Transcript THE REGISTRY OF THE INTERNATIONAL SOCIETY FOR HEART

HEALTH CARE REFORM, GOVERNMENT
RELATIONS, AND TRANSPLANTATION
Maryl R. Johnson, M.D.
Professor of Medicine
University of Wisconsin School of Medicine and Public Health
Medical Director, Heart Failure and Transplantation
University of Wisconsin Hospital and Clinics
Madison, WI
HEALTH CARE REFORM:
The changes in the health care financing and
delivery system enacted through the Patient
Protection and Affordable Care Act and the
associated reconciliation bill.
HEALTH CARE REFORM GLOSSARY
Accountable Health Care Organization (ACO): A group of providers (physicians, hospitals,
nursing facilities, ancillary care) that create an organized delivery system to achieve cost
savings and improve quality.
Cadillac Plans: Expensive health care plans which provide low deductibles and cost sharing.
Carve Out Contracts: Contracts for highly specialized services (transplant) which are
separated from general coverage and managed by separate firms for a portion of the
premium collected (limits insurance company’s liability through re-insurance provisions for
very expensive cases).
Community Rating: Health premiums based only on age, smoking and local community
medical costs but not health status of the beneficiary.
Comparative Effectiveness Research (CER): Research examining the relative health and cost
implications of competing techniques for treating the same condition.
Disproportionate Share Hospital Payments: Funds paid by Medicare to hospitals which
provide high levels of uncompensated (charity) care.
HEALTH CARE REFORM GLOSSARY
(Cont.)
Guaranteed Issue Coverage: Requirement to provide coverage without regard to health
status.
Health Insurance Exchange (SHOP): State-based insurance exchanges which offer insurance
plans meeting specified requirements to individuals and businesses with fewer than 100
employees. (Based on community rating, adjusted for age and smoking).
Individual Mandate: Requirement that all citizens purchase and maintain health insurance
coverage or face a fine. (Includes provisions for religious objections and inability to pay).
Medical Loss Ratio (MLR): Ratio of the health care premium paid to health care providers
(hospitals, physicians, DME suppliers) to total premiums collected.
Reinsurance: Coverage for high cost cases (outliers) purchased by insurance carriers from
other insurers.
Sustainable Growth Rate (SGR): Results in automatic reductions in Medicare physician
payments if the rate of increase in total physician payments exceeds a goal targeted to the
growth in GDP.
GOALS OF HEALTH CARE REFORM
• Expand coverage
– 32 million by 2019
• ½ Medicaid, ½ exchanges/employer based
• Individual/employer mandates
– No lifetime/annual limits
– No exclusion for preexisting conditions (for adults
in 2014)
– Price adjustments allowed only for age/smoking
– Caps on out of pocket costs/deductibles
– Young adults on family plan to age 26
GOALS OF HEALTH CARE REFORM
(CONT.)
• Limit growth in health care costs
– MLR ≥80% for small and ≥85% for large group
market
– Tax on Cadillac Plans
• Reform delivery and insurance systems
– ACOs
– Essential health benefits
– CER
HEALTH CARE REFORM AND
TRANSPLANT
Reform Element
Advantages
Concerns
Expand access to
private insurance
• Earlier specialist referral
• Restrictions on premiums
• Improved access to transplant
may increase market
evaluation and listing
power of large networks
• Reduced risk of nonadherence • Stronger ‘in-network’
from loss of drug coverage
provisions may limit
access to some centers
• Elimination of high cost,
high choice plans
Expand Medicaid
coverage
• Improved access to transplant • Expansion in patients
• Coverage for uninsured
with inadequate coverage
patients posttransplant
• Shift in patients with
• Reduced organ loss to
private insurance to lower
medication nonadherence
cost or free public care
Axelrod et al
Am J Transplant 2010;10:2198
HEALTH CARE REFORM AND
TRANSPLANT (Cont.)
Reform
Element
Advantages
Concerns
Medicare
reforms
• Better drug coverage
(reduction in donut hole)
• Stabilization of the SGR
• Creation of medical homes
• Shift to episode of care
reimbursement
• CER
• New reimbursement reductions by
independent medical board
• Reduction in disproportionate share
payments
• Penalties for re-admissions and hospital
acquired infections
• Fails to address the cuts under the SGR
Tax increases
• Spread across a wide range • Likely to predominantly affect high-cost
of entities including
medical and surgical staff
pharmaceutical
• May reduce pharmaceutical support for
manufacturers and
education and research
insurance companies
• Reduces competition among insurers
increasing market power of larger
national networks
Axelrod et al
Am J Transplant 2010;10:2198
TAXES TO HELP FINANCE HEALTH
CARE REFORM
Tax Provisions
Description
Implementation
Date
1. Tax on individuals without coverage
• $695 to 2.5% of household income
Phased in
beginning
2014
2. Change in Medical Savings account
practice
• Limit to $2500
• Exclude over the counter medications
Jan 2011
3. Increase tax on wages for Medicare
part A
• From 1.45% to 2.35% for earnings over $200,000 for individuals,
$250,000 for couples
• 3.8% tax on unearned income for higher income taxpayers
Jan 2013
4. Excise tax on Cadillac plans
• Up to 40% on plans which cost more than $10,200 per individual,
$27,500 per family
Jan 2018
5. Annual fee on pharmaceutical
manufactures
• Range $2.8 billion to $4.1 billion per year
Jan 2012
6. Annual fee on health insurance sector
• Range $8 billion to $14.3 billion per year
• Indexed by rate of premium increase
• Reduced for nonprofit insurers
Jan 2012
7. Excise tax on taxable medical device
• 2.3% of sale price
Jan 2013
8. Limit deduction for executive and
employee compensation for health
insurers
• Limited to $500,000 per individual
Jan 2009
9. Tax on providers of tanning services
• 10% tax
Jan 2010
Axelrod et al
Am J Transplant 2010;10:2205
QUESTIONS REMAIN. . .
