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President Sends “Trigger” Proposal to Congress
Finance Committee Urges Medicare to Further Regulate Private Plans
CMS Issues List of Underperforming Nursing Homes
Hearings

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President Sends "Trigger" Proposal to Congress

The Bush administration sent a Medicare proposal to Congress today in compliance with a Medicare "trigger" provision included in the Medicare Modernization Act of 2003 (MMA).

The provision requires the President to propose, and Congress to consider, changes to the Medicare program whenever Medicare spending exceeds certain budgetary thresholds in consecutive years, as has happened in each of the last two years. While this is the first time the administration and Congress have been forced to respond to the MMA trigger, Medicare spending is expected to continue to exceed the trigger threshold in future years. The MMA dictates that Congressional Committees of jurisdiction respond by reporting their own version by June 30 and if they do not, any member can offer a privileged motion calling for a floor vote on the president's proposal.

The President's proposed legislation has 3 sections addressing value-based healthcare proposals, medical malpractice reforms, and means-testing reductions in premium subsidies under the Medicare Part D prescription drug program. The value-based section includes provisions requiring development of health information technology for electronic medical records and e-prescribing, pricing and service quality transparency, patient access to provider information and access to Health Savings Accounts (HSAs). It also includes a pay-for-performance system to be first implemented for providers where these system measures are already well-established, such as with doctors and hospitals.

Health and Human Services (HHS) Secretary Leavitt said the bill is intended to begin to transform Medicare and should be enacted along with the Administration's fiscal year (FY) 2009 budget that cuts $178 billion from the Medicare program. Congressional Republicans are expected to use this proposal as evidence of a broken Medicare program while Democrats are expected to decry this and the budget proposal as first steps to dismantling and even privatizing the Medicare program. Democrats are expected to address the trigger in a larger Medicare package some time later this Spring.

Health Care News

Finance Committee Urges Medicare to Further Regulate Private Plans

At a Senate Finance Committee hearing this week, Centers for Medicare and Medicaid Services (CMS) Acting Administrator Kerry Weems, stated that the agency will be taking Administrative action in the coming weeks to address abuses by Medicare Advantage (MA) plans.

These private Medicare plans have been targeted by the Finance Committee and others in Congress on a number of issues, including controversial marketing practices. This was the third hearing the Finance Committee has held this year on MA plans as the leadership prepares for a likely Medicare bill and a broader Medicare reform debate.

Weems acknowledged that abuses are taking place and that the agency is considering several options to reign in such abuses, but did not go into detail on such regulatory changes. He expressed his opposition however, to providing states with more enforcement authority over the MA plans, stating that the state enforcement model would make plans more difficult to administer.

Weems also stated that an increase in the agency's current operating budget would allow more audits of these plans to take place.

Chairman Baucus (D-MT) questioned whether the agency will take a strong regulatory posture on this issue, but urged the Acting Administrator to offer and enforce more guidelines.

CMS Issues List of Underperforming Nursing Homes

On Tuesday, the Centers for Medicare and Medicaid Services (CMS) publicly released a list of nursing homes identified in the agency's Special Focus Facilities (SFF) program. The SFF program is designed to identify underperforming nursing homes.

The list is posted on the CMS website and will be updated quarterly, according to the agency. Nursing homes included in the list are subject to twice the number of standard surveys and are monitored until demonstrating 12 months of progress, or until they are dropped from the Medicare or Medicaid programs.

Meanwhile, Senate Finance Committee Ranking Member Charles Grassley (R-IA) and Senator Herb Kohl (D-WI) introduced legislation this week to require additional information regarding nursing homes to be posted on CMS' "Nursing Home Compare" website, including ownership information, complaint forms, and links to inspection reports. The bill would also require reporting of the nursing home direct service staff and increased penalties for quality deficiencies. A similar bill is expected to be introduced in the House shortly.

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