House Leaders Unveil SGR Repeal Framework
The Chairmen with primary jurisdiction over the Medicare payment rates announced their plan to repeal and replace the current sustainable growth rate (“SGR”) formula. Ways and Means Chairman Camp (R-MI) and Energy and Commerce Chairman Upton (R-MI) announced they will work together to address the SGR.
Their framework outlines a three-step process: (1) repeal the SGR and provide a period of stability in payments; (2) reform the Medicare fee-for-service system to reward physicians who provide high-quality care; and (3) reward physicians who deliver efficient care. The timeline for moving legislation is still under consideration, although many expect the framework to be introduced as legislation as early as April.
One area not addressed by the framework is how to pay for the repeal of SGR. The Congressional Budget Office recently revised the price of repeal at $138 billion, which is nearly half of what it said it cost a few months ago.
On February 6, a bipartisan group of House lawmakers offered their own physician payment repeal proposal (H.R. 574), which is similar to the House Republican framework. The issue will stay in focus next week as the House Energy and Commerce subcommittee holds a hearing on overhauling physician payment policies.
CMS Releases Physician Sunshine Rule
On February 1, 2013, CMS issued a final rule that requires drug and medical device makers to disclose their financial relationships with doctors and hospitals. The long-awaited rule requires manufacturers of drugs, devices and biological and medical supplies covered by Medicare, Medicaid or the Children’s Health Insurance Program to report to CMS payments or other transfers of value that they make to physicians and teaching hospitals.
The final rule, which implements Section 6002 of the Affordable Care Act, will now require companies to begin collecting the information in August and start reporting it to HHS by the end of March 31, 2014. CMS will release the data on a public website by September 30, 2014. The rule will be published in the Federal Register February 8, 2013.
Children’s Hospital Training Bill Passes House
On February 4, the House passed a bill (H.R. 297) that would reauthorize the Children’s Hospitals Graduate Medical Education (“CHGME”) Program at the current level of $330 million annually through fiscal year 2017. The program has been in existence since 1999 and supports 56 children’s hospitals in 30 states to train pediatric residents.
The CHGME Program expired September 30, 2011, but Congress has continued to fund it. Last Congress, the House passed similar reauthorization legislation, but the Senate did not take up the measure. The Administration has often targeted the CHGME Program for budget cuts, and it is uncertain what level of funding the CHGME Program will receive when the President releases his budget in the coming weeks.
CMS Announces New Initiative to Improve End-Stage Renal Disease Care
On February 4, 2013, CMS announced the new Comprehensive End-Stage Renal Disease (“ESRD”) Care initiative to test the effectiveness of a new payment and service delivery model for Medicare beneficiaries with ESRD. Through the initiative, CMS will enter into agreements with groups of health care providers and suppliers called ESRD Seamless Care Organizations who will work together to provide beneficiaries with a more patient-centered, coordinated care experience.
Participating organizations must include at least a dialysis facility, a nephrologist and one other Medicare provider or supplier. These participating organizations will assume clinical and financial responsibility for a group of beneficiaries with ESRD, based on where these beneficiaries receive services. Those organizations successful in improving beneficiary health outcomes and lowering the per capita cost of care for beneficiaries will have an opportunity to share in Medicare savings with CMS.
Interested applicants are required to file non-binding letters of intent, which are due on March 15, 2013. Applications to participate in the model are due May 1, 2013.
Bills Introduced This Week
H.R. 574: Rep. Schwartz (D-PA) introduced a bill to reform Medicare payment for physicians’ services by eliminating the SGR system and providing incentives for the adoption of innovative payment and delivery models.
H.R. 523: Rep. Paulsen (R-MN) introduced a bill to repeal the excise tax on medical devices. A similar bipartisan bill was also introduced in the Senate to repeal the tax. The device tax repeal passed the House last year but failed to win support in the Senate.
Next Week in Congress
The Senate reconvenes February 11 and resumes consideration of a measure to reauthorize the Violence Against Women Act for five years. Senate Democrats are also expected to unveil a short-term sequester replacement bill aimed at combining alternative spending cuts and new tax revenue to avert the $85 billion in automatic spending cuts scheduled to begin taking effect March 1. The House reconvenes February 12, and the schedule includes an Energy and Commerce hearing on overhauling physician payment policies.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
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