House E&C Committee Markup of SGR Fix

In an attempt to meet House Energy and Commerce Committee Chairman Fred Upton’s (R-MI) schedule to pass by the August recess a permanent fix for the current Medicare physician payment sustainable growth rate (SGR) formulation, the committee’s Health Subcommittee has scheduled a markup of a bipartisan bill for Monday and Tuesday. The proposed legislation, released by committee leaders, Reps. Upton (R-MI), Pitts (R-PA), Burgess (R-TX), Waxman (D-CA), Pallone (D-NJ) and Dingell (D-MI), is intended to replace the SGR with a new payment system with an alternative that emphasizes payment for quality care. Specifically: the 70-page discussion draft would provide for annual payment updates of 0.5% for the first five years during which various quality care measures would be established by HHS/medical groups/quality organizations and tested; then, beginning in 2019, physicians exceeding their specialty’s newly established quality measures under the Physician Quality Reporting System (PQRS) would get 1% incentive payment increases; also, physicians could voluntarily opt out of the fee-for-service system at any time and participate in alternative payment models, such as patient-centered medical homes or bundled care. While the draft includes a provision stating an intent for the final legislation to maintain “budget neutrality”, the committee is likely to have help from the House Ways and Means Committee in finding the offsets for the ten-year cost of the fix which the Congressional Budget Office (CBO) has yet to estimate (CBO previously estimated $139 billion ten-year cost of a ten-year freeze on physician payments).

House Ways and Means Committee Proposes Medicare Reforms

In releasing a discussion draft of three significant changes to the Medicare program, House Ways and Means Committee Chairman Dave Camp (D-MI) stated “Without action, Medicare will be bankrupt by 2026….There has been strong bipartisan support for advancing common sense solutions to ensure these programs are on a more fiscally sound path, and there is no reason why we cannot work together to achieve that goal.” The three provisions, along the lines suggested in the President’s budget, estimated to decrease Medicare spending by about $60 billion over 10 years, would: increase income-related premiums for Parts B (physician services) and D (prescription drugs) beginning in 2017; increase the annual Part B deductible by $25 for new enrollees in 2017, 2019 and 2021; and establish a $100 per episode home health copayment starting in 2017. The release of the draft appears to be an opening bid in the committee’s attempt to fashion a larger package of Medicare savings which could be included in a broader budget package. With respect to the scoring of potential future legislative changes to Medicare, Reps. Michael Burgess (R-TX) and Donna Christensen (D-VI) introduced H.R. 2663, legislation that would require the CBO to adopt health cost estimating practices over 10+ years which are similar to those in the private sector which use scientific data in order to better score programs affected by chronic disease and child health care.

Senate Finance Committee Hearing on Meaningful Use

At a Senate Finance Committee hearing Republicans disagreed with a CMS statement that the meaningful use program has resulted in more health care providers adopting electronic health records (EHRs) to deliver care. They said that meaningful use incentive payments should be immediately halted, given that rural area health providers are having trouble meeting the requirements of the program. However, the National Coordinator for Health IT testified that halting the program would “stall the progress that’s been hard-fought….”

Comprehensive ESRD Care Initiative Extension

CMS announced that the agency has reopened the submission period until August 1st for letters of intent from providers who wish to apply for participation in the Comprehensive End-Stage Renal Disease (ESRD) Care Initiative.

New Open Payments Apps

CMS announced a new application for physicians and another for the health industry manufacturers to be used on mobile devices for purposes of reporting transfers under the Physician Payments Sunshine Act (i.e. OPEN PAYMENTS program).

FDA Issues

At a House Energy and Commerce Subcommittee on Health hearing to take testimony on legislation to regulate compounding pharmacies (H.R. 2186, S. 959 and Rep. H. Morgan Griffith’s (R-VA) Compounding Clarity Act), witnesses were generally supportive of legislative efforts to help clarify the Food and Drug Administration’s (FDA) authority over such entities. One witness said that any new legislation should not encourage compounding at the expense of traditional manufacturing. The PhRMA witness said they would generally support legislation that, among other things, clarifies the FDA’s authority to regulate “as a new drug” any drug that is compounded outside of traditional compounding, and any person involved in the manufacture, distribution or the marketing of such a drugs. However, the organization is not in favor of creating a new classification of “compounding manufacturers” which could result in state and federal regulatory confusion. The CEO of the International Academy of Compounding Pharmacists offered a statement that said S. 959 would limit anticipatory compounding only to instances where the historical volume is directly associated with an individual patient prescription and that his could seriously curtail the ability of a pharmacy to have product on hand when demand exists. The statement also took issue with several provisions under H.R. 2186 which would treat “office use and anticipatory compounding” as problematic and cause major patient and practitioner access issues for medications that are not manufactured and readily available.

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