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As a means to delay the automatic spending “sequester” scheduled to go into effect January 2013, House Democrats said they are open to a one-year fix that would postpone the scheduled budgeted cuts.  Under the 2011 debt limit law, the sequester would amount to across the board cuts to discretionary spending and to mandatory programs, such as Medicare.  Delaying the cuts would allow Congress time to reach a broader deal to replace the sequester with a long term deficit reduction plan.  While Republicans have also endorsed a one-year fix, an agreement will require tough negotiations, which would likely take place during a lame-duck session of Congress after the election.

This item is a summary of George Cahlink and Frances Symes’ Congressional Quarterly briefing “A One-Year Fix.”

Seeking to replace the sustainable growth rate (SGR) formula that determines Medicare reimbursement, Representative Allyson Schwartz (D-PA) and Representative Joe Heck (R-NV) have introduced legislation to revamp the payment system. SGR calls for cuts in Medicare reimbursements to physicians but these cuts have been avoided through short-term payment patches. The proposed bipartisan plan would stabilize the payment system and provide increases for both primary care and specialty physicians. At the same time, the legislation would call for the testing and evaluation of new payment models as a means to identify best practices. Physicians would then be given time to move to the new models. The proposal has not yet specified how to pay for costs.

This item is a summary of Emily Ethridge’s Congressional Quarterly article “Lawmakers to Release Bipartisan Plan to Replace Medicare Payment System.”

In recent Congressional hearings on funding for the National Institutes of Health (NIH), appropriators expressed concern about plans to cut funds in the fiscal year (FY) 2013 budget for the Institutional Developmental Award (IDeA) program.  IDeA allocates medical research dollars to 23 states that are often unsuccessful in competing for NIH grant money.  NIH Director Francis Collins MD, PhD, has planned to cut $50 million from the $276 million program, which funds states primarily in the Midwest, West, South and Appalachia.  Proponents believe that these funds attract scientists to institutions within these states and also help underfunded states become more competitive in the global high-tech economy.  Dr. Collins has said that he is enthusiastic about the IDeA program, but explained that it received $50 million as a boost in FY 2012 and now the money is needed elsewhere.

This item is a summary of John Reichard’s Congressional Quarterly article “Funding Squeeze at NIH May Deliver Blow to High-Tech Hopes of 23 States.”

The Institute of Medicine (IOM) will appoint an 18-member committee to study the governance and financing of graduate medical education (GME).  The mission of the committee is to assess “current regulation, financing, content, governance, and organization” of GME and recommend how to modify GME for to produce a 21st century health care workforce.  As reported in AAIM Connection, a bipartisan group of seven senators sent a letter to IOM on December 21, encouraging them to conduct a review of GME.  The alliance joined the American College of Physicians and the Society of General Internal Medicine to submit a January 24 letter to the group of senators endorsing their actions and expressing support for an IOM review.

The study is expected to begin June 1, 2012, and be completed in spring 2014.

Read IOM description of the study

The U.S. Supreme Court held oral arguments March 26-29 about the constitutionality of certain components of the Affordable Care Act (ACA); the health care reform mandate was signed into law in March 2010. The debate centers around the individual mandate, which beginning in 2014 will require individuals to purchase health insurance or face penalties, as well as a required Medicaid expansion for all states.  Further, the court examined the consequences repealing the individual mandate would have on the entire health care law.  Opponents have argued that if the individual mandate is struck down and ACA’s consumer protections are kept in place (notably protections that bar denial of coverage based on pre-existing conditions), then the insurance industry could see a rapid rise in premiums.   However, Justice Sonia Sotomayor maintains that if one part of ACA is deemed unconstitutional, the law could remain if Congress will make necessary changes.  The Supreme Court is expected to each decision in June.

This article is a summary of Jane Norman’s Congressional Quarterly article, “Justices Debate Medicaid Expansion, Which Branch Should Settle Severability Question” and other sources.

In its March 2012 report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommends repealing the sustainable growth rate (SGR) formula and replacing it with a “10-year path of statutory fee-schedule updates.”  Under this recommendation, specialists would see annual payment reductions of 5.9 % for three years, and then see a freeze in their reimbursements.   Current payment levels for primary care visits would freeze for the 10 years.  MedPAC also recommends reducing payments for evaluation and management (E/M) office visits in hospital outpatient departments (HOPDs) so that they equal the E/M rates in private physician offices.  These changes to E/M payments at HOPDs would be phased in over a three-year period. 

Presently, there is no indication of Congressional action regarding MedPAC’s recommendations; updates on any developments will be provided to membership as they become available.

