H.R. 3590: What Health Care Reform Holds for Physicians

Pete S. Batra, MD, FACS

On March 23rd, President Obama signed into law the Patient Protection and Affordable Care Act of 2009. With the stroke of a pen, the most sweeping change in health systems delivery in more than a generation is upon us. With 2,393 pages of complex rules and regulation, coupled with $938 billion in new spending anticipated over the next ten years, the new law represents a daunting piece of legislation. Needless to say, this has created significant angst among physicians and their patients. It is time to start assessing potential implications of this legislation.

One of the core principles of the bill is expanded coverage for uninsured Americans. Congressional Budget Office (CBO) estimates that the law will expand coverage to 32 million persons by 2019. This will be achieved through (1) increasing Medicaid eligibility to individuals up to 133% of federal poverty level (FPL) and (2) providing credits to individuals and families up to 400% FPL to purchase private insurance. Dependent coverage age will be increased to 26. New health insurance protections will also be enacted. Insurance companies will no longer be able to deny coverage based on pre-existing conditions. Insurers also will no longer be able to drop coverage if policyholders get sick, and once insured, patients will have guaranteed renewability of their health insurance policies. Americans with affordable coverage options who choose to remain uninsured will be required to pay a penalty as a flat tax or as a percent of income starting in 2014.

Primary care physicians and rural general surgeons can expect a 10% incentive in Medicare payments. The law will also reduce geographic payment deferential for physician practice expenses in rural and low-cost areas. Payment for mental health services will also increase by 5%. The American College of Surgeons (ACS) supports increases in generalist payments but has expressed concerns if these incentives are offset by across-the-board cuts from all other medical services.

The law will create new governmental regulatory agencies that will influence health care delivery in the coming years. An Independent Payment Advisory Payment Board (IPAB) comprised of 15 members appointed by the President and confirmed by the Senate will be enacted in 2012. The primary goal will be to reduce per capita growth rate in Medicare spending based on preset targets. The board’s recommendations will automatically take effect annually starting in 2014 unless Congress achieves the required savings through legislation. A Patient-Centered Outcomes Research Institute will also be established to fund comparative effectiveness research (CER). This is worthy goal to improve patient care, but CER evidence may also be used to make coverage and/or reimbursement decisions and to establish differential copayments.

The bill did not include a repeal of the flawed Sustainable Growth Rate (SGR) formula. A mandated cut of 21.3% looms over physicians, narrowly being averted by temporary fixes in Congress through May 31st. The estimated costs of fixing the SGR are rapidly approaching $300 billion. Medical liability reform was not incorporated in this legislation. It is the lack of these key provisions that resulted in both the ACS and AAO-HNS opposing this bill in letters sent to Speaker Pelosi on March 19th. Meaningful health care reform remains an imperative goal to achieving quality, efficient health care for all Americans. Will H.R. 3590 help or hinder our ability to care for our patients? Only time will answer this crucial question.

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Revised 5/2010
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