"Sustainable Growth Formula - DOC"
Summary and Comments on House Tri-committee Draft Health System Reform Bill U.S. House of Representatives Tri-Committee Proposal on Health Care Reform June 19, 2009 Comments of the American Medical Association The American Medical Association (AMA) appreciates the opportunity to offer our comments on the Tri-Committee proposal to provide affordable, high-quality health care to all Americans and reduce the growth in health care spending. We commend the Committees on Ways & Means, Energy & Commerce, and Education & Labor for their leadership in developing a framework to transform our nation’s health care system and for inviting public input. The AMA is committed to working with the Committees, Congress, Administration, and other stakeholders to advance proposals that expand coverage, improve quality, reform government programs, reduce costs, increase focus on wellness and prevention, and provide payment and delivery reforms. We particularly want to express our appreciation for the House’s recognition that fundamental Medicare reforms are essential to the effectiveness of a comprehensive health system reform plan. The Medicare program has a significant influence on other health care coverage programs and plans, and as a dominant force in the health care marketplace it has a profound impact on the practice of medicine. Any efforts to build new payment models to promote health care delivery system improvements and practice innovations simply cannot succeed without first addressing the barrier presented by the Medicare sustainable growth rate (SGR) formula. We realize that resolving this persistent problem requires a substantial financial commitment at a time when Congress is challenged with financing system-wide reforms, and we agree with House leaders and President Obama that the current budget baseline is an inaccurate projection of future Medicare spending for physician services and cannot be allowed to impede efforts to build a better health care system. Of course, the AMA’s goals for health system reform extend far beyond the Medicare physician payment system. We have a longstanding and unwavering commitment to working with policymakers on expanding health care coverage to the uninsured, and have devoted significant resources toward raising the public profile of this issue. The AMA and the physician community at-large are deeply invested in efforts to improve health care quality, and we share a comprehensive public health agenda. We have publicly acknowledged the need to rein in health care spending growth to make our system financially sustainable and are currently engaged in efforts to develop clinical measures to promote appropriate and cost-effective care. We want to be part of a successful effort to enact comprehensive health system reforms this year. Following are our detailed comments and recommendations on specific proposals set forth in the Tri-Committee discussion draft. We look forward to working with you in the coming weeks to refine your proposals and work toward passage of system-wide reforms. Health Insurance Market Reform We strongly agree that health insurance market reforms are required to ensure greater accessibility to affordable health insurance coverage and to make the health insurance market work better for both patients and physicians. Market reforms should create a more competitive insurance market in which plans compete on price and quality, allowing patients to gain more control over their choice of health insurance coverage and their own care. The AMA supports the insurance market reform provisions in Title I of Division A of the Committees’ draft bill relating to guaranteed renewability, modified community rating, pre-existing condition limitations, nondiscrimination based on health status, adequacy of provider networks, and transparency. We also support guaranteed issue in the context of an individual mandate to purchase insurance. With respect to medical loss ratios (section 116, Division A, Title I), the AMA supports transparency to prospective enrollees and regulatory bodies regarding reporting of medical loss ratios by insurers. We also support the development and implementation of a uniform, national accounting and reporting system to report administrative expenses and medical expense ratios as part of national uniformity in market regulation, and accordingly, we recommend that a requirement for such a system be added to the bill text. Health Insurance Exchange We agree that individuals who currently have coverage and small employers who currently provide insurance to their employees, and who are satisfied with their coverage, should be allowed to keep it. For those individuals who do not have access to or do not select employer- based insurance, we support establishing a national health insurance exchange (HIE) or state-based exchanges, as proposed in the draft bill (section 201, Division A, Title I), to increase choice, facilitate plan comparisons, and streamline enrollment to assist them in choosing coverage that best suits their needs. We are pleased to see that qualified health benefits plans would be required (section 133) to provide understandable and comparable information about their policies, benefits, and administrative costs to empower patients, employers, and other purchasers and consumers to make more informed decisions. The AMA supports the delineated responsibilities of the Health Choices Commissioner (Division A, Title II) with regard to providing public information and education to help individuals in choose a health plan option. We believe that mechanisms must be in place to educate patients and assist them in making informed choices, including transparency among all health plans regarding covered services, cost-sharing obligations, out-of-pocket limits and lifetime benefit caps, administrative costs, and excluded services. We are concerned, however, that the Commissioner’s responsibilities in terms of oversight and enforcement of health insurance plans operating within the HIE (as set forth in section 142) are too broad and could interfere with and usurp the regulatory role of state insurance commissioners. We support maintaining the important regulatory role of state insurance commissioners with regard to consumer protections such as grievance procedures, external review, oversight of agent practices and training, and market conduct, as well as physician protections like state prompt pay laws, protections against health plan insolvency, and fair