Read MedPAC fact sheet

The House Committee on Ways and Means and the Energy and Commerce Committee approved legislation March 8 and March 6, respectively, that would abolish the Independent Payment Advisory Board (IPAB); a 15-member panel charged with curbing growth in Medicare spending.  IPAB was created by the Obama Administration’s 2010 health care overhaul legislation and is set to begin its work in 2013.  IPAB is tasked to annually evaluate whether projected Medicare expenditures will exceed target levels, then make recommendations to Congress and the President.  Opponents of the panel cite that these recommendations would automatically go into effect, barring Congressional action.
 
The bill currently has 234 co-sponsors and is expected to be considered by the full House of Representatives as early as the week of March 19.  While Senator John Cornyn (R-TX) is pursuing similar action to repeal the panel on the Senate side, President Obama has made it clear that he supports IPAB and will oppose any measure to repeal it.

This item is a summary of Elham Khatami’s Congressional Quarterly article “Bill to Abolish Medicare Board Approved in Two House Panels.”

A new rule established February 7 by the American Board of Medical Specialties (ABMS) now requires physicians to attain board certification three to seven years after completing residency training.  Specific time limits will vary by specialty, with each of the 24 ABMS member boards required set their respective policies by April 16, 2012.  According to ABMS President and Chief Executive Officer Kevin B. Weiss, MD, the goal of this new rule is to ensure the term “board eligible” is used appropriately by banning physicians from using the status indefinitely.  American Board of Internal Medicine Vice President of Academic Affairs William B. Iobst, MD, praised the policy.  He explains that it will allow physicians to show they are becoming certified, while at the same time protecting patients from physician misrepresentation about board status.  The policy is retroactive to January 1, 2012.

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A deep cut in Medicare reimbursements to physicians was averted when the House of Representatives and Senate approved legislation freezing payment rates through December 31, 2012.  The February 17 vote paves the way for President Obama’s signature.  Commonly known as the “doc fix,” this payment patch blocks a scheduled 27.4% cut calculated from the sustainable growth rate (SGR) formula.  The cost for the doc fix will be offset by reductions to parts of the Affordable Care Act, cuts in Medicare ”bad debt”  payments to hospitals, and reduced payments to clinical laboratories.  It is likely the SGR debate will reignite after the election; when the payment patch inches toward its January 1, 2013 expiration.

This article is a summary of John Richard’s Congressional Quarterly article “Payroll Tax Deal Freezes Medicare Doc Payment Rates Until 2013,” and other sources.

The Medical Group Management Association (MGMA) sent a letter to Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, calling for action regarding problems with the transition to Health Insurance Portability and Accountably Act (HIPAA) Version 5010 electronic transactions.  The February 1 letter to Secretary Sebelius outlines the critical payment and billing issues physicians now face because of the transition to Version 5010, and implores her to address these issues.  Concerns with the transition include claims being rejected or lost, issues with secondary payers, and sporadic payment of re-submitted claims.  MGMA recommends several steps HHS should take, including extending the enforcement delay until at least June 30, 2012; instructing Medicare Administrative Contractors to provide advance payments to physicians whose practices are struggling to meet the Version 5010 mandate; and monitoring the readiness of the industry for the transition.

Read the MGMA letter to Secretary Sebelius regarding HIPAA Version 5010

Focusing on trimming the deficit, President Barack H. Obama unveiled his budget blueprint for fiscal year (FY) 2013 on February 13.  Included in the plan is a proposed reduction in reimbursement for graduate medical education (GME).  If implemented, there would be a 10% cut to GME beginning in 2014, totaling a reduction of approximately $9.7 billion over 10 years.  Medicare and Medicaid would be cut by $360 billion, the budget for National Institutes of Health would freeze at $31 billion, and the budget for Centers for Medicare and Medicaid Services would increase by $1 billion.  Congress will consider the FY 2013 budget in the coming months.

Read the list of proposed cuts, consolidations, and savings within the President’s budget

This item is a summary of several different articles from Congressional Quarterly.

During a February 7 House Ways and Means Subcommittee on Health hearing, witnesses argued for the need to link incentives programs that reward physicians for their performance to reforms at the federal level.  Those testifying from the health community all discussed private sector innovations that evaluate performance and create incentives.  In particular, Jack Lewin, MD, of the American College of Cardiology (ACC) detailed the performance measures of the ACC “Door to Balloon” initiative, aimed at speeding up treatment for myocardial infractions.

Subcommittee chair Wally Herger (R-CA) and ranking member Pete Stark (D-CA) both stressed the need to hear from the private sector regarding reforms to Medicare.  Discussion about comparative effectiveness and the need to bring a permanent solution to the ongoing sustainable growth rate problem was a key highlight of the question and answer session.

