Johnson Introduces Bill To Link Medicare Physician Reimbursements With Quality of Care

House Ways and Means Health Subcommittee Chair Nancy Johnson (R-Conn.) on Thursday introduced a bill that would repeal the existing formula for calculating Medicare's physician payments and replace it with a system linking payments to quality, CongressDaily reports. The measure, which seeks to pre-empt a scheduled 4.3% cut in Medicare physician payments in January, could become part of this fall's budget reconciliation package, according to Johnson (CongressDaily, 7/28).

At a press briefing to announce the introduction of her bill, Johnson said it is "extremely important" that Congress not continue to "kick the can down the road" by enacting a temporary payment fix to avoid the scheduled cut, as it has done in years past. The $30 billion to $40 billion cost of such fixes should go toward a permanent change in the Medicare doctor payment system, Johnson said.

Her proposal would eliminate the existing sustainable growth rate formula and replace it with a system under which annual payment increases would be based on the growth of the Medical Economic Index. MEI tracks the cost of providing physician care.

The bill calls for a 1.5% payment increase in 2006. MEI-based payment increases, which would start in 2007, would be reduced by one percent that year and in 2008 if doctors fail to report data on the quality of care they provide.

According to CQ HealthBeat, the legislation does not include "gain-sharing" provisions, which allow doctors and hospitals to share savings if they develop ways to improve the efficiency of treatments (CQ HealthBeat [1], 7/28).

The Congressional Budget Office has estimated that repealing the current SGR formula would cost as much as $183 billion over the next 10 years (CongressDaily, 7/28). CBO also has estimated that an MEI-based system would cost as much as $155 billion over 10 years.

Johnson and House Ways and Means Committee Chair Bill Thomas (R-Calif.) have called on CMS to administratively remove prescription drug spending from the physician payment formula, which would reduce the 10-year cost of an MEI-based system by $114 billion. CMS officials have said they might not have the legal authority to make such a change.

According to CQ HealthBeat, it is "unclear" how much support Johnson has for her bill. Thomas has yet to announce his support, but Johnson says he is "supportive" of her efforts (CQ HealthBeat [1], 7/28).

C. Anderson Hedberg, president of the American College of Physicians, at the conference said that the group would not support a quality-improvement effort unless the threat of payment cuts is eliminated.

Meanwhile, CongressDaily reports that the inclusion of Johnson's proposal in the fall's budget reconciliation package "might open other parts of the Medicare program, which the [Bush] administration and GOP leaders want to avoid during the delicate implementation period for Medicare's drug benefit" (CongressDaily, 7/28).

In related news, House Majority Leader Tom DeLay (R-Texas) on Thursday urged health care lobbyists to help Republican lawmakers in promoting the new Medicare prescription drug benefit, saying that beneficiaries' support of the added coverage will be a boon to Republican lawmakers in the 2006 mid-term elections and in their efforts to enact changes to Social Security, CQ Today reports.

"If we have credibility with seniors, they'll start trusting us on Social Security," DeLay said, adding, "I have a very, very tough race coming up. It's going to be a national race. And I'm going to be the No. 1 guy signing up seniors in my district [for the new drug benefit]. And seniors are going to be my friends when it's over."

Thomas Reynolds, chair of the National Republican Congressional Committee, also emphasized the importance of promoting the new benefit with respect to the upcoming election, saying, "This is the most important project the Republican Party can undertake with our allies in selling to seniors."

House Republican Deputy Whip Eric Cantor (R-Va.) added, "This is about marketing. ... There is no better product for the Republican Party to be talking about than health care."

The event also was attended by HHS Secretary Mike Leavitt. Following the meeting, lobbyists said they will fund ad campaigns and other promotional efforts aimed at showing Medicare beneficiaries the benefits of the new drug plan (Adams, CQ Today, 7/28).

Meanwhile, CMS Administrator Mark McClellan this week announced that CMS is searching for five to 10 states to participate in the second phase of a long-term care planning education project. Medicare does not cover long-term care, and Medicaid currently pays nearly half of the long-term care expenses in the U.S.

Medicare in January in five states launched the first phase of the trial, which seeks to find the best methods for encouraging advance planning for long-term care costs. CMS and HHS have been working with governors to send letters to households with members ages 50 to 70 encouraging planning for future care needs.

The letters included information about Medicare and Medicaid, legal issues and private financing options, as well as suggestions on how to plan ahead. CMS said overall response to the first phase, which ended in May, was "good."

For the second phase, states will be chosen through competition. CMS will earmark $2.5 million toward the campaign, and states will pay the cost of printing and mailing the governors' letters. Phase two will run from January to May 2006 and is expected to reach about five million households (CQ HealthBeat [2], 7/28).

Several broadcast programs reported on the 40th anniversary of Medicare and Medicaid, as well as other issues related to the programs:

• NPR's "Morning Edition": The segment includes comments from Stuart Altman, health economist and professor of national health policy at the Brandeis University Heller School for Social Policy and Management; Robert Ball, a former commissioner of Social Security; and McClellan (Silberner, "Morning Edition," NPR, 7/29). The complete segment is available online in RealPlayer.
  
  
• NPR's "Talk of the Nation": The segment includes comments from Edward Annis, former president of the American Medical Association, and Ball (Conan, "Talk of the Nation," NPR, 7/28). The complete segment is available online in RealPlayer.
  
  
• PBS' "Tavis Smiley Show": The late-night television news and talk program on Thursday as part of a monthly "Road to Health Series" included an interview with Jeanne Finberg, attorney for the National Senior Citizens Law Center, about Medicaid and the Medicare prescription drug benefit (Smiley, "Tavis Smiley Show," PBS, 7/28). The complete transcript and audio of the program in RealPlayer will be available online a few days after the broadcast.