Diane Rowland, Chair of the Medicaid and CHIP Payment and Access Commission (MACPAC), announced that Lu Zawistowich was named the Commission’s Executive Director and that the first public MACPAC meeting will be convened in September. The Commission was authorized in the Children’s Health Insurance Program Reauthorization of 2009 (P.L. 111-3). Congress appropriated funding for MACPAC in the Affordable Care Act.  MACPAC will advise Congress on Medicaid, CHIP, and health insurance exchange policies. 

Dr. Zawistowich most recently served as the Acting Deputy Director of the Office of Consumer Information and Insurance Oversight at the Department of Health and Human Services. She previously worked at the Centers for Medicare and Medicaid Services as well as at the Maryland State Department of Health and Mental Hygiene. 

On July 21, Democratic Rep. Lynn Woolsey introduced H.R. 5808 to amend the Affordable Care Act (ACA) to include a public plan option. The Congressional Budget Office CBO issued a letter to House Ways and Means Health Subcommittee Chairman Pete Stark noting that the bill would reduce the budget deficit by $53 billion over 10 years. The letter also states that the cost of insurance under a public plan option would be 5-7 percent lower on average. 

Including a public plan option in health care reform legislation was a controversial issue that did not ultimately have traction in the Senate’s Patient Protection and Affordable Care Act. The House-passed health care reform bill included a public plan option.  The rates under the Affordable Health Care for America Act would be negotiated and could not be less than Medicare rates, but not higher than the average rates of other health benefit plans. Rep. Woolsey’s legislation would set reimbursement rates under the public plan option as equal to Medicare plus 5 percent. Although the legislation has 128 co-sponsors, the House is unlikely to move the bill during this session of Congress. 

The National Association of Insurance Commissioners convened last week to develop a recommendation to HHS regarding the definition of medical loss ratio, which would serve determine the types of insurance spending that should count as medical spending. NAIC was charged with this role in the Affordable Care Act, which requires large group health insurance plans to spend 85 percent of premium dollars on clinical services and activities related to quality of care. The NAIC hopes to present a recommendation to HHS by mid to late August; although, its work could continue into September. Secretary Kathleen Sebelius must certify the Commissioners work. NAIC has also been tasked with developing standard insurance benefits and enrollment forms and regulations for the state-based exchanges.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Last week, the White House announced President Obama’s recess appointment of Donald Berwick as CMS Administrator. Dr. Berwick is a pediatrician and professor at Harvard University and the founder the Institute for Healthcare Improvement. He launched the“100,000 Lives” campaign to reduce the number of deaths attributable to medical errors in hospitals. He has previously served as Vice Chair of the U.S. Preventive Task Force, member of the Board of Trustees of the American Hospital Association, Chair of the National Advisory Council of AHRQ. Dr. Berwick was sworn in on July 12.   

The Constitution provides an exception to the Senate confirmation process for nominations. When the Senate is in recess, the President may make a temporary appointment known as a “recess appointment” without Senate approval. President Obama is making the appointment during a recess in the middle of a session, so Dr. Berwick’s appointment will expire at the end of the following session or at the end of the first session of the 112^th Congress. President Obama has made 15 recess appointments, not including Donald Berwick.

Senate Minority Leader Mitch McConnell, along with Republican Senators John Barrasso, Pat Roberts and Tom Coburn have objected to President Obama’s move noting that confirmation hearings had not been scheduled to allow for consideration of the nominee. Senate Finance Committee staff have responded to the announcement noting that Republicans have urged Leadership to expedite Dr. Berwick’s confirmation hearing and hold his hearing before Supreme Court Justice nominee Elena Kagan’s hearing.    

Republicans on the Senate Finance Committee sent a letter to Chairman Baucus requesting a hearing on the appointment of Dr. Berwick. The letter requests a chance for Dr. Berwick “to present his qualifications for the position in the usual process” so as not to create “a shadow over his legitimacy and authority to serve as Administrator during a critical time for CMS.”  Republican members of the House Ways and Means Committee also urged a hearing with Dr. Berwick.

The Office of Management and Director Peter Orszag has announced that his last day at his post will be July 30.  President Obama announced that he will appoint Jack Lew as the new OMB Director. Mr. Lew currently serves as an aide to Secretary of State Hillary Clinton and previously worked as the budget director for former President Bill Clinton. Given the current budget deficit, the new OMB Director will certainly continue the focus on reducing the deficit.         

The Chairmen of the National Commission on Fiscal Responsibility, former Republican Senator Alan Simpson of Wyoming and Erskin Bowles, former chief of staff to President Bill Clinton, spoke to the National Governor’s Association and relayed that Congress must examine any and all proposals to contain entitlement programs, particularly Medicare and Medicaid. The Commission is required to develop a plan by December 1 to reduce the deficit. 

