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.

The Senate continues to focus its attention on consideration of legislation to extend unemployment benefits, COBRA insurance, and the increased FMAP rate.  This afternoon, Senate Finance Republicans circulated the most recent Senate amendment in the nature of a substitute for H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, compared to an earlier version along with a CBO score of the legislation.

On the Senate floor, Majority Leader Harry Reid (D-NV) indicated that Senate Finance Committee Chairman Max Baucus (D-MT) is working to revise the substitute amendment.  The Majority Leader signaled that he will determine how to proceed on the measure later tonight or tomorrow morning. 

UPDATE:  Sen. Baucus filed a revised subsitute amendment during the evening of June 23. A cloture vote on the measure is expected on Friday.

On June 17, 2010, the National Quality Forum (NQF) hosted a webinar focused on the intersection of health information technology (HIT) and quality improvement. 

Dr. Marc Overhage, MD, PhD, Director of Medical Informatics at Regenstrief Institute, reviewed the goal of the Health Information Technology for Economic and Clinical Health Act (HITECH) to improve care and the efficiency of care. He stated that the key to HITECH is the definition of “meaningful use.”  He reported that the Centers for Medicare and Medicaid Services (CMS) is close to issuing its final rule that will establish the definition of meaningful use. He speculated that the Agency will soften the definition of meaningful use in the final rule, but that the proposed and final rules will be very similar. He stated that the Agency’s goals in 2010 are data capture and sharing.  In 2013, the goal is increased data use to improve the quality of care and in 2015 CMS intends to focus on substantially improving outcomes for patients. 

Dr. Overhage described the incentives established in HITECH to encourage physicians to become meaningful users of EHRs.  He stated that the EHR adoption timeline is constructed in a graduated incentive model and that the Federal government hopes that many providers will adopt EHRs early.  He noted that if providers become meaningful user in 2011 and 2012, they will receive the full incentive payment. 

He highlighted the connection between the National Priorities Partnership priorities and the health outcomes policy priorities established in HITECH. He reported that patient and family engagement, population health, safety, and care coordination were common themes. The National Priorities Partnership also identified palliative and end-of-life care and overuse as additional priorities. 

Dr. Overhage shared that Regenstrief has established a Quality Health First® Program that uses HIT to drive performance measurement and quality improvement. The program has incorporated a Medicare demonstration program, which allows Medicare providers to participate along commercial providers and provide incentives.  He explained that providers receive incentive payments based upon their own quality improvement, even if they are the worst performing among providers. In 2009, a 5 percent improvement in quality was reported across the 1,000 primary care providers. 

He stated that NQF is convening the HIT and Quality Committees to: (1) help build the electronic infrastructure to help automate performance measurement; (2) encourage and harmonize information standards; (3) facilitate coordination between quality and HIT communities; and (4) establish quality measurement and clinical decision support to occur in simultaneous fashion.

NQF will host another webinar on July 16 at 12:00 pm Eastern Time focused on quality and leadership.

Physician Fee Fix and Extenders Legislation 

The Senate did not act to extend the physician fee fix that would prevent a 21 percent Medicare payment cut from going into effect on June 1.  The House and Senate were poised to consider the “American Jobs, Closing Tax Loopholes and Preventing Outsourcing Act of 2010,” which would have provided an update to physicians for the remainder of 2010 and 2011, increased payments in 2012 and 2013 if spending growth is within reasonable limits, and provided an extra allowance for primary and preventive care in 2012 and 2013.

Due to concerns regarding the bill’s cost, which was scored at $200 billion, House Leadership scaled back the physician fee fix, COBRA, and unemployment extensions. That version of the bill would have provided a 2.2 percent update to physicians for the remainder of 2010 and a 1 percent increase in 2011 bill at a cost of $144 billion. 

In an effort to prevent the 21 percent Medicare physician payment cut, House Leadership separated the legislation into two pieces – the physician fee fix provision and other extenders. The extenders piece no longer includes an extension of COBRA and FMAP. Today, the House voted 245-171 to adopt the 19-month physician fee fix and 215-204 for the extenders package.      

