Government and Regulations

Use of electronic health records is no longer a condition for participating in an accountable care organization, according to the Oct. 20 final rule that will govern how ACOs are constructed and how they will be paid. The change is just one of many in the long-awaited regulation.

The 696-page final rule contains many significant changes that were made in response to the 1,320 comments the agency received on its proposed rule, issued in late March and published April 7 in the Federal Register.

Many physician groups and hospitals complained about various aspects of the proposed rule. They met repeatedly with the agency, CMS Administrator Don Berwick said during a press briefing.

"Thanks to the generous input of ideas from so many Americans, we’ve been able to fine-tune and improve these rules to better meet the needs of a range of stakeholders," Dr. Berwick said.

"When folks see the rules and see the many changes, they will see that CMS listened," Jonathan Blum, CMS deputy administrator and director of the Center for Medicare, said during the briefing.

In the proposed rule, half of primary care physicians in an ACO had to meet the meaningful use criteria for EHRs by the second year of what will be 3-year contracts with the CMS. Under the final rule, EHRs will not be required, but instead be heavily weighted as a measure of quality of care.

The final rule also pushes back the program’s starting dates. Originally, the CMS envisioned a start date of January 2012 for organizations that wanted to participate.

Now, the program will be established by January 2012 with the initial agreements starting in April or July of that year. The first performance "year" will be 18 or 21 months in length, rather than 12 months.

Under the final rule, there are two components to the ACO program: the Shared Savings Program and the Advanced Payment Model.

To be eligible to participate in the Shared Savings Program, ACOs must be able to be held accountable for at least 5,000 beneficiaries a year for each of the 3 years of the agreement. Only certain parties may sponsor an ACO: physicians in group practices, individual practitioner networks, or hospitals. That list was expanded in the final rule to include collaborations between Rural Health Clinics and Federally Qualified Health Centers.

To earn shared savings, ACO participants will have to report on measures that span four quality domains: quality standards, care coordination, preventive health, and at-risk populations. The final rule substantially reduces the number of quality measures, from 65 in five domains to 33 in four domains. In the first year, ACOs that are sharing savings will be required to report only on these measures to receive payment. In the second year, they will need to meet pay-for-performance standards on 25 of the measures, growing to 32 measures in the third year.

In the proposed rule, ACOs could share savings only in the third year of the 3-year agreement. Now, they can share beginning in the first. The CMS says this will help less-experienced organizations gain know-how before they more fully participate in the program. Fuller participation would have ACOs sharing losses, as well.

The savings-only route has ACOs splitting up to 50% of the savings with the CMS. If an ACO chooses to also share losses, it will get up to 60% of the savings. Under the proposed rule, the CMS could withhold 25% of pay-for-performance bonuses, but that has been removed from the final rule.

Also, under the proposed rule, ACOs would start sharing in the savings only after they had passed a minimum threshold set by the CMS. That threshold was established to ensure that the savings weren’t just random, Dr. Berwick said. The minimum still exists under the final rule, but now, if the savings aren’t just due to a random variation in costs, the ACO can share in savings starting with the first dollar, Dr. Berwick said.

The final rule made some changes to how Medicare beneficiaries would be assigned to ACOs, noting that "determination of whether an Accountable Care Organization was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization."

To spur participation in the Shared Savings Program, the CMS also announced that it would make money available to physicians, hospitals, and others for major capital investments under the Advanced Payment Model.

This model will pay a portion of future savings to eligible participants. Once they begin sharing in savings, they will have to repay the money. According to the final rule, eligible ACOs will either receive an upfront, fixed payment; an upfront, variable payment; or a monthly payment of varying amount depending on of the number of Medicare beneficiaries historically attributed to the ACO. More information on eligibility and requirements is at the agency’s innovation centers website.

Simultaneously with the announcement of the final rule, several federal agencies issued additional guidance on how ACOs could steer clear of violating antitrust laws and other measures designed to keep medicine competitive.

The HHS Office of Inspector General also issued an interim final rule on how the ACOs could stay within the antikickback rules.

In the proposed rule, ACOs were required to seek antitrust review from the Federal Trade Commission and the Department of Justice. The final rule lifts that requirement, and instead advises potential ACOs to seek review. Those two agencies issued a final policy statement outlining enforcement plans and indicating that voluntary reviews would likely take about 90 days.

Use of electronic health records is no longer a condition for participating in an accountable care organization, according to the Oct. 20 final rule that will govern how ACOs are constructed and how they will be paid. The change is just one of many in the long-awaited regulation.

The 696-page final rule contains many significant changes that were made in response to the 1,320 comments the agency received on its proposed rule, issued in late March and published April 7 in the Federal Register.

Many physician groups and hospitals complained about various aspects of the proposed rule. They met repeatedly with the agency, CMS Administrator Don Berwick said during a press briefing.

"Thanks to the generous input of ideas from so many Americans, we’ve been able to fine-tune and improve these rules to better meet the needs of a range of stakeholders," Dr. Berwick said.

"When folks see the rules and see the many changes, they will see that CMS listened," Jonathan Blum, CMS deputy administrator and director of the Center for Medicare, said during the briefing.

In the proposed rule, half of primary care physicians in an ACO had to meet the meaningful use criteria for EHRs by the second year of what will be 3-year contracts with the CMS. Under the final rule, EHRs will not be required, but instead be heavily weighted as a measure of quality of care.

The final rule also pushes back the program’s starting dates. Originally, the CMS envisioned a start date of January 2012 for organizations that wanted to participate.

Now, the program will be established by January 2012 with the initial agreements starting in April or July of that year. The first performance "year" will be 18 or 21 months in length, rather than 12 months.

