ForImmediateRelease September16,2009

Contact:

ScottMulhauser ErinShields (202)2244515

BAUCUSINTRODUCESLANDMARKPLANTOLOWERHEALTHCARECOSTS, PROVIDEQUALITY,AFFORDABLECOVERAGE
CongressionalBudgetOfficeestimatesthefullypaidforpackage willincreasequalityhealthcoverageandreducefederaldeficitwithintenyears

Washington,DCSenateFinanceCommitteeChairmanMaxBaucus(DMont.)today introducedtheAmericasHealthyFutureAct,landmarkhealthcarereformlegislationto lowercostsandprovidequality,affordablehealthcarecoverage.TheChairmansMark willmakeiteasierforfamiliesandsmallbusinessestobuyhealthcarecoverage,ensure Americanscanchoosetokeepthehealthcarecoveragetheyhaveiftheylikeitandslow thegrowthofhealthcarecostsovertime.Itwillbarinsurancecompaniesfrom discriminatingagainstpeoplebasedonhealthstatus,denyingcoveragebecauseofpre existingconditions,orimposingannualcapsorlifetimelimitsoncoverage.Thebill wouldimprovethewaythehealthcaresystemdeliverscarebyimprovingefficiency, quality,andcoordination.The$856billiondollarpackagewillnotaddtothefederal deficit.TheFinanceCommitteewillmeettobeginvotingontheChairmansMarknext week. ThecostofAmericasbrokenhealthcaresystemhasstretchedfamilies,businesses andtheeconomytoofarfortoolong.Fortoomany,quality,affordablehealthcareis simplyoutofreach,saidBaucus.Thisisauniquemomentinhistorywherewecan finallyreachanobjectivesomanyofushavesoughtforsolong.TheFinance Committeehascarefullyworkedthroughthedetailsofhealthcarereformtoensure thispackageworksforpatients,forhealthcareprovidersandforoureconomy.We workedtobuildabalanced,commonsensepackagethatensuresquality,affordable coverageanddoesntaddadimetothedeficit.Nowwecanfinallypasslegislation thatwillreininhealthcarecostsanddeliverquality,affordablecaretotheAmerican people. ProvisionsincludedinthelegislationtoensureAmericanshavequality,affordable, healthcarecoveragewould: Createhealthcareaffordabilitytaxcreditstohelplowandmiddleincome familiespurchaseinsuranceintheprivatemarket; Providetaxcreditsforsmallbusinessestohelpthemofferinsurancetotheir employees; more

 Allowpeoplewholikethecoveragetheyhavetodaythechoicetokeepit; Reformtheinsurancemarkettoenddiscriminationbasedonpreexisting conditionsandhealthstatus; Eliminateyearlyandlifetimelimitsontheamountofcoverageplansprovide; Createwebbasedinsuranceexchangesthatwouldstandardizehealthplan premiumsandcoverageinformationtomakepurchasinginsuranceeasier; Giveconsumersthechoiceofnonprofit,consumerownedandorientedplans (COOP); StandardizeMedicaidcoverageforeveryoneunder133percentofthefederal povertylevel. Provisionsincludedinthelegislationtoimprovethequalityofcare,increaseefficiency withinthehealthcaresystem,andlowerhealthcarecostswould: ShiftincentivesinMedicaretorewardbettercare,notjustmorecare; Increasethenumberofprimarycaredoctorsinthesystem; Aggressivelyfightfraud,waste,andabuseinMedicare; Encourageallofapatientsdoctorstocoordinatecareandreduceduplication andwaste; Createincentivesforhealthcareproviderstoimprovequalitybyusingsafer, morecosteffectivehealthtechnologylikeelectronicmedicalrecords;and Increasehealthcareresearchsodoctorsknowwhatcareworksbestforwhich patients. Provisionsincludedinthelegislationtopromotepreventivehealthcareandwellness would: ProvideannualwellnessvisitsforMedicareparticipantsandtheirdoctorsto focusonprevention; EliminateoutofpocketcostsforscreeningandpreventionservicesinMedicare; CreateincentivesinMedicareandMedicaidforcompletinghealthylifestyle programs; IncreasefederalMedicaidfundingforstatesthatcoverrecommended preventiveservicesandimmunizationsforenrolleesatnoextracost;and ProvidefreetobaccocessationservicesforpregnantwomeninMedicaid. TheCongressionalBudgetOfficeestimatestheChairmansMarkwouldmakean$856 billioninvestmentinthehealthcaresystemovertenyears.Thatinvestmentwouldbe fullypaidformostlythroughincreasedfocusonquality,efficiency,preventionand adjustmentsinfederalhealthprogrampayments,withoutaddingtothefederaldeficit. AsummaryoftheChairmansMarkfollowsbelow.ThefulltextoftheAmericas HealthyFutureActisavailableat:http://finance.senate.gov/sitepages/leg/LEG 2009/091609Americas_Healthy_Future_Act.pdf. more

