Professional News
Medicare Payment Reform Urgently Needed, AMA Says
Psychiatric News
Volume 42 Number 24 page 4-25

With health system reform looming as a central issue in the 2008 presidential race, members of the AMA House of Delegates focused on strategies to advance the AMA's own proposals.

Medicare reform, state health care reform initiatives, the AMA's longstanding opposition to a "single-payer" system of health care, and pending legislation to reauthorize the State Children's Health Insurance Program dominated debate at last month's interim meeting of the AMA House of Delegates in Honolulu (see also Physicians Face Drastic Cut in 2008 Medicare Payment).

Indicative of the urgency felt by delegates surrounding health care reform efforts was a resolution that would have had the AMA sponsor a forum on health care reform for all the major presidential candidates at the AMA's annual meeting in June 2008.

Ultimately referred to the AMA board, the resolution was nevertheless strongly supported by some delegates who felt that the time was ripe to confront presidential hopefuls and to assert the AMA's proposal for reform. That proposal emphasizes use of tax credits and deductions to promote private ownership of health insurance and free-market choice.

"This is where the tire meets the road," said Arthur Palamara, M.D., a delegate from Hollywood, Fla. "We have a group of people in the running for president who all have proposals for health care reform. We should have the opportunity to interact with those individuals, and we believe the AMA is the perfect forum for this, as well as a tremendous opportunity to exert influence over the process."

But many other delegates argued successfully that the logistical difficulties of sponsoring such an event, especially with regard to security requirements, would be overwhelming, and the resolution was sent to the board for consideration.


Nevertheless, the discussion about a presidential forum reflected an atmosphere of anticipation and anxiety about a deteriorating health care system and the need for urgent change. Among the most passionately debated issues at the meeting was one that has been an article of faith for AMA policy since the 1980s—opposition to the prohibition on balance billing under the Medicare program.

The house resolved to "devote the necessary political and financial resources to introduce national legislation at the appropriate time to bring about implementation of Medicare balance billing and to introduce legislation to end the budget-neutral restrictions inherent in the current Medicare physician payment structure that interferes with patient access to care."

According to the resolution approved by delegates, this legislation should be designed to preempt state laws that prohibit balance billing and prohibit the inappropriate inclusion of balance-billing bans in physicians' insurance contracts. The AMA also will develop model language for physicians to incorporate into insurance contracts that attempt to restrict a physician's right to balance bill any insured patient.FIG1

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Jeremy Lazarus, M.D. (left), is believed to be the first psychiatrist to serve as speaker of the AMA House of Delegates. As speaker, he presides over proceedings of the house and serves on the AMA Board of Trustees. At right is the vice speaker, Andrew Gurman, M.D. 

Credit: Mark Moran

The renewed urgency around the issue of balance billing came amid increasing frustration with efforts to reform the Medicare payment formula—especially the so-called "sustainable growth rate" (SGR) component that requires the program to remain budget neutral—and a sense that the only way to force change in the Medicare payment scheme was to enlist the voice of patients.

Characteristic of the careful parsing of words that sometimes takes place on the house floor, considerable energy was spent discussing a change to the resolution that would have advocated "immediate" implementation of balance billing, as opposed to implementation "at the appropriate time."

Past AMA President Donald Palmisano, M.D., argued for" immediate" action saying, "The ship is sinking."

Peter Levine, M.D., a delegate from the District of Columbia, said efforts to reform the payment formula otherwise were fated to failure. "It is a fantasy to think that Congress will do anything to fix the SGR," Levine said on the house floor. "If we wait until the SGR is fixed, we will be waiting forever. We should demand balance billing, and do it now."

But other delegates argued successfully that AMA lobbyists need the latitude to determine a politically appropriate time to introduce legislation and noted that balance billing is a volatile topic for elderly patients and for advocacy organizations such as AARP.

"The timing of legislation is critical," said Sheldon Gross, a delegate from Texas. "In the eyes of AARP, for us to demand balance billing immediately is the equivalent of holy war."

