Healthcare Business News

Reform Update: Political season injects variables into healthcare agenda

By Andis Robeznieks
Posted: August 15, 2014 - 4:15 pm ET

The dynamics of healthcare reform may wildly change in the weeks ahead. The congressional calendar calls for a short legislative session followed by nonstop campaigning, a November election followed by a lame-duck session, and then finally the seating of a new Congress that could feature a shift in power in the Senate.

While healthcare stakeholders have their own interests and priorities, reaching an agreement to fund the government beginning Oct. 1 will top the legislative agenda, said Tom Nickels, the American Hospital Association's senior vice president for government relations.

Healthcare reform-related issues that the AHA is still working to get done this year—regardless of who wins the elections—include changes to the CMS recovery audit contractor program and recalibrating hospital readmission quality scores. Bipartisan legislation has been introduced that calls for considering the socio-economic factors of a hospital's service population in calculating readmission scores in pay-for-performance formulas, he said.

In addition to working on those two fronts, Nickels said, the AHA also has to guard against legislators' attempts to pay for their own pet programs by cutting Medicare funding—particularly funding for graduate medical education.

Chet Speed, vice president for public policy at the American Medical Group Association, said refining Medicare's shared-savings program for accountable care organizations tops the AMGA reform agenda along with stabilizing funding for Medicare Advantage plans.

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Speed said more than 100 of the 435 large, multispecialty group practices that belong to the AMGA participate in an ACO and the feedback the organization receives is that commercial ACOs offer a lot more flexibility than those under the CMS umbrella.

The attribution process, in which ACOs are assigned responsibility for specific beneficiaries, remains a big problem as well, Speed said. “When 40% of the people in an ACO are seeking care outside of the ACO, it's difficult to manage that population.”

The AMGA will also work to block funding cuts to Medicare Advantage, a business more AMGA members are getting into. “The cuts mandated in the Affordable Care Act are likely to continue,” Speed said. “We're trying to ensure that any further cuts to the MA program are kept to a minimum.”

Because of the annual drama surrounding potentially huge Medicare payment cuts driven by the sustainable growth-rate physician-reimbursement formula, Medicare Advantage is seen as more stable and predictable revenue stream for large practices, Speed said.

While not directly related to healthcare reform, the SGR is linked to several reform initiatives such as paying primary-care doctors at Medicare rates for services delivered to Medicaid beneficiaries. The ACA's Medicaid parity provision is set to expire Dec. 31, and physician organizations are pushing to extend it, but the SGR may get in the way.

“There will certainly be a strong effort to extend the Medicaid payment parity, but it's unclear whether something like that could get passed through Congress individually or as part of larger healthcare legislation in a lame-duck session,” said Anders Gilberg, the Medical Group Management Association's senior vice president for government affairs. “But, when you link Medicaid to Medicare, you're simply linking it to a system that still remains under the SGR formula—which doesn't supply any more stability.”

A bipartisan, bicameral SGR reform bill was introduced in both houses of Congress last year, but the effort to get it passed unraveled at the last minute as lawmakers argued over how to pay for it. Instead, Congress approved the 17th legislative “patch” to postpone SGR-driven pay cuts until April 1, 2015.

“We're setting ourselves up for an 18th patch, that's the fear the physician community has,” Gilberg said. “So, all our focus is on getting Congress to pass SGR reform in the lame-duck session.”

One reason for optimism, according to Gilberg, is that—if funding SGR repeal results in unpopular spending cuts elsewhere—there will be shared accountability. If Republicans take control of the Senate after the election, he said the GOP will end up “owning the issue” along with any negative repercussions that become attached to their action or inaction.

Speed was not optimistic. He predicted another 12- or nine-month patch will be passed next March and repeal won't be seriously addressed until the summer of 2016.

Watching for ACO rules

In addition to keeping their eye on Congress, physician organizations are keeping watch for announcements from the White House Office of Management and Budget. The office has been reviewing a rule making adjustments to the ACO program for several weeks. Speed said the CMS has been told by the AMGA and others that its ACO program is requiring physicians, who are used to operating under a fee-for-service system, to take on too much financial risk too soon. He's hoping this may be addressed in the rule. Neither he nor Gilberg would predict when the rule would be released, but both said they wouldn't be surprised if it comes Aug. 29—the Friday before the Labor Day weekend.

Targeting the device tax

If Republicans wrest control of the Senate from Democrats in the Nov. 4 election, pundits have predicted that the newly empowered GOP may target repeal of the ACA's medical-device tax as one of its first efforts to roll back Obamacare.

The 2.3% excise tax on sales of certain domestic and imported medical devices is projected to provide $29.1 billion over 10 years to fund Obamacare provisions. But while most reform-related efforts are usually only supported by one party or the other, the move to repeal the device tax has the support of least one liberal Democrat: Sen. Al Franken of Minnesota. “We've got over 400 companies that employ 35,000 people in Minnesota alone in the industry, and we should not be stifling their innovation,” Franken told Modern Healthcare. “That's why I've fought against the medical-device tax since it was first proposed. I fought the tax and was successful in getting it cut in half during the debate over health reform, and I'll keep working to find a bipartisan way to repeal it once and for all.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks

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