AAIM asks you to educate your member of Congress about the negative consequences of the Medicare Payment Advisory Commission (MedPAC) recommendation to reduce payments for non-emergency evaluation and management (E/M) care at hospital outpatient departments (HOPDs).  Congress will consider this recommendation when MedPAC submits its formal report in March.  At present time, there is also a possibility that Congress could consider reducing payments to HOPDs while they negotiate a solution for the “doc fix.” 

The Association of American Medical Colleges (AAMC) has provided talking points that explain the key problems with the recommendation, including that HOPDs differ from private practices because they incur significant additional costs, teaching hospitals would be disproportionately affected, and that HOPDs in teaching hospitals provide critical opportunities for residents.  Call or write a letter to your member of Congress today!

The Alliance for Academic Internal Medicine (AAIM) joined the American College of Physicians (ACP) and the Society of General Internal Medicine (SGIM) to submit a letter January 24 to seven senators who had called for a review of graduate medical education (GME).  This bipartisan group of senators asked the Institute of Medicine (IOM) December 21 to conduct an independent review of the governance and financing of GME.  In the letter, AAIM, ACP, and SGIM express their enthusiastic support for an IOM review as well as for the need for GME redesign.  Among several recommendations, the organizations stress the need for an analysis to quantify the costs of resident training and emphasize the paucity of data on the current actual costs.

During its January 12-13 meeting, the Medicare Payment Advisory Commission (MedPAC) approved a recommendation to equalize Medicare payments for non-emergency evaluation and management services between hospital outpatient departments and freestanding physician practices.   This decision was met with disappointment and opposition from medical advocacy groups, several of which spoke at the meeting.  Additionally, MedPAC voted to recommend a 0.5% update for ambulatory surgical centers, a 1% increase for outpatient dialysis payment rates, and a 0.5% increase in payment rates for hospice care.  MedPAC also voted to revise the payment system for skilled nursing facilities in FY 2013 (while recommending an initial 4% reduction in FY 2014), eliminate the update for both inpatient rehabilitation facilities and long-term care hospitals, and encourage the use of generic medication by Medicare beneficiaries by reducing copayments.  Congress will formally receive the recommendations in March 2012.

The Association of American Medical Colleges (AAMC) sent a letter to the Medicare Payment Advisory Commission (MedPAC) urging the Commission not to approve a draft recommendation presented at the December MedPAC meeting.  If adopted, the proposal would reduce payment rates to evaluation and management (E/M) services provided in hospital outpatient departments (HOPDs), as a means to equalize the rates with those in physician offices.  In the January 9 letter, AAMC states that the implementation of this recommendation would be a “significant policy shift that would be borne disproportionally by major teaching hospitals.”  The letter also notes that the policy could potentially disrupt the education of many residents if services at HOPDs have to be reduced.  AAMC urges MedPAC not to change the current payment system regarding E/M services until a thorough analysis is conducted to assess the impact such a policy would have on HOPDs and teaching hospitals.

Read the letter

A bipartisan group of seven senators sent a letter to the Institute of Medicine (IOM) December 21, encouraging them to conduct a review of graduate medical education (GME).   The senators ask IOM to provide an analysis of the governance and financing of both the current GME system and potential GME reforms.  Additionally, the letter highlights several areas of particular concern, including: accreditation, reimbursement, workforce-related issues, and GME funding inequities.  The senators urge IOM to move forward quickly and to have recommendations regarding suggested changes by the third quarter of 2012.

Read the letter

In the final weeks of 2011, the “doc fix” designed to prevent scheduled cuts implemented by the sustainable growth rate (SGR), has become part of a political deadlock between the House of Representatives and the Senate.  On December 13, the House passed payroll tax legislation that included a two year fix to prevent the scheduled 27.4% Medicare payment cut to physicians.  However, on December 17, the Senate overwhelmingly passed an amended version of the bill that would implement a two month extension.  The Senate bill was passed with the expectation that a full-year extension would be negotiated early in 2012.  Both chambers must agree on the legislation; however on December 20, the House voted to disagree with the Senate proposal and request a conference between the two chambers to consolidate both versions into one bill.  This may prove difficult, as the Senate has already gone into recess.  The House appears to be concluding its business as well, hurting the chances for a fix before the cuts are scheduled to go into effect on January 1, 2012.  If there is no SGR fix by the end of the year, the Centers for Medicare and Medicaid Services may have to hold claims paid under the Medicare Physician Fee Schedule while waiting to see how Congress acts.  This measure would allow for lawmakers to implement a retroactive fix if necessary.

This announcement is a summary of articles from cq.com, thehill.com, and cnn.com.

