Medicolegal Issues

New Party in Power


Due to an overwhelming number of Democratic victories in last November’s midterm elections, the 110th Congress, which took office early this year, has new leaders and a new agenda that could bode well for healthcare legislation.

In this article, Laura Allendorf, SHM’s senior advisor for advocacy and government affairs, explains what the changes in Congress could mean for the near future of healthcare and for the legislation and issues that SHM strongly supports. Based in Washington, D.C., Allendorf is responsible for providing government relations services for SHM. She advises the organization on key legislative and regulatory healthcare issues before Congress and the Bush administration, and she works with SHM leaders and staff on policy development and advocacy strategies.

Hospital Mortality Rates to Be Made Public

Hospital risk-adjusted mortality rates will be made public by the Centers for Medicare & Medicaid Services (CMS) beginning in June 2007. CMS conducted a “dry run” of the reporting process in November and December of 2006 to introduce hospitals to the process. The risk-adjusted mortality rates will include comparisons of heart failure data from acute-care facilities across the country.

Source: CMS

Majority Rules

The midterm elections brought about a shift in power that goes deeper than numbers of bodies on each side of the aisle. “The Democrats are now the majority in both chambers. This is significant, because they’ve been the minority since 1994, says Allendorf. “As the majority, they control the agenda now—on healthcare and other issues—and they also head the key committees.”

What can we expect to see from the Democratic Congress? “We should expect to see a more expansionist agenda” in general, according to Allendorf. “We’re going to see more activism in the area of healthcare, but whether anything gets done remains to be seen. There’s only a slim majority in the Senate, and President Bush can wield his veto pen. For example, the Democrats would like to give [the Department of] Health and Human Services the power to negotiate drug prices with pharmaceutical companies, specifically on Medicare Part D, but Bush won’t like that.”

Much depends on the issues at hand, as well as on how much bipartisan support exists for each specific bill.

Changing of the Guard

Anyone who glances at the newspaper knows that Democrat Nancy Pelosi (Calif.) is now the Speaker of the House. But Democratic leadership goes much deeper than that because the ruling party has also taken over leadership of Congressional committees. These committees shape the legislation introduced in the House and Senate.

New Advocacy Tool Available on

For the latest information on Congress and healthcare legislation, you can turn to Capwiz, a new interactive online site housed in the “Advocacy & Policy” section of SHM’s Web site.

“This is a powerful new advocacy tool,” says Allendorf. “You can look at committee assignments, key players, voting records, cosponsors of bills … all kinds of information. But, most importantly, it makes it much easier to lobby your representatives on SHM issues; it’s a way to advance our agenda.”

Through the Legislative Action Center, SHM members can quickly and effectively take action on issues affecting hospital medicine by sending a personalized communication to their elected officials.

Visit Capwiz at

As of press time, Congressional committee assignments had not been formally decided—at least not in the Senate—but many assignments were certain. “Typically, the highest-ranking Democrat [House or Senate] on a committee will become the new head, though Nancy Pelosi isn’t sticking to that,” explains Allendorf. “Pete Stark (D-Calif.) will likely chair the Ways and Means Committee’s Subcommittee on Health, and Charles Rangel (D-N.Y.) will head the House Ways and Means Committee. John Dingell (D-Mich.) will chair the House Energy and Commerce Committee.” (For more on committee chairs, visit

For a complete list of committee members, visit SHM’s new Legislative Action Center at See “New Advocacy Tool Available,” for more information on the Legislative Action Center, above.)

Starting Over on Key Issues

Many of the bills introduced in 2006—particularly spending bills—were not voted on by the end of the lame duck session last fall. That means that these bills must be reintroduced in the new year. Bills that recommend funding changes are frozen, so agencies continue to receive 2006 funding until the new Congress votes to change their budget.

“All bills have to be reintroduced in the 110th,” stresses Allendorf. “It will take some time—how much depends on the issue. The Democrats may want to hold hearings on legislation, or they may simply dust off legislation that was introduced last year.”

The Democrats are expected to move on many of the issues that SHM has been lobbying for. “They’ve said that they want to reform the healthcare system,” says Allendorf. “Top issues include providing coverage to the uninsured, reforming Medicare Part D, and resolving the physician payment issue.”

OIG Approves Gainsharing for Cardiac Surgeons

Despite the federal government’s general squeamishness over the practice of gainsharing—hospitals sharing the monies realized through cost savings with those physicians responsible—the Office of the Inspector General (OIG) approved a new gainsharing arrangement in November 2006. The arrangement is between an unnamed acute care hospital and its cardiac surgeons. The OIG has authorized the hospital to pay the surgeon group a share of the first-year cost savings directly attributable to specific changes in the group’s operating room practices.

Whether this approval is evidence of continued interest in gainsharing on the part of the administration remains to be seen.


HHS Pushes Healthcare Transparency

The Department of Health & Human Services (HHS) is taking President Bush’s executive order on healthcare transparency to the private sector. The executive order requires key federal agencies—including HHS—to collect information about the quality and cost of the healthcare they provide and to share that data with beneficiaries. HHS is planning to distribute an “employer toolkit” to the nation’s large employers and purchasers, asking their CEOs to pledge written support of the executive order.

The AMA has concerns about the toolkit, specifically about quality measures that were developed without input from medical groups and policies that focus on cost rather than quality.

Source: November 21, 2006 Federation Memo from AMA

Allendorf believes that there will be a bipartisan effort to push through physician payment reform. “There are some 265 members of Congress who requested action on this issue this year [in 2006],” she points out. “There’s a genuine interest and desire to address physician payment reform and pay-for-performance as well. They may differ on how quickly they want to move on some of these.”

The news is not so good on the issue of gainsharing, where physicians are allowed to share the profits realized by a hospital’s cost reductions when linked to specific best practices. “Representative Nancy Johnson (R-Conn.) was a big proponent of this issue in the House, and she was not re-elected,” says Allendorf. “Stark is an opponent of gainsharing, so there may not be the same Congressional push behind it—at least in the House.”

However, the unexpected gainsharing demonstration projects approved in 2006 are underway, and Congress will hear reports on those in several years, once the projects have been analyzed.

Another issue that may not be addressed is liability. “Medical liability reform will be on the back burner,” warns Allendorf. “It’s generally not supported by the Democrats.”

In 2006, SHM supported increased funding for the Agency for Healthcare Research and Quality (AHRQ)—this was one of the major issues addressed by members during Legislative Advocacy Day during the Annual Meeting in Washington, D.C. Whether the next budget includes more money for the agency remains to be seen. “The Democrats support increased funding for NIH (National Institutes of Health), AHRQ, and other healthcare agencies,” says Allendorf. “There’s certainly political will, but where is the money going to come from?”

New Congress, New Issues

What about new issues? “Democrats have signaled that healthcare access for the uninsured will be a priority,” says Allendorf. “I think that we’ll see new legislation with a renewed emphasis on access to care.”

SHM’s Public Policy Committee will be waiting for the first legislation to be introduced regarding coverage for uninsured Americans. “This is an issue that SHM is strongly in favor of,” explains Allendorf. “SHM will look at any bills that come out on this issue and then form a policy.”

Regardless of which healthcare issues come to the forefront first, SHM’s Public Policy Committee, staff, and members are likely to be more active than ever. “I see a very busy year legislatively for SHM,” says Allendorf. TH

Jane Jerrard regularly writes “Public Policy” for The Hospitalist.

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