This Week in Washington – February 14, 2014

Senate Extends Medicare Sequester Cuts

On February 12, the Senate passed military pension legislation that is paid for by an extension of the 2% Medicare sequester cuts to 2024. The Congressional Budget Office estimates the one-year extension will create $8.3 billion in savings. The legislation sets aside $2.3 billion of the savings as a “down payment” on a permanent repeal of the Sustainable Growth Rate (“SGR”) formula. Congress had already used a two-year extension of the Medicare sequester to pay for the 2013 Ryan-Murray budget deal that passed before the end of the year. That extension raised $28 billion to help offset cuts to non-Medicare providers.

Congress Passes Clean Debt Ceiling Bill

In a narrow vote on February 11, the House approved a “clean” bill to lift the debt ceiling until March 2015. Over the weekend, the House Republican leadership floated the idea of adding budget cuts to the bill but abandoned the idea after it became clear they could not rally enough Republican votes for passage. The Senate approved the House measure the following day. By removing the threat of a default on the national debt until next year, Congress won’t face a major fiscal decision until after the November midterm elections. It also means lawmakers no longer have a legislative vehicle into which they can insert a permanent SGR repeal this year, and that makes passage of another temporary SGR “patch” before March 31 much more likely.

Senate Approves Delay of Outpatient Therapy Supervision Requirements

On February 10, the Senate passed legislation (S. 1954) by voice vote to extend the enforcement moratorium on the “direct supervision” requirement for outpatient therapy at critical access hospitals and rural prospective payment system hospitals through 2014. The measure was referred to the House Ways and Means and Energy and Commerce committees where its future is uncertain.

Lawmakers Urge Medicare Audit Changes

This week, a bipartisan group of more than 100 House members wrote HHS Secretary Kathleen Sebelius to urge that HHS reform its Recovery Audit Contractor (“RAC”) program. The letter notes that commissions earned by RACs incentivize them to deny claims and that beneficiaries can end up paying higher out-of-pocket Medicare costs when inpatient stays are denied. It calls on CMS to “implement reforms to ensure the auditors are charged with identifying real claim coding and medical documentation errors, as well as provide a more transparent mechanism through which providers can be informed of errors so as to avoid them in the future.”

Senators Introduce Health IT Bill

On February 10, Senators Deb Fischer (R-NE) and Angus King (I-ME) introduced legislation intended to protect health information technology, such as electronic health records, mobile wellness apps and scheduling software, from overregulation from the Food and Drug Administration (“FDA”). According to the sponsors, current law allows the FDA to use its definition of a medical device to assert regulatory authority over a number of low-risk health information technology, including electronic health records and scheduling software. They claim their bill clarifies the FDA regulatory process to focus on products that pose a legitimate risk to human health. Similar legislation addressing health software (H.R. 3303) was introduced in the House by Rep. Marsha Blackburn (R-TN) in October 2013.

Health Care-Related Bills Introduced This Week

Rep. McDermott (D-WA) introduced the Access to Hearing Healthcare Act of 2014 (H.R. 4035) that would “provide Medicare beneficiaries coordinated care and greater choice with regard to accessing hearing health services and benefits.”