Congress Passes 10-Month Doc Fix; Uses Provider Funding To Do It

The President is signing into law this week a 10-month Medicare payment extension for physicians. Current law was expiring February 29 and docs would have been hit with a 27% Medicare payment cut. To pay physicians, Congress mostly cut payments to hospitals, clinical laboratories, and the public health prevention fund. It’s the first time Congress has cut payments to providers to fix the physician payment formula.  Physician payment rates are frozen through the end of 2012, which means Congress may have to revisit the issue during a Lame Duck session after the November election. Remember, the 2% across-the-board budget cut also goes into effect January 1, 2013.  A good three-page summary (written by GOP Ways and Means staff) is here. Click here to see how your House members and Senators voted.

Obama FY13 Budget Make Major Cuts to Medicare, Medicaid

Although Congress says the President’s FY13 budget is “dead on arrival,” they may still use it as justification to make further spending reductions this year – with health care as a primary target. Included in the budget:

  • •A total of $303 billion in Medicare, Medicaid cuts over ten years;
  • •1.1 % market update cuts (but not less than zero %) to SNFs, IRFs, LTCHs and home health starting in 2014;
  • •Cut bad debt reimbursement to 25% over three years starting in 2013 for hospitals, SNFs;
  • •Critical Access Hospitals (CAHs) reimbursement would be cut to 100% rather than 101% of costs;
  • •CAHs would lose their CAH designation in 2014 if there is another hospital within 10 miles;
  • •Prior authorization of advanced imaging; plus physician office imaging cuts of $820 million;
  • •A single matching rate for ALL states’ Medicaid funding – saves Feds $18 billion;
  • •Phase down provider tax threshold starting in 2015 from 6 percent to 3.5% in 2017.

For an excellent three page summary of the President’s health care budget highlights, click here.

CMS: ICD-10 To Be Delayed

CMS announced last week its intention to delay the implementation of ICD-10 codes. Exactly who will be allowed to postpone implementation and how for long are apparently still under development. Without a delay, ICD-10 is to be implemented by October 1, 2013. The American Medical Association had made the delay one of its policy priorities this year. Click here for more. Click here to read the AMA’s response.  Opposing the delay is HIMSS, health information professionals. Click here for their side.

CMS Sees “Strong MA Landscape,” Posts Changes to Its MA, Rx Policies

CMS said last week that the national per capita growth percentage, a key factor in determining capitation rates for Medicare Advantage plans, will increase by 2.47 percent in 2013, a sign that there will be a “strong Medicare Advantage landscape.” CMS last week proposed a variety of updates to its MA and prescription drug policies.  Among the changes:

  • •CMS will likely deny bids, if it determines that the bid proposes too significant an increase in cost sharing or decrease in benefits from one year to the next.
  • •In 2013, eligible drug plan enrollees with liability in the donut hole will continue to receive a 50 percent discount on covered brand name drugs and in addition, will see a further 2.5 percent reduction in cost sharing on such drugs.
  • •In 2013, CMS will alert plan members if their drug or health plan has failed for three straight years to achieve at least a three star quality rating and offer a special enrollment period, if desired, that will allow the member to move to a higher quality plan.
  • •For MA plans, the three-year Quality Bonus Payment demonstration will continue to provide financial incentives to improve quality of care for people with Medicare.

Click here for more details.

AMA: Too Many States Don’t Have Enough Insurance Competition

The AMA is out with a new report on insurance competition by state – or the lack of it. The AMA says these are the 10 least competitive states:  Alaska, Delaware, Michigan, Hawaii, DC, Nebraska, North Carolina, Indiana and Maine. Click here to read more.

CMS To Impose New Prompt Payment Plan on Providers

CMS last week proposed that providers and suppliers must report and return self-identified overpayments either within 60 days of the incorrect payment being identified, or on the date when a corresponding cost report is due – whichever is later. Click here for more.  Meanwhile, the agency announced recovery of $4.1 billion in fraud and enforcement actions last year. Details are here.

$43 Million Available in New Grants to Reduce Elective Deliveries and Preterm Births

$43 million is available for a new CMS Innovation Center grant “Strong Start” designed to reduce the rate of early elective deliveries and the rate of preterm births for at-risk women covered by Medicaid. A two-page overview can be read here. A letter of intent is due March 21. For more information on how to apply, please contact SHC’s Gwen Mathews at 202-266-2600 or Gwen.Mathews@shcare.net.

Health IT and EHRs Booming, Says HHS

The number of hospitals using health information technology has more than doubled in the last two years, according to HHS. New data shows nearly 2,000 hospitals and more than 41,000 doctors have received $3.1 billion in incentive payments for ensuring meaningful use of health IT, particularly certified Electronic Health Records. The details are here.

GOP Senators Introduce Plan to Transform Medicare

Another plan to significantly revamp Medicare was introduced last week by two GOP senators: Tom Coburn, M.D. (OK) and Richard Burr (NC). It involves a transition to a “premium support” model starting in 2016.  Current seniors don’t have to change. A detailed 36-page report can be read here.

Millions of Americans Getting New, Free Preventative Services: New Government Report

According to new data out last week, approximately 54 million Americans were provided with at least one new free preventive service in 2011 through their private health insurance plans. An estimated 32.5 million people with Medicare received at least one free preventive benefit in 2011, including the new Annual Wellness Visit. A detailed report is here.

New Study Details Likely Impact of Individual Mandate Repeal

Eliminating the health care reform law’s individual mandate to buy health insurance would reduce the number of persons gaining coverage from 27 million to 15 million, a decrease of about 12.5 million people.  But it would increase an individual’s cost of buying insurance through new exchanges to be set up in 2014 by only 2.4 percent. This is according to a RAND Corp. study released last week. Click here for report.

Battle Continues Over Rules That Would Increase Home Health Aide Pay

The battle over increasing hourly wages for home health aides continued last week as a new report from the Paraprofessional Healthcare Institute issued a study supporting its claim that home health agencies can afford to pay more. Click here for the four-page report. Published reports on Friday said the Labor Department may extend its deadline for comments on proposed rules issued December 15. Current deadline is February 27.