Prior to the August recess, the Senate is expected to consider the “Small Business Lending Fund Act” (H.R. 5297), which was introduced by Rep. Barney Frank (D-MA) to address the impact of the financial crisis on small businesses. The Senate will also consider the House-amended war supplementing spending bill before it adjourns. The House amended the Senate-passed bill to include Senator Herb Kohl’s (D-WI) legislation, the “Preserve Access to Affordable Generics Act,” which would ban agreements between brand name and generic drug manufacturers. Senator Kohl has called such agreements “one of the most egregious tactics used to keep generic competitors off the market leaving consumers with unnecessarily high drug prices.” The Generic Pharmaceutical Association, however, expressed opposition to the amendment noting that such agreements have, at times, allowed generic drugs to come to market before the patents of the name brand drugs expire.

On Tuesday, July 13, 2010, the U.S. Department of Health and Human Services (HHS) released the greatly anticipated final regulations for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program and the Initial Set of Standards, Implementation Specifications, and Certification Criteria for EHR Technology. 

HHS Secretary Kathleen Sebelius stated the regulations move Americans toward a 21^stcentury health care system with patients and doctors regaining control.  Dr. Donald Berwick, new Administrator of the Centers for Medicare and Medicaid Services (CMS), stated that EHRs are the future of health care and it will bring tremendous benefits to ensure patient safety, reduce costs and improve access.  Dr. Richard Blumenthal, Director of the Office of the National Coordinator for Health Information Technology (ONC), explained that in his practice as a primary care physician he saw how the use of EHRs prevented tragic errors in providing prescription drugs and duplicating x-rays.  He noted while they may be small victories, but if spread across the health care system, it would greatly bend the cost curve down.

In an HHS press release, the following key changes in the final rules were noted:

• Greater flexibility for eligible professionals (EPs) and hospitals in meeting and reporting certain objectives for demonstrating meaningful use;
• An objective of providing condition-specific patient education resources for both EPs and eligible hospitals and the objective of recording advance directives for eligible hospitals;
• A definition of a hospital-based EP is one who performs substantially all of his or her services in an inpatient hospital setting or emergency room only; and
• Critical Access Hospitals (CAHs) are within the definition of acute care hospital for the purpose of incentive program eligibility under Medicaid.

Dr. Blumenthal also noted that overall achievement levels were reduced, for example, EPs will only have to electronically prescribe 40 percent of medications, down from 75 percent in the proposed rule.

Last night, the White House announced that President Obama has decided to make a recess appointment for Dr. Donald Berwick to serve as CMS Administrator. 

Dr. Berwick is a pediatrician and professor at Harvard University and the founder of the Institute for Healthcare Improvement. He launched the “100,000 Lives” campaign to reduce the number of deaths attributable to medical errors in hospitals.  He has previously served as Vice Chair of the U.S. Preventive Services Task Force, a member of the Board of Trustees of the American Hospital Association, and Chair of the National Advisory Council of the Agency for Healthcare Research and Quality (AHRQ).

The Constitution provides an exception to the Senate confirmation process for nominations. When the Senate is in recess, the President may make a temporary appointment known as a “recess appointment” without Senate approval. President Obama is making the appointment during a recess in the middle of a session, so Dr. Berwick’s appointment will expire at the end of the following session or at the end of the first session of the 112^th Congress. 

President Obama has made 15 recess appointments, not including Dr. Berwick.

Senate Minority Leader Mitch McConnell (R-KY), along with Senators John Barrasso (R-WY), Pat Roberts (R-KS) and Tom Coburn (R-OK), objected to President Obama’s move and noted that confirmation hearings were not scheduled to allow for consideration of the nominee. Senate Finance Committee staff responded that Republicans have urged Leadership to expedite Dr. Berwick’s confirmation hearing and hold it before Supreme Court Justice nominee Elena Kagan’s hearing.

Last week, the House and Senate adjourned for the Fourth of July recess without extending the Medicaid FMAP funding increase or COBRA insurance despite the call of numerous Governors on Congress to extend the enhanced FMAP funding through June 2011. Republican Senators continue to object to extending these provisions unless they are fully offset. Republican Senator Scott Brown of Massachusetts introduced a bill to extend the FMAP funding. The bill would be paid for with unused stimulus funding. However, reapportioning stimulus funding stands little chance of being politically palatable to Democrats. Congressional staff have signaled determination in passing an FMAP extension, perhaps in a supplemental spending bill or Gulf relief legislation.

