CMS Details Sequestration Cuts for Medicare Providers 

CMS formally issued guidance Friday on how the agency will implement budget sequestration for Medicare providers. In general, Medicare Fee For Service claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2% reduction in Medicare payment. Beneficiary payments for deductibles and coinsurance are not subject to the 2% payment reduction. Click here for the CMS announcement.


CDC Sounds Alarm on Hospital “Superbugs”

A family of “nightmare” superbugs — untreatable and often deadly — is spreading through hospitals across the US, and doctors fear that it may be too late to stop them, senior health officials said last week.  So far, this particular class of superbug, called carbapenem-resistant Enterobacteriaceae, or CRE, has been found only in hospitals or nursing homes, rather than in the community, according to the CDC.  But officials sounded the alarm partly because, if the bacteria’s spread isn’t contained soon, even common infections could become untreatable. Click here for the CDC announcement. Click here for the USA Today story.


Budget Battles Underway; Medicare Could Get Hit…Again

The debate this week in Washington will be over two major issues:  the current budget that expires March 27 and the budget that begins October 1. Last week, House majority Republicans passed a bill that keeps the government operating through the rest of this fiscal year. Click here to see what’s in that bill. Majority Democrats in the Senate will try to pass their own version this week. Click here to see the Democrats’ version. Meantime, House Budget Chair Paul Ryan (R-WI) plans to release his version of the FY14 federal budget bill this week. Included will likely be major changes to the Medicare program, including a “premium support” plan, the repeal of ObamaCare and $5 trillion in overall cuts. Click here for details. Senate Budget Committee Chair Patty Murray (D-WA) will likely reveal a budget plan with a major tax increase. Click here for the story.  The Obama Administration is now saying it won’t release its FY14 budget until April 8, more than a month later than normal.


Site Neutral Payment Policy Under MedPAC Consideration

As we have been reporting in this newsletter for the past two months, the Medicare Payment Advisory Commission is considering several proposals to expand site-neutral payments. MedPAC’s discussions continued at its meetings last week, but a formal recommendation likely won’t be until later this year. However, Congress is considering legislation now that would implement the policy of reducing hospital outpatient department rates to those paid to ambulatory sites or physician offices for the same procedures. One proposal would expand the site-neutral policy to 66 additional ambulatory payment classifications, reducing hospital payments by another $900 million. Another more targeted proposal would equalize payment between physician offices and hospital outpatient departments for three high volume cardiac imaging APCs, reducing hospital outpatient payments by $500 million. Click here for a summary from the AAMC. We will have more on this in next week’s report.


Doc Payment Reform Group Support Site Neutral Changes

The National Commission on Physician Payment Reform has released a report with recommendations that include site neutrality payment changes. Additionally, the report recommends moving away from the fee-for-service model as soon as possible, reduce our reliance on technology intensive procedures and the use of too many specialists. Click here for the 24-page report.


More States Move Forward on Exchanges

HHS announced last week that four more states are moving forward to implement the health care law and establishing Health Insurance Marketplaces (what HHS is now calling state health exchanges). HHS conditionally approved Iowa, Michigan, New Hampshire, and West Virginia to operate State Partnership Marketplaces, which will be ready for open enrollment in October 2013.  These approvals bring the total number of states to 24 and D.C. that have been conditionally approved to partially or fully run their Marketplace. Several other states have suggested their own approaches to contributing toward plan management in their Marketplace in 2014 and are in discussions with HHS. Click here for more.


C-Section Rates Continue Wide Variation

Cesarean delivery is the most common surgery performed in the US, but there is enormous variation in C-section rates across the country, according to a new study released last week. The rates varied from 7.1% in some hospitals to 69.9% in others, driven largely by differences in practices at individual institutions. The overall C-section rate in the US has increased from just under 21% of all deliveries in 1996 to nearly 33% in 2011. Click here for the story. Click here for the study in Health Affairs (fee required.) 


