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Tag: Billy Wynne

Unpacking the Doc Fix

If you blinked on Thursday, you might’ve missed the House passing the latest Medicare’doc fix’ (see here for its 30-seconds of deliberation).

After posting the bill in the wee hours of Wednesday morning, House leaders faced opposition over its stop-gap approach and some of the cuts employed to offset the cost of the bill. With some arm-twisting, they managed to suppress objections for the handful of seconds necessary to hammer the gavel and call it done.

The Senate is due to take the bill up Monday evening, and it is highly likely to pass (this time it should actually get a vote). Since it is about to become the law of the land, let’s take a look at what’s inside. There’s a little slice of fun in here for everyone.

First and, theoretically, foremost, the bill blocks the pending cuts to doctors under the long-broken Sustainable Growth Rate (SGR)  formula. It would maintain existing physician pay rates for another twelve months, through March 31, 2015.

Not coincidentally, a vote to raise the debt limit will likely come due again at about that time.

Second, the bill continues, for a comparable period, the package of so-called Medicare extenders: a hodge podge of policies that boost payments in rural areas, suspend caps on certain benefits and other otherwise sunsetting policies that each have their niche constituencies. Many of these items have been reauthorized by Congress for over 15 years.

Third, the bill includes some new policies that put out fires of their own, or effectuate high priority programs for well-placed Members of Congress. These include:

  • An additional six month extension of the Two Midnights Rule, which drew a bright line distinction between presumptive inpatient and outpatient hospital stays but has created significant confusion and objections among many hospitals;
  • A one-year delay of ICD-10 implementation, to October 1, 2015 (this is the second time Congress has acted to delay ICD-10);
  • Elimination of the ACA cap on deductibles for employer-sponsored health plans; and
  • Two provisions aiming to improve mental health services, including the Excellence in Mental Health Act that, among other things, improves funding for community mental health centers.

Woah, some of you are saying. Dial back to that 2nd bullet. While the transition to ICD-10 has been controversial since it was first proposed in 2005, just last month CMS Administrator Tavenner said there would be no more delays (last year, the Administration voluntarily delayed the program from 2013 to 2014).

Healthcare providers have been battening down the hatches and preparing for this colossal transition from ICD-9 and its 14,000 codes to ICD-10 and its 69,000. Word on the street is that the provision was included primarily to earn cred with specialty physician groups, whose support for the bill was in question for concern about other provisions (see the bullet re: misvalued – aka overvalued – codes below).

Turns out, the specialty doc associations by and large opposed the bill anyway, and the healthcare sector is now left grappling with this unexpected turn.

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The Death of SGR Reform

Late last week, House Republican leaders declared their intention to bring H.R. 4015, the bipartisan, bicameral SGR repeal measure, to the floor for a vote.

Good news, you’d think, for doctors and the broader healthcare system, that we might finally be rid of the SGR’s broken machinations and perverse cycle of congressional intervention.

But House leaders added a footnote: the measure would be paid for by delaying the individual mandate, which CBO opined last week would save money through reduced enrollment in Exchanges and Medicaid. To cover the approximate $150 billion cost of the SGR measure, the mandate would probably need to be delayed by at least 10 years.

While sparing us a rehash of the individual mandate debate here, suffice it to say that the Obama Administration, the authors of the Affordable Care Act, and most healthcare insurers and providers consider it to be a linchpin of the health reform regime.

Without it, most agree, the consumer protections established by the ACA would precipitate spiraling premiums that would quickly destroy the market.

In other words, the House measure is DOA in the Democrat-controlled Senate and White House, which House leaders know all too well. In a move whose political deftness is hard to quibble with, they are coupling two very popular measures into a single package that they know the vast majority of Democrats can’t support.

Good politics? Probably. Good for enactment of SGR repeal? More like the opposite.

But don’t blame House leaders for the demise of SGR repeal. This move is a symptom, not a cause, of its end. As previously reported, the well-intentioned negotiators were having difficulty finding common ground on the so-called extenders package that would be included, and were miles apart on the offsets that would be used to fund it.

This train had already come off the tracks.

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Don’t Be Fooled, Prospects for Long-Term SGR Fix Still Dim

In light of Thursday’s bicameral, bipartisan release of a Medicare physician payment policy to permanently replace the Sustainable Growth Rate (SGR) formula – an achievement to be celebrated in its own right – some are seeing momentum toward passage of such a deal before the current doc fix  expires on March 31.

But the scope of what the committees issued Thursday represents as much of a step back as a step forward, at least relative to their aspirations and timeline for accomplishing them.

Once the appointment of Senator Baucus to be Ambassador to China was announced, the committees agreed to make it “as far as they could” toward a comprehensive SGR replacement policy prior to his confirmation, including identifying offsets to pay for the $125-150 billion (over 10 years) bill. For those who missed it, Senator Baucus was confirmed on Thursday.

Only in the past week did the key committees acknowledge that achieving agreement on offsets by this deadline was unattainable, but finalization of the so-called “extenders,” a hodge podge of Medicare payment plus-ups and other polices perennially included with the doc fix, was still the goal.

(Recall that the Senate Finance Committee passed an SGR replacement bill with extenders in December, but their House counterparts have yet to do so.)

In negotiations on that extenders element, House Republican leads reportedly would not agree to include beneficiary-oriented policies, such as funding for outreach to Medicare enrollees regarding low-income subsidy programs and for Family-to-Family Health Information Centers.

While some Democrats involved in the talks may have been inclined to make this concession, others sharply objected, scuttling a deal on this front and demonstrating the difficulty of compromise on this relatively non-controversial topic.

Furthermore, and has always been the assumption, identifying offsets for the package continues to be an exponentially heavier lift than any other aspect of the process. On that front, the key camps have outlined their broad parameters for what they might accept.

