AMA SUPPORT FOR H.R. 3200

Answers to Frequently Asked Questions

Why is the AMA supporting H.R. 3200?

H.R. 3200 contains many elements that reflect AMA priorities for health system reform. This includes: expanding the availability of affordable health care coverage to the uninsured, increased support for prevention and wellness services, investments in the physician workforce, increased Medicare payments for primary care services without cutting payments for other services and, importantly, it represents medicine’s best hope for eliminating the current sustainable growth rate (SGR) formula for updating Medicare physician payments. The AMA will be working with members of the House of Representatives to improve the bill by seeking changes (e.g., adding medical liability reforms). Favorable action on a House bill is necessary to move the process to the end game negotiations that will determine the specifics of a final bill.

Why did AMA react so quickly?

The AMA has been reviewing and submitting detailed comments on draft proposals for several months, as well as engaging in substantive discussions with Congressional leaders and staff. There were a limited number of changes made in a draft of the bill that was released on June 19. So, we were able to complete an analysis of the 1,000+ page bill relatively quickly. Two of the three House committees completed their mark-up of the legislation last week so it was important to voice our views prior to votes in committee.

Does the AMA support all provisions of H.R. 3200?

As is typical with very large bills, it contains many provisions that we wholeheartedly support, others that concern us, and still other provisions that we want to see changed. We plan to continue our efforts to refine those elements that are inconsistent with our policy as the legislative process progresses. For example, during the process of committee consideration we have been supporting amendments to provide federal support to states that implement liability reforms and to preserve patient access to physician-owned hospitals. This is the beginning of a very lengthy process and we believe our support helps put us in a very favorable position to advocate for important changes when a House and Senate conference committee is appointed to craft a single bill for final passage.

Does the AMA support the public plan provisions included in H.R. 3200?

The public plan provisions in H.R. 3200 represent an improvement over previous draft proposals. The Senate is developing different approaches to a public plan. H.R. 3200 would require a public plan to be self-sustaining and not dependent on the federal treasury, and it would not require physicians to participate. It also does not affect the ability of physicians to engage in private contracting arrangements with patients. We believe that, as the legislative process continues, the details surrounding the public plan option will change considerably.

By supporting health reform legislation that includes a public plan, isn’t the AMA really endorsing socialized medicine?

It truly is regrettable that so many of the important goals we hope to achieve through health system reform have been overshadowed by a headline-grabbing debate over the prospects of creating a coverage option bearing the label “public plan,” without regard to the variety of forms such an option could take. The AMA continues to oppose nationalized medicine health insurance, and we continue to express opposition to elements of public plan proposals that we believe could lead us down the road to a single payer system or “socialized medicine.” However, we remain open to proposals that are consistent with our principles of pluralism, freedom of choice, freedom of physician practice, and universal access.

I have heard that as many at 120 million people will be enrolled in the new public option health plan. Is that true?

No. The nonpartisan Congressional Budget Office has estimated that the bill will ensure that 97% of the legal, non-elderly population will have health insurance. At most, 12 million people would be enrolled in the public plan, representing only about 4% of the entire population. Overall, 37 million uninsured Americans will have health insurance coverage who do not have it now.

Won't employers simply drop coverage?

Again, the non-partisan Congressional Budget Office estimates that from 2010 until 2019, the number of Americans with employer provided coverage will increase from 150 million to 162 million people. Additionally, for those Americans who purchase coverage through the Health Insurance Exchange, two-thirds (or 20 million people) will choose private plans. This means a significant increase in the number of American's insured by private insurance plans.

Does H.R. 3200 make private insurance illegal?

There have been some misleading press reports on this issue. The legislation does not make private insurance illegal. Rather, it regulates health insurance coverage and, except for some “grandfathered” existing policies, individual coverage could only be offered through the Health Insurance Exchange established by the bill. (The Health Insurance Exchange is a regulated market place for people to purchase private coverage that meets minimum criteria.) In fact, the legislation would make great strides in regulating insurers so that they treat patients and providers more fairly.

What about liability reform?

The AMA continues to believe that medical liability reform is essential to any health care cost containment strategy.

Is support for replacing the SGR weakening at the White House and in Congress?

No. Key House and Senate leaders as well as senior White House officials remain committed to enacting legislation this year that would erase the existing SGR debt and establish a new, more favorable payment structure for Medicare physician payments. It sometimes is confusing when policymakers discuss Congressional Budget Office scoring rules and legislative procedures.

