Competing Sequester Alternatives Rejected
On February 28, the U.S. Senate rejected competing sequester replacement proposals killing the last legislative options prior to the spending cuts going into effect on March 1. The Senate voted on both a Republican and Democrat plan designed to help the parties position themselves after the budget cuts begin to take effect.
The GOP plan (S.16) was aimed at giving federal agencies flexibility to prioritize the spending cuts. The White House opposed the Republican proposal, which failed 38-62, saying they didn’t want the flexibility. The Democratic bill (S. 388) would have raised $53 billion in additional taxes over 10 years. The proposal failed 51-49, falling 9 votes short of the required 60 votes.
The Office of Management and Budget (“OMB”) has not indicated how much leeway government agencies will have in carrying out the cuts. OMB has until 11:59 P.M. on Friday to issue the order that will set the sequestration process in motion. HHS has confirmed that the 2% reduction to Medicare providers and insurers will be for services provided on or after April 1, 2013.
Most of the key aspects of the Affordable Care Act are exempt from the sequester. Notable provisions exempt include the money to subsidize insurance for eligible beneficiaries and Medicaid expansion, which doesn’t take effect until 2014.
Republican Lawmakers Press CMS on Medicare Advantage (“MA”) Policies
Three influential Republicans sent a letter to CMS Administrator Marilyn Tavenner raising concerns about the agency’s proposed annual adjustment to payment rates and other policies for Medicare Advantage plans. The letter from Sen. Orrin Hatch (R-UT), Energy and Commerce Chairman Fred Upton (R-MI) and Ways and Means Chairman Dave Camp (R-MI) follows a concerted campaign by America’s Health Insurance Plans to push back against a CMS proposal to reduce MA pay rates by 2.3% next year because of historically low health spending and adjustments to the payments in the federal health care law.
Ways and Means Holds Hearing on Medicare’s Benefit Design
On February 26, the House Ways and Means Health Subcommittee held a hearing on proposals to update and improve the Medicare fee-for-service benefit structure. Glen Hackbarth, chairman of the Medicare Payment Advisory Commission, testified on MedPAC’s June 2012 recommendation that Congress replace the current benefit design with one that includes an out-of-pocket maximum, deductibles for Parts A and B services and copayments that may vary by type of service and provider.
Subcommittee Chairman Kevin Brady (R-TX) said Medicare’s system should be modernized to resemble the benefits of MA plans, which are offered by private insurers contracting with Medicare. Brady added the committee is committed to working with members of both parties to modernize the benefit structure system.
HHS Releases Final Rule on 2014 Payment Parameters
On March 1, HHS published a final rule providing additional details about “the risk adjustment, reinsurance and risk corridors programs; cost-sharing reductions; user fees for federally facilitated exchanges; advance payments of the premium tax credit; the federally facilitated Small Business Health Option Program; and the medical loss ratio program.” HHS also has published an interim final rule with comment on amendments to the 2014 benefit and payment parameters rule.
Bills Introduced This Week
H.R. 846: Rep. Pete Olson (R-TX) introduced a bill to amend title XVIII of the Social Security Act to ensure the continued access of Medicare beneficiaries to diagnostic imaging services. Forty-two House members have agreed to cosponsor the legislation.
H.R. 903: Ways and Means Committee Subcommittee Chairman Charles Boustany (R-LA) introduced legislation that would amend the Internal Revenue Code of 1986 to repeal the employer health insurance mandate. The legislation, which was introduced on February 28, will go through the Ways and Means Committee.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
