Tag Archive | "Health Care Reform"

Capitol Thinking Podcast

National Commission on Fiscal Responsibility Convenes

Last week, the National Commission on Fiscal Responsibility convened its first meeting. The 18-member panel heard presentations from Ben Bernake, Chairman of the Federal Reserve, Peter Orszag, Director of the Office of Management and Budget, and Robert Reischauer and Rudolph Penner, both former directors of the OMB. The Commission is required to develop a plan by December 1 to reduce the deficit.

Dr. Orszag highlighted the Administration’s longer-term efforts to reduce the deficit, such as working with Congress to enact pay-go legislation and enacting health care reform legislation, which will reduce the deficit by $1 trillion during the next 20 years.

Mr. Reischauer advised the Commissioners to consider all categories of spending and any revenue options as they draft a proposal.  However, he stated that the health care reform law reduces Medicare spending significantly and that the CMS Chief Actuary has suggested that beneficiaries may have problems accessing medical services if the provider payment updates are implemented.

The Commission will next meet on May 26 on the Hill.

CMS Releases Guidance Documents on Medicare Part D Gap Discount Program

On Friday, the Centers for Medicare and Medicaid released guidance regarding the Medicare Part D coverage gap program established in the Patient Protection and Affordable Care Act and amended in the Health Care and Education Reconciliation Act of 2010.

Under the Medicare Coverage Gap Discount Program, manufacturers are required to provide a $250 drug rebate in 2010 for both brand name and biologics purchased during the coverage gap. For brand-name drugs and biologics purchased during the coverage gap beginning January 1, 2011, manufacturers are required to give a 50 percent discount to beneficiaries.

The guidance explains how CMS will account for the payments and discounts the manufacturers give to beneficiaries. The preliminary guidance also describes how Part D sponsors should determine applicable discounts for beneficiaries.

CMS is accepting comments on the preliminary guidance through May 14 and will issue final guidance after reviewing the public comments.

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President Obama Touts Benefits of Health Care Reform

4 years ago in his weekly address, President Obama discussed the implementation of health care reform and the benefits of the legislation to young adults, retirees, and families.

Source: http://www.whitehouse.gov/blog/2010/05/08/weekly-address-health-reform-starts-kick

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Capital Thinking Podcast

As Congress returned from the August recess, lawmakers and stakeholders geared up for the first public meeting of the Budget Control Act’s Super Committee meeting on September 8.  In preparation for the Committee’s work, the House Ways and Means Committee Democrats released a list of potential health care specific cuts that the Super Committee could consider.  The compiled list was an accumulation of pay-fors that have been offered in various deficit reduction plans.  The list totals more than $500 billion over 10 years and staff confirmed the offsets have not been officially endorsed by Members.  The list included mostly Medicare focused cuts, such as accelerated home health rebasing ($3 billion) and a new home health copay ($40 billion), post acute provider market basket freeze ($14-28 billion), increased SNF cost-sharing ($21.3 billion), elimination of the rural health hospital add-on payment ($62 billion), GME cuts ($15 billion), new cost-sharing for clinical lab services ($24 billion), new Part D rebate for dual eligible and LIS beneficiaries ($120 billion), increased cost-sharing on beneficiaries with Medigap coverage ($12-53 billion), raise Medicare eligibility age to 67 ($124 billion), freeze income thresholds for high income beneficiaries and raise premiums ($13 billion) and chained CPI ($7 billion).   In a jobs-focused speech to a Joint Session of Congress, President Obama called on the Super Committee to come up with additional cuts to pay for his newly proposed American Jobs Act, such as through “modest adjustments” to Medicare and Medicaid.

As for committee action this past week, the Senate Appropriations Committee approved the Agriculture-FDA spending measure on Wednesday (HR 2112) and the Senate Health, Education, Labor and Pensions Committee advanced two health bills in a markup on Wednesday – reauthorization measures for graduate medical education at children’s hospitals (S 958) and autism research (S 1094).  Next week the Senate Committee on Health, Education, Labor and Pensions will hold a hearing on Wednesday, September 14 “Securing the Pharmaceutical Supply Chain” and the House Energy and Commerce Subcommittee on Health has scheduled a hearing on Thursday, September 15 titled, “Cutting the Red Tape: Saving Jobs from PPACA’s Harmful Regulations.”

