AMA backs House health system reform bill that includes Medicare pay overhaul

President Obama and others call the support crucial and historic, but some medical societies are rejecting the legislation.

By — Posted July 27, 2009

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The American Medical Association has thrown its support behind a Democratic national health system reform measure making its way toward the House floor, so far the first comprehensive bill that addresses Medicare physician pay.

On July 16, the AMA announced it would support America's Affordable Health Choices Act, comprehensive legislation officially introduced two days earlier by House Democratic leaders and closely based on a discussion draft unveiled a month before that. The three House committees with primary jurisdiction over health care moved quickly to approve the legislation for House consideration, with two of the panels passing their versions July 17.

The AMA is supporting the legislation partly on the strength of its Medicare payment reform plan, which would spend an estimated $245 billion over 10 years to align physician rates more closely with the costs of providing care. But the Association also backed the bill because it would use health insurance market reforms to cover most Americans, offer a choice of plans to consumers through a health insurance exchange, dedicate new money to boost primary care services and address physician work force problems.

"We are committed to passing health reform this year, consistent with principles of pluralism, freedom of choice, freedom of practice and universal access for patients," said AMA President J. James Rohack, MD, in announcing the AMA endorsement. He was echoing reform principles reaffirmed by the House of Delegates at its Annual Meeting in June.

Dr. Rohack said the AMA decided to back the bill after its authors made several key changes to the original discussion draft. Although the legislation still includes a public plan option, it no longer would require Medicare-participating physicians to accept the new plan's patients. It also would not prohibit balance billing of those patients or ban doctors from privately contracting with patients.

The AMA does not consider the pending bill to be a finished product, Dr. Rohack said. By remaining at the table, the Association aims to push lawmakers to include medical liability reforms missing from the measure and reconsider the bill's ban on self-referral for new physician-owned hospitals.

President Obama cheered the support and noted that physicians have joined nurses in backing reform this year.

Rep. John Dingell (D, Mich.) called the AMA endorsement a milestone in reform and said such a level of physician support indicates that the bill would not threaten the doctor-patient relationship. "The historical significance of the AMA's support should not be underestimated," he said, noting that the Association has not always been in favor of reform efforts.

Some reject public plan, mandates

Several other physician organizations lined up to support the House legislation. The American Academy of Family Physicians is backing the measure, in part, for including primary care bonuses, though it would like to see those incentives boosted. For similar reasons, the American College of Physicians said it expects to back the bill once it is out of the final committee.

The House Energy and Commerce Committee counted about another dozen physician organizations among the list of bill supporters, including the American College of Obstetricians and Gynecologists and the American College of Surgeons.

But not all doctors are on board with the House bill.

Led by the Medical Assn. of Georgia, seven other state and local medical societies and three surgical specialty societies signed a July 21 letter to Congress that opposes the legislation. Two former AMA presidents, Donald J. Palmisano, MD, and William G. Plested III, MD, also signed the letter. The inclusion of a government-sponsored public insurance plan option that would compete with private plans is a major reason for these physicians' opposition. They also reject individual and employer insurance mandates in the bill.

"We adamantly oppose the following as inconsistent with quality medical care and the principles of freedom and liberty that lie at the heart of our form of government and our society," the letter said. The Texas Medical Assn. drafted its own statement, saying it could not support a bill that would create another government-payer health plan when existing federal plans work so poorly.

Twelve members of the GOP Doctors Caucus wrote a July 17 letter to AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, urging the Association to reconsider its support of the legislation. The bill would work against physician priorities by using a government-run plan to drive out private insurance competition, force Medicare-based rates on doctors and prompt many physicians to close their doors for good, they said.

"Based on the endorsement of this legislation, we fully believe that the AMA has lost touch with the vast majority of physicians in this country," the caucus letter said.

Dr. Rohack acknowledged that some physicians and lawmakers are opposed to the AMA's show of support but said many others are enthusiastically in favor. By consistently following its four guiding reform principles, the AMA will best be able to advocate for all physicians, he said.

Cost concerns threaten time line

The plan by House Democratic leaders to move the health system reform bill to the floor before the congressional August recess sustained a major blow when new concerns arose over long-term health spending.

At a July 16 appearance before the Senate Budget Committee, Congressional Budget Office Director Doug Elmendorf said none of the bills before lawmakers includes the necessary system changes to keep long-term health spending in check. Although Obama has called for the need to "bend the cost curve" when implementing health reform, this would not occur under the current plans. "The curve is being raised," Elmendorf said.

GOP leaders pounced on the statement, calling on Democratic leaders to scrap the bill and start over with a new bipartisan proposal and a new time line. Conservative House Democrats who make up the Blue Dog Coalition were able to slow down a markup of the bill in the House Energy and Commerce Committee over concerns that the long-term-spending issue was not being addressed.

Obama responded to the revitalized assault on the Democratic bill, saying in a July 21 news conference that opponents are simply following the time-worn tactic of delaying reform with the intention of killing it. "But make no mistake, we are closer than ever before to the reform that the American people need, and we're going to get the job done."

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The House plan

House Democratic health system reform legislation has gained the support of the AMA and several other physician organizations, though some state and specialty medical societies oppose it. The bill includes numerous major reforms that would impact physicians.

Medicare payment: Rebases the physician pay formula and gives doctors a pay increase in 2010 instead of a 21.5% cut. Establishes a new formula, starting in 2011, that allows annual spending targets to grow based on a rate of the gross domestic product plus 1%, with GDP plus 2% for evaluation and management services and preventive care. Provides a 5% Medicare bonus for physicians in primary care specialties.

Health insurance reform: Implements a national health insurance exchange that includes a government-sponsored, national public plan option financed only through premiums. Prohibits insurers from denying coverage based on preexisting conditions; establishing annual or lifetime limits; or basing premiums on anything other than age, geography or family size. Establishes an essential benefits package that all plans must offer.

Health care affordability: Offers scaled, income-based credits for the purchase of health insurance to people earning up to 400% of the poverty level. Caps annual out-of-pocket spending to prevent bankruptcies from medical costs. Expands Medicaid to all people earning up to 133% of the poverty level.

Coverage responsibility: Requires individuals who do not qualify for a hardship exemption to obtain health coverage or pay a penalty of 2.5% of modified adjusted gross income above a specified level. Requires employers who do not qualify for a small business exemption to offer health insurance to their workers or pay a phased-in penalty of up to 8% of their payroll.

Physician work force: Boosts funding for the National Health Service Corps, primary care physician training, and scholarships and loan forgiveness for physicians who work in underserved areas. Redistributes unused graduate medical education residency slots to train more primary care doctors.

Physician-owned hospitals: Prohibits self-referral of Medicare patients by physician-owned hospitals that did not have a Medicare agreement in place by Jan. 1, 2009.

Source: House Energy and Commerce Committee link

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