TheAmericasHealthyFutureAct
ProvidingQualityCoveragetoAllAmericans Americanswholiketheirhealthinsuranceandwanttokeepitcandoso.Forthe millionsofAmericanswhodonthaveorcantaffordemployerprovidedcoverage,or whoarebeingdeniedcoverageduetoapreexistingcondition,theChairmansMark reformstheindividualandsmallgroupmarkets,makingcoverageaffordableand accessible. IndividualMarketReformsTheMarkwouldrequireinsurancecompaniestoissue coveragetoallindividualsregardlessofhealthstatus;insurerswouldnolongerbe allowedtolimitcoveragebasedonpreexistingconditions.Limitedvariationin premiumrateswouldbepermittedfortobaccouse,age,andfamilycomposition. Variationinratingwouldbeallowedbetweengeographicareas,butwouldnotdiffer withinageographicarea. SmallGroupMarketReformsRatingrulesfortheindividualmarketwouldalsoapplyto thesmallgroupmarket,asdefinedbystates.Thiswouldincludegroupsofoneto50 employees,butcouldincludecompanieswithupto100employees,dependingon currentstatelaw. HealthInsuranceExchangesTheMarkwouldmakepurchasinghealthinsurance coverageeasierandmoreunderstandablebyusingtheInternettopresentconsumers withavailableplans.TheMarkwouldcreatestatebasedwebportals,orexchanges thatwoulddirectconsumerspurchasingplansontheindividualmarkettoeveryhealth coverageoptionavailableintheirzipcode.Theexchangeswouldofferstandardized healthinsuranceenrollmentapplications,astandardformatcompanieswoulduseto presenttheirinsuranceplans,andstandardizedmarketingmaterials.The exchangeswouldhaveacallcenterforcustomersupport.Theexchangeswouldalso enableuserstodeterminewhethertheyareeligibleforhealthcareaffordabilitytax creditsorpublicprogramsandwouldenableconsumerswithoutaccesstotheInternet toenrollthroughthemailorinpersoninavarietyoflocations. SmallGroupPurchasingThroughSHOPExchangesUndertheChairmansMark,small businesseswouldhaveaccesstostatebasedSmallBusinessHealthOptionsProgram (SHOP)exchanges.Theseexchangesliketheindividualmarketexchangeswouldbe webportalsthatmakecomparingandpurchasinghealthcarecoverageeasierforsmall businesses. more

TransitioningtoaReformedInsuranceMarketOncetheinsurancemarketreforms takeeffect,peoplewhowanttokeeptheinsurancetheyhavetodaycandoso.Plans wouldbeallowedtocontinuetoofferthecoveragetheyoffertodayandthiscoverage wouldbegrandfathered.Thesegrandfatheredplanswouldonlybeavailabletothose peoplewhoareenrolledtodayor,inthecaseofasmallemployer,tonewemployees andtheirdependents.Peoplewhoqualifyforthehealthcareaffordabilitytaxcreditsin thereformedmarketwouldnotbeabletousethecreditstopurchasegrandfathered plans.Taxcreditswouldbeofferedonlytopurchaseplanscreatedinthereformed marketthatmeetthenewbenefitstandards. TransitioningforRatingRequirementsFederalratingrulesfortheindividualmarket (otherthanforgrandfatheredplans)wouldtakeeffectbyJanuary1,2013.Federal ratingrulesforthesmallgroupmarketwouldbephasedinoveraperiodofuptofive years,asdeterminedbyeachstate,withapprovalfromtheSecretaryofHHS. MedicaidTheChairmansMarkwouldstandardizeMedicaideligibilityforallparents, children,pregnantwomenandchildlessadultsatorbelow133percentoftheFederal PovertyLevel(FPL),or$30,000ayearforafamilyoffour($14,400foranindividual), beginningin2014.Individualsbetween100percentofFPLand133percentofFPL wouldbegiventhechoiceofenrollingineitherMedicaidorinaprivatehealthinsurance planofferedthroughahealthinsuranceexchange.Thefederalgovernmentwould provideadditionalfundingtostatesforservicesfornewlyeligibleMedicaid beneficiaries.TheChairmansMarkwouldalsoguaranteeprescriptiondrugbenefitsto allMedicaidbeneficiaries. PrescriptionDrugBenefitsMedicarebeneficiarieswhoenrollintheMedicarePartD prescriptiondrugprogramwillreceivesignificanthelppurchasingprescriptiondrugs whentheyhitthecoveragegapportion,ordonutholeofthebenefit.Insteadof paying100percentoftheirdrugcostsinthegap,PartDbeneficiarieswithlowto moderateincomeswillreceivea50percentdiscountonthepriceofbrandnamedrugs coveredbytheirplan.Thediscountmakesexpensivemedicinesmoreaffordableand helpsbeneficiariesstayontreatmentsthattheirdoctorsprescribe. ChildrensHealthInsuranceProgramTheChairmansMarkwouldnotmakechangesto theChildrensHealthInsuranceProgram(CHIP)untilafterSeptember30,2013,when thecurrentreauthorizationperiodends.Then,stateswouldberequiredtoprovide childrenbetweenMedicaideligibilitylevelsandatleast250percentofFPLwith wraparoundcoveragetosupplementthecorebenefitpackageavailablethroughthe exchange.Theseadditionalserviceswouldbetheearlyandperiodicscreening, diagnosisandtreatment(EPSDT)servicesavailabletochildreninMedicaid.Current CHIPcostsharingprotectionswouldcontinuetoapply.CHIPbenefitsunderthisnew formofdeliverywouldbeequallyasormoregenerousthanthecurrentstructure. more