House Republican leads desire and likely require meaningful cuts to ACA-related spending as well as a substantial balance of Medicare beneficiary-impacting cuts, such as those relating to premiums and coinsurance.

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Unpacking the Wyden Chronic Care Bill

As he ascends to the Chair of the Senate Finance Committee, Senator Ron Wyden’s recent proposal to reform Medicare by improving care for the chronically ill has garnered significant attention and support. Its topline goal of incentivizing integration of care for high-risk patients is resonating with stakeholders across the health care continuum.

In light of its momentum and Senator Wyden’s imminently expanding authority over Federal healthcare programs, we thought it wise to take a closer look at his plan – the “Better Care, Lower Cost Act” (BCLA). What we found is more interesting, ambitious and – potentially – complex than the headlines suggest.

In essence, the BCLA would allow providers (and health plans) to form new entities – labeled Better Care Programs (BCPs) – that receive capitated payments for all Medicare-covered services delivered to their enrollees. The initiative would initially focus on regions of the country with disproportionately high rates of chronic illness and only medically complex patients would be allowed to enroll.

There are a variety of medical protocols that BCPs would be required to adopt, including development of personalized chronic care plans for each enrollee.

If you are hearing echoes of the Accountable Care “movement,” then you are in the right concert hall but listening to a very different symphony. While BCPs share some characteristics with ACOs, they would differ in important ways. A limited number of ACOs in Medicare currently take full(ish) financial risk, but all BCPs would do so, with some risk corridors instituted in the first few years.

Unlike most ACO programs, control groups would be established for purposes of measuring BCP performance. Also – and this is pivotal – BCPs would be required to proactively enroll Medicare beneficiaries, while patients are typically passively attributed to ACOs.

By taking a giant step down the shared savings path, which it travels alongside ACO programs, the BCLA further blurs the line between traditional fee for service and managed care. BCPs would actually be compensated in the same manner as Medicare Advantage plans, the private insurance option in Medicare.

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The Doc Fix Is Real

Congress just had an uncharacteristically big week – with significant implications for healthcare policy. It flew by fast and furious, so here we pause to unpack the most significant developments and what they teach us about the future.

1. The Permanent Doc Fix Effort is Real. You have to hand it to the committees of jurisdiction, they have kept their heads down and plugged away all year at permanently repealing the broken Sustainable Growth Rate (SGR) formula that dictates Medicare payments to doctors. They’ve floated new payment methodologies, added policy addressing the package of “extenders” that perennially travels with the “doc fix,” and now all three have successfully completed bipartisan mark-ups of their respective approaches. Furthermore, the three month SGR patch that was included in the budget deal is an implicit endorsement by congressional leadership that there’s actually a chance this could happen in the first quarter of next year.

The next step is to identify savings to pay the roughly $150 billion price tag, which has always of course been the biggest rub. That process is going to take center stage early next year in a “Super Committee-lite” process of negotiating various potential cuts to healthcare programs. The cynics are still betting against it, but we’re closer than we’ve ever been before to replacing the 15+ year-old SGR.

2. The Long-Term Care Hospital Sector Will Never be the Same. In a lesser-noticed component of the three month doc fix patch alluded to above, Congress eliminated the payment differential for LTCHs (pronounced el taks) and regular inpatient hospitals for patients who do not meet clinical complexity criteria. What began as an esoteric exemption for a small handful of hospitals in the early 1980’s and grew to a $6 billion Medicare benefit annually is now going to start to plateau.

The market liked the change, paradoxically, because it was gentler than some bean counters had recommended and gave plenty of time (four years) for sophisticated companies to adjust. But the hot LTCH business just got some pretty cold water poured on it.

3. The Budget Deal Helps Healthcare Programs. The Murray-Ryan agreement to set spending levels for the next two years alleviated some of the impact of the sequester on discretionary spending programs like those at the FDA, NIH and HRSA. This means that funding for new product approvals, clinical research, workforce development programs and some primary care services will be modestly improved in 2014 and 2015.

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The Month of Anti-Deadlines

As we shake off the carb-coma and make our pre-resolutions, Congress and the Administration head into a sprint to the holiday recess fraught with health policy implications. Unlike every December in recent memory, there isn’t very much Congress actually has to do. Here are the top five things you need to know to follow the fun and prepare your organization for the changes afoot. A key theme to take home is that December 2013 is a month of anti-deadlines.

  1. The Nov. 30/Dec. 1 “fix” to Healthcare.gov was set arbitrarily and has simply teed up another pivot point for opponents to pounce. We already know the wand hasn’t tapped the electro-synapses of the site yet to make the dang thing work like it should. Expect more incremental improvements through the month and enrollment numbers to come in above current rock-bottom expectations, with a healthy chunk coming from the proud, the few … the state-based exchanges.
  2. The Dec. 13 deadline for budget conferees to produce a joint resolution is similarly fictional and self-imposed. While there are some burgeoning reports that co-chairs Murray and Ryan might be able to agree to FY14 funding levels and potentially alleviate some of the sequester, the buzz-o-sphere in Washington still has deep doubts. Even if the two negotiators come to agreement, House and Senate leadership have the bigger challenge of getting a bipartisan deal through their chambers.
  3. Jan. 15 is the real deadline for a budget agreement and the real goal is writing a check to fund the government through Sept. 30. A budget resolution is helpful to give appropriators time to write actual spending policy, but it can be bypassed if the end-game is a continuing resolution that keeps current funding allocations in place. (Congress hasn’t passed an actual budget resolution since Democrats controlled both chambers.) At the end of the day, we’ll be back to the all-too-familiar roundtable of congressional leaders and Obama reps hatching a last-minute deal to avert a shutdown.
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