The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Outlines of Senate Finance Committee Health Care Reform Plan Emerges

Posted by Alan on September 7, 2009


Senator Max Baucus of the Senate Finance Committee is circulating a draft health care reform proposal that could form the basis for whatever reform package emerges from Congress. If there is going to be bipartisan health care reform legislation, this is it.

The draft reflects ideas from six members of the Congressional panel who have spent months trying to find common ground – Democratic Senators Baucus (Montana), Jeff Bingaman (New Mexico) Kent Conrad (North Dakota) and Republicans Mike Enzi (Wyoming), Charles Grassley (Iowa), and Olympia Snowe (Maine). The group, often referred to as the Gang of Six, has been working under tremendous pressure. Democrats have been pushing for action and liberals are concerned about giving up on, among others, provisions for a government-run health plan. Republicans have been equally vociferous on their three colleagues, some arguing that the GOP should seek to defeat any health care reform plan in order to deliver a political blow to President Barack Obama and others opposed to specific elements such as how to pay for insuring the uninsured. Rumors of the gang’s failure have been constant and consistent fodder for bloggers, talk shows and news programs, yet they keep on moving forward. The draft proposal is the most concrete evidence yet that these rumors are unfounded.

As reported by the Associated Press, the plan circulated by Senator Baucus includes a fee on insurance companies to help fund coverage for the uninsured, enabling non-profit co-operatives to compete with carriers, authority for health insurance exchanges (note: there would be more than one) to help individuals and small business purchase coverage, expansion of Medicaid, tax credits to help low- and middle income Americans buy private coverage, and a requirement for insurers to disclose their administrative costs and profits.

The Wall Street Journal describes Senator Baucus’ plan as requiring “most Americans to carry health insurance” and, in addition to a fee imposed on all insurers, would include a tax on “insurance companies when they offer particularly generous health insurance plans.”  The Journal describes the exchanges as providing “standardized information on insurance plans and pricing." The article also makes explicit what is generally assumed to be a part of any health care reform plan: carriers will no longer be able to exclude coverage for pre-existing conditions; drop insureds who become ill; and will cap out-of-pocket medical expenses.

Bloomberg reports that Senator Baucus’ proposal “works to reduce Medicare costs by rewarding doctors based on the quality of care provided, not the number of treatments or tests administered.”

The cost of the proposal is estimated to be $900 billion over ten years. The Senator is emphasizing that what he is circulating is only a draft and subject to change. However, he warned Senate Finance Committee members that they would need to suggest ways to pay for any provisions they suggest that increases the cost.

So what does all this mean? Well let’s get the obvious elements out of the way: the devil is in the details; it’s unclear how well the proposal goes after medical cost containment because the media tends to focus on what’s easier to understand (insurance reform) – the good news is there are indications reducing health costs is significant part of the package.

It’s also clear the proposal will be unacceptable to both liberals and conservatives. No problem, the more ideological on both ends of the political spectrum would be unhappy with any reform Congress is capable of passing. Liberals will complain because it doesn’t give government enough control over the nation’s health care system; conservatives because it gives government too much control over the nation’s health care system.

However, ideologues don’t pass much legislation, moderates do. And the Senate Finance Committee’s is apparently getting ready to pass legislation far more moderate than what has already been approved by the Senate Health Education Labor and Pensions Committee or by the three House Committees with jurisdiction.

Which means if the Senate Finance Committee actually moves forward something along the lines of the package being circulated by Senator Baucus, for better or for worse, what passes for moderate health care reform legislation is more likely to become a reality sooner rather than later.

8 Responses to “Outlines of Senate Finance Committee Health Care Reform Plan Emerges”

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  3. PanoTX said

    A Better Way ….
    Improvement In Medical Costs We Can All Believe In (or THE CASH IS KING MEDICAL PAYMENTS ACT)

    It occurred to me while paying my bill at the reception window at the doctor’s office that I, as cash paying customer, was being charge considerably more that other patients receiving the same care. These other patients had health insurance plans accepted by the doctor and included pre-negotiated rates.

    It struck me as unfair that the simplest and quickest way of getting the doctor paid for his/her services (i.e. my cash payment as the time services were rendered) resulted in the highest bill to the patient. I would think the easiest, and most timely, method of payment should result in the largest discount to the patient. Unfortunately the cash customer gets stuck with the largest bill not the smallest.

    That has to change. We need a better way. How is the cash customer going to know what the lowest rate the medical provider is currently selling his/her services for? Patients have a right to know.

