Note:
This is a summary of the “Chairman’s Mark” of the America’s
Healthy Future Act as presented on Sept. 16, 2009 by Sen. Max
Baucus, Chairman, Senate Finance Committee. The summary is a
staff report.
The full text of this health care
reform bill can be reached by
clicking here.
The news report on the bill can be reached
by click here.
Sept. 16, 2009 - Americans who like their health
insurance and want to keep it can do so. For the millions of Americans
who don’t have or can’t afford employer‐provided
coverage, or who are being denied coverage due to a pre‐existing
condition, the Chairman’s Mark reforms the individual and small‐group
markets, making coverage affordable and accessible.
Individual Market Reforms – The Mark would
require insurance companies to issue coverage to all individuals
regardless of health status; insurers would no longer be allowed to
limit coverage based on pre‐existing
conditions. Limited variation in premium rates would be permitted for
tobacco use, age, and family composition.
Variation in rating would be allowed between
geographic areas, but would not differ within a geographic area.
Small Group Market Reforms – Rating rules
for the individual market would also apply to the small group market, as
defined by states. This would include groups of one to 50 employees, but
could include companies with up to 100 employees, depending on current
state law.
Health Insurance Exchanges – The Mark would
make purchasing health insurance coverage easier and more understandable
by using the Internet to present consumers with available plans. The
Mark would create state‐based
web portals, or “exchanges” that would direct consumers purchasing plans
on the individual market to every health coverage option available in
their zip code.
The exchanges would offer standardized health
insurance enrollment applications, a standard format companies would use
to present their insurance plans, and standardized marketing materials.
The exchanges would have a call center for customer support.
The exchanges would also enable users to determine
whether they are eligible for health care affordability tax credits or
public programs and would enable consumers without access to the
Internet to enroll through the mail or in person in a variety of
locations.
Small Group Purchasing Through SHOP Exchanges
− Under the Chairman’s Mark, small businesses would have access to state‐based
Small Business Health Options Program (SHOP) exchanges. These exchanges
– like the individual market exchanges – would be web portals that make
comparing and purchasing health care coverage easier for small
businesses.
Transitioning to a Reformed Insurance Market
– Once the insurance market reforms take effect, people who want to keep
the insurance they have today can do so. Plans would be allowed to
continue to offer the coverage they offer today and this coverage would
be grandfathered.
These grandfathered plans would only be available
to those people who are enrolled today or, in the case of a small
employer, to new employees and their dependents. People who qualify for
the health care affordability tax credits in the reformed market would
not be able to use the credits to purchase grandfathered plans.
Tax credits would be offered only to purchase plans
created in the reformed market that meet the new benefit standards.
Transitioning for Rating Requirements −
Federal rating rules for the individual market (other than for
grandfathered plans) would take effect by January 1, 2013. Federal
rating rules for the small group market would be phased in over a period
of up to five years, as determined by each state, with approval from the
Secretary of HHS.
Medicaid – The Chairman’s Mark would
standardize Medicaid eligibility for all parents, children, pregnant
women and childless adults at or below 133 percent of the Federal
Poverty Level (FPL), or $30,000 a year for a family of four ($14,400 for
an individual), beginning in 2014. Individuals between 100 percent of
FPL and 133 percent of FPL would be given the choice of enrolling in
either Medicaid or in a private health insurance plan offered through a
health insurance exchange.
The federal government would provide additional
funding to states for services for newly eligible Medicaid
beneficiaries. The Chairman’s Mark would also guarantee prescription
drug benefits to all Medicaid beneficiaries.
Prescription Drug Benefits – Medicare
beneficiaries who enroll in the Medicare Part D prescription drug
program will receive significant help purchasing prescription drugs when
they hit the coverage gap portion, or “donut hole” of the benefit.
Instead of paying 100 percent of their drug costs
in the gap, Part D beneficiaries with low to moderate incomes will
receive a 50 percent discount on the price of brand‐name
drugs covered by their plan. The discount makes expensive medicines more
affordable and helps beneficiaries stay on treatments that their doctors
prescribe.
Children’s Health Insurance Program – The
Chairman’s Mark would not make changes to the Children’s Health
Insurance Program (CHIP) until after September 30, 2013, when the
current reauthorization period ends. Then, states would be required to
provide children between Medicaid eligibility levels and at least 250
percent of FPL with wraparound coverage to supplement the core benefit
package available through the exchange.
