A bipartisan bill, H.R. 2, Medicare Access and CHIP Reauthorization ACT, would repeal the Sustainable Growth Rate (SGR) formula, which sets a cap on physician spending, and would revamp payment of physicians under Medicare. On March 26, 2015 the U.S. House overwhelmingly (392-37) voted in favor of the bill, also known as SGR replacement bill. The Senate will vote on the bill after recess.
The legislation was introduced by Speaker John Boehner (R, Ohio) and Minority Leader, Nancy Pelosi (D, California). It would repeal the SGR Medicare formula that imposes the imminent threat of cuts to Medicare providers and would eliminate the need for Congress to set payment rates for Medicare physicians annually – a process known as “doc fix”. Since 2003, Congress has overridden the cuts imposed by SGR on 17 occasions, and the most recent override ends on March 31, 2015. If Congress does not take action, Medicare payments to physicians will be cut by 21% on April 1, 2015.
The H.R. Medicare Access and CHIP Reauthorization ACT will
- Repeal the Sustainable Growth Rate Formula;
- Ensure a 5-year period of annual increases of 0.5% in payments to physicians;
- Set up a two-tier payment system that incentivizes a shift to value-based payment systems that reward physicians who meet performance thresholds and make care-coordination efforts for patients with chronic conditions;
- Incentivize transition to alternative payment models (APMs) by requiring that physicians receive at least 25% of their revenue through an APM in 2018-2019, with an increased threshold overtime; and
- Extend funding for the Children’s Health Insurance Program (CHIP) and community health centers for another two years.
These changes are estimated to cost approximately $200 billion, and $70 billion of that cost would be offset by two major program changes: (1) higher premiums for higher-income Medicare beneficiaries and (2) reduced governmental spending on supplemental insurance plans, increasing out-of-pocket costs for Medigap recipients.
via Legislation Law Prof Blog.
The Centers for Medicare & Medicaid Services (CMS) have revised the Medicare prospective payment system to update payment rates and reporting requirements for hospital outpatient departments, ambulatory surgical centers, and inpatient rehabilitation facilities for 2013, and will continue the electronic reporting pilot for the Electronic Health Record, according to a recent final rule. You can access the regulations here.
According to the Courthouse News, this is the summary of the changes:
Many of the changes were made to bring the Medicare payment system into alignment with provisions of the Affordable Care Act. The changes affect hospitals paid under the Outpatient Prospective Payment System (OPPS) as well as Community mental health centers (CMHCs) and Ambulatory surgical centers (ASCs). The agency estimates that most hospitals paid under the OPPS will see “a modest increase or a minimal decrease” in payment for services in 2013 with an expected 1.9 percent increase for all services over what was paid in 2012.
The agency estimates that some urban hospitals will experience a payment increase of 8.3 percent due to increased payments for partial hospitalization, group psychotherapy and hemodialysis services. CMHCs may see a decrease of 4.4 percent due to a decrease in estimated costs. The updates to the ASC payment system for 2013 will affect each center individually, depending on the mix of patients who are Medicare beneficiaries and the payment changes for the procedures offered by those centers, the rule said.
In addition to new payment rates, the agency decided to continue the electronic reporting pilot for the Electronic Health Record (EHR) Incentive Program “exactly as finalized for 2012” and made changes for the Quality Improvement Organizations (QIOs), including the secure transmission of electronic medical information, and beneficiary complaint resolution and notification processes, according to the CMS.
The agency maintains that “the use of an electronic infrastructure that supports the use of EHRs by eligible hospitals and CAHs [Critical access hospitals] to meet the requirements in various CMS programs” will reduce reporting burdens simultaneously with the submission of quality data “to provide a foundation for establishing the capacity of hospitals to send, and for CMS, in the future, to receive, quality measures via hospital EHRs for the Hospital IQR [Inpatient Quality Reporting] Program’s measures.
via Courthouse News Service.
A federal judge, Judge Rosemary Collyer, in the District of Columbia Court, ruled in the case Allina Health Servs. v. Sebelius, U.S. Dep’t of Health and Human Servs., 10-cv-1463 (RMC).
In his option, Judge Collyer rebuked the government for arbitrarily changing the Medicare reimbursement formula for hospitals serving low-income patients.
Generally, the DSH (Dep’t of Health and Human Services) calculates payments by using the Medicare Disproportionate Share Hospital Fraction. The basis of this lawsuit arose out of the interpretation of the program “Medicate + Choice.” Judge Collyer found that by relying on the complex nature of the program, the government executed a “fancy two-step” process whereby the government did not engage in proper rulemaking or even an explanation of the benefits.
In the opinion, Judge Collyer stated:
“The secretary’s pretense in briefing the instant matter – that her current interpretation is entirely consistent with the past – is, as the court explains below, clearly forestalled by Northeast Hospital.”
“[P]atients enrolled in an M+C Plan should be counted in the Medicare fraction or the Medicaid fraction of the DSH patient percentage calculation.”
Consequently, Judge Collyer ruled:
“The court concludes that the secretary’s interpretation of the fractions in the DSH calculation, announced in 2004 and not added to the Code of Federal Regulations until the summer of 2007, was not a ‘logical outgrowth’ of the 2003 NPRM”…. “The rulemaking procedure was flawed due to both the single-minded way the NPRM presented the issue and the fact that the secretary adopted the polar opposite of the original proposal. Contrary to the secretary’s argument, the comments do not remedy these deficiencies.”
via Courthouse News Service.