The Senate is not expected to consider the physician fee fix or extenders legislation until the week of June 7.

CMS has already instructed MACs to hold Medicare physician claims for 10 days. 

Health Information Technology Grants

The Office of National Coordinator for Health Information Technology (ONC) at HHS announced that they will award an additional $30.3 in Beacon Community Cooperative Agreement Program grants. The grants will provide funding to allow communities to build and strengthen their HIT infrastructure.  Letters of intent are due on June 9, 2010, and grants will be awarded in August 2010. In May, ONC awarded 15 Beacon grants totaling $250 million.

This week, President Obama sent a legislative proposal to Congress that would give him the authority to rescind any spending approved by Congress. The President’s proposal, the “Reduce Unnecessary Spending Act of 2010,” would allow the Congress to vote without amendment to approve or reject the President’s proposed recessions. 

House Budget Committee Chairman John Spratt (D-SC) is expected to introduce legislation on behalf of the President.

With great fanfare, President Obama signed into law the Patient Protection and Affordable Care Act last Tuesday. By a vote of 56-43, the Senate passed an amended version of H.R. 4872, the Reconciliation Bill of 2010 last Thursday. Sens. Lincoln, Pryor, and Ben Nelson joined Republicans in voting against the legislation. Later that evening, by a vote of 220-207, the House passed the amended Reconciliation bill. The bill now goes to President Obama for his signature.

The passage of the Patient Protection and Affordable Care Act and the Reconciliation Bill of 2010 brings to a close the legislative work on comprehensive health care reform that began in November 2008 when Senate Finance Committee Chairman Max Baucus released his “Call to Action” white paper on health care reform.

House and Senate Republicans have already introduced legislation to amend the Patient Protection and Affordable Care Act to require the President, Vice President, Members of Congress and their staff to purchase health care insurance through the Exchange. At least four other pieces of legislation that amend the health care reform law have been introduced, and we expect that Republicans, in particular, will continue to seek changes through legislative action. Republicans are also expected to mount challenges to reform by opposing funding for the newly authorized entities and programs in the Fiscal Year 2011 appropriations bills. Congress will at some point certainly consider technical, if not policy, changes to the newly enacted legislation.

The challenges of implementation now loom large. For example, the Department of Health and Human Services must develop a number of new insurance regulations. The government will also establish a temporary risk-pool for uninsured individuals who have pre-existing conditions and create the health care exchanges in 2014.

The buzz about a Presidential nomination for the Center for Medicare and Medicaid Services Administrator were kicked up again late last week. It is thought that the President could nominate Donald Berwick, a pediatrician and professor at Harvard University, as early as sometime this week. A CMS official has acknowledged that Dr. Berwick has been under consideration for the position, which would require confirmation by the Senate. Charlene Frizzera has served as Acting Administrator since President Obama took office in January 2009.

The Senate adjourned for recess without passing an extension of the Medicare physician fee fix to prevent a 21 percent payment cut from going into effect on April 1. Earlier this month, the House passed the Continuing Extension Act of 2010 to extend the physician fee fix through April 30. The Senate attempted to pass the legislation by unanimous consent, but Senator Tom Coburn of Oklahoma objected. He opposed consideration of the legislation on the basis that the bill is not paid for and would increase the deficit by $9.2 billion. We expect that CMS will issue a notice this week instructing Medicare physicians to hold their claims for some time.

While many are breathing a sigh of relief that the debate on health care reform legislation is done, the difficult work of implementation is just about to begin.

Following House passage of the Senate health care reform legislation, Representative Nathan Deal resigned so he can focus on the Georgia’s governor’s race. Representative John Shimkus of Illinois has been tapped as the new House Energy and Commerce Health Subcommittee Chairman.

Join us this week on Capital Thinking this week as host Kevin O’Neill examines the political impact of the recent House approval of the most sweeping piece of social legislation in decades. John Jonas and Martha Kendrick provide strategic analysis of the bill and what to expect next.