Following the failure of the Joint Deficit Reduction Committee to reach agreement, there has been significant activity on Capitol Hill to block the pending 27.4% cut in reimbursement rates for physicians who see Medicare patients.  The “doc fix” (which suspends these reductions) would likely be included in a year-end legislative package; however, it is unclear whether the payment patch would last for one or two years.  According to the Congressional Budget Office, a two-year fix would leave physicians facing a 36% cut upon expiration in 2013, while a one-year fix would lead to a 32% cut in 2012 (when there would be a lame-duck Congress).  Representative Phil Gingrey, MD (R-GA) has said that the House Republican Doctors Caucus is committed to repealing and replacing the sustainable growth rate (SGR), the cost control formula behind the pending reduction.  On the Democratic side, Representative Allyson Y. Schwartz (D-PA), who had submitted a plan to the now defunct “Super Committee” repealing SGR, is currently working with her fellow lawmakers to stop the cuts and replace the formula.  For the time being, it is likely that Congress will pass another short-term fix.

This announcement is a summary of the article “GOP Lawmakers Vow to Pass ‘Doc Fix’ Before Year’s End,” written by Emily Ethridge of Congressional Quarterly, with contributions by Ben Weyl and John Reichard.

President Obama has announced his intention to nominate Marilyn Tavenner to succeed Donald M. Berwick, MD, as administrator of the Centers for Medicare and Medicaid Services (CMS).  Berwick’s resignation from the position is effective December 2, so Tavenner will serve as acting administrator during her confirmation process.  Tavenner began her career as a nurse and then served in several managerial capacities at Hospital Corporation of America, eventually becoming Virginia’s Secretary of Health and Human Resources.  In February 2010, she was appointed to the position of principal deputy administrator at CMS and has been serving in that capacity up to this point.  Details as to her confirmation process have not yet been made available.

This is a summary of an article originally entitled “Tavenner Picked to Succeed Berwick,” written by John Reichard of Congressional Quarterly.

It appears that the Joint Select Committee on Deficit Reduction (also known as the “Super Committee”) will fail to meet its legislative deadline.  As a result, automatic across-the-board cuts totaling $1.2 trillion are scheduled to go into effect in January 2013.  These automatic cuts will not impact Medicaid and should have a limited impact on Medicare, through which gradaute medical education (GME) is funded.  The Budget Control Act, which was signed into law on August 2, states that the percentage reduction for Medicare programs as a whole would be limited to 2%.  Some of the proposals originally considered by the committee included cuts that exceeded 2% and may have had a devastating impact on GME.  However, if the automatic cuts go into effect as scheduled, then these proposals would be tabled.

These automatic cuts are still subject to congressional action, and therefore any reductions to Medicare could feasibly be modified before 2013.  AAIM will keep you updated about developments in Congress that involve Medicare and GME.

The Supreme Court will hear arguments on the constitutionality of the individual mandate included in the 2010 health care reform law (entitled the Patient Protection and Affordable Care Act).  Both sides of the debate are confident that the decision will benefit them.  Some Republicans have said that they would offer several replacement efforts as soon as the court makes its decision.  Conversely, the White House is confident that the court will rule in its favor.  Democrats have also said that they look forward to the law being upheld because it would stop the opposition’s attempts to strike it down.  In addition to the mandate itself, the court is considering whether or not the rest of the law can stand if the mandate is deemed unconstitutional.  The court is scheduled to hear arguments in March 2012 and a ruling is expected before the court’s session ends in late June 2012.

Read a reprint of this article in its entirety

Modify and use the PowerPoint presentation "Policy Update:  Graduate Medical Education Funding" to educate and engage your residents in advocacy efforts. See the Action Alert to send an email to your senator or representative.

The United States is facing a physician shortage, and the demand for physicians will increase far more rapidly than the supply under current standards.  By 2025, there will be a shortage of at least 124,000 physicians by baseline projections.  The physician population most greatly affected by this shortage is primary care physicians.

Primary care physicians are the “first contact” physicians responsible for providing comprehensive, coordinated, and continuous care for a patient’s health care needs.  This includes care for all stages of life, acute care, chronic care, preventive service, and end-of-life care.  Primary care physicians are best-suited to take care of the nation’s increasing aging population.

Without a robust primary care physician workforce, the nation’s health care system will become increasingly fragmented and inefficient.  As a result, increasing access to high quality and affordable health care will not be possible.

In response to this projected physician workforce shortage, the Alliance for Academic Internal Medicine (AAIM) has finalized its consensus statement, “Meeting the Nation’s Need for Physician Services: A Response to the Anticipated Physician Shortage.”  The statement was written by members of the AAIM Advocacy Committee and endorsed by AAIM’s member organizations, the Association of Professors of Medicine, Association of Program Directors in Internal Medicine, Association of Specialty Professors, Clerkship Directors in Internal Medicine, and Administrators of Internal Medicine.  The summary of the statement is posted online for your review.