Using past approaches, the “budget score” would be $239 billion for changing the SGR policy. This year, we gained the support of House, Senate and White House policymakers to erase the SGR debt and establish a new payment formula without have to identify budgetary offsets. The term of art is a “pay-go waiver.”

When Office of Management and Budget Director Peter Orszag talks about “removing the Medicare physician payment fix” he is referring to budget scoring estimates--not about jettisoning a change in the SGR policy from health system reform legislation. Key policymakers in the House, Senate and White House continue to support replacing the SGR through a pay-go waiver.

Does the bill expand scope of practice of non-physician practitioners?

The bill would establish a medical home pilot program under Medicare that would allow a nurse practitioner to lead a medical home “so long as…the nurse practitioner is acting consistently with State law.” State law requirements regarding physician supervision of nurse practitioners would continue to apply. While the AMA recognizes nurses as valuable members of the health care team, we do not support nurse practitioners practicing independently, without at least regular consultation with a physician. It is the AMA’s policy that a multidisciplinary health care team should be led by a physician who is in the best position to provide coordination of disciplines to assure delivery of high quality patient care.

Preparing for H1N1 and the upcoming flu season

As the President's advisor on Homeland Security, I am passing along the following message from Kathleen Sebelius, Secretary of Health and Human Services, Janet Napolitano, Secretary of Homeland Security, and Arne Duncan, Secretary of Education, who are leading the efforts to prepare our Nation for the coming flu season.

Fellow Americans,

This spring we were confronted with an outbreak of a troubling flu virus called 2009-H1N1. As the fall flu season approaches, it is critical that we reinvigorate our preparedness efforts across the country in order to mitigate the effects of this virus on our communities.

Today, we are holding an H1N1 Influenza Preparedness Summit in conjunction with the White House to discuss our Nation's preparedness. We are working together to monitor the spread of 2009-H1N1 and to prepare to initiate a voluntary fall vaccination program against the 2009-H1N1 flu virus, assuming we have a safe vaccine and do not see changes in the virus that would render the vaccine ineffective.

But the most critical steps to mitigating the effects of 2009-H1N1 won't take place in Washington — they will take place in your homes, schools and community businesses.

Taking precautions for this fall's flu season is a responsibility we all share. Visit Flu.gov to make sure you are ready and learn how you can help promote public awareness.

We are making every effort to have a safe and effective vaccine available for distribution as soon as possible, but our current estimate is that it won't be ready before mid-October. This makes individual prevention even more critical. Wash your hands regularly. Take the necessary precautions to stay healthy and if you do get sick, stay home from work or school.

We are doing everything possible to prepare for the fall flu season and encourage all Americans to do the same — this is a shared responsibility and now is the time to prepare. Please visit Flu.gov to learn what steps you can take to prepare and do your part to mitigate the effects of H1N1.

Take Care,
Kathleen, Janet and Arne

AMA ADVOCACY UPDATE - July 8, 2009

Please visit the AMA Web site for a pdf version of this and past advocacy updates.

Congress continues work on health system reform legislation
The three committees with health care jurisdiction in the U.S. House of Representatives-Ways and Means, Energy and Commerce, and Education and Labor-released a draft bill on June 19. The legislation calls for creating a national health insurance exchange, mandating coverage for individuals and employer contributions to coverage, creating a public option insurance plan, and resetting Medicare's flawed sustainable growth rate (SGR) formula to eliminate the accumulated debt that is undermining physician payments. The bill would set the 2010 Medicare fee schedule update at the Medicare Economic Index. Beginning in 2011, it would establish two new expenditure targets, one for primary care and preventive services, and a second for all other physician services. A revised House bill is expected to be introduced on July 9.

The three House committees held legislative hearings on the draft bill during the week of June 22. Members debated the proposed government health plan option, the proposed employer "pay or play" mandate, and the cost of reform. The House Committees plan to mark up a revised bill during the week of July 13, and floor consideration is expected to be complete prior to the August recess.

