Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

MedPAC has released its annual report to Congress on Medicare Payment Policy, including payment update recommendations for all the major Medicare FFS payment systems and limited Medicare Advantage (MA) recommendations. The report also includes data on the status of the MA and Medicare Part D programs, including information about enrollment, plan options, and beneficiary cost-sharing. Note that while MedPAC’s recommendations are not binding, Congress and CMS often take into account MedPAC’s assessments when updating Medicare payment policies. Major recommendations include the following (many of which were included in previous reports):

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There have been many Congressional health policy hearings recently, with more scheduled. Highlights include the following:

• House Ways and Means Committee. Recent hearings have examined traditional Medicare’s benefit design and tax-related provisions in the ACA, and on March 15, the Health Subcommittee is holding a hearing on the Medicare Payment Advisory Commission's annual March Report to the Congress.
• House Energy and Commerce Committee. The Health Subcommittee has reviewed innovative ways to fight health care fraud and abuse, and the panel has scheduled hearings on the impact of the ACA on jobs (March 13) and health insurance premiums (March 15). A March 18 hearing will focus on “Saving Seniors and Our Most Vulnerable Citizens from an Entitlement Crisis.”
• Senate Hearings. The Finance Committee held a hearing on the status of CMS delivery reform efforts. A Health, Education, Labor and Pensions Committee hearing examined animal drug user fees. The Commerce Committee has reviewed transparency in the individual health insurance market. An Aging Committee hearing focused on ways to strengthen Medicare.

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MedPAC is meeting on November 1 -2, 2012 to discuss a variety of Medicare policy issues, including: Medicare payment for ambulance services, reducing the hospitalization rate for Medicare beneficiaries receiving home health care, Medicare payment for outpatient therapy services, geographic adjustment of payments for the work of physicians and other health professional, the role of provider prices in determining private-plan Medicare costs relative to fee-for-service Medicare, Medicare Advantage special needs plans, and Medicare payment differences for ambulatory care services across settings.

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On September 6 and 7, 2012, MedPAC is meeting to discuss a variety of Medicare issues, including reforming the traditional benefit package, bundling, readmissions, and physical therapy policy. More information, including issue briefs for each of the topics, is available on the MedPAC web site.

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MedPAC has released its 2012 Data Book on “Health Care Spending and the Medicare Program.” The publication provides information on national health care and Medicare spending, Medicare and dual-eligible beneficiary demographics, Medicare quality, and Medicare beneficiary and other payer liability. It also includes data regarding various provider types, such as data on Medicare spending, beneficiary utilization of the service, number of providers, volume, length of stay, and Medicare profit margins. The Data Book also covers the Medicare Advantage and Part D drug programs.

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On June 15, 2012, MedPAC released its June 2012 Report to the Congress on “Medicare and the Health Care Delivery System.”  Unlike most MedPAC reports that focus on provider payments, this report examines the role of beneficiaries and their impact on the Medicare program. In particular, MedPAC recommends reforms to Medicare’s benefit design/cost-sharing structure to protect beneficiaries against high out-of-pocket spending while creating incentives for beneficiaries to make better decisions about discretionary care. The report also assesses different care coordination models, such as bundling and ACOs, and ways to reward outcomes resulting from coordinated care (or penalize fragmented care). In addition, MedPAC examines programs designed to integrate care for Medicare/Medicaid dual-eligible beneficiaries, including the Program of All-Inclusive Care for the Elderly and dual-eligible special needs plan. MedPAC also includes separate chapters on care for beneficiaries in rural areas and options for reforming Medicare coverage of home infusion service, as requested by Congress.

