Today CMS issued preliminary guidance about the Medicare coverage gap discount program that was established in the Patient Protection and Affordable Care Act (P.L. 111-148).

The Senate Aging Committee Chairman Herb Kohl, D-WI, convened a hearing focused on the FCC National Broadband Plan as a means to more efficiently provide health care.

The witnesses relayed that investments in broadband infrastructure can help to decrease health care costs while improving quality of care. Dr. Mohit Kaushal, MD, MBA, the Health Care Director at the FCC, reported that the Veterans Hospital System has established a Care Coordination/Home Telehealth Program (CCHT) for veterans with chronic conditions. The program costs $1,600 annually per patient, compared to the cost of the hospital system’s home-based primary care services at $13,121 per patient, and nursing home care at $77,745 annually per patient.

Dr. Farzad Mostashari, MD, MPH, Senior Advisor at the Office of the National Coordination for Health Information Technology (ONCHIT) at the Department of Health and Human Services (HHS) stated that telehealth will increase access to specialty medicine in rural areas, allow seniors to remain in their homes, and reduce hospital readmissions. He estimated that 50 million people in rural areas have difficulty accessing health care services.

Dr. Mostashari cited privacy and security concerns, licensing and credentialing, and the regulatory approach to the new and evolving technologies as challenges that may delay adoption of telehealth. He highlighted that telehealth models will be tested by at least 15 communities under the Beacon Community Grant Program. Dr. Mostashari noted that the recently enacted health care reform laws, establishes a new Center for Medicare and Medicaid Innovation (CMI) that will have authority to test new delivery system models, including telehealth approaches.

Dr. Kaushal described the barriers to adopting broadband solutions for health care delivery system problems as the broadband connectivity gap, misaligned incentives in reimbursement for health care services, and outdated health care regulations. He stated that the National Broadband Plan addresses the connectivity gap by proposing to create a permanent infrastructure fund under the FCC’s Rural Health Care Program and continue to subsidize monthly internet charges for health care providers. Dr. Kaushal noted that the FCC is working with the HHS Office of the National Coordinator so that “meaningful use” criteria for health information technology will apply to FCC subsidy programs. He shared that the National Broadband Plan calls for HHS to propose changes to physician reimbursement that will help to incentivize use of electronic health technologies. He reported that the FCC and the Food and Drug Administration (FDA) will convene a workshop with industry stakeholders to propose solutions to the regulatory barriers that are inhibiting widespread adoption of such technologies.

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Congress Extends SGR Fix

The sustainable growth rate physician payment formula faced a roller coaster ride to the finish line. The Senate adjourned for spring 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.  Upon return from recess, after much debate regarding the degree to which the legislation would increase the deficit, the Senate passed H.R. 4851 as amended by a vote of 59-38 to extend the physician fee fix through May 31. On April 15, the House agreed to the Senate-amended legislation by a vote of 289-112, and the President signed the bill into law.

The House and Senate are expected to use the “Tax Extenders Act of 2009” (H.R. 4213) as the basis for continuing negotiations about how to extend the physician fee fix and benefits through 2010. The House and Senate both passed different versions of the legislation earlier in the year, but several offsets were used in the newly enacted health care reform laws.      

The American Medical Association has relayed to its membership its expectations that Congress will consider repealing the SGR formula later this year.  However, last October, the Senate failed to gain the support of 60 Senators to proceed to floor consideration of S. 1776, the “Medicare Physicians Fairness Act of 2009.”  The legislation would have frozen physician payments at a 0 percent update to prevent the 21 percent payment and sunset the SGR formula. While Senators largely agree that the sustainable growth rate, known as the SGR, is flawed and must be replaced, moderate Democrats and Republicans opposed the measure on the basis of the $245 billion price tag.  

President Obama Nominates Donald Berwick as CMS Administrator

Last week, President Obama formally nominated Donald Berwick, a pediatrician and professor at Harvard University, to serve as the CMS Administrator. Dr. Berwick must be confirmed by the Senate.  As the Administrator, he would be responsible for overseeing the implementation of the Patient Protection and Affordable Care Act and the health-related provisions in the Reconciliation Act of 2010. 

Dr. Berwick currently is a clinical professor of pediatrics and health policy at the Harvard Medical School and a professor in the Department of Health Policy and Management at the Harvard School of Public Health. 

Dr. Berwick is considered a renowned expert in quality of care. In 1991, Dr. Berwick founded the Institute for Healthcare Improvement (IHI) to develop best practices. He led a “100,000 Lives” campaign to establish practices to reduce the number of deaths attributable to medical errors in hospitals. He previously served as Vice Chair of the U.S. Preventive Task Force, a member of the Board of Trustees of the American Hospital Association, Chair of the National Advisory Council of the Agency for Healthcare Research and Quality (AHRQ), and as a member of President Bill Clinton’s Advisory Commission on Consumer Protection and Quality in the Healthcare Industry. 

Charlene Frizzera has served as Acting Administrator since President Obama took office in January 2009. She will continue to work in the Administrator’s Office to assist with the implementation of health care reform. CMS has not had a permanent Administrator since October 2006. 

CMS Principal Deputy and Chief Operating Officer, Marilyn Tavenner, relayed to staff that the reorganization of the Agency announced in February is effective. The goal of the reorganization is to focus on beneficiary services, program integrity, and strategic planning.  Principal Deputy Tavenner also announced that Caya Lewis, currently serving in the HHS Office of Health Reform and a former Senator Ted Kennedy staffer, will join CMS as the Chief of Staff.

Senate Considers FY2011 Budget Resolution

The President’s push to complete work on health care reform legislation consumed Congress during the first quarter of the year.  However, Congress must now turn its attention to preparing the Fiscal Year (FY) 2011 budget resolution. In accordance with the 1985 Balanced Budget Act, Congress is required to adopt a Budget Resolution by April 15. The Act also requires the Senate Budget Committee to report a Budget Resolution by April 1. Senate Budget Committee Chairman Kent Conrad (D-ND) began mark up a resolution during last week. The Chairman’s mark would reduce the deficit by $2 billion over FYs 2010-2015 and includes a reserve fund to improve health care, which could be used to increase physician payment rates under Medicare, address health care workforce shortages, increase or repeal Medicare outpatient therapy caps, extend expiring Medicare and Medicaid provisions. The FY 2011 budget resolution will establish budgetary targets that will help to shape spending bills for the Fiscal Year.