Prescription Medicine

By unanimous consent on Dec. 18, 2007, the Senate passed the Medicare, Medicaid and SCHIP Extension Act of 2007. The House passed the same legislation 411-3 the next day, and a White House official indicated President Bush would sign the measure.

Instead of facing a 10.1% across-the-board cut in Medicare reimbursement beginning Jan. 1, physicians were given a 0.5% increase. But the boost expires June 30, meaning that the reduction will go into effect in July unless lawmakers approve another bill that would continue to stave it off. Without such a move, the Medicare payment formula would act as if the boost had never happened, and rates as of July 1 would be 10.1% lower than in 2007. The bill also extends payment provisions for rural physicians.

In light of the action, the Centers for Medicare & Medicaid Services extended the deadline for changing Medicare participation status to Feb. 15.

While physician organizations said the half-percent increase is better than a double-digit percentage cut, they are still disappointed that Congress was unable to enact a longer-term Medicare solution. The AMA and other groups were pushing for two years of increases that would reflect the rise in the annual cost of providing medical care.

AMA Board of Trustees Chair Edward L. Langston, MD, said it was extremely disappointing that months of work in the House this year produced only a six-month reprieve. The short-term nature of the bill "creates uncertainty for both Medicare patients and physicians."

"We strongly urge Congress to break the tradition of short-term interventions that are not funded and fail to chart a course for replacing a flawed payment formula that is a barrier to improving quality and access to care for seniors," he added.

The six-month postponement of the cut means physician organizations need to keep pressuring lawmakers to act as soon as the new session starts, said James King, MD, president of the American Academy of Family Physicians. "Yes, they've stopped the hemorrhaging that would have occurred, but we still have the problem of trying to get right back to work with Congress in the first of the year."

The AARP described the measure as "woefully inadequate."

"Enactment of this legislation does little to protect millions of Medicare beneficiaries from higher monthly premiums and only temporarily averts the problems beneficiaries would face finding a physician if payment cuts take place," said David Sloane, AARP director of government relations.

The entire package was expected to cost about $6 billion, according to the Senate Finance Committee. The six-month reprieve for doctors alone would cost $1.4 billion over five years, estimates the Congressional Budget Office. The cost was offset by cuts to a special stabilization fund for Medicare Advantage plans.

Lawmakers tried to craft a pay raise that would go beyond six months, but disagreements between the parties and the White House prompted leaders to pursue a bare-bones approach that could pass both houses and obtain the president's signature.

Senate Democrats, for instance, were pushing for a two-year update that would have paid for annual pay increases by equalizing per-capita pay between traditional Medicare and Medicare Advantage -- a move supported by the AMA and AARP. But Senate Republicans threatened to block the measure, and President Bush threatened to veto any bill that cut Medicare pay to private plans.

In August 2007 the House approved a two-year Medicare payment update as part of a massive Medicare and SCHIP package, but congressional negotiators deleted Medicare language before passing the bill. Bush vetoed the resulting SCHIP expansion measure.

Party differences on SCHIP remain

The newly passed 18-month SCHIP extension takes the issue off the legislative front burner for 2008.

Drs. Langston and King said they appreciate the action. "The renewal of SCHIP is a true gift to families in need," Dr. Langston said.

The legislation would maintain the current enrollment of roughly 6 million by adding $800 million to the existing annual SCHIP funding of $5 billion. Without that extra funding, at least 19 states would have faced program shortfalls in 2008, according to the Congressional Budget Office.

While the extension sets the stage for efforts in 2009 to expand SCHIP, passage doesn't resolve the party differences that kept Democrats from having their version of a five-year program reauthorization adopted. They championed a $60 billion renewal, funded in part by a 61-cent federal cigarette tax increase. It would have expanded SCHIP enrollment by 4 million to reach 10 million. Bush vetoed two similar versions of the bill.

The president and some other Republicans want an SCHIP reauthorization that immediately keeps the program from covering any adults and from covering children in families earning more than 250% of the federal poverty level. They also favor tough enforcement to keep illegal immigrants from enrolling and oppose funding via a tax increase. About 600,000 adults are enrolled in SCHIP.

The passed legislation meets some of their criteria. It does not override an August 2007 Centers for Medicare & Medicaid Services rule limiting SCHIP enrollment to families earning 250% of the federal poverty level. States can exceed that threshold only if the program covers 95% of children in families earning 200% or less of the poverty level, among other requirements. Five states have filed lawsuits against CMS to block the regulation, saying the agency didn't use the proper public comment process. The rule would become effective Aug. 17.

Democrats, such as Rep. John Dingell (D, Mich.), chair of the Energy and Commerce Committee, were disappointed that Congress came within 11 votes of overriding a veto without succeeding. "Unfortunately, Republicans in the House and Senate have chosen to join the president's efforts to deny health care to an additional 4 million uninsured children."