The Obama Administration welcomed good news last week when a Virginia-based U.S. District Court of Appeals threw out two challenges to the health care reform law, the Affordable Care Act.  In a high profile case filed by the Commonwealth of Virginia by Attorney General Ken Cuccinelli, the court said that Virginia lacked standing to bring suit against the law.   The Attorney General filed the suit the day the Affordable Care Act was signed into law.  In the second case, filed by Liberty University of Lynchburg, Va., the appeals judges set aside a district court decision that the law is constitutional and ordered that the lawsuit be dismissed because the district court does not have jurisdiction to hear the challenge.  The Supreme Court is still likely to consider the constitutionality of the Affordable Care Act in the near future.

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Senators Offer Health Amendments To Trade Agreements

The Senate Finance Committee is marking up a number of trade agreements at 3pm this afternoon. The following health-related amendments have been filed to the United States-Korea Free Trade Agreement:

Rockefeller #2 – GAO study of health coverage tax credit

Hatch #19 – To ensure health care premiums are reduced by $2,500 for American families

Hatch #20 – To ensure greater health care choices for American families

Hatch #21 – To repeal the job-killing employer mandate

Hatch #22 – To repeal the job-killing medical device tax to ensure continued access to life-saving medical technologies to Americans

Hatch #23 – To restore the longstanding partnership between the States and the federal government in managing the Medicaid program (Saves $2.1 billion over 10 years, which shall be allocated to a deficit reduction trust fund.)

Hatch #24 – To ensure that taxpayer dollars are effectively used in demonstration programs implemented by the Centers for Medicare and Medicaid Services (CMS)

Hatch #25 – To close the loophole that sends taxpayer dollars to fund operational costs for abortions

Hatch #26 -To repeal the burdensome restrictions on taxpayers’ purchase of over- the counter medications

Grassley #1 – Sunsetting the Independent Payment Advisory Board (CBO informally suggested to Senator Grassley’s office that this amendment is budget neutral, having no impact within the 10 year budget window)

Kyl #4 -TAA/health care/tax- related reform

Kyl #5 -TAA/health care/tax- related reform

Kyl #6 – TAA/health care/tax- related reform

Kyl #7 – TAA/health care/tax- related reform

Kyl #8 -TAA/health care/tax- related reform

Kyl #9 -TAA/health care/tax- related reform

Crapo #1 – Ambulatory Surgical Center Update

Crapo #2 – Equalizing Radio Surgery Reimbursment (CBO scored language at a 300 million savings over 10 years)

Crapo #3 – Accountable Care Organizations Regulatory Repeal (Cost neutral)

Crapo #4 – Ensuring Access to Ambulatory Surgery Centers Same Day Services

Crapo #5 – Medicare Advantage Payment Rate Update

Roberts #4 -To prevent seniors requiring in home health care from being forced out of their homes and into institutional care

Roberts #5 -To ensure continued access to care for those of the most vulnerable populations and to enusre equitable treatment of all hospitals

Roberts #6 -To ensure valuable stakeholder comment on regulations implementing the Patient Protection and Affordable Care Act

Roberts #7 -To ensure the integrity of the Medicare program and avoid undue burden on rural home health and hospice providers

Roberts #8 -To ensure access to over-the-counter medications

Enzi #4 -An amendment to eliminate Medicaid and insurance subsidy eligiblity for early retirees

Enzi #5 -Making helath care more affordable for consumers and reducing burdens on physicians and pharmacists

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Election Analysis: What It Means for Health Care Reform

After months of debate and considerable political maneuvering, President Barack Obama signed the Patient Protection and Affordable Care Act (H.R. 3590/P. L. 111-148) into law on March 23, 2010. On March 30, 2010, the President signed into law the Health Care and Education Reconciliation Act of 2010 (H.R. 4872/P. L. 111-152), which makes select changes to H.R. 3590.

Together, these laws, known as the Affordable Care Act (ACA), are designed to expand health insurance coverage to 32 million Americans who are currently uninsured, while reining in rapidly-growing health care costs.  Health care spending is the fastest growing line item in the Federal budget. Health care premiums have doubled in the last decade and have been an increasing burden to employers and employees, as well as State and local governments.

