Health Care Reform: Analysis & Perspectives

3/11/2010

The current push for comprehensive health care reform will have a tremendous impact on our clients’ businesses and strategies. Our Health Law and Employee Benefits attorneys and the consultants at ML Strategies, our government relations affiliate, are closely following, analyzing, and interpreting every aspect of this critical legislative initiative.

As a resource for our clients, Mintz Levin is compiling the latest information on congressional developments and providing additional updates and commentary on issues of great significance included within the reform bills.

Please check back here often for the latest information, and please contact us if you have any questions.

Legislative Updates

3/1/10
Weekly Legislative Update
Last Thursday, the effort to reform the nation’s health care system received renewed international attention thanks to President’s Obama White House health care summit, attended by leaders of both the Republican and Democratic parties. The event, which started at 10 a.m. and lasted until after 5 p.m., with only a quick break for lunch and votes at the Capitol, was billed as an attempt to reach some kind of consensus moving forward. As expected, many lawmakers from both parties made lengthy statements seemingly designed for scoring political points, but there were also moments of seemingly genuine and constructive debate. In particular, the President appeared to have substantive discussions with Rep. Marsha Blackburn (R-TN) and Sen. Tom Coburn (R-OK) over purchasing insurance across state lines and cost containment measures, respectively. The summit also included a tense exchange between President Obama and Sen. John McCain (R-AZ) in which the President admonished his former Republican opponent for attempting to revisit their campaign instead of discussing substantive issues.

As for the next steps, during the summit, Democratic leaders in Congress and President Obama all rejected calls by Republican leaders to take the reconciliation route off the table. In fact, the President and Democrats insisted that reconciliation is an appropriate path to take and that they will pursue that option if they do not receive any Republican support. Since the Thursday summit, House Speaker Nancy Pelosi (D-CA) has publicly stated that she supports the President’s plan and pledged that she would be able to find the votes for health care even if the Senate pursues reconciliation. Last Friday, White House Press Secretary Robert Gibbs announced that President Obama is currently considering all of the proposals discussed during the summit and that he will formally make a final decision on the next steps for health care reform in the middle of the week. Political insiders expect that the President will likely incorporate some of the Republican ideas offered at the summit, although it’s not clear which ones and how many points he will concede to Republicans. Senate Minority Leader Mitch McConnell (R-KY) predicted yesterday that, no matter what the President decides, there will be no Republican support for the health care bill in the Senate. This only fueled speculation that Democrats will pursue reconciliation. Aides to top Democratic leaders have confirmed that the President and Democrats want to pass a bill by the March congressional recess.

This update is an abbreviated version of a more comprehensive weekly alert compiled by the Washington, D.C. office of ML Strategies. If you would like more information or would like to receive the complete update, please do not hesitate to contact ML Strategies.

Legislative Resources

The House of Representatives and the Senate were working on separate comprehensive bills to reform the health care system in the U.S. The House passed its version of the legislation, the Affordable Health Care For America Act (H.R. 3962), in October 2009. The Senate passed the Patient Protection and Affordable Care Act (H.R. 3590) on Christmas Eve 2009. The House and Senate were in the process of resolving the differences between the two bills when the surprise election of Sen. Scott Brown (R-MA) temporarily put those ambitions on hold. While the prospects for a comprehensive overhaul of the nation's health care system remain unclear, the President and Congressional leaders insist that action must be taken to curb the long-term burdens of health care. Whether in the form of a comprehensive bill or through smaller, incremental reforms, it is likely that some reforms will be passed and that the health care debate will remain front-and-center on the political scene as the November mid-term elections approach. Click on the following links for the text of the relevant bills below, as well as section-by-section summaries and related resources.

2/8/10
While the comprehensive reform effort has temporarily stalled on Capitol Hill, freshman Reps. Tom Perriello (D-VA) and Betsy Markey (D-CO) are planning on introducing a bill to repeal the antitrust exemption for health insurers. Please click here for draft legislative language of the bill, which the Speaker of the House intends to bring to the floor for a vote the week of February 8, 2010.

12/24/09
On Christmas Eve at approximately 7am, the Senate passed the Patient Protection and Affordable Care Act (H.R. 3590) by a vote of 60-39. Click here for summary of the bill as amended.

12/22/09
On December 22, 2009, the Senate adopted a comprehensive manager’s amendment to the Patient Protection and Affordable Care Act, offered by Senate Majority Leader Harry Reid (NV). Click here for a copy of the amendment and here for a section-by-section analysis.

11/18/09
The Senate introduced the Patient Protection and Affordable Care Act (H.R. 3590) on November 18, 2009 as a compromise between the two previous bills from the Senate Health, Education, Labor & Pensions and Finance Committees. Click here to read the bill text and here for a section-by-section analysis.