The House amended and passed a Senate-approved war supplementing spending bill before it adjourned. The House amended the bill to include Senator Herb Kohl’s legislation, the “Preserve Access to Affordable Generics Act,” which would ban agreements between brand name and generic drug manufacturers. Senator Kohl has called such agreements “one of the most egregious tactics used to keep generic competitors off the market leaving consumers with unnecessarily high drug prices.” The Generic Pharmaceutical Association, however, expressed opposition to the amendment noting that such agreements have, at times, allowed generic drugs to come to market before the patents of the name brand drugs expire.

Last week, the Centers for Medicare and Medicaid Services released the 2011 Physician Fee Schedule Proposed Rule. CMS estimated that without Congressional action, physician payments would be cut by 23 percent beginning on December 1 and reduced by an additional 6.1 percent beginning January 1, 2011. Congress is almost certain to have a lame duck session in which Members will pass another short-term SGR fix.

Capital Thinking Radio Show July 1, 2010

If you missed the Capital Thinking Radio Show with Kevin O’Neill last week, listen to the podcast on demand. 

Join us as we examine the hurdles of turning the new health care bill into a reality with advocacy leaders John Jonas and Julie Black.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

On June 24, the House passed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” which will increase Medicare reimbursement to physicians by 2.2 percent through November 30, 2010.  President Obama signed the legislation into law on June 25.  Amy Hall, Director of the Office of Legislation at the Centers for Medicare and Medicaid Services (CMS) issued a notice to Hill staff explaining that Medicare physician “claims containing June 2010 dates of services which have been paid at the negative update rates will be reprocessed as soon as possible.”  The notification indicated that contractors have been instructed to stop processing claims with the 21 percent cut and to hold claims for services provided in June until the 2.2 percent update is loaded into the claims processing systems.      

After eight weeks of consideration of various versions of the “American Jobs and Closing Tax Loopholes Act of 2010” (H.R. 4213) that would extend the Medicaid FMAP funding increase, COBRA insurance, and unemployment benefits, the Senate continues to be in a holding pattern.  Senate Majority Leader Harry Reid most recently failed to get 60 Senators to support cloture on June 24.  Senator Ben Nelson voted with Republicans to block the measure.   The majority has not signaled whether it will try to pass another version this week, but it is the last week Congress is in session before the week-long July 4^th recess.

HHS has two major deadlines mandated by the health reform law, the Affordable Care Act, this week – the Department must establish high-risk pools and launch a health insurance web portal by July 1.  Thirty-one states have agreed to run their own high-risk pools, while 20 states will have pools administered by the federal government.

This week the House Education and Labor Committee will hold a hearing on H.R.5504, the “Improving Nutrition for America’s Children Act.”  The bipartisan bill aims to improve the meals children eat both in and out of schools, as well as support community efforts to reduce childhood hunger.  Additionally, the legislation establishes nutrition standards for all foods sold in schools.  The Senate Agriculture Committee has already marked-up its version of a child nutrition reauthorization bill, which awaits floor time.

On Wednesday, June 23, 2010, the House Energy and Commerce Subcommittee on Health held a hearingentitled “MedPAC’s June 2010 Report to Congress:  Aligning Incentives in Medicare.”  The hearing examined the findings and recommendations proposed in the report submitted by the Medicare Payment Advisory Commission (MedPAC) to Congress on June 15, 2010.

MedPAC Chairman Glenn Hackbarth testified that the Commission has offered 26 recommendations in two reports to Congress this year.  He highlighted areas where MedPAC commissioners have reached strong consensus, such as the unsustainability of Medicare and the need to look for ways to slow the growth rate of expenditures, while improving access and quality.  He stated that there needs to be consistent pressure applied to all health care services to look for ways to change relative values of payments and opportunities need to be examined that signal the type of care beneficiaries need and to reward that type of care.  As an example, he highlighted the medial home concept.  Additionally, Chairman Hackbarth stated that there still needs to be a robust and value-focused Medicare Advantage (MA) program because private plans have the ability to provide care in ways that traditional Medicare does not. 

He explained that it is important to reform how Medicare pays for Graduate Medical Education (GME).  Chairman Hackbarth stated that the Commission believes the GME system is the envy of the world, but the current system is not consistently producing physicians that the system needs to move towards a value-based health system.  He noted two types of deficits in the system: 1) the mix of physicians being produced (i.e. lack of racial and ethnic diversity; and 2) content of training, evidence-based medicine, team coordination, or shared decision making is not focused on.  Chairman Hackbarth stated his support for The Accreditation Council for Graduate Medical Education (ASCGME) for working on an outcomes project to refocus training on new skills and a focus on higher value health care, but urged rapid movement on implementing value-based standards.

