WASHINGTON WIRE

November 2, 2007
Issue 151

In this issue, you'll find:

CMS Publishes Final Physician Payment Rule

House Committee Examines Controversial Medicaid Regulations

Top Story

CMS Publishes Final Physician Payment Rule

On Thursday, the Centers for Medicare and Medicaid Services released the 2008 final Medicare physician payment schedule which will be published in the November 27, 2007 Federal Register.

The final rule states that Medicare reimbursements to physicians will decrease by 10.1% in 2008 as a result of the statutorily-based sustainable growth rate (SGR) formula. The proposed rule, published in July, estimated payments would decrease by 9.9%.

The final rule also outlines measures for the Physician Quality Reporting Initiative (PQRI) which provides payment incentives to physicians who report on quality measures to CMS. Medicare will use a $1.35 billion set-aside fund to pay for the PQRI.

Physician groups, including the American Medical Association (AMA), continue to urge lawmakers to enact legislation this year that would prevent the 10.1% cuts to reimbursement. The House has approved legislation that would provide doctors with a 0.5% payment bump each year for the next two years. The Senate has not yet acted on the Medicare physician reimbursement issue but has said it will likely consider a 1-2 year temporary fix.

Health Care News

House Committee Examines Controversial Medicaid Regulations

The House Committee on Oversight and Government Reform held a hearing this week to address a series of regulations from the Centers for Medicare and Medicaid Services (CMS) to cut approximately $11 billion from the Medicaid program. The targeted regulations would find savings from the Medicaid rehabilitative services option, Medicaid graduate medical education (GME) spending, and Medicaid-reimbursed school-based services.

Witnesses at Thursday's hearing included Dennis Parella, chairman of the National Association of State Medicaid Directors (NASMD), who told the Committee that he is opposed to the pending Medicaid cuts. He stated that such drastic cuts would impact vulnerable populations, such as individuals with disabilities and under/uninsured individuals, in the middle of what some consider a national health care crisis.
Another witness with bipolar disorder, Barbara Miller, stated that the rehabilitative services she was provided under Medicaid helped her achieve independent living after living in an institutional setting for years. Miller stated that the vital services she received would be reduced or eliminated under CMS' proposed regulation to cut $2.2 billion from the Medicaid rehabilitative services option.

CMS Administrator, Dennis Smith, also testified at the hearing and was criticized by Chairman Henry Waxman (D-CA) for overstepping CMS's authority in making changes to the Medicaid program that should be considered by Congress through the legislative process, rather than through the Administration's regulatory process. Smith stated, however, that the proposed rules are simply attempting to protect the fiscal integrity of the Medicaid program. He argued that some states are pushing the envelope and billing services to Medicaid that are not considered allowable under the program.

Senate Approves Revised SCHIP Bill

On Thursday, the Senate approved revised legislation to reauthorize the State Children's Health Insurance Program (SCHIP), after the House approved identical legislation last week.

In early October, the President vetoed legislation to reauthorize SCHIP and invest an additional $35 billion over five years in the program. The House subsequently failed to override the veto. The President has stated he will veto the revised SCHIP bill as well.

Last week, House leaders took a revised SCHIP bill to the floor that they hoped would appease additional House Republicans. However, despite passing the measure, the House again failed to secure the necessary two-thirds majority needed to override the expected veto.

Senate leaders had hoped to delay their vote on the revised SCHIP bill until next week to allow for continued negotiations between supporters in the Senate and GOP opponents in the House. Senate leaders were considering offering amendments to the revised SCHIP bill that would attract the support of additional Republican House members, but Senate opponents of the bill forced a vote on Thursday. The Senate approved the legislation by an expected veto-proof vote of 64-30 without making any of the changes to the legislation that could have garnered additional House votes.

Congressional leaders have agreed not to attempt an override of the revised SCHIP bill, but will instead continue to work with negotiators to reach a compromise on SCHIP reauthorization.

Upcoming Events

Hearings

Tuesday, November 6, 2007

VA Medical Facilities
Senate Veterans' Affairs Committee
10 a.m., 562 Dirksen

Wednesday, November 7, 2007

Drug Resistant Infections
House Oversight and Government Reform Committee
9:15 a.m., 2154 Rayburn

Thursday, November 8, 2007

Medicare Reimbursement Reductions
House Small Business - Subcommittee on Regulations, Healthcare
and Trade
11 a.m., 2360 Rayburn

Veterans' Benefits Bills
House Veterans' Affairs - Subcommittee on Disability Assistance and Memorial Affairs
2 p.m., 334 Cannon

For More Information

For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call 202.466.6550 and ask for the Legislative Practice Group.

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