Kenneth A. Shull is the new president/CEO at St. Luke's Hospital. Shull, who currently serves as CEO of Highlands-Cashiers Hospital, will assume his new role Nov. 30. He has more than 30 years of healthcare experience in North and South Carolina and has held CEO positions at Lexington Medical Center, Stanly Memorial Hospital, and Cannon Memorial Hospital.

The Congressional Budget Office (CBO), completing the scoring of the new House healthcare reform bill (HR 3962), predicted that those enrolled in a public plan might not necessarily save money as initially envisioned.

CBO said that the number of individuals enrolled in a health insurance exchange could be expected to number about 30 million. Of that number, only about one-fifth—or 6 million—would be expected to enroll in a public insurance plan.

A public plan paying negotiated rates would be expected to attract a broader network of providers, CBO said. However, the premiums are anticipated to be "somewhat higher than the average premiums for the private plans in the exchanges," CBO said.

The reason is that although administrative costs from the plan would be lower and "less management of utilization” would be expected, those enrollees would be a part of a less healthy pool of enrollees. Also, the public plan now would use the same formula in the revised House bill as private insurers.

Initially, the House had sought to have a more "robust" public option plan—with payment rates tied to Medicare plus 5%. That method had received opposition from many provider groups. Instead, a different option was selected in which the Health and Human Services (HHS) secretary would negotiate rates with healthcare providers as private insurers currently do.

In the long run, the effects of that "adverse selection" on the public plan's premiums would be only partially offset by the "risk adjustment" procedures that would apply to all plans operating in the exchanges, CBO said.

The public option is part of the bill that will cost a gross $1.055 trillion over 10 years. However, it will cost a net $894 billion and reduce the deficit by $104 billion over the same period, according to CBO. The entire bill is expected to be brought to the House floor this week where 218 votes will be needed to pass the measure.

It's a threat made many times before. Large numbers of doctors will stop accepting new Medicare patients, and may scale back their existing Medicare patient roster, if a 21% Medicare pay cut goes through as scheduled in January.

This time more than ever, physicians say they're serious.

"Access to care and choice of physician for seniors, baby boomers and military families is at serious risk and Congress must fix the payment formula once and for all this year," says J. James Rohack, MD, president of the American Medical Association.

The 21.2% cut is "the largest payment cut since Congress adopted the fatally flawed Medicare physician payment formula," he says.

A remedy is on the way with H.R. 3961, legislation introduced Thursday in the House Ways and Means Committee. It would stop the 2010 payment cut from going through, at an estimated cost of $239 billion.

It would also "replace the physician payment formula (known as the Sustained Growth Rate or SGR) with a more stable system that ends the unrealistic cycle of threats of ever-larger fee cuts followed by short-term patches," according to a Ways and Means statement issued Thursday.

The new formula would:

• Remove items such as drugs and laboratory services not paid directly to practitioners from spending targets in Medicare Part B (physician services).
• Allow the volume of most services to grow at the rate of the gross domestic product plus 1 percentage point per year.
• Allow the volume of primary and preventive care services to grow at gross domestic product plus 2% per year.
• Encourage coordinated innovative care through Accountable Care Organizations, which would be responsible for their own growth paths, without regard to reductions or increases that apply elsewhere in the system.

Ted Mazer, MD, a California ear, nose and throat specialist, confirms that doctors will find it difficult to continue seeing Medicare patients, especially taking on new patients. Additionally, all other physician reimbursement from government funds tied to Medicare, such as those paid by CHAMPUS for military dependents, is affected as well.

Already, he says, many physicians are saying goodbye to Medicare and going to "concierge-only" practices, where they accept an annual fee or retainer with a promise of providing enhanced care.

Mazer says the key problem is how the formula treats the calculation for purchasing and administering intravenous drugs for cancer or renal failure patients in their office settings. "The way it is now, doctors who administer these therapies in their offices have to lay out the money to buy these costly drugs and they're not reimbursed that cost. Under the current formula, the cost of those drugs comes under physician services, under Medicare Part B," he says.

Mazer says the nation's physician spending budget is calculated to include these expensive drug products. He likened it to a parent who is given $1,000 a month to raise a child in a home when the electricity bill alone costs $1,000 a month.

It was a smaller problem when there were few such drugs that were administered, and the cost was lower. But now, Mazer says, an increasing number of costly drugs are required by an increasing number of patients and the burden on physician practices is unsustainable.

Mazer says that if the correction does not pass or seems to falter in coming weeks, he sees a "White Coat March around the Capitol," with thousands of physicians from across the country flying to Washington to make their point.

"We can not tolerate this any further," Mazer says.

H.R. 3961 has powerful support. "It is time to stop passing short-term fixes for massive payment cuts that hurt physicians and threaten Medicare access for seniors and people with disabilities," says Rep. Pete Stark, D-CA, Ways and Means Health Subcommittee chairman. "This bill will make the payment system work better not just for physicians, but also taxpayers, beneficiaries and the Medicare system as a whole."

Added Energy and Commerce Health Subcommittee Chair Frank Pallone, D-NJ, "Democrats have been calling for a permanent fix to the Medicare physician payment problem for years. We have now taken one long step toward ensuring that America's doctors are paid fairly for quality healthcare services they provide to seniors and the disabled.

Republicans are preparing an alternative healthcare bill to Democratic legislation, House Republican Leader John Boehner announced. Boehner said the Republican bill would extend health-insurance coverage to "millions" of Americans but wouldn't try to match the scope of the House Democratic bill unveiled last week. The GOP plan would likely be less costly to taxpayers and involve less government intrusion into the private sector. Boehner said the bill would take "a step-by-step approach" to expanding coverage. It would, among other things, propose new limits on medical malpractice lawsuits and make it easier for individuals and small businesses to pool resources to purchase insurance.