By Kerry Young, CQ Roll Call

March 17, 2016 -- Medicare within months will unveil its draft proposal for carrying out a major overhaul of its payments for physicians, with agency officials on the hook to make myriad decisions about judging the quality of service provided to the nation’s elderly and disabled.

Patrick Conway, the chief medical officer for the Centers for Medicare and Medicaid Services (CMS), on Thursday told a House Energy and Commerce panel that the draft will be released this spring. Doctors and others with an interest in Medicare policy will then have 60 days to comment on the rule. Medicare spent $69.2 billion in 2014 for the services of about 576,000 physicians and 315,000 nurse practitioners, physician assistants, therapists, chiropractors, and other professionals, according to a recent report from the Medicare Payment Advisory Commission.

The CMS rule will be a key tool for carrying out the payment changes mandated by last year’s overhaul (PL 114-10) of physician reimbursements, considered one of the most significant recent federal health laws. The measure stopped what had been a near Sisyphean task for Congress every year of overriding a previous budget law’s mandate for cuts in physician pay through a series of often hastily passed "doc fix" bills that held at bay payment reductions.

"It is a little bit surreal to be here discussing the implementation of this Medicare provider payment reform," Rep. Michael C. Burgess, R-Texas, a doctor, said at the hearing. "So many times we were here worried about how we were going to keep the dire wolf away from the door for yet one more time, to stop a substantial double-digit cut."

Burgess and other lawmakers on the Energy and Commerce Health Subcommittee told Conway that they will watch closely as his agency brings forward the new payment system. Because the draft is not yet public, there was little cause for argument between the lawmakers and Conway at the hearing.

Medicare in recent years already had begun to tie some quality measure to payments for doctors in its traditional fee-for-service system. The stakes tied to judgments made via quality measures rise under the new payment framework created by Congress.

The new framework, known as a merit-based incentive payment system, takes effect in 2019. Physicians will see their Medicare reimbursement rise or fall based on how well they score in the new system. Cuts are generally limited to 4 percent in 2019, rising to 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022. Doctors also have the option of working with Medicare outside of the MIPS program by participating in alternative payment models such as accountable care organizations. These programs already seek to tie reimbursement to judgments about quality.

At the hearing, Conway reminded lawmakers the agency already has met a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to alternative payment models, a level that it earlier expected to reach later in the year.

Not all doctors are enthusiastic converts to alternative payment systems. The overhaul of Medicare payments will be highly disruptive, Burgess said. Many physicians would prefer having fewer demands attached to their Medicare reimbursement. Burgess said many of his fellow doctors are nervous about how the changes will affect them, and prefer they not take place. Still, he conceded a broad shift in attitude about what Medicare can demand in return for its payments.

"If I had been able to do this the way I would have wanted, I would have simply directed CMS to pay whatever bills come in over the transom and stop bothering everybody," Burgess said of the reimbursement overhaul at the hearing. "We all know that wasn’t a realistic approach."

By Marissa Evans, CQ Roll Call

March 18, 2016 -- The handful of red-state governors and lawmakers who have been willing to expand Medicaid under the Affordable Care Act have tried to put their own spin on the program—and one of their favorite ideas has been pushing recipients to find jobs.

The federal Centers for Medicaid and Medicare Services (CMS), which holds that Medicaid is for health insurance, not employment, has so far not granted waivers that would allow states to require Medicaid beneficiaries to enroll in job-search and training programs.

CMS is expected to rule soon on such a waiver sought by Arkansas Gov. Asa Hutchinson, who wants to require adult Medicaid recipients to join a mandatory work referral program. Without that requirement, the Republican governor argues, he won’t be able to persuade Republican lawmakers in his state to approve his plan to continue its Medicaid expansion beyond the end of 2016. Arizona is seeking a similar waiver.

Forty percent of Arkansas residents who went onto the rolls under expansion—enacted in 2014 by Hutchinson’s Democratic predecessor, Mike Beebe—are unemployed, live in places where there are few jobs available, and lack skills to land a job. Hutchinson said at a news briefing last month that the new requirement would help beneficiaries "move up the economic ladder."

"We’re still trying to hone down and identify how we can move these people into work or work training opportunities and move them up the employment ladder so that ultimately they move off the Medicaid expansion," Hutchinson said.

