Health Industry Washington Watch

New Postings on the Reed Smith Health Industry Washington Watch Blog

Debra A. McCurdy — Mon, 14 May 2012 14:23:41 -0500

The Reed Smith Health Industry Washington Watch blog has been updated to discuss a variety of health policy developments, including the following:

Regulatory Developments. CMS has issued rules on Medicare IPPS and LTCH PPS rates; regulatory relief for hospitals and other providers; provider/supplier enrollment, ordering, documentation requirements; home & community-based services; Medicaid payments for primary care services; and the Medicare supplier application. HHS seeks input on stop loss insurance practices, and FDA has issued rules on FDA disqualification of clinical investigators and on sterility testing of biological products.
Other HHS Developments. CMS has issued updates on the Physician Payments Sunshine Act and Medicare home health certification requirements (see http://www.healthindustrywashingtonwatch.com/articles/other-cms-developments-1/). Other HHS developments involve health insurance risk adjustment, health IT resources, and Medicaid drug payment files. FDA has issued a variety of guidance documents.
Legislative Developments. The House has approved a sequestration replacement plan with health provisions, Congressional panels have approved FDA user fee legislation, lawmakers are seeking public input on combating Medicare and Medicaid fraud and abuse, and Congressional committees are holding hearings on health policy issues.
OIG & GAO Developments. Recent OIG reports address pharmacy billing for Medicare drugs, evaluation and management services, and vision loss drugs. The GAO has issued reports on Medicare Advantage payments, provider/supplier screening efforts, fraud and abuse laws, group purchasing organizations, electronic health record incentive programs.
Health Industry Events. Upcoming events include meetings/calls on new HCPCS applications, the ACA medical device tax, coverage with evidence development, comparative effectiveness research, IRF PPS coverage, and HIPAA security standards.

CMS Proposes Medicare Inpatient Hospital Rates/Policies for FY 2013

Debra A. McCurdy — Mon, 14 May 2012 10:41:27 -0500

On May 11, 2012, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule to update Medicare inpatient prospective payment system (IPPS) hospital and long-term care hospital prospective payment system (LTCH-PPS) payment and other policies for FY 2013. Overall, CMS estimates that FY 2013 payments to general acute care hospitals for operating expenses would increase by $175 million under the proposed rule considering all policy changes, the expiration of certain temporary payment increases, and projected utilization. CMS addresses a wide variety of policies in the sweeping rule, which are summarized below.

CMS proposes updating IPPS rates by 2.3%, which reflects a projected market basket update of 3.0%, which is reduced by a multi-factor productivity adjustment of 0.8% and an additional 0.1% reduction mandated by the Affordable Care Act (ACA), increased by 0.2% documentation & coding adjustment. Note that this rate increase would be offset by other reductions, including a -1.3% documentation/coding adjustment to hospital-specific rates, a 0.3% cut under a readmissions reduction program (discussed below), and expiration of certain temporary increases to the Medicare-Dependent Hospital program and the low-volume hospital payment adjustment under the ACA.
The proposed rule includes a number of hospital quality initiatives. The rule would strengthen the Hospital Value-Based Purchasing Program (VBP Program) to adjust hospital payments beginning in FY 2013 and annually thereafter based on how well a hospital performs or improves performance on a set of quality measures. Among other things, CMS would add a risk-adjusted Medicare spending per beneficiary measure to the VBP Program, which would affect payments beginning in FY 2015. The rule also would revise the Inpatient Quality Reporting (IQR) program measures, resulting in a net reduction in measures from 72 to 59 for the FY 2015 payment determination. Hospitals that do not successfully participate in the IQR program will have their market basket update reduced by two percentage points. The proposed rule also would establish the methodology and payment adjustment factor for the ACA Hospital Readmissions Reduction Program, which will reduce payments beginning in FY 2013 to certain hospitals that have excess readmissions for heart attack, heart failure, and pneumonia. CMS estimates that readmission policy will reduce base operating DRG payments to 2,210 hospitals, resulting in 0.3% overall decrease in hospital payments. CMS also proposes adding Surgical Site Infection Following Cardiac Implantable Electronic Device and Iatrogenic Pneumothorax with Venous Catheterization to the list of hospital acquired conditions for FY 2013. In addition, the also would establish new or revised requirements for quality reporting by other types of Medicare providers, including cancer hospitals, inpatient psychiatric facilities, and ambulatory surgical centers.
CMS proposes to postpone the effective date of a policy adopted in the FY 2012 IPPS rule that clarified that hospitals may provide only therapeutic and diagnostic services “under arrangements” with an outside entity. On the other hand, routine services, such as contracted nursing services, furnished outside the hospital may not be furnished “under arrangement” and covered by Medicare. In response to requests from hospitals for additional time to restructure arrangements and establish operational protocols, CMS now proposes that this policy be effective for hospital cost reports beginning on or after FY 2014.
The proposed rule would, among many other things: modify Medicare severity diagnosis related group (MS-DRG) classifications for certain procedures; make a variety of changes to graduate medical education policy, including changes relating to determining a hospital’s fulltime equivalent resident cap; address applications for new technology add-on payments; update the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits; and update LTCH-PPS policies and rates, as discussed in a separate entry.

