Amid a shifting political climate in Washington, national healthcare associations are already hard at work presenting their 2007 agendas to Congress. With key issues ranging from Medicare reimbursements to medical liability reform to health information technology on the table, the industry finds itself at a crucial crossroads.
Both the American Medical Association (AMA) and the Medical Group Management Association (MGMA) recently talked with Medical News about the hopes and concerns for the coming year that will keep them busy on Capitol Hill.
American Medical Association
"Our number one legislative priority is liability reform," Dr. Cecil Wilson, chair of the board of the American Medical Association, stated unequivocally. "Following close on that is Medicare payment reform."
Turning to the first issue, Wilson said simply, "Our medical liability system is broken."
He added, "It doesn't adequately compensate those who have truly been injured, and it also causes a lot of non-meritorious suits in court."
California, which is often hailed as a model for smart reform, has had caps on non-economic damages for 30 years.
"Medical liability premiums are significantly lower in California than in other parts of the country," Wilson pointed out.
In addition to the direct costs for physicians who pay higher malpractice premiums and defend frivolous cases and the cost to patients in terms of limited access to care, Wilson said the broken system has also created a culture of "defensive medicine." The Congressional Budget Office has estimated that defensive medicine adds $110-$120 billion to the cost of care in America.
"The US House of Representatives has approved caps nine times over the last several years, but the Senate has not," said Wilson, who added that the present administration has been supportive of reform.
"We will continue to push for caps at the national level, but we recognize the difficulty in doing that," he continued, adding the AMA plans to increase efforts at the state level to try to enact reform.
Currently, the organization has identified 21 states as being "in crisis" in terms of medical liability with another 22 states "showing problem signs." Wilson said reform at a state level can make a difference if done right. In Texas, which Wilson called a "shining example," legislators passed caps and then followed up with an amendment to the state constitution authorizing the Legislature to enact the caps. Therefore, the changes couldn't be declared unconstitutional by the court system.
As for Medicare payment reform, Wilson said he was disappointed that Congress didn't address the proposed reimbursement cut before adjourning prior to the November elections.
"At this point, the question is whether they'll do anything during the lame duck session," he said. "In the meantime, there is no way for physicians to plan."
Like their counterparts at MGMA, the AMA wants Congress to base reimbursements on the Medicare Economic Index (MEI), which was established in 1973 to reflect the rising cost of practicing medicine. Both groups, however, think the MEI should be updated to reflect newer compliance costs that weren't applicable when the index was created almost a quarter of a century ago.
In addition to these two major concerns, Wilson said the AMA has pinpointed several other key advocacy issues. The group is actively looking at ways to expand healthcare coverage to every citizen. Wilson called having 46 million Americans without coverage a "national disgrace."
"We believe in universal coverage," he said. "We do not believe the way to achieve that is through a single payer system." Instead, Wilson said the mechanism to achieve broad coverage should be through a public/private partnership.
He added that the group would like to see a combination of upfront tax credits so that lower income families could purchase coverage and tax code changes to allow for a healthcare insurance deduction. Wilson also said increasing insurance options, such as the newer HSA (health savings account) programs, could provide consumers with more choice.
Wilson was quick to note the SCHIP (State Children's Health Insurance Program) is up for reauthorization in the coming year. He said the AMA would not only be supportive of the reauthorization but would work to make sure the program was adequately funded.
Patient safety and quality also ranked high on the list of priorities for 2007. Wilson pointed out the AMA was originally founded to improve the quality of patient care.
Through the AMA-convened Physician Consortium for Performance Improvement®, the association is helping craft quality improvement measures for many disease states. Per an agreement with Congress, the group will have 150 or more measures in place by the end of 2006.
Finally, the AMA also plans to look at the spread of health information technology in the coming year.
"We believe that's a priority of providing good care in this country," Wilson said.
Medical Group Management Association
Patrick Smith, senior vice president of government affairs for MGMA, said the association's top priority is Medicare reimbursement reform (see related story for more on MGMA's response to the 2007 proposed rule).
