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House Budget to Question Obama Medicare Payment Test Program

By Kerry Young, CQ Roll Call

August 31, 2016 -- Republicans on the House Budget Committee appear ready to challenge the Obama administration on one of its most ambitious health proposals, a planned test of alternative Medicare payment for drugs administered in doctors' offices.

The committee invited a key opponent of this plan, known as the Part B drug model, as a witness for a Sept. 7 hearing on the Center for Medicare and Medicaid Innovation (CMMI), which was created in the health care law to fund new ideas. Ted Okon, the executive director for the Community Oncology Alliance, has been a leader in efforts to block CMMI's Part B drug model. 

Many cancer and rheumatoid arthritis doctors say that they might lose money under the Part B plan, which would lower the premium Medicare pays on the drugs administered in their offices to less than 1 percent from about 4 percent. CMMI also proposed adding a set fee of more than $16 to ease the potential financial hit for doctors from this initial stage of its Part B model, which also includes a blueprint for broader action that Medicare could pursue to address rising drug costs. Among the ideas CMMI suggested is pegging future Medicare payments for drugs to the results that they deliver for patients.

The March introduction of the Part B drug proposal vaulted CMMI, also known as the Innovation Center, from relative obscurity into the focus of one of the Obama administration's most bitter final fights with Republicans over health policy. Republicans, including members of the Senate Finance and Ways and Means committees asked the center's parent agency, the Centers for Medicare and Medicaid Services (CMS), to drop the plan entirely. Republicans argued that patients might need to travel some distances to find doctors still willing to administer costly drugs. 

CMS has not given a date for the expected release of the final model. The proposal has ardent backers including the seniors' advocacy group AARP, but many Democrats too have asked CMS to narrow the plan's scope, which now calls for nearly nationwide implementation of pricing changes. 

While debate about the Part B model may dominate the Budget hearing next week,  the witness list and title of the hearing suggest it may be intended as groundwork for a broader look at the Innovation Center. In a Wednesday media advisory, the committee questioned whether the center exceeded its legal authority in the design of recent payment tests, citing specific concerns about mandatory participation in certain programs.

The hearing also is intended to examine whether the Congressional Budget Office's approach to analyzing the financial impacts of the center's projects may be hampering Congress' ability to oversee the program, the committee said.

House Republicans want to bring to an end this center, which the 2010 health law created as something akin to a venture capital firm for testing ways to improve the practice of medicine. Provided with an initial allotment of $10 billion, the Innovation Center has claimed some success to date with efforts to save money and improve quality of care. It last week announced savings of $466 million from programs meant to provide more coordination of medical services, known as accountable care organizations.

In a June policy paper on health care, House Republicans called for ending CMMI on Jan. 1, 2020, when the health law calls for giving it a second $10 billion tranche of funding. They argue that the center's work could result in limiting access to care for some senior citizens. House GOP appropriators also proposed in the fiscal 2017 Labor-Health and Human Services-Education bill (HR 5926) to rescind $7 billion of the original funding that the center had been given.

Chairman's Interest

Other witnesses for the Sept. 7 Budget hearing include Mark Hadley, deputy director of the Congressional Budget Office, and Joseph Antos, a researcher at the American Enterprise Institute, which promotes limited government. The committee also has invited Mark P. Madden, an orthopedic surgeon at Ortho Virginia.

Budget Committee Chairman Tom Price, a Georgia Republican who is a former orthopedic surgeon himself, is seeking to suspend a separate CMMI test of alternative Medicare payment for care of people getting hip and knee replacements. Known as the Comprehensive Joint Replacement test, this test is mandatory for most hospitals in 67 regions of the country. Medicare may raise or lower reimbursement for hospitals participating in the test based on judgments about how well they have cared for seniors citizens and people with disabilities who get these joint replacements. Price has 23 Republicans cosponsors for his bill (HR 4848) that seeks to suspend the implementation of the program, along with one Democratic supporter, Rep. David Scott of Georgia.

Price is also one of 16 Republican cosponsors of a bill (HR 5122) from Rep. Larry Bucshon, R-Ind., that seeks to block CMS from implementing the Part B drug model, which has two Democratic backers, Rep. Brad Ashford of Nebraska and Rep. Pete Aguilar of California. Price, who serves on the Ways and Means health subcommittee, is known for taking an active interest in CMS policies. He played a key role in shepherding a bill addressing electronic health records rules through Congress on its final day in session last year.

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