Washington Highlights: January 14,
2005
AAMC Convenes Title
VII Reauthorization Committee
Contents
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The AAMC Title VII Reauthorization Committee, chaired by Ronald
D. Franks, M.D., Vice President for Health Affairs and Dean of the
East Tennessee State University Quillen College of Medicine, met
Jan. 12 in Washington, DC. The newly formed committee is charged
with reviewing the missions and effectiveness of the Title VII health
professions education programs and proposing recommendations to
Congress as it seeks to reauthorize these programs.
Representatives from 14 health professions organizations presented
their recommendations and engaged in a discussion with the committee
on the future of the programs. The committee members include: Joseph
F. Amaral, M.D., President and CEO of Rhode Island Hospital; J.
Manuel de la Rosa, M.D., Regional Dean of the Texas Tech University
Health Sciences Center in El Paso; Michael V. Drake, M.D., Vice
President of Health Affairs at the University of California; Richard
Krugman, M.D., Dean of the University of Colorado Health Science
Center School of Medicine; Lois Nora, M.D., J.D., President and
Dean of the Northeastern Ohio Universities College of Medicine;
and Denise V. Rodgers, M.D., Senior Associate Dean for Community
Health at UMDNJ-Robert Wood Johnson Medical School.
Information:
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Government Relations
efroyd@aamc.org
(202) 828-0525
MedPAC Approves Specialty Hospital, Payment Update
Recommendations
At its Jan. 12-13 meeting, the Medicare Payment Advisory Commission
(MedPAC) approved its 2005 recommendations on Medicare policies,
which will be published with accompanying discussions in the commission's
upcoming March Report to the Congress.
On the specialty hospital issue, which has been followed with great
interest by a variety of provider groups, the commission backed
off the draft recommendation it discussed in December to ask Congress
to eliminate the whole hospital exception in the Stark law. Instead,
the commission recommends the current moratorium be extended until
January 2007. During that time, MedPAC hopes that the Centers for
Medicare and Medicaid Services (CMS) and Congress will implement
the commission's diagnosis-related groups (DRG) refinement recommendations,
which MedPAC believes will go a long way to introducing more payment
equity among the cases treated by specialty versus community hospitals.
On the hospital payment update recommendation, the commission
also retreated from its December draft recommendation of a full
market basket update and instead approved a recommendation to increase
hospital payments by the market basket update less 0.4 percentage
points. The 0.4 percentage point reduction represents half of the
commission's productivity estimate that it expects hospitals to
achieve.
The commission also approved a broad array of quality and "pay
for performance" recommendations
that would affect virtually all providers.
The specific recommendations are:
Hospital Payment Updates
Congress should increase the payment rates for the inpatient PPS by
the increase in the hospital market basket less 0.4 percentage points
Congress should increase the payment rates for the outpatient PPS
by the increase in the hospital market basket less 0.4 percentage
points
DRG Refinement Recommendations
The Secretary of Health and Human Services should improve payment
accuracy in the hospital inpatient prospective payment system by:
refining the current DRGs to capture more fully differences
in severity of illness among patients,
basing the DRG relative weights on the estimated costs
of providing care rather than on charges, and
basing the weights on the national average of hospitals
relative costs in DRG cases.
Congress should amend the Medicare law to give the Secretary authority
to adjust the DRG relative weights to account for differences in the
prevalence of high cost outlier cases.
Congress and the Secretary should implement the case mix measurement
and outlier policies over a transitional period.
Specialty Hospital Recommendations
Congress should extend the Medicare Modernization Act moratorium on
physician-owned single specialty hospitals until January 1, 2007.
Congress should grant the Secretary the authority to allow and regulate
gainsharing among and between physicians and hospitals so that quality
of care is protected and financial incentives that could affect physicians'
referrals are diminished
Physician Payment Update
The Congress should update services by the projected change in input
prices, less 0.8 percent in 2006.
Other Physician Recommendations
The Secretary should use Medicare claims data to measure fee-for-service
physician resource use and share results with physicians confidentially
to educate them about how they compare with aggregated peer performance.
The Congress should direct the Secretary to perform this function.
The Secretary should improve Medicare's coding edits that detect unbundled
diagnostic imaging services and reduce the technical component payment
for multiple imaging services performed on contiguous body parts.
The Congress should direct the Secretary to set standards for all
providers who bill Medicare for performing diagnostic imaging services.
The Secretary should select private organizations to administer the
standards.
The Congress should direct the Secretary to set standards for all
providers who bill Medicare for interpreting diagnostic imaging studies.
The Secretary should select private organizations to administer the
standards.
The Secretary should include nuclear medicine and PET procedures as
designated health services under the Ethics and Patient Referrals
Act.
The Secretary should expand the definition of physician ownership
in the Ethics and Patient Referrals Act to include interests in an
entity that derives a substantial proportion of its revenue from a
provider of designated health services.
