News in brief - June 14, 2004

Senators urge CMS to review assumptions on physician payment - Bush promotes community health center funding - Sen. Byrd signs onto association health plan bill - Tenn. Legislature passes teaching hospital immunity bill

Senators urge CMS to review assumptions on physician payment

Sens. Charles Grassley (R, Iowa) and Max Baucus (D, Mont.) have urged the Bush administration to consider the ripple effect of the Medicare reform bill in calculating the physician payment update.

The new prescription drug benefit will significantly increase physician services as beneficiaries who previously could not afford medications now visit physicians to seek prescriptions, the senators said in a letter to the Centers for Medicare & Medicaid Services. In addition, the new preventive Medicare benefits, including cardiovascular screening, diabetes screening and an initial physical, are likely to lead to greater use of physician services, they said.

Under the Medicare physician payment formula, CMS must estimate the impact of new legislation on physician spending to set an annual spending target. If spending exceeds that target, pay in future years is reduced. Underestimating the impact of legislation makes it more likely that physician spending will exceed the target.

The letter said current projections indicate that physicians will not see a positive Medicare update until 2014, at which point payments would be almost 40% lower than in 2005.

"We must work together to repair the sustainable growth rate payment formula," the senators said.

Bush promotes community health center funding

President Bush touted his efforts to increase funding for the expansion of community health centers at a recent event at a health center in Ohio. The president's proposed 2005 budget request includes $1.8 billion for CHCs, which represents a 57% increase from 2001, according to the White House. Bush has said he would like his administration to establish 1,200 new grants to expand or build CHCs with the goal of serving an additional 6.1 million patients by 2006.

"This is a wise expenditure of taxpayers' money," Bush said. "It relieves pressure off of the emergency rooms, and it provides a safety net." However, some CHC advocates have questioned Bush's commitment to the centers because of proposed cuts to training grants for the physicians and others who staff them.

Sen. Byrd signs onto association health plan bill

Legislation to create national association health plans by moving their regulation from the states to the federal government has made little headway in the Senate in the past, but that could be changing.

The measure has gained bipartisan status in the Senate with the sponsorship of senior lawmaker Sen. Robert Byrd (D, W.Va.). A companion bill has already passed the House.

Proponents of the legislation have argued that AHPs would enable small business to effectively band together to purchase health plans for their workers. Opponents say the AHPs will remove important state controls that protect plan beneficiaries.

"This proposal is one step that can be taken to open health care coverage to more Americans. It is not the be-all, end-all, solution, but this legislation would help to move us toward a goal that we all share, namely, to have as few uninsured Americans as possible," Byrd said.

Tenn. Legislature passes teaching hospital immunity bill

Teaching hospitals in Tennessee would be immune from liability in situations in which they have no control over residents if Gov. Phil Bredesen signs a bill that the Legislature approved in May. The bill would not give teaching hospitals immunity when they are the cause of the negligence.

The bill is in response to a Tennessee Supreme Court ruling that found that teaching hospitals and teaching physicians could be held vicariously liable for resident physicians.

The Tennessee Medical Assn. and Tennessee Hospital Assn. said the court ruling could jeopardize resident programs because hospitals wouldn't want to open themselves up to risk. The bill, the associations said, would ensure that teaching programs remain in the state.

At press time, the bill was awaiting the governor's signature. It would go into effect July 1.