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raiviLEOED AND COWFIPEWTIAL
•
A r b i t r a t i o n , i n which both sides agree t o
submit a claim and t o allow the a r b i t r a t o r t o
determine i t s v a l i d i t y and the extent o f
damages
•
Mediation, i n which a n e u t r a l p a r t y works
w i t h the claimant and the p a r t y alleged t o
have caused harm t o reach a settlement
•
Early o f f e r o f settlement, i n which a
settlement o f f e r i s extended t o the i n j u r e d
p a r t y immediately on the assumption t h a t
reasonable o f f e r s o f settlement avoid
litigation
Accelerated compensation f o r avoidable
classes o f events, i n which plans o f f e r
compensation immediately f o r events i n which
i t i s established t h a t damage was avoidable,
again on the assumption t h a t compensating t h e
i n j u r e d p a r t y avoids l i t i g a t i o n
•
No-Fault Programs, i n which plans set up
programs t o pay i n j u r e d p a r t i e s a u t o m a t i c a l l y
without regard t o f a u l t f o r some or a l l
events, compensating i n j u r e d p a r t i e s q u i c k l y
and avoiding l i t i g a t i o n
FEDERAL STANDARDS FOR MALPRACTICE CASES
Health reform establishes f e d e r a l standards f o r malpractice
and t o r t reform i n the f o l l o w i n g areas:
•
Non-Economic Damages
Not l a t e r than four years a f t e r enactment o f
reform, states adopt a l i m i t on non-economic
damages awarded i n malpractice cases. A s t a t e
t h a t f a i l s t o adopt a l i m i t may have f e d e r a l
funds w i t h h e l d .
44
�miVILEOED AND COMFIDEMTIAL
Limit on Contingency Fees
Federal law l i m i t s contingency fees i n
medical malpractice cases t o no more than
o n e - t h i r d o f the t o t a l recovery, leaving
s t a t e s f r e e t o enact more s t r i n g e n t l i m i t s i f
they choose. To the extent a s t a t e enacts a
l i m i t below o n e - t h i r d f o r large awards, t h e
s t a t e may allow fees greater than o n e - t h i r d
f o r awards under $100,000.
Periodic Payment of Awards
At the request o f e i t h e r p a r t y , judgements
may be made payable i n p e r i o d i c i n s t a l l m e n t s
as appropriate t o r e f l e c t the need f o r
medical and other services.
C o l l a t e r a l Sources
Damages i n malpractice cases w i l l be reduced
by the amount o f any payments made f o r
medical costs by the h e a l t h plan o r any other
source.
45
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�DETERMINED TO BE AN
—
aOOfa-O&lb- F
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—
GOVERNMENT PROGRAMS
MEDICARE
Under h e a l t h reform. Medicare remains a d i s t i n c t program i n
order t o avoid any d i s r u p t i o n i n care t o i t s b e n e f i c i a r i e s .
M o d i f i c a t i o n s t o the Medicare program expand b e n e f i t s , streamline
a d m i n i s t r a t i o n , c o n t a i n costs and expand b e n e f i c i a r i e s ' access t o
organized d e l i v e r y systems.
F i n a l l y , when a l l i a n c e s are f u l l y operational, s t a t e s may
apply f o r expedited Medicare waivers t o i n t e g r a t e Medicare
b e n e f i c i a r i e s i n t o the new health care system f o r insurance and
care.
NEW COVERAGE FOR OUTPATIENT PRESCRIPTION DRUGS
A l l Medicare Part B b e n e f i c i a r i e s receive coverage f o r
o u t p a t i e n t p r e s c r i p t i o n drugs, subject t o the same co-payments
and d e d u c t i b l e s as apply t o the under-65 population.
The b e n e f i t covers a l l FDA-approved drugs and b i o l o g i c a l s
and t h e i r medically accepted i n d i c a t i o n s . The Secretary o f t h e
Department o f Health and Human Services, working w i t h a
subcommittee o f the National Health Board, may decide t o exclude
c e r t a i n types o f drugs, based on evidence t h a t they are subject
t o c l i n i c a l misuse or inappropriate use.
I n areas i n which h e a l t h a l l i a n c e s are not yet i n operation.
Medicare's p r i c e f o r any drug i s the lower o f the median p r i c e
f o r each drug charged t o a l l purchasers or the p r i c e c u r r e n t l y
s p e c i f i e d f o r Medicaid (the 1990-indexed Average Manufacturers
Price l e s s a rebate now set a t 15.7 percent).
Once a l l i a n c e s are i n operation, the p r i c e f o r Medicare drug
b e n e f i t s i s the lower o f the median p r i c e i n the A l l i a n c e or t h e
Medicaid-equivalent p r i c e . The Secretary o f HHS may n e g o t i a t e
p r i c e s f o r new drugs, r a t h e r than simply accepting a
manufacturer's p r i c e .
To encourage use o f generic drugs, physicians must s p e c i f y
"brand medically necessary" or obtain p r i o r approval when
s p e c i f y i n g brand-name drugs. Pharmacists must submit hard copy
to carriers.
Under reform. Medicare reimburses pharmacists a t a r a t e
equal t o the number o f u n i t s dispensed times the median Average
Wholesale P r i c e f o r a l l manufacturers, i n c l u d i n g brand-name
drugs, plus 50 cents. For other drugs, payment i s the lesser o f
46
�PRIVILEOCD MID CONriDENTIAtr
the 90th p e r c e n t i l e o f "usual and customary" charges o r t h e
pharmacists' a c t u a l a c q u i s i t i o n cost plus $5.
Pharmacists who accept Medicare reimbursement as payment i n
f u l l ( t h a t i s , agree t o p a r t i c i p a t e ) receive $2 more per
p r e s c r i p t i o n than pharmacists t h a t do not. Pharmacists may not
charge Medicare b e n e f i c i a r i e s more than they charge cash-paying
customers before and a f t e r the deductible i s reached.
To monitor program outlays and make recommendations t o t h e
Congress and the Secretary on program financing and operations,
the reform establishes an eight-member P r e s c r i p t i o n Drug Payment
Review Commission, s i m i l a r t o ProPAC and PPRC.
Under reform. Medicare p a r t i c i p a t e s i n the Drug Use Review
program e s t a b l i s h e d f o r Medicaid i n OBRA 1990. I n a d d i t i o n , t h e
Secretary o f HHS must e s t a b l i s h a n a t i o n a l system o f E l e c t r o n i c
Claims Management as the primary method f o r determining
e l i g i b i l i t y , f o r processing and a d j u d i c a t i o n claims, and f o r
p r o v i d i n g the pharmacist information about the p a t i e n t ' s drug and
medical h i s t o r y under the program.
The Department o f Health and Human Services funds a
demonstration p r o j e c t t o assess the cost e f f e c t i v e n e s s o f paying
pharmacists t o provide ongoing medication management f o r s e l e c t ,
h i g h - r i s k Medicare b e n e f i c i a r i e s .
ADMINISTRATIVE SIMPLIFICATION
Medicare p a r t i c i p a t e s i n the uniform b i l l i n g , e l e c t r o n i c
claims submission, remittance notices, coordination o f b e n e f i t s ,
unique i d e n t i f i e r s and u t i l i z a t i o n review s t r e a m l i n i n g required
f o r the r e s t o f the health system under reform.
These changes r e l i e v e health providers and consumers o f
s i g n i f i c a n t a d m i n i s t r a t i v e burdens, as w e l l as c l a r i f y i n g
b e n e f i t s , payments and e l i g i b i l i t y f o r consumers.
COST CONTAINMENT
To c o n t a i n the volume o f health services paid f o r by
Medicare, the program consolidates i n d i v i d u a l procedures and
treatments i n t o packages t o reduce incentives f o r providers t o
over-use services. Changes address s u r g i c a l and r a d i o l o g i c a l
procedures i n h o s p i t a l o u t p a t i e n t departments, radiology,
anesthesia and pathology services i n the h o s p i t a l .
47
�-PRIVILEGED AND CONFIDENTIAL
To s h i f t the Medicare program t o a budgeted system, h e a l t h
reform t i g h t e n s t a r g e t s f o r t o t a l spending on physicians services
(Medicare Volume Performance Standards), compatible w i t h the
o v e r a l l h e a l t h care budget.
As under c u r r e n t law. Medicare p a r t i c i p a t e s i n s t a t e e f f o r t s
t o c o n t a i n costs by agreeing t o apply the same systems t o
payments under Medicare t h a t apply t o other payers, i f the s t a t e
demonstrates t o the Secretary of the Department of Health and
Human Services t h a t the l e v e l and r a t e of increase i n Medicare
expenditures i n the s t a t e w i l l be no greater than expenditures i f
Medicare had not p a r t i c i p a t e d .
EXPANDED PARTICIPATION IN ORGANIZED DELIVERY SYSTEM
Medicare c u r r e n t l y contracts w i t h HMOs t o serve Medicare
b e n e f i c i a r i e s . These plans provide b e n e f i t s beyond those
Medicare covers, where t h e i r costs are below average f o r Medicare
b e n e f i c i a r i e s i n an area. Under health reform. Medicare expands
the array o f plans w i t h which i t contracts on b e n e f i c i a r i e s '
behalf i n order t o promote i n t e g r a t i o n i n t o the broader h e a l t h
care system. As under current arrangements, b e n e f i t s i n these
plans may be broader than Medicare b e n e f i t s .
To address b e n e f i c i a r i e s ' reluctance t o e n r o l l i n managedcare h e a l t h plans. Medicare also develops a new arrangement
p r o v i d i n g b e n e f i c i a r i e s w i t h choice at the p o i n t of service.
Under t h i s arrangement. Medicare contracts w i t h h e a l t h
i n s t i t u t i o n s and providers t o create preferred provider networks
i n each major metropolitan area.
B e n e f i c i a r i e s i n networks choose on a service-by-service
bases whether or not t o use the network or continue i n the feef o r - s e r v i c e system. B e n e f i c i a r i e s share i n savings t o Medicare
i f they increase t h e i r use of networks. Physicians p a r t i c i p a t i n g
i n the network also receive expedited payment on b e t t e r terms
than payments t o other physicians.
MEDIGAP INSURANCE
Under h e a l t h reform, insurance p r a c t i c e s r e l a t e d t o the sale
of Medigap supplemental insurance p o l i c i e s and s p e c i a l Medicare
programs f o r such insurance must conform t o insurance r u l e s t h a t
govern the o v e r a l l health-care system.
48
�-PHlVlLEGhlJ ANU CONFIDEMTIAL —
STATE INTEGRATION OF MEDICARE
To f a c i l i t a t e integration without disruption, states may
seek waivers to include the Medicare population into t h e i r
alliance-based systems, once they are f u l l y established. Terms
of the waiver must guarantee beneficiary protections and ensure
that Medicare spending i s no greater than under the t r a d i t i o n a l
program. Terms may include provisions to allow states to share
i n any savings that result from integration.
49
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INmALS:£^DATE:fi2U^iP l ERxyxuGBD
c
MID GOHFIDDHTIAL
GOVERNMENT PROGRAMS
MEDICAID
I n t h e reformed health-care system, low-income and disabled
people e l i g i b l e f o r the Medicaid program o b t a i n h e a l t h insurance
coverage f o r t h e guaranteed b e n e f i t package through h e a l t h
a l l i a n c e s and h e a l t h plans established by s t a t e s .
Current Medicaid r e c i p i e n t s who work receive coverage
through t h e i r employers. Like other working i n d i v i d u a l s , they
c o n t r i b u t e a percentage o f p a y r o l l t o the cost o f h e a l t h
insurance and pay any deductible and co-insurance requirements
under t h e i r h e a l t h plan.
Most d o l l a r s c u r r e n t l y spent f o r acute-care f o r Medicaid
r e c i p i e n t s are s t i l l spent on care f o r these i n d i v i d u a l s , i n the
form o f r i s k - a d j u s t e d premiums f o r the guaranteed b e n e f i t
package.
A p o r t i o n o f Medicaid revenues saved from employer
c o n t r i b u t i o n s f o r M e d i c a i d - e l i g i b l e workers can be r e d i r e c t e d t o
subsidize premiums f o r nonworking low-income i n d i v i d u a l s and
families.
Long-term care services f o r Medicaid e n r o l l e e s continue t o
be funded by the Medicaid program.
RESIDUAL BENEFITS
Medicaid continues t o e x i s t f o r services not covered under
the guaranteed b e n e f i t package. Supplemental services i n c l u d e
hearing aids, eyeglasses and r e s t o r a t i v e d e n t a l work f o r a d u l t s ,
p r i v a t e duty nursing. Medicare cost sharing, case management,
p h y s i c a l therapy, r e s p i r a t o r y care and other s p e c i a l i z e d services
f o r c u r r e n t M e d i c a i d - e l i g i b l e people.
MAINTENANCE OF EFFORT
Under h e a l t h reform, states continue t h e i r commitment t o
p r o v i d i n g h e a l t h care f o r low-income populations a t c u r r e n t
l e v e l s o f funding; however, the formula t h a t determines s t a t e
maintenance o f e f f o r t w i l l be calculated only on spending f o r
acute medical care under Medicaid.
During t h e f i r s t several years the new system operates,
s t a t e s ' maintenance o f e f f o r t increases a t a r a t e negotiated by
the s t a t e s and the National Health Board.
50
�-PRIVILEGEB AND CONFIDEMTIAL
A f t e r t h i s period, the Board recommends an adjustment t o
s t a t e c o n t r i b u t i o n s t o promote greater e q u i t y across s t a t e s .
Congress acts on t h e Board's recommendations w i t h an up o r down
vote.
LONG-TERM CARE
For nursing homes and other long-term care i n s t i t u t i o n s .
Medicaid coverage continues under h e a l t h reform. Matching
formulas t h a t determine current s t a t e and f e d e r a l funding f o r
those services also continue unchanged.
51
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digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
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�DETERMINED TO BE AN
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" " S S f e ^ F ^ ^
PniVILEOED A D COHriDEMTIAL
M
LONG-TERM CARE
Health reform establishes the foundation for a s o c i a l
insurance system for long-term care. The guaranteed national
benefit package includes some long-term care services
administered through a partnership between federal and state
governments.
However, long-term care benefits are phased i n over an
extended time and administered separately from the health
a l l i a n c e structure.
Although i n s t i t u t i o n a l care i s not included i n the new
benefits, health reform modifies the existing Medicaid long-term
care program.
Health reform also addresses requirements for the private
insurance market to improve the r e l i a b i l i t y and quality of those
p o l i c i e s covering long-term care.
F i n a l l y , health reform provides tax credits to a s s i s t
persons with d i s a b i l i t i e s i n paying for work-related expenses.
HOME AND COMMUNITY-BASED CARE
Health reform establishes a new program for home and
community-based care, available to a l l seriously disabled persons
regardless of age or income.
The new program defines serious d i s a b i l i t y as d i f f i c u l t y
performing three or more a c t i v i t i e s of daily l i v i n g , such as
eating, bathing, dressing and toileting; a similar l e v e l of
cognitive impairment; or, for people with mental retardation,
severe and profound retardation. The existing Medicaid program
continues for beneficiaries who do not qualify under these
stricter eligibility criteria.
Each state defines the array of long-term care services
offered under the new program. Minimal services include personal
care assistance. Beyond the minimal, services may include but
are not limited to:
•
Homemaker and chore assistance
•
Adult day care
A s s i s t i v e devices
Habilitation and rehabilitation
52
�PRIVILECED AND COMFIDEWTIAL'
•
Home h e a l t h services beyond those provided by
h e a l t h plans.
States may provide b e n e f i c i a r i e s w i t h vouchers or cash
payments as a means t o d i s t r i b u t e b e n e f i t s .
States determine e l i g i b i l i t y f o r the program, develop care
plans, coordinate services and ensure q u a l i t y .
State-designated
s e r v i c e coordinators must authorize payment f o r services. States
exercise s u f f i c i e n t f l e x i b i l i t y t o encourage service coordinators
to t a i l o r b e n e f i t s t o the needs of i n d i v i d u a l consumers.