marketing practices. We recommend that the bill language be amended to make it clear that these state law protections are not preempted. Moreover, we recommend that the language in section 151 be modified to clarify which provisions in existing federal and state law are intended to be superseded under the draft bill. Public Health Insurance Option We appreciate that the Committees have reconsidered earlier proposals that would have mandated Medicare provider participation in a public health insurance plan and we view this as a significant improvement. However, we continue have serious concerns about the use of federally administered payment rates, especially given physician experiences with the Medicare and Medicaid programs. Our interpretation of the language in section 223 is that payment to physicians would initially be based on Medicare rates, with a floor of one percent for annual updates. However, the Secretary would apparently have wide discretion to adjust such rates under the rules of construction in subparagraphs (d) and (e) of section 223. We urge the Committees to clarify the intent of these sections. The process for determining payment rates under the public plan option is critical if we are to achieve our mutual goal of minimizing additional cost shifting to private carriers and providers and ensuring access for patients to physician 2 services. A public program must offer rates that are competitive with private plans to avoid the cost shifting we are currently experiencing under Medicare. As we have stated on other occasions, the AMA does not believe that creating a government-run health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs across the health care system. Indeed, a reformed private insurance market, with a HIE that provides a variety of plans from which to choose, would achieve our common objective of providing access for all consumers to a broad range of coverage options. However, we remain open to considering an alternative that would provide competition from a non-profit entity that is self-supporting, is subject to the same solvency requirements as private plans, does not receive special advantages from government subsidies, where rates are established through meaningful negotiations and contracts, and where enrollees have access to the sort of out-of-network benefits that are available in private plans. In short, we are open to exploring health system reform alternatives that are consistent with the principles of pluralism, freedom of choice, freedom of practice, and universal access for patients. Standardized Benefits The AMA supports an alternative approach to the language in Division A, Title I, Subtitle C that requires the establishment of standard benefit options that plans must offer and that individuals must obtain in order to qualify for affordability credits. In lieu of a mandate for a particular benefit package or setting minimum benefit standards in statute, the AMA supports using existing federal guidelines regarding types of health insurance coverage (e.g., Title 26 of the US Tax Code and Federal Employees Health Benefits Program [FEHBP] regulations) to assess whether a given plan would provide meaningful coverage. The AMA believes that a principal goal of health system reform should be to expand rather than limit health plan choices for consumers so that they can purchase the coverage that best suits their needs. Therefore, rather than specifying options in statute, a regulatory environment should be established that enables rather than impedes private market innovation in product development, benefit packages, and purchasing arrangements. We are concerned that the bill as currently drafted will essentially eliminate health savings accounts (HSAs) in the group health insurance market in the next five years, which would serve to limit consumer choice. We recommend that the Committees clarify that HSAs would be considered “acceptable coverage” under the draft bill. Affordability Credits We support the provisions in the bill (Division A, Title II, Subtitle C) that would provide advanceable, sliding-scale subsidies to low-income individuals who need financial assistance to purchase private health insurance. The premium assistance framework proposed in the draft bill is consistent with AMA principles that tax credits should be inversely related to income, refundable, and advanceable, and that the tax credits should be adequate to ensure that health insurance is affordable for most people. We recommend, however, that affordability credits also be extended to those individuals who have employer-sponsored insurance, to use either to pay their premium costs for the employer’s plan or to purchase coverage through the HIE. The credits must at least be sufficient to cover a substantial portion of the premium costs for individuals in the low-income categories, and at the lowest income levels the credit should approach 100 percent of the premium. In addition, the size of tax credits should vary with family size to mirror the pricing structure of insurance premiums, with premiums for family policies being less than the sum of premiums for individual members. 3 Individual Responsibility The provisions in sections 301 and 401 (Division A) requiring individuals to have insurance coverage or pay a tax penalty are generally consistent with AMA policy. We support requiring individuals and families who can afford coverage to obtain it. Those earning more than 500 percent of the federal poverty level should be required to obtain at least catastrophic and preventive coverage, or face adverse tax consequences. Those who cannot afford it and do not qualify for public programs should receive tax credits for the purchase of health insurance. Upon implementation of subsidies or tax credits for those who need financial assistance obtaining coverage, the AMA believes everyone should have the responsibility to obtain health insurance. Administrative Simplification The AMA supports finding solutions to achieve the simplification of health care administration and its associated cost savings as proposed under Division A, Title V. We recommend that the final bill include additional provisions to direct HHS to adopt the remaining transactions named in Section 1173 of the Social Security Act that have not yet been adopted, and to evaluate options for streamlining the updating process with respect to existing HIPAA transaction and code set standards. We also recommend immediate investments to enable increased enforcement, accuracy, and