The Senate's health reform bill differs from the House's version in a number of significant ways that are important to hospitals and will have to be addressed as the Senate and House meet to reconcile their bills.
Here, Chip Kahn, president and CEO of the Federation of American Hospitals, discusses differences between the two bills within the context of an understanding that the Federation and other hospital organizations reached earlier this year with the White House and Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee.
In this agreement, hospitals concurred to $155 billion in federal Medicare payment cuts over 10 years with the understanding that health reform would provide coverage to 94 percent of U.S. residents and would not feature a public option with payment rates either based on Medicare or determined administratively. Hospitals entered into the agreement because there was an expectation that everyone in the health sector was going to have to contribute to health reform, and, by working with Congress, hospitals would have some say over the process.
1. Number of covered Americans. Mr. Kahn believes no other aspect of health reform is as important to hospitals as increasing the number of people in America with coverage. The House bill would cover 94 percent of all U.S. residents, while the Senate bill would cover 92 percent. The House percentage is higher because it places more stringent coverage requirements on individuals and on employers to cover their workers, and because it increases Medicaid eligibility to people earning up to 150 percent of the federal poverty level, compared to 133 percent in the Senate bill.
The Federation prefers the higher coverage level in the House bill because it wants to see more people with coverage. Mr. Kahn also notes that the agreement between hospitals and the White House and Senate Finance Committee assumes reductions in Medicare and Medicare DSH payment will be calibrated to progress in extending coverage to uninsured people.
2. Public option. A government-run "public option" for insurance coverage is part of the House version but not the Senate version. The Federation opposes any public option that would pay hospitals based on Medicare rates or on rates determined and controlled by the HHS Secretary; instead, it favors market-based negotiated rates. The House bill moves somewhat toward having negotiated rates, but the rates would be negotiated by HHS, which only knows how to determine rates under Medicare, Mr. Kahn says. Accordingly, the House provision remains unacceptable to the Federation. "We think the public option probably will go by the wayside in the final product," Mr. Kahn says.
3. Readmissions. Under both bills, hospitals could be penalized for readmissions that are not preventable and avoidable. Both bills could reduce payments to hospitals when a patient is readmitted to any hospital within 30 days of discharge. The Federation supports the principle of decreasing potentially preventable hospital readmissions, but the bills could reduce payments to hospitals even if the readmission was unplanned but clinically necessary and unrelated to the care provided during the previous hospital stay.
4. Prospective ban on self-referral to physician-owned hospitals. This provision, supported strongly by the Federation, remains in both bills, although last-minute amendments to the Senate bill would push back the start of the ban from Feb. 1, 2010, to Aug. 1, 2010. "We believe this provision will end a serious conflict of interest that could affect patient care and would allow full-service community hospitals to continue providing care for all those in need," Mr. Kahn says.
5. Independent Medicare Advisory Board. The Federation opposes this new board because, despite the "advisory" in its name, this body would have virtually unchecked power to set reimbursements unless Congress steps in to oppose a decision. Language in the Senate bill based on the agreement between hospitals and the White House and the Senate Finance Committee would protect facilities that lose money under Medicare, such as hospitals and hospices, from IMAB-mandated funding cuts over 10 years. Mr. Kahn notes that it is important to hospitals and the patients they serve that this provision is preserved and that hospitals' contribution of $155 billion for health reform provides sufficient savings for health reform.
6. Value-based purchasing. The Senate bill includes a budget-neutral Medicare value-based purchasing program for hospitals that expands upon the current "Hospital Compare" reporting program. The House does not include this provision. The Federation generally supports value-based purchasing, which includes pay-for-performance incentive payments to hospitals.
Contact Leigh Page at leigh@beckersasc.com.
Here, Chip Kahn, president and CEO of the Federation of American Hospitals, discusses differences between the two bills within the context of an understanding that the Federation and other hospital organizations reached earlier this year with the White House and Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee.
In this agreement, hospitals concurred to $155 billion in federal Medicare payment cuts over 10 years with the understanding that health reform would provide coverage to 94 percent of U.S. residents and would not feature a public option with payment rates either based on Medicare or determined administratively. Hospitals entered into the agreement because there was an expectation that everyone in the health sector was going to have to contribute to health reform, and, by working with Congress, hospitals would have some say over the process.
1. Number of covered Americans. Mr. Kahn believes no other aspect of health reform is as important to hospitals as increasing the number of people in America with coverage. The House bill would cover 94 percent of all U.S. residents, while the Senate bill would cover 92 percent. The House percentage is higher because it places more stringent coverage requirements on individuals and on employers to cover their workers, and because it increases Medicaid eligibility to people earning up to 150 percent of the federal poverty level, compared to 133 percent in the Senate bill.
The Federation prefers the higher coverage level in the House bill because it wants to see more people with coverage. Mr. Kahn also notes that the agreement between hospitals and the White House and Senate Finance Committee assumes reductions in Medicare and Medicare DSH payment will be calibrated to progress in extending coverage to uninsured people.
2. Public option. A government-run "public option" for insurance coverage is part of the House version but not the Senate version. The Federation opposes any public option that would pay hospitals based on Medicare rates or on rates determined and controlled by the HHS Secretary; instead, it favors market-based negotiated rates. The House bill moves somewhat toward having negotiated rates, but the rates would be negotiated by HHS, which only knows how to determine rates under Medicare, Mr. Kahn says. Accordingly, the House provision remains unacceptable to the Federation. "We think the public option probably will go by the wayside in the final product," Mr. Kahn says.
3. Readmissions. Under both bills, hospitals could be penalized for readmissions that are not preventable and avoidable. Both bills could reduce payments to hospitals when a patient is readmitted to any hospital within 30 days of discharge. The Federation supports the principle of decreasing potentially preventable hospital readmissions, but the bills could reduce payments to hospitals even if the readmission was unplanned but clinically necessary and unrelated to the care provided during the previous hospital stay.
4. Prospective ban on self-referral to physician-owned hospitals. This provision, supported strongly by the Federation, remains in both bills, although last-minute amendments to the Senate bill would push back the start of the ban from Feb. 1, 2010, to Aug. 1, 2010. "We believe this provision will end a serious conflict of interest that could affect patient care and would allow full-service community hospitals to continue providing care for all those in need," Mr. Kahn says.
5. Independent Medicare Advisory Board. The Federation opposes this new board because, despite the "advisory" in its name, this body would have virtually unchecked power to set reimbursements unless Congress steps in to oppose a decision. Language in the Senate bill based on the agreement between hospitals and the White House and the Senate Finance Committee would protect facilities that lose money under Medicare, such as hospitals and hospices, from IMAB-mandated funding cuts over 10 years. Mr. Kahn notes that it is important to hospitals and the patients they serve that this provision is preserved and that hospitals' contribution of $155 billion for health reform provides sufficient savings for health reform.
6. Value-based purchasing. The Senate bill includes a budget-neutral Medicare value-based purchasing program for hospitals that expands upon the current "Hospital Compare" reporting program. The House does not include this provision. The Federation generally supports value-based purchasing, which includes pay-for-performance incentive payments to hospitals.
Contact Leigh Page at leigh@beckersasc.com.