Consumers share the cost of services. A co-insurance
payment of 20 percent w i l l be required except from i n d i v i d u a l s
whose incomes are below 150 percent of poverty.
The program services l i v e under a pre-determined, f i x e d
budget established at the n a t i o n a l l e v e l and based on estimated
costs of service. Annual budget increases w i l l be c a l c u l a t e d
based on the Consumer Price Index, population growth and an
a d d i t i o n a l amount (1.5 percent) r e f l e c t i n g r e a l wage growth i n
the economy.
Budgets include the amount each s t a t e c u r r e n t l y c o n t r i b u t e s
to home and community-based services through Medicaid.
Maintenance of e f f o r t w i l l be required t a k i n g i n t o account the
continued need f o r a r e s i d u a l Medicaid program.
The
and age
w e l l as
outside
budget w i l l be d i s t r i b u t e d among states based on size
of the e l i g i b l e population l i v i n g outside i n s t i t u t i o n s as
the numbers of severely disabled persons i n need of care
institutions.
I n i t i a l funding f o r the program w i l l begin i n 1995.
In that
year, s t a t e s w i l l receive 20 percent of the estimated t o t a l
budget. An a d d i t i o n a l 20 percent w i l l be added each year u n t i l
the program reaches f u l l funding i n 1999.
IMPROVED MEDICAID NURSING HOME PROTECTION
I n some s t a t e s , i n d i v i d u a l s whose incomes exceed the l e v e l
t o q u a l i f y f o r Medicaid but are s t i l l i n s u f f i c i e n t t o pay p r i v a t e
nursing-home r a t e s , may be unable t o q u a l i f y f o r Medicaid
coverage. I n most s t a t e s , i n order t o q u a l i f y f o r Medicaid,
i n d i v i d u a l s are permitted t o r e t a i n only approximately $2,000 i n
personal assets. I n d i v i d u a l s e l i g i b l e f o r Medicaid nursing home
coverage are permitted t o r e t a i n from t h e i r income only a very
small personal allowance.
53
�•PRIVILCOED AND COHriDEMTIAL
For those i n d i v i d u a l s , h e a l t h reform secures the f o l l o w i n g
changes:
A l l s t a t e s w i l l be required t o allow i n s t i t u t i o n a l i z e d
i n d i v i d u a l s t o spend down income t o q u a l i f y f o r
Medicaid
•
I n s t i t u t i o n a l and nursing home residents w i l l r e t a i n
$12,000 i n protected assets
•
I n s t i t u t i o n a l and nursing home residents w i l l
be allowed a personal allowance of $100 per
month, more than three times the c u r r e n t
allowance of $30.
I n a d d i t i o n , s t a t e s continue t o have the o p t i o n of expanding
asset p r o t e c t i o n f o r nursing home residents through Medicaid t o
the e x t e n t of coverage purchased through p r i v a t e insurance.
PRIVATE LONG-TERM CARE INSURANCE
To promote the a v a i l a b i l i t y of p r i v a t e long-term care
insurance p o l i c i e s t h a t p r o t e c t consumers against the cost of
service beyond guaranteed p u b l i c b e n e f i t s , h e a l t h reform includes
r e g u l a t i o n and tax c l a r i f i c a t i o n f o r such p o l i c i e s .
REGULATORY PROCESS
States r e g u l a t e long-term care insurance p o l i c i e s and
businesses or insurance agents who s e l l those p o l i c i e s , subject
t o f e d e r a l standards s p e c i f i e d i n the s t a t u t e and described
below.
States are responsible f o r monitoring and e n f o r c i n g longterm care insurance standards, subject t o a plan approved by the
Secretary of the Department of Health and Human Services. States
may apply standards beyond those required under f e d e r a l law and
must e s t a b l i s h mechanisms t h a t guarantee:
•
Procedures f o r r e c e i v i n g , responding t o and
i n v e s t i g a t i n g complaints r e l a t e d t o long-term care
insurance
•
Provide consumers access t o complaint f i l e s and other
i n f o r m a t i o n on p o l i c i e s or insurance company
performance
54
�•PRIVILEOED AND CONFIDENTIAL
•
Enforcement measures that include opportunities f o r
c o r r e c t i o n , c i v i l monetary p e n a l t i e s up t o $25,000,
p l u s imprisonment and other f i n e s separately a p p l i e d to
companies and agents
•
Rules f o r e v a l u a t i n g and approving premiums
•
Data c o l l e c t i o n by i n s u r e r s
•
Annual r e p o r t s t o the Secretary on the e f f e c t i v e n e s s of
the regulatory process
The f e d e r a l government w i l l conduct p e r i o d i c a u d i t s and
i n s p e c t i o n s of regulatory performance t o determine compliance
with s t a t e p l a n s . S t a t e s determined t o be out of compliance w i l l
have 30 days t o submit a plan for c o r r e c t i v e a c t i o n t o the
Secretary.
Under h e a l t h
to t h e s t a t e s and
conduct counseling
of long-term c a r e
reform, the f e d e r a l government provides grants
t o n a t i o n a l organizations to e s t a b l i s h and
s e r v i c e s for consumers e v a l u a t i n g the purchase
insurance.
REGULATORY STANDARDS
Health reform s p e c i f i e s standards for long-term c a r e
insurance p o l i c i e s and the p r a c t i c e s of i n s u r e r s o r agents.
A long-term c a r e insurance p o l i c y i s defined as any
insurance p o l i c y , r i d e r or c e r t i f i c a t e a d v e r t i s e d , marketed,
o f f e r e d o r designed t o provide coverage f o r not l e s s than 12
consecutive months for each covered person on an expense
i n c u r r e d , indemnity, prepaid or other b a s i s of one or more
necessary d i a g n o s t i c , preventive therapeutic, r e h a b i l i t a t i v e ,
maintenance o r personal care s e r v i c e s provided i n a s e t t i n g other
than an acute c a r e u n i t of a h o s p i t a l .
P o l i c i e s include group and i n d i v i d u a l a n n u i t i e s and l i f e
insurance p o l i c i e s , r i d e r s or c e r t i f i c a t e s t h a t provide, d i r e c t l y
or i n d i r e c t l y , o r t h a t supplement long-term c a r e insurance and
p o l i c i e s , r i d e r s o r c e r t i f i c a t e s that provide f o r payment of
b e n e f i t based on c o g n i t i v e impairment or l o s s of f u n c t i o n a l
c a p a c i t y . Insurance components of continuing care r e t i r i n g
communities are a l s o s u b j e c t to r e g u l a t i o n .
P o l i c y standards
include:
D e f i n i t i o n of nursing home and home-care b e n e f i t s t h a t
c o n s t i t u t e covered s e r v i c e s
55
�PRIVILEOED AMD
COHriDEHTIftfc
N o n f o r f e i t u r e b e n e f i t s , i n case of p o l i c y lapse
Offer of i n f l a t i o n p r o t e c t i o n
Requirements t h a t e l i g i b i l i t y be based on an
independent assessment of f u n c t i o n a l capacity and, at
the Secretary's d i s c r e t i o n , based on a uniform
assessment instrument and a standard set of e l i g i b i l i t y
triggers
P r o h i b i t i o n on l i m i t a t i o n s regarding r e c e i p t of
b e n e f i t s , i n c l u d i n g p r e - e x i s t i n g conditions
Uniform d e f i n i t i o n s , terminology and
format
Rights and r u l e s regarding upgrades of p o l i c i e s ,
c o n t i n u a t i o n and conversion of group p o l i c i e s
N o t i f i c a t i o n of premium lapses
Provision of o u t l i n e s of coverage t o inform consumers
as t o b e n e f i t s , e l i g i b i l i t y , exclusions, value of
b e n e f i t s r e l a t i v e t o service costs, expected premium
increases, tax treatment, and r e l a t i o n t o p u b l i c longterm care b e n e f i t s .
National standards f o r business practices
include:
Compliance w i t h s t a t e r u l e s f o r premium
determination
Establishment of an appeal process f o r b e n e f i c i a r i e s
Mechanisms f o r t i m e l y r e s o l u t i o n of consumer complaints
Provision of information regarding claim
denials
T r a i n i n g and c e r t i f i c a t i o n of agents
L i m i t s on commissions paid t o agents f o r renewal or
replacement of p o l i c i e s
P r o h i b i t i o n s against s p e c i f i c sales p r a c t i c e s ,
i n c l u d i n g sales t o persons e l i g i b l e f o r Medicaid,
completion of medical h i s t o r i e s by agents, sales
of d u p l i c a t e coverage, t w i s t i n g , high pressure,
cold-lead a d v e r t i s i n g and reduction of b e n e f i t s on
the basis of e l i g i b i l i t y f o r other b e n e f i t s
Standards f o r association endorsement or sale of
policies
56
�-PRIVILECED AND CONFIDENTIAL
TAX INCENTIVES
Under c u r r e n t law, long-term care insurance premiums are
paid w i t h a f t e r - t a x d o l l a r s and b e n e f i t s are taxable. Health
reform includes e x p l i c i t tax m o d i f i c a t i o n s t o t r e a t expenditures
f o r long-term care insurance s i m i l a r l y t o accident and h e a l t h insurance premiums, as f o l l o w s :
•
Amounts paid e i t h e r f o r services o r as cash
payments under a q u a l i f i e d long-term care
p o l i c y w i l l be excluded from taxable income.
Q u a l i f i e d p o l i c i e s are those t h a t meet
r e g u l a t o r y requirements and cover persons
l i m i t e d i n three o r more a c t i v i t i e s o f d a i l y
living.
The maximum d a i l y b e n e f i t amount excluded
from income i s $110 i n 1994, adjusted
thereafter t o r e f l e c t i n f l a t i o n .
•
Amounts paid t o t e r m i n a l l y i l l i n d i v i d u a l s as
accelerated death b e n e f i t s are not subject t o
taxation.
I n d i v i d u a l s w i l l be allowed t o deduct as a
medical expense payments f o r q u a l i f i e d longterm care p o l i c i e s subject t o the 7.5 percent
f l o o r f o r taxpayers who itemize deductions.
•
Employer-paid premiums f o r long-term care
p o l i c i e s w i l l be treated as deductions f o r
employers and excluded from taxable income
f o r employees.
TAX INCENTIVES FOR PERSONS WITH DISABILITIES W O W R
H OK
To encourage p a r t i c i p a t i o n i n the workforce by i n d i v i d u a l s
w i t h d i s a b i l i t i e s , h e a l t h reform establishes a tax c r e d i t f o r
expenses associated w i t h personal assistance services.
Employed i n d i v i d u a l s can o b t a i n a tax c r e d i t f o r 50 percent
of t h e i r costs t o pay f o r personal assistance services up t o a
maximum o f $15,000 annually, o r a maximum tax c r e d i t o f $7,500.
Personal assistance services covered under t h e tax c r e d i t
include:
57
�PRIVILEOCD AND
COMFIDEMTIAL
Personal services, i n c l u d i n g but not l i m i t e d t o , those
a p p r o p r i a t e t o c a r r y i n g out a c t i v i t i e s of d a i l y l i v i n g
i n o r o u t o f t h e home, such as a s s i s t a n c e w i t h b a t h i n g
and p e r s o n a l hygiene, bowel and b l a d d e r c a r e , d r e s s i n g
and grooming, l i f t i n g and t r a n s f e r r i n g , e a t i n g o r
f e e d i n g , g i v i n g medications and i n j e c t i o n s , m e n s t r u a l
c a r e , o p e r a t i n g and m a i n t a i n i n g r e s p i r a t o r y equipment,
and p r o v i s i o n o f a s s i s t i v e technology d e v i c e s and
services
E s s e n t i a l home s e r v i c e s i n c l u d i n g a s s i s t a n c e w i t h meal
p l a n n i n g and p r e p a r a t i o n , shopping, p r e p a r a t i o n o f work
clothes
L i f e - s k i l l support i n c l u d i n g b u t n o t l i m i t e d t o
a s s i s t a n c e w i t h money management, p l a n n i n g and
d e c i s i o n - m a k i n g i n c l u d i n g computer a s s i s t e d
d i r e c t i o n s , home management, companion o r roommate
s e r v i c e s t o p r o v i d e r e g u l a r 24 hour s u p e r v i s i o n
Communication s e r v i c e s i n c l u d i n g b u t n o t l i m i t e d t o
assistance w i t h i n t e r p r e t i n g , reading, l e t t e r w r i t i n g
and use o f communication o r t e l e c o m m u n i c a t i o n d e v i c e s
S e c u r i t y services i n c l u d i n g but not l i m i t e d t o
m o n i t o r i n g alarms o r systems as w e l l as arrangements
f o r p e r i o d i c c o n t a c t i n person o r by t e l e p h o n e
M o b i l i t y s e r v i c e i n and o u t o f t h e home i n c l u d i n g b u t
n o t l i m i t e d t o e s c o r t and d r i v i n g and use o f p u b l i c
transportation
W o r k - r e l a t e d support s e r v i c e s i n c l u d i n g b u t n o t l i m i t e d
t o on-going s e r v i c e s t o a s s i s t an i n d i v i d u a l i n
p e r f o r m i n g w o r k - r e l a t e d f u n c t i o n s necessary t o o b t a i n
and r e t a i n employment i n an i n t e g r a t e d work s e t t i n g and
t o f u l f i l l t h e r e q u i r e m e n t s o f employment
Service coordination i n c l u d i n g assistance w i t h
r e c r u i t i n g , s c r e e n i n g , r e f e r r i n g and managing p e r s o n a l
assistants
A s s i s t i v e technology s e r v i c e s i n c l u d i n g e v a l u a t i n g
needs; a d a p t i n g , f i t t i n g , m o d i f y i n g and m a i n t a i n i n g
d e v i c e s ; c o o r d i n a t i n g o t h e r t h e r a p i e s ; t r a i n i n g and
t e c h n i c a l a s s i s t a n c e f o r f a m i l y members o r f o r p e r s o n a l
assistants
Emergency s e r v i c e s i n c l u d i n g s u b s t i t u t e s e r v i c e s f o r
any o f t h e above r e q u i r e d on an emergency b a s i s .
58
�miVILEOED AMD COMITTnFitlTTftL
CONTINUUM OF CARE DEMONSTRATION PROGRAMS
Under h e a l t h reform, the Department o f Health and Human
Services e s t a b l i s h e s a demonstration program t o :
I d e n t i f y o r g a n i z a t i o n a l s t r u c t u r e s t h a t i n t e g r a t e acute
medical and long-term care
•
Assess the operational and f i n a n c i a l v i a b i l i t y o f
model i n t e g r a t i o n arrangements
•
Evaluate the impact o f i n t e g r a t i o n on c o n t i n u i t y and
q u a l i t y o f care, on delaying or preventing t h e
progression o f d i s a b i l i t y and on o v e r a l l costs
Determine the appropriateness o f i n c l u d i n g model
arrangements as options f o r health plans p r o v i d i n g
guaranteed b e n e f i t s .
An i n t e g r a t e d care arrangement must provide the n a t i o n a l l y
guaranteed b e n e f i t package, specialized b e n e f i t s involved i n
t r a n s i t i o n s between acute and long-term care and some set o f
long-term care and h a b i l i t a t i o n b e n e f i t s .
Model i n t e g r a t i o n arrangements can t a r g e t disabled persons.
Medicare b e n e f i c i a r i e s , or Medicaid long-term care b e n e f i c i a r i e s
also e l i g i b l e f o r Medicare o r SSI.
