New Two-Year Federal Budget Has Big Health Care Changes

The House of Representatives Friday voted 332-94 to approve a two-year budget agreement. Important to health care providers, the new budget would:

  • Increase Medicare payment for physicians by 0.5% from January through March, which would temporarily avert a 20.1% payment cut effective January 1 under the Sustainable Growth Rate (SGR) formula;
  • Continue the 2% sequestration for Medicare and extend it by two years through 2023;
  • Delay the start of the Medicaid Disproportionate Share Hospital payment cuts under the ACA for two years until FY 2016;
  • Revise long-term care hospital payments beginning in two years;
  • Extend certain Medicare payment policies important to small and rural hospitals.

Click here for a 3-page summary of the health care provisions. The Senate is expected to vote on this same budget plan Tuesday, December 17 and the President is expected to sign it. Please note that a number of these extensions expire in several months. They could receive a longer extension if they are included in the long-term SGR repeal and reform legislation. See next story.

Permanent Doc Payment Fix Moves Forward

Senate Finance Committee last week passed legislation by voice vote to repeal the current physician Medicare payment formula (SGR) and replace it with broad new payment requirements based on value. Still undetermined is how to pay for the new legislation, which costs about $150 billion over 10 years. Click here for access to all the documents, including summaries, for the Senate’s SGR legislation. The House Ways and Means Committee passed a similar bill:

  • All 39 committee members voted in favor of the bill;
  • The legislation includes a 0.5 percent update through 2017;
  • There is a zero percent update for 2017 through 2023;
  • In 2024, all Medicare professionals would be provided annual updates of one percent and those in alternative payment models (APMs) would receive two percent;
  • The funding available for VBP incentive payments will be equal to 4 percent of the total estimated spending in 2017; 6 percent in 2018; 8 percent in 2019; and 10 percent in 2020. Starting 2021, the funding pool could increase but is capped permanently at no greater than 12 percent.

Click here to read the amendments approved to the original legislation. Click here for the 168-page bill.

The House and Senate will have until the end of March to reconcile and pass this legislation. At that time, the temporary payment fix being enacted this week will expire.

House Doctors List SGR Replacement Requirements

In a letter sent last week to House Republican and Democratic leaders, the 19 lawmakers who are also physicians say any SGR repeal bill must also include a five-year transition period to a new model, a fee-for-service option without penalties, evaluation of physicians from within their own specialties; and quality metrics set by the specialties, not the government. Click here to read their letter.

What Happened to CMS’ 2-Midnight Rule? New Delay Bill Introduced

House and Senate committees were poised to adopt amendments last week that would have delayed for a year CMS’ 2-midnight rule; unfortunately, both attempts were withdrawn. The Congressional Budget Office released information that the amendment would cost the government about $2 billion. That gives you an idea of how much the rule may cost hospitals over the next year. After the committees balked, Rep. Jim Gerlach (R-PA) introduced a separate bill to delay the rule. The bill was cosponsored by Reps. Burgess (R-TX), Crowley (D-NY), Jenkins (R-KS), Kind (D-WI) Reed (R-NY) and Roskam (R-IL). Click here for a copy of the short bill. AHA wrote a letter to Gerlach (click here) stating support for the bill. Don’t forget – CMS will host a third follow-up conference call to answer questions about the 2-midnight rule and related issues on Thursday, December 19, from 1:00pm – 2:00pm EST. Click here for the details.

MedPAC:  3.2% Increase for Hospitals, 0% for Other Providers in 2015

The group that advises Congress on Medicare policies, MedPAC, made its likely recommendations known last week for 2015 payment policies. Formal recommendations will be made in January. See the list of recommendations below. By clicking on each link you will get a more detailed SHC summary, plus the slides MedPAC used in its presentation last week.

  • Inpatient and Outpatient: 3.2% update; outpatient site neutrality; payment reform of the LTCH PPS for CCI/non-CCI cases, click here.
  • Physicians and ASCs: repeal the SGR; 0% update for ASCs, click here.
  • LTCHs: 0% update, click here.
  • Outpatient Dialysis: 0% update, click here.
  • SNFs: 0% update; 4% reduction to payments in 2016, click here.
  • Post Acute Care:  implementation of CARE tool, click here.
  • Home Health: rebase and rebalance payments, click here.
  • Medicare Advantage: new payments for employer-group plans; inclusion of hospice benefits, click here.
  • Hospice: 0% update, click here.
  • IRF: 0% update, click here.

High Risk Pools Extended

Obama administration officials said last week that the state-based “high risk pools” set up in 2010 will continue to offer coverage to existing members through the end of January rather than ending at sunset on Dec. 31. The Administration also took additional steps last week to help those seeking coverage. Click here for the details from HHS. Click here for the news media report. Click here for an excellent Q&A about what the changes mean to individuals.

