Framework for Permanent SGR Replacement Circulated
On October 31, the Senate Finance and House Ways and Means committees released the framework of legislation that would permanently repeal and replace the Sustainable Growth Rate (“SGR”) formula. Given the bipartisan and bicameral nature of the proposal, it is a significant step in reforming the current Medicare payment system.
The framework sets forth two different physician payment proposals. The first would freeze pay for 10 years and pay bonuses for good performance. Under the second, physicians could receive a 5% pay increase for participating in “two-sided risk” alternative pay models, including accountable care organizations (“ACOs”). That 5% increase would be on top of shared savings that providers stand to earn from those ACOs, but it would not be cumulative and it would not continue beyond 2021.
Unfortunately, none of the proposals released by Congress include specifics on how to cover the estimated $139 billion cost to replace the SGR formula. On Friday, House Energy and Commerce Committee Chairman Fred Upton (R-MI) told Hall Render attorneys that Congress will most likely put the SGR legislation into the next continuing resolution package that must be passed before January 15, 2014. The alternative is another one-year extension of the current formula, which Upton said he adamantly opposes. Were Congress to not act, the current SGR formula would cut physician pay by as much as 24% on January 1, 2014.
CMS Releases Medicare Part A and B Rates for 2014
On October 28, CMS announced the Medicare Part A and B premium and deductible rates for 2014. According to a CMS press release, the Medicare Part A deductible, which beneficiaries pay when admitted to the hospital, will increase by $32 in 2014 to $1,216. The Medicare Part A premium will drop $15 to $426 in 2014. Medicare Part A pays for inpatient hospital, skilled nursing facility and some home health services. Medicare Part B premiums and deductibles won’t increase in 2014. CMS said the average Medicare Part B monthly premium and deductible will remain the same at $104.90 and $147 respectively.
Senate Committee Passes Physician Training Bill
On October 30, the Senate Health, Education, Labor, and Pensions (“HELP”) Committee advanced legislation that would reauthorize a program that provides federal money to support training physicians at children’s hospitals.
The legislation (S. 1557), which was passed by voice vote, reauthorizes the Children’s Hospital Graduate Medical Education Payment Program through fiscal year 2018 and provides $300 million in annual funding. The bill also allows the HHS Secretary to direct up to $7 million of any funding in excess of the $245 million appropriated for the program to freestanding children’s hospitals that meet certain characteristics listed in the bill.
Earlier this year, the House passed a similar version of the Senate bill (H.R. 297) that would reauthorize the program through FY 2017. The bill now heads for a vote in the full Senate.
Bills Introduced This Week
H.R. 3365: Rep. Tim Walberg (R-MI) introduced legislation that would exempt certain long-term care hospitals operating in a single-hospital MSA from the Medicare threshold payment adjustment policy for long-term care hospitals. The bill was referred to the House Committee on Ways and Means.
H.R. 3444: Rep. Greg Walden (R-OR) introduced a bill that would amend title XVIII of the Social Security Act to provide flexibility in the manner in which beds are counted for purposes of determining whether a hospital may be designated as a critical access hospital under Medicare.
H.R. 3425: Rep. Dan Lipinski (D-IL) introduced legislation that would delay both the deadline for enrollment in the health insurance exchanges and the individual mandate penalties created by the ACA.
Next Week in Washington
On November 5, the Senate HELP Committee will hold a hearing on the implementation of the health law with CMS Administrator Marilyn Tavenner. On November 6, the Senate Finance Committee will hold a hearing on implementation of the insurance exchanges with testimony from HHS Secretary Kathleen Sebelius. It would be Sebelius’s second hearing before Congress. Earlier this week she testified before the House Energy and Commerce Committee.
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.