During the 112th Congress, Members will focus their attention on the implementation of the new law. The Republican gains, expanding the bloc of conservative Republicans, resulting in the control of the House and narrower margins in the Senate will bring about a focus on repealing or modifying the Affordable Care Act.

Other forces will be at play, beyond the political makeup of Congress, that may impact the trajectory of health care reform implementation. For example, in a Florida U.S. District Court, a judge allowed a lawsuit to challenge parts of the new health care reform law brought by 20 states, the National Federation of Independent Business, and two private citizens to move forward. The plaintiffs argue that the Affordable Care Act’s mandate that individuals purchase health care insurance and the Medicaid expansion violate the Commerce Clause of the Constitution. A summary judgment hearing where both the plaintiffs and defendants will have the opportunity to argue the merits of their case is scheduled for December 16. The lawsuit is likely to be heard by the Supreme Court in the next two years. A successful challenge would be a victory for Republicans and could result in major restructuring of the law.

In addition, Republicans are expected to win 6-8 governors’ races, resulting in a majority of state executive offices being held by Republicans. Control of these offices will impact funding priorities and health care reform implementation.

While there are many factors at play, the core provisions of health care reform, namely the establishment of state insurance exchanges and premium subsidies, are likely to remain intact in the law. In addition, given the enormous fiscal pressures, many of the Centers for Medicare and Medicaid Services’ (CMS) cost-cutting initiatives are likely to move forward, despite attempts to modify or repeal the reform law. Other provisions of the law, such as the creation of the Independent Payment Advisory Board (IPAB), are more likely candidates for repeal.  Regardless of the final outcome of the elections, we expect the battles regarding the health care reform law to continue up to and through the 2012 elections.

Committees of Jurisdiction

House Ways and Means Committee

Current Chairman Sandy Levin (D-MI) is expected to retain the top Democratic post on the Committee, serving as the Ranking Member of the full Committee in the 112th Congress. Ranking Member Dave Camp (R-MI) will assume the Chairmanship. Rep. Pete Stark (D-CA) will serve as Ranking Member of the Health Subcommittee. Rep. Wally Herger (R-CA) is in line to serve as the Subcommittee Chairman; however, Rep. Charles Boustany (R-LA) may contend for the position.

House Energy and Commerce Committee

Ranking Member Joe Barton (R-TX) is term limited according to GOP rules. Although he petitioned the Steering Committee to clarify whether the Republican Party’s six-year term limit is applicable to time served in the minority, it is unlikely that he will serve as Chairman. Instead, Rep. Fred Upton (R-MI), a moderate, is expected to rise to hold the top seat on the Committee. Current Chairman Henry Waxman (D-CA) will serve as the full Committee Ranking Member.  Health Subcommittee leadership will not change. Rep. Frank Pallone (D-NJ) will retain the top Democratic seat and Rep. John Shimkus (R-IL) will serve as the Chairman of the Subcommittee. Rep. Upton has signaled that he will seek to repeal the health care reform law and prioritize passage of legislation that would permanently prevent federal funds from being used for abortions. In addition to continued oversight of health care reform, the Committee will also consider Food and Drug Administration (FDA) user fee and reform legislation.

Senate Finance Committee

Sen. Max Baucus (D-MT) will retain his position as Chairman of the Committee.  However, leadership changes are expected on the Republican side of the aisle.  Sen. Orrin Hatch (R-UT) will serve as Ranking Member while current Ranking Member Chuck Grassley (R-IA) will transition to the Judiciary Committee to be the top Republican.  In addition to monitoring health care reform implementation, Senate Finance Committee Republicans will continue to call for a hearing with the Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick, who was sworn in on July 13.  Dr. Donald 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 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.  President Obama appointed Dr. Berwick during a recess in the middle of a session, so Dr. Berwick’s appointment will expire at the end of the first session of the 112th Congress.

Senate Health, Education, Labor and Pensions (HELP) Committee

The leadership of the HELP Committee will remain unchanged. Sen. Tom Harkin (D-IA), who has served as Chairman since the death of Sen. Ted Kennedy (D-MA) in August, will remain Chairman.  Sen. Michael Enzi (R-WY) will continue to serve as the Ranking Member of the Committee. Chairman Harkin recently established a health care investigations staff team, signaling his interest in more actively overseeing FDA policies.

