Legislative Update for Week Ending June 15, 2012

Legislative Update for Week Ending June 15, 2012

This week, the House of Representatives adjourned for a recess while Members of the Senate kept busy on Capitol Hill. The Senate Appropriations Committee approved a fiscal 2013 spending bill for labor, health, and education programs, and the Senate Finance Committee sought out advice from several private insurance company executives during a roundtable discussion. In addition, The Senior Citizens League (TSCL) saw support grow for one key bill.

Senate Committee Approves Spending Bill

On Thursday, the Senate Appropriations Committee approved a spending bill for the Departments of Labor, Health and Human Services (HHS), and Education by a vote of 16-14. At the Full Committee Markup, Chairman Tom Harkin (IA) stated, “This bill trains and protects American workers, provides the nation’s youth with the skills they need to succeed, funds life-saving medical research, and targets fraud and abuse.”

The bill includes $610 million for the Health Care Fraud and Abuse Control activities – nearly double the funding that the program received last year. It also includes $1.024 billion for the Social Security Administration to conduct Continuing Disability Reviews, which are completed periodically to determine whether a Disability Insurance beneficiary has recovered enough to return to work. According to the Appropriations Committee, this investment will save $8.1 billion over ten years.

If signed into law, the bill would appropriate $11.736 billion to HHS for administrative expenses – an increase of $290 million over last year’s spending level. That increase would help the agency eliminate the daunting disability hearings backlog. It would also appropriate $3.156 billion to the Centers for Medicare and Medicaid Services – an increase of $547 million over last year’s level – in order to accommodate a boost in the Medicare population and to continue the implementation of the Affordable Care Act. In total, the bill would provide discretionary program level funding of $71 billion to HHS.

The fiscal 2013 spending bill now moves to the Senate floor where it awaits consideration. Action on an appropriations bill for the Departments of Labor, HHS, and Education is required before September 30th, which marks the beginning of the new fiscal year. TSCL will continue to monitor the movement of key spending bills.

Senate Finance Committee Meets with Insurance Executives

On Thursday, the Senate Finance Committee held a roundtable discussion with five private insurance executives to speak about Medicare physician payment policy. All five witnesses and each Finance Committee member agreed that the sustainable growth rate (SGR) formula, which is currently used to reimburse Medicare physicians, must be repealed and replaced.

In his opening statement, Chairman Max Baucus (MT) stated, “We know the SGR must be repealed. It causes uncertainty. It causes seniors to fear losing access to their doctors. It threatens physicians with increasing payment cuts year after year … We need an efficient system that rewards physicians for providing high-quality, high-value care.”

At the roundtable discussion, private insurance executives shared their strategies for developing new payment models, and offered candid suggestions to the Finance Committee. Dana Safran, Senior Vice President of Blue Cross Blue Shield of Massachusetts, said the new system should allow providers to work in small groups, where they can join together to reach certain cost and quality targets. “The individual actor has no real incentive around efficiency and quality, and has no real ability to control anything,” she said. Working in groups could solve that problem.

A number of suggestions offered by the panelists were well-received by the Finance Committee, and TSCL is hopeful that Members of Congress can compromise on a permanent solution before the “doc fix” expires at the end of this year.

Support Grows for SGR Repeal Bill

This week, two new cosponsors signed on to Rep. Allyson Schwartz’s (PA-13) Medicare Physician Payment Innovation Act (H.R. 5707), bringing the total up to fourteen. The new cosponsors are Reps. Martin Heinrich (NM-1) and Sam Farr (CA-17).

The bill, if signed into law, would repeal the SGR and set up a five-year trial period during which CMS would test and evaluate new payment and delivery models. Rep. Schwartz recently stated, “For too long we have failed America’s seniors and created a long-term fiscal nightmare for Medicare by maintaining the status quo of the broken Medicare physician payment system.” TSCL strongly supports H.R. 5707, and we were pleased to see support continue to grow this week.