10/29/09
The House of Representatives was the first to vote on health care reform, passing the Affordable Health Care for America Act (H.R. 3962) on October 29, 2009. Click here for the bill text and here for a section-by-section analysis.

Relevant Committees

Senate

Committee on Finance - Chairman: Sen. Max Baucus (D-MT), Ranking Member: Sen. Charles Grassley (R-IA)
Committee on Health, Education, Labor & Pensions (HELP) - Chairman: Sen. Tom Harkin (D-IA), Ranking Member: Sen. Mike Enzi (R-WY)

House of Representatives

Committee on Energy & Commerce - Chairman: Rep. Henry Waxman (D-CA), Ranking Member: Rep. Joe Barton (R-TX)
Committee on Ways & Means - Chairman: Rep. Charles Rangel (D-NY), Ranking Member: Rep. Dave Camp (R-MI)
Committee on Education & Labor - Chairman: Rep. George Miller (D-CA), Ranking Member: Rep. John Kline (R-MN)

Other Key Players & Useful Resources

Democrats

Senate Majority Leader Harry Reid (D-NV)
House Speaker Nancy Pelosi (D-CA)
House Majority Leader Steny Hoyer (D-MD)
Sen. Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing and Urban Affairs
Democratic Policy Committee’s Health Care Page, Chairman - Sen. Byron Dorgan (D-ND)

Republicans

Senate Minority Leader Mitch McConnell (R-KY)
House Republican Leader John Boehner (R-OH)
Republican Policy Committee’s Health Care Page, Chairman - Sen. John Thune (R-SD)

Industry & Advocacy Organizations

The Henry J. Kaiser Family Foundation is a leading non-profit in the field of health care. The organization places extensive resources on their website about health care, health policy and the health care reform efforts in Congress. Click here to generate your own side-by-side comparison of the bills using their interactive tool.

The American Medical Association (AMA) is the leading industry organization representing America’s doctors and medical care providers. Active in the health reform effort, the AMA endorsed both the Senate and House legislation although the organization still has reservations about certain provisions.

The National Association of Health Underwriters (NAHU) is an industry organization representing over 100,000 health care professionals in the United States. Click here to view the NAHU’s side-by-side comparison of the House and Senate bills.

The Center on Budget and Policy Priorities (CBPP) is an organization that conducts research and analysis on policies affecting the nation’s budget and tax situation, especially that of the low- and middle-income community. The CBPP conducts extensive analysis of key provisions in the bill.

The Healthcare Information and Management Systems Society (HIMSS) is one of the leading organizations focused on the development of the nation’s health IT infrastructure and promoting effective management systems for health care data. The organization has conducted analysis on the provisions of the bill that touch the health IT community.

Employee Benefits

12/31/09
This client advisory focuses on the likely impact of federal health care reform on employers. It explains the key features of the House and Senate bills; assesses the likely impact on employers (cost and administrative complexity); and speculates on what the final legislation may look like. For employers domiciled or with operations in Massachusetts, some of what is described here will be familiar. For others, the Massachusetts experience with the employer mandate adopted in 2006 furnishes clues about the problems and issues that may arise in implementing the final version of the national legislation. Please click below to read our Advisory:
Assessing the Impact of Federal Health Care Reform on Employers and Group Health Plans

Medicare/Medicaid Reimbursement

1/25/10
The pending health care reform legislation includes Medicare reform proposals that are designed to improve the quality and efficiency of care and provider accountability while also reducing overall costs. Even if no legislation is enacted, it is worth considering the possible effect of proposals for payment reform and the development of provider networks—referred to as “accountable care organizations” (ACOs)—on M&A activity. Both the House and Senate bills contain extensive provisions aimed at moving Medicare, and eventually perhaps the payment mechanisms for other payors throughout the health care system, toward payment policies intended to promote value, efficiency, and quality and away from fee-for-service-based reimbursement. Less far-reaching federal legislative initiatives, potential regulatory activity by the Centers for Medicare & Medicaid Services, parallel initiatives at the state level (such as the proposal for payment reform and ACO development under consideration in Massachusetts), and private payor initiatives all seem to be leading in the same direction. Please click below to read our Advisory:
Payment Reform - A Catalyst for Increased M&A Activity

Health IT / Electronic Medical Records

3/5/10
Is your electronic health record technology “meaningful?” The National Coordinator for Health Information Technology issued a proposed rule on March 2 to help answer that question for the thousands of health care providers that will request Medicare/Medicaid payments for the meaningful use of certified electronic health record (EHR) technology. Please click below to read our Advisory:
Is Your Electronic Health Record Technology “Meaningful?”

