Washington Highlights: July 29,
2005
Medicaid Commission Holds First Meeting
Contents
Prior Issues
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The Medicaid
Commission held its first meeting on July 27 to swear-in and
introduce members, receive background information and receive public
comments. Established by Secretary of Health and Human Services
Mike Leavitt, the Commission is charged with outlining recommendations
to achieve $10 billion in Medicaid program savings over the next
five years. The Commission must deliver their recommendations to
Congress by Sept. 1, 2005. They are also charged with identifying
potential long-term program enhancements by Dec. 31, 2006.
The meeting included presentations by Martha Roherty, director
of the National Association of State Medicaid Directors, and Vivian
Riefberg, director and senior partner of McKinsey and Company, who
offered background information and highlighted the current state
of the Medicaid program. During the public comment period following
the presentations, most individuals raised concerns about how proposed
cuts could affect Medicaid beneficiaries. Groups representing children
and the disabled opposed the use of co-payments, arguing that co-payments
could potentially increase the long-term financial pressures on
Medicaid and the healthcare system, since they could cause individuals
to forgo much needed care. The Commissioners were sensitive to the
public comments and welcomed the submission of alternative proposals
detailed enough to permit budget scoring by Aug. 5.
Several members expressed concern about a perceived lack of credibility
stemming from the fact that they must complete a highly complex
task in a very short time. Some Commissioners suggested that the
report include a request to revisit/revise their recommendations
after the first year; however, the Commission ultimately agreed
to include a note in the final report that addressed the limitations
of the Commission's recommendations in light of the short time frame.
Members also expressed their intention to find a time to start fine-tuning
their recommendations, once the report is submitted.
The Commission's next meeting is scheduled for Aug. 17-18.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
House Passes Medical Liability Reform Bill
The House of Representatives July 28 passed the "HEALTH Act"
(H.R.
5), which includes AAMC-supported medical liability reforms.
Introduced by Reps. Phil Gingrey (R-Ga.) and Lamar Smith (R-Texas),
the bill includes:
- Unrestricted awards for economic damages;
- A $250,000 cap on non-economic damages ("pain and suffering");
- Capping punitive damages at the greater of $250,000 or twice
economic damages;
- Limits on attorneys' contingency fees;
- Joint and several reforms;
- No double recovery of damages; and
- Payment of certain awards over time.
The bill passed by a vote of 230-194,
with 14 Democrats supporting and 9 Republicans opposing the legislation.
The Senate has not yet introduced companion legislation. The leadership
is working to finalize language and a timeframe for such action..
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Letter on Residency Training in Non-Hospital Sites
Circulates for House Signatures
Rep. Kenny Hulshof (R-Mo.) is circulating for House signatures
a letter addressed to Centers for Medicare
and Medicaid Services (CMS) Administrator Mark McClellan, M.D.,
Ph.D., to urge CMS "to act, through its inherent regulatory
authority, to promptly extend and expand the moratorium established
by Section 713 of the MMA." In addition, the letter urges CMS
to suspend their April 8 Question and Answer document so that Congress
and CMS can "further study and work together toward a clear
and appropriate policy that will define 'all or substantially all'
of the costs associated with training residents in non-hospital
settings and encourage this valuable service."
The letter reviews the legislative and regulatory history of residency
training in non-hospital sites. Specifically, the letter expresses
concern with CMS' actions since 2002 that have denied teaching hospital
payments for resident training in non-hospital sites when the supervising
physician volunteers their time or receives nominal payments from
the hospital.
The letter states "With the December 2004 expiration of the
Medicare Modernization Act's one-year moratorium on payment denials
related to family
medicine residents training in non-hospital settings, "CMS
has resumed its activities denying teaching hospitals payments.
Furthermore, CMS has caused even greater confusion as a result of
recent guidance included in the April 8 frequently asked question
(FAQ) document titled 'Medicare Policy Qualifications on Graduate
Medical Education Payments for Residents Training in Non-Hospital
Settings.' While we appreciate CMS's efforts to try to lend clarity
to a difficult and complicated policy, we are concerned that this
new guidance has raised more questions than it has answered and
may impose undue regulatory burdens."
Information:
AAMC Government Relations
House Panel Weighs Tying Medicare Physician Payments
to Quality
At a July 21 hearing
of the House Ways and Means Subcommittee on Health, Center for Medicare
and Medicaid (CMS) Administrator Mark McClellan, M.D., Ph.D., testified
in favor of a value-based purchasing program for Medicare physician
services. According to Dr. McClellan, "Medicare needs to move
away from a system that pays simply for more services, regardless
of their quality or impact on patient health" and toward a
system that "encourages and rewards efficiency and high quality
care…." Dr. McClellan argued that linking "a portion
of Medicare payments to valid measures of quality" would provide
physicians with "direct incentives to implement the innovative
ideas that actually result in improvement in the value of care…."