Data files and tables are posted here. Comments will be accepted until June 25, 2012.

CMS Proposes LTCH Payment, Policy Changes for FY 2013

Debra A. McCurdy — Mon, 14 May 2012 10:17:10 -0500

This post was written by Paul W. Pitts.

On May 11, 2012, CMS published a proposed rule updating Medicare long-term acute care hospital (LTCH) prospective payment system (PPS) policies and rates for FY 2013. Highlights include the following provisions:

Two different standard federal rates would apply to discharges during FY 2013. During the first three months of FY 2013, the standard federal rate would be $41,026.88, falling to $40,507.48 during the last nine months (both rates are above the FY 2012 rate of $40,222). The rate reflects an estimated market basket increase of 3.0% less a productivity adjustment of -0.8% and less an additional -0.1% adjustment mandated by ACA. For the last nine months of FY 2013, the market basket increase would be further reduced by a budget neutrality adjustment (discussed below).
CMS proposes to adopt an LTCH-specific market basket based entirely on Medicare cost report data from LTCHs (replacing the rehabilitation, psychiatric, and LTCH market basket). CMS estimates that the LTCH-specific market basket update for FY 2013 would be the same as under current policy.
CMS proposes a one-time budget neutrality adjustment that would result in a permanent 3.75% reduction to the LTCH base rate. The adjustment would be implemented over three years, FYs 2013, 2014 and 2015, except it would not apply to payments for discharges occurring on or after October 1, 2012 through December 29, 2012 because of a statutory prohibition (resulting in the two standard federal rates for FY 2013).
The fixed loss amount for high-cost outlier cases would be $15,728, down from $17,931 in FY 2012.
CMS proposes a one-year extension of the moratorium on the full application of the 25% Rule, until cost reporting periods beginning on or after October 1, 2013. LTCHs with cost reporting periods that begin between July 1, 2012 and September 30, 2012 would not qualify for the one-year extension until their subsequent cost reporting period. CMS indicates that “within the near future” it may recommend revisions to the payment policies addressing MedPAC’s recommendations for the development of patient-level and facility-level criteria.
Medicare payment for the so-called “very short-stay cases” will be lowered to a rate based on the IPPS per diem beginning with discharges on or after January 1, 2013.
CMS proposes to add five quality measures for LTCH reporting beginning in FY 2016, including: (1) percent of nursing home residents who were assessed and appropriately given the seasonal influenza vaccine, (2) percent of residents assessed and appropriately given the pneumococcal vaccine, (3) ventilator bundle, (4) restraint rate per 1,000 patient days, and (5) influenza vaccination coverage among healthcare personnel.

Comments will be accepted until June 25, 2012.

CMS Issues Final Rules to Ease Regulatory Burdens on Hospitals, Other Providers

Debra A. McCurdy — Mon, 14 May 2012 10:13:37 -0500

On May 10, 2012, CMS released two final rules designed to reduce regulatory burdens on health care providers as part of the Administration’s ongoing regulatory review initiative. According to CMS, the regulations, will save approximately $1.1 billion across the health system in the first year and more than $5 billion over five years. The rules are summarized below.

