENT FACTOR- For purposes of paragraph (2), the `physician work value adjustment factor’ for a service for a hospital referral area (as defined by the Secretary), is the product of–

`(A) the proportion of the total relative value for the service that reflects the relative value units for the work component; and

`(B) the value index score for the area, based on the value index established under paragraph (6).’.

(c) Availability of Quality Component Prior to Implementation- The Secretary of Health and Human Services shall make the quality component described in section 1848(c)(6)(B) of the Social Security Act, as added by subsection (a), for each hospital referral area (as defined by the Secretary) available to the public by not later than July 1, 2011.

(d) Effective Date- Subject to subsection (e), the amendments made by this section shall apply to the Medicare physician fee schedule for 2012 and each subsequent year.

(e) Transition- Notwithstanding the amendments made by the preceding provisions of this section, the Secretary of Health and Human Services shall provide for an appropriate transition to the amendments made by this section. Under such transition, in the case of payments under such fee schedule for services furnished during–

(1) 2012, 25 percent of such payments shall be based on the amount of payment that would have applied to the services if such amendments had not been enacted and 75 percent of such payment shall be based on the amount of payment that would have applied to the services if such amendments had been fully implemented;

(2) 2013, 50 percent of such payment shall be based on the amount of payment that would have applied to the services if such amendments had not been enacted and 50 percent of such payment shall be based on the amount of payment that would have applied to the services if such amendments had been fully implemented; and

(3) 2014 and subsequent years, 100 percent of such payment shall be based on the amount of payment that is applicable under such amendments.


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