Insurers Say Healthcare.gov Inaccuracies Continue

One of the reasons the Administration is providing all the new sign-up flexibility is that problems persist on the “back end” of Healthcare.gov. Insurers are continuing their complaints about the level of date inaccuracies they receive in the applications. Click here for the report.

Report Shows that Expensive Rx Use Driving Up Costs Unnecessarily

Even though the least expensive drug is used more of the time, treatments for Medicare patients in the past five years have cost about $5.7 billion more than they would have had the least expensive drug been used in all treatments, according to an analysis by the Washington Post. One of those involves the use of Lucentis over Avastin, drugs used to help prevent blindness in the elderly. Click here for the report.

Report: Hospitals Scaling Back Blood Transfusions

Blood transfusions have been a staple of hospital care for nearly a century, but providers find they can reap big savings by stemming the number of such procedures performed, according to USA Today. For example, the four-hospital Lee Memorial Health System in Florida has cut blood product usage by 2,200 units a year, an 11 percent reduction. The initiative translated to a $2.5 million annual savings on both staff and supplies. The system encourages physicians who typically have ordered two units of blood for transfusions to order only one. Click here for the story.

Lack of Residency Slots Causing Doc Shortage

Why aren’t there enough physicians? This report examines the argument that the real bottleneck is at the post-med-school step: residencies. There has been little growth in residency slots; they totaled 113,000 in 2011-12, from 96,000 a decade earlier. Why have residencies have not increased faster? Hospitals, doctors and med students usually give the same explanation: Congress is too stingy. Click here.

Study: There Are Enough Docs for Seniors

The Medicare program gives most beneficiaries ample access to physician services, as 91 percent of office-based doctors accept new Medicare patients and few physicians in clinical practice have left Medicare, according to a new study by the Kaiser Foundation. Click here.

Survey: About Half of Hospital Execs Not Planning on ACO

Almost half of hospital executives have no plans to implement an accountable care organization (ACO)-like model in the near future, according to a Purdue Healthcare Advisors survey. Executives are also struggling to find solutions for lower reimbursements and increased costs, all while complying with the changes under the Affordable Care Act and maintaining quality care, states the survey, which polled more than 206 executives in October. Click here for more.

CDC:  New Hospital Infection Data Posted by Hospital

New data posted last week and gathered through the CDC gives patients a first look at how their local hospitals are doing at preventing Clostridium difficile infections (deadly diarrhea) and methicillin-resistant Staphylococcus aureus (MRSA) bloodstream infections. This information, as well as other hospital performance measures, is collected as part of CMS’ Hospital Inpatient Quality Reporting (IQR) Program and is publicly available on the Hospital Compare website. Click here for Hospital Compare.

HHS To Award $50 Million for CHC Behavioral Health Services

HHS last week announced that it plans to issue a $50 million funding opportunity to help Community Health Centers establish or expand behavioral health services for people living with mental illness, and drug and alcohol problems. Community Health Centers will be able to use these new funds for efforts such as hiring new mental health and substance use disorder professionals, adding mental health and substance use disorder services, and employing team-based models of care. Click here for details.

Report: Americans Made Notable Shift Toward Better Health in 2013

An annual measure of the nation’s health status finds evidence that Americans made “a notable shift” toward better health in 2013. Important gains were seen in more than two-thirds of the measures analyzed for the 2013 America’s Health Rankings report. This marks the first year since 1998 that obesity rates did not increase. Among the challenges noted in the report is the increasing percentage of adults who have been diagnosed with diabetes, a chronic condition that affects 9.7% of adults, about double the rate in the mid-1990s. The prevalence of diabetes ranges from 7% of adults in Alaska to 13% in West Virginia. Click here for the report including an inter-active US map.

Healthcare.gov Sign Up Increases Significantly

About 1.2 million people have gained health coverage through Obamacare, according to new federal data released last week. Approximately 365,000 have purchased private insurance and 803,000 have been determined to be eligible for the public Medicaid program. These numbers count data from both October and November. Click here for details. Click here for an interesting story about how Aetna handled Obamacare’s launch.

Key Doc Critical of Growth in ADHD Prescriptions

The rise of A.D.H.D. diagnoses and prescriptions for stimulants over the years coincided with a remarkably successful two-decade campaign by pharmaceutical companies to publicize the syndrome and promote the pills to doctors, educators and parents, according to a report out last week. With the children’s market booming, the industry is now employing similar marketing techniques as it focuses on adult A.D.H.D., which could become even more profitable. Click here for the story.

Dartmouth: Pediatric Care Services Based More on Provider Preference Not Need

Variations in physician services, hospitalizations, surgeries, imaging and prescriptions show that the medical care children receive is often the result of provider preference and not patient need, according to a new report by the Dartmouth Atlas Project release last week. Using claims data generated between 2007 and 2010 from an all-payer data set for patients younger than 18 years old in Maine, New Hampshire and Vermont, Dartmouth researchers found wide variations in care for children in those three states. Click here for the Dartmouth report.