Under the final rule, there are two components to the ACO program: the Shared Savings Program and the Advanced Payment Model.

To be eligible to participate in the Shared Savings Program, ACOs must be able to be held accountable for at least 5,000 beneficiaries a year for each of the 3 years of the agreement. Only certain parties may sponsor an ACO: physicians in group practices, individual practitioner networks, or hospitals. That list was expanded in the final rule to include collaborations between Rural Health Clinics and Federally Qualified Health Centers.

To earn shared savings, ACO participants will have to report on measures that span four quality domains: quality standards, care coordination, preventive health, and at-risk populations. The final rule substantially reduces the number of quality measures, from 65 in five domains to 33 in four domains. In the first year, ACOs that are sharing savings will be required to report only on these measures to receive payment. In the second year, they will need to meet pay-for-performance standards on 25 of the measures, growing to 32 measures in the third year.

In the proposed rule, ACOs could share savings only in the third year of the 3-year agreement. Now, they can share beginning in the first. The CMS says this will help less-experienced organizations gain know-how before they more fully participate in the program. Fuller participation would have ACOs sharing losses, as well.

The savings-only route has ACOs splitting up to 50% of the savings with the CMS. If an ACO chooses to also share losses, it will get up to 60% of the savings. Under the proposed rule, the CMS could withhold 25% of pay-for-performance bonuses, but that has been removed from the final rule.

Also, under the proposed rule, ACOs would start sharing in the savings only after they had passed a minimum threshold set by the CMS. That threshold was established to ensure that the savings weren’t just random, Dr. Berwick said. The minimum still exists under the final rule, but now, if the savings aren’t just due to a random variation in costs, the ACO can share in savings starting with the first dollar, Dr. Berwick said.

The final rule made some changes to how Medicare beneficiaries would be assigned to ACOs, noting that "determination of whether an Accountable Care Organization was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization."

To spur participation in the Shared Savings Program, the CMS also announced that it would make money available to physicians, hospitals, and others for major capital investments under the Advanced Payment Model.

This model will pay a portion of future savings to eligible participants. Once they begin sharing in savings, they will have to repay the money. According to the final rule, eligible ACOs will either receive an upfront, fixed payment; an upfront, variable payment; or a monthly payment of varying amount depending on of the number of Medicare beneficiaries historically attributed to the ACO. More information on eligibility and requirements is at the agency’s innovation centers website.

Simultaneously with the announcement of the final rule, several federal agencies issued additional guidance on how ACOs could steer clear of violating antitrust laws and other measures designed to keep medicine competitive.

The HHS Office of Inspector General also issued an interim final rule on how the ACOs could stay within the antikickback rules.

In the proposed rule, ACOs were required to seek antitrust review from the Federal Trade Commission and the Department of Justice. The final rule lifts that requirement, and instead advises potential ACOs to seek review. Those two agencies issued a final policy statement outlining enforcement plans and indicating that voluntary reviews would likely take about 90 days.

Use of electronic health records is no longer a condition for participating in an accountable care organization, according to the Oct. 20 final rule that will govern how ACOs are constructed and how they will be paid. The change is just one of many in the long-awaited regulation.

The 696-page final rule contains many significant changes that were made in response to the 1,320 comments the agency received on its proposed rule, issued in late March and published April 7 in the Federal Register.

Many physician groups and hospitals complained about various aspects of the proposed rule. They met repeatedly with the agency, CMS Administrator Don Berwick said during a press briefing.

"Thanks to the generous input of ideas from so many Americans, we’ve been able to fine-tune and improve these rules to better meet the needs of a range of stakeholders," Dr. Berwick said.

"When folks see the rules and see the many changes, they will see that CMS listened," Jonathan Blum, CMS deputy administrator and director of the Center for Medicare, said during the briefing.

In the proposed rule, half of primary care physicians in an ACO had to meet the meaningful use criteria for EHRs by the second year of what will be 3-year contracts with the CMS. Under the final rule, EHRs will not be required, but instead be heavily weighted as a measure of quality of care.

The final rule also pushes back the program’s starting dates. Originally, the CMS envisioned a start date of January 2012 for organizations that wanted to participate.

Now, the program will be established by January 2012 with the initial agreements starting in April or July of that year. The first performance "year" will be 18 or 21 months in length, rather than 12 months.

Under the final rule, there are two components to the ACO program: the Shared Savings Program and the Advanced Payment Model.

To be eligible to participate in the Shared Savings Program, ACOs must be able to be held accountable for at least 5,000 beneficiaries a year for each of the 3 years of the agreement. Only certain parties may sponsor an ACO: physicians in group practices, individual practitioner networks, or hospitals. That list was expanded in the final rule to include collaborations between Rural Health Clinics and Federally Qualified Health Centers.

To earn shared savings, ACO participants will have to report on measures that span four quality domains: quality standards, care coordination, preventive health, and at-risk populations. The final rule substantially reduces the number of quality measures, from 65 in five domains to 33 in four domains. In the first year, ACOs that are sharing savings will be required to report only on these measures to receive payment. In the second year, they will need to meet pay-for-performance standards on 25 of the measures, growing to 32 measures in the third year.

In the proposed rule, ACOs could share savings only in the third year of the 3-year agreement. Now, they can share beginning in the first. The CMS says this will help less-experienced organizations gain know-how before they more fully participate in the program. Fuller participation would have ACOs sharing losses, as well.

The savings-only route has ACOs splitting up to 50% of the savings with the CMS. If an ACO chooses to also share losses, it will get up to 60% of the savings. Under the proposed rule, the CMS could withhold 25% of pay-for-performance bonuses, but that has been removed from the final rule.