The first rule reforms requirements that hospitals and critical access hospitals (CAHs) must meet in order to participate in the Medicare and Medicaid programs. Among other things, the rule: allows one governing body to oversee multiple hospitals in a single health system; revises requirements for reporting of restraint-related deaths; provides flexibility to consider other practitioners (e.g., advanced practice registered nurses, physician assistants, and pharmacists) as eligible candidates for the medical staff; allows patients or their caregivers to administer certain medications; allows hospitals to have a single, interdisciplinary care plan including nursing and other disciplines or a stand-alone nursing care plan; revises the rules for standing orders and verbal orders; and removes the requirement for a single Director of Outpatient Services. The rule also allows CAHs to provide certain diagnostic and therapeutic services, including laboratory and radiology services and emergency procedures, under arrangement (rather than directly by CAH staff).
A second final rule make a series of reforms to regulations identified as unnecessary, obsolete, or excessively burdensome for providers and suppliers. For instance, the rule: clarifies which end stage renal disease facilities must comply with the full federal Life Safety Code requirements; streamlines requirements for emergency equipment at ambulatory surgical centers (ASCs); eliminates the Medicare re-enrollment bar in instances when revocation of billing privileges is based solely upon the failure of a provider or supplier to respond timely to a revalidation request or other CMS information request; removes obsolete language related to initial determinations, appeals, and reopenings of Part A and Part B claims and entitlement determinations; removes duplicative language on ASC infection practices; updates obsolete e-prescribing technical requirements to meet current standards; and removes outdated Medicaid personnel qualifications language for physical therapists and occupational therapists.

Both rules will be published May 16, 2012, and are effective on July 16, 2012.

Three OIG Reports Review Medicare E/M Services

Debra A. McCurdy — Mon, 14 May 2012 10:08:27 -0500

The OIG has issued three reports on Medicare evaluation and management (E/M) services, reviewing use of higher-level E/M codes and E/M services included in cardiovascular and musculoskeletal global surgery fees. The first report, “Coding Trends of Medicare Evaluation and Management Services,” found that from 2001 to 2010, physicians increased their billing of higher level E/M codes for all types of services. The OIG also identified approximately 1,700 physicians who consistently billed higher level E/M codes in 2010. While the OIG did not determine whether physicians who billed higher level E/M codes billed inappropriately, subsequent evaluations will determine the appropriateness of Medicare payments for E/M services and the extent of documentation vulnerabilities in E/M services. In the meantime, the OIG recommends that CMS (1) continue to educate physicians on proper billing for E/M services; (2) encourage its contractor to review physicians’ billing for E/M services; and (3) review physicians who bill higher level E/M codes for appropriate action. In a second report, “Cardiovascular Global Surgery Fees Often Did Not Reflect the Number of Evaluation and Management Services Provided,” the OIG estimates that Medicare paid a net $14.6 million for E/M services that were included in cardiovascular global surgery fees but not provided during the global surgery periods in 2007. The OIG recommends that CMS adjust the estimated number of E/M services within cardiovascular global surgery fees to reflect the actual number of E/M services being provided to beneficiaries, or use the results of this audit during the annual update of the physician fee schedule. Similarly, in a report entitled “Musculoskeletal Global Surgery Fees Often Did Not Reflect the Number of Evaluation and Management Services Provided,” the OIG reviewed of a sample of 300 musculoskeletal global surgeries. The OIG estimates that Medicare paid a net $49 million for E/M services that were included in musculoskeletal global surgery fees but not provided during the global surgery periods in 2007. The OIG recommends that CMS adjust the estimated number of E/M services within musculoskeletal global surgery fees to reflect the actual number of E/M services being provided to beneficiaries, or use the results of this audit during the annual update of the physician fee schedule. Note that the OIG did not determine the medical necessity of the cardiovascular or musculoskeletal surgeries or the related E/M services.

CMS Publishes Two Home & Community-Based Services (HCBS) Rules

Debra A. McCurdy — Mon, 14 May 2012 07:05:09 -0500

This post was written by Susan A. Edwards.

CMS recently published two rules -- one proposed and one final -- related to HCBS policy. Continue reading for summaries of the rules.

