BearNet News Spring 2010
Healthcare Reform Legislation Becomes Law
On Tuesday, March 23, 2010, President Obama signed into law HR 3590, the $940 billion health care reform legislation that expands insurance coverage to 32 million uninsured Americans. This is the most sweeping federal legislation since Medicare was created in 1965.
The final bill resulted from a series of House and Senate bills and attempted fixes. The House of Representatives passed the final legislation on Sunday, March 21, by a vote of 219-212. That bill was the Senate bill that had passed earlier in December.
Immediately after the President signed the bill into law, the Senate turned its attention to passing the House's 153-page reconciliation bill, HR 4872, the "Health Care and Education Affordability Reconciliation Act of 2010." HR 4872 contains the tax and outlay provisions of HR 3590, the health reform bill, and was drafted to include House "fixes" to the Senate bill that passed on Christmas Eve.
Senate Republicans attempted several parliamentary challenges in order to thwart passage of the bill, including forcing 41 votes to strip or alter provisions and identifying 20 words that violated procedural rules. Their efforts were unsuccessful however, as the Democrats won all 41 votes. Procedural rule violations required that the bill return to the House to be approved a second time. House Democrats again prevailed on a 220 to 207 vote. By March 25, 2010, the reconciliation bill passed the Senate 56 to 43, and was sent to President Obama for his signature.
Throughout the health care debate, The BearNet Team at Children’s National emailed a weekly “Health Reform Update” to BearNet Advocates. Our goal was to summarize the week’s news into a short, simplified format, and to highlight as often as possible the impact on children and children’s hospitals. From last summer’s “Speak Now for Kids” campaign and the weekly Health Reform Update, to our quarterly BearNet News publication, we hope the information and advocacy tools have been helpful resources for our advocates throughout the debate. In the coming weeks, more information will be added to the Children’s National Government Affairs Resource Center.
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Healthcare Reform Includes Changes Impacting Kids and Kids’ Health Care
The healthcare reform law includes many provisions that directly impact children’s health care and their healthcare providers. Included among them are that the uninsured would receive more generous subsidies to buy coverage and that federal funding of Medicaid would increase.
It also accelerates the enactment of new insurance restrictions that will benefit people with chronic medical conditions. In six months, uninsured adults younger than 26 may be added to their parents' health plans.
Other areas that impact children and children’s providers include access to care provisions and Disproportionate Share Hospital (DSH) payments.
Access to Care
The new law establishes the first federal payment standard for Medicaid and requires states to pay primary care providers, as defined by evaluation and management services, at Medicare levels beginning in 2013 and 2014. States will receive 100 percent federal matching funds for the difference in payment above the state’s rates for those services that were in place on July 1, 2009. An additional $433 billion will be provided to Medicaid over the next 10 years to cover expanded Medicaid eligibility guidelines. For more detail, see Issue Focus, below.
Disproportionate Share Hospital (DSH) Payments
Administered by Medicaid, DSH funding is a supplemental payment made to safety net hospitals that serve a disproportionate share of Medicaid and uninsured patients. Children’s National is one of these disproportionate share hospitals. DSH payments partially close the shortfall between what Medicaid pays and what it actually costs to provide services. The new law would cut $18 billion in federal Medicaid DSH funding to states through 2020. The cuts take effect in 2014, but the bulk of the cuts will fall in the later years:
- FY 2014: $500 million
- FY 2015: $600 million
- FY 2016: $600 million
- FY 2017: $1.8 billion
- FY 2018: $5 billion
- FY 2019: $5.6 billion
- FY 2020: $4 billion
The Secretary of Health and Human Services is required to impose the largest DSH cuts on the states that have the lowest percentage of uninsured individuals and that do not target their DSH funds to hospitals with high volumes of Medicaid inpatients and uncompensated care.
Other Areas Impacting Children’s Health Providers
Included in health reform is language to reauthorize the federal Emergency Medical Services for Children (EMSC) program. The federal EMSC program is designed to ensure that all children and adolescents, no matter where they live, attend school, or travel, receive appropriate care in a health emergency. Children’s National administers the EMSC National Resource Center, which supports the federal EMSC program and provides technical assistance to EMSC grantees throughout the country.
Other significant provisions of the new law include:
- Insurance reforms that prevent insurers from denying coverage to children with pre-existing conditions;
- Creation of insurance exchanges that require pediatric-specific healthcare benefits;
- Extension of the Children's Health Insurance Program;
- Provision for a 23 percent increase in federal funding for the Children’s Health Insurance Program, beginning in 2015;
- Creation of a $30 million loan forgiveness program for physicians who choose to enter a pediatric specialty; and
- Authorization of pediatric accountable care organization demonstrations that allow providers, including children's hospitals, to receive incentive payments under a pilot program.