transparency of existing electronic HIPAA standard transaction and code set (TCS) rules, including the rules governing patient eligibility and payment transactions. In addition, we recommend a 2-year time frame for adoption of the new standards, companion guides, and operational guidelines and instructions recommended in the draft bill. We believe that any proposed new HIPAA standards, such as claims attachments and quality reporting, should be issued through the rule-making process so that stakeholders, including physicians, have an opportunity to comment. We would also support establishing a National Health Plan Identifier. We further recommend clarifying that the administrative simplification requirements outlined in the draft bill are not intended to delay the scheduled implementation of the Version 5010 electronic transaction update, to be effective on January 1, 2012, and recommend adding a provision that requires the Secretary of HHS to adopt and make readily available a single, mandated cross-walk for the transition from ICD-9-CM to ICD-10-CM as soon as practicable. Medicare Physician Payment Formula The AMA greatly appreciates the Committees’ recognition in Division B that the Medicare physician payment formula (the sustainable growth rate, or SGR) is fatally flawed and needs to be addressed to avoid steep cuts that are inherent in the formula, threaten Medicare access to care, and undermine broad-based health reform efforts. We also agree that clinical laboratory and drug costs should be removed retroactively from the Medicare physician payment formula, especially since they are not paid under the physician fee schedule. We also are pleased that the new target growth rates are not limited to GDP growth; however, we are concerned that the new system could still lead to significant pay cuts in future years and urge the Committees to include design features that will preclude negative payment updates. A stable Medicare payment foundation is essential for new payment models and delivery reforms. Further, a stable, predictable physician payment system would allow physicians to plan ahead for practice innovations, investments, and personnel decisions that are fundamental to improved care coordination and chronic disease management, as well as help sustain the physician workforce. The physician community understands that the status quo is not sustainable, and is willing to embrace significant changes to help reform the Medicare program. This has been demonstrated by our support for 4 comparative effectiveness research, our support for incentive programs to encourage electronic prescribing and the adoption of health information technology, and our efforts to develop new performance measures and appropriateness criteria. We also support and are encouraged by the pilot programs in the Committees’ proposal (e.g., the medical home, accountable care organizations, gainsharing) that will help develop and test innovative alternative payment reforms. We believe these programs should be undertaken in a flexible and dynamic process in which multiple models in a variety of practice settings can be tested and refined, and where information about problems and solutions are collected and shared across programs and regions to facilitate mid-course corrections. This effort will allow us to accumulate the data and experience needed to enable wider implementation of beneficial reforms (although we would not support a mandatory requirement that physicians participate in any particular reform model). We fully expect that these initiatives, along with the waiver of cost-sharing for Medicare-covered preventive services (which we support), will generate system-wide savings over the long-run by avoiding hospitalizations and other costly interventions. However, with expanded access to these services the volume of physician visits and other services will increase in the short-term. If a target system remains in place, the activities policymakers want to promote are likely to trigger additional payment cuts in future years. While we continue to believe Medicare must move away from a target-based approach based on volume rather than value, we appreciate that the Committees have made a considerable investment dedicated to addressing the SGR and look forward to working with you to further develop an approach that ensures that Medicare payments for physicians’ services accurately reflect increases in medical practice costs while rewarding value-based, high-quality, cost- effective services. Private Contracting At the our annual meeting earlier this month, the AMA House of Delegates renewed its support for the enactment of federal legislation that ensures and protects the fundamental right of patients to privately contract with physicians, without penalties for doing so and regardless of payer within the framework of free market principles. The current two-year Medicare program exclusions for physicians who privately contract unnecessarily limits choices for beneficiaries as well as for physicians. We strongly urge the Committees to include language in the bill to ensure that patients have the ability to privately contract with their physician, free of any penalties and regardless of payer. Primary Care Bonus The AMA supports additional funding for primary care services, and we applaud you for focusing on these critical workforce needs, as proposed in section 1303, Division B. Further, we appreciate the Committees’ recognition that enhanced support for primary care should be viewed as a national investment in improving the health of Medicare beneficiaries through better chronic disease management and care coordination, and so should not be financed in a budget-neutral manner through offsetting decreases in payments for other valuable physician services. Work GPCI The AMA supports extension of the geographic practice cost index (GPCI) floor under section 1194, Division B. 5 Physician Quality Reporting Initiative The improvements to the Physician Quality Reporting Initiative (PQRI), including more timely feedback, an appeals process, and extension of PQRI bonus payments through 2012, are welcome changes that will go a long way toward helping physicians participate successfully in the program. We also recommend adding language in section 1124(a) (Division B) that would provide physicians with a prior opportunity to verify that the data CMS uses to determine whether they successfully participate in the PQRI are the correct data, as reported to CMS by the physician. This