These additional services would be the early and
periodic screening, diagnosis and treatment (EPSDT) services available
to children in Medicaid. Current CHIP cost‐sharing
protections would continue to apply. CHIP benefits under this new form
of delivery would be equally as or more generous than the current
structure.
Addressing Health Care Disparities – The
Chairman’s Mark would require federal health programs to collect uniform
data on race, ethnicity, gender and disability to help program
administrators and researchers work to end disparities among these
groups.
Promoting Maternal and Child Health – The
Chairman’s Mark would provide funding to states, tribes and territories
to develop and implement one or more evidence‐based
Maternal, Infant and Early Childhood Home Visitation programs. Program
options would provide training and consultation aimed at reducing infant
and maternal mortality and its related causes by producing improvements
in prenatal, maternal and newborn health, child health and development,
parenting skills, school readiness, juvenile delinquency and family
economic self‐sufficiency.
Making Coverage Affordable
The cost of health insurance has increased five
times faster than wages over the last eight years. Estimates show that
just seven years from now, most Americans will spend nearly half their
income on health insurance. American businesses pay nearly three times
more than our major trading partners for health care benefits.
Unaffordable coverage prevents these companies from competing in the
global market. The Mark makes coverage more affordable by providing tax
credits for low and middle‐income
individuals and small businesses, and by strengthening public programs.
Options for Standard Benefits – The Mark
creates four benefit categories for the reformed health insurance
market: bronze, silver, gold and platinum. No policies (except
grandfathered policies) would be issued in the individual or small‐employer
market that do not comply with one of the four categories.
All insurers would have to offer coverage in the
silver and gold categories. All plans would be required to provide
primary care and first‐dollar
coverage for preventive services, emergency services , medical and
surgical care, physician services, hospitalization, outpatient services,
day surgery and related anesthesia, diagnostic imaging and screenings,
including x‐rays, maternity
and newborn care, pediatric services (including dental and vision care),
prescription drugs, radiation and chemotherapy, and mental health and
substance abuse services.
Plans would not be allowed to set lifetime limits
on coverage or annual limits on any benefits. Plans would have out‐of‐pocket
limits at least equal to the limits for Health Savings Accounts (HSAs),
which will be $5,950 for an individual and $11,900 for a family in 2010.
Health Care Affordability Tax Credits –The
Mark would provide an advanceable, refundable tax credit for low and
middle‐income individuals to
subsidize the purchase of health insurance. Beginning in 2013, tax
credits would be available on a sliding scale for individuals and
families between 134‐300
percent of FPL (Federal Poverty Level) to help offset the cost of
private health insurance premiums.
Beginning in 2014, the credits are also available
to individuals and families between 100‐133
percent of FPL. The credits would be based on the percentage of income
the cost of premiums represents, rising from three percent of income for
those at 100 percent of poverty to 13 percent of income for those at 300
percent of poverty. Individuals between 300‐400
percent of FPL would be eligible for a premium credit based on capping
an individual’s share of the premium at a flat 13 percent of income.
A cost‐sharing
subsidy would be provided to limit the amount of cost‐sharing
that individuals and families between 100‐200
percent of FPL have to pay. Undocumented immigrants are prohibited from
benefiting from the credit.
Small Business Health Care Affordability Tax
Credits – This proposal would provide a tax credit to small
businesses that offer health insurance to their employees. In 2011 and
2012, eligible employers can receive a small business credit for up to
35 percent of their contribution.
Once the exchanges are up and running in 2013,
qualified small employers purchasing insurance through the exchanges can
receive a tax credit for two years that covers up to 50 percent of the
employer’s contribution. Small businesses with 10 or fewer employees and
with average taxable wages of $20,000 or less will be able to claim the
full credit amount.
The credit phases out for businesses with more than
10 employees and average taxable wages over $20,000, with a complete
phase out at 25 employees or average taxable wages of $40,000.
Cafeteria Plan Changes‐ This proposal creates a
Simple Cafeteria Plan – a vehicle through which small businesses can
provide tax‐free benefits to
their employees. This change would ease the participation restrictions
and include self‐employed
individuals as qualified employees.