1/15/10
The recession has impacted the pockets of Americans and state governments alike. Already facing huge budget shortfalls due to declining revenues, states have been forced to deal with the high demand for public programs. To that end, states are looking for mechanisms that will control Medicaid spending, yet improve medical quality and efficiency. The American Recovery and Reinvestment Act (ARRA) provided some much needed Medicaid fiscal assistance, including approximately $19 billion for payments and incentives to providers under public programs to adopt and implement health information technology. Its provisions require providers to demonstrate “meaningful use” of this technology, but the benefits may in fact be equally meaningful for states and providers. Please click below to read our Advisory:
Meaningful Use = Meaningless Dollars?

1/4/10
On December 30, 2009, the Centers for Medicare & Medicaid Services (CMS) issued a Proposed Rule implementing incentive payments under the Medicare and Medicaid programs for the “meaningful use” of certified electronic health records (EHR) technology. Congress mandated the Medicare and Medicaid EHR incentive programs as part of the American Recovery and Reinvestment Act of 2009 to incentivize eligible health care providers (professionals, hospitals, and critical access hospitals) to adopt EHR technologies. Incentive payments for eligible hospitals may begin as early as October 2010, while payments to other eligible providers may begin in January 2011. Please click below to read our Advisory:
CMS Issues Proposed Rule on Meaningful Use of EHR Technology

11/04/09
On October 30, 2009, the U.S. Department of Health and Human Services (HHS) published the interim final rule implementing statutory changes to HIPAA’s civil enforcement rules resulting from the enactment of the Health Information Technology for Economic and Clinical Health Act (HITECH Act). The Interim Final Rule was effective November 30, 2009. Please click below for Mintz Levin’s analysis of this important rule:
HHS Issues Interim Final Rule Implementing Civil Penalty Provisions of HITECH Act

8/26/09
The Department of Health and Human Services issued an interim final rule on August 19, 2009, establishing standards for notification of breaches of unsecured protected health information (PHI) under the HIPAA privacy and security rules. The rule clarifies certain key definitions and concepts, generally in a manner that is favorable to covered entities and business associates, while remaining true to the HITECH Act and the intent of Congress. The interim final rule also makes minor modifications to, and formally adopts, HHS’s April 17, 2009 proposal relating to which technologies and methodologies will render PHI unusable, unreadable, or indecipherable to unauthorized individuals (and, as a consequence, exempt from the Act’s breach notice requirements). Please click below for Mintz Levin’s analysis of this important rule:
HHS Issues Rules Relating to Breach Notification and Related Items under the HITECH Act

Fraud, Waste and Abuse

12/28/09
Despite the many differences between the House passed health care reform bill and the Senate bill passed on December 24, 2009, the two are remarkably similar with respect to the enhanced fraud and abuse enforcement provisions. This solidarity is not surprising given that many experts estimate that losses resulting from health care fraud could pay for much, or even all, of health care reform. Please click below to read our Advisory:
Solidarity in a Sea of Dissent: Consistencies Between the House and Senate Bills’ Provisions Targeting Fraud and Abuse

Health Care Delivery Reforms

1/11/10
Emergency departments and trauma centers play a key role in issues of public health and national security, be it in response to a pandemic or other disaster. However, the United States’ system for the delivery of emergency medical services, in particular trauma center services, faces challenges in the areas of funding and reimbursement, access, coordination of services, geographic/regional disparity, and the ability to respond in the event of a pandemic, disaster or other catastrophic event. Both the House and the Senate health care reform bills, in varying ways, attempt to address these and other issues. As a result, any final legislation likely will create opportunities for facilities and states to capture funds that will benefit both providers and patients. Please click below to read our advisory:
Emergency Care—Will Health Care Reform Come to the Rescue?

1/4/10
Health care reform legislation places a strong emphasis on improving primary care services and care coordination. Both the House and Senate bills encourage further testing and implementation of the “medical home” model, an approach to primary care for patients of all ages, in coordination or partnership with the patient and, as appropriate, the patient’s family. Primary care providers have, for some time, advocated that the medical home model is key to providing efficient, high‑quality, coordinated care. Both the Senate and House bills reflect that the medical home model, and a payment methodology that supports it, is a central component of reforming the health care delivery and payment system. Please click below to read our Advisory:
The Medical Home: A New Foundation for Health Care

1/4/10
The House and Senate health care reform proposals create federal comparative effectiveness research centers to conduct, support, and disseminate findings from comparative effectiveness research. Generally, comparative effectiveness research is evidence‑based research to evaluate and compare the health outcomes and clinical effectiveness of two or more medical treatments. Although the goal of both proposals is to identify effective and efficient treatment options, they give rise to questions about exactly how comparative effectiveness research results will be used, and the extent to which they will influence coverage and reimbursement policies or otherwise impact patient care and potentially limit provider treatment choices. Please click below to read our Advisory:
Comparative Effectiveness Research Proposals: Potential Implications for Stakeholders

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