verification process should be user-friendly as well. Further, it is important to recognize that the PQRI’s limited success is due in no small part to a lack of resources and poor implementation by CMS. Along with PQRI improvements and other demands that will accompany health system reform, we believe it is vital for Congress to support the staffing and financial resources CMS will need to implement these programs. For example, more timely feedback reports for physicians are critical throughout the performance period but, based on current staffing, we do not believe CMS has the resources to meet this requirement. We urge the Committees, therefore, to provide funding to CMS to ensure adequate resources to appropriately implement the PQRI and all other programs proposed in the legislation. Finally, we greatly appreciate the Committees’ agreement that PQRI should remain a positive incentive program that does not include financial penalties. Physician practices already confront challenges in implementing staffing and workflow changes, as well as making substantial financial investments, to comply with incentive programs for the adoption of electronic prescribing and health information technology. Some practices would be unable to simultaneously absorb yet another set of requirements in order to avoid financial penalties. Quality Measurement We appreciate the Committees’ support for a process to identify national priorities for performance improvement and develop quality measures, including the testing and updating of measures. As part of the Stand for Quality (SFQ) Coalition, the AMA and more than 165 organizations have developed a framework for improving the quality and affordability of health care through a public-private partnership. Based on this framework, the SFQ Coalition has developed legislation for identifying national priorities for performance improvement along with improving how quality measures are developed, selected, and implemented under federal quality improvement programs, including Medicare. We urge the Committees to adopt the SFQ legislation as this proposal builds on existing resources, ensures a private-public partnership, and helps develop broad-based agreement on priorities, processes, and measures. In providing additional funding for the development of quality measures, we urge that the legislation specifically recognize the Physician Consortium for Performance Improvement (PCPI) as an entity qualified to develop physician-level performance measures. This will ensure that physician measures are developed and accepted by their end users. Misvalued Codes Under the Physician Fee Schedule We appreciate that the draft bill authorizes the Secretary to use existing processes in identifying, adjusting, and validating relative values for potentially misvalued CPT codes, and support providing funds for CMS to carry out these efforts. In the past, the AMA/Specialty Society RVS Update Committee (RUC) has requested resource-intensive data from CMS to review relative values, and because of limited 6 CMS resources, it has been a hardship to produce the data. Additional funding will greatly facilitate this process. We are also concerned about repeal of Section 4504(d) of the Balanced Budget Act of 1997. While this provision includes obsolete requirements that could be repealed, it also includes important requirements specifying that that actual and valid data are used in determining practice expense relative value units and that physician organizations are consulted about methodology and data to be used in developing these relative values. We urge that these provisions be retained in the law. Payment for Imaging Services We believe the provision assuming a higher utilization rate for imaging equipment under section 1147(a) (Division B) is too broad, and should permit a more refined approach allowing medical specialties that represent users of the various imaging modalities to submit data to CMS to determine an appropriate assumption for utilization. We also cannot support the provision in section 1147(a) that would increase the multiple procedure payment reduction to 50 percent. In fact, this provision may not be necessary. Where procedures are predominantly performed together (i.e., abdominal and pelvic CT), the RUC and CPT Editorial Panel have already asked medical specialties to develop a code proposal to bundle the codes together as one code. Finally, in the event that either of the above provisions is retained, we urge that any resulting savings remain in the physician pool. Accountable Care Organizations The AMA supports allowing groups of providers (physicians and/or hospitals) to meet certain requirements and quality thresholds to share Medicare cost-savings through an Accountable Care Organization (ACO). We also support allowing an ACO to be comprised of physicians only, without requiring a hospital to be involved. If a hospital is part of the ACO, however, there must be shared decision-making. Further, we support implementing beneficial components of the pilot program on a broad-scale basis, but we would not support a mandatory requirement that physicians participate in an ACO. Section 1301 (Division B) allows the Secretary of HHS to determine a “base period” for performance measurement for an ACO. If the base period involves multiple years, we would be very concerned that without some financial incentives to encourage patients to stay within the ACO for their care, these entities will be at substantial financial risk for expenditures over which they have no control. We also anticipate significant logistical problems with patients who want to have serious procedures performed in another state so they can be near a child or other family member, and with “snowbirds” and others who live in different states for significant portions of each year. Multiple year “base periods” would magnify these problems. Further, we have concerns about possible logistical and administrative difficulties in implementing the ACO provision, and we look forward to working with the Committees to work through any such difficulties. We recommend that the Committees include explicit language in the bill confirming that the ACO pilot program would be exempt from antitrust laws. Also, as the draft bill recognizes, physicians may pursue similar care coordination activities in the private market. We believe that for a program such as this to be successful, especially in the private market, changes to the antitrust laws are required to allow physicians to participate in care coordination programs, such as ACOs, that will require joint negotiation of contracts with payers. 