MDH, Low Volume Hospitals Get CMS Guidance

CMS issued a notice last week detailing the changes affecting Medicare dependent and low volume hospitals for FY2013 that were included in the fiscal cliff deal passed at the start of the year. For FYs 2011 and 2012, a hospital qualifies as a low volume hospital if it is more than 15 road miles from another hospital and has less than 1,600 discharges of Medicare hospital patients. The Medicare Dependent small, rural hospital program is extended through September 30, 2013. Click here for the 25-page notice.


Insurers Battle Proposed Cut; House GOP Report Says Rates Will Increase

The health insurance industry is fighting a proposed 2.3% cut to Medicare Advantage payments and released an ad last week designed to encourage the public to call Congress with their concerns. Click here to see the ad. House Republicans issued a report last week detailing how insurance rates will increase under the Affordable Care Act, with particular emphasis on the provision designed to reduce the disparity between age groups. Click here for the 8-page report.


Spending on Traditional Drugs Fall; Specialties Go Up

Spending on traditional prescription drugs by private insurers fell in 2012 for the first time in 20 years, according to an annual report by Express Scripts. But spending on specialty pharmacy drugs and attention deficit disorder prescriptions continued their climb, so total prescription drug spending rose 2.7%,  about the same as it did in 2011, according to the report released last week. Click here for the  report.


Hospice Savings to Medicare Greater than Previously Reported

According to a study out last week and reported in Health Affairs, researchers found $2,561 in savings to Medicare for each patient enrolled in hospice 53–105 days before death, compared to a matched, non-hospice control. Even higher savings were seen with more common, shorter enrollment periods: $2,650, $5,040, and $6,430 per patient enrolled 1–7, 8–14, and 15–30 days prior to death, respectively. Click here for more (fee required.)


Recommendations Would Cut Medicare Spending by $600 Billion

A series of recommendations were released last week that would reduce Medicare spending by $600 billion over ten years, including the repeal of the physician payment formula. Included in the Urban Institute/Robert Wood Johnson recommendations: raise the eligibility age to 67, but allow 65 and 66 year olds to “buy in”, cut Medicare Advantage payments, cut teaching hospital payments, and increase the payroll tax by 0.5%. Click here to review the 16-page report.


FDA Warns on Latex Free

The FDA last week issued a warning to medical device manufacturers stating that they should provide accurate information about their products that don’t contain natural rubber latex and stop labeling them as “latex free”. Click here for the story.


ICD-10 to Move Forward; Stage 3 Meaningful Use Delayed

CMS is trying to help physicians and hospitals prepare for ICD-10, which is scheduled to be required by October of next year. CMS has  posted checklists and timelines to help small hospitals, physician practices and payers transition to ICD-10 for reporting patient diagnoses and inpatient procedures.  Click here for the checklists. CMS did confirm last week if it will delay any rulemaking on Stage 3 Meaningful Use or electronic health records until next year while the agency examines how the existing requirements are rolling out.


EHR Adoption Continues to Grow: Report

According to a government report last week, hospital adoption of at least a Basic EHR system more than tripled since 2009, increasing from 12% to 44%. The percent of hospitals possessing a certified EHR technology increased by 18% between 2011 and 2012, rising from 72% to 85%. Click here for the 9-page report.


20 More Community Transition Programs Added

CMS added 20 more participants to its Community Based Care Transitions program (CCTP), bringing the total number of CCTP sites up to 102. The addition of the new participants means the program, authorized under the health reform law, is poised to serve more than 700,000 Medicare beneficiaries in 40 states, CMS says. Click here to see the list of the new sites.


HHS Wants Input on Community EHRs

HHS is seeking input on a series of potential policy and programmatic changes to accelerate electronic health information exchange across providers, as well as new ideas that would be both effective and feasible to implement. The agency issued a 20-page request for information last week. To further advance interoperability and health information exchange beyond what is currently being done through ONC programs and the EHR Incentive Program, HHS is considering a number of changes using existing authorities and programs. Click here for the RFI. Comments are due by April 21.