I n order t o sponsor an i n t e g r a t i o n program, the sponsoring
i n s t i t u t i o n demonstrates the f o l l o w i n g :
•
C a p a b i l i t y t o provide or contract f o r enrollment
services, c l i e n t assessment and planning, s i m p l i f i e d
access t o needed services, ongoing and i n t e g r a t e d acute
and chronic care management, c o n t i n u i t y o f care across
s e t t i n g s and services, q u a l i t y assurance, grievance and
appeals procedures and member services
Consumer p a r t i c i p a t i o n and involvement as i n d i c a t e d by
support from community agencies or consumer groups,
plans f o r making consumer information a v a i l a b l e t o
e n r o l l e e s , methods f o r consumer or consumer advocate
p a r t i c i p a t i o n i n care planning and treatment decisions,
mechanisms f o r r e s o l u t i o n o f e n r o l l e e complaints
regarding b e n e f i t s or services, methods f o r i n v o l v i n g
consumers i n q u a l i t y assurance and provider c o n t r a c t i n g
and evaluations o f consumer s a t i s f a c t i o n
Organizational q u a l i f i c a t i o n s i n c l u d i n g adequate
f i n a n c i a l c o n t r o l s , board or other governing body
59
�PRIVILCOED AMD COHriDEMTIAL
commitment t o demonstration goals, management and
i n f o r m a t i o n systems, compliance w i t h s t a t e laws
Sponsors receive a capitated amount t o provide mandatory
services under the demonstration. Capitations may be negotiated
or c o m p e t i t i v e l y b i d t o achieve a c t u a r i a l equivalence o f
Medicare, Medicaid, long-term care o r health-plan b e n e f i t s .
Financing i s drawn, as appropriate, from these sources.
I n a d d i t i o n , sponsors may receive premiums from i n d i v i d u a l s
e n r o l l e d i n the program f o r the a c t u a r i a l equivalent o f costsharing under Medicare o r health plans as w e l l as f o r o p t i o n a l
services.
C a p i t a t i o n payments r e f l e c t the age, d i s a b i l i t y s t a t u s and
other c h a r a c t e r i s t i c s o f the e n r o l l e d population.
The Department o f Health and Human Services i d e n t i f i e s up t o
25 s i t e s i n which t o conduct demonstration programs w i t h emphasis
on sponsors and p r o j e c t s t h a t serve m i n o r i t y populations o r other
underserved populations w i t h d i s a b i l i t i e s .
Demonstrations run f o r a period o f f i v e years from the date
of award. The Department o f Health and Human Services i s
a l l o t t e d $25 m i l l i o n t o support t e c h n i c a l assistance, s i t e
development and research and evaluation.
The Secretary designs the demonstration program as a p o l i c y
research experiment f o r use i n advising Congress about the coste f f e c t i v e n e s s o f i n t e g r a t i o n programs and the appropriateness o f
t h e i r eventual i n c o r p o r a t i o n i n t o the broader h e a l t h system. The
Secretary w i l l r e p o r t f i n d i n g s t o Congress w i t h appropriate
p o l i c y recommendations.
60
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
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�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: jf&f^DATE: rtftflftlCfl
2,00(0-O&O- F
PRIVILECCD MTD COWFIPEWTIAL
WORKERS COMPENSATION AND AUTO INSURANCE
With the u n i v e r s a l insurance coverage provided under h e a l t h
reform, h e a l t h plans provide medical b e n e f i t s c u r r e n t l y provided
through s t a t e workers' compensation programs as w e l l as
a d d i t i o n a l b e n e f i t s , such as more extensive r e h a b i l i t a t i o n ,
covered under workers' compensation.
Under h e a l t h reform, the medical component of workers'
compensation works i n the f o l l o w i n g manner:
•
Insurers continue t o c o l l e c t premiums f o r
workers' compensation insurance using
experience rates t h a t allow employers who
have fewer claims t o pay lower premiums.
•
Health a l l i a n c e s negotiate w i t h h e a l t h plans
t o e s t a b l i s h fee schedules, or c a p i t a t e d
payments, f o r providing the f u l l range of
services t o i n j u r e d workers under workers'
compensation.
A l l i a n c e s require each health plan t o achieve
the same e f f i c i e n c i e s i n i t s fee schedule f o r
workers' compensation t h a t i t achieves f o r
the comprehensive b e n e f i t package.
•
Health plans i n which workers are e n r o l l e d
provide medical care f o r work-related
injuries.
•
Workers' compensation insurers pay h e a l t h
plans f o r t h a t care under the negotiated fee
schedule.
Because workers' compensation insurance provides b e n e f i t s ,
such as f i r s t - d o l l a r coverage, long-term r e h a b i l i t a t i o n therapy
and c u s t o d i a l long-term care, beyond the n a t i o n a l l y guaranteed
b e n e f i t package, a separate s t r u c t u r e w i t h i n each h e a l t h plan
t r e a t s work-related i n j u r i e s .
I n t e g r a t i n g the treatment of work-related i n j u r i e s i n t o the
h e a l t h care system provides b e t t e r coordination and c o n t i n u i t y of
care and i n c e n t i v e s t o manage the cost of t h a t p o r t i o n of h e a l t h
care. I t also helps curb instances of fraud which are prevalent
i n workers' compensation.
61
�PniVILECED AMD COHFIDENTIALAs a r e s u l t of various exclusions, approximately 13 percent
of American workers are not covered under workers' compensation
insurance. Three states allow workers' compensation coverage t o
be v o l u n t a r y on the p a r t of employers.
Under h e a l t h reform, states r e t a i n the power t o allow
exclusions, and workers who move from a s t a t e where they are not
covered t o one i n which they are included obtain care f o r workr e l a t e d i n j u r i e s through t h e i r health plan i n the new s t a t e .
AUTO INSURANCE
Auto insurance covers medical costs r e s u l t i n g from auto
accidents, w i t h some states providing n o - f a u l t coverage and
others r e l y i n g on t h i r d - p a r t y coverage. Many states allow hybrid
systems t h a t c o n t a i n elements of both a l t e r n a t i v e s .
Under h e a l t h reform, health plans provide medical care
required f o r the treatment of i n j u r i e s suffered i n auto
accidents, i n c l u d i n g both medical costs covered i n the guaranteed
b e n e f i t package and others t h a t are supplementary. When an
i n d i v i d u a l i s involved i n an auto accident, the i n d i v i d u a l seeks
care from h i s or her health plan, as w i t h any other i n j u r y .
Funding f o r the health system covers care f o r auto
accidents, so automobile insurance companies could be taxed t o
provide revenues t o the health care system equal t o the cost of
medical care r e s u l t i n g from auto accidents.
Health reform preempts s t a t e laws t h a t determine coverage
and premiums f o r medical care under automobile insurance.
I n d i v i d u a l s would not be e n t i t l e d t o recover medical costs
r e s u l t i n g from auto accidents through other means.
As a r e s u l t , automobile insurance premiums w i l l d e c l i n e t o
the e x t e n t t h a t medical costs f o r accidents w i l l be paid through
the health-care financing system. Approximately 18 percent of
the c u r r e n t automobile insurance premium pays f o r h e a l t h
coverage, and approximately $12 b i l l i o n per year i s spent on
medical coverage through automobile insurance premiums. I n the
highest cost s t a t e s , medical coverage b u i l t i n t o automobile
insurance premiums can t o t a l $200 or more per p o l i c y .
Health reform mandates t h a t auto insurance premiums d e c l i n e
when the new h e a l t h care system picks up the cost of medical
coverage. State insurance departments are responsible f o r
e n f o r c i n g the law, and s t a t e compliance could be a c o n d i t i o n f o r
p a r t i c i p a t i o n i n the new system. Coverage f o r medical costs of
auto accidents begin as soon as u n i v e r s a l coverage i s a v a i l a b l e
i n a state.
62
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
[3
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: J&2£—DATE:
^
a.OOtC-O^t)"^
miVILEOED AMD CONFIDENTIAL
ADMINISTRATIVE SIMPLIFICATION
The National Health Board, through an Advisory Conunittee on
A d m i n i s t r a t i v e S i m p l i f i c a t i o n , has r e s p o n s i b i l i t y t o c o n t r a c t f o r
the development of and implement the f o l l o w i n g :
Standardized reimbursement and c l i n i c a l encounter forms
Standardization and Automation of Insurance
Transactions
Standardization and s t r e a m l i n i n g of u t i l i z a t i o n review
S i m p l i f i e d c o o r d i n a t i o n of b e n e f i t s requirements
Standard and unique provider, p a t i e n t , plan and
e m p l o y e r - i d e n t i f i c a t i o n numbers
Medicare s t r e a m l i n i n g
Streamlined c e r t i f i c a t i o n and l i c e n s u r e
Streamlined C l i n i c a l Laboratory Improvement Act
The f e d e r a l government mandates t h a t plans i n the h e a l t h
a l l i a n c e and employers outside the a l l i a n c e standardize
reimbursement and encounter forms.
By January 1, 1995, a l l plans standardize reimbursement
r e p o r t i n g on a s i n g l e form f o r the f o l l o w i n g classes of
providers:
•
The UB-92 f o r i n s t i t u t i o n a l providers
The Standard Health Insurance Claim Form (HCFA-1500)
f o r a l l n o n - i n s t i t u t i o n a l providers except f o r
pharmacies and d e n t i s t s
The HCFA 1500 f o r d e n t i s t s
•
The Universal Drug Claim Form developed by the National
Council on P r e s c r i p t i o n Drug Programs f o r pharmacies
who submit b i l l s f o r pharmaceutical products
An advisory committee t o the National Health Board,
f o l l o w i n g c o n s u l t a t i o n w i t h providers, plans, employer groups,
q u a l i t y i n t e r e s t groups and others, adopts these forms and
prescribes standard content and data d e f i n i t i o n requirements f o r
these forms by January 1, 1994.
63
�-PRIVILEGED AMP CONFIDEMTIAL.
A l l payers conform t o t h e e s t a b l i s h e d c o n t e n t r e q u i r e m e n t s
by December 3 1 , 1994.
INSURANCE TRANSACTIONS
The N a t i o n a l H e a l t h Board c o n t r a c t s f o r t h e development o f
n a t i o n a l s t a n d a r d s f o r t h e automation o f i n s u r a n c e t r a n s a c t i o n s ,
i n c l u d i n g c l a i m s payment and s t a t u s , r e m i t t a n c e a d v i c e ,
e l i g i b i l i t y , c o o r d i n a t i o n o f b e n e f i t s i n f o r m a t i o n and u t i l i z a t i o n
review i n f o r m a t i o n .
The new development process does n o t r e - c r e a t e s t a n d a r d s
t h a t a l r e a d y e x i s t . The N a t i o n a l H e a l t h Board i d e n t i f i e s
s t a n d a r d s a l r e a d y i n use i n t h e h e a l t h - c a r e i n d u s t r y and
c o n s o l i d a t e s t h e s e s t a n d a r d s . The American N a t i o n a l Standards
I n s t i t u t e a l r e a d y has developed p r o t o t y p e s f o r t h e c o r e s e t o f
t r a n s a c t i o n s . The Board r e v i e w s these standards f o l l o w i n g
c o n s u l t a t i o n w i t h groups such as t h e Workgroup f o r E l e c t r o n i c
Data I n t e r c h a n g e , t h e American N a t i o n a l Standards I n s t i t u t e , t h e
N a t i o n a l I n s t i t u t e o f Standards and Technology.
By J u l y 1 , 1994, t h e Board d e s i g n a t e s n a t i o n a l s t a n d a r d s
t h a t p r o v i d e r s , p l a n s , a l l i a n c e s and o t h e r employers adhere t o as
a c o n d i t i o n o f p a r t i c i p a t i o n i n t h e h e a l t h system.
The Board i s s u e s a r e p o r t d e t a i l i n g c o n t e n t r e q u i r e m e n t s and
d e f i n i t i o n s a l o n g w i t h an i m p l e m e n t a t i o n s t r a t e g y no l e s s t h a n
s i x months b e f o r e t h e r e q u i r e m e n t f o r s t a n d a r d i z a t i o n goes i n t o
effect.
A l l government h e a l t h programs, i n c l u d i n g t h e Department o f
Defense, CHAMPUS, Department o f Veterans A f f a i r s , Medicare and
any r e m a i n i n g components o f Medicaid adopt s t a n d a r d s i m m e d i a t e l y .
A l l p r i v a t e payers, those p u r c h a s i n g h e a l t h i n s u r a n c e t h r o u g h t h e
a l l i a n c e s and o u t s i d e t h e a l l i a n c e s , use these s t a n d a r d s f o r
t r a n s a c t i o n s conducted e l e c t r o n i c a l l y a f t e r January 1 , 1995.
Major p u b l i c and p r i v a t e payers, h o s p i t a l s , major employers
and s e l f - i n s u r e d p l a n s , as w e l l as c l i n i c s and group p r a c t i c e s o f
20 o r more p r o f e s s i o n a l s must automate t h e c o r e t r a n s a c t i o n s e t
by J u l y 1 , 1995.
To speed i m p l e m e n t a t i o n , t h e Board p r o v i d e s t e c h n i c a l
a s s i s t a n c e t o h e a l t h a l l i a n c e s and p l a n s . I t a l s o c o n t r a c t s f o r
t h e development o f s t a n d a r d computer s o f t w a r e f o r h e a l t h
a l l i a n c e s and p l a n s t o purchase a t a reduced p r i c e .
S t a t e s ensure t h a t p r o v i d e r s , p l a n s and a l l i a n c e use t h e
n a t i o n a l s t a n d a r d s as a c o n d i t i o n o f p a r t i c i p a t i o n i n t h e new
system.
T o o l s f o r enforcement i n c l u d e b u t a r e n o t l i m i t e d t o
64
�-PRiVSLEfiEa~AMD COMFIDENTIALc i v i l monetary p e n a l t i e s as w e l l as allowing a l l i a n c e s t o deny
payments t o plans t h a t have not automated t r a n s a c t i o n s .
UTILIZATION REVIEW
An advisory committee t o the National Health Board c a r r i e s
the r e s p o n s i b i l i t y t o conduct analyses and disseminate
i n f o r m a t i o n about a l t e r n a t i v e s t o case review t h a t reduce t h e
a d m i n i s t r a t i v e burden on providers while achieving cost
efficiencies.
COORDINATION OF BENEFITS
A f t e r J u l y 1, 1994, plans are p r o h i b i t e d from r o u t i n e l y
r e t u r n i n g claims, denying payment, o r otherwise delaying payment
to o b t a i n i n f o r m a t i o n about coverage under other h e a l t h insurance
plans.
During t h e f i r s t two years o f the new h e a l t h system, a l l
plans provide i n f o r m a t i o n t o an enrollment clearinghouse, a f i l e
of subscribers o r e l i g i b l e i n d i v i d u a l s . Plans annually submit a
sample o f paid health-insurance claims t o the clearinghouse t o
determine t h e d o l l a r value o f b e n e f i t s t h a t should have been
covered by another payer. By a date c e r t a i n o f each year, a l l
payers conduct a b e n e f i t - r e c o n c i l i a t i o n process and reimburse one
another f o r covered b e n e f i t s processed i n the p r i o r calendar
year.
By an e s t a b l i s h e d date c e r t a i n , payers a l t e r t h e i r claims
processing systems t o forward claims e l e c t r o n i c a l l y t o other
i n s u r e r s r a t h e r than r e t u r n i n g t h e i r claims t o p r o v i d e r s .
UNIQUE IDENTIFICATION NUMBERS
The Board holds r e s p o n s i b i l i t y t o develop and mandate t h e
use o f unique i d e n t i f i e r numbers f o r p a t i e n t s , considering t h e
advantages o f adopting e x i s t i n g i d e n t i f i e r s , such as S o c i a l
S e c u r i t y numbers.
STREAMLINE MEDICARE
Health reform streamlines the a d m i n i s t r a t i o n o f the Medicare
program t o reduce the burden on providers. An outside review
group working under the Task Force on Health Care Reform makes
s p e c i f i c recommendations t o reduce regulatory burdens under
Medicare next week. Those recommendations w i l l be included i n a
l a t e r d r a f t of t h i s report.
65
�-TRIVILEQED AND COHriDEHTIAL
CERTIFICATION AND LICENSURE
Under h e a l t h reform, the National Health Board develops
n a t i o n a l standards t o be used t o streamline state and f e d e r a l
l i c e n s u r e surveys.
