Transcript: Health On The Hill – November 15, 2010

As Congress returns for its lame-duck session, lawmakers will debate legislation to stop an impending cut in Medicare physician payments. Other health-related issues include the possible repeal of a provision requiring individuals to file a 1099 form with the Internal Revenue Service for the purchase of goods and services of $600 or more, which has drawn the ire of small business groups.

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Transcript:

JACKIE JUDD: Good day. This is Health on the Hill. I am Jackie Judd. In Washington, the “lame duck” session of Congress has begun, and while Republicans won’t assume control of the House until January, there is expected to be a lot of political positioning regarding the health care reform law in these final weeks of the 111th Congress. And in the states, there is talk of further rebellion about the future of the overhaul law.

Here to join me to discuss all of this and more, Mary Agnes Carey, senior correspondent for Kaiser Health News, and Julie Rovner of National Public Radio. Welcome to you both, ladies. There is going to be politicking and policy tinkering in the final weeks of the Congress. Julie, what kind of politicking are we going to see regarding the health care law?

JULIE ROVNER: Well, certainly the Republicans feel like one of the waves that they rode to their takeover of the House was antipathy towards the new health law, and they say they are going to do everything in their power to, if not out and out repeal the law, which they admit even with their coming power in the House they will not have the votes to do, they are going to try to chip away at the waning public support, as they see it, for the law.

JACKIE JUDD: And do they begin to build support for that now, even though they are not in control of the House?

JULIE ROVNER: Yes, I think so, so I think everything they do will be aimed at continuing to, as I say, chip away.

JACKIE JUDD: To rail against it.

JULIE ROVNER: To rail against it as much as they can, and they are going to start that in the lame duck and they are going to continue it when they get control of the apparatus of the House. So I think it starts today and it just continues and continues, looking towards and then after the 2012 elections. I mean, they are not making a secret that that is their plan.

JACKIE JUDD: And one of the pieces of policy tinkering that we are going to see very soon is the subject that the three of us return to periodically through the year, it is known inside the beltway as the “doc fix.” Unless Congress makes a move on December 1st, doctors who treat Medicare patients will see a 23 percent reduction in reimbursement. Mary Agnes, what can be done? What might be done?

MARY AGNES CAREY: Well, the American Medical Association has been pushing for a 13 month reprieve in this doc payment, for this doc fix as you describe it. Now, that is unlikely to happen because of the expense of it. A 13 month fix would cost something like $15, $16 billion.

There will be other priorities that they also want to take care of in the lame duck session. But physicians are saying, now wait a minute, we face this roller coaster all the time. There are impending cuts, and they are stopped. Sometimes it is a retroactive fix, but they are saying that doctors are thinking more about whether or not they are going to be in Medicare and they might decide to stop taking new Medicare patients if this isn’t taken care of and so that will be sort of the show down over the Medicare physician payment formula.

JACKIE JUDD: How many times have you covered this story, Julie?

JULIE ROVNER: Oh I don’t want to think about it. This is the fourth time this year and that has never happened before. We have never had to do this four times in a year where doctors have faced this sword of Damocles hanging over their head. Twice it had to be retroactive, where doctors have gone a period of weeks with getting basically no payments.

What happens, every time this goes beyond the cutoff date, the Medicare agency basically stops paying anything in hopes that Congress will fix it before they have to cut the checks with the payment cut in it. So basically doctors wait a couple of weeks and get no payments in hopes that they will then get just their regular payments rather than the payments with the cuts.
So, this has really been, doctors are kind of at their wits end and the Administration came out last week endorsing what the AMA asked for, which is a 13 month fix. Again, as Mary Agnes said, that would cost a significant amount of money that Congress would then have to come up with.

Now, in the past when the Republicans were in charge, in fact, they didn’t pay for these when they extended them, when they said we are not going to do this, and we were talking then about cuts of 5, 6, maybe up to 10 percentage points. No one is suggesting that doctors should be subject to payment cuts of 20 or 23 percent, which is what we are looking at here. So there is no one that suggests that this is anything approaching a legitimate policy thing to do. The only question is how to make up the money that it would cost to do it.

Everybody agrees that this was a sort of failed idea back when they did it in 1997. It was bipartisan formula that was put in place. It worked okay for the first few years and then it just got out of hand and the reason the cuts have gotten so big is they keep putting them off, so they have become additive, so we are now in this kind of place that everybody recognizes is ridiculous. Everybody recognizes that it needs to be fixed, and we have come to this sort of political gamesmanship place where nobody can agree on how to fix it, and the doctors and the Medicare patients are the ones who are really suffering.

JACKIE JUDD: Another piece of tinkering that may occur this year or maybe next is the 1099 – that is what it is known shorthand inside the beltway, related to the health care reform law, having to do with whether small businesses were going to be too burdened by these new IRS filing requirements. Mary Agnes, what is going on there?

MARY AGNES CAREY: Well, Max Baucus, who is the Senate Finance Committee Chairman, is going to introduce legislation to repeal this requirement. And here we are talking about a provision, as you say, in the health law, that requires you to file a 1099 form with the IRS if you purchase anything over $600 in goods or services from a vendor. Small business is up in arms. This is a phenomenal paperwork requirement. Democrats hate it. Republicans hate it. President Obama believes it should be repealed.
But just as we were talking about with the Medicare physician payment fix, it is all about money. The pay for, again a Washington term for how do you pay for repealing this requirement, is unclear. It is about $17 billion over 10 years. It was a revenue raiser to help pay for health reform. Where will the money come from? That is the big question.

