By: Libery Partners Group
House Committees Discuss SGR
On May 5, the House Energy and Commerce Committee held a hearing entitled “The Need to Move Beyond the SGR.” During this bipartisan hearing, it was agreed that a solution to the SGR must be enacted. Ideas among witnesses included repealing the SGR and enacting a series of stable payments for a five-year period to give organizations and lawmakers time to formulate and enact a new payment plan. It was also agreed that the solution to the SGR cannot be a “one size fits all” approach. In addition, support was voiced for H.R. 1700, the Medicare Patient Empowerment Act, introduced by Representative Tom Price (R-GA) on May 3. This legislation would allow physicians to privately contract with beneficiaries without penalty.
In addition, the House Ways and Means Subcommittee on Health held a hearing on May 12 to discuss overhauling the SGR. Alternatives such as the five-year, per-patient global budgets and “capitation” under which providers get a fixed, per-patient sum over a span of time, regardless of the amount of care a patients gets, were discussed. Witnesses also discussed plans their respective states have implemented to help tackle this issue. For example, Lisa Dulsky Watkins, a Vermont State Official, said Vermont’s “Blueprint” initiative emphasizes prevention and wellness through “community health teams” allowing doctors to focus on the medical needs of patients. The “community health team” is a multidisciplinary team that partners with primary care offices, the hospital, and existing health and social service organizations.
Currently, if Congress does not act, Medicare physician payments will drop nearly 30% beginning on January 1, 2012. Such a cut could force doctors out of the Medicare program and cause access to care problems for Medicare beneficiaries.
Big Multi-Specialty Medical Groups Raise Concerns over ACO Framework
On May 11 the American Medical Group Association (AMGA) sent a letter to Dr. Donald Berwick, Administrator of CMS, expressing concern over the Accountable Care Organizations (ACOs) framework in the ACO Proposed Rule. While the AMGA supports ACOs generally, it stated the following with respect to the Proposed Rule: “it is overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.” AMGA also expressed concern that if the ACO is not successful the “only alternative to future delivery system ‘reform’ will be draconian cuts across the provider spectrum.”
In a conference call on May 12, a day after the letter was sent to CMS, HHS Secretary Kathleen Sebelius acknowledged that the proposed rule was drawing intense criticism and noted that the Department would take the “comments very seriously.”
CMS Announces Three Related ACO Initiatives
CMS announced on May 17 three new initiatives designed to help doctors, hospitals, and other Medicare providers become ACOs. The first initiative is the Pioneer ACO Model designed for advanced organizations ready to participate in shared savings. The second initiative requests comment on the idea of an Advance Payment ACO, which would provide additional “up-front” funding to providers lacking funds to become an ACO. The comment period on this request for information is open until June 17, 2011, and information on making comment(s) can be found by clicking here. The third initiative – Accelerated Development Learning Sessions – is being offered for groups interested in learning more about how to establish ACOs. Session dates and registration can be accessed by clicking here.
Annual Medicare Report Released
The Annual Medicare Trustees Report was released on May 13. The report showed Medicare Part A would remain solvent until 2024; this is five years earlier than projected last year and, according to the Trustees, is due to a sluggish economy. It is also projected that Medicare costs will continue to grow from 3.6 percent of GDP in 2010 to 5.5 percent in 2035.
The report included the following opinion of the Medicare actuary: “the financial projections shown in this report … do not represent a reasonable expectation for actual program operations.” The actuary released an alternative scenario for what he believes to be a more realistic snapshot for Medicare’s unfunded obligations. The report reiterates the actuary’s projection of last year that productivity adjustments could cause approximately 40 percent of providers to become unprofitable by 2050. The alternative scenario assumes that the productivity adjustments included in the ACA are phased out from 2020 through 2035, and that the SGR mechanism is effectively repealed and replaced with growth in reimbursement levels set at medical inflation, beginning 2012. Assuming the above assumptions take place the alternative scenario projects the following:
- Over 75 years, Part A’s unfunded obligations are nearly three times higher under the alternative scenario – $8.3 trillion compared to $3.0 trillion.
- Part B physician spending projections “would be 12.6 percent higher than under current law in 2012. The difference would grow to be 19.3 percent higher by 2019. The projected average annual expenditure growth rate over the 8 years is 5.4 percent under current law versus 7.8 percent for the MEI scenario.”
- Over 75 years, Part B’s unfunded obligations are significantly higher under the alternative scenario – $21.0 trillion compared to $13.9 trillion under current law.