The board convenes an inter-departmental committee t o
develop a simple, outcome-driven survey t h a t overrides t h e
m u l t i p l e surveys confronted by health providers and i n s t i t u t i o n s
i n t h e c u r r e n t system.
The committee's charge i s t o streamline the m u l t i t u d e o f
requirements imposed by OSHA, Medicaid, JCAHO, Medicare,
departments o f h e a l t h , f i r e marshals and other p u b l i c agencies
f o r o n - s i t e surveys i n t o one, annual survey. The i n t e r departmental committee faces a deadline f o r r e p o r t i n g i t s
recommendations by July 1, 1994.
STREAMLINE CLIA
Health reform amends the C l i n i c a l Laboratory Improvement Act
t o reduce i t s j u r i s d i c t i o n t o large-volume, reference
l a b o r a t o r i e s and c r i t i c a l p o i n t - o f - s e r v i c e t e s t i n g , such as
d i a l y s i s blood work and Pap smears. (See Q u a l i t y Assurance
s e c t i o n f o r a d d i t i o n a l explanation.)
66
�Clinton Presidential Records
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marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
�DETERMINED TO BE AN
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INITIALS:
DATE: SSli^iO^
-CsSlO-^
PRIVILEGED MfP COMF1DKMT1AL
PROTECTING AGAINST FRAUD AND ABUSE
The General Accounting O f f i c e estimates the cost o f fraud
and abuse i n the current health system a t $80 b i l l i o n each year.
Under h e a l t h reform, the proper scope o f federal a n t i - f r a u d
e f f o r t s w i l l extend beyond t r a d i t i o n a l government programs, such
as Medicare and Medicaid, because o f the p o t e n t i a l f o r fraud and
abuse t o undermine budget c o n s t r a i n t s .
The encouragement o f a system based on c a p i t a t e d payments t o
h e a l t h plans reduces incentives f o r fraud and abuse inherent i n a
predominantly f e e - f o r - s e r v i c e environment. I n a c a p i t a t e d
payment system t h a t puts providers ordering services a t f i n a n c i a l
r i s k f o r costs, incentives t o f i l e f a l s e claims o r over-use
services d e c l i n e .
The s i m p l i f i c a t i o n o f claims procedures and the adoption o f
a standard form, along w i t h a uniform, c a r e f u l l y defined coding
system also serve t o reduce o p p o r t u n i t i e s f o r fraudulent b i l l i n g ,
which o f t e n e x p l o i t s the inconsistent r u l e s and codes, and t h e
myriad payment methodologies i n the current system.
Health reform goes beyond those important s t r u c t u r a l changes
i n p r o t e c t i n g against fraud and abuse, however. The Departments
of J u s t i c e and Health and Human Services w i l l organize an A l l Payer Health Care fraud and Abuse Enforcement Program t o
coordinate f e d e r a l , s t a t e and l o c a l law-enforcement a c t i v i t i e s .
CRIMINAL PENALTIES
Health care reform creates new and expanded c r i m i n a l
p e n a l t i e s f o r health-care fraud i n c l u d i n g :
•
Amending the f e d e r a l f o r f e i t u r e a u t h o r i t y t o
encompass proceeds derived from health-care
fraud.
•
Enacting a new health-care fraud s t a t u t e
modelled a f t e r e x i s t i n g mail and bank-fraud
s t a t u t e s s p e c i f i c a l l y oriented t o p e n a l i z i n g
schemes t o defraud e i t h e r p u b l i c o r p r i v a t e
h e a l t h care programs.
•
I n c l u d i n g i n the health-care fraud s t a t u t e
p r o h i b i t i o n s against submitting f a l s e
statements t o health a l l i a n c e s o r accountable
h e a l t h plans, paying bridges, g r a t u i t i e s o r
other inducements t o persons associated w i t h
h e a l t h a l l i a n c e s or plans.
67
�PniVILEOED AMP CONFIPENTIALCIVIL PENALTIES
Under h e a l t h reform the f e d e r a l government expands i t s
a u t h o r i t y t o assess c i v i l monetary p e n a l t i e s i n an a d m i n i s t r a t i v e
proceeding against h e a l t h plans and providers who engage i n
p r o h i b i t e d a c t i v i t i e s . This expansion of a u t h o r i t y i n t o the
e n t i r e health-care system p a r a l l e l s the e x i s t i n g a u t h o r i t y of the
O f f i c e o f Inspector General under the Medicare and Medicaid
programs.
Penalties amount t o $10,000 per item or service and an
assessment o f no more than t r e b l e the amount claimed.
An
A d m i n i s t r a t i v e Law Judge imposes a pre-judgement i n t e r e s t on
p e n a l t i e s and assessments. The standard of knowledge applied i n
a l l cases i s "knew or should have known."
P r o h i b i t e d a c t i v i t i e s include:
F i l i n g f a l s e claims f o r a medical service or
supply
•
Submitting a claim f o r physician's service
t h a t was provided by someone other than a
licensed physician, whose license was
obtained through misrepresentation, or who
was improperly represented t o a p a t i e n t as a
specialist
•
Making f a l s e statements
•
E x p e l l i n g or r e f u s i n g t o e n r o l l an e l i g i b l e
individual
•
F a i l i n g t o provide medically necessary items
or services f o r which a p a t i e n t i s e l i g i b l e
•
Claiming reimbursement under a higher code
than the c o r r e c t code f o r the provided
service
•
B i l l i n g separately f o r a series of services
t h a t normally are consolidated under one
charge ( t h e p r a c t i c e of "unbundling charges")
•
Engaging i n unnecessary m u l t i p l e admissions
or other inappropriate medical or
a d m i n i s t r a t i v e practices i n order t o
circumvent payment systems
68
�PRIVILEGED AND CONriDENTIAL
•
Submitting f a l s e or fraudulent statements t o
the National Health Board, a health a l l i a n c e ,
a plan or a s t a t e
•
Engaging i n any p r a c t i c e reasonably expected
to have the e f f e c t o f denying or discouraging
enrollment by e l i g i b l e i n d i v i d u a l s whose
medical c o n d i t i o n s or h i s t o r i e s i n d i c a t e the
need f o r s u b s t a n t i a l medical services i n t h e
future
Employing or c o n t r a c t i n g w i t h any e n t i t y o r
person excluded from p a r t i c i p a t i o n i n the
d e l i v e r y h e a l t h care, u t i l i z a t i o n review,
medical s o c i a l work or a d m i n i s t r a t i v e
services
•
F a i l i n g t o cooperate w i t h q u a l i t y
programs or u t i l i z a t i o n review
•
assurance
Providing unlawful kickbacks
Submitting a claim f o r an item or service
provided by someone excluded from the h e a l t h
care system f o r previous v i o l a t i o n s
•
F a i l i n g t o report violations of federal
c r i m i n a l law
KICKBACKS
Kickbacks r e f e r t o the payment or r e c e i p t o f items o f value
as an inducement f o r the r e f e r r a l o f any type o f h e a l t h care
business. Under the e x i s t i n g Medicare and Medicaid programs,
kickbacks are p r o h i b i t e d and are t r e a t e d as f e l o n i e s .
I n e f f e c t , the Medicare and Medicaid p r o h i b i t i o n s are
extended t o cover a l l payers i n the health-care system. To
enforce those p r o h i b i t i o n s , f e d e r a l a u t h o r i t i e s impose c i v i l
remedies, i n c l u d i n g c i v i l p e n a l t i e s , i n j u n c t i v e r e l i e f and the
c o n f i s c a t i o n o f assets where appropriate.
The Medicare and Medicaid "safe harbor" exceptions continue
to apply, however. I n a d d i t i o n , payments f o r h e a l t h services
furnished on an a t - r i s k basis -- such as c a p i t a t e d payments -are excepted from the p r o h i b i t i o n against kickbacks.
69
�-PR-IVILEGED AND CONPIDENTIRL
SELF-REFERRAL
Health reform p r o h i b i t s payment f o r any item or h e a l t h
service i n which the physician ordering the item or service holds
a f i n a n c i a l i n t e r e s t i n the e n t i t y providing i t unless t h e
physician renders the service. This p r o h i b i t i o n resembles the
p r o h i b i t i o n under Medicare against b i l l i n g c l i n i c a l l a b o r a t o r y
t e s t s performed by labs w i t h which the ordering physician has a
financial relationship.
The p r o h i b i t i o n against s e l f - r e f e r r a l s contains t h e same
exceptions f o r c a p i t a t e d payment system and s i m i l a r organizations
as discussed above i n t h e section on kickbacks.
EXCLUSION FROM HEALTH CARE
Grounds f o r exclusion from p r a c t i c i n g i n the health-care
system p a r a l l e l those c u r r e n t l y applied i n the Medicare and
Medicaid programs, i n c l u d i n g :
A c r i m i n a l c o n v i c t i o n r e l a t e d t o fraud,
t h e f t , embezzlement, breach o f f i d u c i a r y
r e s p o n s i b i l i t y or other f i n a n c i a l misconduct
i n connection w i t h the d e l i v e r y o f h e a l t h
care
A c r i m i n a l c o n v i c t i o n r e l a t e d t o neglect o r
abuse o f p a t i e n t s .
The exclusion clause i s permissive w i t h d i s c r e t i o n vested i n
f e d e r a l a u t h o r i t i e s t o determine when i t i s appropriate under the
f o l l o w i n g circumstances:
•
A c r i m i n a l c o n v i c t i o n r e l a t i n g t o fraud,
t h e f t , embezzlement, breach of f i d u c i a r y
r e s p o n s i b i l i t y o r other f i n a n c i a l misconduct
i n connection w i t h a c t i v i t i e s other than the
d e l i v e r y o f health care
A c r i m i n a l c o n v i c t i o n r e l a t i n g t o the
unlawful manufacture, d i s t r i b u t i o n ,
p r e s c r i p t i o n , o r dispensing o f a c o n t r o l l e d
substance
•
Revocation, suspension, or loss o f a l i c e n s e
t o provide health care f o r reasons o f
p r o f e s s i o n a l competence, performance, o r
financial integrity
70
�-TRIVILEGEP Km COMPIPEWTIftL
•
Exclusion from Medicare o r other federal o r
s t a t e h e a l t h care programs
•
Furnishing t o p a t i e n t s items o r services t h a t
f a i l t o meet p r o f e s s i o n a l l y recognized
standards i n a gross and f l a g r a n t manner
•
E n t i t i e s o r organizations c o n t r o l l e d by an
i n d i v i d u a l excluded from the health-care
system
•
I n d i v i d u a l s who hold a m a j o r i t y ownership
i n t e r e s t i n an e n t i t y convicted o f an offense
r e l a t e d t o the d e l i v e r y o f h e a l t h care
•
F a i l u r e t o disclose required i n f o r m a t i o n
•
F a i l u r e t o allow physical access t o
appropriate a u t h o r i t i e s
•
Default on repayments o f scholarship
o b l i g a t i o n s o r loans i n connection w i t h
health-profession education secured by the
Department o f Health and Human Services
RESTRICTIONS ON HEALTH PLAN PHYSICIAN INCENTIVES
Health reform p r o h i b i t s s p e c i f i c , d i r e c t payments used t o
reduce services t o an i n d i v i d u a l e n r o l l e d i n a plan. Health
a l l i a n c e s and plans must disclose any physician i n c e n t i v e plans
t o the p u b l i c . Health reform w i l l impose sanctions f o r excessive
i n c e n t i v e s f o r u n d e r - u t i l i z a t i o n o f care, d e n i a l o f necessary
services and f a i l u r e t o make the required disclosures.
71
�Clinton Presidential Records
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marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
15"
�miVILEOED AND
CREATING A NEW
COHFIDENTIAL
HEALTH WORKFORCE
Under h e a l t h reform, the f e d e r a l government supports the
p r o v i s i o n of an appropriate mix of specialized and primary-care
physicians, advanced p r a c t i c e nurses and members of selected
a l l i e d h e a l t h occupations, p a r t i c u l a r l y i n underserved r u r a l and
urban areas.
To guarantee the supply of primary-care physicians and
c o r r e c t the imbalance between primary and s p e c i a l i s t providers,
the f e d e r a l government:
•
Establishes a n a t i o n a l l i m i t of 50 percent on
the number of s p e c i a l t y t r a i n i n g p o s i t i o n s
w i t h the balance reserved f o r general
i n t e r n a l medicine, general p e d i a t r i c s and
f a m i l y p r a c t i c e , phasing i n the l i m i t over a
f i v e - y e a r period.
Sets the number of t r a i n i n g p o s i t i o n s each
year f o r each s p e c i a l t y based on
recommendations by a subcommittee of the
National Health Board.
•
Allocates p o s i t i o n s t o i n d i v i d u a l residency
t r a i n i n g programs through a process s i m i l a r
t o the National I n s t i t u t e s of Health's grantreview process. C r i t e r i a f o r each s p e c i a l t y
are published annual and take i n t o account
considerations such as:
- Appropriateness of t r a i n i n g f o r f u t u r e p r a c t i c e
- Geographic balance
- Responsiveness t o needs of
underserved areas and populations
I n order t o slow the growth i n physician
supply, l i m i t s the t o t a l number of f i r s t - y e a r
residency p o s i t i o n s t o the number of
graduates of U.S. schools plus ten percent.
Provides grants t o h o s p i t a l s t h a t reduce the
number of residency t r a i n i n g p o s i t i o n s during
the five-year phase down period.
72
�PRIVILEGED AND CONFIDENTIAL"
•
Allows any program approved by the
A c c r e d i t a t i o n Council f o r Graduate Medical
Education t o receive f e d e r a l t r a i n i n g
payments regardless o f t r a i n i n g s e t t i n g .
•
Removes Health Care Finance AdministrationGraduate Medical Education r e s t r i c t i o n s on
t r a i n i n g i n ambulatory care, community-based
sites
•
Authorizes programs t o r e - t r a i n s p e c i a l i s t
physicians f o r primary-care careers through
f e d e r a l and s t a t e partnerships w i t h
p r o f e s s i o n a l organizations, academic h e a l t h
centers and other i n s t i t u t i o n s .
CONSORTIA FOR COMMUNITY-BASED HEALTH EDUCATION
To improve the geographic d i s t r i b u t i o n o f physicians, t h e
mix o f primary and s p e c i a l i s t care, i n t e r - d i s c i p l i n a r y t r a i n i n g ,
d i v e r s i t y and provider competency, the f e d e r a l government r e d i s t r i b u t e s i t s support f o r h e a l t h t r a i n i n g and education across
a variety of practice settings.
Health reform allows the establishment o f r e g i o n a l networks,
or Health Professions Educational Consortia, through which
Graduate Medical Education funding f o r physician education flows
t o a v a r i e t y o f h e a l t h i n s t i t u t i o n s and organizations beyond the
t r a d i t i o n a l teaching h o s p i t a l .
Preferences f o r f e d e r a l funding create i n c e n t i v e s f o r
c o n s o r t i a t o form, i n c l u d i n g such i n s t i t u t i o n s as teaching
h o s p i t a l s , academic h e a l t h centers, community h e a l t h centers and
r u r a l c l i n i c s , other n o n - p r o f i t health care organizations, s t a t e
and l o c a l p u b l i c h e a l t h c l i n i c s and others.
I n a d d i t i o n , h e a l t h reform creates i n c e n t i v e s f o r providers
t o p r a c t i c e i n i n n e r - c i t y and r u r a l underserved areas, i n c l u d i n g :
Expanding the National Health Service Corps
t o a f i e l d strength o f 16,000 professionals
and p r o v i d i n g 4,000 NHSC scholarships per
class
•
Expanding the National Health Service Corps
and loan-forgiveness programs t o cover a l l
h e a l t h professions
•
Providing p r e f e r e n t i a l funding f o r schools,
residency and t r a i n i n g programs t h a t
73
�PniVILEOED AMD COHriDEHTIAL
demonstrate an a b i l i t y t o t u r n out providers
who p r a c t i c e i n underserved areas
•
Providing targeted support f o r the education
of under-represented m i n o r i t i e s , through such
mechanisms as the Department o f Health and
Human Service Centers o f Excellence program
and t h e Health Careers Opportunity Programs.
