Health Policy Blogger by Peyton Howell

CMS Issues Proposed 2012 Medicare Physician Fee Schedule --- Dramatic Cut to Physician Reimbursement if Congress does not act

2011-11-02T14:41:00.000-07:00

Unless Congress intervenes (yet again), physicians will incur a 27.4 percent reduction in Medicare payment rates Jan. 1 2012, according to the Center for Medicare & Medicaid Services (CMS) final rule released yesterday. This cut is actually a bit smaller than the the 29.5 percent CMS estimated in March due to reduced physician visits but is clearly a threat of a massive, unsustainable cut.

"This payment rate cut would have dire consequences that should not be allowed to happen," CMS Administrator Dr. Donald M. Berwick said in a press release. "We need a permanent SGR fix to solve this problem once and for all." The American Medical Association (AMA) released a similar statement decrying the cuts and repeating its call for a solution. "Payments for Medicare physician services have fallen so far below increases in medical practice costs that there is a 20 percent gap between Medicare payment updates and the cost of caring for seniors," AMA President Dr. Peter W. Carmel said. He continued, "The Joint Select Committee on Deficit Reduction must include repeal of the formula in their recommendation to Congress to protect access to care for seniors and stabilize the Medicare program."

Other changes were announced in the rule but most none as significant as this issue including:

Increases in payments for Medicare beneficiaries' Annual Wellness Visits to reflect the additional office staff time required to administer a health risk assessment in conjunction with the visit

Continuation of CMS's "misvalued code initiative," focusing on codes billed by physicians in each specialty that result in the highest Medicare expenditures under the fee schedule

Changes to the way CMS adjusts payment for geographic variation in the cost of practice

Reduction in payment for a second advanced imaging service provided by the same physician on the same day

Expansion of covered telehealth services, including smoking cessation

The final rule will appear in the Federal Register Nov. 28 but the real action will be to see when and if Congress will address the SGR issue in at least another temporary way.

Accountable Care Organizations (ACOs) -- A model that is emerging for the long-term but hard to implement in the short-run

2011-05-25T09:29:00.000-07:00

CMS Announces New Options for ACOs
Last week, CMS announced several new options for implementing accountable care organizations (ACOs). These new options provide incentives for providers to develop or join ACOs earlier than the original start date (January 1, 2012) and to receive upfront bonus payments. ACOs were established as part of health care reform to incentivize the development of networks of providers to collaborate and coordinate services to deliver higher-quality care to Medicare beneficiaries. By delivering care that meets certain quality measurements, ACO-affiliated providers can receive CMS-issued bonus payments.

The new options to facilitate ACO development that were proposed are:
1. Pioneer ACO Model -- CMMI is now accepting applications for this new ACO model, which will provide a faster path for existing ACOs and integrated-care organizations than under the Medicare Shared Savings Program start date of January 1, 2012. Pioneer ACOs will be able to collaborate with private payers and achieve greater savings by transferring to a population-based model in the third performance year (given satisfactory performance during the first 2 years of operation). CMS will hold these organizations financially liable for delivered care and will publicly report their performance.
2. Advance Payment ACO Initiative -- CMMI proposes to allow ACOs to receive a portion of shared savings (ie, bonus payments) upfront before CMS begins contracting with ACOs in 2012. These upfront payments will help providers make necessary infrastructure and staffing investments that are the backbone of successful ACOs. CMS plans to recoup these advanced payments through ACOs' shared savings once they become operational. Comments for this initiative should be submitted to advpayACO@cms.hhs.gov by June 17, 2011.
3. Accelerated Development Learning Sessions -- CMS will offer educational sessions to inform providers about the necessary steps to becoming a successful ACO. These free sessions will provide information about actions providers can undertake to improve delivery of care and to achieve better-coordinated care. CMS will offer 4 sessions in 2011, each with a focused curriculum on ACO development. To attend the June Accelerated Development Learning Session in person, individuals may register at https://acoregister.rti.org.

Many healthcare stakeholders believe CMS released these new options in response to the strong criticism facing the ACO proposed rule. Provider reaction to these new options is still unclear and many providers remained fundamentally concerned about the ability of these models to positively impact the quality and outcome of care.

So what does an ACO mean to a physician, nurse or pharmacist in your community? At this point its not clear but many analysts are projecting these new care models will develop more locally through the expansion of existing integrated delivery systems. There is hope that eventually these models will allow very different models for care including expanded roles of physician assistants, nurse practitioners and pharmacists.

So as a patient, will I know if I am in an ACO? The answer is a "maybe". In fact we know that in Massachusetts, the ACO model has grown but patients often do not know they are part of an ACO. Its often "not obvious" that you are being served by an ACO which in many ways is a positive sign that care is not being inappropriately restricted -- but questions remain on how ACOs impact care for disease states like cancer.

Like many parts of health care reform implementation -- we are just beginning to see how this might work and what it might mean for patients.

CMS Announces a Delay to Implementation of Short-Cycle Dispense Component of HCR

2011-04-06T12:42:00.000-07:00

CMS issued an important delay and change to much anticipated short-cycle dispensing rules today. Specifically CMS has delayed this part of health reform implementation until 2013 (a one-year delay) and also expanded the maximum increment for dispensing Medicare Part D covered solid oral brand drugs to beneficiaries residing in long-term care facilities (LTCFs) from 7 days to 14 days.

This is an important change and delay that industry advocates have requested given concerns about new costs related to dispensing. However at this time CMS has not opted conduct a pilot study to assess the impact and effectiveness of short-cycle dispensing. CMS did however go forward with eliminating the requirement for returning unused drugs back to the pharmacy for ultimate disposition. CMS cited conflicts with existing state and federal regulations for hazardous waste and controlled drug disposal.

Will this Congress Correct ASP Reimbursement?

2011-03-04T08:52:00.000-08:00

Good news this week in the ongoing struggle to clarify reimbursement of drugs administered in the physician office and outpatient setting. Specifically, Congressmen Whitfield (R-Ky.) and Green (D-Texas) introduced H.R. 905 a bill to amend part B of title XVIII of the Social Security Act to exclude customary prompt pay discounts from manufacturers to wholesalers from the Average Sales Price (ASP) for drugs and biologicals under Medicare.

If passed, this legislation would be one important step to improving the consistency, accuracy and adequacy of reimbursement for infused and injected drugs administered in the physician office and clinic settings. The change is particularly important since ASP is now used as a basis for reimbursement by most payers, not just Medicare. This is one of several key changes Congress can make to correct and improve reimbursement for outpatient treatments and support patient access to care.

What can we do to expand patient access to primary care?

2011-02-10T10:37:00.000-08:00

The lack of investment in primary care physicians and mid-level professionals is expected to be a challenge moving forward. Its clearly a challenge to managing the costs of health care in the future. In reality we already have a primary care shortage in many parts of the country including rural and low-income urban areas.

Today, at a 340B related conference in San Diego, Dr Mary Wakefield, Administrator, Health Resources & Services Administration emphasized the investment of the Health Reform (Affordable Care Act) in ensuring primary care physicians are encouraged and funded to work in under served communities, also investments in pharmacy care services in these communities are being funded to help patients have access to care. Programs and changes are rolling out now to help those who previously did not have access in rural and remote communities to have more choices.

The hope is these investments will address the projected gaps in access to primary care resources. Suggestions we have heard include:

Expanding the role and reimbursement of pharmacy care services to support patient education and adherence. Medication Therapy Management (MTM) is a beginning but it needs to be expanded and modest reimbursement to pharmacists could create dramatic savings. Many of the Pharmacy Associations (like APhA) are leading the way with such models.
Expand the role of community pharmacy to include a wide range of injections. This year we have seen a dramatic increase in the role of pharmacists as the leading site for patient flu shots but clearly many other types of injections could easily and conveniently be provided in the community pharmacy setting with appropriate coverage and reimbursement (including Medicare and Medicaid).
Expanding the role and appropriate reimbursement for mid-level providers such as nurse practitioners and physician assistants could dramatically expand access to primary care.

House and Senate both Pass a 1-year "Doc Fix" to Avoid Reimbursement Cuts

2010-12-09T10:48:00.000-08:00

Breaking news today. The House has just passed the 1-year correction to the Sustainable Growth Rate (SGR) issues that threaten to reduce Medicare reimbursement to physicians by 25% starting on January 1st. The President is expected to sign the measure into law by tomorrow. This is welcome news as it will avoid the type of drama we experienced in 2010 with fee cuts being threatened several times during the year which created a messy patchwork of temporary corrections.

This provision would reverse that reduction and extend current Medicare payment rates through December 31, 2011. The estimated cost of the provision is $14.9 billion over ten years. Please note this is a 12-month fix so this issue has not yet been permanently addressed and given the high price tag to "avoid a pay cut" it remains an issue that is very difficult to explain to Mainstreet USA but has gone on for far too many years (and now across two different administrations). We can only hope that Congress will do what's right and create a permanent fix next year well in advance of the December 31st 2011 deadline.

President signs 1-month SGR Fix -- Congress must work to avoid a Jan 1 Medicare Reimbursement Cut

2010-12-03T06:05:00.001-08:00

Some good news and some work to be done. This week, President Obama signed a 31-day Medicare physician payment extension that will temporarily postpone a 23% reduction in the payment rate. The Senate passed the one-month payment extension on November 18, and the House passed the measure on November 29. The temporary patch extends the current Medicare payment rate until December 30, and, as such, postpones the 23% reduction called for by the sustainable growth rate (SGR) formula that was scheduled to take effect December 1st.

However more work remains for this Congress before they can recess. Without further congressional intervention, the payment cut will grow to more than 25% on January 1.
Senate Finance Committee leaders this week continued the effort they started prior to the Thanksgiving recess to pursue legislation to affect a year-long patch to prevent the Medicare payment cut scheduled to go into effect January 1. The current projected cost of a 12-month fix that many expect to be included in a Medicare “extenders package” favored by Senate Finance Committee Chair Max Baucus (D-MT) is nearly $20 billion. As yet, funding offsets to pay for a 12-month patch and any extenders that many be included in future legislation have not been revealed. Both parties appear to be working to try to address this issue for 2011 during this lame duck Congress rather than returning home to their districts with a reimbursement reduction starting on January 1st.

It is important that Congress act on this issue now and avoid a potential issue or gap in reimbursement in January that could impact Medicare beneficiary access to care and would certainly jeopardize the financial stability of some physician clinics.

Senate Passes 31-Day Medicare Physician Patch; House Action Needed After Thanksgiving

2010-11-20T16:26:00.000-08:00

Before the Thanksgiving break, the Senate passed a measure that would create a 31-day payment "patch" to the Medicare sustainable growth rate (SGR) formula and temporarily stave off the 23% cut to physicians scheduled to take effect December 1. The legislation, called the Physician Payment and Therapy Relief Act of 2010, would continue the existing 2.2% update (expiring November 30, 2010) for an additional month through December 31, 2010, and would fully offset the cost.

The one-month physician payment update comes with a price tag of $1 billion over 10 years. The Senate's proposal would offset the cost of the patch by modifying the multiple payment procedure reduction (MPPR) finalized in the calendar year (CY) 2011 Medicare Physician Fee Schedule Final Rule by applying a 20% reduction, rather than the 25% reduction included in the final rule, to the practice-expense component for the second and subsequent outpatient physical therapy services furnished in the office setting.

The month-long patch was announced as part of a two-part deal agreed to yesterday by Senate Finance Committee leaders who will pursue a payment fix through 2011 after they win approval of the patch through 2010. The Senate's proposed fix follows lobbying by the Obama administration and physician and advocacy groups to enact a 13-month payment patch.

The House, already adjourned for the Thanksgiving recess, will take up the measure when it reconvenes, which would then prevent the December 1st reimbursement cut physicians will otherwise face. However, this 31-day fix leaves Congress with a great deal of work remaining to prevent the additional cuts that would otherwise go into effect after January 1st.

Will Medicare Part B and Part D come together?

2010-10-29T12:46:00.000-07:00

A new CMS study released last week has revived discussions about consolidation of the Medicare Parts B and D benefits. Many of the these studies were recommended back in 2004 as part of MMA and indeed they would offer some cost savings to the Medicare program. However, there are also dramatic differences in the coverage and copayments associated with these benefits.

According to a new CMS report, consolidating benefits for three drug cohorts (anticancer, pumped insulin, and nebulizer inhalants) covered by Medicare Part B and Part D under Part D could save Medicare nearly $150 million annually, while consolidating three different drug cohorts (vaccine, injectable insulin, and metered-dose inhalers) under Medicare Part B could increase Medicare spending by $52 million annually. Medicare is considering combining payment and coverage for certain drugs under either the Part B program or the Part D program partially because of the administrative complexity of the B versus D determination process for pharmacies and medical providers.

The report, "Estimating the Effects of Consolidating Drugs under Part D or Part B, " found that while consolidation under Medicare Part D could save Medicare money, it would impact Medicare beneficiaries adversely. Because Part D has "less generous coverage rules," switching the Medicare coverage of drugs from Part B to Part D would cost beneficiaries roughly $267 in added out-of-pocket expenses. But for many specialty products the increase in patient out of pockets is dramatically higher given most Medicare beneficiaries have Medigap (or Medicare Supplemental Insurance) that covers Part B out of pocket costs for such services.

Kaiser Survey Shows Dramatic Growth in Pharmacy Copayments

2010-09-14T11:39:00.000-07:00

The Kaiser Family Foundation and the Health Research & Educational Trust (HRET) released the 2010 Employer Health Benefits Survey this month and while the "headline" showed average premiums increasing only 3% -- the real news is that families are seeing significant increases in out-of-pocket costs including deductibles, copayments and tiered copays that esclate the cost share for more costly drugs and services,

Since 2005, workers’ contributions to premiums have gone up 47 percent, while overall premiums rose 27 percent, wages increased 18 percent, and inflation rose 12 percent. Many employers are also raising the annual deductibles workers must pay before their health plans begin to share most health care costs. A total of 27 percent of covered workers now face annual deductibles of at least $1,000, up from 22 percent in 2009.

Of particular note, one in 8 employers now have 4 tiers for drug benefit copayments a trend which has doubled in just 2 years. Such tiers often leave families with overwhelming copayments for chronic and/or high cost biologicals.

The nation’s recession contributed to the shift in burden to workers. In response to the economic downturn, 30 percent of employers say they reduced the scope of health benefits or increased cost sharing, and 23 percent report increasing the amount employees pay for coverage, the survey finds. A summary of the study can be found at http://ehbs.kff.org/pdf/2010/8086.pdf

Employers likely to Change Plan Design and Benefits for 2011

2010-09-14T11:20:00.000-07:00

A new Mercer survey shows that many employers will need to change their plan design and/or contributions for 2011 and beyond to an extent that will cause the plans to forfeit "grandfathered" status. Given the need to impose cost savings - or else absorb an unpalatable level of health benefit cost increases - only half (53%) of surveyed employers indicated they would retain grandfathered status for their plans.

Healthcare reform included a proviso that plans would not have to implement many of the cost-sharing and coverage mandates - provided the plans only imposed minimal cost-sharing requirements on members. For example, a plan cannot increase deductibles or out-of-pocket (OOP) limits by more than 15 percentage points beyond the increase in the medical inflation, nor can they raise copays by more than that amount, or $5, whichever is greater. Also, plans cannot increase employee coinsurance percentages. However, survey results demonstrated that, as a Mercer partner commented, "The rules for maintaining grandfathered status were tougher than many employers expected. As they start to get a clearer picture of projected cost for 2011, many are finding they need more flexibility to get their cost increases down to a level they can handle." Maintaining grandfathered status becomes more challenging over time so we expect this trend will grow.

What does this mean for the average American with employer-sponsored coverage including self funded plans? Well just under half of the plans will have their coverage, copays and contribution stay exactly the same for 2011 which is of itself remarkable. But for the rest, the trend will continue for higher premium and out of pocket costs where such increases are permitted under health reform. Health reform has brought more transparency and focus on these issues -- but the cost issue especially for working families remains.

Bill Providing Medicaid Assistance to States Advances

2010-08-05T05:19:00.000-07:00

Legislation that includes $26 billion in aid and Medicaid support for cash-strapped state governments advanced yesterday in the Senate and then at the end of the day House Speaker Nancy Pelosi made a surprise announcement that she will call the House back into session next week to approve the legislation.

The legislation is generally supported since it directly helps cash-strapped states and includes some emergency type measures that will help to save key jobs for teachers, police officers and other government workers. The legislation also includes some health care related components. Specifically it provides an exclusion for Average Manufacturer Price (AMP) for inhalation, infusion and injectable drugs not generally dispenses through a retail community pharmacy. There is some concern about the specific wording of this component and how reimbursement would be impacted.
Also of note, the legislation does not include any further revisions or expansion to the 340b program which had been previously included.

CMS Extends Medicare Claims Processing Hold through June 17. Physicians may experience slight delay in claims payment.

2010-06-14T07:56:00.000-07:00

CMS announced this morning that they will continue to hold claims pending congressional action this week to address the sustainable growth rate (SGR) issue that otherwise would create a 21% cut in Medicare claims payment for services starting on June 1st. This announcement does mean a potential delays in claims payment for physicians but based on guidance the worse case scenario would be a 3 day delay, if any.

