With comprehensive healthcare reform all but dead for next year, the debate is likely to move back to traditional venues such as the budget agreement, HCFA and the states, provider groups say.
The most significant shift in the next 18 months may be a more activist HCFA.
Since the Clinton administration took office, HCFA has issued only required regulations such as the Medicare payment updates for hospitals and physicians. But that may change next year.
"I think in the absence of healthcare reform, HCFA will be much more active," said Robert Doherty, vice president of Governmental Affairs and Public Policy at the American Society of Internal Medicine. "This will be one way that the (Clinton) administration will be able to move forward some of its agenda."
For example, next year, HCFA will begin its five-year review of the resource-based relative value scale, which is the physician reimbursement system. While HCFA officials have said they will not be opening up the entire fee schedule, providers say even a modest revamping of the system will create significant winners and losers among physicians.
With powerful senators, including Daniel Patrick Moynihan (D-N.Y.), vehemently opposed to any work-force regulation, primary-care groups say HCFA's revamping of the RBRVS is probably the best hope to make inroads into the shortage of primary-care physicians.
Hospital payments also will be under review by HCFA, which is expected to once again review severity-adjusting of DRGs. HCFA officials also may attempt to tackle the issue of "DRG creep," or the gradual inflation of the value of DRGs over the years, which they contend is resulting in higher-than-necessary Medicare payments for services.
Providers are concerned HCFA may be used as a backdoor means to control Medicare spending by the Clinton administration. For example, next year, HCFA may issue the final regulations on detailing what home medical equipment, supplies, and other services and devices it will cover under Medicare.
"Under the guise of `coverage decisions,' HCFA will impose new criteria that are hard to meet, and the result will be HCFA saves money by covering less," said Frederick Graefe, a healthcare lawyer with Baker & Hostetler in Washington.
William Cox, vice president of government relations for the Catholic Health Association, predicted HCFA also will move to protect the system from providers skimming off the least-risk Medicare and Medicaid patients, particularly in managed-care settings.
"They are not going to stand by and allow market forces alone to dictate how organized systems of care market to Medicare and Medicaid patients," Mr. Cox said.
HCFA will not be the only vehicle for those attempting healthcare reform next year, providers say.
In the past, the budget agreement has carried many legislative agenda items. Because of the increasingly partisan atmosphere on Capitol Hill, the budget agreement may be the only piece of legislation that passes in 1995, making it a target for anyone trying to implement reform measures.
"The administration is going to try to meld its own reform plan into the budget, liberals in the Congress (are) going to try to change it and add their own plans and provisions, and conservatives are going to try to have all the healthcare provisions stripped out completely," said one lobbyist, who asked not to be identified. "It is going to be a great battle."
Providers worry that such an agreement could contain hidden cost-cutting measures. For example, in the 1993 budget agreement, Congress passed a provision that ended separate Medicare payments for interpreting electrocardiograms.
"In a big budget package there are prospects for all kinds of mischief being done," said Mr. Doherty.
With little hope of any comprehensive healthcare reform at the federal level, states are also going to be moving ahead next year. According to HCFA Administrator Bruce Vladeck, nearly half the states are currently seeking federal waivers that would allow them to implement their own reforms.
The major obstacle is the Employee Retirement Income Security Act, known as ERISA, which bars states from regulating employee benefits. Since last year, states have been calling for increased flexibility from ERISA. Congress has been reluctant to grant more flexibility, largely because members have been unwilling to fight big business, which opposes changes to ERISA.
Mr. Vladeck said last week that while there was no official Clinton administration position on ERISA yet, he favored either "totally repealing ERISA as it applies to health insurance" or "substantially reducing the limitations on states.
"The issue of ERISA waivers is going to be quite central to healthcare reform in the next year and in the future," Mr. Vladeck said.