The proposal also exempts employers who make
contributions for employees under a simple cafeteria plan from pension
plan nondiscrimination requirements applicable to highly compensated and
key employees.
Finally, the proposal allows for qualified long‐term
care insurance to be provided under a cafeteria plan to the extent the
amount of such contributions does not exceed the eligible long-term care
premiums for the contract. This proposal is effective beginning on
January 1, 2011.
Consumer Owned and Oriented Plan (CO-OP) –
The Mark creates authority for the formation of the Consumer Owned and
Oriented Plan (CO-OP). These
plans can operate at the state, regional or national level to serve as
non‐profit, member‐run
health plans to compete in the reformed non‐group
and small group markets. These plans will offer consumer‐focused
alternatives to existing insurance plans. Six billion dollars of federal
seed money would be provided for start‐up
costs and to meet solvency requirements.
Personal Responsibility – The Mark would
create a personal responsibility requirement for health care coverage,
with exceptions provided for a variety of reasons including religious
conscience (as defined in Medicare) and an exemption for undocumented
workers.
Individuals who fail to meet the requirement are
subject to a penalty. If an individual’s income is between 100 and 300
percent of poverty, the penalty for failing to obtain health coverage is
$750 per person per year with a maximum of $1,500 per family. If an
individual’s income is above 300 percent of poverty, the penalty for
failing to obtain coverage is $950 per person per year with a maximum of
$3,800 per family.
Exemptions from the penalty will be made for
individuals
…where the full premium of the lowest cost option
available to them (net of subsidies and employer contribution, if any)
exceeds ten percent of their adjusted gross income (AGI);
…those below 100 percent of FPL; any health
arrangement provided by established religious organizations comprised of
individuals with sincerely held beliefs (e.g., such as those
participating in Health Sharing Ministries);
…those experiencing hardship situations (as
determined by the Secretary of Health and Human Services); and
…an individual who is an Indian as defined in
section 4 of the Indian Health Care Improvement Act.
Additionally, in 2013, individuals at or below 133
percent of FPL will be exempt from the penalty. When making these
determinations, income from individuals not subject to the mandate
should not be considered.
Responsibility for Employers – The Mark
would not require employers to offer health insurance. However,
effective January 1, 2013, all employers with more than 50 employees who
do not offer coverage will have to reimburse the government for each
full‐time employee (defined
as those working 30 or more hours a week) receiving a health care
affordability tax credit in the exchange equal to 100 percent of the
average exchange subsidy up to a cap of $400 per total number of
employees whether they are receiving a tax credit or not.
As a general matter, if an employee is offered
employer‐provided health
insurance coverage, the individual would be ineligible for a health care
affordability tax credit for health insurance purchased through a state
exchange. An employee who is offered coverage that does not have an
actuarial value of at least 65 percent or who is offered unaffordable
coverage by their employer, however, can be eligible for the tax credit.
Unaffordable is defined as 13 percent of the
employee’s income. A Medicaid‐eligible
individual can always choose to leave the employer’s coverage and enroll
in Medicaid.
In this circumstance, the employer is not required
to pay a fee.
Strengthening Coverage of Preventive
Services in Medicare and Medicaid
For the nearly one in three Americans covered under
Medicare or Medicaid, the Chairman’s Mark makes critical investments in
policies that will promote healthy living and help prevent costly
chronic conditions like diabetes, cancer, heart disease, obesity and
mental illness. Preventive screenings enable doctors to detect diseases
earlier when treatment is most effective averting more serious, costly
health problems later.
Providing Personalize Prevention Plan and
Wellness Visit‐ The
Chairman’s Mark provides Medicare beneficiaries with a free visit to
their primary care provider every year to create and update a
personalized prevention plan to address health risks and chronic health
problems and to design a schedule for regular recommended preventive
screenings.
Improving Access to Preventive Services‐ The Mark eliminates out‐of‐pocket
costs for recommended preventive services for Medicare beneficiaries.
Beneficiaries will no longer face financial deterrents for seeking
preventive care.
The Chairman’s Mark also encourages states to cover
preventive services recommended by the U.S. Preventive Services Task
Force (USPSTF) and immunizations recommended by the Advisory Committee
on Immunizations (ACIP) to adults enrolled in Medicaid. States that opt
to cover recommended services and immunizations without cost‐sharing
would receive a one percent increase in the federal share of the FMAP
reimbursement rate for those services.