House Ways and Means Committee

Current Chairman Sandy Levin (D-MI) is expected to retain the top Democratic post on the Committee, serving as the Ranking Member of the full Committee in the 112th Congress.  Ranking Member Dave Camp (R-MI) will assume the Chairmanship.  Rep. Pete Stark (D-CA) will serve as Ranking Member of the Health Subcommittee.  Rep. Wally Herger (R-CA) is in line to serve as the Subcommittee Chairman; however, Rep. Charles Boustany (R-LA) may contend for the position.

House Energy and Commerce Committee

Ranking Member Joe Barton (R-TX) is term limited according to GOP rules.  Although he petitioned the Steering Committee to clarify whether the Republican Party’s six-year term limit is applicable to time served in the minority, it is unlikely that he will serve as Chairman.  Instead, Rep. Fred Upton (R-MI), a moderate, is expected to rise to hold the top seat on the Committee.  Current Chairman Henry Waxman (D-CA) will serve as the full Committee Ranking Member.  Health Subcommittee leadership will not change.  Rep. Frank Pallone (D-NJ) will retain the top Democratic seat and Rep. John Shimkus (R-IL) will serve as the Chairman of the Subcommittee.  Rep. Upton has signaled that he will seek to repeal the health care reform law and prioritize passage of legislation that would permanently prevent federal funds from being used for abortions. In addition to continued oversight of health care reform, the Committee will also consider Food and Drug Administration (FDA) user fee and reform legislation.

Major Issues Likely to Be Addressed in 112th Congress

Health Care Reform Implementation. Prior to the election, House Republican leaders, including Minority Leader John Boehner (R-OH) and Minority Whip Eric Cantor (R-VA), announced their conservative agenda should they win enough seats in the mid-term elections to regain the majority in the House.  “A Pledge to America” proposes “to advance policies that promote greater liberty, wider opportunity, a robust defense, and national economic prosperity.” The agenda offers a plan to repeal and replace the health care reform law with “common-sense solutions focused on lowering costs and protecting American jobs.” Specifically, the Republicans plan to enact medical liability reform, allow purchase of health insurance across state lines, expand tax-free Health Savings Accounts (HSAs), ensure access for patients with pre-existing conditions, expand state high-risk pools and reinsurance programs, reduce cost of coverage, and permanently prohibit taxpayer-funded abortions.

Although the Republicans were not able to regain a majority in the Senate, the new House Republican Majority is likely to pass legislation to repeal or modify the Affordable Care Act.  Republicans have acknowledged that fully repealing the health care reform law is unlikely as long as President Obama is in office and Republicans do not have veto-proof majorities in the House and Senate. Furthermore, a Kaiser Family Foundation poll found that only 31 percent of registered voters favor full repeal of the law, making such a move politically unpopular.

While the Senate is not expected to consider legislation to fully repeal the health care reform law, House action will serve to outline the problems with the health care reform law and position the Republicans to articulate market-based solutions. The Republicans will use the next two years to relay to the American public through Congressional hearings and legislative activity that in order for changes to be enacted to the Affordable Care Act, a Republican president must be elected in 2012.

According to a Congressional Budget Office (CBO) analysis, Congress must appropriate more than $115 billion in 2010-2019 for the Internal Revenue Service (IRS) and Department of Health and Human Services (HHS) administrative costs associated with implementation as well as explicit authorizations of discretionary funding.  Republicans will certainly use the appropriations process to try to slow implementation of reform and to continue the debate about health care reform and its merits.

Health Care Reform Technical Corrections. A legislative package to correct provisions of the Affordable Care Act is expected to be introduced in the 112th Congress. Although House Republicans will not be successful in repealing health care reform in its entirety, Republicans in both the House and Senate may be able to modify provisions for which popular support could be garnered:

1099 Reporting Requirement. One provision that may be included in such a legislative package would repeal or modify the requirement that all businesses issue Form 1099 to vendors from which they purchase $600 or more of goods annually and file the information report with the IRS. The requirement is effective for payments made after December 31, 2011. The requirement was included in health care reform as a revenue raising provision that will generate $17.1 billion over 10 years. Congress considered proposals during this session to either repeal or modify the requirement. Republicans are expected to focus on this requirement as a way in which the Affordable Care Act burdens small businesses.

