Health Reform Bill Reading Project: Part 2, The Gory Details

by Luna Flesher

As I'm sure you know, I read the House version of the America's Affordable Health Choices Bill of 2009 over the weekend.  If you want the quick summary, and my opinion, please read Part 1.

As I read the bill, I made notes.  I basically summarized each part as I mentally processed it.  I did not leave anything out unless it was repetitive, technical (indexes, definitions, amendment legalese), or seemingly unimportant.

These are those notes, in the raw, with some minor spell checking and cleanup. In a way, this is a live-blogging event. I did intersperse a little bit of opinion, but not much.

The notes are roughly in the order in which they appear in the House AAHCA Bill, unless it made more sense to move it elsewhere (like where a later part of the bill was talking about something earlier).

If you happen to doubt my assessment of this bill, you can read the full thing yourself:


Defines a Qualified Health Benefits Plan. It is my understanding that being a QHBP allows you to be included on the Exchange (defined later) if and only if you meet the criteria below. I think an insurance company is still free to make whatever plans they want, but those plans won't qualify for the Exchange.

Sets limits on premium increases, that they have to match all other increases for people in the same risk pool.

Requirements that insurance renewals will always be available, and no one shall be canceled except through lack of payment or convincing evidence of actual fraud.

Limits and rules for charging variable rates by age, family status, gender.

Provisions to conduct a study on the the adequacy of the health insurance markets.

Provisions to ensure that a majority of insurance premiums actually go to giving care, with some wiggle room left for profit and competition. This is referred to as "medical loss ratios".

Sets up a health exchange. Insurance providers who want to be listed on the exchange have to meet a minimum number of requirements, including:

1. A minimum level of health care coverage
2. Setting no lifetime limits of coverage
3. Not denying anyone coverage, even if they have pre-existing conditions
4. No copays for prevention care or children's care.

Annual limits to cost sharing (copays, coinsurance, deductible, etc.)

Employers can use the health exchange as well.

If you don't want to be on the health exchange, you don't have to abide by these rules. Providers can also offer enhanced plans for additional premiums.

Setting up on an advisory committee with representatives for consumers, providers, employers, labor, health insurance, health care financing and delivery, experts in racial and ethnic issues, disability experts, government agencies, at least one practicing physician, and a children's health expert.

The committee will define standards and give updates, with deadlines. The committee must take public input. They will basically fill in the details of the above requirements on an updated basis.

Insurance providers must have a system for addressing grievances within a timely manner and with an appeals process.

Transparency requirements for insurance providers to expose plan documents, plan terms and conditions, claims payment policies and practices, data on disenrollment, data on enrollment, data on the number of claims denials, data on rating practices, information on cost-sharing and payments, etc. These must be presented in plain language.

Notice must be given of plan changes.

Claims must be paid in a timely manner.

A commissioner will be appointed to carry out the provisions of the bill, promote accountability, conduct audits, and remedy violations of the law.

Appointment of an Ombudsman for assisting with consumer complaints.

Whistleblower protection.

The bill does not supersede collective bargaining laws.

Create a standardized electronic administrative transactions. This means all insurance providers, where possible, will use standardized forms. Patients, where possible, would know at the time of service what their portion of the bill is. Where possible, paper forms will be eliminated. The insurance industry has two years to adopt a standard.

Personal data will be protected and have limited use.

A government assistance plan for participating employer plans to provide insurance to pre-medicaid eligible retirees.

If you are an individual who qualifies for enrollment under an Exchange plan, you may opt instead to enroll in Medicaid. This essentially applies to anyone without satisfactory employer-provided coverage.

Appoints an inspector general to keep tabs on the exchange.

Establishes a trust fund to operate the exchange. It is funded by taxing individuals who do not opt to cover themselves, employers who do not provide coverage, and insurance providers who do not meet coverage requirements.

If the state already has a good health insurance exchange, they can use theirs instead of the fed's.

There will be a public insurance option on the health exchange. It will provide basic coverage, and may offer premium coverage.

More stuff about appointed officials, reports, data collection.

Rates will be geographically adjusted. Rates will fully finance the cost of health benefits and admin costs. The Treasury will provide startup funds of $2 billion. This is to cover any claims before premiums are collected. These funds are to be repaid in 10 years.

Medical providers are to be paid at market value. There will be preferred (those that accept the rates) and non-preferred providers (those who charge more than the set rates). The government can exclude a provider that does not meet standards. (I saw nothing indicating a provider is required to provide care to public option individuals.)

The public plan is allowed to innovate new payment mechanisms, bundling of services, types of services, etc. With the goal of improving health outcomes, reducing health disparities, providing efficient and affordable care, address geographic variation, and prevent or manage chronic illness and promotes care that is integrated, patient-centered, quality, and efficient.

Affordability credits. Those participating in the exchange, they can be eligible for credits to go towards the premiums and cost-sharing (copayments, deductibles, etc).