In the Senate, the Health, Education, Labor, and Pensions Committee is continuing its mark-up of health reform legislation this week, and the Finance Committee is expected to release details of its proposed legislation shortly. The two Senate committees plan to merge their proposals into a single bill for consideration on the Senate floor

2010 Medicare fee schedule proposed rule issued
Last week, the Centers for Medicare and Medicaid Services (CMS) released the 2010 Medicare physician payment schedule proposed rule, including a long-awaited announcement that the Obama Administration will change the definition of physician services under the SGR to exclude physician-administered drugs. The drug costs will be removed retroactive to the 1996/97 base year of the SGR formula, which will greatly lessen the forecast SGR cuts in future years. This action will substantially reduce the legislative cost of congressional proposals to reform physician payments and makes a permanent solution to the SGR morass much more feasible

CMS also used data that it purchased from a new practice expense survey sponsored by the AMA, 72 specialty societies and other health care professional organizations to revise the practice expense relative values. Specialty impacts resulting from proposed changes in relative values for practice expenses, physician work, and malpractice expenses range from +11 percent for ophthalmology to -19 percent for radiation oncology.

Other changes in the rule include a CMS proposal to eliminate Medicare coverage for consultations and redistribute the relative values to visits, revisions to the e-prescribing incentive program intended to simplify reporting requirements, and the addition of more measures and more measures groups for the Physician Quality Reporting Initiative (PQRI).

The proposed rule is scheduled for publication in the Federal Register on July 13, but is currently available online. Comments are due by August 31st.

Physician Consortium issues new COI policy
Last week, the AMA convened Physician Consortium for Performance Improvement (PCPI) issued a revised Conflict of Interest (COI) policy. The goal of the policy is to insure that PCPI decisions are made as objectively as possible, without improper bias or influence. Specifically, the revised policy does not allow anyone with a material interest to participate in measure development work groups, and also requests disclosure of conflicts from those commenting on measures. The strengthened PCPI COI policy is consistent with recent JAMA articles and an April IOM report discussing COI in medical research, education, and practice. To view the revised PCPI COI policy, please visit www.physicianconsortium.org.

AMA and specialties comment on FDA plans for opioids
On June 30, the AMA and 15 specialty societies submitted a joint comment letter to the Food and Drug Administration (FDA) on its plans for developing a risk evaluation and mitigation strategy or REMS for certain opioid drugs used to treat pain. The letter acknowledges the significant and growing public health danger posed by the misuse and diversion of these drugs and responds to questions raised by the FDA in a notice issued on April 20. It supports providing positive incentives to physicians to encourage education in pain management and increased support for mentoring programs such as the Physician Clinical Support System for Buprenorphine. The letter urges FDA to avoid elements of the REMS that could either hurt patient access to needed pain relief or lead to unintended consequences such as physicians opting out of managing chronic pain patients or shifts in prescribing from one type of pain medication, such as extended release opioids, to another, such as immediate release opioids or NSAIDs. The letter is available at:

New laws in Tennessee and Nevada regulate rental networks and mergers
The AMA campaign to regulate rental network contracting had another victory on June 23, 2009, when Tennessee Governor Phil Bredeson (D) signed Senate Bill (S.B.) 693, the "Preferred Provider Transparency Act." This law reflects many provisions of the AMA/National Conference of Insurance Legislators (NCOIL) model rental network act. Highlights of the new law include definitions of contracting parties; required registration with the Department of Insurance; original contract privity and termination requirements for contracting entity and downstream entities; limitations on third-party access; mandated transparency, notice and contact information of contracting parties; and clear penalties and enforcement provisions. Connecticut, Georgia, Utah and Vermont have had similar rental network victories this session, and bills were introduced with some still pending in Hawaii, Oregon, Rhode Island and Texas.

The campaign to protect competition in the health insurance market had a victory in Nevada this session, when Governor Jim Gibbons (R) signed Assembly Bill (A.B.) 248 on May 29, 2009. This bill strengthens current Nevada law by limiting the circumstances when a health insurer merger or acquisition can occur, mandating that the applicant have the burden of proving there are not any violations of competitive standards and allowing the Insurance Commissioner to consider new evidence when granting a merger, including the effect on the interests of the insurance-buying public.

The AMA's Advocacy Resource Center (ARC) has model bills and campaign toolkits on both of these campaigns. Contact Liz Schumacher for more information.

New AMA resources help physicians understand risk assessment and adjustment models
Two new educational resources from the AMA are designed to help physicians understand health insurers' use of risk assessment and risk adjustment models and how they might affect the physician practice. "An introduction to risk assessment and risk adjustment models" defines the terms "risk assessment" and "risk adjustment" and provides overviews of the prominent risk assessment and risk adjustment models and their various uses, including profiling physicians and other health care professionals. Because numerous risk adjustment models have failed to predict valid practice efficiency rankings and/or health care expenditures, this resource concludes that risk adjustment systems that fail to accurately account for differences in the patient's health status and the related costs of care should not be used to profile individual physicians. Currently, we are unaware of any systems that take into account all of the risk factors that should be considered when using risk adjustment to determine costs of care. A second resource, "Terminology used in physician profiling" helps physicians assess information they receive about physician profiling programs by defining common profiling terms used in health insurers' physician profiling programs. Visit the AMA Web site to access these resources and many others on physician profiling.