Independent Payment Advisory Board. The 15-member board will make recommendations to Congress to reduce excess Medicare cost growth and improve quality of care for Medicare beneficiaries. If Medicare costs are projected to be unsustainable in any given year, the Board’s recommendations will take effect unless Congress passes an alternative measure that achieves the same level of savings. Republicans have proposed eliminating the authority for the Board. Liberal House Ways and Means Committee Health Subcommittee Chairman Pete Stark (D-CA) has agreed that it is a “dangerous provision” and has pledged “to work tirelessly to mitigate the damage that will be caused by IPAB.”

Patient-Centered Outcomes Research Institute. The Affordable Care Act requires the establishment of a private, non-profit institute to identify national priorities and conduct comparative effectiveness research. Republicans have decried that such research will result in government refusal to provide coverage of more costly treatment options.

Community Living Assistance Services and Support (CLASS) Program. The law authorizes the establishment of a long-term disability insurance program for adults who have at least two functional dependencies. After a five-year vesting period, the program will provide those insured under the program with a cash benefit to purchase nonmedical services, such as home modifications, assistive technology, accessible transportation, homemaker services, respite care, personal assistance services, home care aides, and nursing support. Republican Senators have introduced legislation to repeal the program and moderate Democrats voiced opposition to the program during the health care reform debate. Senate Finance Committee Chairman Max Baucus (D-MT) has indicated that he is “no fan of the CLASS Act.”

Prevention and Public Health Fund.  The law authorizes a prevention and public health investment fund to provide an expanded and sustained national investment in prevention and public health programs. Republicans have called the fund a $2 billion-per-year slush fund that supports local government projects such as building jungle gyms. Earlier this year, Senate Republicans unsuccessfully tried to use the rollback of the prevention and public health fund to offset the cost of repealing the 1099 reporting requirement.

Medicare Physician Payment “Fix.” Earlier this year, Congress passed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” which extended the Medicare physician fee fix through November 30, 2010. Without further Congressional action, physician payments will be cut by 23 percent beginning on December 1 and reduced by an additional 6.1 percent beginning January 1, 2011. The American Medical Association (AMA) has called for Congress to extend the fix for an additional 13 months through 2011. If Congress elects to move a short-term patch, Members will be forced to act again in the 112th Congress.

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Capital Thinking Podcast

Last week, as the Senate remained in session to finish up some last-minute business before the August recess, Majority Leader Harry Reid and Washington Senator Patty Murray led an effort to pass a $26.1 billion state-aid package. The measure, in the form of a substitute amendment to the Federal Aviation Administration reauthorization bill, provides $16.1 billion to state governments to put towards their Medicaid expenses. It accomplishes this by extending the increases in the Federal Medical Assistance Percentages (FMAP) for a total of six months, a provision that originated in the stimulus bill.

Republican Senators Susan Collins and Olympia Snowe provided crucial votes for the majority, enabling them to suspend debate and ultimately win passage on the amended bill. The Congressional Budget Office scored the bill as being deficit-neutral over the ten year window in part to a number of revenue-raising provisions including cuts in the food stamp program and international tax credits, as well as recessions to a wide variety of other programs. Although many of these cuts drew criticism, the bill is being praised by many states that are desperately in need of the Medicaid funds.

In wake of the Senate’s passage of the bill, House Democratic leadership announced that it would be calling members back into session this week in order to consider the legislation. House Majority Leader Steny Hoyer announced that the House will meet in pro forma session today and again at 10 a.m. on Tuesday to “vote on the bill and send it to the president for his signature.” Although many members may be reluctant to vote for another spending measure in such proximity to the upcoming elections, the fact that both of the major provisions in the bill have already been passed through the House on two separate occasions bodes well for its chances this time around.