SCOPE OF PRACTICE
Health reform provides incentives f o r states t o adopt
p r a c t i c e acts t h a t promote the f u l l scope o f p r a c t i c e by a wide
range o f h e a l t h providers, encouraging them t o enact laws s t a t i n g
that:
•
State d e f i n i t i o n s o f the scope o f p r a c t i c e o f
any profession w i l l not l i m i t the l e g a l scope
of p r a c t i c e o f any other health care
profession.
•
State laws p r o h i b i t i n g the unauthorized
p r a c t i c e o f a health care profession w i l l not
l i m i t the l e g a l scope o f p r a c t i c e o f any
other h e a l t h profession.
•
Disputes between licensed health
professionals regarding overlapping scopes o f
p r a c t i c e w i l l be d e a l t w i t h f i r s t as an
a d m i n i s t r a t i v e a c t i o n before the appropriate
s t a t e l i c e n s u r e board rather than by seeking
an i n j u n c t i o n i n court.
Health reform d i r e c t s a l l f e d e r a l h e a l t h insurance programs
t o cover services and providers consistent w i t h coverage under
the C i v i l i a n Health and Medical Program o f the Uniformed Services
(CHAMPUS) and the Federal Employees' Health B e n e f i t , which
includes:
•
Reimbursement f o r advanced p r a c t i c e nurses
consistent w i t h l e g a l scope o f p r a c t i c e as
defined by the states.
•
Reimbursement f o r other l i c e n s e d / c e r t i f i e d
providers p r a c t i c i n g w i t h i n t h e i r l e g a l scope
of p r a c t i c e .
•
Require a l l insurers c o n t r a c t i n g w i t h f e d e r a l
programs t o cover q u a l i f i e d providers.
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�PRIVILEGED AND CONFIDENTIAL
I n a d d i t i o n , h e a l t h reform amends the Tax Equity and F i s c a l
R e s p o n s i b i l i t y Act o f 1982 t o eliminate physician supervision
r e s t r i c t i o n s on nurse a n e s t h e t i s t p r a c t i c e t h a t are i n c o n s i s t e n t
w i t h the defined scope o f p r a c t i c e f o r t h a t profession.
TRAINING PROGRAMS FOR NON-PHYSICIAN PROVIDERS
The f e d e r a l government r e d i r e c t s e x i s t i n g t r a i n i n g programs
toward non-physician providers, i n c l u d i n g nurse p r a c t i t i o n e r s ,
nurse midwives, nurse anesthetists and c l i n i c a l nurse
s p e c i a l i s t s , as w e l l as physician assistants and community h e a l t h
workers through the f o l l o w i n g channels:
1.
Increase funding i n e x i s t i n g laws t h a t
support non-physician t r a i n i n g :
T i t l e V I I I , Public Law 102-408 —
Advanced p r a c t i c e nurses and
generic nursing programs aimed a t
community h e a l t h .
T i t l e V I I — Area Health Education
Centers, Health and Education and
Training Centers, G e r i a t r i c
Education Centers, Rural
I n t e r d i s c i p l i n a r y Training
Programs, AIDS Education and
T r a i n i n g Centers,
Allied/Associated/Dental/Public
Health and Physician Assistant
Programs.
2.
Amend T i t l e V I I and T i t l e V I I I t o include
a b i l i t y t o c a p i t a t e support f o r h e a l t h
profession t r a i n i n g aimed a t expansion o f
numbers o f graduates.
3.
Amend T i t l e V I I t o expand e l i g i b i l i t y
requirements f o r t r a i n i n g programs.
4.
Amend Section 767 o f T i t l e V I I o f Public Law
102-408 t o permit stipend support f o r
students who w i l l p r a c t i c e i n medically
underserved communities.
5.
Provide funds t o the f u l l a u t h o r i z a t i o n l e v e l
of section 766, T i t l e V I I , Public Law 102-408
t o create f a c u l t y by providing f o r advanced
t r a i n i n g o f a l l i e d health professionals.
75
�PRIVILEOED MID
COliriDDlfTIAL
6.
Expand education loans to emphasize h e a l t h
occupation v o c a t i o n a l and t e c h n i c a l
education.
7.
R e d i r e c t a portion ($16 m i l l i o n of $1.2
b i l l i o n t o t a l ) of Perkins Act funds to T i t l e
V I I to expand support for a s s o c i a t e degree
l e v e l a l l i e d h e a l t h education.
8.
D i r e c t T i t l e V I I to fund and evaluate p i l o t
programs for the t r a i n i n g of m u l t i - s k i l l e d
providers, such as j o i n p h y s i c a l
therapist/occupational therapist training for
rural practitioners.
9.
Expand the Nursing Education Opportunities
( T i t l e V I I I ) for i n d i v i d u a l s from
disadvantaged background to i n c r e a s e
d i v e r s i t y i n the workforce.
LOAN PROGRAMS FOR NON-PHYSICIAN PROVIDERS
The f e d e r a l government w i l l r e s t r u c t u r e and r e s t o r e
e d u c a t i o n a l loan programs to include non-physician p r o v i d e r s .
Loan programs w i l l include a loan-forgiveness p r o v i s i o n f o r
p r o v i d e r s who work i n underserved areas with an emphasis on the
recruitment and r e t e n t i o n of minority providers:
1.
D i r e c t t h a t not l e s s than 20 percent of the
appropriation f o r the Health Education
A s s i s t a n c e Loan ( P u b l i c Law 102-408) be
a v a i l a b l e for c o l l e g e preparation of nonp h y s i c i a n providers.
2.
D i r e c t t h a t not l e s s than 20 percent of the
appropriation for the Health P r o f e s s i o n s
Student Loan ( P u b l i c Law 102-408) program be
a v a i l a b l e f o r c o l l e g e preparation for nonp h y s i c i a n providers.
3.
D i r e c t t h a t not l e s s than 30 percent of
appropriated funds for Loans for
Disadvantaged I n d i v i d u a l s ( P u b l i c Law 102408) be a v a i l a b l e to students i n c o l l e g e l e v e l program i n a l l i e d h e a l t h .
4.
Restore s c h o l a r s h i p s and expand the
appropriation for the Undergraduate Education
of P r o f e s s i o n a l Nurses Grant Program.
76
�PniVILEOED AMD COMFIDEMTIAL
5.
Expand a u t h o r i t y and appropriations f o r
Professional Nurse Traineeship ( T i t l e V I I I ) .
6.
Expand a u t h o r i t y and appropriations f o r
Professional Nurse Traineeship ( t i t l e V I I I ) .
7.
Expand advanced nurse education support and
include a l l i e d h e a l t h education i n t h e
National Health Service Corps scholarship and
loan repayment programs, emphasizing
recruitment and r e t e n t i o n o f m i n o r i t y
students and providers i n short supply.
8.
Redirect Medicare Graduate Medical Education
( o t h e r ) t o T i t l e V I I I ($300 m i l l i o n ) and
T i t l e V I I ($15 m i l l i o n ) t o t r a i n basic nurses
f o r community p r a c t i c e rather than h o s p i t a l
s e t t i n g s and t o t r a i n a l l i e d health
professionals f o r community p r a c t i c e
(increase T i t l e V I I and T i t l e V I I I
a u t h o r i z a t i o n l e v e l s t o accommodate the
redirected appropriation).
9.
Redirect $400 m i l l i o n o f Medicare Graduate
Medical Education ( d i r e c t ) t o augment T i t l e
V I I and T i t l e V I I I f o r advanced p r a c t i c e
nurses and physician assistants.
10.
Redirect funds t o provide f a c u l t y t o expand
e x i s t i n g c o l l e g e - l e v e l non-physician provider
programs and t o create new programs i n
underserved areas.
11.
Consolidate ( i n t o T i t l e V I I and T i t l e V I I I )
funds f o r health occupations and professions
t r a i n i n g c u r r e n t l y found i n the Department o f
Education and Department o f A g r i c u l t u r e .
LONG-TERM CARE AND MENTAL HEALTH PROVIDERS
I n a d d i t i o n , the a n t i c i p a t e d increase i n demand f o r longterm care and mental health providers requires r e - a l l o c a t i o n o f
t r a i n i n g resources:
1.
Target Department o f Education v o c a t i o n a l
t r a i n i n g funds t o support
v o c a t i o n a l / t e c h n i c a l health care t r a i n i n g and
p i l o t projects.
77
�-PRIVILEOCD AMD CONFIDENTIAL
2.
Increase and t a r g e t Department o f Education
funds f o r long-term care and mental health
workers such as personal-care assistants
under the Perkins Act.
3.
Develop and promulgate educational standards
f o r workers providing long-term care under
T i t l e s V I I and V I I I .
4.
Target funds f o r educating primary p r o v i d e r s
i n mental h e a l t h , substance abuse, g e r i a t r i c s
and gerontology under T i t l e V I I and V I I I .
The N a t i o n a l Health Board w i l l e s t a b l i s h an advisory subcommittee charged w i t h recommending adjustments i n f e d e r a l
funding and programs t o promote n a t i o n a l goals r e l a t e d t o the
health-care workforce.
78
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�DETERMINED TO BE AN
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INITIALS:l&L— DATE:CffiXd&\&\ • PRIVILEGED M<P COMFIOEWTIflL
ACADEMIC HEALTH CENTERS
Academic h e a l t h c e n t e r s p r o v i d e a n a t i o n a l r e s o u r c e f o r
c l i n i c a l and b a s i c s c i e n c e r e s e a r c h , e d u c a t i o n o f h e a l t h
p r o f e s s i o n a l s and h i g h l y s o p h i s t i c a t e d and s c i e n t i f i c a l l y
advanced p a t i e n t c a r e .
Because o f t h e i r m u l t i p l e m i s s i o n s , academic h e a l t h c e n t e r s
a r e more expensive t h a n competing h o s p i t a l s . S u p p o r t i n g t h e s e
m i s s i o n s i s n o t i n t h e i n t e r e s t o f any p a r t i c u l a r purchaser o f
h e a l t h care services.
T h e r e f o r e , h e a l t h r e f o r m a l l o w s academic h e a l t h c e n t e r s t o
compete w i t h o t h e r h e a l t h p r o v i d e r s on t h e b a s i s o f o r d i n a r y
p a t i e n t c o s t s b u t c r e a t e s a new method o f p a y i n g t h e c o s t s unique
t o academic h e a l t h c e n t e r s . I t segregates these c o s t s from
o r d i n a r y p a t i e n t c o s t s and funds them t h r o u g h a n a t i o n a l
surcharge on i n s u r a n c e premiums:
•
Modeled on t h e f o r m u l a t h r o u g h which t h e
Medicare program p r o v i d e s a d d i t i o n a l
r e s o u r c e s t o academic h e a l t h c e n t e r s , h e a l t h
r e f o r m adopts a n a t i o n a l f o r m u l a t o determine
t h e l e v e l o f a d d i t i o n a l resources r e q u i r e d by
academic h e a l t h c e n t e r s t o s u p p o r t f u n c t i o n s
beyond o r d i n a r y p a t i e n t c a r e .
Under t h i s f o r m u l a , resources a r e o b t a i n e d
t h r o u g h a surcharge on i n s u r a n c e premiums i n
t h e r e g i o n served by t h e academic h e a l t h
c e n t e r , a l l o c a t e d across p l a n s based on
a n t i c i p a t e d use o f t h e academic h e a l t h c e n t e r
and a d j u s t e d r e t r o s p e c t i v e l y based on a c t u a l
use.
•
Plans i n o t h e r geographic areas pay a p o r t i o n
o f t h e surcharge based on a c t u a l u t i l i z a t i o n
o f academic h e a l t h c e n t e r s by t h e i r p a t i e n t s .
•
H e a l t h r e f o r m p r e c l u d e s accountable h e a l t h
p l a n s from s y s t e m a t i c a l l y d i s c o u r a g i n g
p a t i e n t s from u s i n g academic h e a l t h c e n t e r s
o r d i s c r i m i n a t i n g a g a i n s t those i n s t i t u t i o n s .
INVESTIGATIONAL TREATMENTS
Academic h e a l t h c e n t e r s develop, conduct and a n a l y z e much o f
t h e n a t i o n ' s c l i n i c a l r e s e a r c h , p r i m a r i l y r e l y i n g on g r a n t s f o r
f u n d i n g . However, g r a n t s o r d i n a r i l y do n o t cover m e d i c a l c a r e
costs associated w i t h c l i n i c a l research.
79
�-PRIVILEGED AND CONriDENTIAL
Health reform covers medical care costs associated w i t h t h e
d e l i v e r y o f i n v e s t i g a t i o n a l treatments through a separate
research fund i f the treatment i s provided as part o f an approved
research t r i a l :
•
Health a l l i a n c e s add a "research premium" t o
the annual premium paid by every person f o r
h e a l t h insurance and c o n t r i b u t e the
a d d i t i o n a l premium t o a n a t i o n a l "research
t r u s t fund." The fund reimburses health-care
providers who t r e a t p a t i e n t s i n an approved
research t r i a l f o r the medical care costs
associated w i t h the research t r i a l .
•
Health plans submit requests f o r reimbursement t o
the n a t i o n a l research t r u s t fund. Health plans
may use money from the research t r u s t fund only
for the coverage o f medical costs associated w i t h
approved c l i n i c a l t r i a l s .
•
I n v e s t i g a t i o n a l treatments include any
medical i n t e r v e n t i o n undertaken t o maintain
or improve health, i n c l u d i n g primary
prevention, screening, diagnosis, support
care, drugs, devices and procedures.
80
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indicated below.
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\J_
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS:iSiL-DATE:C^l^ PRIVILCOED AND COHFIDCHTIAL
ZOCXO-OSlb-
p
MEDICAL RESEARCH INITIATIVES
Complementing the commitment t o improving the q u a l i t y o f
h e a l t h care i n America, h e a l t h reform expands funding f o r
research aimed a t improving the treatment and prevention o f major
i l l n e s s e s . Research i n i t i a t i v e s under h e a l t h reform focus on:
•
Alzheimer's Disease — Providing new funds
d i v i d e d equally between research aimed a t
discovering the cause and a t developing a new
class o f drugs t o combat i t s devastating
a f f e c t s . Four m i l l i o n Americans s u f f e r from
Alzheimer's, a number t h a t i s expected t o
grow t o f i v e m i l l i o n by the end o f the
decade.
•
Breast Cancer -- Providing new funds t o
create a P r e s i d e n t i a l Commission t o design
and implement a plan t o eradicate breast
cancer as the number one k i l l e r o f American
women between the ages o f 32 and 54.
Responding t o appeals from the National
Breast Cancer C o a l i t i o n , h e a l t h reform w i l l
b r i n g together leaders from the executive
branch. Congress, the s c i e n t i f i c community
and women who have experienced the disease t o
reach agreement on a new course o f a c t i o n t o
a t t a c k the disease, which a f f e c t s 4.6 m i l l i o n
American women and k i l l s 46,000 women each
year.
Heart Disease and Stroke --To combat a
disease from which 6 m i l l i o n Americans s u f f e r
and more than h a l f a m i l l i o n d i e each year,
h e a l t h reform w i l l provide i n new funding f o r
research on prevention and treatment o f heart
disease and stroke.
•
B i r t h Defects — To b u i l d a n a t i o n a l
population-based program t o prevent b i r t h
defects, the Center f o r Disease Control w i l l
focus on the prevention o f spina b i f i d a and
f e t a l alcohol syndrome, monitoring r a t e s o f
b i r t h defects and developmental d i s a b i l i t i e s
and funding applied research i n t o the causes
of b i r t h defects and developmental
disabilities.