7 Antitrust Reform We urge the Committees to include reforms that provide relief from legal and regulatory impediments to physician collaboration. Antitrust reforms should be considered an essential element of health system reform. Further, we urge enactment of antitrust reforms that apply regardless of payer. For groups of physicians to effectively reengineer their practices to improve care coordination and quality, they cannot be organized under two separate corporate models— one for Medicare and another for privately insured patients. Greater clinical integration of physician practices would enable care coordination and quality improvements for all patients. Medicare will not be able to achieve improvements in quality and accountability unless physicians are able to take a holistic approach, including joint contracting with private payers. Medical Home Pilot Program The AMA supports testing different models for the medical home (section 1302, Division B). We also support implementing beneficial medical home models on a broad-scale basis upon a thorough evaluation, but we do not support a mandatory requirement that physicians participate in a medical home. In addition, while the AMA recognizes nurses as valuable members of the health care team, we do not support nurse practitioners practicing independently, without at least regular consultation with a physician. It is the AMA’s policy that a multidisciplinary health care team should be led by a physician who is in the best position to provide coordination of disciplines to assure delivery of high quality patient care. The education and training between a physician and an advance-practice nurse (APRN), of which nurse practitioners are a subset, are not equivalent nor are their competencies. When it comes to clinical experience alone, a typical family medicine resident spends approximately 10,000 hours involved in direct responsibility for patients in inpatient and outpatient settings. Family medicine residents typically see approximately 1,650 to 2,000 patients in their continuity clinics alone. Notably, this does not include the myriad of patients who will be seen through their other rotations. In contrast, the American Association of the Colleges of Nursing recommends that APRNs have a minimum of 500 hours in direct clinical practice during their education program. An in-depth AMA study on APRN education and training further found that clinical-hour requirements for direct patient care range from approximately 500 to 720 hours. In addition, AMA only supports APRN practice as authorized by state scope of practice laws. Hospital Readmissions The AMA agrees that it is important to address the issue of hospital readmissions and we support the study on how the readmissions policy could be applied to physicians. We urge the Committees to clarify in section 1151 (Division B) that the Secretary of HHS should consult with physician organizations in conducting the study, especially with regard to critical issues such as attribution. The study should also require the Secretary to consider existing efforts in this regard, such as those of the PCPI. Further, we believe that transitions of care across various health care settings should be addressed as well. Recently, the American Board of Internal Medicine (ABIM) Foundation, American College of Physicians, Society of Hospital Medicine, and PCPI jointly formed a Care Transitions Work Group (CTWG) to identify and define quality measures geared toward improving outcomes for patients undergoing transitions between the inpatient and outpatient settings. The group identified several processes of care demonstrated to improve outcomes during care transitions, and recommended that these be added to the existing portfolio of quality measures. The CTWG is also working with the Agency for 8 Healthcare Research and Quality toward promoting improved patient understanding of and adherence to the post-discharge treatment plan through the addition of appropriate questions to the CAHPS® Hospital Survey. In implementing the hospital readmissions policy, Congress should ensure that there are exceptions to this policy, such as planned readmission or readmission related to cancer care, burn care, trauma care, scheduled surgical procedures, or other admissions deemed appropriate. This policy should also recognize that there will inevitably be times where patients may be re- hospitalized within a 30-day or other designated time period. For example, a patient could be hospitalized for a heart condition, and within 30 days or other designated time period could experience shock due to an unrelated traumatic event. This may ultimately complicate the underlying condition that was the basis for the original hospitalization, and therefore a second hospitalization may be necessary for high-quality care. Risk Adjustment The AMA supports risk adjustment of all payment methodologies used in the foregoing health reform pilot and other programs, and strongly recommends that Congress provide funding to the Secretary to develop improved risk adjustment methodologies that reflect the characteristics of the patient population being treated, including but not limited to such factors as whether an individual smokes or is obese. Health-Care Acquired Conditions The AMA remains concerned that some of the current inpatient health-care acquired conditions (HACs) do not meet the criteria of being “reasonably preventable” through the application of evidence-based guidelines, as developed by appropriate medical specialty organizations based on non-biased, well-designed, prospective, randomized studies. Until there is broader-based consensus about which HACs should be included in the Medicare non-payment policy, we do not support allowing states to include additional HACs for non-payment in their respective Medicaid programs, as proposed under section 1851(b) (Division B). Physician-Owned Hospitals The AMA supports the disclosure of physician ownership and investment information. We oppose the proposal to eliminate the whole hospital exception to the Stark self-referral law. The draft bill (section 1156, Division B) would essentially: prohibit physician-owned hospitals from growing, except under very limited circumstances; force physician-owned facilities currently under construction to be abandoned; and uniformly deter the establishment of new physician-owned facilities by prohibiting