Hedge on pledge

Groups: Cover more peo­ple, or let us con­trib­ute less

Modern Healthcare - - The Week In Healthcare - Jen­nifer Lubell

As law­mak­ers hun­kered down be­hind closed doors last week to be­gin the task of merg­ing two com­pre­hen­sive health­care bills into one, hospi­tal groups set bound­aries on what they’d be will­ing to con­trib­ute to the fi­nal bill.

The na­tion’s hos­pi­tals last sum­mer in an agree­ment with the White House and Se­nate Fi­nance Com­mit­tee had pledged to ac­cept $155 bil­lion over 10 years in low­ered fed­eral in­sur­ance re­im­burse­ment to­ward the cost of in­sur­ing Amer­i­cans without cov­er­age. While ac­cept­ing re­duc­tions to Medi­care and Med­i­caid pay­ments, hos­pi­tals ex­pected to ben­e­fit fi­nan­cially over the long term by car­ing for more in­sured in­di­vid­u­als un­der the new health re­forms.

But now with the cur­rent terms of the Se­nate health­care over­haul ex­pected to cover fewer of the unin­sured than agreed upon, the hospi­tal in­dus­try is call­ing for a pos­si­ble re­vi­sion. In the event a fi­nal health­care re­form bill falls short of the cov­er­age ex­pan­sions as out­lined in the House bill, such a com­mit­ment should be re­duced, the Amer­i­can Hospi­tal As­so­ci­a­tion wrote in a let­ter to House Speaker Nancy Pelosi (D-Calif.) and Se­nate Ma­jor­ity Leader Harry Reid (D-Nev.). The rea­son­ing for this is the $1.1 tril­lion House bill aims to cover at least 96% of all Amer­i­cans, while the $871 bil­lion Se­nate bill has a slightly lower tar­get of 94%.

Law­mak­ers shouldn’t be sur­prised by the AHA’s po­si­tion on this, said Richard Pol­lack, ex­ec­u­tive vice pres­i­dent of the as­so­ci­a­tion. “We’ve al­ways taken the po­si­tion that the $155 bil­lion was re­lated to get­ting 96%-97% cov­er­age” for those unin­sured le­gal U.S. res­i­dents in the coun­try, and the House bill comes pretty close to that goal, he said.

The Fed­er­a­tion of Amer­i­can Hos­pi­tals made a sim­i­lar re­quest in its own let­ter to con­gres­sional lead­er­ship. The Catholic Health As­so­ci­a­tion, the third ma­jor hospi­tal group in­volved in the White House agree­ment, said it “con­curred with the prin­ci­ples of the AHA” on this mat­ter, ac­cord­ing to CHA spokesman Fred Cae­sar.

This doesn’t nec­es­sar­ily mean the agree­ment is in trou­ble, said Kemp Dol­liver, manag­ing di­rec­tor of eq­uity re­search at Avon­dale Part­ners, a Nashville-based in­vest­ment bank that re­cently did an anal­y­sis of the po­ten­tial ef­fect of the health­care bills on var­i­ous sec­tors of the health­care in­dus­try. “It means the AHA would like to see ei­ther the higher cov­er­age num­ber or some re­duc­tion in the Medi­care cuts,” Dol­liver said.

Pol­lack also brushed off the no­tion that the agree­ment was on shaky ground. The in­dus­try’s fi­nan­cial com­mit­ment is just one com­po­nent of the terms reached be­tween the hos­pi­tals, the Se­nate fi­nance panel and the White House, Pol­lack said, in an ef­fort to put the is­sue in per­spec­tive. He con­ceded that ne­go­ti­a­tions “are in a chal­leng­ing stage of mix and match, where we’re still try­ing to get the most fa­vor­able and best pro­vi­sions in each bill.”

While the AHA fa­vors the House’s cov­er­age tar­get, its let­ter also sup­ported some of the Se­nate pro­vi­sions, such as al­low­ing not-for­profit, non­govern­ment or­ga­ni­za­tions to ne­go­ti­ate rates with providers as an op­tion in the ex­changes, and omit­ting a pub­lic op­tion.

Hospi­tal groups weren’t the only trade as­so­ci­a­tions mak­ing fi­nal wish lists to law­mak­ers last week. In its own let­ter to key leg­is­la­tors, the Amer­i­can Col­lege of Physi­cians ral­lied for the pri­mary-care lobby, claim­ing that Congress should in­crease Medi­care and Med­i­caid pay­ments to pri­mary-care physi­cians.

Pelosi seemed con­fi­dent that the play­ers in re­form would be able to rec­on­cile their dif­fer­ences and meet the “AAA test,” oth­er­wise known as ac­count­abil­ity, ac­ces­si­bil­ity and af­ford­abil­ity.

Yet, tense dis­cus­sions lie ahead be­tween the cham­bers. House Democrats said they were con­cerned that they could lose tough-fought ground on abor­tion, taxes, im­mi­gra­tion and Med­i­caid fund­ing as party leaders ne­go­ti­ate a fi­nal over­haul bill.

Find­ing a com­pro­mise be­tween the two cham­bers on how to pay for the bill re­mains a chief stick­ing point. Rep. Louise Slaugh­ter (D-N.Y.), chair­woman of the House Rules Com­mit­tee, ac­knowl­edged last week that law­mak­ers might have to find a “hy­brid” so­lu­tion be­tween the Se­nate’s pri­mary “pay for”—the ex­cise tax on in­sur­ance plans—and the House’s lan­guage to es­tab­lish a sur­tax on wealthy in­di­vid­u­als to off­set the cost of a na­tional health­care over­haul. While the pres­i­dent may be com­mit­ted to an in­sur­ance ex­cise tax, even Pelosi ad­mit­ted the ap­proach “is not a pop­u­lar ini­tia­tive in the Congress, in the House or in the pub­lic.”

Un­sur­pris­ingly, the in­sur­ance lobby doesn’t like it ei­ther. “Cost con­tain­ment shouldn’t be­gin and end with a Cadil­lac tax,” said Karen Ig­nagni, pres­i­dent and CEO of Amer­ica’s Health In­sur­ance Plans, in a meet­ing with re­porters last week.

The in­sur­ance in­dus­try has also taken is­sue with Congress’ in­ter­est in fed­er­al­iz­ing the reg­u­la­tion of the health in­sur­ance ex­changes in the leg­is­la­tion. “State in­sur­ance reg­u­la­tors have ex­ten­sive ex­pe­ri­ence and ex­per­tise in reg­u­lat­ing health in­sur­ance. They are also closer to con­sumers and have a bet­ter un­der­stand­ing of the mar­kets they reg­u­late than a sin­gle na­tional reg­u­la­tor in Wash­ing­ton, D.C., could have. For th­ese rea­sons, con­sumers are best served by in­sur­ance reg­u­la­tion that is lo­cated firmly at the state level,” the Na­tional As­so­ci­a­tion of In­sur­ance Com­mis­sion­ers stated in a let­ter to Pelosi and Reid.

(For more on re­form, see the Wash­ing­ton Out­look, p. 28).

House Speaker Nancy Pelosi says she’s con­fi­dent that the play­ers in re­form will be able to rec­on­cile their dif­fer­ences and meet the ac­count­abil­ity, ac­ces­si­bil­ity and af­ford­abil­ity test.

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