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April 6, 2015

Washington Health Policy Week in Review Archive c500318e-9af9-4360-8807-56fb8953c7e1

Newsletter Article


Spending Caps on Therapy Could Complicate 'Doc Fix' Deal

By Melissa Attias, CQ Roll Call

April 2, 2015 -- The House-passed package to replace Medicare's physician payment formula doesn't include a permanent repeal of caps on how much the program spends on rehabilitation therapy, but proponents say the issue could resurface as an amendment and throw a new wrinkle into the debate when the Senate takes up the measure after recess.

Maryland Democrat Benjamin L. Cardin, who has introduced legislation (S 539) to scrap the caps with Maine Republican Susan Collins, is hoping for an opportunity to offer a repeal amendment, according to spokeswoman Sue Walitsky. The House passed the physician payment package (HR 2) in a 392-37 vote before leaving town March 26, while the Senate put off its consideration of the so-called permanent "doc fix" after a nearly all-night series of votes on its fiscal 2016 budget resolution (S Con Res 11).

Amendment votes would give senators who were largely left out of negotiations on the House package the opportunity to showcase their priorities, even if they aren't adopted. But if the Senate successfully amends the measure it would return to the House, increasing odds that the deal negotiated by House Speaker John A. Boehner of Ohio and Minority Leader Nancy Pelosi, D-Calif., could unravel.

The timing and number of amendment votes—if any—are uncertain. Don Stewart, spokesman for Majority Leader Mitch McConnell of Kentucky, said in an email that members will discuss the path forward but expect it to be done quickly.

Before recess, Minority Whip Richard J. Durbin of Illinois said Democrats wanted to vote on three amendments, including one that would provide a four-year funding extension for the Children's Health Insurance Program instead of the two years in the package. Senate Democrats have also expressed concern about a provision that applies abortion restrictions to funding for community health centers, which could make reproductive health the focus of an amendment fight.

Medicare's annual limits on how much it pays for outpatient rehabilitation services for beneficiaries were established in the 1997 Balanced Budget Act (PL 105-33), the same law that created the sustainable growth rate formula, or SGR, that the House-passed package would repeal. Congress initially blocked the caps from taking effect and created a temporary exceptions process in 2006 (PL 109-171) that allows patients to receive medically necessary services beyond the annual limits, which has been repeatedly extended.

Although language to repeal the caps was included in a Senate version of the SGR legislation in the last Congress, the House-passed bill opts for another extension of the exceptions process through the end of 2017. The Congressional Budget Office estimated that current language would cost $1.9 billion, while supporters said permanently repealing the caps instead would cost between $8.8 billion and $13 billion depending on how it's done. Sending the package back to the House with such a large price tag would threaten the deal.

Mandy Frohlich, vice president of government affairs for the American Physical Therapy Association, said SGR and the caps were created together and should be fixed together. Her group joined with the American Speech-Language-Hearing Association and American Occupational Therapy Association in a March 24 plea to Congress for a repeal of the caps in the bill.

"To do one without the other would be a missed opportunity," Frohlich said.

She also expressed concern that decoupling the issue from SGR could mean that the caps go into effect when the next extension expires at the end of 2017, cutting people off from care. She called it bad policy to arbitrarily cap therapy services, noting that stroke patients, those with Parkinson's disease and others who need therapy could be affected.

The influential seniors lobby AARP also wants a repeal of the caps, according to Ariel A. Gonzalez, director of the federal health and family team in government affairs. AARP supports the House package, he said, but is concerned about the way the legislation covers the cost by increasing Medicare beneficiaries' out-of-pocket expenses without requiring cost-sharing from physicians and the prescription drug industry.

"We remain optimistic that we'll be able to work with the Senate to get improvements on behalf of Medicare beneficiaries," Gonzalez said.

While the Senate could vote on a "very limited number" of amendments to the SGR package, according to Minority Leader Harry Reid of Nevada, proponents of other provisions that were excluded from the deal are still looking for ways to advance them. 