For more information on health reform, including summaries of HR 3590 and HR 4872, visit the Kaiser Family Foundation's "Health Reform Gateway."
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Issue Focus: Improving Access to Care
Through the Reconciliation Act of 2010, Congress has sought to ensure coverage and to improve children’s access to critical pediatric services.
For the first time, a federal payment standard for Medicaid has been linked to Medicare. The new bill increases Medicaid reimbursement to primary care physicians (including pediatricians) to Medicare levels for evaluation and management services. The two-year increase in reimbursement is paid for, in full, with federal Medicaid matching funds.
“In our current health care system, some children have not been able to access needed pediatric care because so many providers have stopped seeing Medicaid patients,” said Lawrence McAndrews, president and CEO of the National Association of Children’s Hospitals. “The Reconciliation Act of 2010 represents a positive first step toward addressing the underlying inequity between Medicaid and Medicare reimbursement that has resulted in access-to-care problems for children as well as adults.”
The disparity in reimbursement between Medicaid and Medicare has long made coverage and access to health care an ongoing challenge for millions of children. While health insurance coverage is a critical component of access, it is not a guarantee that children will receive the right care at the right time and in the right setting. Low Medicaid reimbursement has historically forced pediatric providers to limit the number of Medicaid beneficiaries they will see. When families are unable to receive timely preventive care in a physician office setting, they often allow children’s illnesses to get worse, and then turn to the emergency department, which is a significantly more expensive healthcare setting. For this reason, inadequate Medicaid reimbursement rates, especially for primary care have significantly impacted children's access to care.
Children’s hospitals and pediatric providers have long urged Congress to address Medicaid reimbursement rates in comprehensive health reform and are pleased to see this positive change included in the healthcare reform legislation. While this worthwhile investment will likely reduce costs associated with long-term health problems, its most important impact will be to ensure that all children have access to the right care at the right time.
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Cost Analysis: Impact and Implications of Healthcare Reform
The Congressional Budget Office (CBO) estimated on March 18 that the compromise legislation would cost $940 billion over the next decade and expand insurance coverage to 32 million more Americans by 2016. This estimate is significantly greater than the Senate bill's $875 billion price tag, but less than the $1.05 trillion measure passed by the House in November. The CBO estimates that this bill would reduce the federal deficit by $138 billion over the next 10 years and more than $1 trillion the decade thereafter, eventually slicing $1.2 trillion from the nation's budget gap.
The CBO estimates that the legislation would make insurance available to approximately 95 percent of non-elderly citizens in two ways: by a dramatic expansion of Medicaid and by offering tax credits to approximately 24 million Americans who would otherwise have difficulty affording coverage.
While the cost of expanding coverage is projected to exceed $200 billion per year by 2019, it is intended to be financed through approximately $500 billion in savings to Medicare and other federal health programs, as well through as new taxes. These taxes include taxes on the health benefits of some individuals who receive coverage through their employers. They also include increases to Medicare payroll taxes for wealthy families – those earning more than $250,000 per year. The average annual tax bill for families earning more than $1 million per year would increase by $46,000 per year, according to the Tax Policy Center, a Washington research group.
The benefits of the new legislation would be seen most clearly in households making less than four times the poverty level, or $88,200 for a family of four. Families in this group without insurance would become eligible to receive subsidies or join Medicaid. The result would be an increase to the Medicaid rolls by an estimated 16 million people.
It is projected that the new healthcare reform legislation will reverse the decades-long trend in the growth of Americans without health insurance coverage. In the late 1970s, approximately 90 percent of the eligible population had health insurance and today, only about 85 percent of Americans have health insurance. In 2019, as a result of the new legislation, it is projected that coverage rates will go up to 95 percent of the eligible population.
In addition to expanding access to Medicaid, the new legislation protects working Americans from losing their insurance in the event they lose a job or get sick. By disallowing exclusions related to previous conditions, the new legislation ensures that individuals and families can get insurance when they change jobs or if they purchase individual policies. Even affluent families who currently face similar hardships related to coverage for chronic conditions are now protected under the new legislation that protects everyone from restrictions against pre-existing conditions.
To learn more about what healthcare reform means for you, visit the Washington Post Calculator for healthcare reform legislation.