them from treating Medicare and Medicaid patients. The limits that would be placed on existing physician-owned hospitals would put them at a competitive disadvantage and make it difficult for them to respond to the health care needs of their communities. Similarly, the prohibition on treating Medicare and Medicaid patients for new or developing physician-owned hospitals would make it impossible for them to survive, effectively destroying this hospital sector. Limiting the viability of physician-owned hospitals will only serve to reduce access to high- quality health care for patients and have a destructive effect on the economy in communities these hospitals serve. Physician-owned hospitals are a benefit to patients and their communities and represent the type of coordinated care, efficiency, and aligned incentives that are being proposed for the future of health care delivery. Several studies have shown high levels of quality care and patient satisfaction in physician-owned hospitals. In addition, government studies have found fewer complications, like infections and hip fractures, in physician-owned hospitals. Studies have also shown that these hospitals provide more net community benefits through uncompensated care and taxes than not-for-profit competitors as a share of 9 total revenues. Further, the Center for Studying Health System Change recently released a study that found physician-owned hospitals do not adversely affect general hospitals’ ability to care for patients. These hospitals provide tens of thousands of jobs nationally, a local economic engine through property taxes and higher-wage jobs, and patient access to the best quality health care available. We strongly urge the Committees to remove this provision. Medicare Advantage Reform The AMA strongly supports fiscal neutrality between Medicare Advantage (MA) and Medicare fee-for-service, as well as the elimination of the MA Regional Plan Stabilization Fund, by returning any remaining sums to the Federal Supplementary Medical Insurance Trust Fund. In addition, the AMA is equally supportive of proposed MA provisions in the bill (Division B, Title I, Subtitle D) establishing enhanced beneficiary protections including limitations on cost sharing for dual eligibles and qualified Medicare beneficiaries, limitations on out-of-pocket costs for individual health services, continuous enrollment for enrollees with MA enrollment suspension, provision of information to beneficiaries on MA plan administrative costs (medical loss ratios), and providing HHS with the explicit authority to deny MA plan bids. The AMA also generally supports provisions to ensure the MA special needs plans provide services consistent with the overall purpose of such plans (i.e., coordination of care). Improvement to Medicare Prescription Drug Benefit The AMA generally supports reforms to the Medicare Prescription Drug Benefit (Part D) that increase plan transparency, enhance the quality and uniformity of information about plan options available to beneficiaries, and provide meaningful access to plan options including those that eliminate the coverage gap. We strongly support the proposed changes in to the Part D program (Division B, Title I, Subtitle E) that would permit mid-year changes in beneficiary enrollment for formulary changes that adversely impact beneficiaries (such as reduction in coverage or increase in cost-sharing) as well as provisions that would include the costs incurred by AIDS drug assistance programs and the Indian Health Service in providing drugs toward the annual out-of-pocket threshold under Part D. Medicare Rural Access Protections The AMA generally supports efforts to fund and support CMS demonstration projects to evaluate the effect of care delivered by physicians using telemedicine-related technology on costs, quality, and the physician-patient relationship. Thus, we support provisions in Division B, Title I, Subtitle F that would extend existing authorities related to telemedicine. Comparative Effectiveness Research The AMA concurs that a critical component of health care reform is sustained federal funding for comparative effectiveness research (CER). However, the AMA strongly supports establishing an independent entity that is charged with setting national priorities and supporting the conduct of such research. We also believe that physicians, including practicing physicians, must have a central and substantial role in the governance of the independent CER entity. While the proposed CER Commission provides for physician representation, it is minimal and the Commission would not be independent of HHS since the Commission is subject to the authority of the HHS Secretary. We strongly urge modification to the governance provision in Division B, Title IV, Subtitle A, and recommend the establishment of an independent Commission with a central and significant role for physicians, including clinicians. 10 The AMA supports CER as a tool to assist patients and clinicians in making informed health care decisions, not to dictate them. Physicians will embrace and use clinical guidelines that incorporate CER findings only if they trust the independence and objectivity of the process and the validity and rigor of the standards used to produce the research. Physicians are much more likely to have access to and adopt CER findings if they are involved in its development. Active physician participation in the governance and work of the CER entity will facilitate uptake and reliance on the research findings. We support provisions that mandate transparent practices and require ongoing, regular stakeholder input. In order to ensure the involvement of those impacted by CER findings, patient safeguards must include, among other things, a means of accounting for population variation to avoid exacerbating health disparities. The addition of a patient ombudsman is welcome and language that specifies the limitations of CER findings must be clearly delineated. Furthermore, the AMA supports dissemination of findings, but recommends the inclusion of language that prohibits the development of clinical practice guidelines by the Center. In addition, we strongly urge the inclusion of provisions that ensure that the final uses and application of CER findings do not undermine patient-physician decision-making nor efforts to tailor diagnostics and treatment to the particularized needs of individual patients. The AMA supports provisions that will ensure secure and sufficient funding necessary to produce high-quality