MedPAC Debates Hospital Readmissions; Necessity of Geographic Adjustments for Physicians
On September 6-7, Congress’s Medicare Payment Advisory Commission (“MedPAC”) held a meeting to discuss the hospital readmissions policy as well as the necessity of geographic adjustments for physicians.
The MedPAC findings stated the readmissions policy is headed in the right direction but could be refined through maintaining or increasing the incentive for average hospitals to reduce readmissions. The MedPAC findings also stated the readmissions policy could be applied to a greater share of hospitals that have an incentive to reduce readmissions. Established under the Affordable Care Act (“ACA”), the readmissions program requires CMS to reduce payments to IPPS hospitals with excess readmissions, effective for discharges beginning October 1, 2012.
Earlier in the conference, the Commission opened discussions on whether Medicare should adjust payments to doctors based on where they practice and how such payments should be distributed. While some on the Commission believed the geographic formula should be simplified, others argued to eliminate it entirely. MedPAC indicated it would further study how the geographic pricing cost index might affect access to providers at later meetings. MedPAC’s next public meeting will be October 4-5.
Congress Asks CBO if Doc Fix Triggers IPAB Cuts
Representative Phil Roe (R-TN) is asking the Congressional Budget Office (“CBO”) to analyze what Medicare cuts might be triggered by the health reform law’s Independent Payment Advisory Board (“IPAB”) under a number of scenarios Congress may take to override scheduled Medicare pay cuts to physicians.
In the August 28 letter, Roe specifically asked CBO to analyze the required cuts under the following scenarios: (1) current physician payment rates are extended through 2013 before reverting back to formula; (2) current payment rates are extended through 2013 and 2014 before reverting back to formula; and (3) current physician payment rates are extended indefinitely.
Created under the ACA, the IPAB is required to create policies reducing Medicare spending if growth in the program exceeds certain economic measures. Congress has the authority to replace IPAB’s proposals with its own policies, but the alternative plan must reach the same level of savings. We have spoken with Rep. Roe’s staff, and they are awaiting feedback from CBO.
Congress Returns to Slate of Health Care Committee Hearings
On September 10, Congress returns to D.C. from their August recess. The House and Senate will hold hearings focusing on potential problems with implementation of the health care law and physician payment sunshine measures.
The House Ways and Means Health Subcommittee will examine the rules governing the establishment of state exchanges by the health care law. The Ways and Means Oversight Subcommittee will examine the impact of the health care law implementation duties on the IRS. The Senate Aging Committee will hold a hearing on the implementation of the health care law governing public disclosure of the financial relationships between physicians and applicable manufacturers, including pharmaceutical, medical device and biologics companies.
Congress could potentially deal with the arrival of a statutorily required report from the White House on how it plans to deal with potential health-related cuts from sequestration, which is scheduled to go into effect January 3, 2013. The Sequestration Transparency Act mandated the report be delivered to the House on September 7, 2012 and the Senate two days later.
IOM Report Rebukes Current Health Care Payment Approach
On September 6, the Institute of Medicine (“IOM”) released a report addressing a number of flaws in the current U.S. health care system. In the 382-page report, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, the 18-member IOM panel states the current approach to paying hospitals for each test or treatment “encourages wasteful and ineffective care.”
The report recommended major changes to the way doctors and specialists communicate to prevent misdiagnoses and ensure breakthroughs in medical technology are adopted more rapidly. It also recommends encouraging new payment systems that give doctors incentives to keep patients healthy, rather than performing unnecessary or duplicative tests. IOM reports are frequently used by Congress in addressing health care.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
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