Also, under the proposed rule, ACOs would start sharing in the savings only after they had passed a minimum threshold set by the CMS. That threshold was established to ensure that the savings weren’t just random, Dr. Berwick said. The minimum still exists under the final rule, but now, if the savings aren’t just due to a random variation in costs, the ACO can share in savings starting with the first dollar, Dr. Berwick said.

The final rule made some changes to how Medicare beneficiaries would be assigned to ACOs, noting that "determination of whether an Accountable Care Organization was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization."

To spur participation in the Shared Savings Program, the CMS also announced that it would make money available to physicians, hospitals, and others for major capital investments under the Advanced Payment Model.

This model will pay a portion of future savings to eligible participants. Once they begin sharing in savings, they will have to repay the money. According to the final rule, eligible ACOs will either receive an upfront, fixed payment; an upfront, variable payment; or a monthly payment of varying amount depending on of the number of Medicare beneficiaries historically attributed to the ACO. More information on eligibility and requirements is at the agency’s innovation centers website.

Simultaneously with the announcement of the final rule, several federal agencies issued additional guidance on how ACOs could steer clear of violating antitrust laws and other measures designed to keep medicine competitive.

The HHS Office of Inspector General also issued an interim final rule on how the ACOs could stay within the antikickback rules.

In the proposed rule, ACOs were required to seek antitrust review from the Federal Trade Commission and the Department of Justice. The final rule lifts that requirement, and instead advises potential ACOs to seek review. Those two agencies issued a final policy statement outlining enforcement plans and indicating that voluntary reviews would likely take about 90 days.

WASHINGTON – Expert members of the Medicare Payment Advisory Commission voted Oct. 6 to present their Medicare physician pay fix plan to Congress, despite the objections of primary care and specialist physician organizations.

First presented at the commission’s September meeting, the MedPAC recommendations aim to, among other things, avoid the looming almost-30% Medicare pay cut on Jan. 1 under the Sustainable Growth Rate (SGR) formula.

To do so, the commissioners advise freezing most Medicare payments to primary care physicians for 10 years and cutting specialists’ payments by 17% over 3 years, followed by a freeze for 7 years more. The recommendation passed by a vote of 15-2.

Physician organizations said the recommendations are a less-than-adequate alternative to the current system.

"The MedPAC proposal, we believe, will unintentionally undermine the goal of transitioning to new payment models aligned with value," said Shari Erickson, director of regulatory and insurer affairs for the American College of Physicians.

Ms. Erickson urged the committee to consider the SGR replacement proposal that ACP submitted in September to the Joint Select Committee on Deficit Reduction. Under the ACP proposal:

• The SGR would be repealed and physicians fees would be stabilized and set by statute in a 5-year transition period.

• A physician-led initiative would work to decrease use of low-value services.

• Potential savings of $500 billion to $886 billion could be achieved via measures such as reducing defensive medicine, rewarding physicians for high-quality coordinated care, and allowing the government to negotiate prices of drugs paid by Medicare.

The American College of Cardiology also registered its displeasure. "The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship," Dr. Jack Lewin, CEO, said in a statement. "Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes."

In advance of the MedPAC meeting, a coalition of physician groups, led by the American Medical Association, wrote to commission Chairman Glenn Hackbarth urging that the commission not adopt their proposed recommendations. Instead, the physicians urged the commissioners to look at previous proposals put forth by groups such as the Congressional Budget Office, the Simpson-Bowles Commission, and the Senate Gang of Six.

MedPAC commissioners also voiced their disapproval of the recommendation for pay cuts and freezes.

Dr. Ronald D. Castellanos, a commissioner and a Florida urologist, said he considered it "extremely disturbing" that a nurse practitioner that he may hire could make more money from treating the same patients, simply because of codes. He added that he believes the cuts would push some doctors into early retirement and discourage medical school students from becoming physicians.

Commission member Dr. Karen Borman, a Pennsylvania surgeon, agreed. She warned her fellow commissioners not to create even more adverse consequences than already exist with the SGR.

With a $200 billion price tag, the recommendations reduce the estimated cost of replacing the SGR by $100 billion, according to a MedPAC document. Outside of pay cuts and freezes, the proposal would result in a 2% annual increase in federal spending per Medicare beneficiary, but is budget neutral based on a number of possible savings identified.

WASHINGTON – Expert members of the Medicare Payment Advisory Commission voted Oct. 6 to present their Medicare physician pay fix plan to Congress, despite the objections of primary care and specialist physician organizations.

First presented at the commission’s September meeting, the MedPAC recommendations aim to, among other things, avoid the looming almost-30% Medicare pay cut on Jan. 1 under the Sustainable Growth Rate (SGR) formula.

To do so, the commissioners advise freezing most Medicare payments to primary care physicians for 10 years and cutting specialists’ payments by 17% over 3 years, followed by a freeze for 7 years more. The recommendation passed by a vote of 15-2.

Physician organizations said the recommendations are a less-than-adequate alternative to the current system.

"The MedPAC proposal, we believe, will unintentionally undermine the goal of transitioning to new payment models aligned with value," said Shari Erickson, director of regulatory and insurer affairs for the American College of Physicians.

Ms. Erickson urged the committee to consider the SGR replacement proposal that ACP submitted in September to the Joint Select Committee on Deficit Reduction. Under the ACP proposal:

• The SGR would be repealed and physicians fees would be stabilized and set by statute in a 5-year transition period.

• A physician-led initiative would work to decrease use of low-value services.

• Potential savings of $500 billion to $886 billion could be achieved via measures such as reducing defensive medicine, rewarding physicians for high-quality coordinated care, and allowing the government to negotiate prices of drugs paid by Medicare.