    Instead of a completely unworkable, unaffordable plan, let’s go for the simple plan. Doctors already know what the lowest payment they will accept. It is dependent on which insurance plans they participate in. All that the cash customer lacks is access to this pricing information. If Gas Stations all across America must publish their gasoline prices so that everyone driving by can see them, then why can’t patients and potential patients see doctor’s pricing. This has to change – change we can believe in.

    CASH PATIENT’S BILL OF RIGHTS:

    1. Every medical provider shall provide a single 8.5 by 11 inch of paper listing the 200 most common procedures with columns for procedure code, procedure description, and cost to the cash customer when paid at the time services are rendered. This single sheet of paper shall also list every health insurance carrier accepted by the medical provider. The sheet shall also identify the medical provider by name, address, phone number, and Medical ID number(s). Print no smaller than 10 font must be used. Printing on both sides of the paper is authorized. This document shall be called the Medical Provider Pricing Sheet (MPPS).
    2. Multiple copies of this Medical Provider Pricing Sheet shall be stored and available to all patients and all potential patients in the waiting area of the Medical provider at all times the waiting area is open to patients and potential patients. New paper copy MPPSs with new pricing must be available to patients 10 calendar days prior to the new pricing going into affect. During the 10 day period both current and future MPPSs must be available.
    3. Information contained on the Medical Provider Pricing Sheet shall also be provided on-line. Earlier editions of the Medical Provider Pricing Sheets shall be provided on-line until at least 365 days after the pricing on the sheet became invalid. Earlier editions of the MPPS shall be clearly marked indicating the time period the pricing was valid. The valid time period shall appear on each page and in the file name. New MPPS information must be available on-line 10 calendar days prior to going into affect.
    4. All health insurance providers shall, via an on-line presence, list the 500 most common procedures payable to each medical provider covered by the health insurance policy. The on-line listing shall be customized by medical provider type and medical provider zip code. The on-line listing shall include the provider type (medical specialty or other identifier), zip code, and the 500 most common procedure codes, procedure description, and pricing per service provider zip code. Pricing information must be available for the previous 365 day period by entering a date into the appropriate field on the health insurance web page.
    5. Government, non-government organizations, and individuals will be allowed to audit health insurance information to ensure medical providers always provide cash paying patients with the lowest price currently accepted by the medical provider. Health insurance carriers must offer unrestricted access to on-line medical procedure pricing (include dated pricing up to 365 days old), even to people or organizations not covered under the health insurance plan in question.
    6. In situations where the medical provider does not produce an itemized bill with diagnose codes, procedure codes, and procedure prices at the time services were rendered, then the patient must be offered the Cash discounted pricing if the bill is paid in cash within 10 days of receipt the medical provider’s bill.
    7. All cash paying patients shall be charged the lowest price for any medical procedure.
    8. In all cases “cash” defined as: currency, checks, debit cards, credit cards, and any other form of payment agreed to by the medical provider and the patient.

    Given the Federal government is a health insurance provider, the Federal government shall be required to augment their health insurance web sites. It is estimated that the legislative cost, in dollars, to pass the CASH IS KING MEDICAL PAYMENTS ACT will be greater that the cost to augment the federal health insurance web sites. Given the database driving this pricing information already exists and is used for claims processing, and database updates are required for future claims processing, therefore out-year federal costs will be near zero for the continued implementation of the CASH IS KING MEDICAL PAYMENTS ACT. It’s not a federal budget issue. It’s not a Federal tax and spend issue. It is a fairness issue.

    Now that’s a change we can believe in. Unfortunately no special interest group gains by supporting the CASH IS KING MEDICAL PAYMENTS ACT, even though Americans paying their medical bills in cash could see a drop of 65% in the cost of health care. It appears no one cares about the typical American anymore.

    ****** WHAT YOU NEED TO DO *******: Contact your elected representative and tell him/her to support, even champion, the CASH IS KING MEDICAL PAYMENTS ACT. Remember no one else is looking out for you. Fairness dictates that cash paying patients should pay the lowest price.

    If high deductible health plans are going to be in everyone’s future. Both insured and cash patients need to support the CASH IS KING MEDICAL PAYMENTS ACT in order to have available the information necessary to make sound medical decisions and for comparison pricing.

    I am not saying the CASH IS KING MEDICAL PAYMENTS ACT will create more competition within the medical industry, reduce the rate of medical care inflation, result in more health insurance carriers, result in lower-cost health insurance alternatives, assist small businesses with the health care needs of their employees, or improve the medical profession cash-flow crisis caused by slow pay health insurers. but, these may become secondary benefits.