Attention was drawn on the house floor to the fact that AARP President William Novelli had issued a statement, in time for the AMA meeting, urging reform of the Medicare payment formula. The statement was distributed to house delegates.

"The problem has intensified in recent years and is destined to become even worse," Novelli wrote. "If Congress doesn't act by the end of 2007, doctors will face an unprecedented 10 percent cut in Medicare payments next year. Should that occur, 60 percent of physicians say they'll be forced to limit the number of new Medicare patients they accept...."

Reflecting ongoing controversy at the congressional level over eligibility limits for the State Children's Health Insurance Program, delegates also held a heated debate about a proposal that would have capped the program eligibility at 200 percent of the federal poverty level (see AMA Debates Coverage in SCHIP Legislation).

The house also approved a report by the AMA's Council on Medical Services (CMS) offering guidelines for state health system reform proposals. That report emphasized that "health insurance coverage for state residents should be universal, continuous, and portable."

The original report did not include the specific mention of mental health benefits and avoided making recommendations regarding what would constitute a meaningful benefits package.

The house, however, amended the report to recommend that the health care system should "emphasize patient choice of plans and health benefits, including mental health, which should be value-based."

Another amendment recommends that coverage be made mandatory only if health insurance subsidies are available for those living below "a defined poverty level."

In testimony during reference committee hearings prior to the meeting of the house, CMS member Barbara McAneny, M.D., of Albuquerque, N.M., stated that the council opted for "value-based" purchasing of individual health plans, with a variety of options that might include coverage of mental health benefits, over unwieldy efforts to craft a mandated essential benefits package.

She emphasized that the AMA already had extensive policy on its books in support of mental health parity.

But psychiatry section council member Jeffrey Akaka, M.D., argued that allowing the market to determine the availability of mental health benefits would almost certainly ensure the absence of those benefits. "The market for behavioral health is not a good market," he said. "Mental health is essential to any meaningful benefit plan."

John McIntyre, M.D., chair of the Section Council on Psychiatry and a CMS member, said the recommendation to include the language about mental health in the report was deemed acceptable to council members, and it was approved by the full House of Delegates without debate. But he echoed McAneny in saying that CMS had early on determined that trying to write a "laundry list" of services to be covered in an ideal system would be all but impossible.

"So we were happy to include the language about mental health but decided we would resist efforts to start adding other things to the laundry list. If you try to define a specific benefit package, the discussion then becomes about what is essential and what is not. [CMS] decided that what made sense was to focus on patient choice and value-based purchasing of insurance products."

Another indication of the concern within the AMA ranks about the direction reform efforts may take was an extended debate during reference committee hearings and on the house floor about a resolution to spend $10 million on an advertising campaign against a single-payer system of health care financing.

The AMA has for decades been among the staunchest opponents of a Canadian-style single-payer system under which health care is financed by the government. But some of the testimony on the floor of the house reflected a possible softening of that opposition, especially among younger members, and a realization that there are a substantial number of American doctors who favor a single-payer system.

Palmisano argued on the floor of the house for an advertising campaign, saying that an aggressive approach to opposing a single-payer system would attract new members to the organization. "We should not be afraid" to take that position, Palmisano said.

But the motion was defeated by delegates who did not want the AMA's name associated with negative campaigning. "Regardless of whether we are opposed to single payer, we need to be positive in the way we word things as we approach the entire populace of America," said Benjamin Whitten, M.D., an alternate delegate from Wisconsin. "We should be expressing the will of doctors in terms of positives. Let's not make the headlines a negative. Let's be for things, not against something."

Ruth Cobell, M.D., from the Section on Medical Schools, said there are physicians in America who support a single-payer system. "We can drive membership down, not up, by taking a negative approach," she said.

Information on the AMA proposal for health care reform is posted at<www.voicefortheuninsured.com>.

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Jeremy Lazarus, M.D. (left), is believed to be the first psychiatrist to serve as speaker of the AMA House of Delegates. As speaker, he presides over proceedings of the house and serves on the AMA Board of Trustees. At right is the vice speaker, Andrew Gurman, M.D. 

Credit: Mark Moran

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