All states would be required to provide
comprehensive tobacco cessation services to pregnant women enrolled in
Medicaid.
Moving Toward Patient-Centered Care‐ The Chairman’s Mark
creates a new state option and rewards states for providing chronically
ill individuals enrolled in Medicaid with a health home. Participating
enrollees will receive comprehensive care coordination and management,
transitional care and, if relevant, referral to community-based programs
and social services. States that take up this option will receive an
enhanced match for two years.
Rewarding Healthy Lifestyles‐ The Mark establishes an
initiative that will reward Medicare and Medicaid participants for
healthier choices. Funding will be available to provide participants
with incentives for completing evidence‐based,
healthy lifestyle programs and improving their health status. Programs
will focus on lowering certain risk factors linked to chronic disease
such as blood pressure, cholesterol and obesity.
Reforming the Health Care Delivery
System
Medicare currently reimburses health care providers
on the basis of the volume of care they provide. For every test, scan or
procedure conducted, providers receive payment – regardless of whether
the treatment contributes to helping a patient recover. Medicare must
move to a system that reimburses health care providers based on the
quality of care they provide. The Chairman’s Mark includes various
proposals to move the Medicare fee‐for‐service
system towards paying for quality and value.
These proposals include the following:
Hospital Value - Based Purchasing‐ The proposal would
establish a value‐based
purchasing program for hospitals starting in 2012. Under this program, a
percentage of hospital payment would be tied to hospital performance on
quality measures related to common and high‐cost
conditions, such as cardiac, surgical and pneumonia care. Quality
measures included in the program (and in all other quality programs in
this section) will be developed and chosen in cooperation with external
stakeholders.
Physician Value - Based Purchasing‐ This provision would
strengthen and expand the Physician Quality Reporting Initiative (PQRI)
program, including requiring all eligible health professionals to
participate by 2011. It would also improve the Medicare physician
feedback program and penalize physicians who utilize significantly more
resources than their peers.
Medicare Home Health Agency and Skilled Nursing
Facility Value-Based Purchasing
‐ CMS is currently testing value‐based
purchasing models for these providers. Building on this effort, this
provision would direct the Secretary to submit a plan to Congress by
2011 related to home health providers and 2012 related to skilled
nursing facilities outlining how to effectively move these providers
into a value‐based
purchasing payment system.
Quality Reporting for Other Providers‐ This provision would set
providers – long‐term care
hospitals, inpatient rehabilitation facilities, PPS‐exempt
cancer hospitals and hospice providers – on a path toward value‐based
purchasing by requiring the Secretary to implement quality measure
reporting programs for certain providers. Providers who do not
successfully participate in the program would be subject to a reduction
in their annual market basket update.
Encouraging Collaboration Among Health
Care Providers
Patients receive the best possible care when
doctors collaborate and work together to coordinate care. Current
payment systems often discourage such care coordination.
When providers in different settings – like
doctor’s offices, hospitals, nursing homes and rehabilitation facilities
– work together, patients benefit from receiving better care and costs
in the system are lower.
Payment for Accountable Care − To encourage
providers to improve patient care and reduce costs, the Mark would allow
high‐quality providers that
coordinate care across a range of health care settings to share in
savings they achieve to the Medicare program.
CMS Innovation Center‐ This provision would
establish an Innovation Center at the Centers for Medicare & Medicaid
Services (CMS) that would have the authority to test new patient‐centered
payment models that encourage evidence‐based,
coordinated care. Payment reforms that are shown to improve quality and
reduce costs could be expanded throughout the Medicare program.
National Pilot Program on Payment Bundling‐ The Chairman’s Mark would
direct the Secretary to develop a voluntary pilot program encouraging
hospitals, doctors and postacute care providers to achieve savings for
the Medicare program through increased collaboration and improved
coordination of patient care by allowing the providers to share in such
savings.
Reducing Avoidable Hospital Readmissions‐ To improve quality of
care, this provision would direct CMS to track national and hospital‐specific
data on the readmission rates of Medicare participating hospitals for
certain high‐cost conditions
that have high rates of potentially avoidable hospital readmissions.
