Supreme Court Upholds Individual Mandate: Delivery System Reforms Continue Despite Political Uncertainty
Last week’s Supreme Court ruling upholding the individual mandate in the health reform law will do little to disrupt delivery reforms already taking hold in the U.S., but uncertainty will continue to surround payment and coverage aspects of the law, particularly since health care reform is poised to be the centerpiece of the upcoming presidential election.
“The ruling focused on how health care reform could be paid for, not whether it was good or bad policy,” said CAP Council of Government and Professional Affairs Chair Richard C. Friedberg, MD, PhD, FCAP. “The Supreme Court determined that the individual mandate was a valid way to pay for reform, if the penalty for noncompliance is considered a tax,” he explained. “However, shrinking state budgets, federal subsidies, and coverage gaps will continue to raise controversial as well as political questions, particularly during an election year.”
In the wake of the decision, policy experts are now focusing on a web of coverage questions that remain. The Supreme Court struck down the Medicaid expansion provision of the law, ruling that the federal government could not coerce states to finance additional people under threat of losing their existing federal Medicaid funding.
“Any time you take a tightly wound legislative construct like the Medicaid expansion provision and blow a hole in it, it is going to have far reaching implications,” S. Lawrence Kocot, Deputy Director of Brookings’ Engelberg Center for Health Care Reform told Statline.
The law also establishes state-by-state exchanges for individuals to shop for insurance and apply for subsidies to finance that coverage. However, if one is not eligible for Medicaid or the exchange program (or can’t afford insurance even with the subsidy), they will remain uncovered. “Then we’re just back in the same situation of overtaxing the health care system—the drivers of reform,” said Kocot.
Even with the constitutionality of the health care reform law now resolved, the environment remains far from stable. There’s the presidential election, as well as several key legislative provisions, including sequestration and expiring tax cuts set to take effect this fall. These provisions will likely prompt Congress to act, positioning health care for further cuts.
“As long as we are in an environment where health care comprises such a significant percentage of the annual GDP, absent fundamental reforms, health care will be a prime target for budget cuts,” said Kocot. “There are essentially two approaches to cutting costs: trigger programs such as the IPAB that will force provider payment cuts or systemic payment and delivery reforms that will improve quality and contain costs.”
These payment and delivery reforms include coordinated care models such as accountable care organizations (ACOs). In partnership with the Dartmouth Institute for Health Policy and Clinical Practice, the Brookings Institutions’ Engelberg Center for Health Care Reform has established The Brookings-Dartmouth ACO Network, of which the CAP is a member. Brookings has posted a map online of ACOs across the country.
“ACOs are growing at an aggressive pace, we have documented more than 260 ACOs across the country,” said Kocot.
This aggressive pace means that many of the early ACOs are now maturing and looking at ways to further leverage specialty providers, like pathologists. Kocot sees that one way for ACOs to leverage pathology services are related to laboratory data; specifically communicating the meaning and value of this data to patients and other providers.
“There’s more that pathologists can do in the future in terms of directly engaging not only with patients but also providers that I think will improve health care delivery and lower costs,” concluded Kocot. “The opportunities are especially ripe now, as many ACOs move from that early phase to a more established phase and are looking to better utilize current providers and services.”
The CAP’s Friedberg agrees.
The College sees that the need to improve patient care while reducing costs through delivery reforms is as important now as it was before the law’s passing over two years ago. “The problems with the health care system, particularly in terms of how we deliver care, remain just as imperative now as then, which is why we are seeing such a sizeable shift to coordinated care,” said Dr. Friedberg, “The Supreme Court ruling will have no impact on that aspect of the changing health care paradigm.”
Statline will continue to report on health care delivery reforms and implementation of the health reform law.
Rep. Graves (R-GA) Tours Hamilton Medical Center
Georgia Congressman Tom Graves recently toured the Hamilton Medical Center in Dalton, led by Kathryn Teresa Knight, MD, FCAP, Chair of CAP’s Federal and State Affairs Committee (FSAC).
Throughout the June tour, Rep. Graves was interested in learning more about the impact that pathology and laboratory results have on medical decision-making. In addition to gaining insight into pathology operations, the congressman and Dr. Knight discussed CAP’s advocacy priorities, including SGR reform, closing the in-office ancillary services (IOAS) exception loophole for pathology services; and supporting H.R. 4066 to exclude pathologists from Meaningful Use penalties. Rep. Graves is one of 27 current co-sponsors to the bill.
