Call Us 512-328-8000

Making Progress in HR 3200!

This is part seven in my ongoing series of posts, as I read through the entirety of HR 3200 (which is 1017 pages as of this writing).  I'm sorry that I haven't taken the time to jazz up these posts with graphics, etc.  I guess the content doesn't really lend itself to funny pictures as much as most of the stuff I write.  :)

If you would like to see every post, you can visit my new site at:

I am planning to make it a bit easier to sort the posts there soon.  On another note, I apologize to those of you who were awaiting this installment, since it took me nine days to get it completed.  I have been swamped lately, so it took me awhile to find the "extra" time for my reading.


Below you will find my notes for pages 304-369.  Whoopee!




I came up with a new technique that I think will be helpful from here on out.  I will share any terms with you that required me to consult Google or an online dictionary.  Here are the glossary terms that I learned during this portion: 

Gainsharing - means a hospital shares a portion of cost-savings with doctors who help to reduce clinical costs.

Anti-referral and anti-kickback - "Anti-referral" is a foreign concept for me since I am in the real estate business, but these terms are pretty self-explanatory.  I only included these because I had never heard them used in this fashion.

MA  (Medicare Advantage): Health plan options that are part of the Medicare program. If you join one of these plans, you generally get all your Medicare-covered health care through that plan. This coverage can also include prescription drug coverage.

Co-morbid conditions - means one of two things:    


    • The presence of one or more disorders (or diseases) in addition to a primary disease or disorder; or

    • The effect of such additional disorders or diseases.

Dual eligibles - This refers to people who are eligible for both Medicare and Medicaid.

SNP's (Special Needs Plans) - These are private Medicate plans that serve one of the following groups: 1. people in nursing homes, 2. people in intermediate care facility for the mentally disabled, 3. dual eligible individuals (see definition above), or 4. people who have a specific chronic, severe or disabling condition defined by the plan (such as diabetes or cardiovascular disease).  It seems as though "special needs" in fact covers a broad range of patients.



Now, the meat of the bill itself:



(B) the names and unique physician identification numbers of all physicians with an ownership or investment interest (as described in subsection (a)(2)(A)), or with a compensation arrangement (as described in subsection (a)(2)(B)), in the entity, or whose immediate relatives have such an ownership or investment interest or who have such a compensation relationship with the entity.   

MY NOTE: As you can see, they are really trying to clamp down on any potential abuses when it comes to profits from referrals made from physicians to hospitals.  The next section requires any doctor with an ownership interest to disclose this to a patient being referred, AND to disclose ownership interests on any public hospital website and in any public advertising for the hospital.  Interesting stuff.



MY NOTE: This section does exactly what it sounds like.  According to my research, there was a bill introduced in an attempt to repeal this back in 2005.  According to the status of the prior bill, it was read twice, then referred to the finance committee.  It makes me wonder how many other bills have died a slow, ignominious death in committee over the years.



(a)(4) MEDICAL LOSS RATIO TO BE DEFINED- For purposes of this part, the term `medical loss ratio' has the meaning given such term by the Secretary, taking into account the meaning given such term by the Health Choices Commissioner under section 116 of the America's Affordable Health Choices Act of 2009.'.

MY NOTES: Why would you allow the Secretary of Health and Human Services to have a (potentially) different definition of the term "medical loss ratio" than the Health Commissioner? 

It says that it must take the other definition into account, but it seems as though it should be firmly understood by everyone, if you plan to: (a) rebate money to enrollees based on this definition, and (b) keep plans from enrolling more members if their loss ratio is too low for 3 consecutive years. 

As a quick reminder, the medical loss ratio is normally understood to be the actual percentage of money spent by an insurance company or entity on claims.  In this case, it would be the percentage spent on medical services. 


(b)(4) REQUIREMENT FOR MINIMUM MEDICAL LOSS RATIO- If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio (as defined in section 1851(p)(4)) of at least .85--

 (A) the Secretary shall require the Medicare Advantage organization offering the plan to give enrollees a rebate (in the second succeeding contract year) of premiums under this part (or part B or part D, if applicable) by such amount as would provide for a benefits ratio of at least .85;

 (B) for 3 consecutive contract years, the Secretary shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and

 (C) the Secretary shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.'.

MY NOTE: As you can see, they are really driving this point home - spend the money on claims, or you will be terminated.


SECTION 1181 (b) (b) Requiring Drug Manufacturers To Provide Drug Rebates for Full-Benefit Dual Eligibles-

MY NOTE: This section also does exactly what it sounds like it would, by requiring all drug companies participating in Part D of Medicare to give rebates for dual eligibles.  On the surface, this seems interesting, until you realize that the money is going to the government - "Such rebate shall be paid by the manufacturer to the Secretary". In theory, this money would be used to help cover the "out-of-pocket gap" for Medicare.

The primary document that I had to refer to repeatedly during this portion of the bill was the Social Security Act, since this bill seeks to amend and add to the Act many, many times.  Large chunks of this section deal with how much rebating will be required from drug manufacturers.  I suppose we've all heard stories of how much profit is involved in that particular business.  Maybe a specific pill costs 25 cents to make, but the end-user pays $50 or more per dose.  Still, I do wonder why the rebate is limited to dual eligibles (at least so far). 

Some people will probably love this, as it limits profits for drug manufacturers, who may be perceived as greedy.  Others will hate this, since it appears to hinder the free market.  I typically lean toward the latter, but I guess we aren't currently shopping for drugs directly from those who make them, so the costs are not really driven by demand, at least not directly.



There is a small error in the Social Security Act as it appears on the site currently.  Under Section 1859 (f), there is no subsection (1), so the numbering begins with part (2) instead.  This may be a simple transcribing error on the site.  Since HR 3200 now refers to it, this should be clarified.

"Section 1181 (a) In General- Section 1860D-2(b) of such Act (42 U.S.C. 1395w-102(b)) is amended--"  This is referring to the Social Security Act, but this is at the beginning of a new subtitle and its the first section there, so it should specifically note which Act in order to be consistent with the rest of the Bill.  Later in the same section, when they are seeking to insert a new paragraph (Paragraph 7), under (E), neither the (i) nor the (ii) are needed there.  The same error occurs later in the same section, with an unnecessary (I) and (II).



Agent Login    |    Powered by Onjax
Create Free Account or
Choose Your Agent (optional)
By using our site, users agree
to the terms and privacy policy
Equal Housing Opportunity Realtor MLS
or