- Overall Medicare spending would constitute 10.36% of GDP in 2080 under the alternative scenario, compared to 6.25% under current law.
Senate Democrats Outline Opposition to Ryan Premium Support Plan
Fifty Senators sent a letter to President Obama on May 5 commending his efforts in opposing the “premium support” concept laid out in Representative Paul Ryan’s (R-WI) deficit reduction plan. The Ryan premium support plan would give seniors approximately $8,000 to buy private insurance coverage in a Medicare exchange. The letter stated that the Congressional Budget Office approximates that during 2022, the first year of the premium support program, out-of-pocket expenses for seniors would double under the Ryan plan to more than $12,500 annually.
House Committee Backs Bill to Overhaul Medicare Liability System
During a markup on May 5, the House Energy and Commerce Committee approved legislation (H.R. 5) by a vote of 30-20 that would overhaul the medical liability system. This legislation would allow for unlimited compensation for economic damages, but place a $250,000 cap on non-economic damages. In addition, punitive damages would be allowed “only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer.” H.R. 5 has been placed on the Union Calendar, but the timing of its consideration on the House floor has not been determined.
President’s Cancer Panel Releases Report
On April 28 the President’s Cancer Panel released its annual report which examines the effects of the demographic shift on cancer treatment. According to the report cancer incidences among minority populations are expected to nearly double between 2010 and 2030. Some of the recommendations of in the report include:
- Health care providers should consider patient sociocultural and socioeconomic characteristics when addressing cancer prevention treatment.
- Cultural competency should become an integral part of medical and research training curricula, as well as a continuing education requirement.
- Because weakness in existing data may thwart efforts to characterize populations in a scientifically meaningful way, data collection should be improved.
Otis W. Brawley, chief medical officer of the American Cancer Society, said “overwhelmingly clear is the fact that in order to advance out control of this disease we must understand the role culture, habits and environment play in cancer causation and the cancer treatment experience.”
Mammogram Screening Coverage Legislation Introduced
Representative Jerrold Nadler (D-NY) introduced the Mammogram and MRI Availability Act of 2011, H.R. 1784, on May 5. This legislation would require insurance companies, that currently only cover diagnostic mammograms, to also cover annual screenings for women 40 and over, and MRI screenings for high-risk women. Medicare and Medicaid cover annual screening mammograms, which are used to detect abnormalities not noticeable in a manual exam, when many private insurers only cover diagnostic mammograms used to just confirm the presence of an abnormality.
Senate Hearing Held on Patient Safety
The Senate Health, Education, Labor and Pensions Committee held a hearing on May 5 regarding the new Health and Human Services (HHS) initiative, Partnership for Patients, launched in April. HHS plans to spend up to $1 billion provided under the Affordable Care Act to implement this initiative. According to HHS the program has the potential to save up to $50 billion. Senators Michael Enzi (R-WY) and Orrin Hatch (R-UT) have requested specifics on how those savings will be achieved from Chief CMS Actuary Rick Foster.
Attestation for the Medicare EHR Incentive Program
CMS held a call regarding attestation for the Medicare EHR Incentive Program for “eligible professionals” on May 5. CMS described the path to payment (i.e. register, attest, payment), the Attestation Process, how to review an attestation before submitting, trouble shooting, and helpful resources. The following was also mentioned on the call:
- As of March 31, there are over 35,000 active eligible professionals and eligible hospitals in both the Medicare/Medicaid EHR Incentive Programs;
- EHR certification numbers are 15 characters long – double check number to ensure successful login;
- Upon submission of attestation and feedback regarding successful submission, users should print the webpage as a record (users will not receive an email confirmation);
- Payments are scheduled to begin 4 – 8 weeks after successful attestation and meeting the $24,000 claims threshold;
- Qualifying providers attesting by the 15th of the month will receive payment by the middle of the next month.
CMS National Provider Call on ICD-10 Conversion
CMS held a National Provider call on May 18 regarding the ICD-10 Conversion activities. Any physician services provided on or after October 1, 2013 must use ICD-10-CM diagnosis codes, and service prior to this date must use ICD-9-CM codes. A stated benefit of ICD-10-CM codes is greater detail in describing diagnoses and procedure. CMS noted on the call that providers using ICD-9 codes for services provided after October 1, 2013 will have claims returned and could face possible HIPAA monetary penalties.
Andrew L. Woods
Liberty Partners Group