Frustrated by CMS’s refusal to grant such waivers, at least three states—Indiana, Montana, and New Hampshire—have connected voluntary work referral programs to their respective Medicaid expansion plans, advertising them to new enrollees as a perk for signing up. In Montana and New Hampshire, Democratic governors are working with Republican-controlled legislatures, while Republicans hold both houses and the governor’s office in Indiana.

Under the 2010 health care law, states could expand Medicaid eligibility to individuals with incomes up to 138 percent of the poverty level starting in 2014. The cost is fully covered by the federal government until 2017, when states that expanded will have to start chipping in. By 2020, states will have to cover 10 percent of the cost. So far, 30 states and the District of Columbia have implemented expansion.

Since May, 153 of the 500 people who participated in the Indiana program’s orientation have found jobs such as dishwashing and substitute teaching. Dave Smalley, program administrator for Gateway to Work in Indiana, says it’s focused on people who have no work experience when they enroll, and creates individual action plans that identify beneficiaries’ strengths and personal barriers.

"I would hope once we get them into entry level [jobs] that we continue to try working with these individuals ... to see what can we do to get them to the next level or get that raise or retain that employment," Smalley says.

Montana launched its HELP-Link program on Jan. 1, providing services such as résumé assistance and job matching for Medicaid recipients. The program does not yet have job-placement data for the 178 people who have completed the initial self-assessment.

Agency officials say some of the biggest barriers to employment for participants have included previous convictions, poor credit histories and lack of transportation. Participants in rural areas are also facing general lack of job or education opportunities in their community.

Annie Glover, director of public health and economic security initiatives for the Montana Department of Labor and Industry, says the agency is working with more community organizations to increase its outreach. It hasn’t been easy to get Medicaid enrollees to take advantage of the program, especially ones who are already working full-time but could potentially benefit from career advice and more training.

"It’s just not something we can communicate easily in a letter or a phone call," Glover says of the work program. "They associate Medicaid with health care so it takes a bit more explanation to talk to them about the added benefits of the program which they might not associate with health insurance."

A spokesman for the U.S. Department of Health and Human Services, Jonathan Gold, says that states are free to do work-referral programs as long as they don’t pay for them with Medicaid funds.

"Medicaid’s central objective is providing access to health care for low-income residents," Gold says. "That’s our central objective and anything outside of that, states are free to supplement in other ways."

Trish Riley, executive director for the National Academy of State Health Policy, says the federal Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program have traditionally done welfare-to-work programs. She says states are trying to find new ways to support low-income people—and get them off Medicaid.

"There’s a concern about long-term unemployment among low-income people," Riley says. "Getting them healthy matters, and making sure they’re healthy enough to work and they get into programs to help them get into work matters."

By Kerry Young, CQ Roll Call

March 15, 2016 -- The Medicare Payment Advisory Commission (MedPAC) on Tuesday recommended lawmakers take on several powerful health industries by reshaping Medicare policies, including ones that may let insurers and rehabilitation hospitals gain excess payments by depicting their elderly and disabled patients as being more ill than they actually are.

MedPAC released its annual March report to Congress, a document closely watched by lawmakers and officials who oversee the program. Medicare, one of the federal government's biggest expenses with outlays topping $600 billion a year, serves more than 53 million people. MedPAC is an influential source of nonpartisan analysis, with commissioners from academic and industry backgrounds.

MedPAC’s earlier public deliberations on the recommendations in the March report drew the ire of hospital and physician groups due to a proposed change in the use of savings from the 340B discount drug program. The panel also recommended keeping payments flat next year for six services with more than $75 billion in combined annual reimbursements from the traditional Medicare program: long-term care hospitals, hospice, ambulatory surgical centers, skilled nursing facilities, home health care, and inpatient rehabilitation centers.

Lawmakers are showing increased interest in MedPAC’s findings, with Congress under pressure to find savings within federal programs, said Dan Mendelson, the president of Avalere Health, who earlier served as associate director of health at the Office of Management and Budget in the Clinton administration. This hunt for offsets will lead many staffers, including those on presidential campaigns, to closely read the March report, he said.

