Title II of HR 676 is “Finances”—let’s look at Subtitle A, Budgeting and Payments. A little dry, but very relevant, considering Alabama’s current budget squeeze and the threat to the 40% of Alabama children covered under our Medicaid!
First, there will be an annual budget for our national healthcare program, to include funds to pay physicians and other providers, capital expenditures (such as building hospitals/ buying equipment), health professional education, and administration of the program itself. There will be a strict separation of funds for capital expenditures and operating expenses—I would imagine this is to protect our patient care funds from being eaten up by building costs.
After the total annual budget amount is determined by Congress (susceptible to voter pressure if they don’t put enough in the pot), the Director of the program will give Regional offices their funds. The specific payment arrangements to doctors, hospitals and so on will be done at the regional/ state level but with approval by the national Director.
There are different ways to get paid under this plan—hospitals, nursing homes and similar centers will negotiate a global annual budget, based on their past expenses and projected changes. Kind of like a salary for organizations. Doctors and other providers have three different options. They can submit their bills as usual (fee-for-service) through a standardized electronic billing system (or on paper), they can be salaried by an organization that gets a global budget, or they can be salaried in a group practice or non-profit HMO that gets capitated payments (a set amount per patient enrolled).
How much will the doctors and others get paid? The bill says the amount would have to be negotiated between physician/ provider representative groups and the regional/ state directors. The starting point would be the current payment for various services—I hope this reassures those who worry about sudden/ dramatic changes in payment. The exact details of these physician representative groups will be isn’t laid out, but it seems this could be worked out by the physicians themselves. Might be done through state medical societies and/or through specific professional groups like state chapters of the American Academy of Pediatrics.
That requirement for negotiated rates is critical. Right now, under regular Medicare, there isn’t negotiation. There is only lobbying and outright begging by docs to get fair treatment. Under this system, we have a guaranteed seat at the table. Now, if you know how these budget things work, you can read a lot more into the word “negotiation”! I feel sure there will be a few cat, dog or mud fights between groups who think someone else is getting an unfairly big slice of the pie, but at least we are all in it.
There are a few specific rules worth mentioning. Providers have to be paid within 30 days, or they get paid with interest. There is no “balance billing” allowed for covered services—the docs can’t charge the patients more than what they have negotiated to accept as fair payment, already the rule for most insurances. Patients have to be enrolled without discrimination (standard Civil Rights). HMO’s must pay physicians salaries and are specifically not allowed to give incentives based on utilization. This means, no productivity bonuses—very important to prevent a nasty pressure on docs to see more and more patients in a shorter amount of time. Having experienced that myself several years ago, I can tell you it isn’t good for either the patients or the docs. Obviously if you are a real slacker, you will get fired.
I like this payment/ budget plan overall and don’t see any significant holes in it. The word “reimbursement” instead of “payment” is used several times—I know at least one doc who gets really steamed up at that term, but it could be replaced without much trouble.
I know some don’t think we should allow for any fee-for-service at all, but I see a positive to continuing it at least initially. For one thing, I think a more drastic change of completely going to salaries at the same time as changing how we fund healthcare is just too much. Second, it would give us a chance to see which arrangement works better for patient care quality and cost control, with more of the other variables removed.
I also like that the specific payment agreements will be worked out on a regional/ state level but funded nationally. Our Alabama Medicaid program is a good example of why this matters. The current office does an amazing job of managing limited funds with very low overhead—the administration understands our state and what services we need better than a remote national office would– but we are now facing a ruined system because we just don’t have enough overall money in the General Fund. Assurance of sufficient funds at the Federal level would protect folks in states with budget crunches, while still allowing states some reasonable autonomy for expenditures.
What do you think? Any comments, questions or suggestions to revise this section of HR 676? I hope to have more updates on our Medicaid crisis soon. In the meantime, I advise Alabama folks to join Alabama Arise ASAP, and also to see about getting your community/ civic groups to join. Then set up a house party (see instructions on their website) this month, early in our legislative session. I think this organization may be the best positioned to help us preserve our state Medicaid—they are smart, dedicated and have a good track record.
hospitals, nursing homes and similar centers will negotiate a global annual budget, based on their past expenses and projected changes.
I did a lot of complex budgeting and forecasting when I was in the private sector and if faced with the 676 task I would find it daunting. Implementation of 676 will create significant changes to the business-as-usual-scenario and in many aspects of budgeting these changes will negate any ability to rely on past expenses as a benchmark. The second challenge of budgeting/forecasting based on “projected changes” is enormously challenging. Perhaps the details around budget creation have been addressed at the micro level by finance scholars in the Single Payer diaspora…?? One would need to create a simulated SP financing model and then start rearranging a hospital’s entire financial framework to begin projecting for future changes. VT (if it survives the onslaught of propagandists) will serve as one type of model, however if even one 400-500 bed hospital could attempt (i.e., simulate) a conversion of their budget structure it would be a worthy exercise. At the moment I cannot imagine hosp execs willing to play in this sandbox. It’s complicated because the budget negotiations for a hospital need to be based on solid data for SP to succeed. Early success is very important to allay concerns about SP as an excellent option for our future.
I realize most of those on this blog may be focusing on the language in 676 which outlines the ways in which MDs will be paid. But it’s all linked.
Respectfully submitted,