John Falardeau, senior vice president of government relations for the American Chiropractic Association, said his group remains concerned that chiropractors and other providers were excluded from two provisions in the bill. Although the organization approached senior members in both chambers, Falardeau said the deal was pretty much closed by that point, adding they hope to get some help in the rule-making process.

Legislation (S 688, HR 1343) supported by the American Hospital Association that would factor in patients' socioeconomic status when determining hospital readmission penalties also didn't make it into the package. Tom Nickels, senior vice president of federal relations for the lobbying group, said there is bipartisan support for the issue in the House and Senate and that his organization will keep pressing for it.

At the same time, groups such as AHA have praised the package for excluding some policies that they feared would get wrapped into legislation ticketed for President Barack Obama's desk. In a March 26 letter to the Senate, the organization said the bill "rejects a number of flawed policy options," including paying hospital outpatient departments at the same rate as physician offices and cuts to physician training programs and rural community hospitals.

The hospital organization also applauded the package for excluding another delay of a new coding system for health services known as ICD-10, which was postponed until Oct. 1, 2015, in last year's payment patch (PL 113-93) temporarily averting cuts to Medicare doctors dictated by SGR. Nickels said opponents of another delay will still have to stay vigilant to ensure it doesn't appear in another piece of legislation before October.

Maryland Republican Andy Harris urged Health and Human Services Secretary Sylvia Mathews Burwell to be open to creating a hardship exemption for the new system at a February hearing.

Still, Lynne Thomas Gordon, CEO of the American Health Information Management Association, said her organization has found more acceptance of moving to ICD-10 compared to last year. The group has reached out to the Texas Medical Association—which has advocated for delaying the system—to offer to help get physicians ready, she added.

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New Jersey Doctors Least Likely to Treat Medicaid Patients in 2013

By Marissa Evans, CQ Roll Call

April 2, 2015 -- California, Florida, Louisiana, New Jersey, and New York–area physicians were the least likely to accept new Medicaid patients in 2013, just as states were increasing reimbursement rates for the low-income health insurance program under the Affordable Care Act, according to a new federal report.

The Centers for Disease Control and Prevention 2013 National Electronic Health Records Survey report found that just 38.7 percent of New Jersey physicians said they accepted new Medicaid patients that year—below the national average of nearly 69 percent. Meanwhile, among California physicians 54.2 percent accepted Medicaid patients. Florida, Louisiana, and New York doctors rounded out the top five states.

Under the health care law, the federal government gave states money for Medicaid payment rates for primary care physicians to equal Medicare rates for 2013 and 2014. However, many states experienced delays in implementing payment increases and didn't do so until later on in 2013. The reimbursements aren't reflected in the new report.

Elisabeth Burak, senior program director for Georgetown University's Center for Children and Families, said the temporary reimbursement increase enticed more doctors to join Medicaid. She said it will be important to see next year's report and if there was an increase in the number of participating physicians.

"The really interesting news is going to be in 2014 to see what the trend looks like then since that [reimbursement] bump had an impact," Burak said. "What we're seeing is a lot of states are choosing to continue those rate bumps themselves at their own cost."

Federal funding for the rate increase expired at the end of 2014, but Alaska, Alabama, Colorado, Connecticut, Delaware, Hawaii, Iowa, Maryland, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, and South Carolina have chosen to pay out of pocket to keep the rate increases, according to a Kaiser Family Foundation survey. Twenty-four states will return to payment levels before 2013 while a dozen states haven't decided whether they'll maintain the rate increase.

Lawrence Downs, CEO for the New Jersey Medical Society, said that it's not surprising physicians aren't taking on as many Medicaid patients since the state's Medicaid reimbursement rate is one of the lowest in the country compared to Medicare reimbursement. Republican New Jersey Gov. Chris Christie is proposing an additional $45 million go toward physician reimbursements under the state's Medicaid program in his 2016 budget.

"I don't know if it's enough to bring the payments up to parity with Medicare but it's certainly an important investment for the state to make," Downs said.

Matt Salo, executive director for the National Association of Medicaid Directors said "100 percent physician participation is not high on that list of things" state Medicaid programs are trying to accomplish. He said beyond reimbursement rates, how health plans establish provider networks, ease of Medicaid administrative issues and overall commitment to treat low income patients are what drives doctor participation in the program.