American Medical Association (AMA) Trustee John Armstrong, M.D.,
testified that valued-based purchasing would likely "serve
as a positive force in our healthcare system." However, he
warned that value-based purchasing and the current Sustainable Growth
Rate (SGR) formula "are inconsistent concepts." Dr. Armstrong
explained that value-based purchasing systems are "based on
the notion that the management of potentially costly conditions
in the physician's office will prevent or shorten hospitalization
paid for under Medicare Part A." Because such an approach would
likely increase Medicare spending on physician services, it would
also trigger additional cuts under the SGR methodology. (The SGR's
spending target penalizes volume increases exceeding the target.)
Subcommittee Chairwoman Nancy Johnson (R-Conn.) concurred that any
shift toward value-based purchasing would require repeal of the
SGR.
Also during the hearing, Rep. Johnson asked Dr. McClellan whether
CMS planned to remove the cost of drugs from the SGR formula. According
to Dr. McClellan, legal barriers continue to prevent CMS from making
such changes. Dr. McClellan added that the estimated cost of replacing
the SGR with a formula based on MedPAC recommendations had been
revised at $183 billion over ten years. Earlier this year, the Congressional
Budget Office (CBO) had estimated the cost at approximately $155
billion.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House and Senate Send Letters to CMS Opposing
Proposed Expansion of Post-Acute Transfer Policy
The House and Senate
July 20 and July 22, respectively, sent letters to Centers for Medicare
and Medicaid Services (CMS) Administrator Mark McClellan, M.D.,
Ph.D., in opposition to the FY 2006 Inpatient PPS Proposed Rule
that includes an expansion of the post-acute transfer policy for
hospitals. Spearheaded by Reps. Jim Nussle (R-Iowa) and Earl Pomeroy
(D-N.D.) and Sens. Craig Thomas (R-Wyo.) and Kent Conrad (D-N.D.),
the letters were signed by 125 Representatives and 61 Senators.
Specifically, the FY 2006 Proposed
Rule for the Medicare Inpatient Prospective Payment System would
expand the post-acute care transfer policy from 30 to 223 Diagnostic
Related Groups (DRGs) in FY 2006. According to CMS, this proposal
would result in $880 million less in Medicare program payments to
hospitals, the equivalent of a 1.1 percent decrease in payments.
The letter notes that the hospital payments could be reduced by
almost $5 billion over FY 2006-2010, and that CMS "is not mandated
by Congress to expand this provisions, nor has Congress indicated
to CMS its interest in seeing the policy expanded. We urge CMS not
to implement and further broaden the post-acute transfer provision."
The AAMC stated its opposition to CMS' proposed policy expansion
in a June 24 comment letter
on the proposed rule.
Information:
AAMC Government Relations
Patient Safety Legislation Set for President's
Signature
The House of Representatives July 27 passed by a vote of 428-3
the "Patient Safety and Quality Improvement Act of 2005"
(S.
544), which establishes a voluntary and confidential reporting
system in support of initiatives to reduce preventable medical errors.
The Senate approved the bill by unanimous consent on July 21, and
the White House has indicated the President intends to sign the
legislation.
S. 544 establishes "patient safety organizations" (PSOs),
which would be responsible for compiling and analyzing reported
data. It also directs the Secretary of Health and Human Services
to develop and maintain a network of patient safety databases that
provide "an interactive evidence-based management resource
for providers, patient safety organizations, and other entities."
The bill protects reported medical errors data from subpoena, discovery,
or disclosure in civil, criminal, or administrative proceedings.
However, under S. 544, judges in criminal cases may choose to disclose
"relevant" medical errors data if it "contains evidence
of a criminal act" that is "not reasonably available from
any other source."
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House Passes Legislation Removing Physician Group
Limits on Patients Receiving Substance Abuse Treatment
The House July 27 passed AAMC-supported legislation, S.
45, which removes the current statutory limit on physician group
practices that treat substance abuse patients. The bill passed 429-0.
On July 19, the Senate passed S. 45 by unanimous consent. The bill
will soon be sent to President Bush for his signature.
The 106th Congress enacted the Drug Addiction Treatment Act (DATA)
of 2000 to expand treatment options for patients addicted to opiates.
A limit of 30 patients per treating physician was included in the
legislation to address concerns about potential abuse or diversion
of the treatment medications. In addition to the limit per physician,
DATA also contained language that imposed a 30 patient cap on group
practices as well as amending the Controlled Substances Act. S.
45 clarifies that group practices would not be limited to 30 patients,
while still limiting each provider within the group to 30 patients
seeking treatment for their drug addictions.
Information:
AAMC Government Relations
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