The Policy Makers and the Issues

Feb 1, 2001 12:00 PM, CARA C. BACHENHEIMER

What's on the Health Care Agenda?

NOW THAT THE feverish pitch of the Bush-Gore post-election debate has subsided, it is time to look back at the impact that health care issues had in the election - and to prognosticate about the health care issues that the 107th Congress will address.

While health care issues did not play the lead role in the presidential election, they certainly played an important supporting role. They also appear to have played quite an important role in selecting members of Congress - particularly for Democratic voters. A spokesman for the Democratic Congressional Campaign Committee said that a good number of Democrats running for House seats won their races because of their stances on a Medicare prescription drug benefit or a patients' bill of rights. And no Democrat lost for fighting for a Medicare prescription drug benefit or for health maintenance organization reform, according to the DCCC representative.

Of the voters who named health issues as "extremely" or "very important" in Congressional elections, 83 percent did so because they support helping more families and children get health care coverage; 83 percent support requiring that doctors, not HMOs, make medical decisions; 79 percent support providing seniors with prescription drug coverage; 77 percent want Congress to protect and strengthen Medicare; and 74 percent support comprehensive reform of today's health care system.

Not surprisingly, these are same issues that will dominate Congress' health care agenda this year. Let's take a closer look at some specific issues.

A Medicare Prescription Drug Benefit

UNDOUBTEDLY, THE DOMINANT health care issue this year for the new Congress will be how to craft a new Medicare drug benefit for seniors. Prescription drugs for the elderly and education reform are the new administration's top legislative objectives this year.

But while President Bush will likely propose a Medicare drug package early in the year, it is unlikely that Congress will resolve the issue for at least a couple of years. Why? The benefit costs a lot of money (even in Washington terms), we might not continue to enjoy the budget surplus we currently have, and the Democrats and Republicans have very different approaches to the issue. Even if Congress resolves the issue, implementation would not occur for at least another three years.

Given the uncertain environment for a federal Medicare drug package, many states are looking at President Bush's proposal for an immediate infusion of federal funding for state-based senior drug assistance programs. On the campaign trail, then-governor Bush pledged he would send to Congress the $48 billion "Immediate Helping Hand" proposal immediately after inauguration and that it would be the second bill he would sign into law as president. This proposal would provide the low-income elderly with prescription drug and health care coverage for individual seniors with incomes at or below 135 percent of the poverty level (currently $11,300 for individual seniors and $15,200 for couples).

In addition, President Bush pledged to cover some of the cost of prescription drug coverage for individual seniors with incomes between 135 and 175 percent of the poverty level (currently $14,600 for individual seniors and $19,700 for couples).

A Patients' Bill of Rights

MANAGED CARE REFORM legislation languished last year but likely will make a comeback this year. Because the Senate is evenly divided between the parties, the Republicans are likely to compromise more readily with the Democrats on the contentious issues to give President Bush early legislative victories.

Employer groups have strongly opposed provisions in the 1999 House-passed bill that would significantly expand liability provisions and could expose employers to liability for treatment denials and delays by managed care organizations. Employer groups also feared the bill's liability provisions would cause health care costs to spiral upward, forcing many employers to drop their health plans. Sen. William Frist, R-Tenn., a member of the managed care conference that stalled in its efforts to merge vastly different patient-protection bills (H.R. 2990 and S. 1344), said he views movement on patient-protection legislation as "highly likely" in the 107th Congress with President Bush in the White House.

HIPAA Compliance

WHILE THE DEPARTMENT of Health and Human Services issued the final privacy regulations late in December and the regulatory time frame for compliance has been set for some time, the Health Insurance Portability and Accountability Act has clearly not been the priority it should be with providers. A December report by Gartner Research, a unit of Connecticut-based consulting firm Gartner Group, found that payer organizations have significantly outpaced providers in reaching milestones for complying with HIPAA's administrative simplification provisions. The majority of payers in the survey had at least assessed their status regarding standardized transactions. On the other hand, few providers had completed this task.

It's a safe bet that the home medical equipment/home care industry is on this same track.

While HIPAA's initial focus was health insurance portability for individuals changing jobs, the bulk of the requirements come under the heading "administrative simplification" and will dramatically affect all providers and payers. These provisions include privacy standards, data transmission, electronic signature standards, security standards, unique health identifiers, standard code sets and transaction standards. Compliance with all the requirements is required 24 months from the effective date of the final rule, which is 60 days after publication in the Federal Register. The government provided such advance notice because of the scope of the new rules and the sweeping impact compliance will have on a provider's operations.

If you have not begun to assess your organization's readiness for HIPAA compliance, don't delay. You will need the time between now and the end of 2002 to prepare.

Increased Accountability

WHILE THE OFFICE of Inspector General announced more than two years ago that it was extending its Medicare and Medicaid exclusion authority to manufacturers and other "indirect" providers/billers under the Medicare and Medicaid programs, the announcement passed with less public reaction than I had anticipated.

We are now seeing similar trends across various federal agencies. In December, the Department of Justice announced it was joining a whistle-blower lawsuit against the accounting firm KPMG under the False Claims Act for allegedly preparing hospital cost reports that included false reimbursement claims for submission to Medicare and Medicaid. This intervention demonstrates the government's determination to combat health care fraud not only by providers but also by organizations that assist in preparing false claims submitted to Medicare. This marks the first time the federal government has used the False Claims Act to hold an outside accounting firm liable for aiding and facilitating Medicare fraud committed by a client.

Also in December, the LifeScan subsidiary of manufacturer Johnson & Johnson pleaded guilty to three misdemeanor charges under the False Claims Act stemming from defects in a blood glucose monitoring device it had manufactured.

I expect we will see DOJ, HHS and other federal agencies continue to reach further in their quest to eradicate fraud and abuse under the federal and state health care programs.

Stay tuned for more updates.

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FORCED COOPERATION

With the new Bush administration comes a significant change in the political dynamics between Capitol Hill and the White House. The Republican administration must deal with a Senate equally divided between Republicans and Democrats. Legislative initiatives must enjoy true bipartisan support to be passed into law. While the Republicans maintained their majority in the House of Representatives, it is only a bare majority. This means that again, initiatives must appeal to a significant number of Democrats as well as Republicans to be passed by the entire House.

What this ultimately means is that policy initiatives will have to be more measured, appealing to moderates in both parties. President Bush has talked at length about working with both parties; this year he must prove that it is possible - or none of his administration's initiatives will be passed by Congress.