Caring for the Health of the Community Means Caring for the Health of the Environment

Nancy J. Larson, RS

In fulfilling the obligation to care for their communities, hospitals and other health care facilities can have a negative impact on the environment. Over the past decade, the health care industry has come under the environmental microscope, and the daily work of treating patients has been discovered to be highly wasteful of natural and financial resources. In 1998, the U.S. Environmental Protection Agency (EPA), in partnership with the American Hospital Association and Health Care Without Harm, formed Hospitals for a Healthy Environment (H2E), to address some of the following major environmental concerns related to the health care sector.

• Medical-waste incinerators were the fourth largest source of mercury, a well-known persistent bioaccumulative and toxic substance. The National Academy of Sciences reported that, each year, 60,000 children may be born in the United States with neurological problems due to their mothers’ having eaten mercury-contaminated fish.
• The health care industry generated more than 2.4 million tons of waste per year, often incinerated or deposited in landfills.
• The health care industry was an excessive user of toxic cleaners, pesticides, and sterilants that can affect both patient health and safety.
• Medical-waste incinerators were a source of dioxins and other hazardous chemicals.

LEARNING OBJECTIVELearn about efforts of the last decade to mitigate the harmful impact of the health care industry on the environment.

Recognizing these environmental health concerns, hospitals across the country voluntarily established green teams, joined national voluntary organizations such as H2E, developed environmental policies to guide their purchasing practices, and set waste-reduction and toxic-elimination goals. Top management supports these policies, but physicians, surgical teams, nurses, and support staff make them work, exploring new ways to practice health care while minimizing its impact on the environment and ultimately the health of the community.

What are the environmental compliance obligations? Hospitals, like any business that produces waste as a part of its everyday work, are subject to a range of environmental regulations. These regulations may include:

• The Solid Waste Disposal Act and Resource Conservation and Recovery Act, which regulate the disposal of solid waste and hazardous waste.
• The Clean Air Act, which governs operation of onsite medical waste incinerators, as well as the venting of toxic chemicals such as ethylene oxide (a sterilant) into the atmosphere.
• The Clean Water Act, which covers discharge of wastewater that may contain high concentrations of chemicals.

Some hospitals have been motivated toward environmental awareness through voluntary policies, others through environmental compliance orders that have resulted from inspections by their state or regional environmental enforcement authority, like the EPA.

An example of the health care industry’s lack of awareness of its environmental regulatory obligation is documented by results of a hospital compliance-monitoring program published by the EPA’s Regional Office for New York, New Jersey, and Puerto Rico in August 2006. According to the summary data, the program completed 49 inspections and took enforcement actions at 36 facilities, noting that hospitals in the program had corrected 3,223 violations [1]. In the Midwest EPA Regional Office for Iowa, Kansas, Missouri, and Kansas, hazardous waste inspector Dedriel Newsome reported in October 2008 that the EPA and the states in that region had conducted about 55 inspections of hospitals in the preceding 5 years and had completed at least 35 enforcement compliance actions during that time [2]. Those inspections resulted in at least 35 formal compliance orders.

Both EPA regions reported that the most common violations at hospitals were related to hazardous waste; in the New York, New Jersey, and Puerto Rico region, 70 percent of the violations were hazardous-waste related. Failure to identify hazardous waste and improper hazardous waste-container management accounted for 56 percent of the Resource Conservation and Recovery Act violations cited in the 2006 program. These hazardous wastes typically involve spent solvents used in clinical and research labs; unused chemicals, drugs, and alcohols; respiratory machine media in the surgery and emergency departments; and acutely hazardous chemotherapy agents and other pharmaceuticals.

To assist the health care sector to better understand its compliance obligations, the EPA funded an online resource, the Healthcare Environmental Resource Center, that provides pollution-prevention and compliance-assistance information [3].

As a result of these compliance needs and heightened awareness, most hospitals now require staff who work in the lab and surgery to be trained in environmental compliance management for their areas. The hospital environmental health and compliance officers normally lead this program and act as a resource for regulatory and waste-management policies and questions.