Tune in every Thursday at NOON EST and 9:00 am PST on VoiceAmerica Business 

Today House Democratic Leadership released the legislative text of the Reconciliation Act of 2010, sponsored by House Budget Chairman John Spratt.  The bill amends a number of provisions in the Senate-passed “Patient Protection and Affordable Care Act,” including:

• Provides additional subsidies to improve the affordability of coverage for individuals with incomes up to 400 percent of the federal poverty level;
• Imposes additional requirements for coverage of non-dependent children up to age 26;
• Closes the Medicare Part D donut hole by 2020 by offering seniors an immediate $250 rebate and subsequently increasing discounts on brand-name drugs;
• Strikes the controversial 100-percent federal Medicaid matching rate for Nebraska (known as the “Cornhusker kickback”);
• Delays the annual cap on contributions to health flexible spending accounts (FSAs) by two years until 2013;
• Delays the excise tax on high-cost health plans to 2018, increases the dollar thresholds and indexes them to inflation;
• Delays the industry fee on sales of brand name pharmaceuticals by one year to 2011 but increases revenues raised by $4.8 billion;
• Delays the medical device tax on manufacturers by two years until 2013 and switches the industry fee to an excise tax on the first sale for use of medical devices at 2.9 percent rate; and
• Delays the health insurance industry fee by three years to 2014.

House Majority Leader Steny Hoyer announced that the House would convene at 1:00 pm on Sunday, but the final vote on the reconciliation bill would likely not begin until later in the day to comply with the Democratic Leaders’ promise to give Members 72 hours to review the final bill text.  The House is expected to approve the Senate-passed health reform bill using a “deem-and-pass” procedure that Republicans protest as unconstitutional.

 Since the bill’s release, several House members have switched their previous ‘no’ vote to a ‘yes’ – including Reps. Bart Gordon (D-TN), Luis Gutierrez (D-IL), Betsy Markey (D-CO), and Mike Arcuri (D-NY).  Additionally, Rep. Dennis Kucinich (D-OH) announced yesterday that he will now vote in favor of the bill.

In hopes of moving health care reform, President Obama has taken a more active role in the debate. Earlier this week, the President released his proposal for reform, which is mostly additive to or revisionist of the Senate bill. The President included several fraud and abuse provisions that were included in H.R. 3970, the “Medical Rights and Reform Act,” or H.R. 3400, the “Empowering Patients First Act.”

On Thursday, President Obama is convening a bipartisan summit with a goal of identifying compromises that will help to move health care reform legislation forward. Senate Republican Leadership has expressed disappointment in the President’s unwillingness to scrap the current health care reform bills and have suggested that an incremental approach to reform is more appropriate than comprehensive reform. The summit does not change the procedural options for moving reform legislation. Congress has two options: either move incremental reform bills or use reconciliation to pass comprehensive reform. President Obama will use the summit to build support for passage of health care reform, even if by reconciliation.

At this point, we expect Congress to move several health care provisions separate from health care reform, including a physician fee fix, repeal of the insurance antitrust exemption, and a package of health extenders and use reconciliation to pass comprehensive reform.

“Victory—Healthcare-The Financial Debacle”

This week on Capital Thinking we talk to Benjamin Chew and Michael Guiffré about their recent victory in a complex fraud case involving a minority-owned information management company that suffered a substantial loss when two former employees defrauded the company and usurped a U.S. Census Bureau contract worth over $5 million.
 
Then we return to the rollicking healthcare debate. What does the delay in Congress mean for patients, providers and companies based outside the Beltway? John Jonas has the answers.
 
Micah Green has repeatedly explained the impact of the financial debacle. Now he comes on to discuss how the mortgage mess has bred an unlikely alliance between housing activists and mortgage investors to help homeowners avert foreclosure. This phenomenon was featured in the Wall Street Journal this week.

Be sure to tune to Capital Thinking Thursdays at NOON EST and 9AM PST.