First, a May 3, 2012 proposed state plan HCBS rule would implement statutory provisions included in the ACA and the Deficit Reduction Act. Specifically, the Proposed Rule would permit states to receive federal financial participation (FFP) for the provision of HCBS to Medicaid recipients who do not require an institutional level of care, and who, therefore, would not be eligible for HCBS under states’ waiver programs. Further, the proposed rule would implement Section 2601 of the ACA, authorizing CMS to approve HCBS waivers for dual-eligibles for an initial period of up to five years. The proposed rule also would include an additional exception to the reassignment prohibition to allow direct Medicaid payments on behalf of certain practitioners to a third party for benefits such as health insurance. Finally, the proposed rule defines an HCBS setting, which CMS would use in the context of HCBS waivers, the Community First Choice (CFC) Option program (discussed below), and state plan HCBS. CMS will accept comments on the proposed rule until July 2, 2012.
Second, CMS published its final Community First Choice Option rule on May 7, following a February 25, 2011 proposed rule on the topic. The final CFC rule implements Section 2401 of the ACA, which established a new option for states to provide home and community-based attendant services and supports and allowed for an increased federal medical assistance percentage (FMAP) of six percentage points to pay for such services and supports. Under the CFC Option rule, states must offer HCBS statewide and must at least maintain or exceed the prior year’s HCBS expenditures. Participating states must cover certain home and community-based attendant services and supports to assist Medicaid recipients to accomplish activities of daily living, instrumental activities of daily living, and health-related tasks. States may also cover costs related to an individual’s transition from an institution to the community, such as the first month of rent and utilities. Under the CFC Option, a person-centered service plan is developed for each enrollee under a delivery model proposed by the state and approved by CMS. In the final CFC rule, CMS clarifies that to qualify for CFC option services, an individual must require an institutional level of care, regardless of income. Finally, CMS declined to finalize the definition of HCBS “setting” in the final CFC rule, allowing stakeholders to comment further on the modified definition set forth in the proposed state plan HCBS rule noted above. However, CMS indicated that it will rely on the setting provisions set forth in the final rule, and expects states to do the same, as states implement CFC options. The rule is effective July 6, 2012.

CMS Proposes Increased Medicaid Payments for Primary Care Services

Debra A. McCurdy — Mon, 14 May 2012 07:05:03 -0500

On May 11, 2012, CMS published a proposed rule to implement an ACA provision to temporarily increase Medicaid rates for primary care services to Medicare levels, increasing payments by a total of approximately $11 billion. Specifically, the rule would require Medicaid to reimburse family medicine, general internal medicine, pediatric medicine, and related subspecialists for primary care services at Medicare levels in CY 2013 and CY 2014. States will receive 100% FFP for the difference between the Medicaid State plan payment amount as of July 1, 2009 and the applicable Medicare rate; in other words, no state matching funds are required. Among other things, the rule specifies which services and types of physicians qualify for the minimum payment level, the method for calculating the payment amounts, and how this policy applies to the Vaccines for Children (VFC) program. The policy is intended to help states bolster their primary care networks in anticipation of increased enrollment under the ACA health insurance reforms. Comments on the rule will be accepted until June 11, 2012.

Finance Committee Members Seek Public Input on Medicare/Medicaid Fraud

Debra A. McCurdy — Mon, 14 May 2012 07:05:03 -0500

On May 2, 2012, six members of the Senate Finance Committee posted an open letter seeking “white papers” with suggestions for combating Medicare and Medicaid fraud and abuse. In particular, stakeholder ideas are requested in the following areas: Program Integrity Reforms to Protect Beneficiaries and Prevent Fraud and Abuse; Payment Integrity Reforms to Ensure Accuracy, Efficiency and Value; Fraud and Abuse Enforcement Reforms to Ensure Tougher Penalties Against Those Who Commit Fraud. The lawmakers hope that input from providers, payers, health plans, contractors, non-profit entities, consumers, data analytics entities, governmental partners, and patients “could offer a fresh perspective and potentially identify solutions that may have been overlooked or underutilized.” Comments are requested by June 29.

Congressional Health Policy Hearings

Debra A. McCurdy — Mon, 14 May 2012 07:05:02 -0500

Recent hearings on health policy issues include:

A House Ways and Means Committee hearing on the impact of limitations on the use of tax-advantaged accounts for the purchase of over-the-counter medication.
A Senate Finance Committee discussion on “Medicare Physician Payments: Understanding the Past so We Can Envision the Future.”
A Ways and Means Health Subcommittee hearing on the Medicare DMEPOS competitive bidding program. A GAO report released at the hearing found it is too soon to determine the full effects of competitive bidding on beneficiaries and suppliers.
A House Energy and Commerce Subcommittee on Oversight and Investigations hearing on “Budget and Spending Concerns at HHS.” At the hearing, the GAO issued a report reiterating its recommendations to minimize improper Medicare payments (such as using prepayment controls to identify potentially-improper DME claims and enhanced payment safeguards for physicians who use advanced imaging services) and improve oversight of Medicaid payments.

In addition, the Senate HELP Committeehas scheduled hearings May 15 and 16 on HIV/AIDS drug costs and health care delivery reforms, respectively. In addition, the House Judiciary Subcommittee on Intellectual Property and Competition is holding a hearing May 18 on health care consolidation and competition after the ACA .