• Will transplantation (and if so, of which
organs) be considered an Essential Health
Benefit? (Only end stage renal disease is
currently an “entitlement program”).
• Will increased access only increase the donor
organ shortage?
• What will the administrative burden be?
• How will physician and hospital reimbursement
be affected?
AREAS OF ACTIVE GOVERNMENT
RELATIONS OF IMPORTANCE TO
TRANSPLANT PROFESSIONALS
• Defining “essential health benefit”
• FDA involvement/approval of laboratory based diagnostic
tests (implications for HLA typing, crossmatches, PRAs,
etc.)
• Biovigilance: Appropriate donor testing to prevent disease
transmission (uniform guidelines being proposed for blood
and organs which could decrease organ availability)
• Immunosuppressive coverage for the life of the renal
allograft
• Transplant coverage for Arizona Medicaid recipients
COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE
FOR KIDNEY TRANSPLANT PATIENTS ACT
Why is this legislation necessary?
• Since 1972, Medicare has covered people with ESRD. There is no Medicare time limit for
dialysis. However, kidney transplant recipients lose Medicare coverage 36 months after
transplant.
• Extending immunosuppressive coverage would improve transplant outcomes resulting in a
higher quality of life with a transplant, and recipients are more likely to return to work
than dialysis patients. It also would enable many dialysis patients who do not have
access to other coverage to consider a kidney transplant.
• In 1972, it was estimated that the program would cost $250 million. In 2008, the
Medicare ESRD program cost nearly $27 billion.
• This legislation will allow individuals who are eligible for immunosuppressive drugs whose
insurance benefits under Part B have ended at 36 months to remain in the program only
for the purpose of receiving immunosuppressive drugs. If they have group health
insurance with this benefit, they would not qualify for coverage beyond the 36 months.
COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE
FOR KIDNEY TRANSPLANT PATIENTS ACT (Cont.)
Cost benefits for the continuation of immunosuppressant coverage
• Medicare spends $71,000 per year on a dialysis patient, indefinitely.
• Medicare incurs an average first year cost for kidney transplant of >$100,000 and will pay
for dialysis and re-transplantation in the case of organ failure.
• Medicare only spends $17,000 on a kidney transplant recipient per year after the
year of the transplant.
How is the premium determined for individuals eligible due to ESRD?
• A monthly premium rate will be determined based on the monthly actuarial rate for
enrollees age 65 and over.
How does this affect those with private insurance?
• Coverage by private insurance varies widely; this legislation ensures Medicare is still the
payer of last resort and will not usurp coverage offered by private insurers.
Does this open transplant recipients up to the full benefits of Medicare?
• No, this legislation would extend coverage for immunosuppressive drugs only.
Beneficiaries would pay the Part B premium. All other Medicare coverage would end 36
months after transplant.
Senators Introduce AST Supported Comprehensive Immunosuppressive Drug
Coverage for Kidney Transplant Patients Act of 2011
Today, Friday, July 29th, Assistant Senate Majority Leader Dick Durbin (D-IL) and Senator
Thad Cochran (R-MS) are introducing the Comprehensive Immunosuppressive Drug
Coverage for Kidney Transplant Patients Act of 2011. This important bipartisan and
bicameral legislation will ensure kidney transplant recipients are able to maintain Medicare
Part B coverage of immunosuppressive drugs necessary to avoid organ rejection and a
return to more costly treatments....a win-win for patients and the U.S. Treasury. As you
know, AST has been working very closely with Senators Durbin and Cochran as well as
transplant champions in the House of Representatives to introduce and advance this
important patient advocacy focused legislation. Congressmen Dr. Michael Burgess (R-TX)
and Ron Kind (D-WI) will soon be introducing similar companion legislation in the House.
AST applauds these Members of Congress for their strong and steadfast support of
transplant patients.
National Transplant Organizations Applaud Arizona Governor and Legislature for Restoring Life-Saving Medicaid
Patient Coverages
April 8, 2011 – The Americn Society of Transplantation (AST) and the American Society of Transplant Surgeons (ASTS)
strongly applaud Arizona Governor Jan Brewer and the State Legislature for restoring transplant services that were
previously eliminated as part of the State's FY 2011 budget. The cuts, which took effect on October 1, 2010, resulted
in the loss of Medicaid eligibility for approximately 100 patients awaiting life-saving donor organs.
AST President Dr. Maryl Johnson and ASTS President Dr. Michael Abecassis commend Governor Jan Brewer and state
leaders, including Representatives Anna Tovar, John Kavanagh and Dr. Matt Heinz, for working collectively to resolve
this very challenging Medicaid issue.
"When I met with Arizona leaders in Phoenix, it was obvious that no one wanted patients to go without coverage
for life-saving transplants," states Dr. Johnson. “We are encouraged and pleased that Governor Brewer and the
legislature were able to restore critical Medicaid coverage for transplant candidates....truly preserving the gift of life
for those on the wait list in Arizona.”
“The challenges faced by Arizona and many states attempting to preserve the long-term viability and stability of
their budgets present many obstacles for all involved,” states Dr. Abecassis. “The AST and ASTS recognize the
financial difficulties that states face, and therefore applaud the decision by the state of Arizona to restore coverage
for transplantation services.”