Topics this week:
- Sequester update
- Congressional Academic Medicine Caucus is reinstated
- Patients object to clinicians focusing on cost
- US shines in some areas of cancer treatment
- HP101: Medicare Primer
1. Sequester update: House passes 6-month funding bill
The sequester went into effect on March 1st, with President Obama mandating a 5% cut across all non-defense discretionary funding, as well as a 2% reduction to Medicare, which translates to $11.085 billion in reimbursement cuts. Agencies that will be impacted by these cuts include the NIH and National Health Service Corps (NHSC). The Department of Veterans Affairs is exempt from sequestration.
On March 6th the House of Representatives passed a spending bill to address funding for federal programs through September 30, 2013. The bill passed 267-151, with some Democrats objecting to the bill because of lack of flexibility for non-defense programs to address sequestration cuts and insufficient funds for implementation of insurance exchanges. The bill takes into account the sequestration cuts as well as the spending cap implemented by the fiscall cliff in January. Other health-related cuts include a $10 million cut of funding for the IPAB (Health Policy 101) and a $6.3 bilion cut to performance bonus payments to states to help offset costs of increased Medicaid and Children’s Health Insurance Program enrollment. The Senate is expected to vote on the bill this week.
Sources:
http://medicarenewsgroup.com/news/medicare-faqs/individual-faq?faqId=2ec7b6bb-c68b-433e-830e-035b9d930e4d https://www.aamc.org/advocacy/washhigh/
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2. Congressional Academic Medicine Caucus (CAMC) is reinstated for the 113th Congress
Congressional representatives Schwartz (D-Pa) and Roe, MD (R-Tenn) announced the reinstatement of the bipartisan CAMC to the 113th Congress. A congressional caucus is a group of members that meets to pursue common legislative objectives. There are hundreds of caucuses that have been formally established, and they are often bipartisan and bicameral (with members of both the Senate and House). The CAMC will “strive to educate their colleagues on the unique health care, research, and training missions of teaching hospitals and medical schools.” Schwartz has been active in effort to increase the number of residency spots available by introducing legislation to lift the 1997 ban that put a cap on residency spots. This kind of action is necessary to address the widening gap between residency applicants and available spots.
Sources:
https://www.aamc.org/advocacy/washhigh/
https://www.aamc.org/camc/
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3. Patients object to clinicians focusing on cost of treatment
In an effort to curb continuously rising costs of health care, many strategies are being explored. One option that has been suggested, is to have clinicians include information about cost when they are discussing comparable treatment options. A recent report in Health Affairs found that patients generally object to this method. In focus groups of insured patients from Washington D.C. and Santa Monica, CA, investigators found that subjects were resistant to discussing cost, and that they generally did not accept a marginally ‘lesser’ treatment despite its lower cost (ex: CT vs. MRI). There was a persistent attitude of wanting the best care, no matter what the cost as well as preferring to leave the decision making up to the physician. There also remained a belief that cost correlated with quality of care, or ‘you get what you pay for.’ Participants were resistant to discussing cost even when it would require a difference in their out-of-pocket payments, and they were wholely opposed to considering cost differences to the insurer. The United States needs to continue educating the public about the importance of cost control, how insurance works, and how their decisions can benefit society.
Source:
http://content.healthaffairs.org.libproxy.usc.edu/content/32/2/338.abstract
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4. US shines in some areas of cancer treatment
Statistics about how the United States compares to other developed nations on metrics of health care often reveal that the US spends more money on healthcare than any other nation yet performs worse. While the US has lower life expectancy and greater overall premature mortality than other high-income countries, a recent report by Health Metrics and Evaluation finds that the US ranks highly in areas of cancer treatment. Compared to 18 other high-income countries, the US performs the best in preventing premature mortality due to brain cancer. The US is third in treating colorectal cancer and better than average in treating stroke, falls, breast cancer, and stomach cancer. The US fairs relatively poorly in several other categories, particularly some heart and lung diseases as well as diabetes. Much of this is likely attributed to the poor diet and lack of physical activity of most Americans. The data can be explored via numerous interactive graphics found here: http://www.healthmetricsandevaluation.org/tools/data-visualizations
Sources:
http://www.healthmetricsandevaluation.org/sites/default/files/policy_report/2011/GBD_Generating%20Evidence_Guiding%20Policy_using_GBD.pdf
http://www.npr.org/blogs/health/2013/02/28/173169842/often-a-health-care-laggard-u-s-shines-in-cancer-treatment
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5. Health Policy 101: Medicare Primer
While we’ve previously covered specific topics that fall under the Medicare umbrella, such as The Part D Doughnut Hole , Sustainable Growth Rates, Value Based Purchasing (VBP) , and the creation of the Independent Advisory Board (IPAB) this HP101 will give an overview of Medicare's structure and the changes that are expected under the Affordable Care Act.