The announcement from CMS to Congress on this issue included the following background and context: The Continuing Extension Act of 2010, enacted on April 15, 2010, extended the zero percent (0%) update to the 2010 Medicare Physician Fee Schedule (MPFS) through May 31, 2010. At this time, Congress is still debating the elimination of the negative update that took effect June 1, 2010. CMS is hopeful that Congressional action will be taken within the next several days to avert the negative update. To avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians, non-physician practitioners, and other providers paid under the MPFS, CMS had instructed its contractors on May 27th to hold claims for services paid under the MPFS for the first 10 business days of June (i.e., through June 14, 2010). This hold only affects MPFS claims with dates of service of June 1, 2010, and later. Given the possibility of Congressional action in the very near future, CMS is now directing its contractors to continue holding June 1 and later claims through Thursday, June 17, lifting the hold on Friday, June 18. This action will facilitate accurate claims processing at the outset and minimize the need for claims reprocessing if Congressional action changes the negative update. It also should minimize the provider and beneficiary burdens and costs associated with reprocessing claims. CMS indicated that they understand that the delayed processing of Medicare claims may present cash flow problems for some Medicare providers. However, it is expected that the delay, if any, beyond the normal processing period will be only a few days.

Health care providers and advocacy groups are urging Congress to take action on this issue quickly and hopeful provide for a longer term fix to this issue.

Congress has not acted to address 21.3% Medicare Physician Fee cut on June 1 -- CMS announces they will hold claims

2010-05-27T13:39:00.000-07:00

CMS announces they will temporarily hold claims starting June 1st in case Congress fails to act.

Currently, neither the House of Representatives and the Senate have approved legislation to stop the pending 21.3 percent cut to physician Medicare payments, which will take effect unless final legislation is signed into law by June 1. Despite a proposal earlier this week calling for modest updates through the end of 2014, legislators ultimately scaled back many areas of the bill, including the Medicare physician payment provision, to reduce the overall cost of the bill. However, House members continued to object to the revised cost of the bill, making it unclear when the House would hold a vote.

It is not clear that Congress will be able to pass even another short temporary fix before June 1. To address this possibility, earlier today the Centers for Medicare & Medicaid Services (CMS) released the following statement:

The Continuing Extension Act of 2010, enacted on April 15, 2010, extended the zero percent (0%) update to the 2010 Medicare Physician Fee Schedule (MPFS) through May 31, 2010. The Centers for Medicare & Medicaid Services (CMS) believes Congress is working to avert the negative update scheduled to take effect June 1, 2010. To avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the MPFS, CMS has instructed its contractors to hold claims containing services paid under the MPFS (including anesthesia services) for the first 10 business days of June. This hold will only affect MPFS claims with dates of service June 1, 2010, and later.

This hold should have minimum impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt. Be on the alert for more information about the 2010 Medicare Physician Fee Schedule Update.

Will the Physician "Doc Fix" issue get addressed before June 1st Deadline?

2010-05-21T13:22:00.000-07:00

Potential progress this week on the Medicare Physician Reimbursement "Doc Fix" issue which would create a 21% cut for physicians unless the temporary fix that expires on June 1st is addressed. The issue is being included in a Tax Extenders Bill that includes a wide range of provisions.

Yesterday, House Ways and Means Committee Chairman Sander Levin (D-MI) and Senate Finance Committee Chair Max Baucus (D-MT) circulated a $220 billion tax extenders bill (H.R. 4213) that includes a Medicare physician payment adjustment, an extension of unemployment benefits and COBRA subsidies, an a number of other health care provisions. Details are limited but the proposal includes a plan to block scheduled cuts in Medicare reimbursement for physician services through 2013. According to the bill summary and reports from policy insiders, the proposal would provide a 1.3% rate increase starting June 1 for the remainder of 2010, and an additional 1% increase in 2011. There would be no reductions in 2012 and 2013, and there would be an allowance for payment increases for primary care and preventive care services.

As an offset to the cost of the physician pay "fix" - currently being assessed by the Congressional Budget Office (CBO) - the proposal would change Medicare's "72-hour" rule, disallowing hospitals from submitting separate claims for inpatient and outpatient care provided within 3 days of a hospital admission, a proposal the hospital industry is lobbying against heavily, as it represents further cuts to hospitals on top of the hit the industry will take under the new reform law.

The proposal also includes an expansion of the 340B drug discount program to inpatient drugs for use by patients who do not have prescription drug coverage. However, the language related to expansion of 340B to include inpatients appears to provide new clarity and restrictions regarding the use of 340B drug discounts to only eligible patients within eligible entities. This is a critical issue since current 340B drug discount programs in the outpatient setting appear to be used for all patients by eligible facilities. The details of this provision will be critical to watch should this legislation move forward.

House Democrats have been working since last year toward at least a 5-year solution to the ongoing cuts created by the SGR, but the Senate consistently raised cost concerns and does not support a longer term fix that is not paid for. Physician advocates, while desperate for some form of relief from the imposing 21% cut, continue to push for a permanent fix to the perennial payment problem created by the SGR. About the current proposal, physicians fear that the current problems will only be exacerbated in 2014 when payment rates would revert to the current formula.

In other relief provisions, the bill would extend by 6 months increased federal payments for Medicaid programs (initiated in the American Recovery and Reinvestment Act of 2009, ARRA). Additionally, the bill would also extend, through the end of the year, the 65% COBRA subsidy, also effectuated by the ARRA.

The tax extenders bill is scheduled to be taken up by both chambers next week with some urgency as the current delay in cuts expires May 31st.

Health Reform Creates new Challenges for Physician Issues with Medicare Policy

2010-05-19T08:18:00.000-07:00

The healthcare reform law included a little-publicized provision calling for the permanent dissolution of the Practicing Physicians Advisory Council (PPAC), a CMS physician advisory panel. And, although they have not yet publicly announced the advisory panel's discontinuation, HHS informed PPAC members of the Council's fate last month, indicating the June meeting will not take place.Providers are concerned that their venues for advancing concerns and providing input to Medicare regulations and policy are limited with the demise of the PPAC.
The Medicare Payment Advisory Commission (MedPAC) and the new Independent Payment Advisory Board (IPAB) established by the new reform law have physician members, but both Commissions are primarily focused on cost cutting and are not substitutes for the PPAC.Conjecture about the dissolution attributes the Council's end to the powerful Ways and Means Committee Chair Peter Stark (D-CA), who has very publicly and repeatedly focused on patient concerns over those of providers with increasing vigor over the last several years. Regardless of the motivation and source for dissolving the Council, physicians are concerned that practicing physicians have lost a platform to access regulators and vet their concerns.

Medicare "Doc Fix" -- Groundhog Day Continues

2010-05-07T19:30:00.000-07:00

The temporary fix to avert the 21% cut to Medicare physician payments expires on June 1 -- once again creating a dramatic threat to physician reimbursement.

The long-debated issue of fixing the flawed sustainable growth rate (SGR) payment update formula has now gotten more complex since the Congressional Budget Office (CBO) released an updated estimate on merely freezing the current Medicare payment levels. According to the updated CBO, a long-term payment freeze would cost $276 billion over 10 years, a figure that is more than 30% more than its estimate to adopt a similar measure last fall. The scoring increase is attributable to the improved economic outlook and an increase in the estimate in the volume of Medicare physician services over the next decade. This issue does not make any sense to the average American -- how can it cost $276 billion to keep physician reimbursement flat?

So now physicians (for the third time this year) are facing the 21% "cliff" if Congress does not again act to avert the cuts. Twice so far this year, Congress has extended the 2009 Medicare payment rates as it continues to debate a longer-term fix to the problematic update formula.

Democrats are working to pass a measure that would avert the cuts for up to 5 years, estimated to cost $89 billion. Members of the both the Senate and the House support such a fix but, so far, have not been able to agree on the "pay for" for such a fix which has created the issue.

This issue remains critical to the viability of many physician practices, and there are growing reports of practice and clinic closures due, in part, to this protracted debate along with persisting inadequacies in Part B drug reimbursement.

We need to get this SGR issue fixed -- hopefully for more than a short term fix so we can move onto other issues critical to patient access and reimbursement. We continue to work to urge Congress to exclude prompt pay terms from ASP in order to have accurate and consistent reimbursement of life saving treatments in the physician office and hospital outpatient setting as an urgent next step.

Medicare Part D: New confusion on how the 50% brand discount will work

2010-05-07T19:07:00.000-07:00

This past week CMS released a memo to Part D plan sponsors with draft guidance on how the 50-percent discount provided by drug manufacturers for Part D beneficiaries in the coverage gap will be operationalized. The guidance includes a few surprises, and departs somewhat from how the program was envisioned by congressional members who were part of the "$80 billion deal" negotiated with PhRMA last summer. From a patient access perspective --- many seniors already have very high expectations regarding the "closing of the donut hole" but the reality is this will take some time given the cost.

Some of the highlights from the draft guidance include the following:

A Part D drug will only be covered under Part D if the manufacturer has a signed agreement with CMS to provide the discount on coverage gap claims for all of its applicable drugs and remains compliant with the terms of that agreement
The Part D sponsor must provide the discounts for applicable drugs in the coverage gap at the point-of-sale (POS) (such as the retail pharmacy or specialty pharmacy).
CMS will coordinate the collection of discount payments from manufacturers and payment to Part D sponsors that provided the discount to beneficiaries
A CMS contractor will invoice each manufacturer quarterly on the behalf of Part D sponsors
Manufacturers will be required to pay the invoiced amounts to Part D sponsors directly; manufacturers must pay the entire invoiced amount within 15 days (including any amount in dispute)
Given the timing of the discount agreements and plan bids, CMS must allow coverage in 2011 of Part D drugs irrespective of manufacturer discount agreements
In a departure from what was outlined in the new health reform law, CMS will not be using a third-party administrator to oversee the discount program due to HIPAA concerns.

Perhaps a bigger surprise, being described as a "process glitch", is the fact that the agency does not plan to require all branded manufacturers to offer the discount in 2011. According to the guidance, "CMS must allow coverage in 2011 of Part D drugs irrespective of manufacturer discount agreements," which means that some of the brand drugs on plan formularies may not be discounted in the coverage gap, unless all manufacturers agree to the discounts by the 2010 deadline.

In press remarks following the release of the guidance, a CMS official explained that the formularies for the Part D plan sponsors had to be submitted by last month, and CMS has not yet issued a notice of "model manufacturer agreement", by the time the formularies were due for the 2011 plan year. As such, CMS indicated it won't know until closer to the end of the year whether all manufacturers will sign the discount agreements for next year.

According to the new law, manufacturers are required to have model agreements signed by July 1, 2010, for fiscal year 2011. In popular press this week, manufacturer representatives indicate they anticipate offering the discounts next year.

CMS has requested comments to the draft guidance by May 14.

Current SGR "Doc FIx" issue expires May 31st

2010-04-26T11:37:00.000-07:00

Congress has passed a temporary patch for the Medicare Sustainable Growth Rate (SGR) issue to prevent a 21% cut in Medicare physician reimbursement, however, the current patch expires May 31, 2010 so the work on this issue must continue.

The House Ways and Means Committee is continuing its work on a revised version of the tax extenders bill passed by the House and Senate H.R. 4213, which included a SGR patch until September 30, 2010. The Chairman of the Committee, Sander Levin (D-MI) has stated his intent to move this legislation prior to Memorial Day. The challenge, however, is finding an acceptable pay-for to off-set the cost of extending the tax cuts included in the bill even though it is yet again only another temporary fix. Further, it is concerning to think we could have to address this issue again just before the November elections. I am hoping we see the length of the temporary fix extended at least though the elections or through 2011. Physician groups such as the AMA are pushing for a permanent fix but given the cost of this issue a longer-term temporary fix may be a better option at this point.

On a related issue, Senate Democrats released their 2011 budget proposal last week, which continues to exempt the a fix of the Medicare Physician payment system (SGR) from Statutory-Pay-As-You-Go Act. The language specifically exempts the cost of a 5 year zero percent update from having to be paid for. This does not mean that the Congress must pass a 5 year zero percent freeze as they could do a shorter extension with a higher update just so long as it did not exceed the cost estimated by CBO for a 5 year zero percent update.

Will this issue get addressed in a more sustainable way? We all understand the current budget pressures but to put physicians and Medicare beneficiaries in the middle of these issues is not appropriate.

Temporary "DocFix" is Approved through May 31st

2010-04-15T20:34:00.000-07:00

Good news -- but its another short term fix.
Tonight, Congress has passed and President Obama has signed a Medicare physician payment bill that extends the 2009 physician payment rate until May 31, thus reinstating the payment rate that was in place on March 31. This will allow CMS to rescind a 21.2 percent reduction that went into effect on April 1 because of the sustainable growth rate, or SGR, formula.

CMS held payment of claims from April 1-15, awaiting passage of the payment legislation. The Senate, however, was unable to pass the Medicare payment bill before the 21.2 percent cut started to take effect.

CMS will instruct its contractors to retroactively reprocess any claims that were paid at the lower rate. Claims with dates of service prior to April 1, 2010, are not affected and will continue to be processed under normal procedures.

Good news for tonight but a longer term fix is needed!

Frustration Surges: Senate fails to approve temporary "doc fix" to prevent 21.3% fee cut -- but expected to fix it this week

2010-04-14T19:33:00.000-07:00

Tonight the Senate failed to approve an amended version of H.R. 4851 which would continue the current Medicare physician reimbursement payment freeze until June 1.

Based on the previously announced schedule by CMS, Medicare contractors will begin processing impacted claims on Thursday, April 15th to ensure timely claims payment but at the new reduced fee level. These claims will have to be retroactively corrected once the Senate finally addresses this issue. The Senate is expected to return to consideration of this amended version of H.R. 4851 tomorrow. However, since the version of the extension legislation the Senate is considering is not identical to the version passed by the House on March 17, the House must approve this Senate passed version before sending it to the president for his signature.

Earlier today, the House Rules Committee approved a rule allowing for swift consideration of this amended version of H.R. 4851. The House is expected to act on this legislation later this week.

The Centers for Medicare and Medicaid Services (CMS) previously indicated that if legislation was not enacted by midnight April 14, Medicare contractors would begin processing the held April 1 claims. Once final legislation regarding the Medicare payment freeze is passed, we anticipate CMS issuing an official statement and details related to correcting these reduced levels of reimbursement.

Clearly this is frustrating news from Washington DC tonight -- especially since Senators believe this can be addressed this week. We all know this type of claims "rework" is costly and the gap in reimbursement is unacceptable so please call your Senator and urge action now.

Health Reform Could Increase Medigap Cost-Sharing for Seniors

2010-04-02T09:34:00.000-07:00

Patient advocates are expressing new concerns that the language in the health reform bill will hit Medigap plans with higher cost-sharing requirements and would likely lead to increased copays starting in 2015 for the two most popular types of Medigap plans, Plans C and F.

Some health care experts worry the provisions, targeted for their savings and the hope that extra out-of-pocket costs will reduce unnecessary medical services, would unfairly hurt patients newly enrolling in the program.

Currently, Medigap policies pay the full 20 percent of cost-sharing for physician care and other outpatient Part B services, but the new law indicates that patients have to pay some of the cost sharing in order to reduce unnecessary medical care. Since there is no cap on the Medicare Part B copayment, many seniors prefer Medigap plans C and F as they cover all of those costs. Such coverage is critical for chronically ill patients and cancer patients.

Clearly, this will be one several key issues that impact patient copayment exposure and related access to care.

CMS will hold physician services claims for 10 business Days

2010-03-26T12:55:00.000-07:00

Breaking news from CMS.

CMS has instructed its contractors to hold claims containing services paid under the MPFS (including anesthesia services) for the first 10 business days of April.

This hold will only affect claims with dates of service April 1, 2010, and forward.
In addition, the hold should have minimum impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt

Senate fails to pass 30-day "doc fix" to prevent 21.3% Medicare payment cut for physicians effective April 1st

2010-03-26T12:26:00.000-07:00

The Senate has adjourned for its two-week spring recess without approving H.R. 4851, a short-term measure that would have extended the freeze on Medicare’s current physician payment rates through April 30.

Several Senate Republicans led by Tom Coburn of Oklahoma objected to classifying the bill, which also included extensions of unemployment benefits and COBRA insurance, as emergency spending. The House of Representatives passed the bill on March 17. By law, the 21.3 percent cut to Medicare physician payments will take effect April 1.

However, in similar situations in the past, the Centers for Medicare & Medicaid Services (CMS) has instructed carriers to temporarily hold claims. While CMS has not made this announcement yet, we exect that CMS will hold claims for the first 2 weeks of April.

The Senate returns April 12 and has scheduled a cloture vote on the 30-day extension bill for 5:30 p.m. that evening. Physician offices should contact their Senators and urge them to permanently address this issue by repealing the sustainable growth rate (SGR) formula. This is frustrating and disappointing but as long as Congress acts on April 12th there will hopefully not be an impact for physicians due to the normal lag in claims processing by CMS.

President signs Health Reform into Law; But Many Issues Remain

2010-03-23T21:49:00.000-07:00

The President signed health care legislation into law today. Today's ceremonies followed a very busy weekend in Washington DC with the House approving late Sunday night the Senate Health Reform bill and Reconciliation Language.