AddressingHealthCareDisparitiesTheChairmansMarkwouldrequirefederalhealth programstocollectuniformdataonrace,ethnicity,genderanddisabilitytohelp programadministratorsandresearchersworktoenddisparitiesamongthesegroups. PromotingMaternalandChildHealthTheChairmansMarkwouldprovidefundingto states,tribesandterritoriestodevelopandimplementoneormoreevidencebased Maternal,InfantandEarlyChildhoodHomeVisitationprograms.Programoptions wouldprovidetrainingandconsultationaimedatreducinginfantandmaternal mortalityanditsrelatedcausesbyproducingimprovementsinprenatal,maternaland newbornhealth,childhealthanddevelopment,parentingskills,schoolreadiness, juveniledelinquencyandfamilyeconomicselfsufficiency. MakingCoverageAffordable Thecostofhealthinsurancehasincreasedfivetimesfasterthanwagesoverthelast eightyears.Estimatesshowthatjustsevenyearsfromnow,mostAmericanswillspend nearlyhalftheirincomeonhealthinsurance.Americanbusinessespaynearlythree timesmorethanourmajortradingpartnersforhealthcarebenefits.Unaffordable coveragepreventsthesecompaniesfromcompetingintheglobalmarket.TheMark makescoveragemoreaffordablebyprovidingtaxcreditsforlowandmiddleincome individualsandsmallbusinesses,andbystrengtheningpublicprograms. OptionsforStandardBenefitsTheMarkcreatesfourbenefitcategoriesforthe reformedhealthinsurancemarket:bronze,silver,goldandplatinum.Nopolicies (exceptgrandfatheredpolicies)wouldbeissuedintheindividualorsmallemployer marketthatdonotcomplywithoneofthefourcategories.Allinsurerswouldhaveto offercoverageinthesilverandgoldcategories.Allplanswouldberequiredtoprovide primarycareandfirstdollarcoverageforpreventiveservices,emergencyservices, medicalandsurgicalcare,physicianservices,hospitalization,outpatientservices,day surgeryandrelatedanesthesia,diagnosticimagingandscreenings,includingxrays, maternityandnewborncare,pediatricservices(includingdentalandvisioncare), prescriptiondrugs,radiationandchemotherapy,andmentalhealthandsubstance abuseservices.Planswouldnotbeallowedtosetlifetimelimitsoncoverageorannual limitsonanybenefits.Planswouldhaveoutofpocketlimitsatleastequaltothelimits forHealthSavingsAccounts(HSAs),whichwillbe$5,950foranindividualand$11,900 forafamilyin2010. more

HealthCareAffordabilityTaxCreditsTheMarkwouldprovideanadvanceable, refundabletaxcreditforlowandmiddleincomeindividualstosubsidizethepurchaseof healthinsurance.Beginningin2013,taxcreditswouldbeavailableonaslidingscalefor individualsandfamiliesbetween134300percentofFPL(FederalPovertyLevel)tohelp offsetthecostofprivatehealthinsurancepremiums.Beginningin2014,thecreditsare alsoavailabletoindividualsandfamiliesbetween100133percentofFPL.Thecredits wouldbebasedonthepercentageofincomethecostofpremiumsrepresents,rising fromthreepercentofincomeforthoseat100percentofpovertyto13percentof incomeforthoseat300percentofpoverty.Individualsbetween300400percentof FPLwouldbeeligibleforapremiumcreditbasedoncappinganindividualsshareofthe premiumataflat13percentofincome.Acostsharingsubsidywouldbeprovidedto limittheamountofcostsharingthatindividualsandfamiliesbetween100200percent ofFPLhavetopay.Undocumentedimmigrantsareprohibitedfrombenefitingfromthe credit. SmallBusinessHealthCareAffordabilityTaxCreditsThisproposalwouldprovideatax credittosmallbusinessesthatofferhealthinsurancetotheiremployees.In2011and 2012,eligibleemployerscanreceiveasmallbusinesscreditforupto35percentoftheir contribution.Oncetheexchangesareupandrunningin2013,qualifiedsmallemployers purchasinginsurancethroughtheexchangescanreceiveataxcreditfortwoyearsthat coversupto50percentoftheemployerscontribution.Smallbusinesseswith10or feweremployeesandwithaveragetaxablewagesof$20,000orlesswillbeabletoclaim thefullcreditamount.Thecreditphasesoutforbusinesseswithmorethan10 employeesandaveragetaxablewagesover$20,000,withacompletephaseoutat25 employeesoraveragetaxablewagesof$40,000. CafeteriaPlanChangesThisproposalcreatesaSimpleCafeteriaPlanavehicle throughwhichsmallbusinessescanprovidetaxfreebenefitstotheiremployees.This changewouldeasetheparticipationrestrictionsandincludeselfemployedindividuals asqualifiedemployees.Theproposalalsoexemptsemployerswhomakecontributions foremployeesunderasimplecafeteriaplanfrompensionplannondiscrimination requirementsapplicabletohighlycompensatedandkeyemployees.Finally,the proposalallowsforqualifiedlongtermcareinsurancetobeprovidedunderacafeteria plantotheextenttheamountofsuchcontributionsdoesnotexceedtheeligiblelong termcarepremiumsforthecontract.ThisproposaliseffectivebeginningonJanuary1, 2011. ConsumerOwnedandOrientedPlan(COOP)TheMarkcreatesauthorityforthe formationoftheConsumerOwnedandOrientedPlan(COOP).Theseplanscanoperate atthestate,regionalornationalleveltoserveasnonprofit,memberrunhealthplans tocompeteinthereformednongroupandsmallgroupmarkets.Theseplanswilloffer consumerfocusedalternativestoexistinginsuranceplans.Sixbilliondollarsoffederal seedmoneywouldbeprovidedforstartupcostsandtomeetsolvencyrequirements. more