The American College of Cardiology also registered its displeasure. "The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship," Dr. Jack Lewin, CEO, said in a statement. "Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes."

In advance of the MedPAC meeting, a coalition of physician groups, led by the American Medical Association, wrote to commission Chairman Glenn Hackbarth urging that the commission not adopt their proposed recommendations. Instead, the physicians urged the commissioners to look at previous proposals put forth by groups such as the Congressional Budget Office, the Simpson-Bowles Commission, and the Senate Gang of Six.

MedPAC commissioners also voiced their disapproval of the recommendation for pay cuts and freezes.

Dr. Ronald D. Castellanos, a commissioner and a Florida urologist, said he considered it "extremely disturbing" that a nurse practitioner that he may hire could make more money from treating the same patients, simply because of codes. He added that he believes the cuts would push some doctors into early retirement and discourage medical school students from becoming physicians.

Commission member Dr. Karen Borman, a Pennsylvania surgeon, agreed. She warned her fellow commissioners not to create even more adverse consequences than already exist with the SGR.

With a $200 billion price tag, the recommendations reduce the estimated cost of replacing the SGR by $100 billion, according to a MedPAC document. Outside of pay cuts and freezes, the proposal would result in a 2% annual increase in federal spending per Medicare beneficiary, but is budget neutral based on a number of possible savings identified.

WASHINGTON – Expert members of the Medicare Payment Advisory Commission voted Oct. 6 to present their Medicare physician pay fix plan to Congress, despite the objections of primary care and specialist physician organizations.

First presented at the commission’s September meeting, the MedPAC recommendations aim to, among other things, avoid the looming almost-30% Medicare pay cut on Jan. 1 under the Sustainable Growth Rate (SGR) formula.

To do so, the commissioners advise freezing most Medicare payments to primary care physicians for 10 years and cutting specialists’ payments by 17% over 3 years, followed by a freeze for 7 years more. The recommendation passed by a vote of 15-2.

Physician organizations said the recommendations are a less-than-adequate alternative to the current system.

"The MedPAC proposal, we believe, will unintentionally undermine the goal of transitioning to new payment models aligned with value," said Shari Erickson, director of regulatory and insurer affairs for the American College of Physicians.

Ms. Erickson urged the committee to consider the SGR replacement proposal that ACP submitted in September to the Joint Select Committee on Deficit Reduction. Under the ACP proposal:

• The SGR would be repealed and physicians fees would be stabilized and set by statute in a 5-year transition period.

• A physician-led initiative would work to decrease use of low-value services.

• Potential savings of $500 billion to $886 billion could be achieved via measures such as reducing defensive medicine, rewarding physicians for high-quality coordinated care, and allowing the government to negotiate prices of drugs paid by Medicare.

The American College of Cardiology also registered its displeasure. "The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship," Dr. Jack Lewin, CEO, said in a statement. "Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes."

In advance of the MedPAC meeting, a coalition of physician groups, led by the American Medical Association, wrote to commission Chairman Glenn Hackbarth urging that the commission not adopt their proposed recommendations. Instead, the physicians urged the commissioners to look at previous proposals put forth by groups such as the Congressional Budget Office, the Simpson-Bowles Commission, and the Senate Gang of Six.

MedPAC commissioners also voiced their disapproval of the recommendation for pay cuts and freezes.

Dr. Ronald D. Castellanos, a commissioner and a Florida urologist, said he considered it "extremely disturbing" that a nurse practitioner that he may hire could make more money from treating the same patients, simply because of codes. He added that he believes the cuts would push some doctors into early retirement and discourage medical school students from becoming physicians.

Commission member Dr. Karen Borman, a Pennsylvania surgeon, agreed. She warned her fellow commissioners not to create even more adverse consequences than already exist with the SGR.

With a $200 billion price tag, the recommendations reduce the estimated cost of replacing the SGR by $100 billion, according to a MedPAC document. Outside of pay cuts and freezes, the proposal would result in a 2% annual increase in federal spending per Medicare beneficiary, but is budget neutral based on a number of possible savings identified.

As this newspaper went to press, The Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates payment rates under the Medicare Physician Fee Schedule starting January 2012. Based on the Sustainable Growth Rate (SGR), the rule translates to a 27.4% reduction in payments, less than the 29.5% that CMS had estimated in March 2011 because Medicare cost growth was slower than expected, according to CMS.

"This payment rate cut would have dire consequences that should not be allowed to happen," said Dr. Donald M. Berwick, CMS administrator, in a web release. "We need a permanent SGR fix to solve this problem once and for all. That’s why the President’s Budget and his Plan for Economic Growth and Deficit Reduction call for permanent, fiscally responsible reform and why we are committed to working with the Congress to achieve a permanent and sustainable fix."

This is the eleventh time the SGR formula has resulted in a payment cut, although the cuts have been averted through legislation in every year but 2002, according to CMS.

As this newspaper went to press, The Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates payment rates under the Medicare Physician Fee Schedule starting January 2012. Based on the Sustainable Growth Rate (SGR), the rule translates to a 27.4% reduction in payments, less than the 29.5% that CMS had estimated in March 2011 because Medicare cost growth was slower than expected, according to CMS.

"This payment rate cut would have dire consequences that should not be allowed to happen," said Dr. Donald M. Berwick, CMS administrator, in a web release. "We need a permanent SGR fix to solve this problem once and for all. That’s why the President’s Budget and his Plan for Economic Growth and Deficit Reduction call for permanent, fiscally responsible reform and why we are committed to working with the Congress to achieve a permanent and sustainable fix."

