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CVC February Newsletter
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President Trump Signs Executive Order to Pave Ways for ACA Repeal
 
On January 20, President Donald Trump signed an executive order to facilitate repeal of the Affordable Care Act (ACA). The goal of the executive order is to allow federal agencies to make regulatory changes to reduce the law’s impact, including measures to weaken the individual mandate.
 
The executive order directs government agencies to "ease the burdens" of the ACA while the new administration and Congress work toward repealing and replacing the healthcare law.
 
To read the executive order, click here.
 

Congress Passes Budget Resolution for ACA Repeal
 
On January 12, the U.S. Senate voted 51 to 48 to pass a fiscal 2017 budget resolution (S Con Res 3).  This budget adoption will allow work to begin on repealing the Affordable Care Act through the budget reconciliation process.  The House also passed the budget resolution in a near party-line, 227-198 vote.
 
Before casting the final vote, the chamber considered 19 amendments, including amendments to preserve the ACA’s provisions on pre-existing conditions and allowing young adults to stay on parents' health plans, measures to all of which were prevented through procedural votes. In the end, the budget resolution remained unchanged. 
 
The measure establishes reconciliation procedures to shield an ACA repeal from Senate filibusters, enabling Congress to pass a reconciliation bill to repeal major sections of the law with a simple majority.
 
To view the full budget resolution, click here.
 

Senate Holds Hearings on HHS Secretary Nominee Congressman Tom Price
 
Senate Finance Committee
 
On January 24, the Senate Finance Committee held a hearing on Congressman Tom Price’s (R-GA), an orthopedic surgeon, nomination for the next Secretary of the U.S. Department of Health and Human Services (HHS).  During the hearing, several Senators asked Congressman Price to clarify his views on the overhaul of the Affordable Care Act (ACA). Several lawmakers asked Congressman Price to confirm that no one would lose their insurance because of President Trump’s executive order.   Congressman Price seemed to indicate and assure the Committee that if confirmed he would not undermine the ACA’s individual mandate in an executive order before Congress repeals or replaces the law.  He confirmed that before any decisions, he would make sure to seek insight and information from other lawmakers and governors and follow “the law of the land.” 
 
Congressman Price was also asked whether turning Medicaid into a block grant program would mean fewer people would be eligible in the future.  Congressman Price acknowledged Medicaid is important, but that it is flawed and that state insurance commissioners and governors should decide how their low-income residents should be covered.
 
To view the Finance Committee hearing, click here.
 
To read Congressman Price’s testimony to the Finance Committee, click here.
 
Senate HELP Committee
 
On January 18, the Senate Committee on Health, Education, Labor and Pensions (HELP) Committee held a hearing on Congressman Price’s nomination for Secretary of the U.S. Department of Health and Human Services (HHS).  In attendance were 11 Republicans and 11 Democrats from the 23-member committee.  During the hearing, Chairman Lamar Alexander (R-TN) first focused on the immediate need to adopt a firm rescue plan for the Affordable Care Act (ACA), emphasizing that full repeal should occur once stable reforms are in place to provide access to affordable healthcare.
 
Congressman Price addressed Democrats’ concerns regarding repeal of the health care law covering 20 million Americans.  “We all want a health care system that’s affordable, that’s accessible to all, of the highest quality, with the greatest number of choices, driven by world-leading innovations, and responsive to the needs of the individual patient,” said Price.
 
Among the questions asked, several senators asked Representative Price to express his views on the Center for Medicare & Medicaid Innovation (CMMI).  Many of his responses were in opposition to mandatory CMMI demonstrations and approaches where the federal government control’s healthcare decisions. However, Rep. Price did discuss the promise of CMMI in improving health care value through new payment and delivery models. 
 
Senators also expressed concerns for protecting the doctor patient relationship under specific provisions of the ACA, including possible restrictions and interruptions created by the CMMI, the Independent Payment Advisory Board, new coverage authorities for the U.S. Preventive Services Task Force, and the Patient-Centered Outcomes Research Institute.  In response, Congressman Price explained that the patient should always be at the center and expressed opposition to anything that gets in the way of patients, their families and physicians making decisions about the type of healthcare they want. 
 
To view the full HELP Committee hearing, click here.
 