PersonalResponsibilityTheMarkwouldcreateapersonalresponsibilityrequirement forhealthcarecoverage,withexceptionsprovidedforavarietyofreasonsincluding religiousconscience(asdefinedinMedicare)andanexemptionforundocumented workers. Individualswhofailtomeettherequirementaresubjecttoapenalty.Ifanindividuals incomeisbetween100and300percentofpoverty,thepenaltyforfailingtoobtain healthcoverageis$750perpersonperyearwithamaximumof$1,500perfamily.Ifan individualsincomeisabove300percentofpoverty,thepenaltyforfailingtoobtain coverageis$950perpersonperyearwithamaximumof$3,800perfamily. Exemptionsfromthepenaltywillbemadeforindividualswherethefullpremiumofthe lowestcostoptionavailabletothem(netofsubsidiesandemployercontribution,ifany) exceedstenpercentoftheiradjustedgrossincome(AGI);thosebelow100percentof FPL;anyhealtharrangementprovidedbyestablishedreligiousorganizationscomprised ofindividualswithsincerelyheldbeliefs(e.g.,suchasthoseparticipatinginHealth SharingMinistries);thoseexperiencinghardshipsituations(asdeterminedbythe SecretaryofHealthandHumanServices);andanindividualwhoisanIndianasdefined insection4oftheIndianHealthCareImprovementAct.Additionally,in2013, individualsatorbelow133percentofFPLwillbeexemptfromthepenalty.When makingthesedeterminations,incomefromindividualsnotsubjecttothemandate shouldnotbeconsidered. ResponsibilityforEmployersTheMarkwouldnotrequireemployerstoofferhealth insurance.However,effectiveJanuary1,2013,allemployerswithmorethan50 employeeswhodonotoffercoveragewillhavetoreimbursethegovernmentforeach fulltimeemployee(definedasthoseworking30ormorehoursaweek)receivinga healthcareaffordabilitytaxcreditintheexchangeequalto100percentoftheaverage exchangesubsidyuptoacapof$400pertotalnumberofemployeeswhethertheyare receivingataxcreditornot. Asageneralmatter,ifanemployeeisofferedemployerprovidedhealthinsurance coverage,theindividualwouldbeineligibleforahealthcareaffordabilitytaxcreditfor healthinsurancepurchasedthroughastateexchange.Anemployeewhoisoffered coveragethatdoesnothaveanactuarialvalueofatleast65percentorwhoisoffered unaffordablecoveragebytheiremployer,however,canbeeligibleforthetaxcredit. Unaffordableisdefinedas13percentoftheemployeesincome.AMedicaideligible individualcanalwayschoosetoleavetheemployerscoverageandenrollinMedicaid. Inthiscircumstance,theemployerisnotrequiredtopayafee. more

StrengtheningCoverageofPreventiveServicesinMedicareandMedicaid ForthenearlyoneinthreeAmericanscoveredunderMedicareorMedicaid,the ChairmansMarkmakescriticalinvestmentsinpoliciesthatwillpromotehealthyliving andhelppreventcostlychronicconditionslikediabetes,cancer,heartdisease,obesity andmentalillness.Preventivescreeningsenabledoctorstodetectdiseasesearlier whentreatmentismosteffectiveavertingmoreserious,costlyhealthproblemslater. ProvidingPersonalizePreventionPlanandWellnessVisitTheChairmansMarkprovides Medicarebeneficiarieswithafreevisittotheirprimarycareprovidereveryyearto createandupdateapersonalizedpreventionplantoaddresshealthrisksandchronic healthproblemsandtodesignascheduleforregularrecommendedpreventive screenings. ImprovingAccesstoPreventiveServicesTheMarkeliminatesoutofpocketcostsfor recommendedpreventiveservicesforMedicarebeneficiaries.Beneficiarieswillno longerfacefinancialdeterrentsforseekingpreventivecare.TheChairmansMarkalso encouragesstatestocoverpreventiveservicesrecommendedbytheU.S.Preventive ServicesTaskForce(USPSTF)andimmunizationsrecommendedbytheAdvisory CommitteeonImmunizations(ACIP)toadultsenrolledinMedicaid.Statesthatoptto coverrecommendedservicesandimmunizationswithoutcostsharingwouldreceivea onepercentincreaseinthefederalshareoftheFMAPreimbursementrateforthose services.Allstateswouldberequiredtoprovidecomprehensivetobaccocessation servicestopregnantwomenenrolledinMedicaid. MovingTowardPatientCenteredCareTheChairmansMarkcreatesanewstate optionandrewardsstatesforprovidingchronicallyillindividualsenrolledinMedicaid withahealthhome.Participatingenrolleeswillreceivecomprehensivecare coordinationandmanagement,transitionalcareand,ifrelevant,referraltocommunity basedprogramsandsocialservices.Statesthattakeupthisoptionwillreceivean enhancedmatchfortwoyears. RewardingHealthyLifestylesTheMarkestablishesaninitiativethatwillreward MedicareandMedicaidparticipantsforhealthierchoices.Fundingwillbeavailableto provideparticipantswithincentivesforcompletingevidencebased,healthylifestyle programsandimprovingtheirhealthstatus.Programswillfocusonloweringcertain riskfactorslinkedtochronicdiseasesuchasbloodpressure,cholesterolandobesity. more

ReformingtheHealthCareDeliverySystem Medicarecurrentlyreimburseshealthcareprovidersonthebasisofthevolumeofcare theyprovide.Foreverytest,scanorprocedureconducted,providersreceivepayment regardlessofwhetherthetreatmentcontributestohelpingapatientrecover.Medicare mustmovetoasystemthatreimburseshealthcareprovidersbasedonthequalityof caretheyprovide.TheChairmansMarkincludesvariousproposalstomovethe Medicarefeeforservicesystemtowardspayingforqualityandvalue.Theseproposals includethefollowing: HospitalValueBasedPurchasingTheproposalwouldestablishavaluebased purchasingprogramforhospitalsstartingin2012.Underthisprogram,apercentageof hospitalpaymentwouldbetiedtohospitalperformanceonqualitymeasuresrelatedto commonandhighcostconditions,suchascardiac,surgicalandpneumoniacare.Quality measuresincludedintheprogram(andinallotherqualityprogramsinthissection)will bedevelopedandchosenincooperationwithexternalstakeholders. PhysicianValueBasedPurchasingThisprovisionwouldstrengthenandexpandthe PhysicianQualityReportingInitiative(PQRI)program,includingrequiringalleligible healthprofessionalstoparticipateby2011.ItwouldalsoimprovetheMedicare physicianfeedbackprogramandpenalizephysicianswhoutilizesignificantlymore resourcesthantheirpeers. MedicareHomeHealthAgencyandSkilledNursingFacilityValueBasedPurchasing CMSiscurrentlytestingvaluebasedpurchasingmodelsfortheseproviders.Buildingon thiseffort,thisprovisionwoulddirecttheSecretarytosubmitaplantoCongressby 2011relatedtohomehealthprovidersand2012relatedtoskillednursingfacilities outlininghowtoeffectivelymovetheseprovidersintoavaluebasedpurchasing paymentsystem. QualityReportingforOtherProvidersThisprovisionwouldsetproviderslongterm carehospitals,inpatientrehabilitationfacilities,PPSexemptcancerhospitalsand hospiceprovidersonapathtowardvaluebasedpurchasingbyrequiringtheSecretary toimplementqualitymeasurereportingprogramsforcertainproviders.Providerswho donotsuccessfullyparticipateintheprogramwouldbesubjecttoareductionintheir annualmarketbasketupdate. more