"Some providers would rather see uninsured patients because with the uninsured they can write it off but with Medicaid there are rules," Salo said. "They'd rather do their own thing and provide care and know they're not going to get paid than deal with bureaucratic hassles."

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Medicaid Providers Lose Bid to Force States to Raise Rates

By Melanie Zanona, CQ Roll Call

March 31, 2015 -- The Supreme Court ruled last week that health care providers cannot force states to raise their Medicaid reimbursement rates in an effort to keep pace with rising medical costs.

Justices ruled 5–4 that companies do not have a private right to sue a state for not adequately reimbursing them for services provided under the federal–state health insurance program for the poor.

At issue was whether private companies had legal recourse to enforce federal laws. Providers maintained that the Constitution's Supremacy Clause, which states that federal law preempts state law, allows them to sue for higher rates so Medicaid beneficiaries can receive equal access to care, as mandated by federal law (PL 89-97).

But a majority of the justices disagreed with the core of that argument.

"[The Supremacy Clause] instructs courts what to do when state and federal law clash, but is silent regarding who may enforce federal laws in court, and in what circumstances they may do so," Justice Antonin Scalia said in the majority opinion of the court.

Justices John G. Roberts, Stephen G. Breyer, Samuel Anthony Alito, Jr., and Clarence Thomas joined Scalia in favor of the states. Justices Sonia Sotomayor, Anthony M. Kennedy, Ruth Bader Ginsburg, and Elena Kagan dissented.

"We 'have long held that federal courts may in some circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law,'" Sotomayor said in the dissent.

The case originated with a group of private health care providers serving disabled adults and children in Idaho that filed a lawsuit against the state's Health and Welfare Department for freezing Medicaid reimbursement rates at 2006 levels, despite a study showing that medical costs had risen.

In 2011, a U.S. district judge ordered Idaho to raise Medicaid payments, which was upheld by the 9th U.S. Circuit Court of Appeals in 2013. Idaho officials estimate that it cost an extra $12 million in 2013 to increase reimbursements.

Justices heard an appeal of that outcome in January, ultimately siding with Idaho officials who said that it is up to federal agencies, not private parties, to determine whether states are in compliance with federal Medicaid statutes.

"The dissent speaks as though we leave these plaintiffs with no resort. . . .That is not the case," Scalia said. "Their relief must be sought initially through the Secretary rather than through the courts."

Trade and hospital groups like the American Medical Association (AMA) and the U.S. Chamber of Commerce backed providers in the case, contending that a ruling against the health care industry would unfairly suppress reimbursement rates and inhibit Medicaid patients from receiving care.

"Non-compliance with Medicaid's equal-access mandate will likely continue unabated," said AMA President Robert M. Wah in a statement. "The secretary of Health and Human Services has rarely, if ever, cut funding to a state for violating the equal-access mandate."

Sotomayor echoed the concerns over the "very real consequences" of "reimbursement rates so low that providers were unwilling to furnish a covered service for those who need it."

The outcome of the case could also have broader implications for whether private parties can bring such suits against states in the future.

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Court Declines Medicare Payment Board Challenge

By Melissa Attias, CQ Roll Call

March 30, 2015 -- The Supreme Court has declined to weigh in on a Republican-backed challenge to a controversial Medicare cost-cutting board authorized by the health care law, leaving congressional repeal efforts as opponents' best chance for action.

Justices denied the Goldwater Institute's petition for review of an appeals court dismissal of a challenge to the constitutionality of the Independent Payment Advisory Board, or IPAB. A group of 24 House Republicans and former Sen. Tom Coburn, R-Okla., filed a friend of the court brief in December asking the court to take up the case.

Rep. Phil Roe, one of the lawmakers on the brief, said in a statement that he was disappointed with the decision and pledged to press on with legislative repeal efforts. The Tennessee Republican and Linda T. Sánchez, D-Calif., introduced repeal legislation (HR 1190) earlier this month that currently has 210 cosponsors, including 17 other Democrats.