To view Congressman Price’s opening statement, click here.
 

House Ways and Means Holds Hearing on Replacing Individual Mandate
 
On January 24, the House Committee on Ways and Means Subcommittee on Oversight held a hearing to examining the effectiveness of the individual mandate under the Affordable Care Act. 
 
Witnesses at the hearing included:
  • Thomas Miller, Resident Fellow, American Enterprise Institute
  • John R. Graham, Senior Fellow at the National Center for Policy Analysis
  • Dr. John E McDonough, DrPH, MPA, Professor of Practice, Department of Health Policy & Management, Harvard TH Chan School of Public Health
To view the full hearing, click here.
 

AMA Releases Letter to House and Senate on Health Reform
 
In response to the U.S. Senate and House of Representatives’ consideration of a budget resolution that includes a reconciliation bill to enable the repeal of portions of the Affordable Care Act (ACA), the American Medical Association (AMA) sent a letter to House and Senate leaders expressing their commitment to the improvement of health insurance coverage, emphasizing their advocacy for all Americans to have coverage and access to high-quality healthcare.  AMA also recognizes their support for the passage of the ACA while acknowledging that it is imperfect and therefore welcome proposals consistent with the policies of their House of Delegates. 
 
AMA further discusses that in regards to any altering of health insurance coverage based on a reconciliation bill or other proposals, gains in the number of Americans with coverage should always be maintained.  Also, all patients and other stakeholders need to have a clear understanding of what will replace current policies.  The AMA urges that reforms enable consumers to easily compare current policy to new proposals to make informed decisions about whether this is a step forward in the process of health reform.
 
AMA also included a list of Its current key objectives for reforming and improving the health care system:
  • Ensure that individuals currently covered do not become uninsured while taking steps toward achieving coverage and access for all.
  • Maintain key insurance market reforms including coverage for pre-existing conditions, guaranteed issue and parental coverage for young adults.
  • Stabilize and strengthen the individual insurance market.
  • Assure that low or moderate income patients can secure affordable and adequate coverage.
  • Decrease regulatory burdens that take from patient care and increase costs.
  • Provide greater cost transparency throughout the health care system.
  • Incorporate common sense medical liability reforms.
  • Continue the advancement of delivery reforms and new physician-led payment models to achieve good outcomes, high quality, and lower spending trends.
To view the full letter, click here.
 
To view the list of health reform objectives, click here.
 

CBO Releases Report on Repealing Portions of the ACA
 
In January, the Congressional Budget Office (CBO) released a report on how repealing portions of the Affordable Care Act would affect insurance coverage and premiums. 
 
In the report, the CBO and Joint Committee on Taxation (JCT) provide the following estimates:
  • In the first new plan year following the enactment of the bill, the uninsured rate of people would increase by 18 million. 
  • Following the above increase, with the elimination of the ACA’s expansions of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, the number of uninsured would increase to 27 million, and then to 32 million in 2026.
  • Based on relative projections under the current law, premiums would increase by 20 to 25 percent in the first new year. 
To view the full document, click here.
 
To view a summary of the document, click here.  
 

Republican Senators Hold Governors’ Roundtable on Medicaid
 
Republican Senate Finance Committee members held a GOP governors’ roundtable on January 19 to discuss changes to the Medicaid program. Input from governors had previously been requested by the committee on replacing the Affordable Care Act (ACA) and increasing flexibility over Medicaid.  During the meeting, many governors expressed support for the expansion of Medicaid under ACA, calling for a continuation of the expansion under the new Administration.
 
Following the meeting, Finance Committee Chairman Hatch said hearing from governors who administer the Medicaid program is a prudent way to gain the insight and input needed to help decide the best path forward as the new Administration seeks to repeal and replace the ACA.
 
To read Chairman Hatch’s press statement, click here.
 

MedPAC January Meetings Address Physician Payment Adequacy and Primary Care
 
The Medicare Payment Advisory Commission (MedPAC) held meetings on January 12 and 13 to assess payment adequacy and payment updates for hospital inpatient and outpatient services as well as primary care delivery.
 
