Senate Finance Committee Hearing on SGR Replacement

At last week’s Senate Finance Committee hearing to take testimony on means to replace the current Medicare physician payment sustainable growth rate (SGR) system, the CMS principal deputy administrator said that while the delivery system reforms that CMS is pursuing “do not obviate the need for a legislative solution to address the sustainable growth rate formula on a more permanent basis….”, Congress should not “start fresh” in developing a different payment model. He also attributed the CBO lowered cost of replacing the SGR ($139 billion over ten years) to CMS efforts to make payment codes more accurate and to other improvements already underway, such as payment for care coordination and for value, feedback reports, shared savings initiatives and quality bonuses. He also said the Administration supports a 4-5 year period of stability to “allow time for the continued development of scalable, accountable payment models.” Chairman Max Baucus (D-MT) and Senator Orrin Hatch (R-UT) said the lower CBO cost gives Congress the opportunity to act on legislation this year to change the “antiquated, inefficient and flawed” system. They also said they have received 133 responses on means to reform the SGR from various elements of the health care system. In response to Senator Mike Enzi’s (R-WY) question, CMS testified that the Medicare Part A and B cost sharing structure needs to be reformed and that the agency is willing to work with Congress to this end.

CMS Proposes Medicare Physician Payment Rule

CMS issued a proposed 2014 Medicare physician payment rule under which the agency would pay for non-face-to-face complex chronic care management services for Medicare beneficiaries who have at least two significant chronic conditions and have had an annual wellness visit or an initial preventive physical examination. The separate payments would be through two G-codes for establishing of a plan of care and furnishing care management over 90-day periods. CMS also said the actual values used to compute physician payments for CY 2014 (currently subject to an estimated 24.4% cut) will be based on later data and promulgated under the final rule. The rule also proposed new geographic practice cost indices (GPCIs) using updated data and changes to the Physician Quality Reporting System (PQRS), the Medicare Electronic Health Record (EHR) incentive program as well as the Physician Compare tool on the Medicare.gov website.

CMS Proposes OPPS Payment Rule

CMS issued a proposed 2014 Medicare outpatient prospective payment system (OPPS) rule under which payments would increase by 1.8%, or about $4.4 billion in total. The number of categories of related items and services packaged into a single payment for a primary service under the OPPS would also be expanded. Also, payments to ambulatory surgical centers would be increased by 0.9%. The final rule will be issued by November 1st.

Hearing on Medicaid Prospects

At a House Energy and Commerce Health Subcommittee hearing, Making Medicaid Work for the Most Vulnerable, the Executive Director of the National Academy for State Health Policy testified that the current Medicaid system provides states with sufficient flexibility to introduce new reforms, such as innovations in the areas of long-term services and supports, managed care programs and patient-centered medical homes. Other witnesses, including the Director of the Center for Health Policy Studies at the Heritage Foundation, were critical of the expansion of Medicaid under the PPACA and said CMS should focus efforts on providing states more flexibility to deliver quality services, especially to existing enrollees. Possible legislative changes as promoted by congressional Republicans include: increasing the use of premium assistance to allow states to use Medicaid funding to purchase health coverage in the private market; allowing states to enroll people into Medicaid managed care plans without having to receive advance approval from CMS; requiring CMS to act on state Section 1115 waiver requests within 120 days; and imposing a per-capita cap on Medicaid expenditures.

Health-Related Hearings and Markups

House Energy and Commerce Health Subcommittee will hold a hearing entitled “Reforming the Drug Compounding Regulatory Framework;” 3:00 p.m., 2123 Rayburn Bldg; July 16.

House Ways and Means Health Subcommittee: will hold a second hearing on the delay of the employer mandate and employer information reporting requirements under the Affordable Care Act. 10 a.m., 1100 Longworth; July 17.

Senate Finance Committee (Chairman Baucus, D-Mont.) will hold a hearing titled “Health Information Technology: A Building Block to Quality Health Care;” 10:00 a.m., 215 Dirksen Bldg; July 17.

Senate Appropriations Defense Subcommittee: will hold hearings on proposed fiscal 2014 appropriations for agencies, programs and activities under its jurisdiction. 10 a.m., 192 Dirksen; July 17.

House Energy and Commerce Oversight and Investigations Subcommittee: will hold a hearing on the 2010 health care overhaul law and delays in its implementation. 1:30 p.m., 2123 Rayburn; July 18.

Health Legislation Recently Introduced

H.R. 2618 (MEDICARE), to allow certain state and local government employees to elect to treat employment as Medicare qualified government employment for purposes of entitlement to Medicare coverage; GENE GREEN of Texas; jointly, to the committees on Ways and Means and Energy and Commerce, July 8.

H.R. 2619 (MEDICARE), to amend Title XVIII of the Social Security Act to provide for Medicare coverage of pulmonary self-management education and training services furnished by a qualified respiratory therapist in a physician practice; LEWIS; jointly, to the committees on Energy and Commerce and Ways and Means, July 8.

H.R. 2632 (SCHOOL-BASED HEALTH CENTERS), to amend Section 399Z-1 of the Public Health Service Act to extend for five years the authorization of appropriations for operational grants under the school-based health centers program; CAPPS; to the Committee on Energy and Commerce, July 9.

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