December1 , 2009 Recent News

Health Reform



Health Reform

The Republicans asked CMS about the House health reform bill.  What they found was the cost of health care would rise by $289 Billion over the next ten years.  CMS stated that "the bill would not have a significant impact on future healthcare cost growth rates."  The bill would also cut Medicare and Medicaid as well as increase costs.  About 60% of the uninsured would be eligible for Medicaid.  Medicare would be cut by $571 Billion possibly decreasing access.  The Seattle Times writes that the cost on hospitals and nursing homes may be so severe as to have them stop accepting Medicare patients.

A similar article appeared in the Washington Post, a "liberal newspaper."

Apparently in the House Bill is a special amount of money for California rural physicians.  Once this was found out the other states wanted more money for their rural physicians as well.  This will continue to escalate the costs of this bill.  This is not in the Senate version.

The Senate came out with their version of healthcare reform.  To its credit it is Billions of dollars cheaper than the bloated House version.  It is even projected to save $130 Billion over a decade and still provide coverage for an additional 31 million people.  There would be a public plan but states could opt out.  It would be funded by higher Medicare taxes on high income people, defined as over $250,000 per year, and a tax on the Cadillac health care plans.  Abortion would still be in the plan as would the requirement to force all to buy insurance, this of questionable legal force.  Much of the bill would take place a year later than the House bill to reduce the costs, a bit of fiscal chicanery.  There would also be a 5% tax on elective cosmetic surgery.  

Both the House and Senate bills start collecting money for the "reform" program several years before the program would start.  The payments would start immediately but the "reforms" wouldn't start to either 2012 or 2013.  

The AP reports that Medicare paid $47 Billion in suspect medical claims in 2009.  This is the main difference between Medicare and private insurers.  The latter may be overly cautious and restrict care whereas the former must sue to get money back, if they can.  This amount of potential fraud is about three times the prior year.  There is an additional $18 Billion in potential fraud in Medicaid.  CMS had been warned regarding specific problems but did not respond.

The AMA has come out with a notice that some specialists will get blasted by the extra Medicare cuts.  The extra cuts on radiology would mean radiologists would get a 5% reduction on top of the proposed 21% reduction.  The reduction would be over four years and would mean that the cost of doing a radiograph and running an office would be less in that time.  Fuzzy logic there.  Cardiologists would get a 8% cut over the 21% in the first year and more over the following three years.  Under the new plan the range of payments are from a 5% increase for ophthalmologists to an 18% decrease in nuclear medicine.

That's not all.  CMS is planning on January 1 to delete all consultation codes.  This means that specialists will now have to bill consults and referral letters as an office or regular hospital visit.  This will cost the specialist just under $50 per consult and may have an impact on ER consults and back-up.  This is being done so Obama may show he is paying more to primary care physicians who may have a harder time finding specialists to refer patients.  It will be imperative to bill CMS for the highest office or hospital code instead of a consult, otherwise denials will come and new billings will be needed delaying reimbursement.

The House passed a bill to take back the 21% decrease in physician payments but the bill is not looking good for Senate approval. This would be offset by higher co-pays by Medicare beneficiaries.  

In the model for "reform" the People's Republic of Massachusetts continues to show the way.  They can not pay for what they ordered and are now pushing the business tax to higher levels.  The plan would also have the jobless pay higher amounts for physician visits to physicians who charge more than their neighbors.  The reason for all this is federal funds to help pay for the failed experiment are needed and will not happen if the state can not pay more.  Remember with Obamacare that is the feds and when it begins to go under who will pay, you.  The Republic will double the tax on businesses per employee.  This is on top of a 40% increase on unemployment taxes.

The New York Times has an article showing that EMR has little or no benefit on quality or cost of care.  This is due to most not using EMR to their full capability either due to inability from costs or knowledge or both.  It is predicted that it will take at least five years prior to any significant changes being seen.  The study that showed no benefit included Kaiser, Mayo and other major users of EMR.  Only about 20% of the nation's physicians use EMRs.  The incentive payments will kick in meaningful use.  It is not known what this means until the end of this year and then will increase yearly.  An example of the EMR not being helpful is in heart failure.  Those hospitals with the best EMRs comply with best practice standards 87.8% of the time.  Those hospitals with regular EMR comply 86.7% and those with no EMR comply 85.9%.  These are slim differences for major money.  Another marker is hospital days.  There was a 0.2 days difference between the top and no EMR.  Again alot of money for nothing.  

The US Preventative Health Task Force made up of a significant number of HMO types have stated that screening mammograms are no longer needed until age 50 and then only every two years.  This is the beginning of what to expect with comparative effectiveness under the health reform.  Fortunately most physicians will ignore the recommendations.  The problem will come when the insurers begin to follow them. The legal problem will come when a woman in her 40s did not get a mammogram because of the recommendation and an early cancer was missed. 

Several days after the mammogram fiasco, there was another report stating Pap smears should be done less often.  However, this one came from the American College of OB/GYN.  They recommend starting cervical cancer screening at age 21 instead of starting within three years of their first sexual intercourse but no later than 21.  This group has good medical and not economic reasons for their recommendations and oppose the mammography recommendations.        

The Wall Street Journal editorial calls the Congressional removal of their responsibility to an Executive appointed commission the "Rationing Committee."  This committee would set all fees and they would become law unless Congress stops them within 60 days.  When was the last time you heard of any Legislature doing anything within that length of time.  The Committee would not only set fees but to meet budget targets would also determine what can be cut in benefits to all citizens.  This would be like the US Preventative Health Task Force noted above but with teeth. This will remove patient physician discussions about their healthcare as some treatments will just not be allowed.

There was an interesting article in the Wall Street Journal regarding health care in Germany.  However, just above the healthcare article was on about the economic crisis there makes a tax cut critical.  The healthcare article talks about the German plan which is mostly government with some private.  The government portion is funded by 8% of gross wages from the employees and an additional 7% of gross wages by the employer.  The plan is run on a year to year pay as you go basis and is now $11 Billion in debt.  They plan to shift from an income based system to a flat fee basis.  They also want to have the system be a basic floor and for those who want more they pay more.  It remains to be seen whether the government can pull this off.       Top


Los Angeles has decided to reopen the old King Drew Hospital which was closed after they killed people and had complete lack of oversight.  They were truly the worst hospital in the country.  It was run by the county board of supervisors who were inept.  The hospital will reopen in 2011 as the Martin Luther King, Jr. Hospital.  It will be staffed by the University of California and the board will be a private non profit group operating under a lease agreement with the county.        Top


The Boston Globe reports that the Republic's physicians are bracing for a change in payments.  The costs are already $3000 more in the Republic than the states due to sweetheart deals and massive mandates.  The pols instead of blaming themselves are putting together a "global payment" system.  This is a fancy name for the HMO system of per patient per month.        Top


  DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.