EncouragingCollaborationAmongHealthCareProviders Patientsreceivethebestpossiblecarewhendoctorscollaborateandworktogetherto coordinatecare.Currentpaymentsystemsoftendiscouragesuchcarecoordination. Whenprovidersindifferentsettingslikedoctorsoffices,hospitals,nursinghomesand rehabilitationfacilitiesworktogether,patientsbenefitfromreceivingbettercareand costsinthesystemarelower. PaymentforAccountableCareToencourageproviderstoimprovepatientcareand reducecosts,theMarkwouldallowhighqualityprovidersthatcoordinatecareacrossa rangeofhealthcaresettingstoshareinsavingstheyachievetotheMedicareprogram. CMSInnovationCenterThisprovisionwouldestablishanInnovationCenteratthe CentersforMedicare&MedicaidServices(CMS)thatwouldhavetheauthoritytotest newpatientcenteredpaymentmodelsthatencourageevidencebased,coordinated care.Paymentreformsthatareshowntoimprovequalityandreducecostscouldbe expandedthroughouttheMedicareprogram. NationalPilotProgramonPaymentBundlingTheChairmansMarkwoulddirectthe Secretarytodevelopavoluntarypilotprogramencouraginghospitals,doctorsandpost acutecareproviderstoachievesavingsfortheMedicareprogramthroughincreased collaborationandimprovedcoordinationofpatientcarebyallowingtheprovidersto shareinsuchsavings. ReducingAvoidableHospitalReadmissionsToimprovequalityofcare,thisprovision woulddirectCMStotracknationalandhospitalspecificdataonthereadmissionrates ofMedicareparticipatinghospitalsforcertainhighcostconditionsthathavehighrates ofpotentiallyavoidablehospitalreadmissions.Startingin2012,hospitalswith readmissionratesaboveacertainthresholdwouldhavepaymentsfortheoriginal hospitalizationreducedby20percentifapatientwithaselectedconditionisre hospitalizedwithapreventablereadmissionwithinsevendaysorby10percentifa patientwithaselectedconditionisrehospitalizedwithapreventablereadmission within15days. InfrastructureInvestments:ToolstoReduceCostsandImproveQuality Effortstoreducecostsandimprovequalityinthehealthcaredeliverysystemwill requireequaleffortstomodernizethesystemwithnewtoolsthatsupportcoordinated qualitycare.Investmentsinthehealthcareinfrastructureareessentialtocreatinga moreeffective,efficientdeliverysystem. more

StrengtheningtheQualityInfrastructureAdditionalresourceswouldbeprovidedtothe DepartmentofHealthandHumanServices(HHS)tostrengthenthequalitymeasure developmentprocessesforpurposesofimprovingquality,informingpatientsand purchasers,andupdatingpaymentsunderfederalhealthprograms.Specifically,the SecretaryofHHSwouldbedirectedtodevelopanationalqualitystrategy;establishan interagencyworkinggrouponhealthcarequality;provideadditionalresourcesfor qualitymeasuredevelopmentandendorsement;andestablishaprocessforHHSto workwithexternalstakeholders,suchastheNationalQualityForum,toselectquality measurestobeincludedinMedicarevaluebasedpurchasingandpayforreporting programs. ResearchandInformationTheMarkwouldinvestinresearchonwhattreatments workbestforwhichpatientsandensurethatinformationisavailableandaccessibleto patientsanddoctors,suchasthroughtheestablishmentofanindependentinstituteto researchtheeffectivenessofdifferenthealthcaretreatmentsandstrategies.These provisionsarecarefullycraftedsothatpatientswouldneverbedeniedtreatmentbased onage,disabilitystatusorotherrelatedfactorsasaresultoftheresearchfindings. TransparencyToincreasetransparency,theChairmansMarkwouldprovidepatients withinformationaboutphysicianindustryrelationshipssocalledphysicianpayment sunshine,closeloopholesinphysicianselfreferrallawsthatallowconflictsofinterest, andprovidepatientsandfamilieswithmoreinformationaboutnursinghomefacilities andhospitalchargestohelpthemmakebetterdecisions.TheChairmansMarkwould alsorequiredrugmanufacturersanddistributorstoreportinformationtheyalready collectregardingthenumberandtypeofdrugsamplesgiventophysicians.TheMark wouldalsorequirethenationshospitalstomaketheiraveragechargeinformationfor commercialpayersandselfpaypatientsavailabletothepublic. StrengtheningPrimaryCareandOtherHealthcareWorkforceImprovements Primarycarephysiciansplayacriticalroleinourhealthcaresystem.Theyarevitalto reducingcostsandimprovingqualityinthehealthcaresystem.Primarycaredoctors providepreventivecare,helppatientsmakeinformedmedicaldecisions,assistwithcare management,andhelpcoordinatewithapatientsothercareproviders.Despitetheir criticalfunction,primarycaredoctorsreceivesignificantlylowerMedicarepayments thanotherdoctors,whichhasplayedaroleinthecurrentshortageofprimarycare providers. PromotingPrimaryCareToencouragemoreprimarycaredoctorstobepartofthe system,theChairmansMarkwouldprovideprimarycarepractitionersandtargeted generalsurgeonswithaMedicarepaymentbonusoftenpercentforfiveyears. more