The House took two separate votes on the reform legislation. First, the House passed - by a vote of 219 to 212 - HR 3590, the Patient Protection and Affordable Care Act, the bill approved by the Senate last December. The House then passed HR 4872, the Health Care and Education Affordability Reconciliation Act of 2010, by a vote of 220 to 211. This legislation modifies the Senate bill with a number of "fixes" negotiated over the last two months by the House and Senate. As expected, not a single House Republican voted in favor of either measure.

The contentious, year long health reform debate is not finished, however, as H.R. 4872 goes to the Senate, where only a simple majority is needed to approve the bill under the reconciliation process. The Senate will consider the modification bill under streamlined procedures that avoid time-consuming cloture motions to begin and end debate on the bill. Senate Republicans are expected to offer numerous amendments and raise multiple points of order to the legislation. If the bill is changed in any way prior to Senate approval, it must return to the House for an additional vote before the President can sign it. A timeline on the Senate debate of the reconciliation measure has not yet been officially released but is expected to proceed quickly given the upcoming Spring recess which is supposed to start at the end of the week.

Even with passage of the most historic health reform legislation since the enactment of Medicare, policy insiders anticipated a reinvigorated battle over the future of Medicare as the Senate considers the reconciliation language. Also expected on the horizon are appropriations funding battles for the provisions of the bill of discretionary spending provisions and threats of court cases in several states over requiring individuals to purchase health insurance.

The Senate this week will also consider a new short-term extension bill (HR 4851) to extend the delay in Medicare physician rate cuts until April 30. The current extension expires on March 30. The House approved the measure on Wednesday. The Senate approved a longer-term extension (HR 4213) earlier this month which is pending action in the House. This is one of several critical issues yet to be addressed. Next up...the real work begins on the implementation of health reform.

Health Reform -- Too Close to Call

2010-03-13T21:36:00.000-08:00

Speculation is growing that Democrats do not yet have the votes necessary to pass a healthcare reform bill. At the same time, House Speaker Pelosi has signaled she will work to push through health reform well before the coming spring recess.

The House Democratic Caucus was reportedly told by their leadership this morning that there would be a single, closed health reform vote within the next week, to include the reconciliation provisions (amendments to the Senate health reform bill and a student aid package) and the Senate passed reform bill. The Senate bill vote is wrapped into the single vote, so when members vote for or against the reconciliation package they will also be voting for or against the Senate passed health reform bill. Once passed, the Senate bill would go to the President for signing, and the reconciliation provisions would go to the Senate where they must pass the provisions unchanged. The Senate Parliamentarian ruled earlier this week that the President must sign Congress' original health care reform bill before the Senate can act on a companion reconciliation package. Some speculate this new twist could create new challenges for health reform legislation.

The White House has been pressing for a vote next week, but lingering questions this week cast doubt on whether the House would vote on the reform provisions before Congress adjourns for two weeks on March 26th.

Senate Passes A 6-Month Fix to SGR Issues

2010-03-13T21:34:00.000-08:00

Senate passes another temporary fix to SGR and Medicare Pay extenders This week the Senate passed another temporary Medicare physician payment patch by a vote of 62-36. The bill prevents a cut to Medicare physician reimbursement and instead holds payment levels flat until October 1, 2010. The legislation extends several programs related to unemployment and COBRA benefits, as well as other tax provisions and federal programs. It also includes language to delay DME accreditation requirements for pharmacies until January 2011 and exempts pharmacies where DME is less than 5% of sales.

The following lists some of the key health extenders contained in the American Workers, State, and Business Relief Act of 2010, as passed by the Senate:

Provides a nine month extension of the 65% COBRA premium assistance (through December 31, 2010) and extends the enhanced Medicaid FMAP increase from the American Recovery and Reinvestment Act through 2010.
Provides a six month extension of the 0% update to the 2010 Medicare physician fee schedule (through September 30, 2010).
The 1.0 floor for the work geographic practice cost index (GPCI) used to help calculate the Medicare physician fee schedule update would remain in effect through 2010 which is important for rural physicians.
Extends the Medicare exceptions process for outpatient therapy services through December 31, 2010.
Extends for one year (to January 1, 2011) the date by which certain pharmacies must be accredited as durable medical equipment (DME) suppliers and allows HHS to establish alternative quality standards and accreditation requirements for pharmacies.
Extends the Medicare mental health services 5% add-on payment through December 31, 2010.

CMS will temporarily hold claims while we wait for Congress to address SGR Issue and health reform update

2010-02-28T16:00:00.000-08:00

The Senate was unable to pass legislation to block the scheduled 21% Medicare cut to physicians scheduled for Monday, March 1st. Earlier in the week, Senate Majority Leader Harry Reid (D-NV) attempted, unsuccessfully, to procure unanimous consent (UC) from the Senate on a bill that would extend current Medicare rates for 30 days among other healthcare provisions. The 30-day extension plan was part of a two-step approach that involved two legislative measures: a smaller measure, which included a 30-day extension in SGR-imposed cuts and unemployment benefits, as well as COBRA insurance programs; and a larger, more comprehensive measure that would delay the cuts through the end of the year along with a more comprehensive set of health-related and tax "extenders." Reid's plan was blocked by Senator Jim Bunning (R-KY), over objections that the healthcare-related "extenders" in the measure were not offset, or paid for. The House passed the 30-day extension bill on February 24th.

Senate Democrats will, reportedly, try again next week by taking up a longer-term (year long) extension package, which is expected to include most of what Senate Democrats were unable to pass in the 30-day extenders package. The bill is not expected to clear the floor until the latter part of next week at the earliest.

CMS instructed Medicare contractors to hold claims for the first 10 days of March pending further developments on the payment cuts. Prior to the announcement, there were a number of anecdotal reports that physicians had planned to hold claims, reschedule Medicare patients or stop seeing Medicare patients altogether until the payments are restored. Under current regulations, physicians can hold claims up to 14 days before submission. What all this means is that we have a 2 week buffer before claim payment is reduced and physician practices begin to feel this devastating cut in payment. We need to all work to keep the pressure on all members of Congress to address this now.

While debate continues following the "health summit" last week, we can not let these core issues such as SGR and other Medicare extenders impact patient access to care.
The white house summit ended with the President making it clear that he intends to move forward with reform legislation with or without the Republicans within the next 4 to 6 weeks. The process to do so will either be a scaled-down plan ("skinny plan") or Democrats could use the process of reconciliation that would likely be modeled on the President's proposed outline which is based on some modifications to the Senate bill.

Key components of that proposal include the following:

Insurance Exchange: Sets up 50 insurance marketplaces administered by the states, in which small businesses and people without employer coverage could buy insurance that meets new federal standards; establishes a new federal authority that would address insurance premium hikes.
Individual Mandate: Individuals must purchase insurance or pay a penalty that would be the greater of $695 or 2.5% of income by 2016.
Employer Responsibility: Does not include an employer mandate, but requires companies with 50 or more employees to help defray the cost if taxpayers are paying for their worker's insurance. Also penalizes companies with 50 or more employees that don't provide coverage, but exempts the first 30 workers when calculating the tax. Companies that don't offer insurance would be charged $2,000 annually per employee.
Medicaid Expansion: Expands Medicaid to cover everyone earning less than 133% of the FPL ($29,327) for a family of 4. Increases the federal share of covering new eligible beneficiaries, and proposes to simplify several eligibility rules for the current program. The proposal also seeks a middle path between the House and Senate bill's subsidies for low-income Americans.
Closes the Medicare Part B Doughnut Hole: Closes the doughnut hole by 2020 by increasing the amount of money provided for rebates to beneficiaries and by reducing co-insurance payments.
Pathway for Follow-on Biologics: The proposal includes very little detail, but includes establishing "a new pathway to create generic versions of biological products." The proposal does not include data exclusivity terms.
Financing: Combination of Medicare cuts, new taxes and increased industry fees. The proposal includes a tax on high-cost insurance (or "Cadillac" health plans), but pushes it up to $27,500 for family plans and $10,200 for individual plans, up from $23,000 and $8,500, respectively, compared to the Senate bill. It extends the 2.9 percent Medicare payroll tax into unearned income for couples earning more than $250,000. It also Increases the pharmaceutical industry fees to $33 billion (up from the $23 billion in the Senate bill), and builds on Medicare cuts included in the House and Senate bills.

Rumors have begun to emerge that a scaled-down measure is being prepared by Democratic lawmakers should they lack the votes needed to pass reform legislation through the reconciliation process.

Health Reform -- "Side car" Reconciliation if Bipartisan Effort Fails? Doc Fix issue still looms...

2010-02-19T15:12:00.000-08:00

White House and Democratic congressional leaders were, reportedly, imminently close to completing a detailed health care proposal designed to win passage without Republican support if President Barack Obama's summit next week fails to produce bipartisan compromises.

During a press conference yesterday, HHS Secretary Kathleen Sebelius said Democratic negotiators are reconciling final differences in House and Senate health bills that passed last year. The White House plans to post the proposals online early next week (perhaps on Monday February 22), ahead of the February 25 summit announced earlier this month.

In other news reports filed by the Associated Press this week, another White House official, who spoke anonymously, made comments suggesting the White House and Congress' Democratic leaders could fall back to the reconciliation process to enact comprehensive health reform if Republican leaders don't support compromises that could draw enough lawmakers from both parties to create a bipartisan majority. According to those reports, the goal of this week's negotiations is to develop a reconciled measure that Senate Democrats can pass, under rules barring Republican filibusters, unless Republicans offer acceptable changes at next week's summit.

The House does not have enough votes to pass the Senate-passed reform bill, HR 3590, without changes to the measure's financing proposals. Under the parliamentary procedure known as reconciliation, the House would pass the Senate bill and the Senate would immediately amend the measure through a "side car" reconciliation bill. The contents of such a proposal have been tightly held and there is no clarity but it is expected to modify the Senate Bill just enough to garner the necessary votes on the House side.

While broader reform continues to swirl -- we have a March 1 deadline to prevent a dramatic 21% cut in Medicare Physician Reimbursement due to SGR (known as the "Doc Fix") that still has not been addressed. This issue will remain central to next week's activities.

Medicare "Doc Fix" issue Looms as Senator Reid Narrows the Bipartisan Jobs Bill

2010-02-11T14:31:00.000-08:00

In a surprise announcement this afternoon, Senator Reid has narrowed the proposed Baucus & Grassley bipartisan jobs bill to focus it on jobs related issues. The problem is that some of the components added were critical "extenders" to Medicare that are needed to address critical issues including the 21% Medicare pay cut for physicians on March 1st. This issue must be addressed now.

Link to article announcing the change in course http://su.pr/2Zf3zj

Congress and Health Reform Update: Will Jobs Bill Help Address Urgent Issues Such as Doc Fix?

2010-02-05T13:41:00.000-08:00

Congress is reportedly still weighing health reform options, including reconciliation based on reports this week. While health care reform legislation has clearly stalled since State Senator Brown (R-MA) won the special U.S. Senate race in Massachusetts last month, congressional leaders are, reportedly, continuing to ponder options for passing comprehensive reform legislation. House leaders said this week they will take their cues from the Senate before determining their strategy for advancing comprehensive reform legislation.

After a budget hearing this week, Senate Finance Committee Chair Max Baucus (D-MT) reportedly told Congressional Quarterly that the Senate is continuing to consider moving health care reform through the reconciliation process. Under that scenario, the Senate reform bill would be approved by the House and simultaneously amended via "sidecar reconciliation bill" introduced in the Senate. Congressional leaders in both chambers, since the special MA election, continue to say reconciliation is the best chance for passing a comprehensive reform bill. This approach has the support of the White House, but it does not have broad support from members of Congress.

Given the current stalemate on moving comprehensive reform legislation, House and Senate leaders are preparing to move forward with stand-alone votes for smaller-scale reform provisions. The House is preparing to advance a repeal of anti-trust exemption for health insurers, medical loss ratio rules and banning health plan rescissions. The Senate is considering a six-month extension of increased federal funding for Medicaid (FMAP) as part of its jobs creation bill. The White House continues to push for enactment of comprehensive healthcare reform this year despite the President's economic agenda having taken first priority. The President's FY 2011 Budget Proposal, released February 1, assumes $150 billion deficit reduction resulting from passage of health care reform.

So what's next?? Indeed it is not clear what, when or how health reform might move forward. We all recognize that there are issues that must be addressed quickly including the Medicare SGR Physician Reimbursement issue (or "Doc Fix"). Rumors today are that Congress might address this issue (for at least a year or perhaps as a 5-year fix) as part of a jobs-related bill.

State of the Union Address: 5 Minutes on Health Care

2010-01-27T20:38:00.000-08:00

In tonight's much anticipated State of the Union Address, the focus was on jobs and the economy. However, the President asked Congress to continue to focus on health care and he linked the debate on health reform as central to our economic challenges. The President urged Congress to "finish the job" on health care as more Americans lose health insurance each day. Specific health reform initiatives were not addressed and in fact the President spent only about 5 minutes on health reform in total.

So where does this leave the health reform debate? Its not clear but we all know there are health care related issues that still must be addressed this year such as critical Medicare and physician reimbursement issues. The fun here in Washington continues.

Health Reform Debate May Take a Break but Medicare Physician Reimbursement Issue Must be Fixed Now

2010-01-22T13:42:00.000-08:00

While health care reform is in limbo, we do need some form of health care legislation to pass in order to prevent a looming cut to Medicare reimbursement for physicians at the end of February. We understand that Senate leadership and the chairmen of the Finance and Budget committees are working to try to include a fix to the Medicare physician payment formula as part of legislation being considered to increase the federal debt ceiling.

While details have not been confirmed, but the deal being discussed reportedly includes a 5-year exemption from the pay-as-you-go rules for a physician pay fix. The plan also includes creation of a deficit reduction commission, which would make recommendations to Congress on how to proceed with reducing the federal debt. The commission's recommendations would be put to congressional vote for approval. There is disagreement within Senate leadership on the creation and scope of the commission, and some leaders support creation of such a commission via executive order instead of legislation. The physician pay fix could have a modest increase to Medicare fees but all of the scenarios are very modest at this point. Without congressional action, a 21.2 percent cut to the fee schedule is scheduled to kick in at the end of February making this a critical health care issue that must be addressed regardless of other health care legislation.

Massachussetts GOP Win creates uncertainty for health reform

2010-01-21T09:35:00.000-08:00

Since the GOP win in the Massachusetts Senate race Tuesday night, Healthcare reform is again back at the top of the news headlines and it remains unclear what the next step for health reform legislation will be. Here are some of the key headlines and insights from Washington insiders

On ABC's Nightline last night, President Obama indicated that he did not want the Senate to push through legislation without Senator Brown. He also signaled that he might be willing to scale back his proposed health care overhaul to a version that could attract bipartisan support which is welcome news.
Today many major industry players announced their continued support for some form of healthcare overall including PhRMA and even some larger insurers.
We understand that Pelosi has indicated that she does not think the House could pass the Senate's health care bill and we believe democrats are now talking about paring down the healthcare reform package to so that they could get some kind of bill--albeit a smaller one--through Congress. Most party moderates believe some type of bipartisan support is needed.
Despite the headlines, health reform can still pass this year. Although Democrats won't have 60 votes in the Senate any more, they will have 59, which is a wider majority than presidents like Ronald Reagan or George W. Bush needed to win significant legislative victories. The fun in Washington continues and health reform remains a central issue!

Hopefully, this game changer will create an opportunity to correct some serious gaps in the proposed health reforms with a more bipartisan approach. Regardless, there are several significant issues that must be addressed soon including the looming Medicare physician (SGR) 20% cut in reimbursement. Stay tuned....

President pushes to health reform negotiations

2010-01-15T08:07:00.000-08:00

This week has included several unusual day-long negotiating sessions on health reform that included President Barack Obama and top Democratic congressional leaders. Progress appears to have been made on several issues and on Thursday the White House announced that a tentative agreement has been reached with union leaders to tax high-cost insurance plans. If the agreement holds, this would remove one of the major stumbling blocks in the way of a final compromise on comprehensive health care legislation.

The breakthrough on the insurance tax marked a victory for the White House, which has long sought a tax on high-cost plans as a way of curbing the rise in health care expenditures. Organized labor had opposed it, arguing the impact would fall heavily on workers whose bargaining contracts gave them more robust health care coverage and therefore limits on the amount of money that could be claimed as a tax deduction could increase income taxes for employees that opt for such plans.

Many key issues are still being debated including whether to establish a single national health insurance exchange, as supported by the House, or dozens of state exchanges, which has been proposed by the Senate. We are also closely following a proposed "Medicare Commission" board which could significantly reduce Medicare reimbursement process without a normal rule making process.

White House officials have told Democrats that they want an agreement as soon as possible, maybe in the next week to 10 days. It will then take time to receive a cost estimate from Congressional Budget Office before votes can be considered. If the goal remains to complete the legislation before the State of the Union, then they would need to be close to key compromises. The date of the State if the Union address has not yet been finalized but today we are hearing it could be February 9th.

Next week we expect to see how key Senators such as Nelson and Lieberman react to potential discussions as their support remains critical for health reform to pass.

Congress gets back to work but final pieces of health reform legislation not yet clear

2010-01-10T17:56:00.000-08:00

The House of Representatives will resume legislative business on Tuesday, January 12, thus beginning the Second Session of the 111th Congress. The Senate will resume legislative business a week later on January 19.

