President Signs Legislation to Avert Deep Cuts to Medicare Providers

On January 2nd, the President signed into law legislation that averted the fiscal cliff, which included measures to delay deep cuts to Medicare physician payments. capitol webThe bill, HR 8 “American Taxpayer Relief Act of 2012,” was negotiated and passed in the Senate by an 89-8 vote early Tuesday before being it passed by 257-167 vote in the House. This legislation will give a one-year delay to the scheduled 27% cuts to Medicare payments to physicians by temporarily overriding the Sustainable Growth Rate (SGR).

According the Congressional Budgeting Office (CBO), the cost of the patch will be $25 billion over 10 years and will be offset by savings from the Medicare program that are estimated to be $25.7 billion over the same period. The savings to cover the cost of the one-year extension includes, for example: $10.5 billion from projected Medicare hospital payments over 10 years for inpatient or overnight care; $4.9 billion by rebasing End Stage Renal Disease (ESRD) payments; $300 million reduction in advanced imaging payments and $1.7 billion by eliminating the Medicare Improvement Fund.

Other health-related provisions in HR 8 include:

•Extension of Geographic Work Adjustment through December 31, 2013

•Delay of the scheduled 2 % cut in Medicare payments to physicians as a result of the Budget Control Act (sequestration) for two months

•Measures to create paths to improve the provision of relevant and timely data to physicians needed in new delivery and payment models

•Allowing physician participation in clinical registries to meet Medicare quality reporting requirements; and

•Reauthorization of funding for National Quality Forum for one-year

Sources inform NASS that negotiations are currently underway between House and Senate leaders to address upcoming budget battles, including pending cuts to Medicare providers as a result of sequestration. Sources also indicate that the temporary SGR patch may delay immediate Congressional action in permanently repealing the SGR this year.

To view how your House Representative voted on HR 8, please click here.

Medicare Claims Processing and the Fiscal Cliff

Last month, the Centers for Medicare and Medicaid Services (CMS) announced tentative plans to proceed with paying 2013 Medicare claims as they are received if Congress did not pass legislation prior to January 1 to prevent the 27% cut in Medicare payments to physicians based on the SGR.

In the past, CMS held claims until Congress passed a patch to prevent significant cuts. However, while CMS has not indicated they will hold claims in 2013, they do have flexibility to fix claims when a patch is passed retroactively. CMS does not pay electronic claims sooner than 14 days after receipt and 29 days after receipt of paper claims, allowing for flexibility since Congress passed a patch late on January 1.

Medicare carriers are not expected to post new 2013 payment rates until mid-January and it is recommended that physicians hold their claims until that time to minimize incorrect payments. An alternative option is to submit claims with 2012 rates and request any necessary adjustments once the new rates are made available. Additionally, CMS has indicated the 2013 Medicare conversion factor (CF), the monetary amount that is used to calculate base Medicare payment amounts from relative value units (RVUs), will be $34.0230.

CMS Considering ACO Specialty Demo

The Centers for Medicare and Medicaid Services (CMS) announced last week that it would consider allowing specialties to operate Accountable Care Organizations (ACO’s) despite built-in preference within the Affordable Care Act (ACA) for these organizations to be run by primary care physicians.

CMS’ Principal Deputy Administrator Jonathan Blum made the announcement citing that many specialties act as the “primary-care” provider for their patients. Under the law, ACO’s can include specialties. However, these groups may not act as the main drivers of the organizations.

House Passes Rule to Block IPAB Implementation

Last week, the House of Representatives passed a rules package that included a measure avowing that the House would not be required to carry out any cost-cutting recommendations by the Independent Payment Advisory Board (IPAB).  The resolution, H. Res. 5, states that the “ACA’s requirements will not apply to the One Hundred Thirteenth Congress,” a sign that the Republican-led House will attempt to bypass the panels Medicare reductions.

Under the Affordable Care Act, the IPAB can make a set of recommendations for lowering payment rates, treatments and medications, which can take effect if Congress is unable to pass equivalent savings on its own. At this time it’s unclear whether the House rules will stand as this approach will likely be challenged in court.

HHS Approves 8 Additional State-Exchanges

The Department of Health and Human Services announced last week that it has approved eight additional state health exchanges. The recently approved states are California, Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah. Arkansas will operate a joint program with the federal government. In total 19 states, including Washington, DC will operate exchanges.