Since last summer, many Republicans have complained that Democrats have ignored their input on SCHIP, but the Bush vetoes turned out to be a powerful weapon. Said Minority Leader Sen. Mitch McConnell: "Again and again, we've insisted the minority be heard and, in the end, we were."

At a Dec. 4, 2007, Senate Judiciary Committee hearing, lawmakers also expressed frustration with the lack of movement toward allowing e-prescribing of controlled substances.

Sponsors of the two electronic prescribing bills tried to fold the legislation into a measure to prevent next year's 10.1% Medicare physician payment cut. But the language was not included in a last-minute Medicare package.

Rep. Allyson Y. Schwartz (D, Pa.), one of the bill's sponsors, said that if the measure didn't pass in 2007, she would press for hearings and continue to vet the legislation in 2008, according to her spokeswoman, Rachel Manguson.

The bills would fine physicians who continued writing paper Medicare prescriptions after Jan. 1, 2011. They would allow the Health and Human Services secretary to give one- or two-year exemptions to physicians facing hardships buying and implementing the technology. The measures would give HHS discretion to determine what constitutes a hardship, according to the office of Sen. John Kerry (D, Mass.), a sponsor of the Senate bill.

The legislation, the Medicare Electronic Medication and Safety Protection Act, also would provide one-time Medicare grants to offset the costs of e-prescribing technology. The grants would be $2,000 in the first two years of implementation, $1,500 in the next two years, and $1,000 permanently thereafter.

The amounts go down because costs usually drop after a technology's introduction. Typical startup costs to comply would be around $2,800, according to Schwartz's staff.

The bills would not set an e-prescribing standard. The Centers for Medicare and Medicaid Services would handle that task. Any technology that met the standards would qualify physicians for the payment, said a Schwartz staff person.

Doctors also would receive a 1% bonus on Medicare evaluation and management services provided in conjunction with an e-prescription, as long as they electronically prescribed at least a certain portion of their scripts. HHS would determine the threshold. The extra payments would be permanent, the staffer said. But pay for E&M services provided during a visit in which a prescription was written on paper would be cut 10% if the prescription could have been handled electronically.

The American Medical Association has not taken a formal position on the bills. The AMA supports the voluntary adoption of health information technology and federal government efforts to promote it. The Association strongly opposes mandates.

The Schwartz staff person acknowledged the AMA's opposition to mandates and said the lawmaker was willing to accommodate its concerns. The goal is to encourage e-prescribing and improve patient safety while not being punitive, the source explained.

Senators criticize e-prescribing ban

Meanwhile, the Senate Judiciary Committee held a hearing Dec. 4, 2007, on allowing electronic prescribing of controlled substances. The Drug Enforcement Administration has been considering new regulations to permit this practice since 2006 but has not committed to a timeline, said Sen. Sheldon Whitehouse (D, R.I.).

Current law requires paper prescriptions for controlled substances. As a result, many physicians write all scripts by hand, rather than maintain two separate systems, he said.

"Billion-dollar transactions are done electronically, highly classified national security information travels electronically, military attack aircraft are targeted electronically. Don't tell me we can't figure out a way for a doctor to prescribe Vicodin electronically," Whitehouse said.

Sen. Arlen Specter (R, Pa.) said he supports allowing physicians to e-prescribe controlled substances. It is understandable that the DEA wants to establish a paper trail for controlled substances, he said. But, he noted, electronic transmissions such as e-mails are traceable.

Sen. Edward Kennedy (D, Mass.) expressed disappointment that the DEA turned down a waiver from Massachusetts to allow e-prescribing of controlled substances and said he hoped the agency would work with CMS on new regulations.

The AMA supports e-prescribing of controlled substances as long as security measures are in place to ensure patient confidentiality and the information's integrity.

DEA Deputy Assistant Administrator Joseph T. Rannazzisi told senators that the agency supports e-prescribing of controlled substances but that adequate safeguards must be established to prevent criminals from diverting drugs for illicit use. Rannazzisi noted that almost 7 million Americans abuse prescription drugs, up from 3.8 million in 2006.

While there is no timeline to establish new regulations, Rannazzisi told senators that he believes the rulemaking process will be completed in three years. He promised to provide a formal timeline within 60 days.

The DEA rejected the Massachusetts waiver because one of the state's goals was to create a nationwide system that could be used for e-prescribing controlled substances, Rannazzisi said. Such a system would have to be created by federal agencies, he explained. The DEA is working with Massachusetts on resubmitting its proposal so it can be approved, he added.

At the hearing, Rite Aid Corp. Vice President Mike Podgurski said the company supports e-prescribing for controlled substances. It would speed the spread of e-prescribing technology, he said. It also would reduce theft by replacing paper prescription pads, which are easier to steal and forge, Podgurski said.

Whitehouse followed up the hearing with a Dec. 17, 2007, letter to the DEA formally requesting that it promptly issue standards for prescribing controlled substances. The letter was signed by a bipartisan group of 18 senators, including Sens. Kennedy and Specter.

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