Since both chambers of Congress have passed health care reform legislation, Democratic leadership is currently working to combine the two bills and reach consensus on the remaining contentious topics. Although Democrats are hoping to pass legislation before the State of the Union, this deadline is not set in stone and could be subject to further delay.
　
Last week, Democratic leadership from both the House and Senate met with President Obama and members of his Administration to discuss health care reform strategy and substance. Private discussions will continue next week and are likely to heat up as Congress returns to town. Before a final bill is ready for passage, Democratic leadership must reach agreement on several issues. It is currently projected that the Senate version of health reform will carry the key issues (such as no public option) but many other issues remain unclear.
　
President Obama has begun taking a more active role in the House/Senate negotiations. This week, Obama voiced support for taxing so called "Cadillac Health Care plans." He believes that this provision is key to curbing the rising cost of health care. As Congressional negotiations move forward, President Obama will continue to increase his involvement.
　
Earlier this week, the President met with Congressional Democratic leadership to discuss the future of health care reform. President Obama continues to urge Members to finish work on health care reform and send legislation to his desk as soon as possible.
　　

Happy New Year -- Health Reform Fun Continues!

2010-01-04T14:28:00.000-08:00

Today, reports from Democratic leaders indicate that the House and Senate will not set up a formal conference process to work through the significant differences in the health reform bills that have passed in the Senate versus the House. This informal process of negotiations (often referred to as ping pong) has already begun between Senate Majority Leader Reid and House Speaker Pelosi. The informal process is the only way that Democrats can bypass procedural hurdles that would challenge the feasibility of passage of a final health reform bill. Senators are not in town this week, but House leaders and key committee chairmen plan to meet Tuesday to discuss melding the bills.

The Senate bill that passed early in the morning on December 24th does not include a public option like the House bill which will bring this issue back into debate.
The bills also differ in how they are funded. Reports are that the House may be prepared to accept a Cadillac tax as long as the threshold for premiums considered high cost is raised so union plans are exempt.
The House bill imposes a 5.4 percent surtax on individuals earning at least $500,000 and families earning at least $1 million. The Senate bill imposes a 40 percent excise
tax on the value of premiums that exceed $8,500 for individuals and
$23,000 for families.
There are also differences in how to fill the gap in Medicare Part D prescription drug coverage, known as the doughnut hole.
Also important is a Senate-created commission meant to make
cost-cutting decisions in Medicare.

The White House would like to see a bill on the president's desk by the State of the Union address which will likely be late January or early February which is a challenging timetable for such negotiations.

Thus the debate and discourse on these details continue....is it Groundhog Day yet?

House passes temporary 3-month fix to Medicare MD Pay Cut -- Senate action needed

2009-12-16T16:50:00.001-08:00

The House passed a defense bill tonight that includes 60 day halt to Medicare Physician 21.2% payment cuts scheduled to take effect Jan.1. The House included an amendment to the 2010 Defense Department appropriations bill, HR. 3326 that freezes Medicare payments at their current levels until Feb. 28, 2010.

The legislation now goes to the Senate, where Republicans are expected to filibuster it, forcing Senate Majority Leader Harry Reid (D-NV) to obtain 60 votes before the bill can be considered. This procedural hurdle will likely delay consideration of the bill until Friday or Saturday. This is a critical issue that has been inappropriately caught in the health care reform debate along with other critical issues impacting reimbursement such as excluding distribution prompt pay terms from Average Selling Price (ASP) calculations. We need health care providers to urge their Senators to act on these issues now with at least a temporary fix.

Good news for providers: Senate Expected to drop "Medicare-Buy In" Option

2009-12-15T07:28:00.000-08:00

Reports starting Monday night are that top Senate Democrats are prepared to sacrifice proposals to expand Medicare in a bid to win over moderates and amass the 60 votes needed to pass their health legislation. While this will be portrayed in the media as "dropping the public option", this is actually very good news for health care providers that recognize the problematic issues that expanding Medicare to any 55 to 64 year olds would create at this time. Instead this leaves the Federal Employee Health Benefit Plan (and some expansion of Medicaid) as they resources to address the uninsured. We expect to see a CBO score on the revised plan today.

One urgent issue that remains unclear is whether Congress will fix the looming Medicaid physician reimbursement cut of over 20% that will go into effect in January 1st. In these economic times lets hope that Congress addresses this prospectively even if its just another temporary or one-year fix.

More votes on health reform amendments expected later this afternoon.

Specter-Brown file key amendment today to correct reimbursement issue impacting physician-administered drugs

2009-12-11T18:44:00.000-08:00

This afternoon, Senators Specter (D-PA) and Brown (D-OH) filed an amendment to the Senate health reform bill that would exclude from the calculation of average sales price (ASP) prompt pay discounts extended to wholesalers up to 2% of wholesale acquisition cost (WAC) for a period of five years. This language is similar to language that was approved in the House Energy and Commerce Committee, but was not included in the final House bill.

This technical modification is essential to accurate and consistent reporting of ASP. This change would correct Medicare reimbursement to physicians and hospital outpatient centers to be consistent across products. This issue is critical to products that must be professionally administered including treatments for cancer, rheumatoid arthritis, and multiple sclerosis.

Physicians, hospitals and patient advocacy organizations should urge their Senators to ask Senator Reid to include the prompt pay amendment in the Senate health reform legislation.

With the potential growth of Medicare this issue takes on added urgency. The proposed language would also be consistent with similar language within Medicaid.

Next week looks to be busy for Senate on Health Reform

2009-12-11T18:34:00.000-08:00

The second week of the Senate's official debate on its health care reform bill (S 3590) was marked by partisan floor speeches and resulted in adoption of only 7 of the nearly 300 filed amendments by press time. While the process has been slow, Senate Majority Leader Harry Reid (D-NV) reported earlier this week that a tentative agreement on a replacement for the public option has been reached.

Based on the limited details released to date, the agreement appears to establish private, nonprofit health insurance programs that would be set up by the Office of Personnel Management, much like the federal employees program. These programs would be run by private companies, but a new government insurance plan could be triggered if the private plans are not acceptable. The pending agreement would also allow uninsured people between the ages of 55 and 64 who lack insurance to buy into the Medicare program and expand the Children's Health Insurance Program. The agreement would also require health insurance companies to spend at least 90 percent of the premiums they collect on medical services. The compromise proposal is now at the Congressional Budget Office (CBO) for analysis and a score is expected by early next week.

Drawing ire from Republican senators, Senator Reid halted, temporarily, the contentious health care reform debate to focus on the year-end omnibus spending bill, HR 3288, adopted in the House yesterday. Reid shifted the upper chamber's priority to the spending bill while he awaits the CBO score on the alternative to the public plan option. Reid's decision to put the health care reform debate in a holding pattern pending CBO analysis, has delayed a controversial drug importation amendment to the health care legislation, along with a motion to limit its tax impact on individuals and married couples.

During a conference call last night with health care groups, Senate Majority Leader Harry Reid and Finance Chairman Max Baucus (D-MT) discussed the following time table as related to Senate health care reform bill:

The Senate will return to health care on Monday, December 14 with the goal of completing consideration of all amendments by Tuesday, December 15 and begining consideration of procedural motions on Wednesday, December 16.
The vote on final passage is targeted for Monday, December 21.

Despite the ongoing wrangling in the Senate over health care reform, the Senate is working to pass its reform bill as early as next week with the hope that the House will approve the Senate version before Congress adjourns for the year thereby limiting the need for a conference committee. Still other speculation suggests that the final bill may not pass the full Congress until Valentine's Day.

Senate Leaders Work on Compromise on Public Option as Debate Continues

2009-12-08T07:57:00.000-08:00

The Senate Healthcare debate continues today and there is momentum toward compromise on some of the most polarizing issues. A potential compromise plan is being developed as an alternative to the public option that would allow the government to contract with private insurers, similar to the Federal Employees Health Benefits Program (FEHBP). This model was proposed by Obama during the election and is also similar to the approach used with success for Medicare Part D which had bipartisan support.

However, there are also reports that the compromise plan may also allow people over age 55 to buy-in to Medicare. This would probably generate significant concerns from health care providers including hospitals and physicians since Medicare reimbursement rates are often considered inadequate.

Today a team of Senate democratic freshmen proposed a range of cost containment proposals related to health care reform. Their proposal did not appear to have any controversial components but would expand or accelerate a wide range of cost containment strategies that have been discussed as part of health reform.

The Senate debate today will break at 12:30 pm EST and is expected to reconvene at 2:30 pm EST. We may see a vote on the abortion related amendment this afternoon. Also McCain has proposed an amendment that would grandfather all existing Medicare Advantage enrollees.

To date, the Senate has voted on 12 amendments of the 212 that have been offered to H.R. 3590.

Today the Senate Finally Began Votes on Amendments to Health Reform

2009-12-03T13:50:00.000-08:00

Today, following three days of debates without a vote on a single amendment, the Senate has begun to vote on amendments to the health reform bill.

The first two votes were on two amendments related to women's health. The first, offered by Senator Barbara Mikulski (D-MD) would give the Health and Human Services secretary authority to authorize the services, with the aim of ensuring that women over 40 receive mammograms and other treatments. This amendment passed with a vote of 61-39, with Republican Senators Olympia Snowe, Susan Collins, and David Vitter voting for the amendment and Democratic Senators Ben Nelson and Russ Fiengold voting against it. An alternative amendment submitted by Republican Lisa Murkowski was defeated 41-59, with Sen. Ben Nelson voting with the Republicans.

McCain's motion to remove the Medicare cuts from the bill failed 42-58 but two democrats, Nelson and Webb, voted for it. Senior groups, including AARP, opposed the McCain amendment and argued that the cuts in Medicare were cuts to reduce waste and not cuts in benefits. Senator Michael Bennet's amendment requiring that nothing in the Patient Protection and Affordability Act will result in a reduction of guaranteed Medicare benefits passed 100-0.

With momentum finally building in the Senate debate it still remains unclear where we will end up on the public option and there were reports today that another proposal is expected to be revealed next week that would provide more of a compromise that the "opt-out" language currently in the Senate health reform bill. Thus far there is no variation of a public option that has attracted the support of 60 Senators.

Prediction of the day: Despite progress today, it remains difficult to imagine how the Senate will be able to pass health reform legislation before the the holidays. Possible but challenging especially given wild card issues such as abortion and the public option.

Senate Vote Expected Saturday would move the Senate Health Reform Bill forward for debate

2009-11-20T15:03:00.000-08:00

The technical procedures and process in the Senate is different than the House and makes the process for trying to pass this Bill before the end of the year more challenging. As part of the unveiling of the bill, Senate Majority Leader Harry Reid (D-NV) outlined the process by which the Senate bill is expected to move through required procedural steps to get to the vote.

Senator Reid has already filed cloture on the motion to proceed on his health care bill. It is expected that the cloture vote on the motion to proceed to the bill will occur on Saturday night. In order to invoke cloture on the motion to proceed, 60 votes are required. This is a vote to simply move to consideration of the bill, not the bill itself.
If cloture is invoked on the motion to proceed, there will likely be three weeks of debate on the bill, with numerous procedural votes, before a final vote on the bill is held.
The timeline for debate combined with the holidays makes is difficult (but possible) for the Senate to pass reform before the end of the year. The process is very fluid and President Obama may end up playing a key role especially if he pushes for compromise in order to pass a bill before this session of Congress ends.
Both the House and Senate are targeting to adjourn on December 18th but that also appears optimistic.

House Passes SGR Fix to prevent huge cut for physicians; Will Senate follow or do a temporary fix?

2009-11-20T14:57:00.000-08:00

On November 19, the House voted to approve H.R. 3961 , The Medicare Physician Payment Reform Act of 2009, by a vote of 243 to 183. Only 1 Republican member voted in favor of the bill. The legislation did not contain any off-sets of the bill's estimated $210 billion cost. The bill would restructure the SGR formula on a long-term basis beginning in 2011, and would provide two separate updates, one for evaluation, management and preventive services and another for other services.

Immediately prior to the vote on H.R. 3961 the House rejected by a vote of 177 to 252 a Republican Motion to Recommit that included and alternative SGR fix, which would have would have provided physicians with a 2% Medicare payment rate increase in each of the next 4 years.

The bill will now be sent to the Senate, where it is unlikely to be taken up due to the opposition to the fact that the cost of the legislation is not off-set. H.R. 3961 is a priority for the White House as a critical piece of the overall healthcare reforms, and it is still expected that the Congress will approve legislation to at least delay the 21.2% cut to the Medicare Physician fee schedule prior to the end of the year regardless of whether they pass a health care reform bill.

The SGR issue an unfortunate distraction and is often mis-represented and mis-understood by the media. We must all urge Congress to do the right thing and fix this technical error that each year threatens physician reimbursement for Medicare patients.

Senate Releases Democratic Health Bill: $849 Billion

2009-11-18T18:02:00.000-08:00

Tonight, Majority Leader Reid (D-NV) unveiled the $849 billion Senate Democratic health reform bill. This bill is a combination of the bills that the Senate Finance Committee and Senate Health, Education, Labor and Pensions (HELP) Committee passed this year.

The bill is over 2,000 pages so we have not digested it at this point and the full bill is available at http://democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf. The bill costs $849 Billion over 10 years and would provide coverage for 94% of Americans. The Bill is estimated to reduces deficit $127 billion in first 10 years with more dramatic savings estimated beyond the first 10 years.

We understand that key Senate votes including Landrieu, Nelson and Lincoln met in Reid's office this afternoon for a first look at the bill. We have also heard that Baucus had to return home to Montana for a family emergency.

Since there has to be one day between the day cloture if filed and the day you have to vote we assume that cloture vote will be Saturday based on reports this evening. It could be delayed if Baucus can not return to DC. If Reid is able to get to the 60 vote mark, he will invoke cloture on the motion to proceed. Thirty hours after cloture is invoked the Senate will proceed to vote on adoption of the motion to proceed itself. All of this happens before the real work on the health reform bill.

Based on a summary released tonight by the Senate, the Bill does include some immediate benefits primarily in areas of insurance market reforms and issues that impact patient access to adequate health insurance coverage:

Access to Affordable Coverage for the Uninsured with Pre-existing Conditions
Re-insurance for Retiree Health Benefit Plans
Closing the Coverage Gap in the Medicare (Part D) Drug Benefit
* The Patient Protection and Affordable Care Act will reduce the size of the “donut hole” by raising the ceiling on the initial coverage period by $500 in 2010.
* The Patient Protection and Affordable Care Act will also guarantee 50 percent price discounts on brand-name drugs and biologics purchased by low and middle-income beneficiaries in the coverage gap.
Small Business Tax Credits
Extension of Dependent Coverage for Young Adults (until age 26)
Free Prevention Benefits
No Arbitrary Limits on Coverage
* The Patient Protection and Affordable Care Act will prohibit insurers from imposing lifetime limits on benefits and will restrict the use of annual limits.
Ensuring Value for Premium Payments (insurance standards and new transparency)
Public Access to Comparable Information on Insurance Options
Health Insurance Consumer Information
Clear Summaries, Without the Fine Print
Appeals Process
* Under The Patient Protection and Affordable Care Act, all health plans will implement an effective appeals process for appeals of coverage determinations and claims.
Administrative Simplification Under the Patient Protection and Affordable Care Act, all health plans will adopt uniform descriptions of plan benefits and appeals procedures and will use uniform forms and claims processing processes to reduce costs.

Still waiting for the Senate Bill -- but Senate & House leaders hope to end this session of Congress Dec 18th

2009-11-17T16:58:00.000-08:00

Washington insiders reported today that Senate and House leaders are hoping to end this session of Congress by Dec. 18, even though neither chamber has figured out the end game for health care reform and must-pass appropriations bills.

Congress and staff are expecting to work through the weekends in December to try to meet this goal which is challenging given the current complexities of health reform legislation.

The Senate is expected to begin debate on its own version of health reform legislation but the expected CBO score has not yet been released today. Senator Reid has been expecting the CBO score to be finalized someone today. We understand that Senator Reid had several different health care scenarios sent to be scored by CBO and we hope to have draft legislation to review this week.

Senate CBO Score on Health Reform Expected on Tuesday

2009-11-16T18:21:00.000-08:00

Based on reports from the Senate Finance Committee Meeting today, the much anticipated score for Senate health reform legislation is now expected on Tuesday. The score is expected to be acceptable and in the 900 billion range.

The 72 hour notice would start on Tuesday and we assume the bill would be released to the public shortly thereafter. The vote to invoke cloture could then be as early as Friday. We expect members will review the bill first and then public release later this week.

With House Health Reform Passed, Will Senate be able to finish this year?

2009-11-13T20:58:00.000-08:00

Last Saturday, November 7, the House passed its healthcare reform bill HR 3962, the Affordable Health Care for America Act, by a narrow margin of 220-215. Now as we look to next week -- will the Senate be able to build consensus to be able to pass their own bill before the end of the year? The House now holds an upper hand but many still believe that the Senate will in the end develop legislation most likely to build final consensus.

Some key highlights of the House Bill are provided below:

Public Option

HHS would establish a public health insurance option as one of the available insurance plans in a national Health Insurance Exchange
HHS would negotiate payment rates for health care items and services, including prescription drugs. Payment rates could not be lower, in the aggregate, than rates under Medicare

Medicare Part D

The coverage gap (or Part D donut hole) would be phased out by 2019
While the coverage gap exists, drug manufacturers would be required, as a condition of drug coverage under Part D, to pay a rebate equal to 50% of the negotiated price of the drug. The amount of the rebate would count toward the enrollee's TrOOP.
Manufacturers would be required to enter into a separate agreement providing for payment to Medicare of rebates on Part D drugs dispensed to full-benefit dual eligibles
HHS would have explicit authority to negotiate with drug manufacturers the prices, including discounts and rebates, that PDPs may be charged for drugs.