This is the eleventh time the SGR formula has resulted in a payment cut, although the cuts have been averted through legislation in every year but 2002, according to CMS.

As this newspaper went to press, The Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates payment rates under the Medicare Physician Fee Schedule starting January 2012. Based on the Sustainable Growth Rate (SGR), the rule translates to a 27.4% reduction in payments, less than the 29.5% that CMS had estimated in March 2011 because Medicare cost growth was slower than expected, according to CMS.

"This payment rate cut would have dire consequences that should not be allowed to happen," said Dr. Donald M. Berwick, CMS administrator, in a web release. "We need a permanent SGR fix to solve this problem once and for all. That’s why the President’s Budget and his Plan for Economic Growth and Deficit Reduction call for permanent, fiscally responsible reform and why we are committed to working with the Congress to achieve a permanent and sustainable fix."

This is the eleventh time the SGR formula has resulted in a payment cut, although the cuts have been averted through legislation in every year but 2002, according to CMS.

The future of federal spending on health care, medical research, and countless other programs will be determined by the actions this fall of a new Congressional committee. The Joint Select Committee on Deficit Reduction, also known as the "Super Committee," was created by the Budget Control Act of 2011 as part of the August 2011 compromise to raise the federal government’s borrowing limit (the "debt ceiling") and reduce the federal deficit. The Super Committee is charged with producing a plan by Nov. 23, 2011 to reduce the federal deficit by at least $1.2 trillion over 10 years. If the Super Committee does not produce a plan that achieves this much in savings, or if the committee’s plan is not passed by both houses of Congress by Dec. 23, 2011, automatic spending cuts (implemented through a process called "sequestration") will take effect over fiscal years (FY) 2013 through 2021. The Budget Control Act also set new limits on discretionary spending, including spending on medical research for FY 2012 and 2013.

Meet the Super Committee

The Super Committee is composed of 12 members of Congress, 3 from each party from each house. The members were chosen by the leaders of each party in each house. The committee roster is:

Rep. Jeb Hensarling (R-Tex.), Co-Chair

Sen. Patty Murray (D-Wash.), Co-Chair

Sen. Max Baucus (D-Mont.)

Rep. Xavier Becerra (D-Calif.)

Rep. Dave Camp (R-Mich.)

Rep. Jim Clyburn (D-S.C.)

Sen. John Kerry (D-Mass.)

Sen. Jon Kyl (R-Ariz.)

Sen. Rob Portman (R-Ohio)

Sen. Pat Toomey (R-Pa.)

Rep. Fred Upton (R-Mich.)

Rep. Chris Van Hollen (D-Md.)

The Super Committee began meeting on Sep. 8, 2011, and as of Oct. 13, it held two public hearings and many closed door sessions to discussion options for spending cuts. Interest groups from across the country, representing nearly every issue in the federal budget, are trying to influence the Super Committee’s decisions and help it set priorities.

Potential Automatic Spending Cuts For FY 2013-2021

With an even number of members from each party, the Super Committee might not be able to reach an agreement, particularly when there are sharp partisan divisions about whether deficit reduction should include increased revenues as well as spending cuts. If the Super Committee succeeds at producing a bill, the legislation must be approved by both houses of Congress. No amendments or filibusters (prolonged debate in the Senate to avoid a vote) of the bill would be permitted. If Congress does not pass legislation to achieve the required level of deficit reduction by Dec. 23, 2011, automatic spending cuts will take effect in FY 2013-2012 through the sequestration process. Half of the automatic cuts would come from defense spending, and the other half would come from the rest of the federal budget, excluding Social Security and other retirement programs, Medicaid, and certain safety-net programs for people with low-incomes. Cuts to Medicare would be limited to 2% of payments to provider and Medicare Advantage plans; beneficiary costs would not increase. The cuts would be applied evenly across Medicare, but physician payments would be reduced by more than 2% if the physician update formula is not repealed.

Healthcare Options on the Table

One of the difficult issues the Super Committee faces is how to achieve reductions in Medicare spending while also preventing another payment cut under the physician fee schedule. Repealing the current physician payment update formula, which has produced payment reductions of 20%-30% before being reversed by Congress, is estimated to cost $300 billion over ten years. The Medicare Payment Advisory Commission (MedPAC) developed a proposal to replace the current update formula with a new approach that would freeze payments to primary care physicians and reduce payments to other physicians. Additional savings could come from other parts of the Medicare program. For example, payments to hospitals for bad debt and graduate medical education could be reduced, payments to physicians for imaging services could be cut, and beneficiary cost-sharing could be required for laboratory and home health services. Any or all of these options could be on the table for the Super Committee to consider. Medicare is a large part of the health spending at issue, but all other federal spending on health issues also is up for debate by the Super Committee. As the committee looks for potential deficit reduction options, it may consider spending on medical research, Medicaid, and other health-related expenses, as well.

Opportunities for Medical Research Spending in FY 2012 and Beyond

In addition to creating the Super Committee, the Budget Control Act set limits on discretionary spending – federal spending excluding Social Security, Medicare, and Medicaid and the wars in Iraq and Afghanistan. The spending cap for 2012 ($1.043 trillion) is $7 billion less than the total approved discretionary spending for FY 2011 ($1.050 trillion), but $24 billion more than the House of Representatives approved in its budget for FY 2012. The spending cap for FY 2013 is only $4 billion more than the FY 2012 cap, but beginning in 2014, the annual cap will increase by $20 billion to $25 billion per year. These increases in the spending cap could allow for increases in appropriations for the National Institutes of Health and other federal research programs.

What Happens Next?

