Efforts to cut federal budget deficit could be good, bad for physicians

April 1, 2011

With Republicans in control of the House of Representatives, dermatologists and other physicians may be in for some good - and some bad - news as the drive to slash the federal deficit heats up in Washington.

Key Points

First the good news ... on two fronts. The long-fought effort to achieve at least some degree of medical malpractice reform finally may have a chance of succeeding, as two important bills have been introduced with strong support among House Republicans who dominate that chamber, offering supporters hope of at least partial success over the next two years.

In addition, the Independent Payment Advisory Board (IPAB), established by the Affordable Care Act (the new healthcare law), could be cancelled before it ever takes effect in 2015 - if House Republicans have their way. The House approved an amendment by Rep. Nan Hayworth (R-N.Y.), an ophthalmologist, to kill the IPAB as part of its sweeping legislation to slash $60.9 billion from the current FY 2011 budget.

Reality check

Now the bad news. Those same House Republicans are working to repeal several provisions of last year's stimulus law. One is intended to recoup unexpended funding designed to help physicians and hospitals acquire equipment and software for an electronic health records (EHR) system. Doctors who have made plans to purchase that technology, expecting to receive the incentive payments, could find themselves without the financial support they had expected.

The effort is part of the ongoing budget debate, and while it has the support of most Republicans, chances for enactment appear to be slim, since Democrats control the Senate and President Obama can exercise his veto. The president repeatedly has emphasized the importance of the EHR program to his overall goal of improving healthcare.

"This would really hurt small practices who have been counting on this money," said one veteran healthcare lobbyist. "Furthermore, it doesn't include the penalties that are still in the law for healthcare providers that fail to comply by 2015. We are letting everyone on Capitol Hill know why this would be a very bad idea. It could cripple or destroy small practices."

While the GOP initiative in the House was specifically focused on pulling back unexpended stimulus funds, it did not appear to affect the overall Health Information Technology for Economic and Critical Health (HITECH) Act, which authorized the EHR program.

As of Feb. 23, more than 21,000 providers had signed up for the EHR program, and more than 45,000 providers requested information or registration assistance from the agency's 62 Regional Extension Centers. CMS said survey results indicate that four-fifths of the nation's hospitals and 41 percent of office-based physicians intend to sign up for the payments.

Those payments could reach $44,000 over five years for eligible professionals under the Medicare EHR incentive program, with even more money possible for providers located in health professional shortage areas. To get the maximum amount possible, providers must start participating by 2012. The Medicaid EHR program provides up to $63,750 over six years for eligible professionals.

Malpractice update

On the medical malpractice front, Rep. Phil Gingrey, M.D. (R-Ga.) has reintroduced the Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act, which includes a number of long-sought provisions designed to reduce malpractice insurance costs.

The bill, which has been introduced in previous Congresses but has not been successful, may have a better chance for success this time around because of the strong GOP majority in the House. The measure's fate in the Senate, however, is less than certain.

A second initiative by Rep. Henry Cuellar (D-Texas) and Dr. Gingrey also focuses on healthcare liability. That bill, the "Provider Shield Act of 2011," would protect physicians from a possible cause of action inadvertently resulting from provisions of the Affordable Care Act.

Physician groups have complained that certain sections of the law could leave providers vulnerable to new lawsuit claims dealing with quality reporting, hospital readmissions, hospital-acquired conditions and other related provisions. The ACA requires the Government Accountability Office to determine whether any ACA provisions would result in a new cause of action or claim and report to Congress within two years.

Regarding the IPAB, Dr. Hayworth, speaking in the House, pointed out that the only option the board will have to control Medicare spending is to reduce payments to physicians and hospitals.

"If Members (of Congress) believe that the cuts proposed by IPAB won't work or are too draconian, it will taken an affirmative act by future Congresses to overturn its recommendations," she said. "This represents an abdication of responsibility by Congress whose members are expected to make these decisions, not unelected, unaccountable federal bureaucrats."

Bob Gatty, former congressional aide, covers Washington for businesses specializing in healthcare and related issues. Contact him at bob@gattyedits.com
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