81
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�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: KD£ DATE-QSia^
PROTECTING AND
PniviLCCED
AMD
COHFIDEHTIBL
PROVIDING ACCESS FOR UNDERSERVED POPULATIONS
T r a n s l a t i n g the n a t i o n a l guarantee of health-care coverage
i n t o a c t u a l access t o h i g h - q u a l i t y care requires investments and
enhancements i n underserved communities. Of the 72 m i l l i o n
American r e s i d e n t s underserved by the current health system, 24.5
m i l l i o n l i v e i n areas i n which more than 50 percent of residents
have low incomes and 58.1 m i l l i o n l i v e i n ares i n which more than
a t h i r d have low incomes.
Overcoming f i n a n c i a l and n o n - f i n a n c i a l b a r r i e r s t o care
r e q u i r e investments i n delivery-system capacity i n underserved
communities while enhancing and p r o t e c t i n g the r o l e of the s a f e t y
net providers who t r a d i t i o n a l l y serve those communities.
INVESTMENT IN CAPACITY
I n i t i a t i v e s under h e a l t h reform b u i l d on e x i s t i n g f e d e r a l
programs but emphasize the development of system capacity and
support services. Health reform also envisions i n s t i t u t i n g new,
a l t e r n a t i v e d e l i v e r y systems, p a r t i c u l a r l y school-based c l i n i c s
t o serve vulnerable and h i g h - r i s k populations.
I n FY-1994, e x i s t i n g f e d e r a l programs t h a t address these
needs provide a t o t a l of $2.5 b i l l i o n t o s t a t e and l o c a l
governments and community-based organizations. Investments can be
made a t e i t h e r an " e s s e n t i a l " or an "optimal" l e v e l w i t h the
expectation t h a t as development of the system proceeds and
insurance coverage expands, demand f o r f e d e r a l investment w i l l
plateau.
By the year 2000, the " e s s e n t i a l " l e v e l of investment
provides $4.9 b i l l i o n i n new f e d e r a l funds -- an increase of $1.9
b i l l i o n or 65 percent over current funding. This l e v e l of
investment develops capacity and provides comprehensive primary
care services f o r a l l underserved areas w i t h high concentrations
of low-income persons. I t also establishes 18,000 c l i n i c s t o
serve schools w i t h predominantly low-income populations.
An optimal l e v e l of investment provides $7.3 b i l l i o n by the
year 2000 — an increase of $4.3 b i l l i o n or 143 percent. That
l e v e l of investment develops capacity and provides comprehensive
primary care f o r a l l underserved areas w i t h high and moderate
concentrations of low-income persons. I t establishes c l i n i c s i n
40,000 schools, i n c l u d i n g every high school and one i n three
elementary schools.
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�PRIVILEGED AMD COHriDEHTIAL
BUILDING INFRASTRUCTURE
Components necessary t o b u i l d i n f r a s t r u c t u r e and c a p a c i t y
f o r health-care d e l i v e r y i n underserved areas i n c l u d e :
•
The development o f networks o f care through
needs assessment, telecommunications,
i n f o r m a t i o n systems and t e c h n i c a l assistance.
•
Investment i n s i t e s f o r the d e l i v e r y o f
primary care i n c l u d i n g community and migrant
h e a l t h centers, r u r a l h e a l t h c l i n i c s , l o c a l
h e a l t h departments, maternal and c h i l d h e a l t h
c l i n i c s , residency programs, reorganized
o u t p a t i e n t services of "safety net" h o s p i t a l s
and p r i v a t e n o n - p r o f i t p r a c t i c e s .
•
Recruitment and r e t e n t i o n o f primary care
providers through scholarships, loan
repayment and s i m i l a r s t a t e programs (see
s e c t i o n on workforce development).
ENABLING SERVICES AND ALTERNATIVE DELIVERY SITES
During t h e t r a n s i t i o n t o u n i v e r s a l h e a l t h coverage, t h e
f e d e r a l government supports h e a l t h services f o r h i g h - r i s k and
underserved populations. A f t e r the t r a n s i t i o n , support continues
f o r services not covered i n the comprehensive b e n e f i t package
t h a t help c e r t a i n population groups o b t a i n e f f e c t i v e h e a l t h care.
Federal investments focus on i n i t i a t i v e s i n these areas:
Preventive and primary care services f o r
residents o f r u r a l and urban underserved
areas, migrant farm workers and homeless
persons, i n community and migrant h e a l t h
centers, r u r a l h e a l t h c l i n i c s , l o c a l h e a l t h
departments, maternal and c h i l d h e a l t h
c l i n i c s , residency programs, and reorganized
o u t p a t i e n t services administered through
"safety net" h o s p i t a l s .
•
Comprehensive p e r i n a t a l care centers t h a t
provide outreach, home v i s i t i n g and s o c i a l
support services. These would be combined
w i t h organized o b s t e t r i c services o r provided
as a "wrap around" t o encourage p r i v a t e
provider p a r t i c i p a t i o n .
83
�•PRIVILEGED AND COMFIDENTIAL
•
School-based c l i n i c s i n or adjacent t o
elementary and secondary schools and l i n k e d
t o another medical i n s t i t u t i o n .
•
Family planning c l i n i c s focused on
adolescents and women who r e q u i r e access t o
f a m i l y planning services other than t h e i r
primary h e a l t h providers because o f r e l i g i o u s
or c u l t u r a l b a r r i e r s .
•
Specialized c l i n i c s t h a t serve homeless
persons.
•
Emergency care f o r undocumented persons, as
provided under current law.
•
Specialized services f o r persons i n f e c t e d
w i t h HIV.
SUPPLEMENTAL SERVICES
Health reform continues support f o r a s p e c i f i e d set o f
supplemental services f o r underserved populations funded under
Public Health Service Act sections 330, 329 and 340. Those
services include p a t i e n t outreach and education, t r a n s p o r t a t i o n
and t r a n s l a t i o n .
Sponsors o f h e a l t h centers and c l i n i c s e l i g i b l e f o r support
expand t o include l o c a l governments, h o s p i t a l s t h a t serve l a r g e
p r o p o r t i o n s o f low-income and h i g h - r i s k p a t i e n t s and f a m i l y
medicine t r a i n i n g programs.
ESSENTIAL COMMUNITY PROVIDERS
Health reform assures the p a r t i c i p a t i o n o f s p e c i a l i z e d and
community-based "safety net" providers c a r i n g f o r underserved
populations i n t h e new insurance system through t h e f o l l o w i n g
means:
•
The National Health Board provides t e c h n i c a l
assistance t o help community-based providers
form and develop networks.
•
The board designates e s s e n t i a l community
providers who care f o r a d i s p r o p o r t i o n a t e
share o f low-income, underserved or
vulnerable populations, i n c l u d i n g
comprehensive primary care providers,
providers o f l i m i t e d but e s s e n t i a l preventive
and treatment services (such as f a m i l y
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�rniVILCODD AND CONFIDEMTIAL'
planning c l i n i c s ) and h o s p i t a l s . Essential
access providers include f e d e r a l l y q u a l i f i e d
h e a l t h centers and h o s p i t a l s designated under
the P r e s c r i p t i o n Drug Act o f 1992.
•
Health A l l i a n c e s negotiate w i t h plans t o
ensure t h e i n c l u s i o n o f e s s e n t i a l conununity
providers and t o contract d i r e c t l y w i t h
e s s e n t i a l community providers where
appropriate.
•
A mixed d e l i v e r y system w i l l encompass
primary-care providers as contractors t o
h e a l t h plans, although some providers, such
as f a m i l y planning c l i n i c s or homeless
s h e l t e r s , may remain outside the mainstream
system r e c e i v i n g reimbursement f o r care
through h e a l t h a l l i a n c e s .
While the c r i t e r i a and mechanism may vary among s t a t e s , t h e
i n t e n t i s t h a t e s s e n t i a l community providers receive
reimbursement f o r care provided t o p a t i e n t s e n r o l l e d i n other
plans. Health a l l i a n c e s f a c i l i t a t e the p a r t i c i p a t i o n o f
e s s e n t i a l community providers by r e q u i r i n g h e a l t h plans t o
c o n t r a c t w i t h them.
ADMINISTRATION
By January 1, 1994, the Secretary o f Health and Human
Services w i l l r e p o r t t o Congress on the steps required, i n c l u d i n g
t e c h n i c a l amendments, t o combine a p p l i c a t i o n s and r e p o r t i n g
formats t o s i m p l i f y the process of obtaining grants f o r community
h e a l t h providers.
As h e a l t h reform i s implemented, the Secretary analyzes
changing needs and reports p e r i o d i c a l l y t o the National Health
Board and t o Congress on the p o t e n t i a l f o r c o n s o l i d a t i o n and
e l i m i n a t i o n o f programs.
85
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�DETERMINED TO BE AN
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INITIALS:jS<_DATE2SiaS£/t w r e n ^ u
^^OCP'OSID-F
AWU COMFIPEMTIMT
OTHER GOVERNMENT PROGRAMS
DEPARTMENT OF DEFENSE
Under h e a l t h reform, the Department o f Defense maintains
readiness requirements f o r m i l i t a r y medicine and f u l f i l l s c u r r e n t
commitments t o provide h e a l t h care t o m i l i t a r y personnel and
t h e i r dependents.
THE MILITARY ACCOUNTABLE HEALTH PLAN
With the exception o f active-duty personnel, the Department
of Defense g r a d u a l l y i n t e g r a t e s i t s h e a l t h care programs i n t o the
new system. When f u l l y implemented, the Department o f Defense
h e a l t h care system w i l l have the f o l l o w i n g features:
•
The Department operates m i l i t a r y h e a l t h plans t h a t
serve each geographic area i n which m i l i t a r y medical
centers are located.
The m i l i t a r y health plans compete w i t h c i v i l i a n h e a l t h
plans o f f e r e d through health a l l i a n c e s t o e n r o l l
m i l i t a r y beneficiaries.
•
The Department requires t h a t b e n e f i c i a r i e s e n r o l l f o r
m i l i t a r y h e a l t h care, ending space-available care f o r
those who do not e n r o l l .
M i l i t a r y b e n e f i c i a r i e s receive the comprehensive
b e n e f i t package and pay a p o r t i o n o f costs on the same
basis as other c i t i z e n s .
•
P r i v a t e employers are responsible f o r the employer's
standard share o f premiums f o r Department o f Defense
b e n e f i c i a r i e s employed elsewhere.
•
The Department receives capitated payments from
Medicare f o r b e n e f i c i a r i e s who use the m i l i t a r y h e a l t h
care system.
To enable m i l i t a r y health plans t o compete, the Secretary o f
Defense adapts r e g u l a t i o n s t o increase the f l e x i b i l i t y and
autonomy o f managers o f m i l i t a r y plans. For example, t h e
d i r e c t o r o f a m i l i t a r y plan has a u t h o r i t y over the resources
spent f o r h e a l t h care d e l i v e r y i n the plan.
M i l i t a r y plans t h a t f a i l t o provide adequate care, c o n t r o l
costs o r e n r o l l s u f f i c i e n t numbers o f p a t i e n t s cease t o operate.
However, f a c i l i t i e s necessary t o maintain readiness remain open,
and medical a c t i v i t i e s r e l a t e d t o readiness are funded by a
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�-PRIVILEGED AMD
COHriDEHTIAL
separate budget.
PHASING IN BENEFICIARIES
Current b e n e f i c i a r i e s of the C i v i l i a n Health and Medical
Program of the Uniformed Services (CHAMPUS) — dependents of
personnel now on a c t i v e duty, as w e l l as current r e t i r e d
personnel and t h e i r dependents — continue t o pay no premiums.
Current b e n e f i c i a r i e s who j o i n a c i v i l i a n health plan pay
the n a t i o n a l l y set l e v e l of cost sharing. B e n e f i c i a r i e s who j o i n
a m i l i t a r y h e a l t h plan pay n a t i o n a l cost sharing rates f o r care
d e l i v e r e d outside the d i r e c t care system, and l e g i s l a t i v e l y
determined l e v e l s f o r care delivered i n s i d e the d i r e c t care
system.
Dependents of personnel who e n l i s t f o r a c t i v e duty a f t e r
enactment of n a t i o n a l health reform and those personnel at
retirement pay a p o r t i o n of the premium as w e l l as a standard
share of costs, l i k e other Americans. I n c o n s u l t a t i o n w i t h
Congress, the Department of Defense determines requirements f o r
cost-sharing f o r f u t u r e b e n e f i c i a r i e s who e n r o l l i n m i l i t a r y
h e a l t h plans, using as a benchmark the cost of the n a t i o n a l l y
guaranteed, comprehensive b e n e f i t package.
87
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITlALS:ik^DAm^& P*™"™™
^00<0~OSI6-F-
coMFiDEinpiAL
OTHER GOVERNMENT PROGRAMS
INDIAN HEALTH SERVICE
Under n a t i o n a l h e a l t h reform, the f e d e r a l government honors
i t s t r e a t y and s t a t u t o r y o b l i g a t i o n s t o Indian people by paying
the f u l l c o s t of coverage for the comprehensive b e n e f i t package
on behalf of American Indians and Alaska Natives.
The f e d e r a l government a l s o continues t o appropriate funds
for supplemental h e a l t h s e r v i c e s such a s p u b l i c h e a l t h nursing
and h e a l t h education, outreach s e r v i c e s and c o n s t r u c t i o n of
s a n i t a t i o n i n f r a s t r u c t u r e i n Indian communities.
The s t r u c t u r e of h e a l t h care d e l i v e r y under the I n d i a n
Health S e r v i c e changes i n the following ways:
PARTICIPATION IN HEALTH ALLIANCES
The I n d i a n Health S e r v i c e , e i t h e r independently or with
t r i b e s , and t r i b a l organizations a c t i n g alone, operate a s h e a l t h
plans providing the comprehensive b e n e f i t package. The I n d i a n
Health S e r v i c e and t r i b a l organizations may a l s o a c t only a s
p r o v i d e r s of h e a l t h care, obtaining payments from other h e a l t h
plans t h a t c o n t r a c t f o r t h e i r s e r v i c e s .
I n d i v i d u a l t r i b e members e n r o l l i n an Indian Health S e r v i c e
or t r i b a l h e a l t h plan through the l o c a l consumer h e a l t h a l l i a n c e
but a r e not r e s p o n s i b l e f o r premium c o n t r i b u t i o n s o r c o s t
s h a r i n g . I f a t r i b e member chooses a h e a l t h plan other than the
I n d i a n Health S e r v i c e or t r i b a l plan, the i n d i v i d u a l pays any
c o s t above the premium that employers are required t o pay.
A plan may choose to e n r o l l non-Indians or provide s e r v i c e s
to non-Indians on a c o n t r a c t b a s i s .
OPERATION OUTSIDE HEALTH ALLIANCES
Some t r i b e s may be u n w i l l i n g t o p a r t i c i p a t e i n the h e a l t h
a l l i a n c e purchasing s t r u c t u r e for h e a l t h insurance because of
longstanding c o n f l i c t s with s t a t e governments. Others may be
u n w i l l i n g t o assume the r i s k s of operating a h e a l t h plan. I n
these areas and i n i s o l a t e d areas where no h e a l t h plans e x i s t ,
the I n d i a n Health S e r v i c e operates outside the a l l i a n c e ,
coordinating h e a l t h c a r e d e l i v e r y with t r i b a l o r g a n i z a t i o n s .
I n those areas. Congressional appropriations augment c u r r e n t
budgets t o enable the Indian Health S e r v i c e o r t r i b a l h e a l t h
programs t o d e l i v e r the comprehensive b e n e f i t package. I n t h a t
s i t u a t i o n , American Indians and Alaska Natives s t i l l have the
88
�miviLECFn nun
CONFTDITNTIAI.
o p t i o n of e n r o l l i n g i n a health plan o f f e r e d through the
a l l i a n c e , but f e d e r a l subsidies are a v a i l a b l e only t o i n d i v i d u a l s
who do not have reasonable access t o an Indian Health Service or
t r i b a l h e a l t h plan.