Starting in 2012, hospitals with readmission rates above a certain
threshold would have payments for the original hospitalization reduced
by 20 percent if a patient with a selected condition is rehospitalized
with a preventable readmission within seven days or by 10 percent if a
patient with a selected condition is re‐hospitalized
with a preventable readmission within 15 days.
Infrastructure Investments:Tools to Reduce Costs and Improve Quality
Efforts to reduce costs and improve quality in the
health care delivery system will require equal efforts to modernize the
system with new tools that support coordinated quality care. Investments
in the health care infrastructure are essential to creating a more
effective, efficient delivery system.
Strengthening the Quality Infrastructure‐ Additional resources would
be provided to the Department of Health and Human Services (HHS) to
strengthen the quality measure development processes for purposes of
improving quality, informing patients and purchasers, and updating
payments under federal health programs.
Specifically, the Secretary of HHS would be
directed to develop a national quality strategy; establish an
interagency working group on health care quality; provide additional
resources for quality measure development and endorsement; and establish
a process for HHS to work with external stakeholders, such as the
National Quality Forum, to select quality measures to be included in
Medicare value‐based
purchasing and pay‐for‐reporting
programs.
Research and Information − The Mark would
invest in research on what treatments work best for which patients and
ensure that information is available and accessible to patients and
doctors, such as through the establishment of an independent institute
to research the effectiveness of different health care treatments and
strategies. These provisions are carefully crafted so that patients
would never be denied treatment based on age, disability status or other
related factors as a result of the research findings.
Transparency‐ To increase transparency,
the Chairman’s Mark would provide patients with information about
physician‐industry
relationships – so called “physician payment sunshine,” close loopholes
in physician self‐referral
laws that allow conflicts of interest, and provide patients and families
with more information about nursing home facilities and hospital charges
to help them make better decisions.
The Chairman’s Mark would also require drug
manufacturers and distributors to report information they already
collect regarding the number and type of drug samples given to
physicians. The Mark would also require the nation’s hospitals to make
their average charge information for commercial payers and self‐pay
patients available to the public.
Strengthening Primary Care and Other
Healthcare Workforce Improvements
Primary care physicians play a critical role in our
health care system. They are vital to reducing costs and improving
quality in the health care system. Primary care doctors provide
preventive care, help patients make informed medical decisions, assist
with care management, and help coordinate with a patient’s other care
providers. Despite their critical function, primary care doctors receive
significantly lower Medicare payments than other doctors, which has
played a role in the current shortage of primary care providers.
Promoting Primary Care – To encourage more
primary care doctors to be part of the system, the Chairman’s Mark would
provide primary care practitioners and targeted general surgeons with a
Medicare payment bonus of ten percent for five years.
Health Care Workforce − Ensuring America’s
health care system has a sufficient supply of health care professionals
to meet the demands of a changing and aging population is essential to
maintaining focus on high‐quality,
cost efficient care.
To strengthen the health care workforce, the Mark
would be increase graduate medical education (GME) training positions
through a slot re‐distribution
program for currently unused training slots and priority would be given
to increasing training in primary care and general surgery. The proposal
would also encourage additional training in outpatient settings and
ensure communities retain vital training slots if a hospital closes. It
would establish a Workforce Advisory Committee made up of external
stakeholders tasked with working with HHS and other relevant federal
agencies to develop and implement a national workforce strategy.
The Chairman's Mark establishes competitive
demonstration grant programs designed to help low‐income
individuals obtain the education and training needed for well‐paying,
high‐demand health care
jobs. The Mark also includes demonstration grants for up to six states
to develop training and certification programs for personal and home
care aides.
Ensuring Beneficiary Access and Payment
Accuracy in Medicare
The Chairman’s Mark ensures that Medicare
beneficiaries will continue to have access to physicians and other
critical health care providers. The Mark also improves the accuracy of
Medicare payments to providers. Reducing overpayments to providers saves
money for seniors and taxpayers without limiting beneficiary access.
Physicians – Due to the flawed Sustainable
Growth Rate (SGR) formula, physician payments are scheduled to be
reduced by 22 percent in 2010. To ensure that Medicare beneficiaries
continue to have access to physician services, the Chairman’s Mark
replaces the impending cut with a positive update next year.