Established in the Affordable Care Act (ACA), IPAB is charged with making annual cost-cutting recommendations if Medicare spending exceeds a target growth rate, which would be implemented automatically unless Congress passes legislation with the same level of cuts. The conditions that trigger the panel's recommendations haven't been met and Obama hasn't appointed any members.

As a result, the U.S. Court of Appeals for the 9th Circuit ruled that the legal challenge's "allegations of future injury are too speculative to satisfy the constitutional requirement of ripeness" and the Supreme Court's decision not to review the case leaves that decision intact.

"This case is not dead; we're simply in a holding pattern," Christina Sandefur, a senior attorney at the Goldwater Institute, said in a release. "We will bring this challenge again once the Independent Payment Advisory Board takes action."

In a brief submitted March 10, the plaintiffs argued the challenge is valid, even though the board hasn't acted. "The unconstitutional provisions governing IPAB are already operating now, and because the ACA frees the Board of any meaningful checks and balances, waiting to consider this constitutional challenge could cause irreparable injury," the brief states.

The plaintiffs also maintain that the statute of the health law "completely insulates IPAB from repeal and forever prohibits Congress from replacing IPAB proposals" outside of a narrow window in 2017 when the board can be repealed by super majority vote. Immediate action is necessary because doctors will otherwise be left without recourse, they argue.

But in a February brief, the Justice Department says in a footnote that Congress can override the board's proposals by repealing or suspending the rules for congressional consideration, followed by a vote on superseding legislation. It also maintains that "nothing prevents Congress from abolishing the board altogether" by repealing the statute as multiple bills have proposed.

Roe spokeswoman Tiffany Haverly acknowledged the controversy over repeal but pledged to push ahead. "We had serious concerns about the constitutionality of a provision in the law that tries to prohibit its own repeal, but regardless of whether that provision is deemed constitutional or not, we do not believe future Congresses can be bound by previous Congress' action and will be pushing for full repeal," she said in an email.

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States Give Nurse Practitioners More Leeway to Treat Patients

By Marissa Evans, CQ Roll Call

March 30, 2015 -- Nebraska this month became the 20th state to approve a law allowing nurse practitioners to treat patients without the supervision of a doctor, a move that supporters say is gaining traction as state legislators work to find more providers to care for the newly insured under the Affordable Care Act.

Under the bill signed by Republican Gov. Pete Ricketts on March 5, nurse practitioners starting in September will not have to work with a physician to diagnose and treat patients. They currently are required to get a signature from a doctor before treating a patient. 

Nurse practitioners are registered nurses who have completed a master's or doctoral degree program, and have advanced clinical training beyond their initial professional registered nurse preparation, according to the American Association of Nurse Practitioners, which represents 205,000 members nationwide. Under the guidance of a physician in most states, they can diagnose and write prescriptions for patients.

LaDonna Hart, president of the Nebraska Nurse Practitioners, said the state has been losing nurse practitioners to the 19 other states that do not have physician supervision requirements. She said it's difficult to find doctors to work with nurse practitioners.

"It's difficult to recruit physicians to rural communities and that's not just for Nebraska, that's throughout our most rural states in the nation," Hart said. "It's difficult to retain physicians in rural communities. We see physicians come to practice for loan repayment then leave rural communities."

Hart said the law would help nurse practitioners who want to start their own practice or be in rural areas where primary care is needed most.

Even in states that don't require physician supervision, there are often supervisory requirements for newer nurse practitioners. In Nebraska, new nurse practitioner graduates will be required to have one year  of supervision by a doctor or nurse practitioner with five years or more of experience before they can practice medicine on their own.

Lawmakers in California, Illinois, Kansas, Maryland, Pennsylvania, South Carolina, and Texas are considering similar bills easing supervision requirements for nurse practitioners.

Taynin Kopanos, vice president for state government affairs for the American Association of Nurse Practitioners (AANP), said nurse practitioner laws are getting support in state legislatures as more patient advocacy groups and long term care groups are lobbying alongside AANP to pass the laws.