CER. Funding source(s) that are not subject to the political process safeguard the independence of the CER entity. Physician Payments Sunshine Provisions The AMA supports adoption of reasonable measures that will increase transparency in the relationship between physicians and applicable manufacturers of drugs, medical devices, and medical supplies with respect to payments and other transfers of value and physician ownership or investment interests in such manufacturers. A national registry that provides information on transfers of value to physicians by these industries will provide information that can be used by physicians, patients, and researchers. However, establishing a national registry that would involve reporting on a greatly expanded group of entities and persons as well as mandating reports on indirect payments or transfers of value including through third parties would result in a flood of information, some of which would be of questionable validity and value. In particular, reporting on indirect transfers of value where unrestricted manufacturer funding used to support a conference would actually result in a perverse outcome—where detailed information on each conference participant must be provided to the manufacturer, thus arming it with information that can be used to target marketing and track participant activities. Currently, manufacturers who provide unrestricted funding are not entitled to such information. Given the existing patchwork of reporting requirements at the state level and the number of states considering such legislation, the AMA strongly urges the Committees to amend Division B, Title IV, Subtitle D and adopt a single comprehensive reporting regime for industry, as well as preemption of state laws. This will provide a much needed apples-to-apples comparison of information across the country and minimize the potential for an administrative quagmire. We also recommend: requiring disclosure of only the health professional’s name and business addresses in publicly available registries; including specific language that prohibits the public disclosure of National Provider Identifiers (NPIs) to decrease the possibility of identity theft and fraud in health programs; providing physicians a reasonable opportunity to review and correct reports on transfers of value attributed to them prior to public disclosure; and removing the requirement to report ownership interest by a member of a physician's immediate family in any non-publicly held manufacturer regardless of its relevance to the physician’s practice. 11 Graduate Medical Education (GME) The AMA believes that the Medicare GME proposal under Division B, Title V, to fill vacant GME resident slots alone, will not be enough to address the predicted physician shortages. A peer-reviewed study published in the Journal of the American Medical Association (JAMA) in 2008 projects an additional 21,000 residency positions will be needed within the next decade to ensure that we have a fully trained physician workforce available to serve the needs of patients. The AMA recommends the following additional GME actions to ensure an adequate physician workforce: (1) maintain adequate and stable Medicare and Medicaid GME funding levels and investigate additional sources of GME funding (e.g., private payers); (2) increase Medicare supported GME positions in primary care, general surgery, and other undersupplied specialties, as well as in underserved areas with new funding; and (3) bring together a variety of health care experts to assess and make recommendations on our physician workforce needs, including the number of needed GME positions and the use of GME funds, and how meeting these needs should be funded. The AMA is also very concerned about the draft bill’s proposal to require a study and report on medical residency training programs, including curriculum requirements. We do not support efforts by the government to dictate the content of medical school or residency curricula either directly or as a condition for receiving funds and we believe this study would duplicate work already underway by MedPAC. Program Integrity Funding and Reporting Requirements The AMA supports increased funding for program integrity since many of the programs currently being administered are severely under-funded and result in significant problems for physicians. However, any increased funding should go toward properly supporting currently under-funded integrity programs first before establishing new programs, and any new programs should be properly coordinated with existing ones. Fraud and Abuse Compliance and Penalties The AMA supports efforts to combat fraud and abuse. However, we believe that efforts must be made to clearly define health care fraud, as opposed to honest mistakes. In addition, efforts to curb fraud and abuse must ensure due process rights for physicians and verifying the accuracy of claims submitted by other providers and suppliers should not take away time from physicians' patient care activities. We are opposed to the requirement for face-to-face meetings to certify home health care given that many of these patients, by definition, are unable to get to a physician’s office. Finally, we are opposed to the requirement that physicians who order durable medical equipment must sign a Medicare Participation Agreement. This could be disruptive to long-established physician-patient relationships. In addition, we do not believe that creation of a payment modifier that would have to be added to claims for evaluation and management services when a physician ordered another service would substantially improve the government's ability to identify questionable ordering or referral practices. These services can already be matched up by beneficiary and we question the need to impose yet another administrative cost and burden on physicians. As a practical matter, much of this new burden will fall on primary care physicians and penalize them for the very kinds of coordination of services that policymakers want to encourage. For these reasons, we would like to work with the Committee staffs to clarify the rationale for this section and determine whether there are less burdensome ways of achieving the goal. Data Bases We have significant concerns about combining and/or expanding data banks (Title VI, Division B) with sensitive physician information. We support eliminating duplicative physician databases. However, 12 given that NPDB data have been shown to be incomplete, duplicative, and inaccurate, we