On June 19, the U.S. House of Representatives released a discussion draft of sweeping health reform legislation that expands health coverage to the uninsured and makes significant delivery system reforms. It was developed jointly by the three committees of jurisdiction—the Ways & Means, Energy & Commerce, and Education & Labor Committees. The Congressional Budget Office had yet to score the bill as of the Skyline News deadline, so it is possible that further revenue raisers and cost containment will be added to the bill in the coming weeks.

Specifics: The bill expands coverage to the uninsured through insurance reforms, Medicaid expansion, and a health insurance exchange that would offer a public health insurance option. The public plan would for the first three years pay providers Medicare rates, although the Secretary would have the discretion as to whether to include rate add-ons such as disproportionate share hospital payments (DSH) and indirect medical education (IME) adjustments. Most notably, and reflecting the strong position taken by Ways & Means Chairman Charles Rangel (D-NY), the legislation does not include reductions in either Medicare or Medicaid DSH or graduate medical education (GME) payments to offset the cost of providing coverage for the uninsured. It also does not contain damaging proposals to reduce geographic variation in Medicare spending. 
     
It does, however, include annual market basket cuts (so-called productivity gains cuts) in the range of -1% to -1.5% each year, and includes reductions to hospitals that have higher-than-expected rates of readmissions (for certain conditions). The American Hospital Association has estimated that these cuts along with others in the bill could cost New York providers $10 billion over 10 years.  It does not include a value-based purchasing program for hospitals, and, rather than implementing bundled payments under Medicare, the bill calls upon the Secretary of Health and Human Services to work with stakeholders to develop a viable bundling program for further consideration by the Congress. For a more detailed summary of provisions of interest, go to www.gnyha.org and access ML-66.

Senate Action: On the Senate side, the Senate Finance Committee, had originally planned to take formal Committee action on a bill last week, but has since delayed action until after the July 4th Congressional recess due to concerns about cost and the lack of a bipartisan consensus. As Skyline News went to press, the Finance Committee was reportedly closing in on a bipartisan package that would cost nearly $1 trillion over 10 years ($600 million less than original estimates). The other committee of jurisdiction, the Senate Health, Education, Labor, and Pensions (HELP) Committee, continued to mark up its legislative proposal last week, with little cooperation between Democrats and Republicans. The HELP bill includes a number of workforce provisions, and includes a public health insurance coverage option that would pay providers Medicare rates plus 10 percent. The HELP bill has been estimated to cost more than $1 trillion over 10 years, and is projected to extend coverage to 16 million uninsured individuals (about a third of the total uninsured population in the United States). In the five legislative weeks following the upcoming recess, the Senate HELP bill will need to be reconciled with the Senate Finance bill before the Senate can bring a final reform package to the floor. The President has urged both the House and the Senate to pass their respective measures before adjourning for the month-long August recess in order to enact a final bill by October 2009.

GNYHA Reaction: Many proposals have been floated in Congress that would disproportionately harm New York health care providers. Because the House draft avoided some of these most damaging cuts, which would devastate New York’s health care system, GNYHA reacted positively to the House bill. In a statement, GNYHA said that we “applaud Charles B. Rangel (D-NY) and his House colleagues Henry A. Waxman (D-CA) and George Miller (D-CA), along with Frank Pallone (D-NJ), for the draft bill for health care reform they introduced…The draft bill is a thoughtful, intelligent response to the urgent need to lower health care costs and ensure access to quality, affordable health care for all Americans. It is a tremendous first step on the long, challenging road to comprehensive, meaningful health care reform that will benefit every patient that America’s hospitals serve.” GNYHA will now work with members of Congress and the Administration to limit reimbursement rate reductions for hospitals and nursing homes while fighting for proposals to reduce provider costs of doing business, including HMO reform, medical malpractice reform, and proposals to reduce the costs of supplies, pharmaceuticals, and high-cost medical devices.