On August 21, 1996, President Clinton signed into law H.R. 3103, the “Health Care Coverage and Affordability Act of 1996.” While the final version of the law does not contain the most contentious elements included in earlier iterations, such as medical savings accounts (MSAs), mental health parity and medical malpractice reform, it does provide much needed health insurance protection for many of the nation’s workforce.
Portability and Pre-existing Conditions
The new law will require insurers to offer group health insurance policies to eligible employers in the jurisdictions where they sell policies. Health insurers will also be required to offer individual coverage to a person who has had group coverage for at least 18 months, is not eligible for coverage under any other group plan, has exhausted COBRA coverage, and has never been denied coverage for fraud or nonpayment of premiums.
The new law will also restrict the ability of insurers to deny coverage to workers with pre-existing conditions if they have had continuous coverage. However, the conference agreement allows pre-existing condition exclusions to be imposed on individuals for as long as 12 months with exceptions for newborns, adopted children, and pregnancy. The one-year pre-existing conditions waiting period may be reduced by the length of time that an individual has creditable prior coverage. The bill also requires health insurers to renew all group health plans, provided the insured have paid their premiums and not violated the insurance contract.
MSA Demonstration Project
After much compromise, a modified medical savings account provision was included in the bill. Under the conference agreement, a maximum of 750,000 medical savings account/catastrophic insurance policies will be available over the next four years to the self-employed and those in firms with 50 or fewer employees. After the completion of the demonstration project, Congress will vote on expanding the program to other participants. Under the agreement, the General Accounting Office will contract with an outside organization to study the effects of MSAs on the small-group market.
Fraud and Abuse
The new law includes sweeping changes to the current fraud and abuse laws. Remaining in the law is a provision requiring the Department of Health and Human Services Inspector General and the Department of Justice to issue binding “advisory opinions” on whether provider joint ventures and other business arrangements would violate federal anti-kickback laws.
The advisory opinions requirement was opposed by Justice officials, including Attorney General Reno, but Republicans and provider groups fought vigorously for the proposal. Proponents believe the requirement will provide guidance on how to comply with the law because of delays in issuing regulations on fraud and abuse laws.
Provisions Omitted in the Final Version
The issue of mental health parity, which was included in the original Senate bill, continued to be an issue until the final vote. Senators Pete Domenici (R-NM) and Kent Conrad (D-ND) were deeply committed to the goal of requiring employers to offer mental health benefits on a level equivalent to those offered in acute care policies. However, mental health parity met with sharp resistance from the business community. Ultimately, despite fierce debate, the mental health parity provision was not included in the conference agreement.
Also not included in the conference agreement were the malpractice provisions as they were originally passed in the House bill. The original House bill limited pain-and-suffering damages in medical liability cases to $250,000 while punitive damages were capped at $250,000 or three times the amount of economic damages, whichever was greater.
The ultimate impact of the act will not be known for years. There is an ongoing debate that costs could rise for the healthy as the less healthy regain their insurance. Affordability of plans should be a key issue in the near future and Democrats have expressed an intention to return in 1997 with more expansive health bills.
Practice Expenses Coalition
The AANS and CNS have been particularly active in the Practice Expense Coalition. The coalition’s main focus at this time is to seek a one-year extension of the implementation date for the new Medicare resource-based practice expense relative values. The Health Care Financing Administration’s (HCFA) data collection effort is seriously behind schedule, such that the agency is prepared to use proxy data and formulas to develop the new values. If the agency goes forward with this formulaic approach, the impact on neurosurgery will likely be quite significant.
A one-year extension would give the agency the necessary time to collect actual data from physician practices. To achieve the extension, the coalition has focused its energies on several fronts. We recently succeeded in getting the support of the American Medical Association (AMA) at its June House of Delegates Meeting. Prior to the meeting, the AMA had remained neutral on this issue. The AMA has now joined the effort to seek an extension of time.
At the behest of the coalition, Reps. Edward Whitfield (R-KY) and Ralph Hall (D-TX), introduced H.R. 3859, which extends the implementation date by one year. We are currently working to get additional co-sponsors for the bill and get a companion bill introduced in the Senate.
The coalition recently testified before the Practicing Physicians Advisory Council (PPAC). This is an advisory council to the Secretary of the Department of Health and Human Services. At the conclusion of its meeting, the council was generally supportive of the need to delay implementation of the new values. Gary Dennis, MD, a neurosurgeon from Washington, DC, is a member of the PPAC and conveyed our concerns about the study at the July council meeting.
Patient Access to Specialty Care Coalition Activities
The Patient Access to Specialty Care Coalition, an organization of 123 provider and patient groups — including the AANS and CNS — has had some recent successes in the campaign to protect patients’ and providers’ rights in the managed care environment. The coalition is supporting the “Patient Right to Know Act of 1996” (H.R. 2976) which was introduced by Rep. Greg Ganske (R-IA). This legislation prevents all health plans from imposing “gag” clauses in physician contracts that would restrict or interfere with medical judgment. This bill recently passed out of the House Commerce Committee and may be considered by the full House of Representatives before Congress adjourns this year.
At the Coalition’s behest, Rep. Tom Coburn (R-OK) introduced the “Medicare Patient Choice and Access Act of 1995” (H.R. 2350). This legislation ensures that Medicare enrollees will receive timely access to specialists, and permits the enrollee to seek medical treatments and services outside the HMO network.
On July 17th the House of Representatives passed the Treasury Operations Appropriations bill which included an amendment introduced by Reps. Bernard Sanders (I-VT) and Tom Coburn (R-OK). This amendment prohibits health care plans offered to Federal workers and retirees from utilizing financial incentive arrangements which may result in the withholding of, or denial of a referral for, health care. While the current law only applies to health plans participating in Medicare and Medicaid, this amendment extends the law’s reach to Federal Employee Health Benefits Plans. The Senate is expected to consider the Treasury Postal Operations bill in September.
Medical Procedure Patent Coalition
The provider community, led by a coalition of 17 national health care trade associations including the AANS and CNS, is very concerned about the patenting of medical and surgical procedures. The coalition does not support medical and surgical procedure patents because of the belief that they undermine the practice of sharing innovation and discovery in the medical community through papers and lectures.
On July 24, 1996, the House of Representatives passed an amendment to the Commerce, Justice, State, and the Judiciary Appropriations bill (H.R. 3814) that specifically prohibits the Patent and Trademark Office from using any of the funds made available in the appropriations bill to issue patents for purely medical or surgical procedures. However, the provision does make exception for medical devices and drugs which are themselves patentable.
The amendment is a modified version of Rep. Greg Ganske’s bill, H.R. 1127. Senator Bill Frist (R-TN) has introduced similar legislation in the Senate. There is some hope that a compromise agreement will be voted on and sent to the President for his signature prior to the end of the session.