Senate Vote on Permanent CMS Administrator Imminent

After Senator Tom Harkin (D-IA) released his hold on the nomination of Marilyn Tavenner to become the permanent CMS Administrator, Senate Majority Leader Harry Reid (D-NV) said the confirmation vote would be scheduled soon.

Medicare Physician Payment Reform Takes Center Stag

Last week the House Ways and Means Health Subcommittee took testimony from several physician organizations to solicit their recommendations on how to reform the Medicare physician payment system’s sustainable growth rate (SGR) formulation. Subcommittee Chairman Kevin Brady (R-TX) indicated that perhaps the most vexing problem will be to find the money to offset the cost of the SGR fix which the CBO estimates to be about $138 billion over ten years. He said additional hearings will be held on the issue. The draft framework for a fix released by both the House Ways and Means and Energy and Commerce Committees served as a guideline for those testifying. In general, physician groups said that upon repealing the SGR the “period of payment stability” should be set at five years. After the period of stability, witnesses said that payments should be transitioned to value-based payment (VBP) models and some even suggested that physician payments be increased for participating in VBP programs during a transition period and as early as 2014. A witness cautioned that negative payment updates would discourage physicians from transitioning into VBP programs and even in continuing to participate under Medicare. In related news, Senate Finance Committee Chairman Max Baucus (D-MT) and ranking member Orrin Hatch (R-UT) released a letter to the “health care provider community” urging physician groups to make suggestions on how to “improve the current system to ensure that it makes appropriate payments for physician services, reduces unnecessary utilization and improves quality while also easing the transition to new payment models….”

CMS Posts Charges Made by Nation's Hospitals

CMS released Medicare claims data on its website which was developed from about 90% of the claims filed by U.S. hospitals in 2011. The charges for most procedures varied significantly both across the nation and even within local communities. The charges shown do not reflect final payment amounts, however. It was reported that the charges by for-profit hospitals exceeded those submitted by not-for-profit hospitals. In related news, HHS announced that $87 million in grants will be awarded to health-care-data-pricing centers in an attempt to help consumers better understand the comparative price of procedures in a given region or for a specific health insurer or service setting.

HHS OIG Says CMS Pays for Invalid Medicare Claims

In the report, Medicare Payments for Part B Claims with G Modifiers that providers expected to be denied as not reasonable and necessary or as not being covered by Medicare, the HHS Office of Inspector General (OIG) stated that CMS paid $744 million for Medicare Part B claims in 2011 that providers expected would be denied for being not reasonable and necessary or not covered by Medicare. The OIG recommended that CMS and claims contractors take appropriate steps to remedy the situation.

FDA User Fee and "Supply Chain" Legislation Advances

The Senate passed S. 622, legislation to amend the Federal Food, Drug, and Cosmetic Act to reauthorize user fee programs relating to new animal drugs and generic new animal drugs. In a related action, the House Energy and Commerce Subcommittee on Health reported by voice vote the bill H.R. 1407, legislation similar in nature to the Senate passed bill. The reauthorization would require the animal drugs industry to pay about $23.6 million in FY 2014 and $21.6 million for each subsequent year through FY 2018. The same House subcommittee also passed by voice vote bipartisan legislation that Chairman Joe Pitts (R-PA) said “provides a uniform framework for securing the downstream pharmaceutical supply chain, which includes manufacturers, wholesale distributors, pharmacies, re-packagers, and third-party logistics providers.” In particular, the legislation would establish lot-level tracking requirements throughout the pharmaceutical supply chain. Rep. Kathy Castor (D-FL) said the legislation needs to be amended to allow current state drug pedigree laws to continue until the new federal rules take full effect.

Hearing on Compounding Pharmacy Regulation

At a Senate Health, Education, Labor and Pensions (HELP) Committee hearing which focused on legislation released by the committee to help improve the safety of drugs manufactured by compounding pharmacies, the Director of the FDA Center for Drug Evaluation and Research (CDER) testified that the FDA needs broader record authority than in the bill in order to address serious quality issues uncovered by the agency among such compounders. The Director also said the proposal could give traditional manufacturers incentives to act as compounding manufacturers to avoid the more strict FDA enforcement standards currently applicable to such traditional entities. To avoid this problem, it was suggested that compounding manufacturers be required to have state pharmacy licenses and be subject to state, as well as federal, standards. Chairman Tom Harkin (D-IA) said his goal is to mark up the legislation before Memorial Day.

Upcoming Health-Related Hearings/Markups

Senate Finance Committee: will hold a hearing on Medicare physicians’ payments; 10:00 a.m., 215 Dirksen Bldg.; May 14.

Senate Special Aging Committee: will hold a hearing on the ten-year anniversary of the Medicare prescription drug program; 2:00 p.m., 366 Dirksen Bldg; May 15.

Senate Appropriations Labor, Health and Human Services, Education and Related Agencies Subcommittee: will hold hearings on proposed fiscal 2014 appropriations for the National Institutes of Health; 2:30 p.m., 138 Dirksen Bldg; May 15.

Senate Appropriations Military Construction, Veterans Affairs and Related Agencies Subcommittee: will hold hearings on proposed fiscal 2014 appropriations for agencies, programs and activities under its jurisdiction. 10 a.m., 124 Dirksen; May 15.

House Appropriations Military Construction, Veterans Affairs, and Related Agencies Subcommittee: will hold a mark up on proposed fiscal 2014 appropriations for agencies, programs and activities under its jurisdiction. 11 a.m., H-140 Capitol. May 15.

Senate Appropriations Agriculture, Rural Development, FDA, and Related Agencies Subcommittee: will hold hearings on proposed fiscal 2014 appropriations for agencies, programs and activities under its jurisdiction. 10 a.m., 124 Dirksen; May 16.

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