House committee approves reform bill, revamps public plan option

The House Energy and Commerce Committee late Friday approved health care reform legislation, H.R. 3200, that would expand coverage to 94% of the  uninsured, and, in a concession to fiscally conservative “Blue Dog” Democrats, allow the secretary of the Department of Health and Human Services to negotiate public plan payments to providers based on rates between current aggregate Medicare rates and aggregate rates paid by private insurers in the legislation’s health insurance exchange. Of concern to the AHA is a provision that would cut hospital payments by $19 billion over 10 years because of Medicare patient readmissions.

Among other provisions, the bill would ban physician self-referral to hospitals in which they have an ownership interest, with limited exceptions for existing facilities that meet strict investment and disclosure rules. During committee action last week, Rep. Joe Barton (R-TX), the panel’s ranking member, offered and withdrew an amendment to strip the physician self-referral language from the bill. Had the vote on the amendment occurred, the proposal would have failed. The legislation also exempts 85% of small businesses from being required to contribute to health insurance for their workers; and allows states to set up insurance cooperatives alongside a national government health insurance plan. The bill provides for federal subsidies to help individuals and families earning up to 400% of the federal poverty level afford policies that would otherwise be out of their reach. 

 During last week’s markup, the committee voted 28-18 to reject another Barton amendment, introduced with Rep. Bart Stupak (D-MI), to create an independent price transparency commission within HHS to collect quality and price information from hospitals and other providers, including privately negotiated rates. The amendment was faulted for the broad scope of the commission’s powers, similar to those provided to the Securities and Exchange Commission, and the nature of the information requested. Also worth noting is that the committee’s bill does not call for creation of an Independent Medicare Advisory Council or  Medicare Payment Advisory Commission with enhanced authority to set Medicare reimbursement rates for providers – a rate-setting mechanism strongly opposed by the AHA. The Energy and Commerce Committee was the third of three House panels to act on health care reform legislation. House Democratic leaders next plan to meld the bills together and report the package as a single bill for floor consideration in September.

(American Hospital Association, August 5, 2009)