Medicare provides health insurance to Americans who are age 65 and older who have been legal residents of the US for at least 5 years, as well as younger people with disabilities, end stage renal disease, or amyotrophic lateral sclerosis (AML). In 2010 Medicare provided insurance to 48 million Americans, including 40 million elderly and 8 million with disabilities. Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), which falls under the umbrella of the Department of Health & Human Services.
Part A: Hospital Insurance
Part A is provided free of co-pay if the beneficiary or their spouse has paid taxes into Medicare for at least 10 years, otherwise they must pay a monthly premium. It covers inpatient hospital stays of up to 90 days as well as convalescence in a skilled nursing facility for up to 100 days per ailment (only if there is a preceding hospital stay of at least 3 days). The last first 20 days are free, while the last 80 days require a co-pay, on the order of $144 per day. Hospice care, for terminally ill patients who have less than 6 months to live, is also covered.
Changes under the ACA:
· There is an increased Medicare payroll tax for high-income households beginning in 2013 of 2.35% (up from 1.45%) on wages over $200,000 for an individual (or $250,000 for a married couple).
· These taxes will go to the Part A Trust Fund.
· While this fund was initially projected to run out in 2017, this added tax boost has resulted in projections that the fund will not be exhausted until 2026.
Part B: Medical Insurance
Part B is optional if a person and/or his spouse is covered by an employer-based insurance plan. It covers outpatient services such as vaccines, diagnostic tests, and chemotherapy. While most drugs are covered under Part D, if a practitioner administers a drug during an office visit, then it falls under Part B. Many other outpatient services and supplies are included in Part B.
In 2013, the annual deductible is $147, after which Medicare covered 80% of services. The monthly premium is as low as $104.90 in 2013, with a sliding scale up to $335 based on income.
Changes under the ACA:
· The guaranteed benefits are not to be reduced or eliminated
· There is a new 3.8% tax on investment income for high-income households (>$200,000 income) that will fund Part B.
· Higher Part B premiums for beneficiaries with incomes above a certain threshold
· Preventative care services are provided free of charge, including annual wellness visits and screenings for diabetes and cancers
Part C: Medicare Advantage (MA)
Part C was created in 1997 in an effort to give Medicare beneficiaries the opportunity to get their benefits through a private insurance plan. Medicare pays the private health plan a fixed amount per month, rather than operating under the fee for service mechanism that Part A & B operate under. Beneficiaries also pay an additional premium on top of their Part B premium. While this option offers expanded coverage of prescription drugs, dental care, and gym memberships, beneficiaries are restricted to a smaller ‘network’ of providers (similar to HMOs).
MA is projected to cost $140 billion in 2013, which is 22% of total Medicare spending. Currently 27% of Medicare participants are enrolled in MA. Medicare pays more per enrollee for MA plans, as the emphasis is more on expanded benefits than cost savings.
Changes under the ACA
· Because MA costs more per enrollee, federal payments to MA plans will be reduced to bring spending closer to traditional Medicare.
· MA will be restricted to the share of premiums that they can use for administrative expenses, so that 85% of premiums most go toward benefits.
· MA plans are eligible for bonuses if they demonstrate high quality of care
Part D: Prescription Drug Plan
While those with Parts A & B are eligible for Part D, it requires a separate enrollment (except for Medicare Advantage, which includes Part D within it). Plans are administered by private health insurance companies and approved by Medicare. These plans are not standardized, and may offer an array of different options. Enrollees can use the Find A Plan website to enter their specific medications and find the plan that best suits them.
Changes under the ACA
· Closing The Part D Doughnut Hole to reduce out of pocket payments (read more in a previous HP101)
Sources:
http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=17
http://www.kff.org/medicare/upload/2052-16.pdf
http://www.aarp.org/health/health-care-reform/info-06-2010/fact_sheet_health_law_and_medicare.html
http://en.wikipedia.org/wiki/Medicare_(United_States)
http://www.medicare.gov/sign-up-change-plans/decide-how-to-get-medicare/original-medicare/how-original-medicare-works.html
http://www.medicareadvocacy.org/2010/10/28/health-care-reform-does-not-cut-medicare-benefits/
http://healthreform.kff.org/faq/how-does-law-change-the-medicare-part-d-donut-hole.aspx
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
Alexandra Printz – National Delegate
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To access previous updates see our blog at:
https://www.aamc.org/members/osr/communications/legislative_affairs/
For more Health Care Policy news go to:
https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html