The Super Committee is being watched closely for signs that it might be able to reach an agreement, as the President, other members of Congress, and interest groups prepare proposals for its consideration. Sequestration may be the most likely outcome of this process. The only certainty is that we should know by Nov. 23 whether the Super Committee will produce a plan, and we will know by Dec. 23 whether Congress will pass that plan.

Elizabeth Halpern, J.D., writes on medico-legal issues for the AATS and is an attorney at Hogan Lovells.

The future of federal spending on health care, medical research, and countless other programs will be determined by the actions this fall of a new Congressional committee. The Joint Select Committee on Deficit Reduction, also known as the "Super Committee," was created by the Budget Control Act of 2011 as part of the August 2011 compromise to raise the federal government’s borrowing limit (the "debt ceiling") and reduce the federal deficit. The Super Committee is charged with producing a plan by Nov. 23, 2011 to reduce the federal deficit by at least $1.2 trillion over 10 years. If the Super Committee does not produce a plan that achieves this much in savings, or if the committee’s plan is not passed by both houses of Congress by Dec. 23, 2011, automatic spending cuts (implemented through a process called "sequestration") will take effect over fiscal years (FY) 2013 through 2021. The Budget Control Act also set new limits on discretionary spending, including spending on medical research for FY 2012 and 2013.

Meet the Super Committee

The Super Committee is composed of 12 members of Congress, 3 from each party from each house. The members were chosen by the leaders of each party in each house. The committee roster is:

Rep. Jeb Hensarling (R-Tex.), Co-Chair

Sen. Patty Murray (D-Wash.), Co-Chair

Sen. Max Baucus (D-Mont.)

Rep. Xavier Becerra (D-Calif.)

Rep. Dave Camp (R-Mich.)

Rep. Jim Clyburn (D-S.C.)

Sen. John Kerry (D-Mass.)

Sen. Jon Kyl (R-Ariz.)

Sen. Rob Portman (R-Ohio)

Sen. Pat Toomey (R-Pa.)

Rep. Fred Upton (R-Mich.)

Rep. Chris Van Hollen (D-Md.)

The Super Committee began meeting on Sep. 8, 2011, and as of Oct. 13, it held two public hearings and many closed door sessions to discussion options for spending cuts. Interest groups from across the country, representing nearly every issue in the federal budget, are trying to influence the Super Committee’s decisions and help it set priorities.

Potential Automatic Spending Cuts For FY 2013-2021

With an even number of members from each party, the Super Committee might not be able to reach an agreement, particularly when there are sharp partisan divisions about whether deficit reduction should include increased revenues as well as spending cuts. If the Super Committee succeeds at producing a bill, the legislation must be approved by both houses of Congress. No amendments or filibusters (prolonged debate in the Senate to avoid a vote) of the bill would be permitted. If Congress does not pass legislation to achieve the required level of deficit reduction by Dec. 23, 2011, automatic spending cuts will take effect in FY 2013-2012 through the sequestration process. Half of the automatic cuts would come from defense spending, and the other half would come from the rest of the federal budget, excluding Social Security and other retirement programs, Medicaid, and certain safety-net programs for people with low-incomes. Cuts to Medicare would be limited to 2% of payments to provider and Medicare Advantage plans; beneficiary costs would not increase. The cuts would be applied evenly across Medicare, but physician payments would be reduced by more than 2% if the physician update formula is not repealed.

Healthcare Options on the Table

One of the difficult issues the Super Committee faces is how to achieve reductions in Medicare spending while also preventing another payment cut under the physician fee schedule. Repealing the current physician payment update formula, which has produced payment reductions of 20%-30% before being reversed by Congress, is estimated to cost $300 billion over ten years. The Medicare Payment Advisory Commission (MedPAC) developed a proposal to replace the current update formula with a new approach that would freeze payments to primary care physicians and reduce payments to other physicians. Additional savings could come from other parts of the Medicare program. For example, payments to hospitals for bad debt and graduate medical education could be reduced, payments to physicians for imaging services could be cut, and beneficiary cost-sharing could be required for laboratory and home health services. Any or all of these options could be on the table for the Super Committee to consider. Medicare is a large part of the health spending at issue, but all other federal spending on health issues also is up for debate by the Super Committee. As the committee looks for potential deficit reduction options, it may consider spending on medical research, Medicaid, and other health-related expenses, as well.

Opportunities for Medical Research Spending in FY 2012 and Beyond

In addition to creating the Super Committee, the Budget Control Act set limits on discretionary spending – federal spending excluding Social Security, Medicare, and Medicaid and the wars in Iraq and Afghanistan. The spending cap for 2012 ($1.043 trillion) is $7 billion less than the total approved discretionary spending for FY 2011 ($1.050 trillion), but $24 billion more than the House of Representatives approved in its budget for FY 2012. The spending cap for FY 2013 is only $4 billion more than the FY 2012 cap, but beginning in 2014, the annual cap will increase by $20 billion to $25 billion per year. These increases in the spending cap could allow for increases in appropriations for the National Institutes of Health and other federal research programs.

What Happens Next?

The Super Committee is being watched closely for signs that it might be able to reach an agreement, as the President, other members of Congress, and interest groups prepare proposals for its consideration. Sequestration may be the most likely outcome of this process. The only certainty is that we should know by Nov. 23 whether the Super Committee will produce a plan, and we will know by Dec. 23 whether Congress will pass that plan.

Elizabeth Halpern, J.D., writes on medico-legal issues for the AATS and is an attorney at Hogan Lovells.