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Several Congressional committees have held hearings this month on health policy issues, including the following:

• A House Education and the Workforce Health Subcommittee hearing on “Barriers to Lower Health Care Costs for Workers and Employers.” 
• A House Veterans’ Affairs Committee hearing entitled “Through the Looking Glass: Return to Pharmaceutical Prime Vendor Program.” 
• House Energy and Commerce Subcommittee hearings on “Examining the Appropriateness of Standards for Medical Imaging and Radiation Therapy Technologists” and “Medicare Contractors’ Efforts to Fight Fraud - Moving Beyond 'Pay and Chase.” 
• A House Oversight Subcommittee on Government Organization hearing on “Assessing Medicare and Medicaid Program Integrity.” 
• A Senate Aging Committee hearing on “Empowering Patients and Honoring Individual’s Choices: Lessons in Improving Care for Individuals with Advanced Illness.”
• A Senate Homeland Security and Governmental Affairs Committee hearing on "Saving Taxpayer Dollars by Curbing Waste and Fraud in Medicaid.” At the hearing, the OIG reported that neither CMS’s National Medicaid Audit Program nor the Medicare-Medicaid Data Match Program are effectively accomplishing their missions, since both programs had low findings of actual overpayments and actually yielded negative returns on investment, and they delivered very few referrals of potential fraud to OIG and law enforcement.
• On June 19, 2012, the House Ways and Means Health Subcommittee is scheduled to meet to discuss MedPAC’s June report to Congress.  

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On March 15, 2012, MedPAC released its annual report to Congress on Medicare payment policy.  Major recommendations for 2013 are highlighted after the jump.

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MedPAC is meeting on December 15 and 16, 2011 to discuss payment adequacy of Medicare payment for a variety of provider types, along with ways to encourage the use of lower-cost medications by Medicare Part D low-income subsidy beneficiaries.

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The Medicare Payment Advisory Commission (MedPAC) will be meeting November 3-4, 2011 to discuss a number of Medicare policy issues, including: reforming Medicare’s benefit design; Medicare Part D/beneficiaries with high drug spending; coordinating care for dual-eligible beneficiaries through the PACE program; reforming the Medicare SNF PPS; hospitals’ capacity to serve Medicare patients; payment rate differences across ambulatory sectors; and Medicare coverage of and payment for home infusion.

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On October 6, 2011, the Medicare Payment Advisory Commission (MedPAC) voted to recommend that Congress repeal and replace the statutory sustainable growth rate (SGR) formula for updating the Medicare physician fee schedule (MPFS). Without legislative action, CMS estimates that the SGR formula would result in an almost 30% MPFS cut in 2012. As discussed in a previous blog posting, the controversial MedPAC plan – which would require Congressional approval -- would freeze current Medicare MPFS rates for primary care services for 10 years, while other services would be subject to annual payment reductions of 5.9% for 3 years, followed by a freeze. MedPAC offered a list of options for Congress to consider if it decides to offset SGR repeal costs (estimated at about $200 billion over 10 years) within the Medicare program. In addition to the SGR proposal, MedPAC endorsed budget-neutral changes to improve data on which MPFS relative value unit (RVU) weights are based and to redistribute payments to underpriced services. MedPAC also recommended that CMS increase the shared savings opportunity for physicians and health professionals who join or lead “two-sided” risk ACOs (where providers can receive bonuses or financial penalties based on performance).

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At a recent meeting, the Medicare Payment Advisory Commission (MedPAC) discussed a recommendation to repeal and replace the statutory sustainable growth rate (SGR) formula for updating the Medicare physician fee schedule (MPFS). In recent years, the SGR formula has produced steep cuts in the MPFS update, which Congress has repeatedly blocked through legislation, For 2012, CMS estimates that the SGR formula would result in an almost 30% MPFS cut in the absence of Congressional action. MedPAC is considering an SGR reform proposal that would repeal the SGR and replace it with 10-years of statutory fee schedule updates. The plan would freeze current Medicare payment levels for primary care services, and all other services would be subject to annual payment reductions of 5.9% for 3 years, followed by a freeze.  MedPAC also has released a list of potential offsetting Medicare cuts that would raise $235 billion over 10 years to finance the reforms.  The proposals include, among others: reduced Medicare payments for many Medicare provider types and services; expanded DMEPOS competitive bidding; various reductions in payments to Medicare Advantage plans; prior authorization for certain imaging services; changes to certain Part D cost sharing; prepayment review of power wheelchairs; drug manufacturer rebates for dual eligibles; bundled payments for hospitals and physicians; payment of hospital outpatient evaluation and management visits at MPFS rates; establishment of least costly alternative authority; expansion of readmissions policies for additional provider types, and validation of physician orders for high cost services.