HealthCareWorkforceEnsuringAmericashealthcaresystemhasasufficientsupply ofhealthcareprofessionalstomeetthedemandsofachangingandagingpopulationis essentialtomaintainingfocusonhighquality,costefficientcare.Tostrengthenthe healthcareworkforce,theMarkwouldbeincreasegraduatemedicaleducation(GME) trainingpositionsthroughaslotredistributionprogramforcurrentlyunusedtraining slotsandprioritywouldbegiventoincreasingtraininginprimarycareandgeneral surgery.Theproposalwouldalsoencourageadditionaltraininginoutpatientsettings andensurecommunitiesretainvitaltrainingslotsifahospitalcloses.Itwouldestablish aWorkforceAdvisoryCommitteemadeupofexternalstakeholderstaskedwithworking withHHSandotherrelevantfederalagenciestodevelopandimplementanational workforcestrategy.TheChairman'sMarkestablishescompetitivedemonstrationgrant programsdesignedtohelplowincomeindividualsobtaintheeducationandtraining neededforwellpaying,highdemandhealthcarejobs.TheMarkalsoincludes demonstrationgrantsforuptosixstatestodeveloptrainingandcertificationprograms forpersonalandhomecareaides. EnsuringBeneficiaryAccessandPaymentAccuracyinMedicare TheChairmansMarkensuresthatMedicarebeneficiarieswillcontinuetohaveaccess tophysiciansandothercriticalhealthcareproviders.TheMarkalsoimprovesthe accuracyofMedicarepaymentstoproviders.Reducingoverpaymentstoproviders savesmoneyforseniorsandtaxpayerswithoutlimitingbeneficiaryaccess. PhysiciansDuetotheflawedSustainableGrowthRate(SGR)formula,physician paymentsarescheduledtobereducedby22percentin2010.ToensurethatMedicare beneficiariescontinuetohaveaccesstophysicianservices,theChairmansMark replacestheimpendingcutwithapositiveupdatenextyear. MedicareAdvantagePrivateinsurersthatparticipateinMedicareshouldbringvalue totheprogramandtobeneficiaries.TheChairmansMarkwouldimprovethevalueof MedicareAdvantagebyreformingpaymentssothattheyappropriatelyreimburse insurersfortheircostsandpromoteplansthatofferhighquality,efficienthealthcare forseniors. more

Specifically,theMarkwouldtransitioncurrentMedicareAdvantagepaymentswhichare basedonstatutorybenchmarkstopaymentsbasedoncompetitivebidsfromthe insurers.ItwouldeliminateoverpaymentstoMedicareAdvantageplansandaddresses theinequitabledistributionofrebatespaidtoplansbymakinganyextrapayment contingentonplanperformance.UndertheMark,planswouldbeeligibleforbonus paymentsbasedontheirperformanceonqualitymeasuresandtheoperationof evidencebasedcaremanagementprograms.Plansthatprovidecareatlowercosts thantraditionalMedicarewouldalsobeeligibleforanefficiencybonus.Rebatesand bonusespaidtoMAplanswouldneedtobeusedtoprovideadditionalbenefitsthatare notcoveredunderMedicare.TheMarkwouldpreserveplansabilitytoofferbenefit packagesthatdifferfromorsupplementtraditionalMedicare.TheMarkwouldadd importantprotectionsandtransparencyforbeneficiariesbylimitingcostsharingfor certainservices,likechemotherapyandskillednursingcare,andbycreatingmore consistencyintheextrabenefitsthatplanscanofferbeneficiariesthroughoutthe country. MedicareDisproportionateShareHospitalPaymentsThisprovisionwouldrequirethe Secretarytoupdatehospitalpaymentstobetteraccountforhospitalsuncompensated carecosts.Startingin2015,hospitalsMedicareDisproportionateShareHospital(DSH) paymentswouldbereducedtoreflectloweruncompensatedcarecostsrelativeto increasesinthenumberofinsured. HomeHealthPaymentReformTheSecretarywouldbedirectedtoimprovepayment accuracythroughrebasinghomehealthpaymentsin2013basedonananalysisofthe currentmixofservicesandintensityofcareprovidedtohomehealthpatients.Itwould alsoestablisha10percentcapontheamountofreimbursementahomehealth providercanreceivefromoutlierpayments,whicharedesignedtohelpproviderscover thecostsoftreatingsickerpatients.TheChairmansmarkwouldalsoreinstateanadd onpaymentforruralhomehealthprovidersfrom20102015. HospiceReformBasedonrecommendationsbytheMedicarePaymentAdvisory Commission(MedPAC),thisprovisionwouldrequiretheSecretarytoupdateMedicare hospiceclaimsformsandcostreports.Basedonthisinformation,theSecretarywould berequiredtoimplementchangestothehospicepaymentsystemtoimprovepayment accuracy.TheSecretarywouldalsoimposecertainrequirementsonhospiceproviders designedtoincreaseaccountabilityintheMedicarehospiceprogram. AppropriatePaymentforHighcostImagingServicesBecausepaymentratesfor imagingservicesshouldreflecttheratebywhichtheyareused,theMarkwould increasetheutilizationrateassumptionforadvancedimagingequipment.Inaddition, theMarkpaysmoreaccuratelyformultipleimagingservicesperformedduringasingle patientvisit. more

