Web Exclusive: What the health care reform legislation means for radiation oncology

On March 30, 2010, President Obama signed the last piece of the reconciliation package tied to Patient Protection and Affordable Care Act (H.R. 3590) into law. Here are a few key provisions in the new law that may have an immediate impact on your practice and your patients, while others have a much longer time frame before they will take effect. ASTRO will be monitoring the implementation of this robust health care package and continue to advocate for radiation oncologists and their patients.

Patient protections

• Insurance market reforms. The final package includes several provisions meant to protect patients’ access to affordable coverage.
  • Dependent children will be allowed to remain on their parents’ health insurance up to age 26.
  • Existing insurance plans will be barred from imposing lifetime caps on coverage.
  • Insurers will be prevented from canceling insurance retroactively, except for fraud.
  • Insurance plans cannot exclude coverage for pre-existing medical conditions for children under age 19.
  • Beginning in 2014, insurance plans are prohibited from denying coverage for pre-existing conditions. (Beginning in May 2010, Health and Human Services is to launch a high-risk pool program to offer immediate access to insurance for uninsured individuals with a pre-existing condition. To quality, an individual must have been uninsured for six months and have a pre-existing condition. The program terminates in 2014 when the planned health exchanges are operational. The legislation limits spending for this program to $5 billion.) 
  • Beginning in 2014, group and individual plans will be required to cover routine costs of participation in certain clinical trials by qualified individuals. This requirement applies to all clinical trials that treat cancer or other life-threatening diseases.
• Preventive and screening benefit expansions. Beginning in 2010, Medicaid will be required to cover tobacco cessation services for pregnant women. In 2011, cost-sharing for proven preventive services will be eliminated in Medicare and Medicaid. Co-payments will be eliminated for Medicare beneficiaries for certain preventive services, and incentives will be available to encourage Medicare and Medicaid beneficiaries to complete behavior modification programs. In the private sector, beginning in 2010, health plans will be required to provide a minimum level of coverage without cost-sharing for preventive services such as immunizations, preventive care for infants, children and adolescents, and additional preventive care and screenings for women.

Medicare payment changes

• Physician payment / SGR. Congress did not address the flawed sustainable growth rate formula in this health care reform package; separate legislation is anticipated later this year.
• Utilization rate assumption. The payment formula associated with technical component payments for imaging services in freestanding centers includes an assumption about the utilization rate at which the equipment is used. In the final Physician Fee Schedule rule for 2010, CMS increased this assumption from 50 percent to 90 percent for diagnostic imaging equipment costing more than $1 million. This assumption has an inverse relationship with payment, so as the utilization rate assumption increases, payments decrease. The final legislation sets this utilization rate at 75 percent for imaging equipment over $1 million. The current utilization assumption rate for linear accelerators is 50 percent and remains unchanged.
• Disclosure provisions. Self-referring physicians must disclose ownership and other service locations to patients needing imaging services. (ASTRO will be advocating that the Secretary of HHS expand this requirement to include disclosures for those who offer radiation therapy in self-referring arrangements.)
• Geographic payment differentials. The national average “floor” on Medicare’s geographic payment adjustment (commonly known as the GPCI) for physician work expired at the end of 2009. The law re-establishes that floor in 2010. In 2010 and 2011, Medicare will also reduce the GPCI adjustment for physician practice expenses in rural and low-cost areas. And, beginning in 2011, the practice expense GPCI adjustment will be brought up to the national average for “frontier” states (Montana, North Dakota, South Dakota, Utah and Wyoming). Physicians in 56 localities in 42 states, Puerto Rico and the Virgin Islands will benefit from these geographic payment adjustments.
• Medicare quality reporting incentive payments extended. Incentive payments of 1 percent in 2011 and 0.5 percent from 2012 to 2014 will continue for voluntary participation in Medicare’s Physician Quality Reporting Initiative (PQRI). An additional 0.5 percent incentive payment will be made to physicians who participate in a qualified Maintenance of Certification Program, including ASTRO’s MOC program. Following the practice now in place for hospitals, beginning in 2015 physician payments will be reduced if they do not successfully participate in the PQRI program. In 2015, the penalty will be 1.5 percent; in subsequent years it will be 2.0 percent.
• Independent payment advisory board. A new, independent, 15-member board will be created to submit proposals for reducing Medicare cost growth by targeted amounts. If this board fails to submit proposals, HHS must submit proposals to lower Medicare spending. Any recommended cuts to providers must be proportional to their contribution to Medicare spending. These recommended cuts will go into effect unless Congress overturns them. 
• Hospital outpatient department payments. Medicare payments for hospital outpatient services will be reduced from the current market basket update by 0.3 percent for 2014, 0.2 percent for 2015-2016, and 0.75 in 2017 to 2019. 
• Medicare prescription drug coverage. Medicare patients whose prescription expenses reach the so-called Medicare Part D coverage “doughnut hole” ($2,700 to $6,150) in 2010 will receive a $250 rebate. During the next 10 years, the beneficiary co-insurance rate for this coverage gap will be narrowed in phases from the current 100 percent to 25 percent in 2020.

Other provisions of interest

• Tax on medical devices. Beginning in 2013, a 2.9 percent federal excise tax will be charged for all medical devices sold in the United States, including large capital equipment like linear accelerators.
• Comparative effectiveness research. By October 20112, a new patient-centered outcomes research trust fund will be established to fund the Patient-Centered Outcomes Research Institute and its activities. The trust fund will receive transfers from the general funds in the U.S. Treasury, as well as monies the Medicare trust fund, private health insurance and self-insured health plans according to number of individuals enrolled in those plans. 
• National health care workforce commission. This commission to be appointed by the Comptroller General not later than September 30, 2010, will serve as both a resource and a partner to Congress, relevant Executive agencies (including HHS and the Department of Labor), and states and localities to develop recommendations as to how to best allocate federal health care workforce resources with current needs. The aim is to train, recruit, and retain skilled health care workers to meet the nation’s projected workforce needs.
• Administrative simplification. Beginning in 2010, national rules will be developed and implemented between 2013 and 2016 to standardize and streamline health insurance claims processing requirements. Radiation oncologists should benefit from the changes because it will be easier to track claims and, in many cases, should improve physician revenue cycles and lower overhead costs.
• Medical liability protection and grants. HHS is authorized to award five-year demonstration grants to states to develop, implement and evaluate alternative medical liability reform initiatives, such as health courts and early offer programs, beginning in 2011. Medical liability protections under the Federal Tort Claims Act will be extended to officers, governing board members, employees and contractors of free clinics.

By Emily Wilson, ASTRO Government Relations Director