WEEKLY E-BULLETIN


Dec. 19, 2011


Senate Passes 2-Month SGR, Medicare Fixes; House Action Uncertain

Legislation providing a two-month extension of the Medicare physician payment fix and all other Medicare “extenders” passed the Senate Saturday.  The House GOP baulked and passage is uncertain.  It is supported by the President.  Click here to read a good summary on the congressional battle.  There were NO payment cuts to hospitals or other providers in the Senate bill, as had been passed by the House last week.  An increase in the fees charged by government-sponsored enterprises such as Fannie Mae to guarantee mortgage loans was used to pay for the extension.  Click here for an excellent 3-page summary of what was in the Senate bill.  According to the CBO, the legislation cuts overall government spending by $3 billion.  Click here for the CBO score.  The AMA blasted the deal, click here.

New Plan to Revamp Medicare Has Washington Buzzing

Washington was buzzing last week with the announcement from key House and Senate members about a plan to revamp Medicare.  Democratic Sen. Ron Wyden and House Budget Committee Chairman Paul Ryan introduced a new Medicare reform plan that would allow seniors to choose between traditional Medicare and new private insurance programs.  Click here for their 13-page White Paper.  Click here for the NY Times story.

Government Funded for a Year; Some Cuts Made to Health Programs

Congress averted a government shutdown last week by approving a new  funding bill that runs through September 30, 2012.  There were several cuts to existing Affordable Care Act:  $400 million from the CO-OP program and $10 million from the Independent Payment Advisory Board (IPAB).  It is unclear whether IPAB would be able to function without these funds.  Health and Human Services was cut about $700 million below last year’s level.  Click here for an excellent 15-page summary of the funding bill – health spending starts on page 9.

MedPAC Recommends Update Reductions for Some, Increases for Others

MedPAC last week proposed to reduce hospital inpatient and outpatient rates from 2.9 percent in 2012 to 1 percent in 2013 and freeze them at that level for five years in order to recover an estimated $11 billion in 2010-2012 over payments due to documentation and coding methods. A very good MedPAC powerpoint summary of several key issues can be seen by clicking here.  Issues include payment updates, rural vs. urban payments and E&M payments.

MedPAC recommended a zero percent update for 2013 on skilled nursing facilities (SNFs), as well as rebasing payment rates in 2014 with an initial reduction of 4 percent and further cuts over a period of time in an effort to better align Medicare payments with provider costs. MedPAC said Congress should direct the HHS secretary to cut pay to SNFs with higher rates of risk-adjusted rehospitalization rates for their stays.  MedPAC said SNF Medicare margins in 2010 were 18.5 percent.  Click here for MedPAC’s powerpoint on SNFs.

MedPAC proposed a 1 percent increase for dialysis, a 0.5 percent increase for ASCs, a 0.5 percent increase for Hospice, and eliminating the update for inpatient rehab and long term care hospitals. Click here for MedPAC’s powerpoint on LTCHs.

For home health, commissioners discussed rebasing their payments in 2013, which would lower payments overall and recommended changing the home health payment system to take away incentives to provide unnecessary services to patients.  Rebasing would include an initial reduction of 4 percent and subsequent reductions over an appropriate transition until Medicare’s payments are better aligned with providers’ costs, according to MedPAC.  Click here for MedPAC’s home health very informative presentation.

MedPAC will vote on its current recommendations to Congress in January.

Government Seeks Wage Increase for Home Health Workers

The Department of Labor will propose new rules that would extend minimum wage and overtime protections to in-home health care workers employed by staffing agencies.  According to the administration, many of the workers provide in-home health services such as tube feeding, wound care or assistance with physical therapy. The proposed regulations would apply to workers now classified as “companions” who are exempt from the Fair Labor Standards Act.  Click herefor more.

CMS Rule Requires Disclosure of Industry Payments to Physicians, Teaching Hospitals

CMS last week published a proposed rule intended to create more transparency about financial relationships between doctors and drugmakers, device manufacturers and other private interests.  The proposal would require manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report to CMS payments or other transfers of value they make to physicians and teaching hospitals.  The proposed rule would also require manufacturers and group purchasing organizations (GPOs) to disclose to CMS physician ownership or investment interests. Click here for more.

CMS’ Value Based Purchasing Program Impacts Dialysis Providers

30 percent of dialysis facilities will get a payment cut of 0.5 to 2 percent in 2012 depending on their final performance scores under the Medicare pay-for-performance system, according to CMS last week.  Click here for details.

26 Hospital Groups Get $218 Million for Partnership for Patients

CMS last week announced the 26 organizations that will receive $218 million in funding in the Partnership for Patients program.  (Strategic Health Care provided grants development and health policy assistance to three of the organizations listed.)  Click here to see the list of those receiving Hospital Engagement Contracts.


States to Have More Flexibility in Setting Essential Benefits:  HHS

States will be given wide latitude to decide what “essential benefits” insurers must offer in policies offered on new health exchanges come 2014, HHS announced last week.  Instead of one national standard, states will be able to design benchmark plans based on one of four choices: The benefits offered in one of the three largest federal employee plans (by enrollment), one of the three largest plans offered to their state employees, one of the three largest small-business plans in the state or the plan offered by the largest HMO in the state.  Because state employee plans and policies sold in the states can vary widely, the move means there will likely not be one national standard benefit package, but rather “benchmark” plans in each state. Click here to review the 15-page bulletin. Click here for a good summary from the NY Times.