Medicaid Reimbursement and Rebates

The FUL formula enacted in the DRA (but not yet implemented) would be replaced with a new formula. The new formula --130% of the weighted average of monthly AMPs of the drugs - would replace the DRA-enacted formula of 250% of the lowest AMP among the multiple source drugs
The minimum rebate for innovator drugs would be increased from the current 15.1% to 23.1% of AMP. The current rebate for non-innovator drugs would remain unchanged at 11% of AMP.
Medicaid rebates would be imposed on covered outpatient drugs dispensed to enrollees of HMOs, including Medicaid MCOs, unless the drug is subject to discounts under the 340B discount program

340B Drug Discount Program

The program would be expanded to several additional covered entities, including, among others: free-standing cancer hospitals and children's hospitals that are excluded from Medicare's PPS and that meet disproportionate share requirements; critical access hospitals; community mental health clinics; Medicare-dependant small rural hospitals; sole community hospitals; and rural referral centers. The new covered entities would not be eligible for 340B pricing if they obtain covered outpatient drugs through a GPO. The final bill does not extend the 340B discounts to drugs purchased for inpatient use, a provision that was included in an earlier version of the bill

Biosimilars Pathway

The bill creates a new pathway for the approval of applications for biological products shown to be biosimilar or interchangeable with a licensed reference product, including provisions to resolve patent disputes. The bill provides for up to 12.5 years of exclusivity (initial 12-year exclusivity period that may be extended by 6 months of pediatric exclusivity).

Excise Tax on Non-Retail Sales of Medical Devices

A new excise tax equal to 2.5 % of the wholesale price would be imposed on medical device manufacturers for medical devices sold for use in the U.S.

Comparative Effectiveness Research

A new Center for Comparative Effectiveness Research (CER) would be established within HHS to conduct, support and synthesize CER on health care items, services, and systems, including pharmaceuticals and medical devices.
The Center would have access to data from any federal agency to conduct its research. An independent CER Commission would be established to recommend priorities, review research conducted by the Center and recommend methods of disseminating results.
The Center would not be permitted to mandate coverage, reimbursement or other policies for any public or private payer, and its research findings could not be considered mandates for payment, coverage or treatment.

Senate leaders say health reform legislation possible next week

2009-11-10T13:17:00.000-08:00

Today, Senate Majority Leader Harry Reid (D-NV) said he expects to bring legislation to overhaul the U.S. health-care system up for debate on the Senate side next week. Despite pressure and criticism, Senator Reid said today that he believes the Senate can pass the measure by the end of the year.

In order to get the 60 votes he needs Reid will have to bridge differences on whether reforms should include a public option, employer mandate and significant differences in how to fund coverage for the uninsured. In addition, federal funding for abortion has also entered in as a new, potentially disruptive issue for health reform.

Democrats control 60 votes in the Senate, just enough to pass legislation if they stick together. Currently, Senator Reid is waiting for Congressional Budget Office (CBO) cost estimates before unveiling his health-care bill and pushing to begin debate perhaps as early as next week.

What's next for Health Reform and Senate Following landmark House vote Saturday Night?

2009-11-08T12:33:00.000-08:00

Most insiders have projected that the more moderate Senate would ultimately lead the way for final legislation on health care reform. However now with the Senate's landmark vote this weekend with a health reform bill that includes a public option the next steps on the Senate side are not clear. Pressure is mounting for the Senate to complete a vote before the Christmas deadline but the Senate side have not embraced the public health insurance option that Senate Majority leader Harry Reid has seemed to suddenly be supporting despite the fact that he does not have 60 votes needed for health reform including a true public option.

The Senate debate over health care now seems to have come to a dead stop, raising the possibility the Senate won’t even begin floor debate until after Thanksgiving. Timing is not the only issue as Reid must find a way to bridge the divide in the Democratic party between liberals pushing for a public option and moderates who have resisted the most ambitious version of that plan.

According to an article published in Politico, in a private meeting last week with Finance Committee Chairman Senator Max Baucus (D-MT) and moderate Democrats aired a long list of concerns about the House bill compared to the Senate Finance Committee approach including: the $1.2 trillion price tag on the House bill, its reliance on a “millionaires tax” to fund the overhaul and the lack of common ground between the House and Senate on other taxes, among other issues.

The House vote now puts more pressure on the Senate to bend which could make a more moderate, bipartisan approach to health reform a greater challenge.

Potential House Vote on Health Reform Saturday; But are the votes there?

2009-11-05T11:33:00.000-08:00

House Speaker Nancy Pelosi (D-CA) announced today that she will have enough votes to pass Democratic health care legislation by Saturday and their are rumors of a potential Saturday vote. However many DC insiders are seeing the statement as confirming that she does not yet have the 218 votes needed to pass the $1 trillion dollar bill. Moderates including Democratic Blue Dogs still have concerns with fundamental components of the bill. Over the next 24 hours moderates and Blue Dogs will likely determine if Democrats have the votes they need but at this point there are significant gaps.

Today, AARP and AMA announced support for the House health reform legislation. However dramatic concerns remain regarding components of the bill beyond the public option such as the Medicare Part D drug price negotiation. Many key aspects of the House health reform plan were cut in the final version and there is concern that health reform needs to address long overdue issues such as Medicare Part B reimbursement and physician reimbursement cuts which have significant patient access implications.

Democrats file House Reform Bill; Friday vote possible but not likely

2009-11-04T05:41:00.000-08:00

House Health Reform Update:

Late Tuesday night, the House Rules Committee posted the Manager's amendment of the proposed healthcare reform legislation. Based on House Democrats' agreement with Republican leaders to post final healthcare bills online for a minimum of 72 hours before a vote is called, the earliest a vote could be taken would be Friday night, but a vote could easily be delayed beyond that.

A delay seems likely as the amendment came on an Election Day which saw Democrats lose some key governors' races in the country, potentially creating new pressure for more moderate or bipartisan approach to health reform.

Republicans have also proposed a substitute amendment that focuses mainly on health insurance reforms but does include language to allow a pathway for biosimilars.

CMS Finalizes Controversial 2010 Medicare Physician Fee Schedule

2009-11-03T12:46:00.000-08:00

The Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2010 Medicare's Physician Fee Schedule (MPFS) final rule last week. The final rule with comment period includes a negative 21.2 percent reduction in 2010 Medicare physician payments, which is slightly less than the 21.5 percent cut in the proposed rule released July 1. The cuts, resulting from the Sustainable Growth Rate (SGR) payment update formula, will take place unless Congress passes legislation to reverse them. At this point we expect Congress will implement a temporary fix again this year although there has been hope of a permanent fix.

The SGR issue is only part of the concern with this final rule as the there are other significant policy changes in the rule which seems particularly harsh on oncology and cardiology as well as services with high levels of work from non-physicians. Some drug administration codes (including chemotherapy) will see reimbursement cut over 20% even after the SGR issue is fixed. The increases in reimbursement appear limited to office visit codes.

Key points:

Finalizes the policy to remove physician-administered drugs from the definition of physician services for purposes of computing the physician update formula
Moves forward with updating practice expenses using a new survey, the Physician Practice Information Survey (PPIS), over a 4-year transition period. CMS will continue to use the specialty supplemental survey data for determining practice expenses for medical oncology
Finalizes the proposal to stop making payment for consultation codes other than the G codes that are used to bill for telehealth consultations
Adopts in part the proposal to increase the equipment utilization percentage used for setting practice expense (PE) for expensive equipment valued at more than $1 million from 50 percent to 90 percent.

The display copy of the final rule can be accessed here . The final rule with comment will be published in the November 25, 2009 Federal Register. While provisions of this final rule are expected to go into effect January 2010, CMS will accept comments on designated provisions of the final rule with comment period until December 29, 2009. The new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after January 1, 2010.

Our preliminary analysis of the MPFS final rule identified several additional provisions of importance to physician offices:

Implements a conversion factor of $28.4061 based on the statutory SGR formula, a reduction from the CY 2009 conversion factor of $36.0666
Implements work, practice and malpractice relative value unit reductions that will redistribute payments under the fee schedule. As a result of these changes, specialists' service codes, including drug administration codes, among others will experience significant cuts while primary care services, including visit codes, will experience increases.
Finalizes several of the proposed changes to the Competitive Acquisition Program (CAP), such as instituting a quarterly payment update instead of an annual update, narrowing the CAP drug list, and limiting the geographic area to the 48 contiguous states (as a temporary solution). The rule does not indicate timelines for the return of the CAP.
Finalizes the proposal, per MIPPA, to create new benefit categories for cardiac and pulmonary rehabilitation services and for chronic kidney disease education
Finalizes the proposal to increase by 1.0% the current composite rate for End Stage Renal Disease (ESRD) services to $135.15 and continues the drug add-on payment amount of $20.33 per treatment for services furnished on or after January 1, 2010
Continues the threshold percentage of 5% for the Widely Available Market Price (WAMP) and Average Manufacturer Price (AMP). The Office of the Inspector General (OIG) will continue to compare ASP to WAMP and AMP.
Finalizes changes to the PQRI program, such as adding an additional 30 individual PQRI measures and six measures groups on which individual eligible professionals (EPs) may report; codifies MIPPA requirements that will enable group practices to qualify for a 2010 PQRI incentive payment based on a determination at the group practice level, rather than at the individual EP level; and adds an electronic health record (EHR)-based reporting mechanism which will allow EPs to count their submission of EHR-based measures toward their eligibility for a PQRI incentive payment.
Finalizes proposed changes to the E-prescribing Incentive Program including simplifying the reporting requirements for the electronic prescribing measure. For 2010, the rule requires EPs to report an e-prescribing code only when a patient visit results in an electronic prescription being placed. In addition, the rule implements a MIPPA provision that enables group practices to qualify for a 2010 e-prescribing incentive payment based on a determination at the group practice level, rather than at the individual EP level.

As the healthcare reform debate unfolds, it is unclear the mechanism and scope of the approach Congress will take to address the SGR-imposed cuts scheduled to take effect next year. However, Congress is expected to take action to either permanently address this revolving issue, or at a minimum, make another temporary fix to avoid significant cuts in Medicare physician reimbursement in 2010.

CBO Analysis of House Health Reform Bill

2009-10-30T12:45:00.000-07:00

A Congressional Budget Office (CBO) analysis published subsequent to the bill's release yesterday estimates the bill's cost at $894 billion between 2010 and 2019, and forecasts it would reduce the federal deficit by more than $100 billion during the same period. Of the bill's costs, $425 billion would be incurred in federal outlays for Medicaid and CHIP and $605 billion would go out in federal subsidies provided to purchase coverage through the new insurance exchanges.

The bill's cost would be funded via combination of $426 billion in cuts to Medicare, Medicaid and other federal health programs and a surtax on the "wealthiest Americans" - a 5.4% surtax on the adjusted gross income of individuals making more than $500,000 and married couples making more than $1 million, which is higher than the thresholds in the previous version. Additional new revenue raisers would include a 2.5% excise tax on certain medical devices, penalties from individuals failing to obtain or provide insurance coverage and a payroll tax on employers failing to offer health insurance to employees.

CBO estimates the public plan option approach included in the bill would likely charge similar or even higher premiums compared with private plans in the new insurance exchanges, and forecasts that the public plan option would attract only 6 million enrollees.

House Health Reform Bill -- More Trick than Treat? New concerns grow

2009-10-29T11:20:00.001-07:00

House Speaker Nancy Pelosi (D-CA) unveiled today a health reform bill that includes a public plan with negotiated rates, expansion of Medicaid to people making up to 150 percent of the federal poverty level, and a provision requiring HHS to negotiate drug prices under Medicare. The public plan language does not appear to represent a more partisan approach and has already brought new concerns from moderates.

While the projected costs of the reform is now reduced to $900 Billion, this House proposal creates new significant concerns for health care providers but has some "carrots" for seniors related to the Part D Donut Hole. Below are highlights of some key components and changes in the some 2,000 page House health reform bill released today:

Public Health Insurance Option - Modifies policy so that the Secretary shall negotiate rates with providers that participate in the public plan and provides greater clarity regarding the opt-out policy for providers.
Medicare Part D Donut Hole -- Begins Closing the Medicare Part D Donut Hole Immediately. Effective January 1, 2010, closes the Part D donut hole by $500 and institutes a 50 percent discount for brand-name drugs in the donut hole. Gap in coverage is completely eliminated by 2019.
Medicare Part D Price Negotiation – There is a provision which would allow the Secretary of HHS to negotiate with manufacturers on prices of drugs within the Medicare Part D program.
Medicare Physician Reimbursement (SGR) Issue - Removes overhaul of the Medicare physician payment formula (SGR) which the House indicates will be permanently reformed by separate legislation this year.
ASP – There was an amendment accepted in the Energy and Commerce Committee which would have excluded distribution prompt pay terms, up to 2% of WAC, from the ASP calculation. This would correct a key issue that artificially reduces and skews Medicare Part B drug reimbursement. Unfortunately, this provision is not included in this new version but we hope this issue will be addressed in final health reform legislation.
AMP – The AMP provision has not changed and reimbursement remains at 130% of AMP to calculate the FUL which is considerably less than the Senate version.
Follow-on Biologics. House version continues to create an FDA licensure pathway for "biosimilar" generic biological products, allowing these products to come to market and compete with brand-name biologics. The biosimilar product must have no clinically meaningful differences in safety, purity or potency from the reference product, and may not be licensed until at least 12 years after the date that the brand-name product was licensed.
Comparative Effectiveness Research (CER) - Increases the independence of the Comparative Effectiveness Research Commission: Comptroller General appoints the commission, no longer established by the Secretary of HHS; establishes a separate independent funding stream for the Commission; ensures that the Commission is able to make reports without HHS review. Improves protections to ensure that sub populations are appropriately accounted for in research study design and implementation and requires a researcher with expertise in racial and ethnic minority health research to be on the Comparative Effectiveness Research Commission. Clarifies that comparative effectiveness reports are not considered as mandates for payment, coverage or treatment and that no federal officer or employee will interfere with the practice of medicine.
Vaccines – Earlier versions of the bill would have transferred coverage for all vaccines from Medicare Part D to Part B. This language has been removed.
Expansion of 340(B) – Earlier versions of this provision included creation of a new “acute care” class of trade and included language would require manufacturers to “deduct” prompt pay discounts. While the expansion of the 340(B) program has remained, the language related to acute care class of trade and prompt pay discounts has been removed.

House Bill likely to be released Thursday -- Will it try to fill the donut hole?

2009-10-28T12:06:00.000-07:00

Breaking news from Washington insiders:
House bill language is expected to be released Thursday morning.

There will be a number of key issues to watch for in the House bill and one that impacts patient access is the Medicare Part D Donut Hole. Democratic House leaders have been focused in trying to accelerate the "closing" of the Medicare Part D Donut Hole which leaves seniors with significant out of pocket expense until they reach the catastrophic benefit. One plan would begin to reduce the Part D copayments (or donut hole) as early as January and phase out the coverage gap in 10 years.

The bill that cleared Energy and Commerce would have phased out the donut hole over 15 years beginning in 2011. The underlying bill also shaves $500 from the cost of drugs provided in the coverage gap.

AARP estimates that about 26 percent of Part D beneficiaries who fill one or more prescriptions and receive no other assistance fall into the donut hole and spend four months in the coverage gap on average.

Few issues are as important to patient access for oral and self-administered drugs as the Medicare Part D Donut hole issue so this will be a key issue senior may rally around.

Moderates express concern for Senator Reid's "Public Option"

2009-10-28T08:49:00.000-07:00

Moderate Democrats have responded with concern today to Senate Majority Leader Harry Reid's decision to bring to the chamber's floor a health-care bill containing a "public option" government insurance plan. Some have said they still do not know whether they could support a public option on a final vote even if they were supportive of the procedural motion to bring the measure to the floor. But many moderate remain opposed to any form of government-run insurance plan even if it has a state "opt-out" option.

If the Senate bill advanced next month it is still possible the opt-out provision could be cut from bill during Floor debate. Some moderate Democrats are more comfortable with the "trigger" approach that Senator Olympia Snowe (R-ME) has advocated, saying that a variant of a public plan is more likely to win 60 votes. Under Snowe's approach, a public plan would be available only in states where private companies do not offer policies at broadly affordable rates which creates a trigger to incent cost reductions by insurers.

As of today, Washington insiders report that Senator Reid is short of the votes to pass a government-run public option in the Senate bill. Several moderate Democrats including Sens. Ben Nelson (D-NE); Evan Bayh (D-IN); and Blanche Lincoln (D-AR)have so far declined to say if they'll support a motion to begin debate on the bill.

Its back: "Public Option" Scenarios Take Center Stage Again

2009-10-24T08:22:00.000-07:00

A true "Public Option" was all but dead just a couple of weeks ago with the only potential compromise approach that appeared possible being a "trigger" option for a government plan only if cost savings targets were not reached as has been proposed by Senator Olympia Snowe (R-ME). But in the past two days we have seen support re-emerge for a more "robust public option" perhaps from both the House and Senate.