She also said lawmakers are moving beyond the alarm of a physician shortage to how to maximize their health care workforce related to nursing, pharmacy, mental, dental and other specialties. The increased need for primary care providers as more patients gain insurance under the health law has also helped.

"We'd have a much more effective health system if every health care professional were able to practice to the fullest extent of their education," she said.

The American Medical Association has been working to stop such legislation.

The influential doctors lobby wrote in a Jan. 15 letter to Kathy Campbell, Nebraska's Health and Human Services chairwoman, that allowing nurse practitioners to practice without physician supervision would "further compartmentalize and fragment health care delivery."

"Increased use of physician-led teams of multidisciplinary health care professionals will have a positive impact on the nation's primary care needs," according to the group's letter. "This team-based approach includes physicians and other clinicians working together, sharing decisions and information, to achieve improved care, improved patient health and reduced costs."

Kansas nurse practitioners have been pushing for an  independent practice law for the past three years. A bill that would remove mandated collaborative agreement requirements for nurse practitioners but would require them to have board certification and malpractice insurance coverage hasn't been taken up by the House or Senate health committees this session. The measure would also allow nurse practitioners to serve as a primary care provider and lead health care teams and patient-centered medical homes.

Rachelle Colombo, director of government affairs for Kansas Medical Society, said physicians have the largest breadth and depth in training and are more equipped to take care of patients than a nurse practitioner, making the physician supervision necessary.

"It still provides patients with a measure of oversight and protection because there's a physician involved with delivery of care even if it's done remotely," she said.
Colombo also said that nurse practitioner laws don't give enough distinction between physicians and nurse practitioners "despite significant training differences" and the thousands more hours of supervision doctors must have before treating patients on their own.

Linda Burnes Bolton, vice president for nursing and chief nursing officer at Cedars-Sinai Hospital in Los Angeles, said nurse practitioners have enough education and training to practice on their own to provide primary care. However, she says, like doctors who must have more training and education to become heart or brain surgeons, nurse practitioners also need more training to specialize in areas beyond primary care.

"Nurse practitioners were never meant to replace doctors, and none of these professional organizations have ever touted 'let's get rid of physicians and use nurse practitioners'," she said. "It's about sharing the load."

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Medicare Advisers Take Aim at Hospital Two-Midnight Rule

By Kerry Young, CQ Roll Call

April 2, 2015 -- Congress's advisers on Medicare are backing a proposal that would overhaul payment policies for short hospital stays, including bringing to an end the so-called two midnight rule.

Members of the Medicare Payment Advisory Commission (MedPAC) recently supported a package of draft recommendations regarding hospital payments for short stays. With members voting by a show of hands, commissioners sought to bring to an end a policy that has drawn frequent complaints from hospital executives and associations.

The package of draft recommendations includes proposals to update auditing programs by government contractors to target reviews at hospitals with large numbers of short patient stays. It also suggests that patients be notified when they are being kept in observation status and not admitted for inpatient status.

The two-midnight rule was a bid by the Centers for Medicare and Medicaid Services (CMS) to reserve its higher inpatient-stay payments for cases serious enough to require a patient being admitted for at least two nights.

Hospitals have protested that the policy adds administrative hassles and could leave them at risk of losing payments for care delivered if decisions to admit patients are challenged. In response to complaints, CMS and Congress have never allowed the rule to be fully implemented.

In general, both Medicare and beneficiaries save money when hospitals classify care delivered over short periods as observation status, MedPAC staff said. But people can face unexpected bills in instances where they move from hospitals to skilled nursing facilities or use self-administered drugs.

The two-midnight rule is part of an effort to contain one of the federal government's biggest expenses, the roughly $167 billion Medicare pays annually for hospital services.

But, in the actual practice of medicine, the rule "creates the potential for an incentive to inappropriately hospitalize patients,"  MedPAC Chairman Glenn M. Hackbarth said.

This debate over short hospital stays is part of a broader debate over whether payments are "siloed" in the different sections of the federal health program for the elderly and disabled, Hackbarth said.

"We all long for the day when we're  focused less on the silos and the problems that the silos create, and we have payment systems where there are better incentives for high-quality care for Medicare beneficiaries," he said.

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