HHS Risk Adjustment Bulletin

Debra A. McCurdy — Mon, 14 May 2012 07:04:43 -0500

HHS is requesting comments on a May 1, 2012 “Bulletin on the Risk Adjustment Program.” The draft document sets forth HHS’s intended approach to implementing health insurance risk adjustment when HHS is operating the risk adjustment function on behalf of a state (both inside and outside of the ACA Affordable Insurance Exchanges). HHS expects to provide more detailed information on HHS’s risk adjustment methodology in the first draft HHS Notice of Benefit and Payment Parameters in the fall of 2012, and the final notice is slated to be published in January 2013. The bulletin details other key dates related to the establishment and operation of the risk adjustment program.

CMS Resources on Medicare Home Health Face-to-Face Encounter Requirements

Debra A. McCurdy — Mon, 14 May 2012 07:04:23 -0500

CMS has released new educational materials on Medicare home health certification requirements (homebound criteria and requirements for the face-to-face encounter and documentation). The guidance is intended to ensure that physicians, non-physician practitioners, physician support personnel, and home health agencies understand and meet all certification requirements.

Administration Seeks Input on Stop Loss Insurance

Debra A. McCurdy — Mon, 14 May 2012 07:04:13 -0500

On May 1, 2012, the Internal Revenue Service, Employee Benefits Security Administration, and CMS published a request for information regarding the use of stop loss insurance by group health plans and their plan sponsors to protect against catastrophic or unpredictable insurance claims. The agencies are particularly interested in feedback on the prevalence and consequences of stop loss insurance at low attachment points (or claims levels that trigger stop loss coverage), and the potential for this practice to worsen risk pools and increase premiums in the fully-insured small group market. Comments will be accepted until July 2, 2012.

CMS Proposes Revisions to DMEPOS Supplier Application

Debra A. McCurdy — Mon, 14 May 2012 07:04:08 -0500

CMS is proposing changes to the Medicare enrollment application for DMEPOS suppliers (CMS 855S) to simplify and clarify the current data collection and to remove obsolete questions. According to CMS, the majority of the revisions are non-substantive in nature (e.g., spelling and formatting corrections). Comments on the forms will be accepted until June 4, 2012.

GAO Reviews Medicare Provider/Supplier Screening Efforts

Debra A. McCurdy — Mon, 14 May 2012 04:09:19 -0500

The GAO has issued a report entitled “Medicare Program Integrity: CMS Continues Efforts to Strengthen the Screening of Providers and Suppliers.” The GAO describes how CMS and its contractors use provider and supplier enrollment information to prevent improper payments, along with factors that may affect the usefulness of this information. The report also provides an update on CMS’s progress in implementing new provider and supplier enrollment screening procedures mandated by the ACA. For instance, CMS informed the GAO that it plans to contract with two Federal Bureau of Investigation-approved contractors to conduct fingerprint-based criminal background checks of high-risk providers and suppliers by the end of 2012. CMS also plans to extend the surety bond requirement to high-risk providers and suppliers beyond DMEPOS suppliers (potentially impacting home health agencies, independent diagnostic testing facilities, and outpatient rehabilitation facilities). The GAO also reports that CMS has charged a new automated screening contractor with, among other things, identifying additional data sources for screening checks (e.g., financial, tax, and business data sources). CMS also contracted with a site visit contractor to perform nationwide physical site visits for all providers and suppliers, except DMEPOS suppliers, in the moderate- and high-risk screening categories.

GAO Offers Recommendations for EHR Program Safeguards

Debra A. McCurdy — Mon, 14 May 2012 04:02:29 -0500

The GAO has issued a report entitled, “Electronic Health Records: First Year of CMS's Incentive Programs Shows Opportunities to Improve Processes to Verify Providers Met Requirements.” According to the GAO, CMS has taken a number of steps to assess and mitigate the risk of improper payments under the Medicare and Medicaid electronic health records (EHR) programs, but more can be done to improve the effectiveness of processes to verify whether providers meet program requirements. The GAO recommends that CMS: establish time frames for expeditiously evaluating the agency’s audit strategy for the Medicare EHR program; evaluate whether more prepayment verifications are needed to determine provider eligibility for payments; collect additional information from Medicare providers during attestation; and offer states the option of having CMS collect meaningful use attestations from Medicaid providers.