The future of federal spending on health care, medical research, and countless other programs will be determined by the actions this fall of a new Congressional committee. The Joint Select Committee on Deficit Reduction, also known as the "Super Committee," was created by the Budget Control Act of 2011 as part of the August 2011 compromise to raise the federal government’s borrowing limit (the "debt ceiling") and reduce the federal deficit. The Super Committee is charged with producing a plan by Nov. 23, 2011 to reduce the federal deficit by at least $1.2 trillion over 10 years. If the Super Committee does not produce a plan that achieves this much in savings, or if the committee’s plan is not passed by both houses of Congress by Dec. 23, 2011, automatic spending cuts (implemented through a process called "sequestration") will take effect over fiscal years (FY) 2013 through 2021. The Budget Control Act also set new limits on discretionary spending, including spending on medical research for FY 2012 and 2013.

Meet the Super Committee

The Super Committee is composed of 12 members of Congress, 3 from each party from each house. The members were chosen by the leaders of each party in each house. The committee roster is:

Rep. Jeb Hensarling (R-Tex.), Co-Chair

Sen. Patty Murray (D-Wash.), Co-Chair

Sen. Max Baucus (D-Mont.)

Rep. Xavier Becerra (D-Calif.)

Rep. Dave Camp (R-Mich.)

Rep. Jim Clyburn (D-S.C.)

Sen. John Kerry (D-Mass.)

Sen. Jon Kyl (R-Ariz.)

Sen. Rob Portman (R-Ohio)

Sen. Pat Toomey (R-Pa.)

Rep. Fred Upton (R-Mich.)

Rep. Chris Van Hollen (D-Md.)

The Super Committee began meeting on Sep. 8, 2011, and as of Oct. 13, it held two public hearings and many closed door sessions to discussion options for spending cuts. Interest groups from across the country, representing nearly every issue in the federal budget, are trying to influence the Super Committee’s decisions and help it set priorities.

Potential Automatic Spending Cuts For FY 2013-2021

With an even number of members from each party, the Super Committee might not be able to reach an agreement, particularly when there are sharp partisan divisions about whether deficit reduction should include increased revenues as well as spending cuts. If the Super Committee succeeds at producing a bill, the legislation must be approved by both houses of Congress. No amendments or filibusters (prolonged debate in the Senate to avoid a vote) of the bill would be permitted. If Congress does not pass legislation to achieve the required level of deficit reduction by Dec. 23, 2011, automatic spending cuts will take effect in FY 2013-2012 through the sequestration process. Half of the automatic cuts would come from defense spending, and the other half would come from the rest of the federal budget, excluding Social Security and other retirement programs, Medicaid, and certain safety-net programs for people with low-incomes. Cuts to Medicare would be limited to 2% of payments to provider and Medicare Advantage plans; beneficiary costs would not increase. The cuts would be applied evenly across Medicare, but physician payments would be reduced by more than 2% if the physician update formula is not repealed.

Healthcare Options on the Table

One of the difficult issues the Super Committee faces is how to achieve reductions in Medicare spending while also preventing another payment cut under the physician fee schedule. Repealing the current physician payment update formula, which has produced payment reductions of 20%-30% before being reversed by Congress, is estimated to cost $300 billion over ten years. The Medicare Payment Advisory Commission (MedPAC) developed a proposal to replace the current update formula with a new approach that would freeze payments to primary care physicians and reduce payments to other physicians. Additional savings could come from other parts of the Medicare program. For example, payments to hospitals for bad debt and graduate medical education could be reduced, payments to physicians for imaging services could be cut, and beneficiary cost-sharing could be required for laboratory and home health services. Any or all of these options could be on the table for the Super Committee to consider. Medicare is a large part of the health spending at issue, but all other federal spending on health issues also is up for debate by the Super Committee. As the committee looks for potential deficit reduction options, it may consider spending on medical research, Medicaid, and other health-related expenses, as well.

Opportunities for Medical Research Spending in FY 2012 and Beyond

In addition to creating the Super Committee, the Budget Control Act set limits on discretionary spending – federal spending excluding Social Security, Medicare, and Medicaid and the wars in Iraq and Afghanistan. The spending cap for 2012 ($1.043 trillion) is $7 billion less than the total approved discretionary spending for FY 2011 ($1.050 trillion), but $24 billion more than the House of Representatives approved in its budget for FY 2012. The spending cap for FY 2013 is only $4 billion more than the FY 2012 cap, but beginning in 2014, the annual cap will increase by $20 billion to $25 billion per year. These increases in the spending cap could allow for increases in appropriations for the National Institutes of Health and other federal research programs.

What Happens Next?

The Super Committee is being watched closely for signs that it might be able to reach an agreement, as the President, other members of Congress, and interest groups prepare proposals for its consideration. Sequestration may be the most likely outcome of this process. The only certainty is that we should know by Nov. 23 whether the Super Committee will produce a plan, and we will know by Dec. 23 whether Congress will pass that plan.

Elizabeth Halpern, J.D., writes on medico-legal issues for the AATS and is an attorney at Hogan Lovells.

Many hospitals may be unprepared for a new Medicare requirement to lower readmissions, and could face resulting financial penalties, according to a new report from the Dartmouth Atlas Project.

Over a 5-year period, hospitals made little progress in reducing readmissions among Medicare beneficiaries 65 years and older. The Dartmouth Atlas researchers found that surgical 30-day readmission rates were 12.7% in both 2004 and 2009, and medical 30-day readmission rates rose from 15.9% in 2004 to 16.1% in 2009. Trends were similar for specific conditions. For example, rates were relatively unchanged for congestive heart failure (20.9% vs. 21.2%) and pneumonia (15.1% vs. 15.3%). However, U.S. hospitals showed some improvement in acute myocardial infarctions, reducing 30-day readmissions from 19.4% in 2004 to 18.5% in 2009.