UpdatingOutpatientPaymentsforPPSExemptCancerHospitalsTheSecretaryof HealthandHumanServiceswouldbedirectedtoupdatepaymentratesforoutpatient careprovidedbycancerhospitalsthatareexemptfromtheprospectivepayment system. RuralHealthCareProtections TheChairmansMarkincludesseveralprovisionstoensureruralhealthcarefacilities andprovidershavetheresourcestheyneedtocontinuedeliveringqualitycareintheir communities.Specifically,theMarkwouldextendandimprovemanyruralaccess protections,includingthefollowing: FLEXGrantsforHealthCareinRuralCommunitiesTheMedicareRuralHospital FlexibilityProgramprovidesgrantsthatruralhealthcareproviderscanusetoimprove thequalityofhealthcare,andtostrengthenhealthcarenetworks.Fundscanbeused forservicesrangingfromambulancetransporttothedevelopmentofsmalllocal hospitals.TheChairmansMarkwillextendtheFLEXGrantprogramthrough2012,and willaddanewcomponentthatFlexgrantfundingtobeusedtosupportruralhospitals effortstoimplementdeliverysystemreformprograms,suchasvaluebasedpurchasing programs,bundling,andotherqualityprograms. ExtendHospitalOutpatientDepartmentHoldHarmlessforSmallRuralHospitalsSmall ruralhospitalsthatarenotsolecommunityhospitals(SCHs)canreceiveadditional Medicarepaymentsiftheiroutpatientpaymentsunderanewpaymentsystemareless thanunderthepriorreimbursementsystem.TheChairmansMarkwouldensurethat smallruralhospitalsreceive85percentofthepaymentdifferencein2010and2011. ReasonableCostReimbursementforLaboratoryServicesinSmallRuralHospitals Certainruralareaswithlowpopulationdensitiesusedtoreceivereasonablecost reimbursementforlaboratoryservices,butthispolicyendedin2008.TheChairmans Markwouldreinstatereasonablecostreimbursement,thusimprovingaccessto laboratoryservicesforthoseinruralcommunities. ExtendRuralCommunityHospitalDemonstrationProgramTheCentersforMedicare& MedicaidServiceshasbeenconductingademonstrationprogramtotestthefeasibility ofreasonablecostreimbursementforsmallruralhospitals.TheChairmansMark extendstheprogramfortwoyearsandexpandseligiblesitestoadditionalruralstates. more

ExtendMedicareDependentHospitalProgramSmallruralhospitalswithahigh proportionofpatientswhoareMedicarebeneficiariesreceivespecialtreatment, includinghigherpayments.ThisassistanceforMedicaredependenthospitals(MDHs)is scheduledtoexpireinSeptember2011.Inordertoprotectaccesstohealthcarein ruralcommunities,theChairmansMarkwillextendcrucialsupporttoMDHsforan additionaltwoyears. TemporaryMedicareHospitalPaymentImprovementsTheChairmansMarkwould temporarilyincreasepaymentforcertainlowvolumehospitals,ensuringthatrural hospitalsareadequatelyreimbursedforservingtheircommunities. CommunityHealthIntegrationModelsinCertainRuralCountiesThe2008 demonstrationprojectallowedeligibleruralentitiestodevelopandtestnewmodelsfor thedeliveryofhealthcareservicesinordertoimproveaccessto,andintegratethe deliveryof,acutecare,extendedcareandotheressentialhealthcareservicesto Medicarebeneficiaries.TheChairmansMarkwillexpandthe2008projecttomore eligiblecounties,andwillalsoallowphysicianstoparticipateinthedemonstration project. TransparencyandAccountabilityforInsuranceCompanies Theprovisionimprovesthetransparencyofinsuranceproductstoensurethat individualsknowwhattheyarepurchasing,theserviceswhicharecoveredandthe associatedoutofpocketcosts.TheMarkcreatesstandardsthatwillensurethateach individualreceivesanoutlineofcoveragewhichispresentedinauniformformatthat doesnotexceed4pagesinlengthanddoesnotincludeprintsmallerthan12point font.TheMarkwouldalsorequireinsurancecompaniestopublishtheshareoftheir premiumrevenuethatisusedforadministrativeexpensesandnotmedicalbenefits.In addition,theMarkwouldimposenewrequirementsoninsurerstomeetstandardsfor theelectronicexchangeofpaymentandotherhealthcareinformationwithhospitals, doctorsandotherproviders.By2014,insurersmustcomplywithstandardsforcertain transactionsorfaceapenaltyfeeassessedannuallybytheSecretaryofHealthand HumanServicesandcollectedbytheSecretaryoftheTreasury.Thefeewould representtheinefficiencycostthataninsurerimposesonthehealthcaresystemwhen itselectronictransactionswithprovidersarenotconductedinastandardway. more

CombatingFraud,Waste,andAbuse Reducingfraud,waste,andabuseinMedicareandMedicaidwillreducecostsand improvequalitythroughoutthesystem.TheMedicareimproperpaymentratefor2008 was3.6percent,or$10.4billion,andtheNationalHealthCareAntiFraudAssociation estimatesthatfraudamountstoatleastthreepercentoftotalhealthcarespending,or morethan$60billionperyear.TheChairmansMarkwillcombatfraud,waste,and abusebyrequiringthereviewofhealthcareproviderspriortograntingbillingprivileges, leveragingtechnologytobetterevaluateclaims,educatingproviderstopromote compliancewithprogramrequirements,monitoringprogramsmorevigilantly,and penalizingfraudulentactivityswiftlyandsufficiently. EnsuringMedicareSustainability SharplyrisingcoststhroughoutthehealthsystemthreatenMedicaressustainabilityin thelongterm.Ifcostsarenotconstrained,theMedicareprogramwillbeinsolventby 2017.ToensurethefiscalsolvencyandsustainabilityoftheMedicareprogram,the Chairmansmarkincludesthefollowingprovisions. RevisionstoAnnualMarketBasketAdjustmentsforPartAProvidersTheprovision wouldreduceannualmarketbasketupdatesforhospitals,homehealthproviders, nursinghomes,hospiceproviders,longtermcarehospitalsandinpatientrehabilitation facilities,includingadjustmentstoreflectexpectedgainsinproductivity. PartBProductivityAdjustmentsThisprovisionwouldreducepaymentupdatesforPart Bprovidersbyanestimateofincreasedproductivity. ReducePartDPremiumSubsidyforHighIncomeBeneficiariesThisprovisionwould reducethepremiumsubsidyunderPartDforbeneficiarieswithincomesatorabovethe PartBincomethresholds. MedicareCommissionTheChairmansMarkcreatesa15member,independent MedicareCommissiontaskedwithpresentingCongresswithcomprehensiveproposals toreduceexcesscostgrowthandimprovequalityofcareforMedicarebeneficiaries.In yearswhenMedicarecostsareprojectedtobeunsustainable,theCommissions proposalswilltakeeffectunlessCongresspassesanalternativemeasure.Congress wouldbeallowedtoconsideranalternativeproposalonafasttrackbasis.The Commissionwouldbeprohibitedfrommakingproposalsthatrationcare,raisetaxes,or changeMedicarebenefitoreligibilitystandards. more