It has been reported that President Obama told Democratic leadership at the White House Thursday evening that his preference is for the "trigger option" championed by Snowe which is a sign that the President wants to maintain a sense of bipartisanship around the health reform plan. At that meeting, Obama did not sign on to a plan being floated by Senate Majority Leader Harry Reid (D-NV) to include a different variation of the public option in the Senate bill — a plan that would create a national public plan but allow states to “opt out.”

One of the biggest concerns with a public option is the concern that payment rates and incentives might be based off of the Medicare system which would be a disaster for health care providers. Given this sensitivity expect the public option debate to continue to focus on the details as the various options are considered including both the "trigger option" and the "state opt out".

The October Kaiser Health Tracking Poll finds 57 percent of the public say they favor the creation of a “government administered public health insurance option,” however the poll indicates that this support dips to one-third (32%) when initial supporters are told that such plans “could give the government plan an unfair advantage over private insurance companies.” However, support for the public plan rises to two-thirds (65%) when initial opponents are told that public plans would be “a fallback option" similar to the "trigger option".

As the health reform debate continues into November and perhaps beyond it will be critical for health care providers to focus on the specifics of a public option with the hope that the flaws in the current Medicare system will not be expanded.

Politics vs Good Health Policy: Senate unable to gain votes to fix Medicare SGR Physician Payment Issue

2009-10-21T14:13:00.000-07:00

Despite widespread, bipartisan acknowledgement that the Medicare Physician Reimbursement issue (known as Sustainable Growth Rate or SGR) needs to be fixed, today the Senate failed to assemble the votes necessary to move this issue forward. Feels like politics at play versus taking advantage of the larger health reform debate to address issues that have needed to be fixed for several years.

Due to the flawed SGR issue, physicians will receive a 21% cut in Medicare reimbursement on January 1st and the Senate was attempting to permanently fix this issue separate from health reform since the issue was skewing the debate. The Senate Finance Health Bill does have a one year fix which would (once again) defer this issue which is a huge distraction and frustration since the "cost" to fix the issue grows each time a temporary fix is made.

Today, a vote on the motion to invoke cloture on the motion to correct this issue (S. 1776) failed in the Senate, 47-53. 60 votes were needed to move forward.

Republicans and some Democrats questioned the price of the Medicare measure -- $247 billion over 10 years -- and said proponents haven't offered any new revenue sources or spending cuts to offset the cost. Supporters of the bill say the sharp payment cuts, unless reversed, would encourage doctors to stop seeing Medicare patients.

Since a temporary fix is needed we will likely hear more debate on this issue in the remaining weeks of this year given the looming January 1st massive reimbursement cut.

New "Public Options" and Focus on "affordability" as health reform debate continues

2009-10-20T14:05:00.000-07:00

This week we are seeing new reports to create a "middle ground" on the public option debate -- perhaps focused on scenarios such as the "Trigger Option" proposed by Senator Olympia Snowe (R-ME). The purpose would be to create more incentives for private payers to reduce costs more quickly as a means to prevent having to compete with a public option.

Reports today are that Baucus and other Senate Finance Committee members are discussing ways to modify their health reform bill to make it more affordable to beneficiaries, including the possibility of adjusting the minimum coverage of the lowest (bronze-level) plan down to 60 percent actuarial value from its current 65 percent. The risk in such changes is that while they reduce the cost of health insurance coverage they also typically reduce the scope of coverage and can create new issues in terms of out-of-pocket costs for patients. Senators are also discussing stronger incentives and penalties for individuals which would help increase the number of insured.

On Monday, Baucus also released the legislative text and report language for the health reform bill passed by Finance Oct. 13. http://finance.senate.gov/sitepages/leg/LEG%202009/101909%20America%27s%20Healthy%20Furture%20Act%202009%20Leg.pdf
Based on Baucus' comments the area we may see significant change to bill would relate to affordability concerns.

Health reform debate continues but Senate delays SGR repeal

2009-10-19T12:46:00.001-07:00

Senate Democrats were not able to gather necessary votes to permanently repeal Medicare's Sustainable Growth Rate (SGR) which for many years has led to looming cuts in physician payments that expand each year. The issue began to become confused by the media since it has a high price tag of $240 billion but in reality would only prevent a looming pay cut for physicians. However, AARP is now also weighing in to support the repeal of SGR on a permanent basis which could help draw new support and adds new weight to efforts by the AMA. Currently, the Senate Finance health reform bill draft has only a one year fix of SGR.

On a related note, Senate leadership did announce it will allow a limited number of amendments to be introduced which is expected to open the door for Republicans to seek votes on medical malpractice reform and other issues that are considered to be gaps in health reform legislation. It is not clear what other issues will be considered but it appears we have several weeks more of health reform debate in both the Senate and the House.

On the House side, Washington insiders report that the House will likely not vote on health reform until after the elections but before Thanksgiving. However, the House will likely unveil a bill next week and it may include different options related to the controversial public option. We expect the House bill will end up being deficit neutral or better and the cost will be under $900 billion.

Will we have health reform legislation by Thanksgiving? Possible. But I am betting it will be December.

Former Senator Daschle addresses HDMA meeting in Orlando on health reform

2009-10-16T07:17:00.000-07:00

Former Senator Daschle spoke today at the HDMA annual leadership meeting in Orlando, FL and indicated that health reform has moved to the next level and says the odds of seeing it pass this year are greater than 50/50. He pointed to key areas of consensus to the reforms being proposed but acknowledged that debate on issues such as the public option have taken focus away from areas of consensus.

He spoke to the three major areas of reform:

Insurance Reform -- this is the area of consensus and where the proposed health reforms will have the biggest impact
Payment Reform -- spoke that this is the hardest area and where we have made mistakes int the past; reforms proposed begin to help create new models but it would be more than a decade before those efforts have significant impact
Delivery Reform -- this is also a challenging issue and like payment reform will take a much longer time to develop

Daschle commented that the Senate Finance Committee work has been the most important work on health reform and that the Senate work will be the most likely vehicle for health reform. He commented that it could include health care co-ops and perhaps even triggers related to public options as proposed by Olympia Snowe (R-ME).

When asked about the Medicare Physician Fee Schedule Sustainable Growth Rate (SGR) bill which was separately proposed in the Senate this week he did predict that it has better than even odds to pass separately. This will be voted by the Senate on Monday.

Update: Will Senate Move Forward with Medicare Doc Fix?

2009-10-15T14:22:00.000-07:00

Breaking news: This afternoon Senator Reid moved forward with a bill that would address the Medicare physician payment issue separately from health Reform. As reported previously, S-1776 was introduced this week to provide for the update under the Medicare physician fee schedule for years beginning with 2010 and to sunset the application of the Sustainable Growth rate (SGR) formula. Senator Reid filed cloture on the motion and by unanimous consent, the cloture vote on the motion to proceed to S. 1776 will occur at 5:30pm on Monday, October 19.

What is the probability that this Medicare Doc Fix issue will be addressed separately and permanently? Too early to tell at this point but there is bipartisan support to (finally) address this issue permanently.

Senate Democrats move to fix Medicare Physician Payment Issue

2009-10-14T20:06:00.000-07:00

In a surprise move today, Senate Democrats are making a push to separate the troubling Medicare physician fee schedule issue from health reform. There is bipartisan support to address the issue but the cost of doing so has grown over many years. Now the cost of permanently fixing the Sustainable Growth Rate (SGR) flaw in the Medicare Physician Fee Schedule artificially adds over $200 Billion to the cost of health reform which is why only another one-year temporary fix was included in the Senate Finance Committee's health plan.

Today, Senator Debbie Stabenow (D-MI) introduced the "Medicare Physician Fairness Act of 2009" (S. 1776). The bill would repeal permanently the sustainable growth rate (SGR) payment methodology. Senator Stabenow requested that the bill be considered immediately under a procedure called Rule 14, which waives Committee consideration of the bill. Senate Majority Leader Harry Reid will attempt to bring S. 1776 before the full Senate tomorrow. However if there is an objection, Senator Reid will file a cloture motion which would limit debate and require 60 votes.

Note that our understanding is that this does not have an offset, the Senate will be required to waive the Budget Act prior to final passage which also requires 60 votes. From a health policy perspective, separately addressing this Medicare issue makes sense since the issue has been deferred for many years with one year temporary fixes and has basically led to no increases in Medicare reimbursement for physicians for close to a decade.

Senate Finance Committee approves proposed health plan with 14-9 vote today including Olympia Snowe (R-ME)

2009-10-13T13:47:00.000-07:00

Today, the Senate Finance Committee approved an $829 billion plan to overhaul U.S. health care which now moves the measure forward for a full Senate debate. The vote passed 14-9 and did include one Republican, Senator Olympia Snowe (R-ME), in a vote that otherwise followed the party line.

Senate and House Democratic leaders must now merge the bills and schedule floor debates. After each chamber votes, they’ll have to reconcile their measures but the Senate Finance Committee version is the most moderate reform. Senate Majority Leader Harry Reid will need to meld the finance panel bill with one approved by the Senate health (HELP) committee in July which could create challenges and debate within the Democratic party. The Senate finance version does not include a so-called "public option".

With today's action, the probability for health reform moving forward before the end of the year has advanced significantly and the Senate floor debate will be critical in further shaping this phase of health reform.

In France, Insurers Have to Pay Claims in 3 Days? (From MGMA Meeting)

2009-10-12T14:44:00.000-07:00

Today at the Medical Group Management Association (MGMA) national meeting, author T.R. Reid drew laughs from a crowd of over 10,000 practice administrators when he said that, in France, Insurers must pay claims to providers within 3 days. What a perfect example of some of the costly administrative gaps that exist in the US Health care system. In light of the economic crisis this past year and challenges in access to capital, the current US health care system and its complex and inconsistent claims payment systems take on even more significance.

Also at today's conference was bioethicist Ezekial Emanuel, MD who had several key quotes that were then shared via Twitter real time to MGMA members:

"The problem in the system is not that we don't have the right technologies... it's how we connect with patients."
"There needs to be a shift from volume-driven care to coordinated care."
"The holy grail is High Touch Medicine: access, quality and controlled cost growth."

MGMA urged its members to stay involved and also provided an update on health reform efforts since it is likely that grassroots type input will be important once we move to potential floor amendments on a wide range of key issues impacting physician practices in particular that are not addressed in the current Senate health reform proposal.

Senate Finance Committee Votes Tomorrow on Health Reform

2009-10-12T14:19:00.000-07:00

On Tuesday, Oct. 13, the Senate Finance Committee will vote to approve its version of healthcare reform, which includes Chairman Max Baucus' redrafted legislation as amended during committee deliberations.

The Congressional Budget Office (CBO), the official scorekeeper of legislation, has tallied the cost of the bill at $829 billion. This is less than the $900 billion that the president and Baucus, D-Mont., were seeking. The bill also reduces the budget deficit by $81 billion over 10 years. Senate Majority Leader Harry Reid, D-Nev., will meld this legislation with the bill approved in July by the Health, Education, Labor and Pensions Committee. The combined version will then be sent to the CBO for an official cost estimate necessary prior to consideration by the full Senate.

Since the Constitution mandates that legislation with tax revenues originate in the House, Sen. Reid is expected to "call up" for consideration a House-passed bill related to the AIG bailout and substitute the healthcare reform language for that currently contained in the bailout measure. Republicans are expected to object to consideration of the bill, forcing Reid to file a cloture motion to cut off the filibuster and move to consideration of healthcare reform by the full Senate. This will require 60 votes. If Sen. Reid succeeds, anywhere from hundreds to more than 1,000 amendments could be offered for consideration.

Since most analysts believe that the majority of the re-crafted Senate bill will be derived from the Finance bill, there is an opportunity to reach out to Senators related to specific concerns such as the cuts in Medicare physician reimbursement and to postpone CME proposed cuts that are to be implemented on January 1st since some of those changes in RVUs include dramatic cuts in reimbursement that could impact patient access to care.

The Finance bill only provides a 0.5 percent Medicare payment increase in 2010 and then reverts to massive cuts of approximately 25 percent in 2011 and beyond. There is hope that amendments will be offered during the Senate Floor Debate to address some of these key issues.

Groups such as the Medical Group Management Association (MCMA) and the Community Oncology Alliance (COA) have tools on their websites to facilitate access to members of Congress on these issues.

From AMCP Today: Howard Dean and Bill Frist both predict health reform legislation to pass

2009-10-08T13:17:00.000-07:00

At the Academy of Managed Care Pharmacy (AMCP) meeting in San Antonio, TX, both former Gov. Howard Dean and former Senator Bill Frist predicted health care reform would pass this fall. Frist predicted that key votes would occur next week.

Despite their very different political background the two physicians and former politicians agreed on many of the key items of health reform. The biggest difference was whether health reform needs a public option.

Dean advocated for a public option to be included so that there is a "real choice". He believes that having a modest sized but true public option is important to create change in the market and he felt that health insurance companies would rise to that challenge. He feared that without a real public option of some form that in order to have change in the cost model and incentives we would need a system like Switzerland where private insurers were like a publicly held, highly regulated utility.
Frist presented a case that a public option would be modeled from Medicare payment system which is flawed and would leave a significant gap for physicians, hospitals and other providers. He also presented concerns that more people would opt into the public plan and a public plan that is too large "is not real choice". Frist predicted that we would probably not see a public plan included in health reform since it is not included in the Senate Finance health reform package.

Both agreed that this really is just the beginning of health reform changes -- not the end and both acknowledged that many of the key issues to truly change the incentives of the systems and the "cost curve" that further change and innovation would be needed.

Senate Finance to Vote on Health Reform on Tuesday (Oct 13th)

2009-10-08T13:00:00.000-07:00

The Senate Finance Committee will vote next Tuesday, Oct. 13, on the pending health reform bill based on announcements today from Senate Finance Committee Chairman Max Baucus (D-MT). The announcement came one day after a Congressional Budget Office (CBO) analysis projected that the bill would cost $829 billion and reduce federal deficits by a total of $81 billion over 10 years which is one of President Obama’s main requirements for health reform. The bill would also expand coverage from 83 percent to 94 percent of non elderly Americans over 10 years.

Republicans including Senator Charles Grassely (R-IA) have cautioned that the celebration of reducing the deficit "masks who pays the bills" and that the package includes hundreds of billions of dollars in new taxes and fees. Expect to see a long day Tuesday as Senate Finance members will likely have many questions regarding the CBO analysis and projections released yesterday.

While the Senate Finance Health Reform was developed by a bipartisan team, many project that the final votes for health reform within the Senate Finance Committee may end up appearing largely partisan.

CBO Releases cost estimate for Senate Finance Reform

2009-10-07T14:18:00.000-07:00

Breaking news. This afternoon, the Congressional Budget Office (CBO) issued a letter to Senate Finance Chairman Baucus (D-MT) regarding the cost of his health reform proposal (or Chairman's Mark). The CBO concluded that the bill would increase federal spending by $829 billion over 10 years but would be offset by enough spending cuts and tax increases to reduce the budget deficit by $81 billion over 10 years.

The fact that the plan does reduce the deficit over the next 10 years means that it meets a key objective for health reform and the Finance Committee will now move to consideration of their final bill perhaps this week but more likely next week.

Senate Finance Health Reform Bill Continues to Move forward – CBO to estimate the cost

2009-10-03T06:06:00.000-07:00

The Senate Finance Committee moved health reform to the next level Friday by completing the mark-up process and sending it to the Congressional Budget Office (CBO) for a revised score. The CBO score with its vast array of assumptions will play a key role in determining the next steps for health reform. Once a preliminary CBO score is released the Senate Finance could move forward as early as next week depending on what adjustments must be made.

Why do many feel the Senate Finance proposed reforms have the best chance to pass?

Plan does not include a public option. Senate Finance voted down two separately proposed amendments to add a public plan option this week. Given the public concerns related to a public option, the Senate Finance reforms now appear the most moderate and have some bipartisan support.
The plan does include a popular incentive to all health plans to vary premiums and reward consumers who participate in wellness programs.
The plan does address the looming 2010 Medicare Physician Fee Schedule issue (which would reduce Medicare physician reimbursement by over 20% starting Jan 1st) which has bipartisan support and must be addressed this year.
Includes bipartisan key health insurance reform changes such as prohibiting exclusions for pre-existing conditions.

However, the bill does include controversial issues such as the new Medicare Commission (known as the “Super MedPAC”). Many key issues are not addressed as part of the plan so we would expect to see a significant range of floor amendments offered.

Senator Baucus’s proposed plan appears to balance many of the most controversial issues and it looks well positioned to move forward in the coming weeks in some form. As the work of the Senate Finance Committee is merged with the efforts of the Senate HELP committee we do expect that biosimilars will be added to the Senate version of reform.

Key Questions For Next Week:

Will the Senate Finance bill meet the President's budget related requirements?
Will it have any bipartisan support such as Sen. Olympia Snowe (R-ME)?

Breaking News: Congress expected to delay new requirements for DME Suppliers

2009-10-01T14:52:00.000-07:00

Perhaps as early as tonight, Congress will likely finalize legislation to delay implementation of new requirements for Durable Medical Equipment (DME) suppliers until January 1, 2010. This is an important change, particularly for local medical suppliers and community pharmacies, since many local providers would not be able to continue to provide Medicare beneficiaries with access to DME and related medical supplies based on the new requirements.