Home Health Update
Congress should eliminate the update to the home health payment for
CY 2006.
Skilled Nursing Facilities (SNFs)
Congress should eliminate the update for SNFs in 2006.
The Secretary should develop a new classification system for the SNF
payment system. Until then, the Secretary should:
remove some or all of the 6.7 percent add-on to the rehabilitation
RUG groups and
reallocate these funds to the non-rehabilitation RUG groups.
CMS should develop more quality indicators for SNFs.
Pay-for-Performance and Other Quality Recommendations
Congress should establish a quality incentive payment policy for hospitals
in Medicare.
Congress should establish a quality incentive payment policy for Home
Health Agencies.
Congress should establish a quality incentive payment policy for physicians.
CMS should require hospitals to identify which secondary diagnosis
were present on admission on their claims forms.
The Secretary should develop a valid set of measures of home health
adverse events, including adequate risk adjustment.
CMS should require those who perform lab tests to submit laboratory
values using common vocabulary standards.
The Secretary should ensure that prescription claims data from the
Part D program are available for assessing the quality of pharmaceutical
and physician care.
Congress should direct CMS to include measures of functions supported
by the use of information technology in Medicare to financially reward
providers on the basis of quality.
Information:
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Senate Committee Leaders Urge HHS, OMB to Fund
Health IT Initiatives
Senate HELP Committee Chairman Michael Enzi (R-Wyo.) and Senate
Finance Committee Chairman Charles Grassley (R-Iowa) joined Ranking
Members Edward Kennedy (D-Mass.) and Max Baucus (D-Mont.) in signing
a January 5 letter to Secretary of Health and Human Services Tommy
Thompson encouraging him to "include in the 2006 budget a significant
commitment to health information technology." The letter also
was sent to Office of Management and Budget Director Joshua Bolton.
In the letter, the senators praise the "ambitious and commendable
agenda" of Dr. David Brailer, National Coordinator for Health
Information Technology. They urge Thompson and Bolton to assure
that Brailer's office receives "adequate resources…to
continue its important work." According to the letter, Brailer
has estimated that an interoperable health information technology
system could "generate savings of about…$170 billion annually"
and could improve "clinical trials and public health surveillance
and response."
The senators request a "complete plan of action" to address
"issues surrounding the adoption of health information technology,"
including "targeted financial assistance" for providers,
assistance for regional/community health technology organizations,
and "financial incentives" for providers who "implement
and use" such systems to improve quality. According to the
letter, Congress plans to explore pay-for-performance options, "and
the use of technology may play a role."
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Slow-Down in Healthcare Spending Growth
According to a report in the January/February 2005 issue of Health
Affairs, healthcare spending grew by 7.7 percent in 2003,
versus a 9.3 percent increase the previous year. However, the proportion
of national gross domestic product (GDP) related to healthcare spending
increased from 14.9 percent in 2002 to 15.3 percent in 2003.
"[S]harply slower growth" in Medicaid payments helped
moderate spending growth, according to the report. In 2003, Medicaid
spending grew by about 7 percent, versus about 12 percent in 2002.
The report identifies tighter eligibility requirements, reduced
benefits, and decreased upper payment limit (UPL) payments as major
factors in the decline. In 2003, Medicaid spending growth for hospital
services was 5.3 percent, about 6 percent lower than in 2002.
Medicare spending in 2003 grew by 5.7 percent. In 2001 and 2002,
program spending had increased 10.8 and 7.6 percent respectively.
According to the report, the "slowdown in growth in 2003 was
evident in Medicare spending for hospital services, which increased
5.3 percent in 2003 compared to a 7.0 percent growth in 2002."
While the growth in private spending on physician services increased
from 8.2 percent in 2002 to 9.4 percent in 2003, the growth in public
spending on physician services fell from 8.1 percent in 2002 to
6.7 percent in 2003. However, the growth in Medicare spending on
physician services was higher in 2003 than in 2002 (6.9 percent
vs. 5.7 percent). The increase reflected a significant difference
in the Medicare payment update for CY 2002 (which was negative)
and CY 2003 (when a legislative "fix" averted a negative
update for CY 2003 Medicare physician payments).
According to the report, health insurance enrollment dropped in
2003, likely due to job losses and a reduction in take-up rates
for employer-based coverage.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
On the Hill
The Senate Health, Education, Labor, and Pensions (HELP) Committee
Jan. 6 favorably reported the nomination of Margaret Spellings to
be Secretary of Education. The Senate will vote on her confirmation
later in January.
The Senate HELP Committee is scheduled to hold an information hearing
Jan. 18 on the nomination of Michael O. Leavitt to be Secretary
of Health and Human Services. The Senate Finance Committee, which
has jurisdiction over reporting the Leavitt nomination, has scheduled
a confirmation hearing for Jan. 19. The vote on the nomination has
not yet been scheduled.
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