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MedPAC has released its 2011 Data Book on “Healthcare Spending and the Medicare Program.” The Data Book provides information on national health care and Medicare spending, Medicare beneficiary demographics, Medicare quality and access, and Medicare beneficiary and other payer liability. It also includes data on various provider types, such as data on Medicare spending, beneficiary utilization of the service, number of providers, volume, length of stay, and margins.

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The Medicare Payment Advisory Commission (MedPAC) has released its June 2011 "Report to the Congress: Medicare and the Health Care Delivery System." Most notably, the report includes a number of recommendations that have generated much controversy to address the growing use of ancillary services, particularly non-hospital diagnostic imaging services. According to the report, MedPAC seeks to “improve payment accuracy to reduce providers’ financial incentives to order more ancillary services, while strengthening clinical support tools to improve appropriate use of these services.” Recommendations in this area include the following: (1) the Secretary should accelerate and expand efforts to package discrete services in the physician fee schedule into larger units for payment; (2) Congress should direct the Secretary to apply a multiple procedure payment reduction to the professional component of diagnostic imaging services provided by the same practitioner in the same session; (3) Congress should direct the Secretary to reduce the physician work component of imaging and other diagnostic tests that are ordered and performed by the same practitioner; and (4) Congress should direct the Secretary to establish a prior authorization program for practitioners who order substantially more advanced diagnostic imaging services than their peers. In addition to the ancillary services recommendations, the report includes chapters examining: the Medicare physician fee schedule Sustainable Growth Rate formula; Medicare's fee-for-service benefit design; enhancing Medicare's technical assistance to and oversight of providers; coordinating care for dual-eligible beneficiaries; federally-qualified health centers; and variation in private-sector payment rates. Note that while MedPAC’s recommendations are not binding, Congress and CMS often take into account MedPAC’s assessments when updating Medicare payment policies.  

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This post was written by Paul Pitts.

On April 7, 2011, the Medicare Payment Advisory Commission (MedPAC) approved new recommendations to Congress regarding Medicare payment for imaging and other diagnostic tests. The recommendations reflect a shift in MedPAC’s policies from advocating for tighter controls on physician in-office services to addressing what MedPAC views as inaccuracies in payment and inappropriate use of diagnostic imaging. MedPAC approved the following recommendations: (1) the Secretary should accelerate and expand efforts to package discrete services in the physician fee schedule into larger units for payment; (2) the Congress should direct the Secretary to apply a multiple procedure payment reduction to the professional component of diagnostic imaging services provided by the same practitioner in the same session; (3) the Congress should direct the Secretary to reduce the physician work component of imaging and other diagnostic tests that are ordered and performed by the same practitioner; and (4) the Congress should direct the Secretary to establish a prior authorization program for practitioners who order substantially more advanced diagnostic imaging services than their peers. The recommendations will appear in MedPAC’s June report to Congress.