recommend that any expansion or consolidation of the database contain sufficient measures and protections to ensure the accuracy, relevancy, and confidentiality of the information it contain. In addition, we recommend that the legislation ensure that physicians are accorded full due process rights to contest, appeal, and respond to all alleged charges reported to the database. Medicaid Expansion The AMA supports helping low-income individuals obtain health insurance coverage, and believes the safety net provided by public programs needs to be maintained and strengthened. We support basic national standards of uniform eligibility for all persons below the poverty line, and the elimination of the existing categorical requirements, which would allow for the coverage of low-income individuals based solely on financial need. We support the provisions in section 202, Division A that would allow Medicaid-eligible individuals to purchase insurance through the health insurance exchange. The AMA also supports setting Medicaid payment rates at a level that encourages widespread physician participation in the program. We support the enhanced payments in the draft bill (section 1821, Division B, Title VIII) for primary care practitioners, but urge that these enhanced rates be provided to all physicians participating in the Medicaid program, since access to specialty care is already a problem for beneficiaries. The proposal to expand the array and extent of preventive and wellness promotion services under Medicaid is commendable and much needed. We support the requirements in the draft bill (section 1811, Division B) for coverage of prevention services that are graded “A” or “B” by the United States Preventive Services Task Force (USPSTF), as well as coverage of vaccines recommended by the Centers for Disease Control and Prevention (CDC). The use of the USPSTF and CDC’s Advisory Committee on Immunization Practices (ACIP) provide widely respected and utilized guides for designation of recommended preventive services and are often used in both private and public clinical practices. We also support the draft bill’s elimination of cost- sharing for such services. Moreover, we support the expansion of tobacco cessation counseling for pregnant women, as well as dropping the tobacco exception from covered outpatient drugs (section 1812, DivisionB). Workforce The AMA supports the Workforce provisions (Division C, Title II) that would increase funding for the National Health Service Corps (NHSC) and Title VII health profession and diversity programs to ensure a well-prepared, well-distributed, and diverse health care workforce. We also recommend including provisions that would alleviate high medical student debt burdens through tuition assistance, loan deferment, and loan forgiveness for service programs for all undersupplied specialties, including programs for medical teaching faculty. The AMA generally supports programs that increase basic nursing education opportunities, provide workforce incentives, as well as other initiatives in order to increase the supply of registered nurses. In lieu of the proposed nurse-managed health centers, the AMA supports fully integrated multidisciplinary health care teams that are comprised of nurses and other health care professionals, which are led by physicians to ensure that patients get the best possible care. While we support the establishment of a health care workforce advisory committee, we do not support limiting the number of physicians and health educational professionals to be appointed to the committee. In addition, the AMA supports health care workforce assessments that cover all specialties, not just primary care. 13 Prevention and Wellness It is imperative that we invest in prevention and wellness to promote a healthy America. We will be unable to achieve the goals of improving quality of care and reducing the rate of growth in health care costs without such investments. Billions in savings can be achieved through a large- scale national effort of health promotion and disease prevention to reduce the prevalence of chronic disease and poor health status, which leads to unnecessary sickness and higher health costs. Reform should include a specific focus on obesity prevention commensurate with the scale of the problem. These initiatives are crucial to transform health care in America and to achieve our goal of reducing the rate of growth in health costs. Insurance benefit designs should be aligned with current evidence on disease prevention. Public investments are needed in education, community projects, and other initiatives that promote healthy choices, as well as core public health infrastructure. We support the provisions in Title III, Division C that require the Secretary to develop a national prevention and wellness strategy and to expand the capacity of the USPSTF and the Task Force on Community Preventive Services to undertake rigorous, systematic reviews of existing science to recommend the adoption of proven and effective preventive services. We also support the focus on prevention and wellness research, with regard to coordinating such research and expanding research through new grant programs. The community- based prevention and wellness services grants are also to be commended, especially the focus on reducing health disparities. The AMA recognizes racial and ethnic health disparities as a major public health problem in the United States and a barrier to effective medical diagnosis and treatment. Eliminating such disparities is one of our highest priorities. Medical Liability Reform The AMA believes strongly that medical liability reform is a critical component of health system reform, especially as a means of protecting patients’ access to care and slowing the rising cost of health care. Various states have passed effective medical liability reforms that, in addition to including a cap on non-economic damages, also contain innovative approaches. The AMA strongly favors a $250,000 limitation on noneconomic damages as the optimal solution. However, we also support federal funding for state or local-based demonstration programs to collect information on the efficacy of alternative reforms that have the potential to improve the current litigation climate, including but not limited to: health courts; early disclosure and compensation programs; administrative determination of compensation model; expert witness qualifications; and liability protections for use of evidence-based medicine guidelines. 14