CMS issued a release today that new requirements for suppliers of medical equipment and supplies starting today unless there was legislative action. The House passed a bill last night (H.R. 3663) to delay the DME accreditation requirement for pharmacies until January 1, 2010.
Reports now anticipate that the Senate will pass legislation as early as this evening to delay the accreditation requirement for pharmacies.

Why is this delay important for patients? This would be good news for Medicare patients that access any type of DME or related supplies as they can continue to use their existing providers. Lets hope Congress takes temporary action today and then permanently excludes pharmacies and other community providers as part of health reform.

Senate Finance Votes Against Public Option

2009-09-30T06:29:00.000-07:00

Breaking News. In an important advance for a more moderate, bipartisan health reforms the Senate Finance Committee Tuesday voted against including a "public option" provision in the bill. While the media is reporting this as some form of "set-back" related to health reform, in reality this may prove to be a critical victory towards advancing the more moderate health reform being proposed by Senator Max Baucus (D-MT). The panel rejected a proposal by Sen. John Rockefeller (D-WV) 15-8, and a second public option proposal by Sen. Charles Schumer (D-NY) was defeated 13-10. The votes clearly support the more moderate approach taken by the committee chairman, Senator Max Baucus thus creating new hope for bipartisan health reform legislation. The Senate Finance Committee continues it work today.

The Donut Hole -- Can we affort to fill it as part of health reform?

2009-09-25T14:46:00.001-07:00

One of the most hotly debated issues being considered by the Senate Finance Committee relates to efforts to close the Part D "Donut Hole" coverage gap as part of health reform. The senior lobby is urging lawmakers to go further than the narrowing of the donut hole that has been proposed based on savings from PhRMA. This week Senator Bill Nelson's (D-FL) amendment to fill the donut hole failed 10-13 with three Democrats, including Senate Finance Chair Max Baucus (MT), joining the GOP members in opposing the measure. Nelson's amendment would have required an additional health reform contribution from drug companies beyond the $80 billion deal that Baucus and the White House reached over the summer.

Despite it's failure, we expect to see this as a key issue when legislation comes to the full Senate floor. We may see seniors weigh in heavily on this issue but the concern is of course the cost of this change and even whether we need to expand a program that has high marks overall from beneficiaries.

While many want to close the donut hole eventually, including President Obama, the question is how to balance cost considerations to fund such a change. Before asking for a final vote Baucus also said he supports closing the gap, but said staff needed time to find a “more appropriate way” to do so in terms of offsets. There is concern that dramatic changes could lead to premium increases that would negatively impact all seniors which is difficult to project or estimate.

The "Donut Hole Debate" has likely only just begun as efforts to bring senior on board with health reform overall. For many seniors, particularly those with chronic disease, the donut hole creates significant patient access issues each year so this is a sensitive topic for many interested parties.

Senate Finance Considers Key Amendments to Health Reform

2009-09-25T14:26:00.000-07:00

With over 500 amendments for consideration by the Senate Finance Committee on Health Reform, progress was made to go through proposed changes and support was reached for some significant modifications or additions to the Chairman's Mark released last week by Max Baucus (D-MT). While the progress has been slow, it does feel like we are moving toward a Senate health reform bill that will have enough support to move forward. Key amendments passed by the Committee so far, include:

Biosimilars Reimbursement. Offered by Senator Schumer (D-NY), an amendment that would reimburse biosimilars at the average sales price (ASP) plus the innovator/brand product's 6 percent add on, which is assumed to be greater than the biosimilar's own 6 percent. Senator Schumer had originally filed language that would have assigned the same billing codes to branded and biosimilar products but that language was removed in the modified proposal. PhRMA and BIO, reportedly, supported this amendment as modified. The amendment, as currently understood, contradicts some earlier press reports suggesting reimbursement for the innovator and biosimilar would be determined based on a volume-weighted average of the products. This one will be an important one to watch final bill language.
PBM Transparency. Offered by Senator Cantwell (D-WA), an amendment that would require PBMs operating in the insurance exchanges to disclose to HHS information regarding: (1) the percent of all prescriptions provided through retail pharmacies compared to mail order pharmacies, and the generic dispensing and substitution rates in each location; (2) the aggregate amount and types of rebates, discounts, and price concessions that the PBM negotiates on behalf of the plan and the aggregate amount of these that are passed through to the plan sponsor; and (3) the average aggregate difference between the amount the plan pays the PBM and the amount that the PBM pays the retail and mail order pharmacy.
Medicare Commission. Offered by Senator Rockefeller (D-WV), an amendment that would make binding the recommendations of a Medicare commission to lower spending growth unless the Senate voted by a two-thirds majority to reject them. The new commission's recommendations would have to be accepted by the president before being voted on by Congress.
Patient-Centered Outcomes Research Institute. Offered by Senator Grassley (R-IA), an amendment which would remove cabinet secretaries and other high-ranking government officials from serving on the board of the Patient-Centered Outcomes Research Institute

Was anything key rejected? Yes and as is being widely reported, Baucus, voting along with Republicans, rejected an amendment that would have nullified the PhRMA accord reached earlier this year with Baucus and the White House. The amendment, offered by Senator Nelson (D-FL), would have scrapped the PhRMA agreement and would have made Medicaid-instead of Medicare- responsible for paying for low-income seniors' drugs; it would also eliminate the Part D coverage gap (or donut hole). The cost of the amendment would have been offset by requiring drug manufacturers to provide rebates to dual-eligible enrollees of Part D plans. It was estimated to produce $106 billion of revenue (after filling the doughnut hole, $50 billion would be left over).

Remember this is only what is included in the Senate side and we have not seen any legislative language yet and the Senate Finance Committee will resume its work on considering other amendments on Tuesday.

Senate Debates Proposed Health Bill -- Baucus adds new changes

2009-09-23T05:53:00.001-07:00

Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, opened the debate on healthcare reform with additional changes designed to expand support for working-class families and impose new obligations on the insurance industry. Sen. Baucus announced he was adding $50 billion to draft legislation to help those who would be required to purchase insurance. The changes would expand subsidies for individuals and families with incomes up to four times the government's poverty level ($43,320 for individuals and $88,200 for a family of four) that do not have access to health insurance. The debate and discussion feels like it will be slow with more than three hours of opening statements by both Republicans and Democrats. Committee members offered 564 amendments.

Other key proposed changes include:

Proposals to increase tax credits for middle-income families that buy health insurance
Limits to how many people would be subject to a new excise tax on "high-end" health plans so that high risk works like fire fighters are excluded.
New proposals to expand discounts from the pharmaceutical industry beyond the PhRMA proposed savings.
Proposals to expand Medicaid vs Medicare Part D for low-income seniors to further reduce costs
Additional changes that would require PBMs to disclose rebates from drugmakers to clients

Amendments could be voted on as early as this week.

Baucus Plan Includes Doctor Payment Disclosure Regulations (Known as Sunshine Act)

2009-09-21T15:24:00.000-07:00

Tucked into the details of the Senator Baucus' draft health reform bill is a measure that would require drug and medical device companies to publicly report payments or “transfers of any value, with limited exceptions” to physicians or teaching hospitals. While the actual bill is not yet available, it appears that this provision will impact both physicians and manufacturers. The scope of the Senate provision is unclear but the House reform bill would require reporting of payments to a broader category of recipients, including all hospitals, physicians, pharmacies, health insurers, continuing medical education sponsors, researchers and patient and professional organizations.

The proposal is based on a bill introduced by Sen. Charles Grassley (R-IA), the committee’s ranking Republican, which would require drug makers to publicly report gifts to physicians once the aggregate amount over a year totals $100. Currently, the House bill sets the threshold at $5. This language will be another aspect of health reform to watch as it could create new administrative burdens of physicians as well as manufacturers.

Will the Senate be able to drive toward bipartisan health reform?

2009-09-17T20:51:00.000-07:00

Challenges continue to grow for some form of bipartisan health reform but the debate over health care appears far from over and may last until December.

Today, reports from Capitol Hill indicate virtually no Republican support for Senate Finance Chair Baucus (D-MT) and the health reform mark he released yesterday. Olympia Snowe (R-ME) is the only potential Republican name that may consider supporting the proposed Finance bill. Republicans may not even offer any of the other amendments to the proposed Senate Finance mark based on reports today. What does that mean? Basically, the best chance for bipartisan health reform legislation might start with a fresh, blank piece of paper.

The key areas of consensus remain focused on insurance reforms but virtually all other issues are being debated due to the cost issues with such reforms.

Senator Baucus Releases Draft Health Reform Legislation

2009-09-16T21:07:00.000-07:00

Senator Baucus Released today the Chairman’s “Mark” (or draft legislation): America’s Healthy Future Act of 2009. While today in Washington the effort feels partisan, it is possible that this legislation can be adapted for bipartisan support.

Key highlights include the following:

Individual Insurance Coverage Mandate: Starting in 2013, all U.S. citizens and legal residents would be required to purchase coverage through the individual market, a public health program (e.g.,Medicare, TRICARE), an employer, or a larger market exchange.
Employer Obligations: While employers would not be required to offer health insurance coverage to employees, those employers with more 50 employees that do not offer health insurance would be required to pay a fee (often referred to as “pay-or-play”). The fee assessment would be capped for and the details of this will be critical. The effective date of this provision would be January 1, 2013.
Creation of the Consumer Operated and Oriented Plan (CO-OP): The Chairman’s Mark does not offer a "true" public plan option, but does authorize $6 billion in funding for the creation of the Consumer Operated and Oriented Plan (COOP). The CO-OP would be comprised of non-profit, member-run health insurance companies that serve individuals in one or more states. These plans would establish state-based health insurance exchanges to help facilitate access to coverage for individual and non-group markets.
Part D Drug Discount Program. Beginning in 2010, in order to have their drugs covered under Medicare, manufacturers would be required to provide a 50% discount off the negotiated price for brand-name drugs covered on plan formularies when beneficiaries enter the coverage gap. Beneficiaries are eligible provided they do not qualify for low-income subsidies, do not have employer sponsored coverage, or do not pay higher Medicare premiums under Part B or Part D.
Medicaid Coverage for the Lowest Income Populations. Starting in January 2011, states would be given the option to cover non-elderly, non-pregnant adults (often referred to as childless adults) through a state plan amendment (SPA) at their current match rate. Effective January 1, 2014, the proposal would establish 133% of the federal poverty limit (FPL) as the new mandatory minimum Medicaid income eligibility level nationally.
Medicaid Prescription Drug Coverage. According to the Mark, prescription drugs would become a mandatory Medicaid benefit for the categorically and medically needy effective January 1, 2014.
Physician Reporting (Sunshine Provision). Under the Chairman’s Mark, a reporting requirement for payments to physicians would be required. Beginning on March 31, 2012, and each year thereafter, each manufacturer of a covered drug, device, biological, or medical supply would be required to electronically report information on payments or other transfers of value made during the prior year to physicians, physician medical practices (including group practices), and hospitals with residency training programs.
New Fees. Under the Chairman’s Mark, an annual fee of $2.3 billion annually would be imposed on the pharmaceutical manufacturing sector beginning in 2010. The fee would be allocated by relative market share of covered domestic sales for the prior year. The fee would not be deductible for U.S. income tax purposes. Similar fees of $4 billion, $6 billion, and$750 million are proposed for medical device makers, health insurance sector, and clinical laboratory sectors, respectively. All proposed industry fees would be allocated by market share and start in 2010.
National Pilot Program on Payment Bundling. This provision would direct the Secretary to develop a voluntary pilot program encouraging hospitals, doctors, and post-acute care providers to achieve savings for the Medicare program through increased collaboration and improved coordination of patient care by allowing the providers to share in such savings.
Physician Fee Schedule Medicare Sustainable Growth Rate. The scheduled 21.5% reduction in Medicare physician payment rates in 2010 would be replaced with a 0.5% increase for 2010.

What happened to Bipartisan Support on the Senate Side? The original hope was that this bill would have bipartisan support among the G6, agreement was never reached. In addition, reports have indicated that three Democrats, Senator Jay Rockefeller (D-WV) and two other unnamed Democrats, have stated that they would not vote in favor of the bill as written. However, the next step of the process will be the mark-up by the Senate Finance Committee which is slated to begin on September 22, 2009. During the mark-up process, it is possible that the bill’s provisions could change to garner more bipartisan support.

Is Bipartisan Reform still possible?

2009-09-14T11:48:00.000-07:00

Today, Senate Finance Chairman Max Baucus (D-MT) said there is “high probability” that he will release his health care reform bill Tuesday and that he hopes to simultaneously announce that it will be a bipartisan product. Clearly Baucus is working to bring the "gang of six" together and their has been focus this week to compromise together on the most controversial issues such as having more of a private co-op or exchange than a true "public option". After the Chairman's mark is released there will still be opportunities to modify the bill through the amendment process which does leave open the door for more bipartisan support. Other key issues being discussed include language intended to make sure that illegal immigrants can not participate in such coverage and also new funding to reduce medical malpractice lawsuits.
Stay tuned -- it will be a busy week for health care!

Baucus Healthcare Refom: New Details Released Today

2009-09-08T10:08:00.000-07:00

Below is the framework of Baucus' healthcare reform approach, apparently released to the Senate Finance Committee "gang of 6" for consideration today. The official documents have not been released but new details (summarized below) have been widely shared across Washington experts today. It does includes some key imminent issues such as addressing the 2010 Medicare physician reimbursement cut (referred to as sustainable growth rate). It also includes some new "surprise" fees on health insurers, device industry and others.

The reported price tag comes in a $900 billion over 10 years and there is no "true" public plan option although the bill includes a number of insurance market reforms, including creation of state health insurance exchanges to help facilitate access to coverage for individual and non-group markets. The bill includes an individual mandate for coverage, beginning 2013, but would not require employers to provide coverage for employees (although employers with more than 50 employees must "pay" if they don't "play" per framework below).

The framework also creates/makes improvements to value-based purchasing programs for hospitals, physicians, home health agencies and SNFs, among other providers, and would facilitate payment bundling approaches through pilot programs. It also includes payment changes for some DMEPOS (e.g., oxygen, power wheelchairs, etc.). The framework also includes increased emphasis on industry transparency (e.g., Rx drug sampling reporting requirements) and fraud and abuse, including imposition of new fees on manufacturers.

Key highlights being reported today include the following proposals (please note the actual bill language has not been released):

Part D Drug Discount Program. Beginning in 2010, in order to have their drugs covered under Medicare, manufacturers must provide a 50%discount off the negotiated price for brand-name drugs covered on plan formularies when beneficiaries enter the coverage gap. Beneficiaries are eligible provided they do not qualify for low-income subsidies, do not have employer sponsored coverage, or do not pay higher Medicare premiums under Part B or Part D.
Medicaid Coverage for the Lowest Income Populations. In January 2011, prior to the expansion, states would be given the option to cover non-elderly non-pregnant adults through a state plan amendment (SPA) at their current match rate. Effective January 1,2014, the proposal would expand Medicaid income eligibility levels nationwide.
Prescription Drug Coverage, Medicaid Rebates and AMP. Prescription drugs would become a mandatory Medicaid benefit. The status of drugs used to promote smoking cessation, barbiturates, and benzodiazepines would be changed from "excludable" to "non-excludable." Medicaid prescription drug rebates would be applied to Medicaid managed care organizations. Similarly, the rebates would be applied to new formulations of existing drugs, with an exception for orphan drugs. The rebate amounts would be increased, with the minimum rebate percentage for single-source and innovator multiple source drugs going from 15.1%to 23.1%and from 1 1%to 13% for generic drugs. For clotting factors and drugs approved by the FDA for pediatric use only, the rebate would be increased from 15.1%to 17.1%.The federal upper limit (FUL) would be changed to no less than 175% of the weighted average (determined on the basis of utilization) of the most recently reported monthly average manufacturer price (AMP).
Hospital Value-Based Purchasing.The proposal would establish a value-based purchasing program for hospitals starting in 201 1. Under this program, a percentage of hospital payment would be tied to hospital performance on quality measures related to common and high-cost conditions, such as cardiac, surgical and pneumonia care. Quality measures included in the program (and in all other quality programs in this section) will be developed and chosen in cooperation with external stakeholders.
Physician Value-Based Purchasing.This provision would make improvements to the Physician Quality Reporting Initiative (PQRI) program, including requiring all eligible health professionals to participate by 201 1, establishing payment incentives for physicians to appropriately order high-cost imaging services, expanding the Medicare physician feedback program, and penalizing physicians who utilize significantly more resources than their peers.
CMS Innovation Center. This provision would establish an Innovation Center at CMS that would have the authority to test new provider payment models. Payment reforms that are shown to improve quality and reduce costs could be expanded throughout the Medicare program. The Innovation Center's funding would be set at $10 billion.
National Pilot Program on Payment Bundling. This provision would direct the Secretary to develop a voluntary pilot program encouraging hospitals, doctors, and post-acute care providers to achieve savings for the Medicare program through increased collaboration and improved coordination of patient care by allowing the providers to share in such savings.
Medicare Sustainable Growth Rate (SGR).The scheduled 21% reduction in Medicare physician payment rates in 2010 would be replaced with a 0.5% increase.
Ensuring More Appropriate Physician Payment Rates.This provision would establish a panel comprised of health care providers, experts, and stakeholders to identify physicians' services that are overvalued in the Medicare physician fee schedule. In consultation with the expert panel, the Secretary would be required to adjust payments for those services that have increased at an unusually high annual rate without evidence supporting the clinical appropriateness of such growth.
Prescription Drug Sample Transparency. Drug manufacturers and authorized drug distributors would be required to report to the Secretary information already collected pursuant to the Federal Food, Drug and Cosmetic Act. Specifically, manufacturers and distributors would be required to report the type and amount of drug samples requested by and distributed to practitioners, along with the practitioners' names, addresses, professional designations and signatures. The reported information would not be made publicly available.
Pharmaceutical Manufacturing Companies Fee.Under this proposal, an annual fee of $2.3 billion would be imposed on the pharmaceutical manufacturing sector beginning in 2010. The fee would be allocated by market share.
Medical Device Manufacturers Fee.Under this proposal, an annual fee of $4billion would be imposed on the medical devices manufacturing sector beginning in 201 0. The fee would be allocated by market share.
Health Insurance Provider Fee.The proposal would impose an annual fee of$6billion on the health insurance sector beginning in 201 0. The fee would be allocated by market share.
Clinical Laboratories Fee.Under this proposal, an annual fee of $750 million would be imposed on clinical laboratories beginning in 2010. The fee would be allocated by market share, except for small businesses.