Beyond compliance—successful toxics and natural-resource management. Many hospitals have gone beyond compliance and set goals to reduce and manage their wastes and natural resources more efficiently. In fact, most have virtually eliminated use of mercury-containing devices in patient-care areas, and nearly 200 facilities have been recognized with a Making Medicine Mercury-Free award given out by the H2E program through 2006, and now by Practice Greenhealth. Practice Greenhealth continues the work begun by the H2E program and has become the primary membership and networking organization for health care institutions committed to sustainable, eco-friendly practices. Members include hospitals, health care systems, businesses, and others engaged in the “greening” of health care to improve the health of patients, staff, and the environment [4].

Physicians as part of the solution. Hospitals do not participate in these programs solely to be good environmental stewards—they can often save money at the same time. One Minnesota surgeon’s green efforts have saved his facility $2,000 and 80 pounds of waste annually [5]. Dr. Rafel Andrade saw that waste could be reduced and implemented a program that eliminated needless, redundant supplies from surgical picks, switched to reusable gowns, promoted prudent use of sterile saline solutions, and minimized surgical prep waste. Several hospitals in Kansas have documented 40 to 70 percent reductions in the volume of their red-bag wastes, simply by educating staff about the written policy that defines what should and should not go into the red bags [6].

Nationally, Veteran’s Administration Hospitals have adopted Green Environmental Management Systems (GEMS), a set of policies designed to prioritize, integrate, and address compliance and pollution-prevention opportunities at their facilities nationwide. It considers a balance between environment and economics and uses a 9-step approach to environmental management [7]. Many hospitals have followed with their own version of GEMS.

According to Energy Star for Healthcare, a national program that supports hospital energy conservation, health care organizations spend more than $8.3 billion on energy each year to meet patient needs. Every dollar a nonprofit health care organization saves on energy is equivalent to $20 in new revenues for hospitals or $10 for medical offices. Just a 5 percent reduction in energy costs in for-profit hospitals, medical offices, and nursing homes can boost earnings a penny per share. One Wichita, Kansas, hospital has used Kansas State University engineering interns to benchmark and identify energy-conservation opportunities. In the summer of 2008, it documented more than 3 million kWh conserved with a related savings of $350,000 [8]. The hospital recently detailed a plan to expand the program that may result in a savings of up to $6 million—money that will be put back into patient care.

You see it every day, and if you look for it at your hospital, it’s there—excessive waste of our natural resources and raw materials. Our medical profession stands by an oath to “First do no harm.” Physicians must use available tools, ask about the hospital policies, and be part of the “green” solution for the financial and environmental health of each facility and community.

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References

1. EPA. Healthcare environmental compliance pitfalls. 2007. http://www.sbeap.org/past_workshops/HHE_2007/Main/ Compliance_for_Hospitals.ppt. Accessed May 1, 2009.
2. Newsome D. What to expect when EPA shows up. Routine RCRA inspections, common violations, and enforcement follow-up. 2008. http://www.iowadnr.gov/waste/p2/files/08h2e_rcra.pdf. Accessed May 1, 2009.
3. Healthcare Environmental Resource Center. Pollution prevention and compliance assistance information for the healthcare industry. http://www.hercenter.org. Accessed May 1, 2009.
4. Practice Greenhealth. Knowledge & resources. http://www.practicegreenhealth.org/educate. Accessed May 1, 2009.
5. University of Minnesota. Minnesota technical assistance program. http://www.mntap.umn.edu/health/142.html. Accessed May 1, 2009.
6. Kansas Small Business Environmental Assistance Program. Kansas hospitals for a healthy environment. 2003. http://www.sbeap.org/publications/KS_hospital_factsheet.pdf. Accessed May 1, 2009.
7. Kulas B. The federal electronics challenge and the VA GEMS program. http://federalelectronicschallenge.net/resources/docs/va_gems.pdf. Accessed May 1, 2009.
8. Kansas State University Pollution Prevention Institute. Energy conservation for small business. http://www.sbeap.org/publications/energy/?section=Energy&name=GHG. Accessed May 1, 2009.

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Nancy J. Larson, RS, is the director of the K-State Pollution Prevention Institute and the Kansas Small Business Environmental Assistance Program. She has more than 20 years’ experience in the environmental and public health arena and previously worked as a nurse.

Related in VM

Medicine’s Role in Mitigating the Effects of Climate Change, June 2009

Educating Patients as Medicine Goes Green, June 2009