GAO Report on Impact of Fraud and Abuse Laws on Medicare Financial Incentive Programs

Debra A. McCurdy — Mon, 14 May 2012 04:02:19 -0500

A recent GAO report focuses on how federal fraud and abuse laws affect the implementation of financial incentive programs intended to improve quality and efficiency, such as pay-for-performance programs that reward physicians for adherence to clinical protocols or shared savings programs that offer physicians a percentage of a hospital’s cost savings attributable to the physicians. The GAO finds that stakeholders’ compliance concerns may hinder implementation of financial incentive programs to improve quality and efficiency on a broad scale. The report notes that while properly structured financial incentive programs can potentially improve quality and reduce costs, however, improperly structured programs might disguise payments for referrals or adversely affect patient care. The GAO concludes that government agencies and health care providers are likely to “continue to have different perspectives about the optimal balance between innovative approaches to improve quality and lower costs and retaining appropriate patient safeguards.”

GAO Calls on CMS to Cancel MA Quality Bonus Payment Demonstration

Debra A. McCurdy — Mon, 14 May 2012 04:01:19 -0500

In a recent report, “Medicare Advantage: Quality Bonus Payment Demonstration Undermined by High Estimated Costs and Design Shortcomings,” the GAO recommends that CMS cancel its Medicare Advantage (MA) Quality Bonus Payment Demonstration and allow the MA quality bonus payment system established by the ACA to take effect. The CMS demonstration, announced in November 2010, provides bonus payments to MA plans with 3 or more stars under a quality rating system and accelerates and increases bonuses for plans with higher quality ratings than envisioned under a separate ACA bonus structure. The GAO reports that the demonstration will cost $8.35 billion over 10 years, dwarfing all other Medicare demonstrations, and that most of the funds will be paid to average performing plans. Moreover, the demonstration's design precludes a credible evaluation of its effectiveness in achieving CMS’s stated research goal of determining whether its bonus structure boosts quality improvement more than the ACA structure.

GAO Reviews Oversight of Group Purchasing Organizations (GPOs)

Debra A. McCurdy — Mon, 14 May 2012 03:59:19 -0500

A recent GAO report describes federal oversight of GPOs, which negotiate contracts with vendors on behalf of hospitals and other providers. According to the GAO, since 2004, the HHS OIG has participated in two case investigations with the Department of Justice (DOJ) that involved allegations that certain GPOs did not comply with safe harbor requirements and violated the Anti-Kickback statute, but the OIG has not imposed administrative penalties on any GPOs in that timeframe. The GAO identified one lawsuit filed by DOJ against a GPO in 2007, but the Federal Trade Commission (FTC) has not taken any enforcement action against a GPO since 2004. The report also discusses GPO self-regulation through the Healthcare Group Purchasing Industry Initiative (HGPII), including formation of an ethics advisory council and a vendor grievance process in 2010.

Medicare Payment for Vision-Loss Drugs Reviewed by OIG

Debra A. McCurdy — Mon, 14 May 2012 01:09:19 -0500

The OIG has issued a report entitled “Medicare Payments for Drugs Used To Treat Wet Age Related Macular Degeneration,” which discusses the cost of Lucentis and off-label use of Avastin to treat wet AMD and the potential impact of cost differences on prescribing decisions. The OIG recommends that CMS: (1) establish a national payment code for Avastin when used for the treatment of wet AMD (CMS did not concur at this time), and (2) educate providers about clinical and payment issues related to Lucentis and Avastin (CMS agreed).

House Approves Sequestration Replacement Plan with Health Provisions

Debra A. McCurdy — Fri, 11 May 2012 10:16:35 -0500

On May 10, 2012, the House of Representatives approved H.R. 5652, the Sequester Replacement Reconciliation Act of 2012, on a largely party-line vote. The legislation would replace certain across-the-board cuts to defense and domestic spending scheduled to begin in 2013 under last year’s Budget Control Act with a new package of domestic spending reductions made through the budget reconciliation process (note that the scheduled 2% across-the-board cut to Medicare provider payments would be retained). Among many other things, the House bill would: repeal certain ACA funding (including the Prevention and Public Health Fund, funding for the Consumer Operated and Oriented Plan program, funding for state insurance exchanges, and state bonus payments for increasing Medicaid enrollment); repeal ACA Medicaid maintenance of effort requirements; revise Medicaid provider tax provisions; and provide for various medical malpractice reforms. The Obama Administration strongly opposes the House bill, and consideration in the Senate is unlikely. Any legislative action to block the scheduled sequestration and revise spending/tax policy is not expected until much later in the year – potentially after the November elections.