Physicians and PQRI -- New updates from CMS

2009-09-07T16:28:00.000-07:00

There have been lots of questions from physician offices regarding the 2009 Physician Quality Reporting Initiative (PQRI) and updates including questions regarding payments for prior years. To address this, CMS has just announced that they will host a national conference call (Q&A session) on Thursday, Sept 17, 2009 at 2:30 - 4:30 EDT. The topics covered on this national provider call will include:

Status of the 2007 re-run and 2008 PQRI Incentive payments and feedback reports;
How to access the 2007 re-run and 2008 PQRI feedback reports;
Resources to assist eligible professionals; and
PQRI and E-Prescribing Alternative Report Request Process

Following this presentation, the lines will be opened to allow participants to ask questions of CMS PQRI subject matter experts.

Educational resources are available on the PQRI dedicated web page located at, http://www.cms.hhs.gov/PQRI and specific to the e-prescribing incentive at http://www.cms.hhs.gov/ERxIncentive.

In order to receive the call-in information, you must register for the call in advance at http://www2.eventsvc.com/palmettogba/091709 additionally a transcript of the call will be available at least one week after the call at http://www.cms.hhs.gov/pqri on the CMS website.

Senator Baucus pushes for bipartisan support of Senate Finance Health Reform Proposal

2009-09-07T12:34:00.000-07:00

In today's Washington Post, Senate Finance Chairman Max Baucus is said to be urging his Republican colleagues to support the $900 billion health-care reform package they have helped to negotiate over the past two months -- creating a bipartisan proposal before President Obama's speech Wednesday night.

The Baucus plan, circulating among the Finance Committee's "Gang of Six" this weekend, sets forth provisions that have already gained the group's unofficial support but now there is pressure from other Republican colleagues to let the Democrats fight for a health reform bill on their own.

The Baucus plan creates bipartisan options for some of the most controversial aspects of health reform. Instead of a government insurance option, the Baucus proposal would create a network of non-profit cooperatives which is an alternative that Grassley, the lead Republican negotiator, has backed. The Baucus plan also creates new fees on "high cost plans" which may be controversial since many union households could be impacted.

At a cost of under $900 billion for 10 years, the finance bill would appears to be at least $100 billion less than other legislation on the table. Analysts indicate the plan is designed to "bend the cost curve" downward over time to make health-care more affordable for businesses, individuals and government, while reducing the federal deficit within 10 years.

In addition to the fee on high-cost plans, the proposal also would extract about $400 billion in cost-savings from Medicare, cuts that are stirring unease among both parties.

Under Baucus's plan, Medicaid would be expanded to cover all individuals -- except illegal immigrants -- who make up to 33 percent above the current federal poverty level. The plan would provide tax credits to help low and middle-income families purchase private insurance coverage, and would set up health insurance exchanges so small business workers and other individuals whose employers don't provide health coverage, could select from a menu of plans.

We expect to see more detail tomorrow from the Senate Finance team tomorrow in advance of the President's speech on Wednesday. The Senate Finance health plan proposal has been projected to be the best opportunity for bipartisan health reform legislation this year.

President Obama: How will his address impact progress on health reform?

2009-09-04T11:14:00.000-07:00

President Obama announced this week that he will greet the return of Congress next week with an address to a joint session of Congress on Wednesday night (September 9th). It is expected that the President will provide more specifics on some focused reforms he would like to see related to health reform legislation.

What do we expect to hear from the President? The White House has been very focused that the goal of health reform must be to:

lower costs
create a secure and stable health care system
provide access to affordable health care for all Americans

It is unclear how the President will address the most divisive issue of a public plan option but one scenario gaining support is to propose a public plan option that is used only as a fallback approach should savings from a market-based system not reach certain levels over time. Besides the controversial public plan issue, are there other specific ideas or policies the President will mention or will he keep to the big picture?

Is there a middle ground on health reform?

2009-09-01T17:55:00.001-07:00

Despite the rhetoric and media coverage, there are appears to be some aspects of health reform with bipartisan support. In fact both parties are now saying indeed something must be done related to the cost and access issues regarding health care.

Bipartisan consensus proposals include some of the major health insurance industry reforms such as preventing insurance companies from:

denying coverage to people with preexisting injuries and illnesses
cutting insurance coverage off when a policyholder gets sick
imposing a lifetime cap on benefits

Another key issue with new support from both the Senate and the House would be to require insurance companies to offer dependent coverage to young people through their parents' insurance plan until they turn the age of 26.

This feels modest but as Congress prepares to return from recess next week lets hope they focus on finding some middle ground that we can all agree on.

Senator Kennedy and Impact on Health Reform?

2009-08-28T13:55:00.000-07:00

This past week, with the death of Senator Edward Kennedy, Democrats lost not only a champion of healthcare reform, but also someone who was often able to work with Republicans for bipartisan reforms. Some are now focused on passing health reform in his memory while others argue that someone that was key to the potential for bipartisan reforms is now gone. While it may not change the outcome on health reform this fall, he does leave big shoes to fill.

Sen. Chris Dodd (D-CT) vowed to continue the fight for healthcare reform following the death of Senator Kennedy , but he could not say whether he intends to succeed Kennedy as chairman of the Senate health committee. Dodd, who chairs the Senate banking committee but spearheaded the health panel's five-week markup of health reform legislation, said he would take time to weigh his options and confer with Democratic leaders before making a decision.

The chairmanship of the Senate Health, Education, Labor and Pensions (HELP) Committee is one of many holes that Kennedy's death has left in the Senate. Dodd is now the panel's most senior Democrat, and could become its new chairman, if he is willing to give up the chairmanship of the Senate banking committee. If Dodd does not take the HELP position, the next senators in line would be Tom Harkin (IA) and Barbara Mikulski (MD). Harkin, like Dodd, would have to surrender his chairmanship of the Agriculture Committee in order to lead HELP.

HELP along with the Senate Finance Committee are the key committes for the Senate focused on health reform.

With Congress now in recess, what is the outlook for health reform?

2009-08-07T15:14:00.000-07:00

With both the House and now the Senate going out on recess -- this is a perfect opportunity to assess the outlook for health reform. The Senate is the continues to have the best chance of moving forward with bipartisan health reform this year. In fact yesterday, President Obama met with the group of six Senators (being referred to as the Gang of Six) that are leading the charge on health care reform in the Senate which includes Senate Finance Chair Max Baucus (MT-D), Chuck Grassley (IA-R), Kent Conrad (ND-D), Jeff Bingaman (NM-D), Olympia Snowe (ME-R) and Mike Enzi (WY-R). The meeting did not resolve any key issues but the Senators are reported to have committed to continue negotiations over the recess with a goal of reaching some form of consensus by mid-September. This means that the earliest the Senate Finance would move to mark-up would be the week of September 14th. Key health reform issues that remain unresolved that are key to bipartisan support include:

Public plan option and related details
Independent MedPAC or expanded role for MedPAC as a rate setting authority
Expansion of Medicaid and related budget impact for states
Level of insurance subsidies for lower income families
Mechanisms to fund health reform and other cuts or "pay fors"

Most experts are still projecting some form of health reform legislation will emerge this year but it is not likely until mid or late October based on the differences in bringing together the work from the various committees in both the Senate and House.

The House Energy & Commerce Committee staff will be working over the recess to identify the remaining amendments and determine which are noncontroversial and can be agreed upon by both sides to be made a part of the base bill to be marked up in September starting after the recess. Our understanding is that only the amendments submitted during the last mark-up will be considered and then those would be added as additional recommendations from the committee.

The House Democratic Leadership and the Chairman of the three Committees will then reconcile changes for a final bill for consideration on the House Floor potentially in early October. This means that both the House and Senate could finalize some form of health reform as early as late October.

Health Reform -- Consensus Grows in advance of recess

2009-07-31T13:57:00.000-07:00

This week significant progress appeared to be made in both the House and Senate toward identifying areas of consensus on health reform.

Members of the House Blue Dog Coalition and the House Energy and Commerce Committee are working to complete a compromised before the August recess and have been working hard at committee mark-up on a bill. The compromise has not been released in detail but is reported to include:

Additional cuts of up to $100 million from the total cost of the reform bill and a requirement that the bill cost under $1 trillion (excluding the SGR fix)
Dilution of public plan language by explicitly stating provider participation in a public plan is optional, and Removal of the provision indexing payments for the public plan to Medicare, instead allowing the HHS Secretary to negotiate provider payment rates
Enhanced language around value based purchasing for hospitals
Language grandfathering existing state insurance exchanges (e.g., Massachusetts Health Connector)
Clarification that states have the option for state exchanges
Less generous individual subsidies for insurance coverage
Exclusion of customary prompt-pay discounts extended to distributors from a manufacturer's calculation of Average Sales Price for Medicare Part B Drugs and Biologics

As a part of the accord reached between the Blue Dogs and House leadership earlier this week, the House will not hold a floor vote on reform legislation until September to allow all members time to review all reform bills. If the current timeline holds, we expect the three House committees working the reform legislation-Ways and Means, Education and Labor and Energy and Commerce- will merge their bills together and move to the House floor mid-September. The Ways and Means and Education and Labor Committees have already passed their reform bills.

The Senate is not expected to mark-up a reform bill under after the recess based on statements from Chairman Max Baucus (D-MT) and Senate leaders negotiating on reform legislation. Senate Finance members report the Congressional Budget Office (CBO) has scored its current working draft at less than $900 billion over 10 years. While the official score has not been released, the draft approach is estimated to cover 95 percent of Americans by 2015, boost employer-sponsored coverage, and fully offset and even reduce the deficit in the10th year.

House Health Reform Includes Important Technical Change to ASP

2009-07-31T13:50:00.000-07:00

The House Energy and Commerce Committee had a marathon mark-up session last night on the health care reform bill (as further described in the following article), but one of the key amendments adopted late last night would exclude customary prompt-pay discounts extended to distributors from a manufacturer's calculation of Average Sales Price (ASP) for Medicare Part B Drugs and Biologics. This widely supported technical change would help to ensure consistent and accurate ASP calculations and is consistent with how prompt pay terms are reported to Medicaid. As currently drafted, it would sunset after 5 years and exclude prompt pay terms up to 2 percent of wholesale acquisition cost (WAC). Prompt pay legislation was introduced in the House by Rep. Green (D-TX) and Rep. Whitfield (R-KY). Similar legislation has been introduced in the Senate by Sen. Specter (D-PA) and Sen. Roberts (R-KS).

Why does this matter? This is a key issue and flaw in the current ASP system used to reimburse all Medicare Part B products (including injections and infusions) in the physician office and hospital outpatient settings. This will clarify appropriate reporting which will make reimbursement consistent and accurate across products. This is a key issues for physicians and hospitals.

House may have reached a deal on health reform

2009-07-29T16:05:00.000-07:00

It was a very busy day in Washington as health reform discussions continued on the House side following reports yesterday that the Senate may have reached bipartisan consensus. Specifically bipartisan House leaders, the White House and four Blue Dogs on the Energy and Commerce Committee reportedly have reached a deal today on a health care overhaul. News of the consensus was announced as breaking news during a health care town hall meeting President Obama was leading in Raleigh, NC today.

Details that were announced include:

Costs will be cut by $100 billion (no specific detail was released but estimates are that the bill would have to be under $1 trillion dollars)
Public option not mandatory
Increase exemptions for small businesses
Prevent the public insurance option from basing reimbursement on Medicare rates.
House floor vote would be delayed until at least September or mid-October

The group has been huddling for days to try to reach a deal on the package in advance of the House recess. Clearly this week's activity is a strong signal that some form of health care reform is likely to move forward this year.

Senate Plan Might Not Include Controversial "Public Option"

2009-07-28T12:02:00.000-07:00

Breaking news from Washington DC includes reports that the Senate Finance Committee is close to reaching a bipartisan compromise on health reform that would not include the controversial "public" health plan option or an employer mandate. This is critical in that it may signal consensus developing to create a bipartisan health reform bill that at least initially excludes the most debated aspects of health reform. Clearly it is too early too tell whether we would see any specific language before the Senate recess, but it does appear that progress is being made on the Senate side.

What does this mean? Well it certainly is a sign that more moderate health care reform could prevail this year despite the much more dramatic reforms being debated by the House. For patients and the health care industry in general this would allow some of the benefits of expanding access to health insurance while leveraging the existing private payer markets.

House and Senate Health Reform Efforts Appear to be Slowing

2009-07-24T13:03:00.000-07:00

It now appears that neither the House or Senate will vote on health reform legislation until after the August congressional recess. The good news is this will allow time for review of current draft proposals and time to consider options for additional cost savings. What does this mean for health care reform? In reality this is back to the original schedule most anticipated with potential votes on health reform coming in the Fall. Given the pressures on the economy and concerns about how to pay for health care reform this should allow more options to identify cost savings to fund expanded coverage.

House Energy and Commerce Committee Chair Henry Waxman (D-CA) suspended his committee's markup of the House bill earlier this week and has not scheduled its continuation. The House begins its recess Jul 31st.

Senate Finance Committee Chair Max Baucus (D-MT) said this week he hopes to move legislation out of the committee before the recess, but the process for doing so seems all but impossible. The Senate recess is set to begin August 7th.

While the legislative process may be slowing, some form of health care reform does indeed seem very likely to pass this year even if reforms are more incremental. In a prime time press conference and a town hall meeting in Ohio this week, Obama indicated he was undeterred by Congress' failure to meet his August deadline for reform legislation, and insists reform will happen this year.

House Tri-Committee Reform Bill --- What would this version of health reform mean for patients?

2009-07-21T05:09:00.000-07:00

This week the House committees continue their mark-ups of the healthcare overhaul bill, called the America's Affordable Health Choices Act , introduced last week. The mark-up process is critical as there are many provisions still being debated for inclusion. For example, the House bill released last week does not yet include a biosimilars provision but one is expected to be added during the mark-up process.

So, how would this version of health reform impact patient access?

· Near-universal access to health care (expected to cover 97% of all Americans) is the signature piece of this bill

· Includes an individual coverage mandate and an employer coverage mandate

· Creates a new Health Insurance Exchange for families and small employers to identify and select health insurance from a range of options; the exchange would include a government-run plan option in addition to private payer options which has been one of the most debated concerns

· Creates a defined “essential benefits package” that includes coverage of many preventative services and creates the minimum coverage for all plans in addition to creating a cap on out-of-pocket costs

· Subsidies to individuals and families are limited and some do not begin immediately

· Medicare eligibles that have selected Medicare Advantage (instead of traditional Medicare) might see a change in plan offerings in the future as the government reduces payer incentives for these plans.

· The bill includes some changes to Medicare Part D that would reduce patient copays during the “donut hole”

· The bill also includes some technical changes to Medicare such as correcting a flaw in physician reimbursement

Of course one of the biggest areas of concern for this bill is how to fund universal coverage and this bill includes a mix of cost-cutting initiatives along with new revenues including a tax surcharge for households over $350,000.

Health Reform Cost Pressures Grows -- New Focus on drafts before August recess

2009-07-14T11:29:00.000-07:00

The health care reform debate is facing new cost related concerns on both sides of the Capitol. Based on progress last, the House might have a draft of health reform legislation today. This comes as pressures grows based on concerns expressed by Blue Dogs (the fiscally conservative Democratic coalition) in a letter to Speaker Nancy Pelosi. Last week the Speaker herself called for more focus on cost savings in a public announcement as well as meetings with the committees leading House efforts.

The three committee chairman that are working this are Energy and Commerce’s Henry A. Waxman, D-Calif., Way and Means’ Charles B. Rangel, D-N.Y., and Education and Labor’s George Miller. Pelosi has pledged that the House won’t leave for the August recess without passing a health care overhaul bill, but clearly significant challenges remain on the House side. The Senate side faces even greater challenges in moving a bill forward before the August 7th recess. Key issues of contention remain a potential public plan option and proposals to pay for health reform that include taxing health benefits. Like the House side there are new calls to consider less costly health reform efforts. The next few weeks may end up determining the scope of health reform legislation considered this year.