JACKIE JUDD: Have you heard any ideas about where does the $17 billion come from? Where do they make it up?

JULIE ROVNER: No, they very much haven’t said yet. Ironically, the 1099 issue was itself a pay for. It has nothing to do with health care. It was only put in the health reform bill in the first place because it was there to help pay for some of the health bill. It had been sitting around on lists of ways to improve tax compliance and they put it in there, nobody even knew it was in there for a couple of months, and then small business groups found out about it, and just everything exploded.
The Democrats actually tried to, if not repeal it, at least soften it — rather than having to file a 1099 for every time you bought $600 worth of products, at least, you know, boost that up to $5,000 worth of products. And the Republicans wouldn’t let them do it because they sensed it was a great election issue.

JACKIE JUDD: Okay, one more item on the Hill, before we move to the states, and that is Don Berwick, who is the Administrator of Medicare and Medicaid, is finally going to make an appearance before a Senate Committee. He got his job this past summer through a recess appointment. So, I ask why now? And what should we expect from that testimony and the questions that he gets?

MARY AGNES CAREY: I think he’s going to be asked about anything and everything he has ever written, he has ever said. He has praised the National Health Service in Britain; Republicans will look at that and ask him a lot about that. They feel he is very much in favor of health care rationing, which I am sure he will say that he is not. He will get lots of questions about implementation of the health law.

Now, perhaps with the election behind us, maybe the Administration feels a little freer to have him come up and testify and talk, but there has been a lot of pressure from Republicans, and some Democrats too, have wanted him to get up there and talk about his plans.

JACKIE JUDD: Does it become an opportunity for Republicans on the committee to vent how they feel about the health care reform law through Don Berwick?

JULIE ROVNER: Absolutely. Don Berwick is the proxy for everything that Republicans hate about this law, which is ironic in so many ways because Don Berwick has always been sort of the epitome of what everybody sort of liked about how health care moves forward. He was the head of the Institute for Health Care Improvement, which was this very nonpartisan group that was beloved by everybody in the health care industry, Republicans, Democrats.

I mean, it was very nonpartisan, aimed at improving quality and saving cost. I mean the idea of Don Berwick becoming a politically polarizing figure, if you had said that two or three years ago, I can’t think of anyone who could have ever imagined that happening. He would have been just this consensus pick, so the idea that he has become the center of this political firestorm is just so odd, to say the least, but he has and I expect that the fireworks will ensue at this first hearing where members get to throw all kinds of brick bats at him.

JACKIE JUDD: Okay. Let’s move to the states now. There was a fascinating story that Texas, some lawmakers there are actually talking about the possibility of pulling out of Medicaid. Julie, can they? If so, how would that happen? Is this realistic? Is there some political grandstanding involved? Is it real?

JULIE ROVNER: Well, certainly it is under consideration, and it was a fascinating story done by our colleagues at Kaiser News and The Texas Tribune about what is going on in Texas and perhaps some other states. I mean, first of all, it would certainly be legal for a state to drop out of Medicaid. It is a voluntary program. Now, given that, it should be noted that the multi-state lawsuit that is still going on down in Florida, one of the two remaining counts, in fact the one that the states are challenged.

JACKIE JUDD: This is the challenge to the health care law.

JULIE ROVNER: The challenge to the health care overhaul law says that the Medicaid portion of that law, and remember states are required under this law if they are in Medicaid to go to cover childless adults up to 133 percent of poverty. The states are charging that that is coercive, and that they are basically being blackmailed because states can’t afford to drop out of Medicaid because they get so much help from the federal government.

So, the idea that a state actually would drop out of Medicaid might pretty much moot that lawsuit. If a state can drop out of Medicaid, how could it then be coercive? But you have to wonder, Texas of all states, with the highest and largest percentage of uninsured people, to actually give up that federal funding and think that it could cover all of those uninsured people itself. And we are not talking just about single uninsured people, but we are talking about elderly in nursing homes, disabled people in and out of institutions.

JACKIE JUDD: People with a lot of needs.

JULIE ROVNER: A lot of needs and very high health bills; that is quite a daunting task.

JACKIE JUDD: Is this an idea that other states may begin to look at, Mary Agnes?

MARY AGNES CAREY: Yeah, the article talked about a dozen states, conservative lawmakers looking at what they spent on Medicaid and saying, could we do this cheaper on our own? We don’t get the federal government money but then again we don’t have the strings, in their view, of what the federal government requires you to do, how they require you to take care of this population. But on the flip side, a lot of advocates for these folks are saying, if you don’t have Medicaid, they are going to flood the emergency rooms, that will raise taxes for people in these states, and as Julie mentioned, how do you handle nursing home care? How do you handle care for the disabled, very expensive populations? Medicaid in the eyes of many has served these groups well. If states left Medicaid, how would they be served? So it is a really complex issue.

JACKIE JUDD: Okay, thank you both so much. It’s going to be an interesting couple of years until 2012. Julie Rovner, of National Public Radio, Mary Agnes Carey of Kaiser Health News, thanks.

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