Doc Fix Legislation Advances out of Subcommittee
On July 23, the House Energy and Commerce Health Subcommittee passed bipartisan legislation (H.R. 2810) calling for a new system for Medicare physician payments. The measure was approved without any significant changes made to the policies set forth in the original framework issued last week. It now heads for a full committee markup, which has been scheduled for July 31.
The legislation would provide a 0.5% update in physician payments through 2018. Then, in 2019, it would repeal the Sustainable Growth Rate (“SGR”) in Medicare and replace it with an enhanced fee-for-service payment system while also allowing providers to participate in alternative payment models focused on quality and efficient care.
The hurdle for the legislation will be finding a way to offset its cost, an area the current bill does not address. The Congressional Budget Office estimates the cost of repealing the current payment formula at $139.1 billion over 10 years. The Senate Finance Committee has held several hearings on the “doc fix” issue but has not released any form of draft legislation.
Ways and Means Seeks Input on Medicare Proposals
On July 19, the House Ways and Means Committee asked for public comment on draft legislation containing three modifications to Medicare’s benefit system. The proposals include three Medicare proposals that were included in the President’s fiscal 2014 budget: increasing premiums that wealthier beneficiaries pay for services under Medicare Parts B and D, increasing the deductible for Part B services and creating a copayment for home health services.
The draft legislation follows committee hearings looking into Medicare savings proposals offered by the President or bipartisan task forces. The committee requested comments from the public on the proposals by August 16 and was not expressly endorsing the ideas. Earlier this month, the committee released similar draft legislation with proposals to change Social Security.
HHS Issues Final 340B Rule on Orphan Drug Exclusion
On July 22, HHS issued a final rule clarifying the types of discounts available on rare disease (orphan) drugs when purchased by safety net providers under the 340B drug program. The rule was required as part of the Affordable Care Act (“ACA”) and added additional categories of eligibility for 340B covered entities.
The final rule identifies the specific covered entities to which the orphan drug exclusion applies:
- Free standing cancer hospitals qualifying under §340B of the Public Health Service Act (“PHSA”);
- Critical access hospitals qualifying under §340B(a)(4)(n) of the PHSA; and
- Rural referral centers and sole community hospitals qualifying under §340B(a)(4)(o) of the PHSA.
With the rule applying to the additional group of covered entities, a number of hospitals will now have access to orphan drugs at 340B prices that were previously unavailable. The rule that was proposed in May 2011 will become effective October 1, 2013.
Bills Introduced This Week
H.R. 2801: Rep. Kristi Noem (R-SD) introduced legislation that would allow general supervision by a physician or non-physician practitioner for many outpatient therapy services. The bill requires CMS to allow a default setting of “general supervision” for outpatient therapy services. The bill would also hold hospitals and critical access hospitals harmless from civil or criminal action for failing to meet the “direct supervision” requirements applied to services furnished since 2001. In June, Sen. Moran (R-KA) introduced S. 1143, which is companion legislation to the Noem bill.
H.R. 2810: Rep. Michael Burgess (R-TX) authored the House legislation that would repeal the current physician payment formula (see above) and be taken up by full committee next week.
H.R. 2807: Rep. Diane Black (R-TN) introduced legislation that would prohibit federal funds being used for the establishment or operation of patient navigator programs under the ACA.
Next Week in Washington
On August 1, the House Ways and Means Committee will hold a hearing on the current status of HHS’s and the IRS’s efforts to implement the ACA. The hearing comes ahead of the October 1 open enrollment date in which 51 new health care exchanges are scheduled to begin.
On the same day, CMS Administrator Marilyn Tavenner will testify before the House Energy and Commerce Committee. The hearing will examine the status of implementation of the health law, including the employer mandate delay and the verification process for individuals applying for subsidies on the exchange.
In the Senate, the Health Committee hopes to advance a drug compounding and drug supply chain security bill, and senate appropriators will begin deliberations on the contentious Labor-HHS spending bill (S. 1284), which funds HHS and CMS for fiscal year 2014.
For more information, please contact John F. Williams, III at 317-977-1462 or jwilliams@hallrender.com.
Please visit the Hall Render Blog at http://blogs.hallrender.com for more information on topics related to health care law.
