An expansion of insurance coverage for mental health care is a major component of a compromise health care overhaul bill approved by a key congressional committee in October after months of often contentious negotiation.

The measure, sponsored by Sen. Max Baucus (D-Mont.), chair of the Senate Finance Committee, was approved by that panel on October 13. It was the last of five health care reform bills to advance beyond the committee level. The Baucus legislation was the only health care bill to receive any Republican support—Maine's Olympia Snowe cast the only GOP vote for it. It would provide an $829 billion 10-year expansion to provide insurance to about half of the more than 40 million Americans who lack coverage.

The legislation has drawn cautious support from a variety of health care advocacy groups; however, many physician organizations have reservations about its extensive use of clinician reimbursement cuts to provide some of the $404 billion in Medicare and Medicaid savings that would fund coverage expansions in the rest of the health care system.

The AMA, for example, has raised concerns that the Baucus bill—unlike the House-passed health care bills (three committees have approved varying versions of HR 3200)—would not repeal Medicare's controversial physician-payment formula. The AMA has made repeal of the formula a major item on its agenda, contending that it uses flawed and incomplete data that often result in a recommendation to cut Medicare fees. The Baucus bill would replace a pending 21.5 percent cut in physician reimbursement at the beginning of 2010 with a small one-year increase, while putting off any decision on a long-term replacement of the payment-calculation system. The House health care bills call for replacing the Medicare reimbursement structure.

"Without permanent repeal of the current formula, physicians face cuts of 40 percent over the next few years that will erode access and choice for America's seniors," said AMA President J. James Rohack, M.D., in a written statement.

APA Medical Director James H. Scully Jr., M.D., also urged inclusion of a long-term solution for the Medicare payment formula in a September letter to Baucus (Psychiatric News, October 16). In an attempt to provide a long-term fix, on October 14 Sen. Debbie Stabenow (D-Mich.) introduced the Medicare Physician Fairness Act of 2009, S. 1776, which would "rebase" the sustainable growth rate and thus eliminate the 21.5 percent cut physicians and other health care providers face. The bill also provides a 10-year freeze in lieu of additional payment cuts, allowing for a fair Medicare payment update to be considered as part of health reform. Majority Leader Harry Reid (D-Nev.) brought the bill to the floor for a vote, where it was defeated 53-47 with 12 Democrats and one Independent joining with Republicans to vote "no" on the legislation. Opponents criticized the bill for not including an offset to pay for the fix, estimated to cost $247 billion over 10 years. The Senate will now move forward with the small one-year increase.

Another area of concern for many physicians is the inclusion of penalties related to quality-reporting programs. The bill would mandate participation in a Physician Quality Reporting Initiative (PQRI) that aims to shift Medicare payments from volume-based to a value-based payment system. It would provide participating physicians with a 1 percent bonus payment in 2010 and a 0.5 percent bonus payment in 2011. However, it also would penalize nonparticipating physicians by 1.5 percent of their reimbursements in 2012 and by 2 percent in 2014.

Critics maintain that the current PQRI program has been plagued with problems in providing timely feedback to physicians and approving quality measures applicable to specialty care.

Scully noted that the program could impact psychiatrists in solo or small group practices, because the incentive payments are smaller than the increased costs of reporting on the program's quality measures.

"At a minimum, any proposal to extend or expand the current program must include ‘hold harmless’ language to protect physicians for whom participation in PQRI is neither reasonable nor feasible," he wrote in his letter to Baucus.

Physicians also could face Medicare reimbursement cuts if they incur higher costs than other clinicians. The Senate Finance Committee bill would establish a program to provide information to physicians on their "resource" use and how it compares with such use by other clinicians who treat similar conditions. However, the bill does not define "resource." If its eventual definition includes medications, psychiatrists could face a 5 percent payment reduction for incurring high costs when they prescribe expensive brand-name drugs that may be more effective than generic options for specific patients.

The House bill does not penalize physicians.

In addition, psychiatrists and other clinicians could bear the brunt of future cost-saving measures initiated by the proposed Independent Medicare Advisory Commission (IMAC) that the Baucus bill would create. The new body would submit proposals to Congress to reduce Medicare spending annually by 1.5 percent. Some physician advocates worry such cuts will fall hardest on them since a White House deal exempted hospitals from reductions by the commission.

At press time, Senate leaders had planned to combine the Baucus bill with a more liberal health reform bill approved in July by the Senate Health, Education, Labor and Pensions (HELP) Committee. The HELP Committee version largely focused on areas of the health system reform other than physician reimbursement.

The Baucus bill was amended before it was approved by the Finance Committee to include some key mental health coverage protections. Principal among these was an amendment by Stabenow to require parity coverage of mental health care by private insurance plans included in proposed health insurance exchanges, or marketplaces.

Some mental health advocates have said that the amendment was needed, because although the Baucus bill required insurers participating in the insurance exchanges to include mental health services as part of a minimum benefits package, it was unclear whether the extent and cost of those benefits would have to be on a par with non-mental-health benefits. The amendment applied the parity requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 to plans in the proposed state exchanges.

Other Stabenow amendments that the committee adopted would make it easier for foster children to have access to federal funds for health care, including mental health care in particular and ensure individuals with a serious mental illness are included in the medical home.

Information on the Baucus bill is posted at <http://finance.senate.gov/sitepages/legislation.htm>.