Medicare Advantage – Private insurers that
participate in Medicare should bring value to the program and to
beneficiaries. The Chairman’s Mark would improve the value of Medicare
Advantage by reforming payments so that they appropriately reimburse
insurers for their costs and promote plans that offer high quality,
efficient health care for seniors.
Specifically, the Mark would transition current
Medicare Advantage payments which are based on statutory benchmarks to
payments based on competitive bids from the insurers. It would eliminate
overpayments to Medicare Advantage plans and addresses the inequitable
distribution of rebates paid to plans by making any extra payment
contingent on plan performance.
Under the Mark, plans would be eligible for bonus
payments based on their performance on quality measures and the
operation of evidence‐based
care management programs. Plans that provide care at lower costs than
traditional Medicare would also be eligible for an efficiency bonus.
Rebates and bonuses paid to MA plans would need to
be used to provide additional benefits that are not covered under
Medicare. The Mark would preserve plans’ ability to offer benefit
packages that differ from or supplement traditional Medicare. The Mark
would add important protections and transparency for beneficiaries by
limiting cost sharing for certain services, like chemotherapy and
skilled nursing care, and by creating more consistency in the extra
benefits that plans can offer beneficiaries throughout the country.
Medicare Disproportionate Share Hospital
Payments‐ This
provision would require the Secretary to update hospital payments to
better account for hospitals’ uncompensated care costs. Starting in
2015, hospitals’ Medicare Disproportionate Share Hospital (DSH) payments
would be reduced to reflect lower uncompensated care costs relative to
increases in the number of insured.
Home Health Payment Reform‐ The Secretary would be
directed to improve payment accuracy through rebasing home health
payments in 2013 based on an analysis of the current mix of services and
intensity of care provided to home health patients.
It would also establish a 10 percent cap on the
amount of reimbursement a home health provider can receive from outlier
payments, which are designed to help providers cover the costs of
treating sicker patients. The Chairman’s mark would also reinstate an
addon payment for rural home health providers from 2010‐2015.
Hospice Reform‐ Based on recommendations
by the Medicare Payment Advisory Commission (MedPAC), this provision
would require the Secretary to update Medicare hospice claims forms and
cost reports. Based on this information, the Secretary would be required
to implement changes to the hospice payment system to improve payment
accuracy. The Secretary would also impose certain requirements on
hospice providers designed to increase accountability in the Medicare
hospice program.
Appropriate Payment for High‐cost Imaging
Services‐ Because
payment rates for imaging services should reflect the rate by which they
are used, the Mark would increase the utilization rate assumption for
advanced imaging equipment. In addition, the Mark pays more accurately
for multiple imaging services performed during a single patient visit.
Updating Outpatient Payments for PPS‐Exempt
Cancer Hospitals‐ The
Secretary of Health and Human Services would be directed to update
payment rates for outpatient care provided by cancer hospitals that are
exempt from the prospective payment system.
Rural Health Care Protections
The Chairman’s Mark includes several provisions to
ensure rural health care facilities and providers have the resources
they need to continue delivering quality care in their communities.
Specifically, the Mark would extend and improve many rural access
protections, including the following:
FLEX Grants for Health Care in Rural Communities‐ The Medicare Rural
Hospital Flexibility Program provides grants that rural health care
providers can use to improve the quality of health care, and to
strengthen health care networks. Funds can be used for services ranging
from ambulance transport to the development of small local hospitals.
The Chairman’s Mark will extend the FLEX Grant program through 2012, and
will add a new component that Flex grant funding to be used to support
rural hospitals’ efforts to implement delivery system reform programs,
such as value‐based
purchasing programs, bundling, and other quality programs.
Extend Hospital Outpatient Department Hold
Harmless for Small Rural Hospitals‐ Small rural hospitals that
are not sole community hospitals (SCHs) can receive additional Medicare
payments if their outpatient payments under a new payment system are
less than under the prior reimbursement system. The Chairman’s Mark
would ensure that small rural hospitals receive 85 percent of the
payment difference in 2010 and 2011.
Reasonable Cost Reimbursement for Laboratory
Services in Small Rural Hospitals‐ Certain rural areas with
low population densities used to receive reasonable cost reimbursement
for laboratory services, but this policy ended in 2008. The Chairman’s
Mark would reinstate reasonable cost reimbursement, thus improving
access to laboratory services for those in rural communities.
