The U.S. Congress is once again considering national health insurance reform legislation. Unlike the comprehensive reform proposal advocated by President Clinton and the Democrats two years ago, the Republican bills generally focus only on limiting pre-existing condition exclusions and preserving portability. There are significant differences, however, between the House and Senate versions.
The House bill, which passed on March 28, 1996 by a margin of 267 to 151, includes the following provisions: (1) limitation on preexisting conditions; (2) group-to-group and group-to-individual portability; (3) guaranteed availability of coverage for group health plans; (4) guaranteed renewability of coverage for group health plans; (5) increased enforcement of, and penalties for, health care fraud and abuse; (6) tax deductible medical savings accounts (MSAs); and (7) medical malpractice reform.
The most controversial aspects of the House bill are the MSA and medical malpractice reform provisions. Under the bill, contributions to MSAs are deductible_up to $2,000 for individuals and $4,000 for families – if a high deductible health plan is purchased. The legislation also includes the following medical malpractice reforms. The key provisions are: (1) a $250,000 cap on non-economic damages; (2) limitation of punitive damages to the greater of $250,000 or three times the economic damages; (3) proportional liability for non-economic damages; (4) periodic payment for future economic and non-economic losses which exceed $50,000; and (5) a 2-year statute of limitations that begins when the injury is discovered or should have been discovered.
The Senate bill, sponsored by Senators Nancy Kassebaum (R-KS) and Ted Kennedy (D-MA), is more narrow in scope than the House measure, containing only provisions related to preexisting conditions, portability and guaranteed availability and renewability. Senators Kassebaum and Kennedy are resisting any effort to amend the bill, and are pursuing a “no amendment” strategy, urging their colleagues not to offer any amendments so they can keep the bill “clean.” Because the legislation enjoys bipartisan support, they fear that if both Republicans and Democrats attempt to “load-up” the bill with such controversial issues as MSAs and malpractice reform, passage of any health reform this year will be in jeopardy.
Despite this “no amendment” strategy, organized neurosurgery is actively supporting an amendment to be offered by Senator Jim Jeffords (R-VT) when the Senate votes on the Kassebaum/Kennedy bill. The Jeffords measure will raise the lifetime limits of employer sponsored health insurance to $10 million. This provision would go a long way towards protecting individuals with head and spinal cord injuries, whose lifetime medical costs can exceed $5 million.
Press Conference
Recently, to help promote the issue, The American Association of Neurological Surgeons (AANS) and Congress of Neurological Surgeons (CNS) participated in a press conference held by Senator Jeffords. Speaking on behalf of the AANS and CNS, Jack E. Wilberger, Jr., MD, Chairman of the AANS and CNS Joint Section on Neurotrauma and Critical Care, pointed out that “patients with spinal cord injuries are typically young adults, who are increasingly living to normal life expectancies. . . As a result, they very often incur medical expenses that exceed the lifetime limits set by their insurance policies. As neurosurgeons, we are involved in the ongoing care of head and spinal cord injuries and see first hand the hardships these patients can endure when their insurance benefits are depleted.”
Because of the significant differences between the House and Senate, it is unclear whether any health insurance reform will pass the Congress this year. The issue is on a fast track, but since this is an election year, there are very few legislative days remaining to work out the differences.
Practice Expenses
The Health Care Financing Administration (HCFA), pursuant to a Congressional mandate, is in the process of developing resource-based practice expense relative values for nearly 7,000 CPT codes. This new system, which will be implemented on January 1, 1998, will change the current charge-based method for calculating the practice expense component of the Medicare Fee Schedule. The impact on neurosurgeons may be quite significant, and representatives from the AANS and CNS are therefore working closely with HCFA to assure that accurate data reflecting neurosurgeons actual practice costs are collected. The research project has two phases. During the first phase HCFA will collect data on indirect and direct practice costs. They will collect this data utilizing two mechanisms_a mailed survey and small group consensus panels, or Clinical Practice Expert Panels (CPEPs). The survey instrument will be mailed to approximately 5,000 randomly selected physician practices beginning in late April (See Box). We expect that very few neurosurgical practices will be selected.
Regarding the consensus panels, HCFA convened the first CPEP meetings in February, and several neurosurgeons participated on the neurosurgical panel. The panel developed cost data on a small sample of neurosurgical procedure codes (reference services). The data from these reference services will then be extrapolated to all neurosurgical CPT codes. HCFA plans to convene one or two more CPEP meetings, to further refine the data.
In the second phase of the project, HCFA will contract with several health researchers to develop methodologies for analyzing and applying this data. Each of these different methodologies may produce drastically different results; thus this phase of the project may have the most impact on the final outcome. One of HCFA’s stated goals for physician payment reform is to establish payment equity by redistributing payments from procedure-oriented specialties to primary care physicians. It is therefore anticipated that HCFA will select the methodology that furthers this philosophy.
The AANS and CNS have some serious concerns about this project, including the small sample size, the complexity of the survey instrument, the accuracy of data collected and the rapidly approaching deadline for implementation. These concerns are shared by a large number of medical specialty societies, who, along with the AANS and CNS, have formed a coalition to urge the Congress to delay implementing this new payment system for at least two years. In the meantime, the AANS and CNS are participating in several private initiatives to collect and analyze neurosurgical practice costs so we can develop alternative data to present to HCFA if and when it becomes necessary.
Addenda
Because several local Medicare carriers have ceased or restricted payment for pallidotomy, representatives from the AANS and CNS recently met with HCFA urging the establishment of a national Medicare policy for payment of pallidotomy for individuals with Parkinson’s Disease. A HCFA advisory committee met in March and recommended that Medicare should continue paying for pallidotomy for patients with Parkinson’s Disease. For the time being, the precise payment policies will be determined by the local Medicare carriers, but HCFA will further discuss the necessity for a national policy.
HCFA’s five year review of the Medicare Fee Schedule (physician work component values only) is near completion. We anticipate that nearly all of the AANS and CNS recommended changes will be accepted by HCFA. The new values will be published in the Federal Register in late spring.
The AANS and CNS recently submitted testimony to the House and Senate Appropriations Committees regarding funding for the National Institutes of Health for fiscal year 1997. In our statement, we urged the Congress to focus on four areas of research: (1) stroke and the treatment of cerebrovascular diseases; (2) molecular biology as it applies to tumors and other nervous system disorders; (3) image-guided stereotactic surgery for treatment of brain tumors, strokes, spinal disorders and degenerative diseases of the nervous system; and (4) outcomes research into the effectiveness of new therapies for neurologic disorders.