Physician Payment
 
During the January 12 meeting, the adequacy of hospital payment rates along with information about beneficiaries’ access to care, the supply of hospitals, changes in the volume of services furnished, quality of care, providers’ access to capital, and Medicare’s payments and costs were reviewed.  MedPAC staff also discussed draft recommendations to collect data on off-campus emergency department visits.
 
During the presentation, data were presented on physician and other health professional services in Medicare:
  • $70.3 billion worth of services in 2015, 15% of fee-for-service benefit spending.
  • In total 919,000 practitioners billed Medicare, including 582,000 physicians, 183,000 advanced-practice registered nurses and physician assistants, and 155,000 therapists and other providers in 2015.
Also presented was a summary of physician and other health professional services payment adequacy:
  • The beneficiaries’ ability to access care is like prior years, comparable to privately insured.
  • The supply of providers per beneficiary remains steady.
  • From 2014-2015 the total volume growth per beneficiary was 1.6% for all services.
  • The differences in compensation by specialty continue to implicate fee schedule mispricing.
To view the MedPAC presentation on inpatient and outpatient payment adequacy, click here.
 
Primary Care
 
In a presentation to MedPAC, Commission staff reported that primary care is underpriced in the Medicare fee schedule and outlined options for better supporting primary care delivery.  Per MedPAC, primary care is labor intensive, which limits potential for efficiency gains and volume growth.  Other care services, MedPAC reports, are more likely to achieve efficiency gains due to factors like technology and specialties can also more easily increase service volume than primary care providers.
 
MedPAC states a goal of moving primary care from service-based payment to beneficiary-centered payment because the current fee schedule is not well designed to support primary care.   One option presented by MedPAC includes establishing per beneficiary payment for primary care based on amount of Primary Care Physician Incentive (PCIP) payments, which would be funded by reducing fees by 1.3% for all services other than primary care visits.  MedPAC maintains this would help rebalance fee schedule between primary care and specialty care.
 
To view the MedPAC presentation on primary care, click here.
 

ALEC Issues a New Site Neutral Payment Policy Act

In January, the American Legislative Exchange Council (ALEC) finalized and released its policy “Site Neutral Payment Policy Act.” 

The act allows and provides the following:
  • The state’s Medicaid Program to refund hospital outpatient departments at the same rate as physician-owned medical practices for all equivalent outpatient services.
  • It further provides that a written notice of acquisitions of outpatient facilities or the transfer of health care providers into hospital employment to state agencies and each patient served by such facility or provider must be given by hospitals.
  • The state shall consider and make suggestions to the Legislature on the advisability and feasibility of expanding to commercial health insurance the policy of payment parity between reimbursement rates paid to the physician-owned medical practices and reimbursement rates paid to hospital outpatient departments, or any health providers or physician-owned medical practices transferred to or acquired by a hospital.
To view the full policy, click here.
 

CMS Releases Report on Collecting Physician Time Data
 
In January, CMS released a report on collecting physician time data to address the misvalued services in the Medicare Physician Fee Schedule (PFS) as shown in the Affordable Care Act.  In an effort to find a validation process for the work Relative Value Units (RVUs) used in the fee schedule for both new and existing services to create payment for the work of physicians or nonphysician practitioners, this pilot report was developed.  The project concentrated on the physician service times used in determining physician work RVUs. 
 
The two primary elements of the project included developing empirical measures of physician service times and considering the implications of these estimates for physician work RVUs.
 
The study concludes that the current way of estimating time and work results in differentially inflated time and work values throughout the PFS, create inconsistently and inaccurate payment rates for physician services. The report suggests that CMS should shift from its current approach that relies on specialty society surveys and the RUC to estimate time, and instead look to empirical determination of time for the most common, high-dollar-volume services.
 
To view the full report, click here. 
 

CMS Releases Next Generation ACO Model Request Applications and Letter of Intent
 
In January, CMS released the Request for Applications (RFA) and Letter of Intent (LOI) for organizations interested in applying to the Next Generation Accountable Care organizations (ACO) Model for 2018. 

All organizations interested in applying must first submit an LOI which is now available on the Model’s webpage and open for submission until May 4, 2017.  The Next Generation ACO Model application will open March 2017 and will be due May 2017. 
 
To view more information on the Next Generation ACO Model, click here.
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