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Sustaining the Pediatric Workforce: Graduate Medical Education Advocacy
For 10 years children’s hospitals from across the country, including Children’s National, have advocated for federal graduate medical education (GME) funding comparable to the level Medicare pays adult hospitals. Last year, Congress appropriated $317.5 million for the Children’s Hospitals Graduate Medical Education (CHGME) program – the highest funding level to date – but still below the $330 million that would represent parity with Medicare. Several advocacy efforts are underway this year to build upon last year’s historic funding level and educate Members of Congress about the program’s important role in building and sustaining the future pediatric health care workforce.
President Obama recognized the importance of the CHGME program when he requested $317.5 million for the program in his FY 2011 budget, the same amount that was appropriated for the program in FY 2010. Although the President’s annual budget request is only a blueprint for the administration’s spending priorities (all federal spending originates in the Congress), the $317.5 million included in the budget is a solid starting point for FY 2011 advocacy efforts.
CHGME advocacy was in full swing in February and March as champions in the House and Senate submitted letters – known as “Dear Colleague” letters – to their respective appropriations committees requesting $330 million in FY 2011.
In the House of Representatives, Representatives Mary Bono Mack (R-CA) and Anna Eshoo (D-CA) secured the signatures of nearly 90 Members of the House on their Dear Colleague letter, including local Representatives Chris Van Hollen (D-MD), Eleanor Holmes Norton (D-DC), and Bobby Scott (D-VA).
In the Senate, Senators Kit Bond (R-MO) and Sherrod Brown (D-OH) secured the signatures of 40 Senators, including Senator Ben Cardin (D-MD) and Senator Mark Warner (D-VA).
Thanks to CHGME, children’s hospitals like Children’s National have been able to sustain and improve our teaching programs. The funding has helped expand pediatric training programs and reverse the decline in pediatric residencies that began in the 1990s. In fact, CHGME recipient hospitals have accounted for more than 65 percent of the growth in pediatric specialist training. Children’s National is proud to be among the hospitals that train the next generation of pediatric physicians.
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Children’s Advocates for Muscular Dystrophy Research
On March 10, Children’s National joined the Foundation to Eradicate Duchenne and Diageo, a multinational beverage company, to raise funds for muscular dystrophy research. More than 30 Members of Congress attended the fundraiser, including Senators Scott Brown (R-MA), Johnny Isakson (R-GA), and Roger Wicker (R-MS), as well as Representatives John Barrow (D-GA) and Shelley Berkley (D-NV). The event raised awareness of the prevalence of muscular dystrophy, which affects 1 in every 3,000 male births worldwide. Thanks to a generous contribution by Diageo, the event raised more than $50,000 for research.
On March 30, Eric Hoffman, PhD, of Children’s National’s Center for Genetic Medicine gave a presentation to United States Senators and their staff in the Dirksen Senate Office Building about recent advancements in muscular dystrophy research. Dr. Hoffman underscored the critical role that federal investments in muscular dystrophy research have made in advancing his search for a cure. Attending the briefing were staff from the offices of U.S. Senators Thad Cochran (R-MS) and Roger Wicker. Senators Cochran and Wicker are strong champions for Children’s National and muscular dystrophy research.
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Senate Passes Resolution Designating September “National Childhood Obesity Awareness Month”
In late March, the U.S. Senate passed legislation endorsed by Children’s National and introduced earlier this year by U.S. Senators Kirsten Gillibrand (D-NY) and George V. Voinovich (R-OH) to designate the month of September as National Childhood Obesity Awareness Month – bringing national attention to a growing epidemic among youth in the United States. In addition, the resolution requests that the president issue a proclamation calling on the federal government, states, tribes, and localities to observe this month with programs that promote healthy eating and physical activity among all ages.
The companion resolution, HR 996 introduced by Representative Marcia Fudge (D-OH), is pending in the House of Representatives. More than 100 Members of Congress have co-sponsored the legislation, including Representatives Eleanor Holmes Norton (D-DC), Elijah Cummings (D-MD), Jim Moran (D-VA) and John Sarbanes (D-MD).
In 2008, Children’s National established an Obesity Institute to facilitate institutional collaboration across research, clinical care, prevention, advocacy and clinical education and training focused on childhood obesity. The Obesity Institute brings together the hospital’s talent, ideas and creative energy in order to develop an innovative and strategic approach to addressing the childhood obesity crisis here in the nation’s capital and the country as a whole.
Since the mid-1970s, obesity rates in the United States have increased dramatically for both children and adults, raising concerns about the implications on the health of Americans. The Centers for Disease Control and Prevention estimate annual expenditures related to overweight individuals and obesity to be more than $264 billion – exceeding the cost of tobacco-related illnesses.
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