Monthly Archives: July 2010

Capital Thinking Update

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.

Capital Thinking Podcast

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 112th 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.

President Obama to Make Recess Appointment of Dr. Donald Berwick

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 112th 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.

Capital Thinking Podcast

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.