"It’s the imprimatur that lawmakers need to protect themselves" against backlash from groups representing industries that stand to lose money through policy changes, Mendelson said in a Monday interview. "A MedPAC report is a flak jacket."

It often can take a while for Congress or Health and Human Services officials to act on the panel’s recommendations, but its influence was seen in recent health laws. The Affordable Care Act took steps to reduce what had been seen as excess payments to insurer-run Medicare Advantage plans compared to the costs for the traditional government-run program, an approach MedPAC had urged for years. MedPAC had strongly recommend a shift away from the fee-for-service approach to paying doctors for caring for people on Medicare, which sometimes resulted in needless duplication of services and procedures. Congress last year passed a major Medicare physician pay overhaul (PL 114-10), mandating the creation of a system with stronger links between reimbursements and judgments about the quality of care delivered.

Much of the focus on MedPAC’s work centers on a drive for greater coordination of care of the people enrolled in the program, said Keith Snider, director for health policy at the firm Health Policy Source, Inc. In many cases, MedPAC members argued that new policies may better serve patients while reducing or restraining cost growth.

"There's obviously a lot of interest in those kinds of reforms on the Hill," Snider told CQ HealthBeat. "Not all of MedPAC's recommendations are accepted, but their work is respected in this town even when people disagree with their conclusions.

The recommendations that MedPAC is highlighting from its March report include proposals that would affect:

• Inpatient rehabilitation facilities: Congress should direct the Department of Health and Human Services (HHS) to analyze the coding used to set payments for people treated in specialty hospitals known as inpatient rehabilitation facilities. A new MedPAC analysis raised questions about how patients are evaluated by some of the rehabilitation centers. Some centers with high Medicare profit margins appear to have a pattern of categorizing patients being admitted as being more functionally disabled than another similar treatment center might.
• 340B drugs: Congress should direct HHS to reduce Medicare payments for drugs purchased by hospitals through the 340B discount program by 10 percent of the average sales price. Savings from this program, which can shave a third off the cost of medicines, would go to a pool to pay for uncompensated care. Hospitals that participate in the program have opposed bids to put conditions on how they can apply savings. Policy analysts see the deep discounts available through the 340B program as a driver in hospitals' acquisitions of private medical practices, which in turn raises costs for Medicare. The program pays for more services delivered in what are classified as hospital outpatient departments than it would if they were provided in a private medical office.
• Medicare Advantage plans: Congress should direct HHS to develop a risk adjustment model that uses two years of data from traditional government-run Medicare and from the insurer-run Advantage plans, seeking to account for differences in the assessment of patients’ health in bill coding. 

Of particular concern to MedPAC are cases where a disease may be reported in a health risk assessment, but not subsequently treated. "If conditions are documented without services being provided to treat the condition, current policy may result in increased payments to MA organizations by an amount that is greater than the benefit provided to the Medicine beneficiaries," MedPAC wrote in the March report.

By Andrew Siddons, CQ Roll Call

March 16, 2016 -- A sweeping bill to improve the nation's mental health care system and address opioid addiction, as well as four other bills to combat drug abuse, were approved with a voice vote by the Senate Committee on Health, Education, Labor and Pensions (HELP) on Wednesday.

As the mental health bill heads to the Senate floor, likely in early April, HELP Chairman Lamar Alexander, R-Tenn., hoped House lawmakers would follow the example of the Senate bill’s sponsors, Bill Cassidy, R-La., and Christopher S. Murphy, D-Conn., who introduced an earlier version of the bill last summer.

"They worked with their colleagues here and they’ve come up with a bipartisan approach that’s a consensus. That might help the House come to a conclusion," Alexander told reporters.

Speaking at a fast-moving markup, Democratic ranking member Patty Murray of Washington, also a cosponsor of the bill, said the issues it addresses are personal for lawmakers.

"We’ve all heard from too many families about the struggle to find quality, effective health care for a loved one in need," Murray said. "And we’ve heard too many times from mothers and fathers who fought often for years to help a child break an addiction to opioids."

The Mental Health Reform Act of 2016 (S 2680) would provide block grants to strengthen state-provided mental health care. It also would define the leadership roles of Substance Abuse and Mental Health Services Administration (SAMHSA) officials, establish new residency programs to help meet increased demand for mental health providers, and make it easier for patients to access providers. Rules governing patient privacy information also would be clarified.