The commissioner will determine a standard by which people will be eligible.

The state Medicaid agencies may be utilized for taking applications. The commissioner will compensate Medicaid for costs.

If the individual is eligible for Medicaid, they get that instead of credits.

If you get credits you can only use them on basic plans, not premium plans. There may be exceptions to this rule, based on a standard that will be established. The insured then has to pay the difference.

To qualify for credits, you cannot be receiving insurance through an employer. Your family income must be below 400 percent of federal poverty level, and you cannot be Medicaid eligible. If your employer offers coverage, but it costs the employee more than 11% of their income, they are eligible for a credit. There are some limits on insurance providers for increasing rates and cost sharing for people receiving credits.

Those who receive credits have to report increases of income.

No payments to illegal aliens.

Employers must offer coverage to full time employees. If the employee declines but instead takes exchange coverage, the employer must contribute to the exchange instead. Employers must pay at least 65% of family premiums, and 72.5% of individual employee premiums.

Employers must also partly cover part time employees, in proportion to the hours they work.

An employer can opt out of offering coverage. In this case, they will pay a payroll tax of 8%. For very small businesses (less than $400k / yr payrolls) this percentage is lowered on a tier scale, so that less than $250k payrolls pay 0%.

Employers and insurance providers are not to game the system by convincing higher risk employees to take an Exchange insurer.

Tons of amendments to previous tax code and other laws. Basically boring stuff.

Small businesses get a credit. Employees of that business making over $80k do not receive the credit. There is a complex calculation for how the credits are given, for instance, you get fewer per-employee credits for each employee over 10 or 25, etc. If something would give you a double benefit, you're not allowed to take both. There is an inflation adjustment.

Individuals making between $350-$500k/year receive a 1 percent "surcharge" (tax). 1.5% for $500k-$1m. 5.4% for $1m+. If the health fund gets over ($150b-$175b), then this tax will be dropped for that year.

Amendments to existing Medicare and Medicaid laws. Didn't see anything that lets grandma die. What would be their motive? Contradiction of terms, if they're after increasing socialism, why let grandma die? They wouldn't get away with that for too long.

One interesting part of the Medicare/Medicaid section is that the secretary is authorized to run pilot programs to test improvements to health outcomes and controlling costs. It establishes Accountable Care Organizations to help test new systems and incentive plans to improve health and cut costs. This includes the creation of a best practices website. Successful systems will be considered for permanent implementation.

The pilot programs will be funded by $25m annually, from the Medicare/Medicaid funds.

There is also a pilot program for community based medical homes for Medicare and Medicaid. These will be non-profit organizations OR State run homes. Funding for these programs will be $125-200m annually.

Examples of some of the details in the Medicare/Medicaid sections:

There is an incentive program for primary care practitioners accepting Medicare and Medicaid who operate in "shortage areas". Increased coverage for midwives, waiver of deductible for cancer screenings, amending details on wheelchair coverage, etc.

A quality oversight commission will be created over Medicare and Medicaid.

Improving transparency over nursing facilities to detect and prevent criminal, civil, and administrative violations and to promote quality of care. Provisions for making new regulations over the ethics of nursing home providers. There will also be a Quality Assurance and Performance Improvement program established to develop and assist facilities in implementing best practice standards.

The establishment of a website for comparing nursing home facilities. It would be understandable to average people.

Nursing homes have to report expenditures. There will be a standardized complaint form for residents to file with the state. Whistleblowers will be protected. There will be a complaint resolution process. Provisions for enforcement.

A pilot program will be started: an independent monitoring program for nursing facilities.

Provisions for when a nursing facility closes or relocates, who they must notify, how they must go about closing, how they will be funded until the day of closure.

Amending training requirements for nursing home staff, including amendments to dementia and abuse prevention training.

Still on Medicare and Medicaid, creating new quality measures. Funding for this.

Amendments for financial reporting of physicians relationships with manufacturers and distributors of drugs and medical equipment (Medicare, Medicaid, CHIP). This includes when manufactures of drugs or equipment give financial or other gifts to physicians.

Infections contracted at health care facilities will be reported to the CDC. the CDC will compile information based on these reports.

Medicare currently already gives payments to training hospitals and residency programs.  This bill covers changes to Medicare-related education and residency assignments at training hospitals for doctors. I'm not really sure how drastic these changes are since I don't know how the existing system works, but it doesn't seem to be too drastic. Pages 660-686

Additional funding of $100m to go to fighting waste, fraud and abuse. (still within the context of Medicare and Medicaid) I hope it's money well spent. Enhancements to penalties for fraud and abuse. Assuring quality of care in hospice settings, prevention of abuse, and penalties.

In order to prevent waste and fraud, they will gather more data, as long as it is compliant with HIPPA and other laws. Seeks to eliminate duplication between the Healthcare Integrity and Protection Data Bank and the National Practitioner Data Bank. Once the data is synced, the HIPDB will be shut down and only the NPDB will be used.

