HEALTH CARE REFORM: Chapter 5

Division B deals with Medicare and Medicaid improvements. It really is the bulk of the bill.

Title I is entitled Improving Health Care Value. Subtitle A contains the provisions related to Medicare Part A, which is the hospital insurance aspect of Medicare. Part 1 of this subtitle deals with "market basket updates". Market baskets are a measure of inflation, so here reimbursements seem to be updated to keep up with inflation.

Part 2 of the subtitle is "Other Medicare Part A Provisions". For example, here we find a change in the "recalibration factor" for skilled nursing facility reimbursement. Another provision is a study of Medicare DSH payments (disproportionate share, extra payments to hospitals who treat a lot of Medicare and low-income patients) in light of more low-income patients being insured through Division A of the bill.

Subtitle B contains provisions related to Part B, which is the medical insurance Medicare component. The first provision here deals with sustainable growth reform. The next section singles out some potentially misvalued codes under the physician fee schedule. The third section is about incentive payments for efficient areas. The fourth section modifies the Physician Quality Reporting Initiative (PQRI). The fifth section adjusts the Medicare payment localities.

Part 2 of Subtitle B is about market basket updates. Part 3 is about other provisions, such as modifications to Medicare's involvement in the rental and purchase of power-driven wheelchairs. Another important provision calls for a study evaluating the difference between the costs incurred by cancer hospitals and the costs incurred by other hospitals when treating Medicare patients with cancer.

Subtitle C is provisions related to Medicare Parts A and B (tricksters, I was expecting Part C).

The first provision is about reducing potentially preventable hospital readmissions. I think this idea is somewhat controversial in that it seems to penalize hospitals when their patients are readmitted. However, from my understanding of the language, hospitals are paid a certain amount when their Medicare patients are discharged, and these discharge payments would be reduced. These payments will be reduced taking into account the hospital's "excess readmission ratio". Certain readmission cases for certain conditions are excluded from counting. The idea is to create an incentive to prevent, when possible, readmissions. Targeted hospitals would receive additional payments to be used for transitional care activities to address the patient noncompliance issues that result in higher than normal readmission rates.

Another provision deals with self-referrals and hospital ownership interests held by physicians. There is a prohibition on self-referrals under Medicare. There are exceptions to this exception for rural providers and in certain situations of hospital ownership.

Subtitle D is Medicare Advantage (Medicare Part C, basically private plans, often with prescription drug coverage, offered to Medicare beneficiaries) reforms. Each Medicare Advantage plan will receive a quality performance score. Improvement will also be tracked. Plans that do not provide performance data will automatically be ranked as the worst plans.

Subtitle E contains improvements to Medicare Part D (private prescription drug plans offered to Medicare beneficiaries; some Medicare Advantage plans contain a Part D component). The first provision sets out a schedule for gradually eliminating the coverage gap (known as the doughnut hole where beneficiaries have to pay out of pocket 100% of prescription drug costs once their total drug costs are over $2400 until they reach $3850; not all plans have this gap in coverage).

Subtitle F contains Medicare Rural Access Protections. The first provision is about telehealth expansion. Telehealth already seems to be utilized, especially in rural areas, and the bill creates a Telehealth Advisory Committee to establish what services are appropriate to be delivered in this manner.

This subtitle brings us to page 385 and the end of Title I of Division B. I haven't gone in to a lot of details on these provisions, largely because they all seem to be pretty non-radical (no death panels, that's coming up) amendments to Medicare that will probably get passed even if the health care reform bill dies. But I really want the government to stay away from my Medicare! That would be awful!!