Although the bill moved through the committee without any objection, some senators addressed several issues they hope to see included as amendments when the bill comes to the floor.

Both Democrats and Republicans were concerned about Medicaid’s prohibition against reimbursements to hospitals and facilities larger than 16 beds for mental health and substance abuse treatment.

"It is stunning to me that in this day and age we still do not treat mental illness in the same way that we treat physical illness from the perspective of federal reimbursement policy," said Sen. Susan Collins, R-Maine.

Alexander, who also cosponsored the bill, told reporters after the markup that there is bipartisan support to address the reimbursement exclusion, and the issue would be addressed on the Senate floor after the Senate Finance Committee, which oversees Medicare and Medicaid, is consulted.

Murphy said an earlier Congressional Budget Office estimate that including those mental health facilities would cost up to $60 billion should be revisited, and that money could be found to pay for the issue.

"There’s certainly money to be saved within our health care accounts that could be dedicated toward this kind of necessary expansion," he said.

Other areas will likely be revisited when the bill heads to the Senate floor. Cassidy will push for an amendment that would put SAMHSA’s chief medical officer in charge of the agency’s office of policy planning and innovation, effectively giving that person more resources and more clout in developing and evaluating evidence-based practices.

Sen. Sheldon Whitehouse, D-R.I., has an amendment that would offer behavioral health providers grants to provide incentives to use electronic health records, a provision similar to Medicare’s Meaningful Use program, which uses financial bonuses and penalties to motivate hospitals and physicians to adopt electronic records.

Both of those amendments were offered and withdrawn at Wednesday’s markup.

Before the committee approved all five bills en bloc by a voice vote, members approved four amendments to the primary measure. The amendments would:

• Strengthen parity laws, which require insurance companies to offer mental health coverage that is equal to coverage for physical healthcare.
• Clarify federal regulations to allow patients to request that opioid prescriptions are only partially filled, limiting leftover pills that often find their way into the hands of drug abusers. 

By Melanie Zanona, CQ Roll Call

March 15, 2016 -- Health and Human Services (HHS) Secretary Sylvia Mathews Burwell defended her agency’s authority to implement a reinsurance payment program under the health care law. But Republicans at a Tuesday hearing were unconvinced that the move is legal and even blamed the administration’s actions for contributing to an angry electorate.

A report from the nonpartisan Congressional Research Service (CRS) suggests that the diversion of funds to insurers for a payment program in the 2010 health care overhaul was illegal. Burwell was first confronted with the memo during a House Energy and Commerce Committee hearing last month, where she said she hadn't seen the report and would need to read it in order to respond.

The issue bubbled up again during an Education and the Workforce hearing on Tuesday as Rep. Bradley Byrne pressed the administration’s top health official on the report.

"I assume you’ve had a chance to go over this with your staff, with your counsel," the Alabama Republican said. "Do you now not agree that you violated the law?

"We believe our reading of the law is accurate and correct," Burwell said. "We actually put out our reading of the law in a notice of proposed rulemaking for public comment....No one raised any concerns."

Byrne shot back that "the fact you put it out for comment does not relieve you of your responsibility to enforce the law as it is plainly written."

The transitional reinsurance program is a temporary program that is meant to mitigate the risk for insurers of taking on potentially expensive health care enrollees in an effort to keep prices down, CRS noted. At dispute is a health care law requirement for payments to the Treasury.

The reinsurance program was supposed to deposit a total of $5 billion in the Treasury from its estimated $25 billion in cumulative collections. But HHS announced it would be prioritizing payments to reinsurance claimants over payments to the Treasury. The CRS report examined the legal authority of CMS to prioritize reinsurance claimants over payments to the Treasury.

The reinsurance program is funded by a tax on health insurance premiums. According to CRS, the amount was $63 per person in 2014, $44 for 2015, and $27 for 2016.

Byrne, who just went through a primary election, accused the administration’s actions of contributing to what he described as an angry electorate.

"They’re angry because people of positions of responsibility, like you, violate the law," Byrne said. "I hope you and your legal staff, after this is over, will put something together and send it back to us."