    The Administration could make universal pricing information the first milestone in the Electronic Health Records initiative. If Health Insurance carriers won’t release their pricing data, then I’m not ready to have my private health records available electronically either. Fair is fair ….. let’s have the information (i.e. pricing) that should be commonly available, actually available.

    • Nosedoc said

      While you are certainly right that cash-paying patients at the time of service should be able to pay the lowest fees accepted by health care providers, outside of places like Manhattan, they make up a very small minority of the overall patient population, and most practitioners would simply give up seeing the cash-paying patients before agreeing to the above “Bill of Rights.” The problem is that we have a crazy system in which the insurance companies need to perceive that they are receiving a large discount off full, “usual and customary” fees. Just look at an EOB (explanation of benefits) from an office visit and compare the charges to the “allowed” amount and patient responsibility and you’ll see what I’m talking about (that full fee is a “pie-in-the-sky” number that isn’t terribly relevant in the “in-network” scenario). The fee schedules that health care providers accept as “in-network” providers are either some fraction of the full fee or some multiple of Medicare, generally 1 to 2X Medicare. The patients who pay in full at the time of the visit either have no insurance or are in a network for which the provider is non-participating. The provider must charge the full fee, UNLESS the patient or representative negotiates a discounted fee before or after the time of service. To not charge the full fee or at least establish the full fee as part of a negotiation process (initiated by the patient) would constitute fraud against the insurers the provider is contracted with. Additionally, negotiated fee schedules between a health care provider and an insurance company are considered proprietary information by the insurers. Providers are prohibited from discussing fee schedules with peers outside of their own practices as this a violation of anti-trust laws. I relish when patients ask me why I don’t participate in their insurance (usually United Healthcare) because I am able to respond by saying that I do participate in the largest Medicaid HMO in my state because it reimburses me significantly better than the “take it or leave it” fee schedule offered to me by their insurer to which they (or their employer) pay substantial premiums every month (so what does that say about your insurer?).

      • JimK said

        Excellent reply. You explained perfectly why doctors must charge the fees that they submit to the insurance companies. I once had a Healthplan that had a $2 Co-pay and I asked the receptionist why do they even bother collecting $2 and she told me that it was necessary because otherwise the insurance company would claim that the doctor was overstating their submitted charges. I eventually dropped the Plan because there were so few providers that I would routinely sit for 4 hours before I saw the doctor.
        However, your reply on negotiated fees raises a question for me and that is can doctors post signs stating that they will negotiate a fee based on an individual’s ability to pay or would doing so still be construed as insurance fraud?
        The only signs I believe I have seen posted in a doctor’s office is “payment must be made at the time of the visit unless other arrangements have been made.” Is this type of sign the outer limits of what a doctor can advise patients without worrying about Insurance Fraud.

        • Paul said

          insurers generally have contract language that includes a ‘lessor of’ clause which means that if a provider decides to charge less than what the predefined agreeable rate is, then that lower rate is fine and insurer and individuals pay their (lower) share. So I don’t think it would be a problem for a doctor to post a sign that says all rates negotitiable or something to that affect. As long as they don’t try to get more money than is agreed upon beforhand via the contract everything should be fine.

          Price transparency is (would be) great but most healthcare money eventually is spent on things that neither the patient nor the doctor *fully* knew were going to happen in advance, so its only of value for routine stuff, prevention, etc.

    • Paul said

      that’s all very nice, but if doctors received less money from their cash paying customers then all other customers would need to be charged more…

      and besides – I realize that cash is quick and painless and there is some value in that, but you must also admit that there is value for a doctor in being part of a network. Said another way, a doctor has to spend money to advertise to get cash paying customers, but only has to sign a contract with an insurer to get a large pool of potential customers that will be steered to that doctor. Obviously I’m simplyfying here, but still…

      There are also ways to pay less than the artificial ‘full charges’ from doctors…. you can ask for a lower price, or you can seek group purchasing discounts in the marketplace (think costco). Or if the states weren’t so over-zealous with their regulations you could buy a limited catastrophic policy on the cheap, getting you access to the network negotiated discounts.

      • Loretta Hanson said

        Leave our Health care alone. No one, especially government, can provide a decent healthcare system to everyone (including all the illegals, which is what will happen) without huge cost increases and/or
        huge tax increases. All you are doing is ruining the employer based plans we have now.
        STOP — DON’T MESS WITH OUR EMPLOYER BASED INSURANCE

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