Extend Rural Community Hospital Demonstration
Program‐ The Centers
for Medicare & Medicaid Services has been conducting a demonstration
program to test the feasibility of reasonable cost reimbursement for
small rural hospitals. The Chairman’s Mark extends the program for two
years and expands eligible sites to additional rural states.
Extend Medicare Dependent Hospital Program‐ Small rural hospitals with
a high proportion of patients who are Medicare beneficiaries receive
special treatment, including higher payments. This assistance for
Medicare dependent hospitals (MDHs) is scheduled to expire in September
2011. In order to protect access to health care in rural communities,
the Chairman’s Mark will extend crucial support to MDHs for an
additional two years.
Temporary Medicare Hospital Payment Improvements‐ The Chairman’s Mark would
temporarily increase payment for certain low‐volume
hospitals, ensuring that rural hospitals are adequately reimbursed for
serving their communities.
Community Health Integration Models in Certain
Rural Counties‐ The
2008 demonstration project allowed eligible rural entities to develop
and test new models for the delivery of health care services in order to
improve access to, and integrate the delivery of, acute care, extended
care and other essential health care services to Medicare beneficiaries.
The Chairman’s Mark will expand the 2008 project to more eligible
counties, and will also allow physicians to participate in the
demonstration project.
Transparency and Accountability for Insurance
Companies
The provision improves the transparency of
insurance products to ensure that individuals know what they are
purchasing, the services which are covered and the associated out‐of‐pocket
costs. The Mark creates standards that will ensure that each individual
receives an outline of coverage which is presented in a uniform format
that does not exceed 4 pages in length and does not include print
smaller than 12‐point font.
The Mark would also require insurance companies to
publish the share of their premium revenue that is used for
administrative expenses and not medical benefits. In addition, the Mark
would impose new requirements on insurers to meet standards for the
electronic exchange of payment and other health care information with
hospitals, doctors and other providers.
By 2014, insurers must comply with standards for
certain transactions or face a penalty fee assessed annually by the
Secretary of Health and Human Services and collected by the Secretary of
the Treasury. The fee would represent the inefficiency cost that an
insurer imposes on the health care system when its electronic
transactions with providers are not conducted in a standard way.
Combating Fraud, Waste, and Abuse
Reducing fraud, waste, and abuse in Medicare and
Medicaid will reduce costs and improve quality throughout the system.
The Medicare improper payment rate for 2008 was 3.6 percent, or $10.4
billion, and the National Health Care Anti‐Fraud
Association estimates that fraud amounts to at least three percent of
total health care spending, or more than $60 billion per year.
The Chairman’s Mark will combat fraud, waste, and
abuse by requiring the review of health care providers prior to granting
billing privileges, leveraging technology to better evaluate claims,
educating providers to promote compliance with program requirements,
monitoring programs more vigilantly, and penalizing fraudulent activity
swiftly and sufficiently.
Ensuring Medicare Sustainability
Sharply rising costs throughout the health system
threaten Medicare’s sustainability in the long term. If costs are not
constrained, the Medicare program will be insolvent by 2017. To ensure
the fiscal solvency and sustainability of the Medicare program, the
Chairman’s mark includes the following provisions.
Revisions to Annual Market‐Basket
Adjustments for Part A Providers ‐
The provision would reduce annual market basket updates for hospitals,
home health providers, nursing homes, hospice providers, long‐term
care hospitals and inpatient rehabilitation facilities, including
adjustments to reflect expected gains in productivity.
Part B Productivity Adjustments‐ This provision would
reduce payment updates for Part B providers by an estimate of increased
productivity.
Reduce Part D Premium Subsidy for High‐Income
Beneficiaries – This provision would reduce the premium subsidy
under Part D for beneficiaries with incomes at or above the Part B
income thresholds.
Medicare Commission‐ The Chairman’s Mark
creates a 15‐member,
independent Medicare Commission tasked with presenting Congress with
comprehensive proposals to reduce excess cost growth and improve quality
of care for Medicare beneficiaries. In years when Medicare costs are
projected to be unsustainable, the Commission’s proposals will take
effect unless Congress passes an alternative measure. Congress would be
allowed to consider an alternative proposal on a fast‐track
basis. The Commission would be prohibited from making proposals that
ration care, raise taxes, or change Medicare benefit or eligibility
standards.