TRANSITION
E i t h e r course requires a four- t o five-year t r a n s i t i o n
period i n order t o expand and enhance the Indian h e a l t h d e l i v e r y
system so t h a t i t can d e l i v e r the n a t i o n a l l y guaranteed,
comprehensive b e n e f i t package.
To reach t h a t goal, the Indian Health Service must remove
e x i s t i n g l e g a l , o r g a n i z a t i o n a l and r e g u l a t o r y b a r r i e r s t o i t s
e f f e c t i v e operation, such as:
R e s t r i c t i o n s on the h i r i n g and assigning of s t a f f
•
Federal procurement requirements
F i n a n c i a l systems not designed t o b i l l f o r services
R e s t r i c t i o n s on providing services t o non-Indians
89
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
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PRIVILEGED MID COttriDCHTIAL
OTHER GOVERNMENT PROGRAMS:
DEPARTMENT OF VETERANS AFFAIRS
Health reform honors the nation's commitment t o provide
h e a l t h care t o veterans o f i t s armed forces while modifying t h e
o r g a n i z a t i o n and f i n a n c i n g o f h e a l t h care d e l i v e r e d through t h e
Department o f Veterans A f f a i r s :
THE VA ACCOUNTABLE HEALTH PLAN
The Department o f Veterans A f f a i r s has the o p t i o n o f
o r g a n i z i n g i t s h o s p i t a l s and c l i n i c s i n t o accountable h e a l t h
plans a v a i l a b l e t o veterans through the l o c a l h e a l t h a l l i a n c e .
I n areas where VA h e a l t h plans e x i s t , a l l veterans have the
choice o f e n r o l l i n g i n them t o receive the n a t i o n a l l y guaranteed,
comprehensive b e n e f i t package, or t o e n r o l l i n another plan i n
the a l l i a n c e . However, where the capacity o f the VA h e a l t h plan
i s l i m i t e d , veterans who have service-connected d i s a b i l i t i e s have
p r i o r i t y s t a t u s f o r enrollment. Veterans w i t h annual incomes
less than $20,000 have second p r i o r i t y , and other veterans have
third priority.
Veterans w i t h service-connected d i s a b i l i t i e s and those w i t h
low incomes who e n r o l l i n the Veterans A d m i n i s t r a t i o n h e a l t h plan
are not responsible f o r premium c o n t r i b u t i o n s or cost sharing.
I f veterans i n those p r i o r i t y categories choose another
h e a l t h plan through the a l l i a n c e , t h e i r r e s p o n s i b i l i t i e s include
paying t h e same p o r t i o n o f premiums and cost sharing as other
Americans. Higher-income veterans who choose t o e n r o l l i n the VA
h e a l t h plan also are responsible f o r the same p o r t i o n o f premiums
and cost sharing as i n other health plans.
Equipping the VA h e a l t h service t o act as an accountable
h e a l t h plan requires amending current law governing i t s
operations t o :
Permit the VA t o r e t a i n funds recovered from t h i r d p a r t y payers f o r the cost o f veterans' care
Provide broad a u t h o r i t y f o r the management o f VA
h o s p i t a l s and c l i n i c s t o enter i n t o c o n t r a c t s w i t h
other h e a l t h plans t o provide services f o r veterans
e n r o l l e d i n a VA accountable h e a l t h plan
•
Allow managers t o c o n t r o l budgets without t h e
r e s t r i c t i o n s associated w i t h l i n e items o r earmarked
funds
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�PRIVILEOED AND
CONFIDENTIAL
Delegate t o managers of VA c l i n i c s and h o s p i t a l s
f l e x i b i l i t y i n h i r i n g and personnel management
•
D i r e c t the VA t o e l i m i n a t e excessive and redundant
r e p o r t i n g requirements and inspections
SUPPLEMENTAL BENEFITS
Under h e a l t h reform. Congressional appropriations continue
t o fund s p e c i a l i z e d services, such as treatment f o r posttraumatic s t r e s s disorder, t h a t are not included i n the
comprehensive b e n e f i t package but d e l i v e r e d through the
Department o f Veterans A f f a i r s .
Low-income veterans and those who have service-connected
d i s a b i l i t i e s have access t o these specialized services -- subject
t o capacity l i m i t a t i o n s -- whether or not they e n r o l l i n a VA
accountable h e a l t h plan.
I n the f u t u r e , the VA may o f f e r a supplemental b e n e f i t
package a v a i l a b l e t o a l l veterans. The supplemental b e n e f i t
package would encompass those specialized services, i n c l u d i n g the
VA's long-term care programs, at an a d d i t i o n a l premium.
THE VA AS A FEE-FOR-SERVICE PROVIDER
Veterans who e n r o l l i n a f e e - f o r - s e r v i c e h e a l t h plan through
a h e a l t h a l l i a n c e may o b t a i n care from the VA on a f e e - f o r service basis. Under t h a t arrangement, veterans are responsible
f o r any cost sharing required by t h e i r health plan.
I n a d d i t i o n , VA h o s p i t a l s and c l i n i c s may enter i n t o
c o n t r a c t u a l arrangements w i t h other h e a l t h plans t o act as a
h e a l t h provider serving other plans' p a t i e n t s .
S i m i l a r l y , veterans e l i g i b l e f o r Medicare may o b t a i n care
from the VA on a f e e - f o r - s e r v i c e basis. Under t h a t arrangement.
Medicare reimburses the VA j u s t as i t would any other provider,
and the VA complies w i t h Medicare r u l e s as a provider. Higherincome b e n e f i c i a r i e s pay cost sharing required by Medicare, but
low-income veterans and those who have service-connected
d i s a b i l i t i e s do not pay f o r care.
91
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�DETERMINED TO BE AN
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JniviLEOED
AUD GOHFIDEIITIAL
RETAIL DRUG SALES
R e t a i l s e l l e r s of drugs are e n t i t l e d t o the same volume
discounts provided t o other purchasers of pharmaceuticals under
h e a l t h reform.
C u r r e n t l y r e t a i l s e l l e r s , such as pharmacists, cannot
o b t a i n volume discounts even i f they e s t a b l i s h a j o i n t mechanism
t o purchase i n large volumes. This p r o v i s i o n goes i n t o e f f e c t
when short-term p r i c e c o n t r o l s expire.
PRICING NEW DRUGS
Pharmaceutical companies have s i g n i f i c a n t leverage when
i n t r o d u c i n g breakthrough drugs, o r drugs t h a t o f f e r a s i g n i f i c a n t
advantage over e x i s t i n g drugs. Health plans have no choice but
t o reimburse pharmaceutical companies f o r the use of such drugs.
To encourage reasonable p r i c i n g of breakthrough drugs, a
committee of the National Health Board has the a u t h o r i t y t o make
p u b l i c d e c l a r a t i o n s regarding the reasonableness o f launch
p r i c e s . During the period when short-term p r i c e c o n t r o l s are i n
e f f e c t the Commission would have the a u t h o r i t y t o make p u b l i c
statements about a l l new drugs introduced, which normally i s 2030 per year.
A f t e r short-term p r i c e c o n t r o l s are l i f t e d , the committee
could address new drugs t h a t represent a breakthrough o r
s i g n i f i c a n t advance over e x i s t i n g therapies. The committee also
address a l l drugs subject t o a "reasonable p r i c e " clause i n a
c o n t r a c t w i t h National I n s t i t u t e s of Health.
The committee could i n v e s t i g a t e drug p r i c e s only i n those
cases where a v a i l a b l e evidence suggests t h a t the p r i c e may be
unreasonable. The committee could make an i n i t i a l determination
about the reasonableness of a drug p r i c e based on a comparison o f
t h e r a p e u t i c a l l y s i m i l a r drugs i n the United States p r i c e s charged
f o r the same drug i n seven other i n d u s t r i a l i z e d c o u n t r i e s and
other a v a i l a b l e information.
I f the drug p r i c e exceeds what the committee t h i n k s t o be
reasonable based on the information a v a i l a b l e , o r i f there i s
i n s u f f i c i e n t data, the committee would have the a u t h o r i t y t o
o b t a i n i n f o r m a t i o n from the company about the drug's p r i c e . The
committee could then issue a report regarding the reasonableness
of the drug p r i c e . The committee would have no a u t h o r i t y t o set
or c o n t r o l drug p r i c e s .
92
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�DETERMINED TO BE AN
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-BBIVILEOED AND
CONPIDENTIftL
TRANSITION TO THE NEW
SYSTEM
The f o l l o w i n g t r a n s i t i o n scenario assumes i n t r o d u c t i o n of
h e a l t h care reform l e g i s l a t i o n i n June, 1993 and enactment of
n a t i o n a l h e a l t h reform by December, 1993.
JUNE 1993
1.
Upon announcing the i n t r o d u c t i o n of health care reform, the
President along w i t h provider groups representing
physicians, nurses, h o s p i t a l s , some insurance and
pharmaceutical companies announce a voluntary freeze on
h e a l t h care p r i c e s t o begin immediately. The freeze l i m i t s
p r i c e increases t o the CPI.
I f v o l u n t a r y e f f o r t s do not succeed i n containing p r i c e s , a
standby mechanism i s immediately t r i g g e r e d . Insurance
premiums and p r i c e s f o r a l l health care products and
services would then be frozen by law adjusted t o June 1993
l e v e l s plus CPI.
An independent board monitors compliance w i t h the freeze.
Controls are removed as s t a t e spending goes under the
budget.
JANUARY 1994
2.
Insurance reform i s implemented t o ensure the v i a b i l i t y of
the small group insurance market.
•
Premiums are set at the l e v e l s of the v o l u n t a r y freeze.
They may be adjusted f o r demographics according t o a
s i n g l e r a t e t a b l e developed by each i n s u r e r and
approved by a s t a t e . Premiums f o r new groups are also
based on t h i s t a b l e .
Insurers are required t o accept a l l new f u l l - t i m e
employees added t o c u r r e n t l y - i n s u r e d groups, w i t h rates
set according t o the state-approved r a t e t a b l e .
•
Insurers are p r o h i b i t e d from t e r m i n a t i n g or not
renewing any p o l i c i e s except f o r s t r i c t l y defined
cause.
•
Insurers are required t o p a r t i c i p a t e i n a small market
s t a b i l i z a t i o n program or they are permanently
p r o h i b i t e d from p a r t i c i p a t i n g as a h e a l t h plan i n the
new system.
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�PRIVILECED AMD COMFIDENTIAL
A new f e d e r a l insurance board i s established t o
guarantee coverage i n the event t h a t insurance
companies e x i t the market.
•
States may receive f e d e r a l assistance t o develop a
s t a t e h e a l t h insurance pool t o cover displaced or
uninsured persons. These pools provide coverage t o
displaced groups or uninsured i n d i v i d u a l s t h a t cannot
f i n d v o l u n t a r y insurance. T r a d i t i o n a l premium r a t i n g
methodologies apply. The pools are subsidized by
premium assessments on e x i s t i n g i n s u r e r s .
These f e d e r a l r u l e s terminate upon new system
implementation i n a s t a t e .
3.
Preemptions o f s t a t e anti-managed care laws, anti-Medicaid
managed care laws, scope o f p r a c t i c e l i m i t a t i o n s and a n t i t r u s t laws, as w e l l as ERISA reform and malpractice reform
go i n t o e f f e c t , easing provider burdens.
4.
Planning grants are made a v a i l a b l e t o each s t a t e t o help
them prepare t o e s t a b l i s h the new system.
5.
CLIA, PRO and Medicare reimbursement s i m p l i f i c a t i o n begins.
6.
Medicare comes under budget as p r i v a t e - s e c t o r c o n t r o l s go
into effect.
JULY 1994
7.
The National Health Board i s established.
8.
A l l senior c i t i z e n s e l i g i b l e under Medicare are e n t i t l e d t o
the drug b e n e f i t . Revenue from the c i g a r e t t e tax which also
goes i n t o e f f e c t a t t h i s time i s used t o pay f o r t h e
benefit.
9.
Following enactment o f s t a t e l e g i s l a t i o n , a d d i t i o n a l
f e d e r a l / s t a t e matching funds are provided t o s t a t e s i n two
a l l o t m e n t s . These funds support s t a t e development o f t h e
h e a l t h a l l i a n c e u n t i l the a l l i a n c e can be supported by
premium revenue. These funds are s t r u c t u r e d t o provide
s t a t e s w i t h an i n c e n t i v e t o implement reform i n 1995.
One-third o f s t a r t - u p funds are provided t o the
states upon passage o f s t a t e enabling l e g i s l a t i o n .
•
The remaining t w o - t h i r d s o f the s t a r t - u p funds are
provided a f t e r the acceptance o f t h e s t a t e plan.
94
�rRIVIIiEOED AMD CCmriDENTIAIj
The b e n e f i t s o f the reform, i n general, provide s t a t e s
i n c e n t i v e s t o a c t e a r l y . Those b e n e f i t s include:
Provision o f health care s e c u r i t y t o a l l t h e i r
residents
Budget c o n t r o l and p r e d i c t a b i l i t y
Insurance market reform
R e l i e f from an increasing Medicaid burden
Minimizing the period o f market u n c e r t a i n t y .
For s t a t e s which expand coverage e a r l y , f e d e r a l funding i s
a v a i l a b l e a t higher l e v e l s . The schedule f o r funding i s as
follows:
Implementation Date:
Percent o f Federal Funding:
1/1/95 - 12/31/95
a f t e r 1/1/96
120%
100%
States' maintenance o f e f f o r t o b l i g a t i o n i s reduced i f
s t a t e s implement reform i n 1995.
The schedule i s as f o l l o w s :
Implementation on or by:
% Maintenance o f E f f o r t
1/1/95 - 12/31/95
a f t e r 1/1/96
90%
100%
Graduated p e n a l t i e s incur t o states which have not
implemented by January 1, 1997. These p e n a l t i e s are
s t r u c t u r e d t o increase the purchaser and provider pressure
f o r s t a t e reform.
A f t e r January 1, 1997, t a x d e d u c t i b i l i t y o f h e a l t h insurance
b e n e f i t s i s decreased and u l t i m a t e l y eliminated i n those
s t a t e s which have not implemented h e a l t h reform.
JANUARY 1995
10.
Single reimbursement form i s introduced.
11.
F i r s t group o f states implements mandate and u n i v e r s a l
coverage.
12.
Q u a l i t y system guidelines are i n i t i a t e d .
95
�PRIVILEGED AMD COHriDEMTIAL
13.
Phase-in o f long-term care program begins.
14.
Funding of underserved area i n i t i a t i v e s commences.
JANUARY 1996
15.
Universal
Americans
alliances
enrollees
coverage and mandate extend t o a l l s t a t e s . A l l
receive t h e i r health s e c u r i t y cards. Where h e a l t h
do not e x i s t , the insurance market signs up new
under s t a t e and f e d e r a l supervision.
16.
Auto insurance reforms begin. Either auto insurance rates
are required t o go down by 15%, o r a f e d e r a l surcharge i s
placed on rates t o help fund the program.
17.
Budgets are put i n place i n those states t h a t implement
u n i v e r s a l coverage i n 1995.
18.
Research projects and educational i n i t i a t i v e s begin.
JANUARY 1997
19.
A l l s t a t e s must be under a budget and must e s t a b l i s h t h e i r
health alliances.
20.
Workers' compensation insurance reforms are implemented.
96
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS:
DATE: QSIeffiffi
^OOto-OSlOF
PniVILEOED AMP COMFIDEMTIAt
FINANCING OF HEALTH REFORM
Americans younger than age 65 purchase health care p r i m a r i l y
through insurance premium c o n t r i b u t i o n s by businesses and
households, out-of-pocket spending and government programs, such
as Medicaid.
I n a d d i t i o n , f e d e r a l , s t a t e and l o c a l t a x revenues fund care
provided by t h e Department o f Defense, the Department o f Veterans
A f f a i r s , t h e Indian Health Service, p u b l i c h o s p i t a l s , c l i n i c s and
the p u b l i c h e a l t h service.