Elimination of the HHS Office of the Inspector General.

Giving access to NPDB to the Department of Veterans Affairs (since they used to use HIPDB).

Changes to Medicare eligibility requirements. Set to include families 133% over the poverty line. Medicaid coverage for otherwise uncovered newborns until they qualify for some other program. Simplifying and coordinating eligibility rules between Medicare and Medicaid.

Currently Medicaid pays “disproportionate share hospitals", i.e. hospitals supporting high numbers of low income people. This funding amount will be decreased by $1.5b by 2017 and $2.5b by 2018, and $6b by 2019. Presumably because more low income people will be covered in other ways by then.

I like the last part of this definition of discrimination: provides services to beneficiaries under this title without discrimination on the ground of race, color, national origin, creed, source of payment, status as a beneficiary under this title, or any other ground unrelated to such beneficiary’s need for the services or the availability of the needed services in the hospital;

Medicare and Medicaid required to provide preventative services. They will also now include tobacco cessation drugs. Family planning for those who qualify who are not pregnant (i.e. not abortions).

Patient-Centered Medical Home Pilot program. I researched this, and it's some kind of total care program, for example your whole health is considered, you have a "home", a root place for care, even if you go to specialists, a main doctor is monitoring your total care.

Freestanding birth centers, HIV coverage, vaccines, payments to pharmacists, etc.

Voluntary home visitation programs for medicaid recipients with young children and expecting mothers, done through state grants to states who want it. To reduce abuse and neglect, improve child health and development. To provide parents with education, knowledge of age appropriate child development tools, knowledge of health and wellness, coaching on parenting practices, etc.

Medicare DONE!

Public Health Investment Fund shall be created from the public treasury. The first year will have $4.6b deposited, which will increase until it is $12.7b in 2019. The funds go towards existing programs, including Prevention and Wellness Fund, community health centers, the National Health Service Corps Program (existing program medical tuition in trade for service), primary care loan funds (including funds for schools of medicine), primary care education programs, nursing workforce development, The National Center for Health Statistics, The Agency for Healthcare Research and Quality.

It is unclear if this already exists or if this bill will create it. Already exists, amends Establishment of a Public Health Workforce Corps to "insure an adequate supply of public health professionals". They will be placed in State, local and tribal health departments and federally qualified health centers. It includes a scholarship program for future doctors, nurses, health administrators, researchers, veterinary medicine or dental medicine. Upon completion of education, you will be contracted to serve full time as a "public health professional"

Amendments to existing medical education grants. Preference for these grants will be given to those who get cultural and linguistic training to health professionals, those who address health disparities, and those who choose to work along the Mexican border. Preference are also given to train a higher percentage of those from under served communities.

Creates the Advisory Committee on Health Workforce Evaluation and Assessment to assess supply, diversity, and geographic distribution of health workforce, retention of health workforce. Make recommendations and submit annual reports. Grants may be distributed based on these reports. Grant dollar amounts are specified, starting at $90m in 2010, reaching $140m by 2019.

Amending an existing law for Prevention and Wellness. It appears to be adding money to an existing Public Health Investment Fund, up to $4.6b by 2019. Included in what the funds go towards is a task force related to preventive services to identify clinical preventive services, review scientific evidence related to the benefits, effectiveness, appropriateness and costs of clinical preventive services, take into account health disparities, identify gaps in research, consult with other groups. Develop recommendations. Give research grants.

The CDC will establish a program for delivery of community prevention and wellness services. This will be through awarding grants. A Health Empowerment Zone will be implemented to address health disparities. Grants can't be used to build or by real estate, do anything someone's existing health coverage is already doing.

Grants to create a core public health infrastructure through grants to state, local and tribal health departments. Establish a voluntary public health accreditation program through the CDC for the purpose of advancing the quality and performance of health departments and laboratories. The CDC will be expanded to increase health infrastructure.

A couple of existing preventive task forces will be merged into the new task forces.

There will be a Center for Quality Improvement. The Director will prioritize areas for development and implementation of best practices for quality improvement of health care services. Existing best practices will be identified and evaluated as well as development of new ideas. Grants are specified related to this. Public distribution of the information. Until priorities are determined by the director, the priorities will be to reduce health care associated infections, increase safety in surgery, improving emergency room care, improving pregnancy care.

The position of assistant secretary for health information is modified.

Covered entities receiving discounted drug prices will be expanded to include children's hospitals that are excluded from Medicare, critical access hospitals, entities receiving funds under various programs, sole community hospitals.

Hospitals described here will not be able to use group purchasing arrangements for drugs.

Establishment of grants for school-based health clinics.

Creation of a National Medical Device Registry for tracking medical devices. Providing public access to the data. Requires manufacturers to submit basic data. Tracking of safety information.

Grants to address nursing shortage.

Each state is eligible for funds under the bill only if they abide by Division A of the bill as employers of state employees.

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