Medical Malpractice - The Chairman’s Mark
would express the Sense of the Senate that health care reform presents
an opportunity to address issues related to medical malpractice and
medical liability insurance. The Mark would further express the Sense of
the Senate that states should be encouraged to develop and test
alternatives to the current civil litigation system as a way of
improving patient safety, reducing medical errors, encouraging the
efficient resolution of disputes, increasing the availability of prompt
and fair resolution of disputes, and improving access to liability
insurance, while preserving an individual’s right to seek redress in
court.
The Mark would express the Sense of the Senate that
Congress should consider establishing a state demonstration program to
evaluate alternatives to the current civil litigation system.
Financing an Investment in Quality,
Affordable, Health Care High Cost Insurance Excise Tax
Beginning in 2013, this proposal would levy a
nondeductible excise tax of 35percent on insurance companies and plan
administrators for any health insurance plan that is above the threshold
of $8,000 for singles and $21,000 for family plans. The tax would apply
to the amount of the premium in excess of the threshold. The tax would
apply to self‐insured plans
and plans sold in the group market, but not to plans sold in the
individual market. The threshold would be indexed for inflation, and a
transition rule would increase the threshold for the 17 highest cost
states for the first three years.
Increasing Transparency in Employer W‐2
Reporting of Value of Health Benefits‐ This proposal would
require employers to disclose the value of the benefit provided by the
employer for each employee’s health insurance coverage on the employee’s
annual Form W‐2. This would
be effective beginning in 2010. This proposal has a negligible revenue
impact over ten years.
Limit Health FSA Contributions‐ This proposal would limit
the amount of contributions to health Flexible Spending Accounts (FSAs)
to $2,000 per year, beginning in 2013.
Eliminate Deduction for Employer Part D Subsidy‐ This proposal would
eliminate the deduction for the subsidy for employers who maintain
prescription drug plans for their Medicare Part D eligible retirees.
This would be effective beginning in 2011.
Standardize the Definition of Qualified Medical
Expenses‐ Beginning in
2011, this proposal would conform the definition of qualified medical
expenses for Health Savings Accounts (HSAs), health FSAs, and HRAs to
the definition used for the itemized deduction. An exception to this
rule would allow amounts paid for over‐the‐counter
medicine with a prescription to still qualify as medical expenses.
Increase the Penalty for Use of HSA Funds for
Non‐qualified Medical Expenses
‐ This proposal would increase the additional tax for HSA
withdrawals prior to age 65 that are not used for qualified medical
expenses from 10 percent to 20 percent, beginning in 2010.
Corporate Information Reporting‐ This proposal would
require businesses that pay any amount greater than $600 during the year
to corporate providers of property and services to file an information
report with each provider and with the IRS. Information reporting
already is required on payments for services to non‐corporate
providers. This applies to payments made after December 31, 2011.
Non-profit Hospitals‐ This proposal would
establish new requirements applicable to nonprofit hospitals beginning
in 2010. The requirements would include a periodic community needs
assessment.
Pharmaceutical Manufacturers Fee‐ This proposal would impose
an annual flat fee of $2.3 billion on the pharmaceutical manufacturing
sector, beginning in 2010. This nondeductible fee would be allocated
across the industry according to market share and would not apply to
companies with sales of branded pharmaceuticals of $5 million or less.
Medical Device Manufacturers Fee‐ This proposal would impose
an annual flat fee of $4 billion on the medical devices manufacturing
sector, beginning in 2010. This nondeductible fee would be allocated
across the industry according to market share and would not apply to
companies with sales of medical devices in the U.S. of $5 million or
less. The fee does not apply to sales of Class I products under the FDA
product classification system.
Health Insurance Provider Fee‐ This proposal would impose
an annual flat fee of $6 billion on the health insurance sector,
beginning in 2010. This non‐deductible
fee would be allocated across the industry according to market share.
Clinical Laboratories Fee‐ This proposal would impose
an annual flat fee of $0.75 billion on clinical laboratories, beginning
in 2010. This non‐deductible
fee would be allocated across the industry according to market share and
would not apply to clinical laboratories with revenue of $500,000 or
less.
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