"For a long-standing and well-recognized problem, not much progress has been made," Dr. David C. Goodman, the study’s lead author and director of the Center for Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice, said during a press conference to release the findings.

The researchers analyzed data for fee-for-service Medicare beneficiaries aged 65 years and older who lived in 306 Dartmouth Atlas hospital referral regions and had both Part A and Part B Medicare coverage.

The Affordable Care Act calls on the Centers for Medicare and Medicaid Services to start measuring 30-day hospital readmission rates and to penalize poor performers. In October 2012, hospitals with high readmission rates will face penalties of 1% of their total Medicare billings, increasing to 2% the following year.

Part of the solution to reducing hospital readmissions is good discharge planning, Dr. Goodman said. "This sounds simple but oftendoesn’t happen."

That planning should include having the care team in the hospital develop a care plan and communicate that plan to the patient and their family. It also means ensuring that the patient has all the necessary prescriptions, understands what medications to take and when, and can get their prescriptions. And health care providers in the hospital should also help patients set up follow-up appointments with their primary care physician, Dr. Goodman said.

But aside from discharge planning, there are also "hidden" factors such as how local patterns of hospital use affect readmission rates. Dr. Goodman and his colleagues found that communities and health care systems with higher underlying admission rates also tended to have higher rates of hospital readmission.

The researchers reported no financial conflicts.

Many hospitals may be unprepared for a new Medicare requirement to lower readmissions, and could face resulting financial penalties, according to a new report from the Dartmouth Atlas Project.

Over a 5-year period, hospitals made little progress in reducing readmissions among Medicare beneficiaries 65 years and older. The Dartmouth Atlas researchers found that surgical 30-day readmission rates were 12.7% in both 2004 and 2009, and medical 30-day readmission rates rose from 15.9% in 2004 to 16.1% in 2009. Trends were similar for specific conditions. For example, rates were relatively unchanged for congestive heart failure (20.9% vs. 21.2%) and pneumonia (15.1% vs. 15.3%). However, U.S. hospitals showed some improvement in acute myocardial infarctions, reducing 30-day readmissions from 19.4% in 2004 to 18.5% in 2009.

"For a long-standing and well-recognized problem, not much progress has been made," Dr. David C. Goodman, the study’s lead author and director of the Center for Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice, said during a press conference to release the findings.

The researchers analyzed data for fee-for-service Medicare beneficiaries aged 65 years and older who lived in 306 Dartmouth Atlas hospital referral regions and had both Part A and Part B Medicare coverage.

The Affordable Care Act calls on the Centers for Medicare and Medicaid Services to start measuring 30-day hospital readmission rates and to penalize poor performers. In October 2012, hospitals with high readmission rates will face penalties of 1% of their total Medicare billings, increasing to 2% the following year.

Part of the solution to reducing hospital readmissions is good discharge planning, Dr. Goodman said. "This sounds simple but oftendoesn’t happen."

That planning should include having the care team in the hospital develop a care plan and communicate that plan to the patient and their family. It also means ensuring that the patient has all the necessary prescriptions, understands what medications to take and when, and can get their prescriptions. And health care providers in the hospital should also help patients set up follow-up appointments with their primary care physician, Dr. Goodman said.

But aside from discharge planning, there are also "hidden" factors such as how local patterns of hospital use affect readmission rates. Dr. Goodman and his colleagues found that communities and health care systems with higher underlying admission rates also tended to have higher rates of hospital readmission.

The researchers reported no financial conflicts.

Many hospitals may be unprepared for a new Medicare requirement to lower readmissions, and could face resulting financial penalties, according to a new report from the Dartmouth Atlas Project.

Over a 5-year period, hospitals made little progress in reducing readmissions among Medicare beneficiaries 65 years and older. The Dartmouth Atlas researchers found that surgical 30-day readmission rates were 12.7% in both 2004 and 2009, and medical 30-day readmission rates rose from 15.9% in 2004 to 16.1% in 2009. Trends were similar for specific conditions. For example, rates were relatively unchanged for congestive heart failure (20.9% vs. 21.2%) and pneumonia (15.1% vs. 15.3%). However, U.S. hospitals showed some improvement in acute myocardial infarctions, reducing 30-day readmissions from 19.4% in 2004 to 18.5% in 2009.

"For a long-standing and well-recognized problem, not much progress has been made," Dr. David C. Goodman, the study’s lead author and director of the Center for Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice, said during a press conference to release the findings.

The researchers analyzed data for fee-for-service Medicare beneficiaries aged 65 years and older who lived in 306 Dartmouth Atlas hospital referral regions and had both Part A and Part B Medicare coverage.

The Affordable Care Act calls on the Centers for Medicare and Medicaid Services to start measuring 30-day hospital readmission rates and to penalize poor performers. In October 2012, hospitals with high readmission rates will face penalties of 1% of their total Medicare billings, increasing to 2% the following year.

Part of the solution to reducing hospital readmissions is good discharge planning, Dr. Goodman said. "This sounds simple but oftendoesn’t happen."

That planning should include having the care team in the hospital develop a care plan and communicate that plan to the patient and their family. It also means ensuring that the patient has all the necessary prescriptions, understands what medications to take and when, and can get their prescriptions. And health care providers in the hospital should also help patients set up follow-up appointments with their primary care physician, Dr. Goodman said.

But aside from discharge planning, there are also "hidden" factors such as how local patterns of hospital use affect readmission rates. Dr. Goodman and his colleagues found that communities and health care systems with higher underlying admission rates also tended to have higher rates of hospital readmission.

The researchers reported no financial conflicts.