MedicalMalpracticeTheChairmansMarkwouldexpresstheSenseoftheSenatethat healthcarereformpresentsanopportunitytoaddressissuesrelatedtomedical malpracticeandmedicalliabilityinsurance.TheMarkwouldfurtherexpresstheSense oftheSenatethatstatesshouldbeencouragedtodevelopandtestalternativestothe currentcivillitigationsystemasawayofimprovingpatientsafety,reducingmedical errors,encouragingtheefficientresolutionofdisputes,increasingtheavailabilityof promptandfairresolutionofdisputes,andimprovingaccesstoliabilityinsurance,while preservinganindividualsrighttoseekredressincourt.TheMarkwouldexpressthe SenseoftheSenatethatCongressshouldconsiderestablishingastatedemonstration programtoevaluatealternativestothecurrentcivillitigationsystem. FinancinganInvestmentinQuality,Affordable,HealthCare HighCostInsuranceExciseTaxBeginningin2013,thisproposalwouldlevyanon deductibleexcisetaxof35percentoninsurancecompaniesandplanadministratorsfor anyhealthinsuranceplanthatisabovethethresholdof$8,000forsinglesand$21,000 forfamilyplans.Thetaxwouldapplytotheamountofthepremiuminexcessofthe threshold.Thetaxwouldapplytoselfinsuredplansandplanssoldinthegroupmarket, butnottoplanssoldintheindividualmarket.Thethresholdwouldbeindexedfor inflation,andatransitionrulewouldincreasethethresholdforthe17highestcost statesforthefirstthreeyears. IncreasingTransparencyinEmployerW2ReportingofValueofHealthBenefitsThis proposalwouldrequireemployerstodisclosethevalueofthebenefitprovidedbythe employerforeachemployeeshealthinsurancecoverageontheemployeesannual FormW2.Thiswouldbeeffectivebeginningin2010.Thisproposalhasanegligible revenueimpactovertenyears. LimitHealthFSAContributionsThisproposalwouldlimittheamountofcontributions tohealthFlexibleSpendingAccounts(FSAs)to$2,000peryear,beginningin2013. EliminateDeductionforEmployerPartDSubsidyThisproposalwouldeliminatethe deductionforthesubsidyforemployerswhomaintainprescriptiondrugplansfortheir MedicarePartDeligibleretirees.Thiswouldbeeffectivebeginningin2011. StandardizetheDefinitionofQualifiedMedicalExpensesBeginningin2011,this proposalwouldconformthedefinitionofqualifiedmedicalexpensesforHealthSavings Accounts(HSAs),healthFSAs,andHRAstothedefinitionusedfortheitemized deduction.Anexceptiontothisrulewouldallowamountspaidforoverthecounter medicinewithaprescriptiontostillqualifyasmedicalexpenses. more

 IncreasethePenaltyforUseofHSAFundsforNonqualifiedMedicalExpensesThis proposalwouldincreasetheadditionaltaxforHSAwithdrawalspriortoage65thatare notusedforqualifiedmedicalexpensesfrom10percentto20percent,beginningin 2010. CorporateInformationReportingThisproposalwouldrequirebusinessesthatpayany amountgreaterthan$600duringtheyeartocorporateprovidersofpropertyand servicestofileaninformationreportwitheachproviderandwiththeIRS.Information reportingalreadyisrequiredonpaymentsforservicestononcorporateproviders.This appliestopaymentsmadeafterDecember31,2011. NonprofitHospitalsThisproposalwouldestablishnewrequirementsapplicableto nonprofithospitalsbeginningin2010.Therequirementswouldincludeaperiodic communityneedsassessment. PharmaceuticalManufacturersFeeThisproposalwouldimposeanannualflatfeeof $2.3billiononthepharmaceuticalmanufacturingsector,beginningin2010.Thisnon deductiblefeewouldbeallocatedacrosstheindustryaccordingtomarketshareand wouldnotapplytocompanieswithsalesofbrandedpharmaceuticalsof$5millionor less. MedicalDeviceManufacturersFeeThisproposalwouldimposeanannualflatfeeof$4 billiononthemedicaldevicesmanufacturingsector,beginningin2010.Thisnon deductiblefeewouldbeallocatedacrosstheindustryaccordingtomarketshareand wouldnotapplytocompanieswithsalesofmedicaldevicesintheU.S.of$5millionor less.ThefeedoesnotapplytosalesofClassIproductsundertheFDAproduct classificationsystem. HealthInsuranceProviderFeeThisproposalwouldimposeanannualflatfeeof$6 billiononthehealthinsurancesector,beginningin2010.Thisnondeductiblefeewould beallocatedacrosstheindustryaccordingtomarketshare. ClinicalLaboratoriesFeeThisproposalwouldimposeanannualflatfeeof$0.75billion onclinicallaboratories,beginningin2010.Thisnondeductiblefeewouldbeallocated acrosstheindustryaccordingtomarketshareandwouldnotapplytoclinical laboratorieswithrevenueof$500,000orless. ###