Effect of PPACA on Medicare Advantage Premium Rates

The Medicare Payment Advisory Commission (MedPAC) reported that Medicare Advantage (MA) plans will, on average, be paid 2% above traditional Medicare fee-for-serve (FFS), despite the PPACA provision designed to bring down the rate of payments to Medicare Advantage plans. MedPAC said that payments varied by plan type and ranged from 100% of FFS for regional preferred provider organizations (PPOs) to 111% for private FFS plans with health maintenance organizations (HMOs) getting about 101% of FFS.

Supreme Court and PPACA

The U.S. Supreme Court will hold oral arguments on March 4th on the above-mentioned King v. Burwell case which could result in a decision being released sometime this summer. In related news, the Competitive Enterprise Institute (CEI) filed suit in federal court against HHS which alleges that the agency has failed to respond to Freedom of Information requests the organization has made that would shed some light on the decisions made by the Administration in connection with the issues to be taken up by the high court in King v. Burwell and Halbig v. Burwell.

Meaningful Use Penalties Announced

Reps. Renee Ellmers (R-NC), Jim Matheson (D-UT) and 28 other House members sent a letter to the HHS Secretary which demands that the agency reduce the 2015 meaningful use program reporting period from twelve months to three months. They said that “Our constituents remain concerned that the pace and scope of change has outstripped the capacity of our nation’s hospitals and doctors to comply with program requirements….” CMS announced that over 257,000 providers and 200 hospitals will have their 2015 Medicare reimbursements cut by 1-2% for failing to adopt an electronic health record and meet the requirements of the meaningful use program.

Senate HELP Committee Urges Action on Drug Abuse

More than twelve members of the Senate Health, Education, Labor and Pensions (HELP) Committee sent a letter to the HHS Secretary urging the agency to take further action to stop drug misuse. They said “With our shared goal of preventing and reducing prescription drug abuse in this country -- a crisis that demands continued action, we expect that your activities in this area will continue, and we stand ready to assist you….We request that you provide updates to us early next year about your ongoing work, as we continue to explore potential solutions to this problem….” They also requested help form the American Medical Association (AMA), the Association of American Medical Colleges (AAMC), the National Governors Association (NGA), and the National Association of County and City Health Officials (NACCHO).

Health Care Compare Postings

CMS has posted quality of care data for Medicare providers, including ACOs, and hospitals as follows: 2015 payment adjustments associated with the hospital value-based purchasing program; and 2013 Physician Quality Reporting System (PQRS) Group Practice Reporting Option (GPRO) measures for 139 group practices, 214 Shared Savings Program ACOs and 23 Pioneer ACOs on Physician Compare.

MedPAC on IRF, SNF, ASC and HHA Payments

At its December meeting, MedPAC commissioners appeared likely to recommend that Congress lower Medicare payment rates to inpatient rehabilitation facilities (IRFs) to the levels paid to skilled nursing facilities (SNFs) while leaving the decision on what medical conditions would be affected up to CMS regulations. It was estimated that the change could save Medicare about $500 million per year. For SNFs, it appeared the commission will recommend that there be no payment update for 2016 and that for 2017 there would be a payment rebasing accompanied by a 4% reduction in payments. For ambulatory surgical centers (ASCs), it appeared the commission will recommend that there be no payment update for 2016 and that such entities report certain cost data to CMS. MedPAC also appears set to recommend that outpatient dialysis facilities receive no payment update for 2016. For home health agencies (HHAs), the commission also indicated it will recommend: no update to payment rates; a reduction of payments through a full rebasing that adequately addresses excessive payments; a rebalancing of payments so agencies don’t favor therapy services over non-therapy services; an expansion of fraud and abuse efforts to address regions with aberrant patterns of home health utilization; and the establishment of copayments for certain episodes to encourage appropriate utilization. MedPAC will vote on final recommendations to be included in its March 2015 report to Congress at its January 15-16, 2015 meeting.

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