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.