WASHINGTON WIRE
January 9, 2009
Issue 185
MedPAC Finalizes 2010 Payment Recommendations
HELP Hearing Provides Glimpse of Daschle's Vision for Healthcare Reform
House Expected to Consider SCHIP Next Week
CMS Moves Ahead with Bundling Demo
Top Story
MedPAC Finalizes 2010 Payment Recommendations
In its public meetings held January 8-9, the Medicare Payment Advisory Commission decided to recommend an increase in Medicare reimbursements for physicians in 2010 by 1.1 percent. To obtain the 1.1 percent pay hike, a "productivity goal" of 1.3 percent was subtracted from a forecast of input price inflation of 2.4 percent.
A continuing issue for overall physician reimbursement in 2010 is the sustainable growth rate formula which requires a 20 percent cut. In 2008 Congress enacted a law preventing a 10.6 percent Medicare pay cut for physicians, effective July 1, 2008, from being implemented and replacing it with a payment freeze for the rest of 2008 and a 1.1 percent pay hike for 2009 (which replaced a scheduled 5% cut for that year as well). Congress is expected to consider again canceling a scheduled pay cut for physicians due in 2010 at the end of this year.
In addressing ongoing concern with inadequate payments to primary care physicians, MedPAC will also reissue an unimplemented recommendation from its June 2008 report in the March 2009 report. It will call for Congress to "establish a budget-neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary-care-focused practitioners."
In addition to recommendations for physician payment updates, MedPAC also recommends that Congress should increase payment rates for ASC services in 2010 by 0.6%. For Inpatient Rehabilitation Facilities, MedPAC recommended Congress forgo an update for 2010.
Finally, MedPAC adopted a series of recommendations to reform the hospice payment system to focus increased payments at the beginning of admission and at the end of life. The new system would eliminate the current financial incentives associated with a prolonged period of stay.
Health Care News
HELP Hearing Provides Glimpse of Daschle's Vision for Healthcare Reform
HHS Secretary-Designate Tom Daschle described part of his vision for healthcare reform at a Senate Committee on Health, Education, Labor and Pensions nomination hearing Thursday, Jan. 8.
"I think we need to change the paradigm in this country on health," Daschle told the committee. "The paradigm needs to be changed from illness to wellness."
"I look at health care as a pyramid," Daschle continued. "At the base of the pyramid you have primary care and you work your way up where you get more and more sophisticated until you get to the very top and you have heart transplants and MRIs. Every country starts at the base of the pyramid with primary care and they work their way up until the money runs out. We start at the top of the pyramid and we work our way down until the money runs out. And the money runs out. And so few people get good primary care and wellness. We have to change the pyramid. We have to start at the base."
Committee Ranking Minority Member Sen. Mike Enzi (R-WY) gave some insight into Republican opposition to the incoming administration's plans for health reform. Specifically, Enzi spoke out against expanding public programs to expand insurance coverage and said new coverage should be provided by private health insurance. President-elect Barack Obama has proposed a new public option as an alternative to private insurance and Senator Finance Chair Max Baucus (D-MT) has proposed expanding Medicaid eligibility to all Americans at or below the federal poverty line.
The Senate Finance Committee, which has the authority to confirm Daschle, will soon hold a hearing for Daschle.
House Expected to Consider SCHIP Next Week
Legislation to reauthorize the State Children's Health Insurance Program (SCHIP) could come to the House floor as early as next week. While Senate Democrats are working towards a comprehensive health reform measure, House Democrats appear to favor a more piece meal approach towards coverage expansion.
The House bill is likely to include an expansion of SCHIP, which is currently funded to cover about 6 million children. In 2007, Congress attempted to increase funding for the program by $35 billion, but was unable to override President Bush's veto. President-Elect Barack Obama, who said during his campaign that he supported universal health care coverage for children, would likely sign similar legislation.
House Blocks Medicare Trigger
On Monday, Jan. 6, the House passed a resolution suspending the so-called Medicare "Trigger," which is a provision in the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The provision required the President to propose ways to limit the amount of general revenues spent on Medicare once more than 45 percent of general revenues were spent on Medicare in two successive years. The trigger was first activated after the Medicare Board of Trustees released their 2007 annual report.
CMS Moves Ahead with Bundling Demo
On Tuesday, Jan. 6, CMS announced site locations for its Acute Care Episode (ACE) demonstration program that will bundle Medicare payments for hospital and physician services. The sites are: Baptist Health System in San Antonio; Oklahoma Heart Hospital LLC in Oklahoma City; Exempla Saint Joseph Hospital in Denver; Hillcrest Medical Center in Tulsa, OK.; and Lovelace Health System in Albuquerque, NM. ACE, scheduled to begin this year, will include 28 cardiac and nine orthopedic inpatient surgical procedures.
Upcoming Events
Hearings
Wednesday, Jan. 14
HELP Nominations
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen Bldg.
Thursday, Jan. 15
Investing in Health IT
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen Bldg.
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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