After the final vote on the Medicaid bill, the Senate was also able to achieve passage of Senator Blanche Lincoln’s bill to reauthorize federal children’s nutrition programs, as well as a prescription drug disposal bill. Senators are scheduled to return to Washington on September 13, and will begin consideration of competing amendments to a small business bill soon thereafter. The amendments, offered by Senators Mike Johanns and Bill Nelson, would adjust IRS vendor-purchase tax reporting requirements included in the health care overhaul law. In addition, the Johanns amendment would eliminate a preventive care trust fund and decrease the requirements for mandatory health coverage beginning in 2014.

Last week also saw the release of the annual Medicare and Social Security Trustees Report, which depicted an overly optimistic view of the future of Medicare, although the validity of that report has been questioned given that the authors were all members of the current administration.

State challenges to the health care reform law also received a boost last week as a federal court rejected the administration’s request to dismiss the Virginia lawsuit questioning the law’s constitutionality. Additionally, voters in Missouri overwhelmingly supported a measure to repeal the individual mandate created in the reform law, becoming the first state to overturn a central element of the law. This could be the first in a string of such actions taken by individual states in the coming months, as there continues to be growing anxiety over the implementation of state-based insurance exchanges.

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Capital Thinking Podcast

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 4th 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.

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MedPAC Recs Revisited

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.

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Extending The Extenders Package

This week the Senate will resume consideration of the “American Jobs and Closing Tax Loopholes Act” (H.R. 4213), a substitute amendment released by Senate Finance Committee Chairman Max Baucus. The legislation would provide 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. The key difference in the health provisions of the House and Senate extenders legislation is that the Senate version includes a six-month extension through June 30, 2011 of the enhanced Federal Medicaid Assistance Percentages (FMAP) rate. Senate Republicans introduced an alternative package that reduces the deficit by $55 billion. The amendment extends the “doc fix” an additional year and provides a 2 percent increase in reimbursement levels for 2010, and additional 2 percent increases in both 2011 and 2012.  Other potential amendments filed include an extension of COBRA benefits for unemployed worker health insurance, and adjustments to the 340B inpatient discount program.

The Administration continues to promote the effects of the new health care reform law across the country. President Obama hosted a town hall meeting to announce the mailing of $250 checks to assist seniors whose drug coverage found them in the “dount hole” causing high out-of-pocket costs for prescription drugs.

Chairman of the House Education and Labor Committee George Miller introduced the House’s version of a child nutrition reauthorization bill, the “Improving Nutrition for America’s Children Act.” The legislation would authorize the Department of Agriculture to set nutrition standards for all foods sold or served at schools, as well as raise reimbursement rates for schools that meet higher nutritional standards, and improved food safety requirements for schools meals programs. Additionally, it aims to improve program administration, support services and program access and modernize the WIC program by extending period of certification for children, increasing support for breastfeeding, and transitioning from paper food vouchers to an electronic benefit program. Chairman Miller stated that the legislation mirrors key investments proposed by President Obama and First Lady Michelle Obama in her “Let’s Move” initiative, including reducing childhood obesity and improving school wellness. The Senate version has already been considered by the Senate Agriculture Committee and awaits floor time.

This week, the Health Subcommittee and the Oversight Subcommittee of the House Ways and Means Committee will hold a joint hearing on reducing fraud, waste and abuse in Medicare on Tuesday, and the Health Subcommittee of the House Energy and Commerce Committee will hold a hearing titled “NIH in the 21st Century: The Director’s Perspective” also on Tuesday.

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CMS Releases FAQ Document Regarding ACOs

The Patient Protection and Affordable Care Act requires the Secretary to establish Accountable Care Organizations (ACOs), which will enable care coordinate among providers, by January 1, 2012. ACOs that meet quality targets and reduce the costs of their patients by coordinating items and services under Medicare Part A and Part B are rewarded with a share of the savings they achieve. Physician groups, hospitals, nurse practitioners and physician assistants, and others can participate in ACOs.

The Centers for Medicare and Medicaid Services (CMS) has relayed that while specific quality performance standards will be determined by the Secretary, ACOs will be measured on clinical processes and outcomes of care, patient experience, and utilization of services.

In a Frequently Asked Questions document, CMS stated that the Agency will host an Open Door Forum this summary and will post details of the session by June 11 on its website: http://www.cms.gov/OpenDoorForums/05_ODF_SpecialODF.asp#TopOfPage.  A Notice of Proposed Rulemaking is expected to be released in the fall.

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