White House wants to tie Medicare fee fix to overhaul of information technology

By Jeffrey Young

The Bush administration has issued an eleventh-hour challenge to the physician lobby’s efforts to prevent a pending 10 percent cut in their Medicare fees, in the form of call for a mandate that doctors use new information technology standards.

The administration wants to tie any legislation blocking the cut, scheduled to take effect on Jan. 1, to physicians’ adoptions of health IT in their offices. The American Medical Association (AMA) and other medical societies have long stated their support for technologies such as electronic health records and electronic prescriptions. But they oppose federal mandates and maintain that physicians need financial assistance to acquire new computer systems.

The physician community, which has had to wage a lobbying battle every year to prevent fee cuts caused by a flawed payment formula, has resisted past efforts by lawmakers and the administration to attach any strings to its payment fixes. Under the Republican-controlled Congress, medical societies stiffly withstood efforts to link their payment rates to measurements of quality care, arguing such a transition would be premature.

In a letter sent to Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) Tuesday, Health and Human Services (HHS) Secretary Mike Leavitt laid out the administration’s demand that any Medicare legislation this year include a requirement that doctors adopt health IT.

The bill should “Condition receipt of a portion of any fee adjustment to adoption of certified electronic health information technology. Physicians who do not adopt appropriate, available technology should receive a lower payment than those who do,� Leavitt wrote.

The administration, and Leavitt in particular, has made wider adoption of health IT a major priority and a cornerstone of its efforts to promote better quality medical care and a reduction in medical errors.

A spokeswoman for Baucus declined to comment. A call to a spokeswoman for Grassley (R-Iowa) was not returned by press time.

The timing of Leavitt’s statement is significant, as Baucus, Grassley and their Finance Committee colleagues have struggled to come to terms on the outline of the Medicare bill. Baucus has stated his intention to mark up the legislation this week, but no language had been drafted as of Tuesday afternoon.

Leavitt did not specify which standards or technologies should constitute that requirement. HHS spokesman Kevin Schweers indicated that Leavitt would not offer specifics at this time.

“The secretary was just kind of setting the high-level principles the administration believes Congress should consider as lawmakers assemble the Medicare bill,� said Schweers.

Although Schweers would not provide details about Leavitt’s goals, he did indicate that America’s Health Information Community (AHIC), a quasi-public institution created by the administration, has been establishing health IT standards under HHS supervision since 2005. AHIC already has set standards in four areas, and Leavitt expects about 30 more standards to be approved by the end of the year, Schweers said.

Lawmakers such as Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Edward Kennedy (D-Mass.), HELP Committee ranking member Mike Enzi (R-Wyo.) and Sen. Hillary Rodham Clinton (D-N.Y.) have worked over the last several years to enact legislation laying out health IT standards, and possibly setting aside funding to help doctors pay for new technologies. But no bill has reached President Bush’s desk.

This year — driven in part by an aggressive lobbying campaign spearheaded by the Pharmaceutical Care Management Association (PCMA) — electronic prescriptions have garnered the most attention. PCMA and allies such as Sen. John Kerry (D-Mass.) are pushing for a requirement that doctors use e-prescriptions for all their Medicare patients. Kerry, who sits on the Finance Committee, has advocated including that mandate in this year’s Medicare bill.

Kerry, Sen. Debbie Stabenow (D-Mich.), Sen. John Ensign (R-Nev.) and former House Speaker Newt Gingrich (R-Ga.) are schedule to appear Wednesday at a press conference promoting e-prescribing in Medicare.

In his letter, Leavitt also made clear that cuts in payments to private insurance companies under Medicare Advantage would be enough to trigger a presidential veto of the bill.

The president’s advisers would recommend a veto of Medicare legislation that “Results in the loss of access to health care services, benefits, or choices in the Medicare Advantage program, through which nearly 20 percent of seniors and Medicare beneficiaries with disabilities currently receive their benefits,� Leavitt wrote.

Democratic lawmakers have sought to reduce these payments, which on average are 12 percent higher per beneficiary than under traditional Medicare. But they have met with staunch opposition from the White House and most congressional Republicans.

The House earlier this year passed a bill that would have carved $50 billion from Medicare Advantage by phasing out the higher payments entirely. The Finance Committee is expected, at most, to put forth legislation making more targeted spending reductions in this area, but Medicare Advantage is one of the major sticking points in the panel’s negotiations.

Underscoring the political stakes of the Medicare Advantage issue, competing organizations on both sides sought to illustrate public support for their positions.

Alongside Kennedy, the National Committee to Preserve Social Security and Medicare and the Alliance for Retired Americans unveiled a petition on Tuesday carrying the signatures of 48,000 Medicare beneficiaries favoring reduced spending on Medicare Advantage.

The health insurance industry, however, countered the same day with a show of grassroots force of its own. According to America’s Health Insurance Plans (AHIP), more than 100,000 Medicare Advantage enrollees have written lawmakers to oppose cuts to the program. AHIP has mounted an organizing campaign all year against the cuts and has run broadcast and print advertising campaigns.

AHIP has other powerful foes in this debate, however. The AARP and the AMA joined forces earlier this year on a lobbying and grassroots effort to promote Medicare Advantage cuts. The AARP has ramped up its efforts in Washington and around the country in recent weeks to urge Congress to include such cuts in the Medicare package this year.
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