Senate Finance Committee unveils its version of healthcare reform

Sen. Max Baucus, D-Mont. Image source: www.baucus.senate.gov

The Senate Finance Committee, chaired by Sen. Max Baucus, D-Mont., issued its long-awaited America’s Healthy Future Act of 2009 on Wednesday, which would cost $856 billion over 10 years, and is scheduled to begin committee action on Sept. 22.

Despite the bill's steep price tag, a preliminary Congressional Budget Office and Joint Committee on Taxation assessment of the bill predicts its enactment would result in a $49 billion reduction in the federal deficit over the period from 2010 to 2019.
Although the Senate Finance Committee has previously suggested raising the imaging utilization assumption rate--used to help determine the technical component reimbursement for imaging services performed in an office setting--from 50 percent to 90 percent, this figure was reduced to 65 percent in the current bill. The American College of Radiology (ACR) and other imaging advocacy groups had lobbied heavily for this change.

In addition to the reduced utilization assumption rate increase, the proposed bill increases the technical component payment reduction for sequential imaging services on contiguous body parts during the same visit from 25 percent to 50 percent.

The Committee also added an “Imaging Self-Referral Sunshine” provision that will require referring physicians who own imaging equipment, such as MRI, CT or PET, to disclose to their patients the physician’s ownership interest, and provide the patient with a written list of alternative facilities from which to obtain their studies. In addition, like other proposed healthcare reform bills, the Baucus legislation would impose an annual fee on any entity that manufactures or imports medical devices offered for sale in the United States. The tax would be $4 billion payable annually beginning in 2010. This measure has received widespread opposition from professional associations, as well as states which house U.S. medical device makers, such as Minnesota and Massachusetts.
Under the bill, states would be required to apply the new federal rating rules to two distinct markets: (1) the individual market and (2) the small group market, defined as groups of 1-50 or up to 100 at state option. The plan would seek to establish federal rating, issue, renewability and pre-existing condition rules for the individual market. For instance, issuers in the individual market could vary premiums based only on the following characteristics: tobacco use, age and family composition.

For the purposes of transparency and accountability, states would by 2010 be required to establish an ombudsman's office to act as a consumer advocate for those with private coverage in the individual and small group markets.

As opposed to a government-run public option, the bill authorizes $6 billion in funding for a CO-OP program to foster the creation of non-profit, member-run health insurance companies that serve individuals in one or more states. CO-OP grantees would compete in the reformed individual and small group insurance markets.

For current Medicaid recipients, states would be required to maintain existing income eligibility levels for all Medicaid populations upon enactment. Also, the legislation would expand the current program by creating a new eligibility category for all non-elderly, non-pregnant individuals (childless adults) currently ineligible for Medicaid and establishing 133 percent of Federal poverty level as the new mandatory minimum Medicaid income.

Within a year of enactment, any uninsured individual who has been denied healthcare coverage due to a pre-existing condition can enroll in a high-risk pool, after being uninsured for six months. According to the bill, the high-risk pool will exist until 2013, and $5 billion in funding will be provided to subsidize premiums in the pool.

Finally, the bill seeks to “link payment to quality outcomes” in the Medicare program. Under the bill’s pay-for-performance/value-based purchasing hospital programs, these measures would focus on the same areas of the current programs: heart attack (acute MI); heart failure; pneumonia; surgical care activities; and patient perception of care. Beginning in 2014, the Health and Human Services secretary would have the authority to expand these categories through quality measure development.

Senate leadership has expressed interest in presenting a combined version of the final Finance Committee and HELP Committee bills.