Healthcare industry groups are less concerned about the lineup of the newly appointed federal deficit-reduction “super committee” than they are about that team's game plan for Nov. 23.
Preparing a game plan
Healthcare groups' message to deficit panel: Spare us
In the middle of Washington's August recess, healthcare associations are preparing to educate members of Congress—and especially the six senators and six representatives appointed to the high-profile debt panel—when they return after Labor Day about how cuts to their respective segments would have disastrous consequences on patients, physicians, hospitals and the economy at the local and federal levels.
The majority and minority leaders in the House and Senate chose the 12 committee members: Sens. Max Baucus (D-Mont.), John Kerry (D-Mass.), Jon Kyl (R-Ariz.), Patty Murray (D-Wash.), Rob Portman (R-Ohio) and Pat Toomey (R-Pa.), and Reps. Xavier Becerra (D-Calif.), Dave Camp (R-Mich.), James Clyburn (D-S.C.), Jeb Hensarling (R-Texas), Fred Upton (R-Mich.) and Chris Van Hollen (D-Md.).
The Budget Control Act—the legislation that defused the debt-ceiling stalemate this month—tasked the super committee, as it's known, with submitting a proposal by Thanksgiving that identifies at least $1.5 trillion in deficit reductions through cuts or tax increases (See related story, Feeling pinched). If Congress fails to approve the proposal, automatic cuts of $1.2 trillion—or the trigger—split between domestic and defense spending will take effect. Medicare cuts, limited to providers, would be capped at 2%.
“I think all of this is so fluid and so difficult to predict what will happen,” said Dr. Atul Grover, the chief advocacy officer for the Association of American Medical Colleges. “I'm not confident at all GME (graduate medical education) will be spared,” he added. “I think if they make smart policy decisions, GME will be spared.”
Grover said Kerry has previously taken a stand opposing cuts to teaching hospitals, and he described Baucus as a moderate who likes to reach across the political aisle.
More specifically, Grover highlighted how academic teaching hospitals also serve as economic engines in the states represented by super-committee members. For instance, Toomey represents Pennsylvania—home to UPMC, West Penn Allegheny Health System, and a new medical school in Scranton. Portman, a former director of the Office of Management and Budget, represents Ohio, home to the Cleveland Clinic and the Ohio State University Health System. And then there is Van Hollen, the ranking member on the House Budget Committee, whose district includes employers Johns Hopkins Hospital and federal agencies such as the National Institutes of Health and the Food and Drug Administration.
Grover said his group has spent the past months helping members of Congress understand that cutting GME does not just cut the number of providers today, but will compromise the number of providers who are produced in the future. Meanwhile, there is also the threat of cutting indirect medical education, referred to commonly as IME. This funding, Grover said, could affect the level of trauma services in a teaching hospital, which includes making sure specialists and nurses are available around the clock. “That is an expensive proposition,” he said. “If you're not getting support for those positions, you're going to see trauma centers close in the short term.”
Other healthcare providers offered similar fears about programs that affect their work. The National Association of Public Hospitals and Health Systems, for example, opposes across-the-board cuts to Medicaid FMAP rates or blending rates to a common lower rate, said Beth Feldpush, vice president of advocacy and policy at NAPH. The group also opposes cutting or eliminating provider taxes under the Medicaid program and supports a plan to expand patient access to lower-cost drugs in the inpatient setting. That approach, Feldpush said, is part of legislation introduced by Rep. Cathy McMorris Rodgers (R-Wash.), and has been scored by the nonpartisan Congressional Budget Office to save the government money.
Groups such as the American Hospital Association, America's Health Insurance Plans and the Pharmaceutical Research and Manufacturers of America were reluctant to comment specifically on the selections or qualifications of the various members of the super committee, opting instead for statements supporting their respective positions on the process.
A spokesman for PhRMA said the association will remain focused on educating federal lawmakers about the Medicare Part D program, which the association said in a statement saves Medicare about $12 billion a year.
AHIP is likewise seeking to protect Part D, which is administered by private insurers, as well as Medicare Advantage and supplemental coverage, and Medicaid managed care.
Not surprisingly, the AHA said that regardless of the super committee's composition, “We oppose any further reductions in payment for hospital services under Medicare,” according to a statement from Matt Fenwick, an AHA spokesman. “Americans depend on the care Medicare provides and cuts would jeopardize care for seniors,” the statement continued.
Meanwhile, the Medical Group Management Association is firm in its stance that any fiscally responsible proposal from the panel must include a repeal of the contentious sustainable growth-rate formula for physicians.
“I think they'll consider it because you have members on the committee who are clearly knowledgeable about it,” said Anders Gilberg, senior vice president at the MGMA. “The challenge is to get them to include it in the final recommendation to Congress,” he added. “I'm almost certain it will be discussed.”
Gilberg said the MGMA is “clearly pleased” that the super committee includes members who chair influential committees with jurisdiction over healthcare programs—namely Baucus, who serves as chairman of the Senate Finance Committee; Camp, chairman of the House Ways and Means Committee; and Upton, head of the House Energy and Commerce Committee. In the spring, Camp and Upton indicated that the SGR issue was a priority for their committees this year.
“Sen. Kyl has been very involved in the SGR as well,” Gilberg said. “The reason we're focused on those is that one of our principal strategies to the committee is it must address the SGR,” he said, adding that the MGMA is providing a series of “talking points” for their members to share with lawmakers that stresses any recommendation on Nov. 23 should include a repeal of the SGR. And he said there is precedent for this, given that the “Moment of Truth” plan from the National Fiscal Commission on Fiscal Responsibility and Reform—chaired by former Clinton administration Chief of Staff Erskine Bowles and former Sen. Alan Simpson (R-Wyo.)—called for $4 trillion in cuts and included a repeal of the physician payment formula.
“If the panel doesn't act, there are provisions that call for a 2% across-the-board (cut) to all part A-through-D Medicare providers every year for 10 years,” Gilberg said. “That's a concern, but sort of pales in comparison to the SGR.”
As healthcare providers fret over what the panel will decide, policy wonks and consultants added some outside perspective on the selection of the super committee members and their task ahead.
“Murray and Van Hollen have heavy political hats, which I find a little surprising,” said Michael Franc, vice president of government studies at the Heritage Foundation, a conservative think tank in Washington. “My naïve impression is the negotiation among the principals was establishing parameters,” he said, referring to the contentious political battle that led to the committee's creation. When it comes time for the panel to draft the details, he said, “you want legislative mechanics on the scene—guys like Baucus, Camp, Upton.”
Franc also downplayed the ultimate goal of the super committee. As he explained, the federal baseline for the next 10 years is $47 trillion, and the panel is tasked with trimming only 3% from that figure.
“This is a very modest undertaking,” Franc said. “If you look at this as a business enterprise, if the board of directors created a management team to shave 3 cents off every dollar for the next decade, I don't think it would make the front of the employee newsletter.”
And if members of the panel manage to agree on a plan, the question then becomes: Will it pass muster in the full Congress at Christmastime?
“I'd say right now, and given the acrimony in Congress and difficulty it's having around making decisions, I'm leaning toward the trigger,” said Paul Keckley, executive director for the Deloitte Center for Health Solutions. “Not that the committee won't do a good job,” he added. “It's just that, of late, it appears that a congressional thumbs-up vote is tough.”
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