Posturing Continues as Fiscal Cliff Deals Loom

Partisan wrangling continued last week as leaders in the House and Senate sparred over emerging details of a plan to avert the nation’s so-called fiscal cliff. In a meeting capitol webwith Treasury Secretary Timothy Geithner, House Speaker John Boehner (R-OH) shot down the Obama Administration’s “two-stage” proposal that would raise $1.6 trillion in tax revenue, reduce federal spending and prevent the 27% reduction in Medicare physician payments in 2013 through legislation by the end of 2012. The second part of this plan would then cut $400 billion from Medicare and other mandatory federal health programs and provide additional economic “stimulus” under federal programs in 2013.

Republicans have indicated any deal that contains proposals to raise the effective tax rates on top income earners without any serious proposals to reform entitlement programs such as Medicare and Social Security were non-starters. Instead, some Republicans have thrown their support behind a 10-year deficit reduction plan that has been recently proposed by Senator Bob Corker. In Corker’s plan, Medicare spending would decline by $641 (including by raising the eligibility age to 67 by 2027, combining the Part A and B programs, limiting DME payments, phasing-out Medigap policies, but also providing a two-year SGR fix) and Medicaid spending would decline by $70 billion (including by phasing out provider taxes and streamlining the waiver process.)

In a counter offer, Speaker Boehner and other House Republican leaders sent a letter to the White House outlining their proposal to cut $2.2 trillion dollars from the debt. The House proposal would reduce the debt by cutting $900 billion from Medicare and Social Security cost of living adjustments and would raise tax revenues by $800 billion through tax reform. The Speaker’s letter can be found here.

Lawmakers have little time to come up with a deal to avert $607 billion in automatic tax increases and spending cuts scheduled to begin in January — a scenario that could put the economy back into a recession.

NASS continues to monitor the developments of a pending fiscal deal and will report on any important information as it becomes available.

Path Unclear on Sustainable Growth Rate Patch

Last week, House Republicans unveiled a proposal to pay for a one-year Medicare ‘doc fix’ by cutting Medicare pay for outpatient evaluation and management (E&M) services and eliminating the health reform law’s Medicaid pay hike for primary care services. The E&M measure is estimated to save $8 billion over 10 years, while savings from the primary care pay would amount to $15 billion. Together, the savings would be $23 billion, just short of the $25 billion cost of delaying the 27 percent pay cut physician reimbursements.

While President Obama’s proposal also includes a one-year fix, the plan lacks details in identifying specific pay-fors to offset the costs of an SGR patch. In a statement last week, the President urged Congress to include a short-term patch for the SGR into the fiscal cliff by the end of 2012 and then come up with offsets in 2013, as part of a broader Medicare package that is estimated to cut $400 billion over the next several years.

Sources inform NASS that while Congress is expected to pass a short-term fix before the end of this year, the duration of this fix is still unknown. In a recent telephone town hall conference with NASS, Congressman Michael C. Burgess, MD (R-TX) said that while he supported a two-year fix, the reality is that Congress could only muster enough support to pass a one-year fix. In addition, Dr. Burgess indicated that some physicians groups have been proactively lobbying Congress to pass a short-term, three-month patch, in what appears to be an effort to force Congress’ hand to replace the SGR early in the next Congress.

NASS continues to be engaged with Congress and the Alliance on the SGR negotiations and will continue to provide important updates on this issue as they become available. NASS and the Alliance will be circulating a letter on Capitol Hill urging Members of Congress regarding the SGR in the coming days.

If you missed the telephone town hall with Congressman Burgess on November 27, a recording of the event can be found here.

ACA’s Sunshine Act Rule Gets Final Review

In December 2011, Centers for Medicare and Medicaid Services (CMS) published a proposed rule, the Physician Payments Sunshine Act, which beginning next year will require “applicable manufacturers of drugs, devices, biologicals or medical supplies covered by Medicare to report annually to the secretary of health and human services certain payments to physicians.” The government would then make the collected data available on a public website.

The final rule, Transparency Reports and Reporting of Physician Ownership of Investment Interests, has been received by the Office of Management and Budget, which is the last step before the rule becomes fully implemented by CMS.

To access a copy of the final rule, please click here.

OIG Report Indicates CMS Facing Roadblocks in EHR Oversight

The Department of Health and Human Services Office of Inspector General released a report last week that found CMS is facing significant obstacles in its oversight of the Medicare Electronic Health Records (EHR) incentive program. The report, titled Early Assessment Finds that CMS Faces Obstacles in Overseeing the Medicare EHR incentive program, highlights the programs vulnerability to “paying incentives to professionals and hospitals that do not fully meet the meaningful use requirements.”

Among others, the Inspector General’s report recommended that CMS take extra steps collecting “documentation from selected professionals and hospitals prior to payment to verify the accuracy of their self-reported information and issue guidance with specific examples of documentation that professionals and hospitals should maintain to support their compliance.”

CMS is expected to reimburse physicians and other providers nearly $6.6 billion in payments between FY 2011 and FY 2016 to adopt electronic
health records that meet the goals of the program. To qualify for incentive payments, providers must demonstrate that the systems lead to better patient care or “meaningful use.”

To access the full report, please click here.

Medicare Quality Measurement Entities Announced

Last week, CMS announced that three health care quality organizations have been selected to gather provider quality reports under the Affordable Care Act’s “Availability of Medicare Data for Performance Measurement Program.” These entities are charged with working with providers/insurers to collect data and evaluate the performance of providers/suppliers and making this information public to help consumers.

More information on this program can be found here.