Republican Members of the Committee largely used the hearing as a platform to air its grievances about the health reform law.  Chairman Waxman described the Republican comments as “propaganda.” 

 The majority of members were concerned that MedPAC’s recommendation to restructure GME funds would actually take money away from teaching hospitals.  Chairman Hackbarth reiterated that MedPAC was not recommending that money be taken away from hospitals, but that greater accountability be established for the funds.  Specifically, MedPAC recommended that the GME funds move away from being contingent upon fee-for-service and move towards value-based care.  He stated that the proposed standards for value-based GME payments would take effect in three years, which would give institutions time to conform.  Chairman Hackbarth declared that  Medicare could be the lever for this change. 

Rep. Donna Christensen (D-VI) stated that when CMS institutes a least costly alternative (LCA) policy, providers often face a financial loss when they prescribe a product that is more expensive.  She asked to the extent that Congress grants CMS explicit authority to institute LCA policies for drugs and biologics, what safeguards does MedPAC recommend so that access to medically needed therapies are appropriately observed.  Chairman Hackbarth stated that least costly alternative policies and reference pricing need to be informed by the best clinical evidence and the process needs to be transparent where all interested parties have the opportunity to present information to CMS.  He noted that MedPAC reported that it would be advantageous to give CMS and the Secretary of HHS more flexibility to execute these policies, but it does not mean abdication by Congress.  Chairman Hackbarth noted that Congress could reserve the right override policies.

Rep. Gene Green (D-TX) inquired whether there will be a problem within the Agency for the newly created Center for Medicare and Medicaid Innovation (CMI).  Chairman Hackbarth explained that the health reform law took a major step in giving the Secretary broader authority for testing new ideas in Medicare, but that in order to meet the challenges that Medicare faces, CMS will need to change the process for testing new ideas.  He noted that currently innovation is painfully slow, but that the health reform law could accelerate the process.  Chairman Hackbarth stated that his greatest concern is that resources will be needed to implement successful demonstrations. He also asked about self-referral and imaging services.  Chairman Hackbarth stated that there is variability among the different types of imaging services, but that the combination of physician ownership, fee-for-service, and mispricing of services leads to over-utilization.

Last night, the House passed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” which will increase Medicare reimbursement to physicians by 2.2 percent through November 30, 2010. President Obama signed the legislation into law on June 25. 

Amy Hall, Director of the Office of Legislation at the Centers for Medicare and Medicaid Services (CMS) issued a notice to Hill staff explaining that Medicare physician “claims containing June 2010 dates of services which have been paid at the negative update rates will be reprocessed as soon as possible.” The notification indicated that contractors have been instructed to stop processing claims with the 21 percent cut and to hold claims for services provided in June until the 2.2 percent update is loaded into the claims processing systems.      

Congress is likely to reconvene after the November elections for a lame duck session. The short-term SGR fix along with a number of Medicare extenders that were included in the Affordable Care Act (ACA) will expire before the end of the year. In addition to addressing the Medicare physician reimbursement rate, Congress will likely extend:

• the floor on geographic adjustments to the work portion of the Medicare physician fee schedule;
• the process of allowing exceptions to limitations on medically necessary therapy;
• the policy that directly reimburses qualified rural hospitals for specified laboratory services;
• bonus Medicare payments to ambulance services provided in rural and other areas; and
• the physician fee schedule mental health add-on to increase the payment for psychiatric services.

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius spoke today at the National Partnership for Women and Families luncheon. The Secretary is only the fourth woman to lead the department.

She provided an update on the implementation of the Affordable Care Act (ACA), noting that it is the best woman’s health care bill since Medicare because it gives women more control over their health care. The Secretary stated that the law brings fairness into the marketplace because it prohibits insurance companies from charging women more for insurance than men. She applauded that being a woman is no longer a pre-existing condition. Secretary Sebelius highlighted that ACA limits co-payments for key preventive services. She explained the importance of this provision by noting that early detection of breast cancer yields a 98 percent survival rate.

The Secretary touted President Obama’s Patient Bill of Rights, which reiterates that beginning this fall, insurance companies cannot deny coverage for children who were born with or develop pre-existing conditions, prohibits recessions beginning in September, phases out the annual and lifetime limits, and protects patients’ choice of doctors.

Secretary Sebelius explained that ACA is important for older women, who live longer than men and tend to depend on Medicare in larger numbers. The law will reduce fraud and abuse and close the donut hole.

She stated that health information technology (HIT) is an underpinning of care coordination and management of chronic conditions. The Secretary applauded the President’s investment in HIT that was included in the American Recovery and Reinvestment Act (ARRA).

She concluded that the Affordable Care Act moves toward building a system where women receive the security, flexibility, and quality care that they deserve.