While he said he hopes Congress will take action to avoid the proposed 5.1 percent cut, Smith and his colleagues are calling for real reform as opposed to another stop gap measure.
"We're not interested in taking another freeze … we're not interested in paying for another freeze," he said, adding that option does nothing more than take money out of one pocket to put in another. "In a zero sum game, someone has to pay."
Instead, he continued, "We are trying to change the system to get rid of the sustainable growth rate formula to provide physicians and practices an increase every year that adequately reflects the costs of providing care for patients."
Smith also noted it is difficult to continue to rally the troops every year to fight another round of proposed cuts.
"People outside of Washington have gotten somewhat complacent to a degree," Smith said. He added, however, that the climate in D.C. is tougher now than it has been in the past several years so this is not the time for healthcare industry professionals to stop writing letters and making their opinions known.
Smith said MGMA is also vigorously opposing the imaging cuts in the Deficit Reduction Act that are set to go into effect Jan. 1, 2007. He pointed out that this sector of the healthcare industry would take a double hit in reimbursements if there is no Congressional intervention. However, he added, all of the legislation introduced to address this issue is budget neutral so a freeze in imaging cuts will have to be paid for out of another area of Medicare Part B as things currently stand.
In addition to reimbursement issues, Smith said MGMA is committed to focusing on increased implementation of health information technology in 2007. Both from their own study and from a recent review of other health informatics studies by the Robert Wood Johnson Foundation, MGMA officials have found that a large percentage of practices are still not utilizing much of the available patient management technology. Smith said the implementation rate … particularly for small, medium and solo practices … is still only about 14 to 15 percent.
From looking at all the studies and surveys, he continued, "Clearly the number one burden and hurdle to implementation is cost."
Smith said legislation has actually passed both the House and Senate that provides some grant money to implement new HIT systems. However, the bill has not been conferenced, so it is expected to die at the end of the current Congressional session.
Despite the positive aspects of the bill, MGMA actually opposed the legislation because of a provision requiring a switchover from ICD-9 codes to ICD-10 by Oct. 1, 2010.
"We're not opposed to switching from I-9 to I-10," Smith said. "We are strongly opposed to the time frame because we think it's unrealistic."
Still, Smith said MGMA would continue to look for reasonable ways to increase HIT implementation and search for significant grant money to assist practices.
Pay-for-performance and quality reporting issues are also high priorities for MGMA in the coming months.
Smith pointed out pay-for-performance, quality reporting and health informatics are all inextricably linked together. He noted that when and if quality reporting becomes mandatory, the better the technology systems a practice has in place, the more effective and efficient that practice will be in sharing the established quality measures.
However, he added, "The whole issue of quality reporting is so daunting."
Smith said his office had been taking staff from the committee of jurisdiction into the field to visit D.C.-area practices to show what it takes to implement a quality-reporting program.
"This is going to be yet another administrative burden and another administrative cost for practices," he stated.
Smith also said that the quest to reduce healthcare administrative complexity would remain high on the association's priority list. Dr. William Jessee, FACMPE, president and CEO of MGMA, helped establish the Healthcare Administrative Simplification Coalition (HASC) to focus on cost- and time-saving measures. The public/private partnership of organizations is committed to helping providers share necessary information with carriers and government entities while eliminating unproductive and costly duplication of effort.
"We're the only one in the room that's going to be able to tell you what (a regulation or requirement) is going to mean to the operation of a practice … and that's why administrators are so important to their physicians," he said.
"There's a domino effect when you make a decision that may look good on paper once you take it out in the real practice environment," he continued.
This "real world" knowledge is one of the most important assets Smith said MGMA brings to the table when advocating on behalf of its constituency.
Helping the country's Congressional leadership and oversight agencies better understand the healthcare system from all perspectives is the ultimate goal of the medical industry's key national organizations for 2007 and beyond. Of course sharing knowledge is only half the battle … to win the war, healthcare advocates will have the daunting task of gaining consensus on any of the coming year's legislative hot topics.
Editor's Note: The American Hospital Association declined an interview, stating its 2007 legislative priorities would not be set in time for our December issue.
December 2006
