WEEKLY E-BULLETIN


Nov. 21, 2011


Sequestration or a ‘Work Around’ is the Likely Way Forward

As the Supercommittee sits on the precipice of collapse, other options are now under serious examination.  In one final significant bid, Supercommittee Democrats late last week offered about $125 billion in Medicare provider cuts, $25 billion in Medicaid cuts and $25 billion in Medicare beneficiary cuts. The Supercommittee needs to send its proposal to the Congressional Budget Office today so it can be scored for a vote by the 23rd.  That’s not likely to happen. Washington Post coverage.  New York Times coverage.

If November 23rd passes without a Supercommittee deal, sequestration takes effect January 1, 2013 – almost 14 months from now.  Sequestration cuts 2 percent from all government spending, except for Social Security and Medicaid.  The CMS actuary estimates that Medicare would be cut about $125 billion over 10 years.  Many providers believe this option was always likely better than anything the Supercommittee would have passed because Medicaid is spared.

What is a ‘work around?’  Many members of Congress are now saying that they have 14 months before sequestration takes effect so they can begin work on an alternative to pass before 2013.  Perhaps they would use several of the areas of Supercommittee agreement as a starting point through the regular committee process.

Also, the Supreme Court announced last week it would hear arguments in March 2012 on the constitutionality of the health reform law.  A decision could come before the court’s session ends in June.

Doc Fix, Government Funding are Next Hurdles

Rep. Michael Burgess (R-TX) has already started putting together a bill to fix Medicare payments for physicians, perhaps for one or two years.  Without a fix, physicians will get an average 27.5 percent Medicare payment reduction beginning January 1, 2012.  Additionally, there are a number of Medicare provider payment ’extenders’ that also need a fix to continue.  It is unclear whether physicians will receive any increase in the next payment fix.  House Majority Leader Eric Cantor (R-VA) also said this week he expects to take up legislation to fix the physician payment issue before the end of the year.

Additionally, funding for discretionary government spending ends December 16.  Congress must pass another extension by then or the government shuts down.

New Doc Payment Plan Unveiled

The American College of Physicians, the American Osteopathic Association and the American Academy of Family Physicians are supporting a new plan by Rep. Allyson Schwartz (D-Pa.) that would repeal the outdated Sustainable Growth Rate formula for paying Medicare doctors. It calls for one year of stabilized payments, followed by a five-year transition period with a 2.5 percent increase for primary care and a 0.5 percent increase for specialties.  By 2015, CMS has to issue at least four new payment models to replace the old formula. Physicians would be able to choose a new model or stick with the existing fee-for-service model, with disincentives starting in 2017.  How the fix would be paid for is not spelled out.  The AMA is not supporting the bill.  It is unlikely to pass this year.  Click here for more details.


CMMI Announces $1 Billion for New Health Care Projects

Up to $1 billion dollars will be awarded to innovative projects across the country that test creative ways to deliver high quality medical care and save money. Launched last week by the Center for Medicare and Medicaid Innovation, theHealth Care Innovation Challenge will also give preference to projects that rapidly hire, train and deploy health care workers. Click here for a two-page summary prepared by the Strategic Health Care policy staff.  Click here to read a brief interview with CMS Administrator Don Berwick on the new program and related issues.

CMS Will Conduct 3 New Demos to Reduce Improper Medicare, Medicaid Payments

Beginning January 1, 2012, CMS will conduct demonstration projects to reduce improper payments.

  • Recovery Audit Prepayment Review: this demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. These reviews will focus on seven states with high populations of fraud- and error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient hospital stays (PA, OH, NC, MO).
  • Prior Authorization for Certain Medical Equipment: This demonstration will require Prior Authorization for certain medical equipment for all people with Medicare who reside in seven states with high populations of fraud- and error-prone providers (CA, FL, IL, MI, NY, NC and TX).
  • Part A to Part B Rebilling: This demonstration will allow hospitals to rebill for 90 percent of the Part B payment when a Medicare contractor denies a Part A inpatient short stay claim as not reasonable and necessary due to the hospital billing for the wrong setting. This demonstration will be limited to a representative sample of 380 hospitals nationwide that volunteer to be part of the program. Click here for more.


CDC Tracking Hospital Antibiotoc Use

The CDC has begun a new antibiotic tracking system allowing hospitals to monitor antibiotic use electronically, make better decisions about how to improve use, and compare themselves to other hospitals.  Cllick here.

Long Term Care Group Supports Payments Cuts for Hospital Readmissions

The trade group representing for-profit skilled nursing facilities said last week it backs an administration proposal being considered in the deficit reduction Supercommittee talks that would cut Medicare payments to the facilities when they send too many patients back to the hospital. Click here for details.


Kaiser Report:  Number of Physician Visits Fall During Recession

A new report from the Kaiser Fammily Foundation confirms what most providers have known: the number of physician visits among the privately insured is on a downward trend, which has continued even as the recession technically ended in June of 2009. The number of visits fell to a low of 129 million in the 2nd quarter of 2011, a decline of 17% from 156 million visits in the 2nd quarter of 2009. Click here to see more. 

U.S. Teen Birthrate Hits Record Low

The Centers for Disease Control was out with a new report last week that the birth rate for U.S. teens aged 15–19 years hit a record low in 2010.  The report also documented the first decline in the rate of cesarean deliveries since 1996. In 2010, the cesarean section rate was 32.8, down slightly from 32.9 in 2009. Click here for more.


Employer Sponsored Health Benefit Costs Continue Slow-Down

According to the Mercer National Survey of Employer-Sponsored Health Plans, released last week, growth in the average total health benefit cost per employee, which had reached 6.9% last year, slowed in 2011 to 6.1%, with an increase of 5.7% expected for 2012. Cost averaged $10,146 per employee in 2011.  Click here for complete details.

Premiums for Family Coverage Increase Over Past 7 Years

According to a Commonwealth Fund report released last week, rapidly rising health insurance costs continue to strain the budgets of U.S. families and employers. From 2003 to 2010 total premiums for family coverage increased 50 percent across states and employee annual share of premiums increased by 63 percent over these seven years.  Clickhere.

NCQA Starts ACO Accreditation

The National Committee for Quality Assurance today launches its new ACO accreditation program.  Click here for details.


New Website Compares 530 Insurers, 2700 Plans for Small Business Owners

A greatly expanded website to give small business owners a detailed review of their health insurance plan choices was announced last week by HHS.  More than 530 insurers have provided information for more than 2,700 coverage plans across all states. Click here.