This lab tour materialized as a result of Dr. Knight’s Hill visit with Rep. Graves following the 2012 CAP Policy Meeting in early May. “The Congressman requested the lab tour, as part of his continued learning about all aspects of health care, particularly in the days leading up to the Supreme Court ruling on the Accountable Care Act,” explained Dr. Knight. “He also asked me to convene local physicians and hospital administration for a meeting following the tour to discuss regional health care and larger reform issues. We had approximately 20 attendees at that meeting, and it was an important opportunity to relate our advocacy concerns to this lawmaker in a small group setting.”
Laboratory tours, as well as Hill visits with lawmakers are important ways that pathologists communicate the CAP’s “Now and Future” policy agenda. This initiative focuses on ensuring the pathologist’s role in coordinated care, genomic medicine and other emerging technologies, as well as recognized users of the EHR. To learn more, a video about the College’s lab tour program is available online. Email CAP’s Davon Gray, Legislative Assistant, Federal Legislative Affairs for more information.
New FDA User Fee Legislation Features LDT Provisions
The FDA user fee legislation (S. 3187) recently approved by Congress requires the agency to notify lawmakers 60 days in advance of issuing any draft or final guidance related to laboratory developed tests (LDTs). Approved by the Senate on June 26, the bill is now waiting for President Obama’s signature before becoming law.
The CAP’s LDT Oversight Proposal
The College has met with FDA officials in recent years about its proposal to apply a risk-based model to address oversight of LDTs in an inclusive, systematic way.
CAP’s model, initially proposed in 2009, employs a public-private partnership to strengthen LDT oversight by relying on third party accreditors and inspectors to oversee and monitor standards for low- and moderate-risk LDTs. High-risk LDTs would be reviewed directly by the FDA. The legislation passed in Congress does not impact the status of CAP’s LDT oversight proposal.
The bipartisan bill allows the FDA to waive user fees on LDTs for the next five years, as well as limits the number of LDTs that the agency can require to obtain premarket approval. The bill also requires the HHS Secretary to propose a risk-based strategy for regulating health information technology, including mobile medical applications.
The bill reauthorizes both the Prescription Drug User Fee Act (PDUFA) and the Medical Device User Fee Act (MDUFA). This legislation creates two new categories subject to user fees: generic drugs and biological products shown to be “biosimilar” to an FDA-licensed biological product.
It’s estimated that the medical device industry will pay the FDA an estimated $595 million in user fees between 2013-2017 in exchange for significant changes in FDA performance and accountability. These changes include having the agency report the total time for reviewing devices; ensuring greater interaction between sponsors and the agency during the review process; having an independent entity review the device approval and clearance process; and having the FDA implement a corrective action plan to address deficiencies found in the independent review.
AMA Adopts Medical Examiner Resolutions
Several pathology-related resolutions pertaining to forensics were recently adopted by the American Medical Association’s (AMA) House of Delegates (HOD) at the organization’s annual meeting last month in Chicago.
One resolution introduced during this annual policy-making meeting that began on June 17 was by the AMA Residents and Fellows Section. It called for increased emphasis on the autopsy as an educational tool for medical school and residency training. While the HOD decided to reaffirm current AMA policy in lieu of passing a new resolution, the increased attention paid to pathology and the issue of autopsies by physician colleagues is encouraging, explained Jim Caruso, MD, FCAP, who is a member of the CAP delegation to the AMA.
Another resolution involved developing model state legislation to facilitate the nationwide transition from a coroner systems to medical examiner systems. The AMA delegates agreed to work with states interested in introducing legislation to facilitate this transition.
The National Association of Medical Examiners (NAME), with the support of the CAP, is advocating this transition, where appropriate. “In some areas of the country, the coroner systems work well, as the coroner is a pathologist or a pathologist is in a leadership role in that jurisdiction,” explained Dr. Caruso, who is also a NAME member. “The Los Angeles County Coroner is a prime example. However, certain areas of the country, particularly rural regions, have coroner systems that are not run by medical professionals, but rather by elected or appointed officials.”
In these coroner systems, the cause and manner of death is determined and certified by a lay person, typically with little or no medical training and no license to practice medicine. “Determining the cause of death is the practice of medicine, in my opinion,” explained Dr. Caruso. “For this reason, we are glad to bring this issue to the attention of the AMA House of Delegates. The resolution adopted by the HOD did not go far enough, in the opinion of the Pathology Section Council, but it is a start.”
Also related to forensic pathology was a resolution to improve communication between medical examiners, physicians, health care providers, and family members. The AMA does not currently have a policy in place to address potential complexities in communication, such as when families request an autopsy, and are willing to pay for the procedure even though the case might not meet a facility’s criteria for performing an autopsy or the medical/legal criteria required for an autopsy.
At the meeting, the delegates adopted a resolution to convene a study group to examine strategies to implement a postmortem process for ongoing communication between medical examiners, family members, clinicians, and other key stakeholders. In addition, the resolution calls for developing guidelines for establishing communication between these parties.
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