Medicare p r i m a r i l y funds health care f o r people older than
age 65; Medicare obtains i t s funding through a t r u s t fund i n t o
which general fund revenues and proceeds from a p a y r o l l t a x flow.
Medicare b e n e f i c i a r i e s also purchase supplemental insurance
p o l i c i e s , o r "Medigap," and pay out o f t h e i r pockets f o r various
other services, i n c l u d i n g p r e s c r i p t i o n drugs.
Health reform proposes a financing system t h a t adopts the
same fundamental s t r u c t u r e but w i t h the f o l l o w i n g changes:
Employers and employees pay f o r health insurance
through a mandatory wage-based premium r a t h e r than
c o n t r i b u t i n g v o l u n t a r i l y , as many do now. The
wage-based premium replaces the current system o f
payments by i n d i v i d u a l s and firms based on r i s k
f a c t o r s and experience.
•
Medicare b e n e f i c i a r i e s receive f e d e r a l coverage t o
pay f o r o u t p a t i e n t p r e s c r i p t i o n drugs.
•
A d d i t i o n a l f e d e r a l funds w i l l pay f o r investments
i n h e a l t h care i n underserved areas, f o r h e a l t h
education, f o r research and f o r long term care.
THE EMPLOYER-BASED SYSTEM
Under h e a l t h reform, employers and employees each c o n t r i b u t e
a f i x e d percentage o f p a y r o l l each year t o purchase h e a l t h
insurance. Employers c o n t r i b u t e 80 percent o f t h e cost and
employees 20 percent.
Self-employed persons c o n t r i b u t e the f u l l amount o f the
premium but can deduct i t from federal t a x l i a b i l i t y . Nonworking i n d i v i d u a l s c o n t r i b u t e a percentage o f t h e i r unearned
income comparable t o the amount paid by employed i n d i v i d u a l s .
This c o n t r i b u t i o n also i s t a x deductible.
97
�rniVILECCD AND CONFIPEMTIRL
Employers may e l e c t t o pay the t o t a l premium, i n c l u d i n g t h e
employee's share out o f pre-tax income.
C o n t r i b u t i o n s from employers and employees e n t i t l e a l l
r e s i d e n t s o f an area t o choose a h e a l t h plan through t h e h e a l t h
a l l i a n c e l o c a t e d i n t h a t area. I n states t h a t e l e c t t o e s t a b l i s h
a single-payer h e a l t h system, employers and employees are
r e q u i r e d t o c o n t r i b u t e t o the s t a t e h e a l t h plan, and consumers
simply choose t h e provider they v i s i t . I n states i n which h e a l t h
plans compete, consumers choose a plan o r the f e e - f o r - s e r v i c e
network from which they want t o o b t a i n care.
Depending on how a s t a t e chooses t o organize i t s h e a l t h care
system, c o n t r i b u t i o n s required from employers and employees
provide access t o a benchmark, or the p r i c e f o r which consumers
are guaranteed coverage i n a t l e a s t one plan without a d d i t i o n a l
expenditures. Choosing a more expensive plan requires
i n d i v i d u a l s and f a m i l i e s t o make a d d i t i o n a l out-of- pocket
expenditures.
A l t e r n a t i v e l y , t h e required c o n t r i b u t i o n could provide
consumers access t o an average-priced plan o r t o a l l plans. I f
consumers want t o choose a low-cost plan but l i m i t e d plan
capacity prevents them from doing so, a l l i a n c e s cannot r e q u i r e
consumers t o pay more out-of-pocket expenses f o r a higher cost
plan.
The percentage o f p a y r o l l required t o purchase h e a l t h
insurance t h a t provides the n a t i o n a l , guaranteed b e n e f i t package
v a r i e s from s t a t e t o s t a t e depending upon the cost o f t h e state's
h e a l t h system. The Social Security wage base w i l l be used t o
c a l c u l a t e percentages.
Premium payments w i l l be made t o h e a l t h
alliances.
A n a t i o n a l budget imposed t o l i m i t growth i n health-care
spending determines the annual increase allowed i n payments
r e q u i r e d from employers and employees. I f a s t a t e exceeds i t s
budget, t h e s t a t e seeks a d d i t i o n a l revenue t o make up t h e
d i f f e r e n c e from sources other than assessments on employers or
employees.
As an a l t e r n a t i v e , i f companies are allowed t o purchase
h e a l t h insurance outside the a l l i a n c e , employers and employees of
companies t h a t e l e c t t o f o l l o w t h a t route c o n t r i b u t e t h e i r
premiums t o an escrow fund from which they withdraw funds t o
purchase h e a l t h care f o r employees. Escrow funds would be
required t o make c o n t r i b u t i o n s t o the h e a l t h a l l i a n c e i n i t s area
t o cover t h e cost o f p r o v i d i n g care f o r underserved populations,
the unemployed and t o support education, research and p u b l i c
health.
98
�PRIVILEOED MID COHFIDEHTIftC
The r a t e o f growth o f t h i s escrow account would be l i m i t e d
t o the increase i n h e a l t h expenditures allowed f o r t h a t s t a t e
under the n a t i o n a l h e a l t h care budget.
COST OF MANDATE
The l i k e l y cost t o the p r i v a t e sector o f h e a l t h reform i f
f u l l y implemented i n 1994 t o t a l s approximately $65 b i l l i o n o r an
increase o f 2.3 percent o f p a y r o l l .
Employers pay a t o t a l o f $52 b i l l i o n and employees $13
billion.
I f h e a l t h reform i s f u l l y implemented i n 1996, assuming
implementation o f e f f e c t i v e cost c o n t r o l s , the t o t a l cost t h a t
year amounts t o $72 b i l l i o n . Without cost c o n t r o l s reform costs
$77 b i l l i o n .
Employers and employees who do not now purchase insurance
and, f i r m s t h a t purchase inadequate insurance e v e n t u a l l y bear the
incremental cost. During the t r a n s i t i o n t o the new h e a l t h care
system, other employers and employees may also bear p a r t o f t h e
burden f o r expanding h e a l t h coverage.
EXHIBIT 1
1994
CURRENT
LAW
BB $
1994
PHASED-IN
UNIVERSAL
COVERAGE
BB $
INCREASE
EMPLOYER HEALTH
PREMIUMS
225
273
47
EMPLOYEE HEALTH
PREMIUMS
45
63
18
TOTAL
271
338
% OF TOTAL PAYROLL
9.3
11.6
65
2.3
I
1
E x h i b i t 1 r e f l e c t s a l l premiums paid f o r a l l c u r r e n t l y covered
services, such as eyeglasses o r a d u l t dentures, some o f which are
not included i n the guaranteed b e n e f i t package.
Premiums f o r covering only those services i n the
b e n e f i t package are shown i n E x h i b i t 2.
99
guaranteed
�-PRIVTLEGBB AND CONFIDENTIAL
EXHIBIT 2
1994
CURRENT
LAW
1994
PHASED IN
COVERAGE
INCREASE
EMPLOYER HEALTH PREMIUMS
168
215
47
EMPLOYEE HEALTH PREMIUMS
45
63
18
TOTAL
213
278
65
% OF PAYROLL
7.3
9.6
2.3
1
|
DISTRIBUTION EFFECTS
Employers and employees who do not now c o n t r i b u t e t o pay f o r
h e a l t h insurance coverage o r who purchase only "bare bone"
p o l i c i e s w i l l be required t o pay f o r comprehensive b e n e f i t s .
I n a d d i t i o n , major changes take place under a wage-based
premium system. Many employers and employees who c u r r e n t l y
purchase h e a l t h insurance pay d i f f e r e n t amounts under t h e new
system:
Low-wage workers and t h e i r employers who purchase
h e a l t h insurance pay less.
High-wage workers and t h e i r employers pay
more.
Younger workers and t h e i r employers pay more.
Older employees, r e t i r e e s and t h e i r employers
pay less.
Small companies t h a t c u r r e n t l y purchase insurance f o r
employees pay less.
Single i n d i v i d u a l s and t h e i r employers pay more.
Employees who have f a m i l i e s and t h e i r
employers pay less.
Because o f these changes, t h e t r a n s i t i o n t o t h e new system
should occur gradually, p a r t i c u l a r l y i n the case o f businesses
t h a t are providing health insurance t o workers f o r t h e f i r s t time
and those t h a t c u r r e n t l y provide r e l a t i v e l y l i t t l e coverage.
100
�PRIVILEGED AMD CONFIDEMTIAL
Employers and employees who b e n e f i t from the implementation
of t h e new system w i l l subsidize the t r a n s i t i o n f o r those smaller
companies and f o r low-wage workers who w i l l purchase insurance
f o r t h e f i r s t time. An eight-year schedule phasing i n t h e
system, beginning from c u r r e n t spending f o r h e a l t h insurance as a
baseline, accomplishes t h i s goal.
I n 1993, expenditures f o r premiums by employers and
employees are established, using t h a t year as a baseline i n each
s t a t e . As s t a t e s make the t r a n s i t i o n t o the new program, t h e
percentage o f p a y r o l l payments are adjusted upward o r downward on
a gradual schedule u n t i l an average r a t e f o r a l l f i r m s i s
achieved.
By b r i n g i n g c u r r e n t l y uninsured and underinsured companies
and f a v o r a b l y r a t e d companies up f a s t e r than high cost companies
are brought down, t a c i t subsidies can be provided f o r companies
i n s u r i n g f o r t h e f i r s t time ( E x h i b i t 3 ) .
EXHIBIT 3
SAMPLE PAY-IN SCHEDULE FOR COMPANIES*
HEALTH CARE PREMIUM AS A % OF PAYROLL EMPLOYER/EMPLOYEE
Company 1
Company 2
Company 3
1993
0
5
17
1994
0
5
17
1995
0
5
17
1996
universal
coverage
2
7
17
1997
3.5
7.6
16
1 1998
5.2
8.2
15
1999
6.8
8.8
14
2000
8.4
9.4
13
2001
10
10
12
2002
10
10
11
2003
10
10
10
YEAR
1
for
h e a l t h insurance. Assumes health-care i n f l a t i o n i n l i n e w i t h
increases i n p a y r o l l . I f not, percentages w i l l r i s e , but t h e
concept remains t h e same.
101
�TRIVILEGEP AND COHriDEMTIAL
To defray adverse impacts, each s t a t e also establishes a
" r a i n y day" fund t o a s s i s t small business t h a t experience
d i f f i c u l t y i n meeting the new requirements t o purchase h e a l t h
insurance.
The o r g a n i z a t i o n o f h e a l t h a l l i a n c e s should r e s u l t i n an
immediate cost savings t o the p r i v a t e sector when a d m i n i s t r a t i v e
costs f o r small groups and the cost o f underwriting d e c l i n e .
This savings, i n a d d i t i o n t o s t a t e and l o c a l government savings
from u n i v e r s a l insurance coverage, allows a l l i a n c e s t o provide
a d d i t i o n a l support f o r i n i t i a l subsidies t o businesses.
I f s u f f i c i e n t funds are not a v a i l a b l e by these means, states
may be p e r m i t t e d t o o f f e r a less comprehensive package o f
b e n e f i t s f o r a few years t o newly insured people and phase i t up
as p a y r o l l c o n t r i b u t i o n s gradually increase.
FEDERAL COSTS
Under h e a l t h reform, the f e d e r a l government assumes
r e s p o n s i b i l i t y f o r f i n a n c i n g the proposed new investments i n
p u b l i c h e a l t h , underserved areas, h e a l t h research and education,
long-term care and the Medicare drug b e n e f i t .
The $39 to $44 b i l l i o n cost of these programs can be
financed with some combination of revenues i n Exhibit 4:
EXHIBIT 4
BB $
NEW REVENUES
BB $
11
$1 PER PACK
CIGARETTE
TAX
13
I MEDICARE/CHAMPUS/OTHER
GOVERNMENT SAVINGS BEYOND THE
BUDGET
10-17
ALCOHOL TAX
5
MEDICAID SAVINGS FROM MANAGED
CARE
5-10
SAVINGS
REDUCTION I N DISPROPORTIONATE
SHARE PAYMENTS TO OFFSET SAVINGS
FROM UNCOMPENSATED CARE
A SURCHARGE TO RECOVER SAVINGS
IN AUTO INSURANCE
5
30-40
TOTAL
18
The pace o f phase i n f o r the long-term care program and f o r
p u b l i c h e a l t h i n i t i a t i v e s could be keyed t o the achievement o f
savings from uncompensated care. Medicare, e t c .
102
�PRIVILEOED AMD COHriDDHTIftL
TOTAL PROGRAM COST
T o t a l program costs amount t o approximately $104 t o $109
b i l l i o n , o f which the f e d e r a l government w i l l spend approximately
$39 t o 44 b i l l i o n ( E x h i b i t 5 ) .
EXHIBIT 5
TOTAL COST OF PROGRAM
1994 $
EMPLOYER
PREMIUMS
EMPLOYEE
PREMIUMS
FEDERAL
GOVERNMENT
TOTAL
52
13
-
65
MEDICARE DRUG
BENEFIT
-
-
17
17
LONG TERM CARE
—
—
15-20
15-20
OTHER PROGRAMS
-
-
7
7
52
13
39-44
104-109
UNIVERSAL COVERAGE
TOTAL
The t o t a l program cost u l t i m a t e l y must be weighed against
system savings achieved. Both the p r i v a t e and p u b l i c sectors
achieve s i g n i f i c a n t savings i n the l a s t h a l f o f the decade t h a t
exceed the e x t r a cost o f the program. More importantly, t o t a l
health-care spending comes under budgeted c o n t r o l ( E x h i b i t 6 ) .
As
we w i l l
against
savings
discussions w i t h CBO proceed over the coming two weeks,
be able t o itemize scoreable savings and put them up
the costs. Our best estimates s t i l l i n d i c a t e system
w i l l exceed system costs s i g n i f i c a n t l y .
103
�DETERMINED TO BE AN
ADMINISTRATIVE MARKING
INITIALS: ^
MTPOSVag/^
PRIVILCCED AND CONriDENTIAL'
EXHIBIT 6
TOTAL HEALTH CARE SYSTEM
INVESTMENT AND SAVINGS IN HEALTH CARE WITH FULL
PHASE IN OF UNIVERSAL COVERAGE IN 1996
MEDICARE &
MEDICAID SAVINGS
ABOVE BUDGET
TOTAL GROSS
SAVINGS
NET
SAVINGS
YEAR
INVESTMENT
MANAGED
COMPETITION AND
BUDGET SAVINGS
1994
17
4
4
8
(9)
1995
25
25
6
31
6
1996
95
54
15
69
(26)
1997
108
87
21
108
-
1998
129
133
29
162
33
1999
141
154
40
194
53
2000
153
166
52
218
65
104
�
Dublin Core
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Health Care Reform
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2006-0810-F
Description
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<p>This collection consists of records related to Hillary Rodham Clinton's Health Care Reform Files, 1993-1996. First Lady Hillary Rodham Clinton served as the Chair of the President's Task Force on National Health Care Reform. The files contain reports, memoranda, correspondence, schedules, and news clippings. These materials discuss topics such as the proposed health care plan, the need for health care reform, benefits packages, Medicare, Medicaid, events in support of the Administration's plan, and other health care reform proposals. Furthermore, this material includes draft reports from the White House Health Care Interdepartmental Working Group, formed to advise the Health Care Task Force on the reform plan.</p>
<p>This collection is divided into two seperate segments. Click here for records from:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0810-F+Segment+1"><strong>Segment One</strong></a> <br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0810-F+Segment+2"><strong>Segment Two</strong></a></p>
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Clinton Presidential Records
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[Draft Policy Book] [2]
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Health Care Task Force
General Files
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2006-0810-F Segment 1
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Box 54
<a href="http://clinton.presidentiallibraries.us/items/show/36144" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12090749" target="_blank">National Archives Catalog Description</a>
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Clinton Presidential Records: White House Staff and Office Files
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42-t-2194630-20060810F-Seg1-054-008-2015
12090749