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Several Congressional committees have held hearings on various aspects of the ACA, including: A House Oversight Health Care Subcommittee hearing on “Obamacare: Why The Need For Waivers?"; a Senate Finance Committee hearing on "Health Reform: Lessons Learned During the First Year"; a Senate Health, Education, Labor and Pensions Committee hearing examining "Health Insurance Exchanges and Ongoing State Implementation of the Affordable Care Act” and House Energy and Commerce Health Subcommittee hearings on "The Implementation and Sustainability of the New, Government-Administered Community Living Assistance Services and Supports (CLASS) Program" and on the "Patient Protection and Affordable Care Act in Pennsylvania: One Year of Broken Promises." Looking ahead, the Energy and Commerce Committee has scheduled a March 30 hearing on the ACA’s impact on budget and jobs, and an April 1 hearing on the ACA’s “High Risk Pool Regime: High Cost, Low Participation," and the House Appropriations Committee is holding a hearing on April 1 to discuss health reform funding. In other areas, the House Homeland Security Emergency Preparedness Subcommittee held a hearing on "Ensuring Effective Preparedness, Response, and Recovery for Events Impacting Health Security." The House Ways and Means Committee held a hearing to examine the Medicare Payment Advisory Commission's (MedPAC) annual report to Congress on Medicare payment policies (discussed in greater detail below). The House Budget Committee held a hearing on "Fulfilling the Mission of Health and Retirement Security." 

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On March 15, 2011, MedPAC released its annual report to Congress on Medicare Payment Policy. The report includes MedPAC’s recommendations on payment rate updates and other policies, such as distribution of payments and program integrity, for Medicare fee-for-service payment systems. It also includes an overview of the status of the Medicare Advantage and Medicare Part D prescription drug programs. Major recommendations include the following: 

• Congress should increase acute care hospital inpatient and HOPPS payment rates by 1% in 2012, and require the HHS Secretary to adjust inpatient payment rates in future years to fully recover all overpayments due to documentation and coding improvements.
• Congress should provide a 1% update to Medicare physician payments and outpatient dialysis services for 2012.
• Ambulatory surgical center (ASC) payments should increase by 0.5% for 2012, and ASCs should submit cost and quality data.
• Congress should: eliminate the update to payment rates for skilled nursing facility (SNF) services for FY 2012; revise payment for nontherapy ancillary services; establish a quality incentive payment program for SNFs; and strengthen SNF reporting requirements.
• Congress should: eliminate the home health update for 2012 and direct the Secretary to: begin a two-year rebasing of home health rates in 2013 (and protect beneficiaries from lower quality of care in response to rebasing); revise the case-mix system; establish a per episode copay for home health episodes not preceded by hospitalization or post-acute care use; and expand certain program integrity efforts.
• Congress should eliminate the update for inpatient rehabilitation facilities and long-term care hospitals for 2012.
• Congress should increase hospice rates by 1% for FY 2012 and adopt a series of recommendations from March 2009 addressing payment and program integrity reforms.

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The Medicare Payment Advisory Commission (MedPAC) has released a report, "Report to the Congress: Regional Variation in Medicare Service Use," with related appendices. The report looks at regional variation in Medicare spending and in the use of Medicare-covered services. According to MedPAC, service use in higher-use areas (90th percentile) is 30% greater than in lower-use areas (10th percentile), and spending is about 55% greater in higher spending areas compared to lower spending areas. Regional variation is particularly high for post-acute sector services, although areas that are high use in one sector (such as inpatient, ambulatory, and post-acute) tend to be high use overall. The MedPAC report does not include policy recommendations, but MedPAC warns policymakers that "[e]xtremely high levels of service use in certain areas may be driven by overuse and, possibly, fraud and abuse. Additional policy measures may have to be taken in those areas beyond those used to address variation in general."

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On January 13 and 14, 2011, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss Medicare payment adequacy for a number of Medicare providers, including: physicians and other health professionals, ambulatory surgical centers, hospital inpatient and outpatient services, outpatient dialysis providers, home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, long term care hospitals, and hospice providers. The meeting will also address Medicare Advantage program quality. MedPAC’s assessments will be presented to Congress later this year; while the panel’s recommendations are not binding, they often help shape federal policy.

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On December 2-3, 2010, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss the adequacy of Medicare payment for a variety of services, including hospital (inpatient and outpatient), physician, ambulatory surgical center, outpatient dialysis, hospice, skilled nursing facility, home health, inpatient rehabilitation facility, and long-term care hospital services

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