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Washington Outlook

March 5, 2010

White House and House Democrats plan to move healthcare reform forward before spring recess

White House officials and House leadership late this week laid out a schedule for considering comprehensive healthcare reform legislation that would culminate in a final vote on a bill before Congress breaks for its spring recess, which starts March 26. 

Following last week’s White House healthcare reform summit, President Barack Obama announced on Wednesday that his administration plans to move ahead with legislation that will follow the Senate-passed healthcare reform bill with some modifications, rejecting earlier ideas of taking a piecemeal approach.  In his speech, Obama broadly outlined his plans to incorporate provisions that would reform the private insurance market, expand coverage and reduce healthcare costs.  He also reiterated his intention to incorporate into healthcare legislation four Republican proposals identified during the summit. The Republican priorities, which were also outlined in a letter the White House sent to congressional leaders on March 1 include: undercover investigations of healthcare providers to weed out fraud and abuse; $50 million in appropriations for additional state grants for medical liability demonstration projects; increasing Medicaid reimbursement for physicians in a "fiscally responsible manner;" and, offering high-deductible health plans in a national exchange.

Although he did not directly call on Congress to use the budget reconciliation to achieve reform, Obama clearly signaled his expectation that Democratic House and Senate leaders would use this expedited process to move a reform package through the two chambers.

Under this scenario, the House must approve the Senate-passed healthcare reform bill (H.R. 3590), and subsequently pass a budget reconciliation bill that amends the bill to win support from House Democrats who have concerns with the Senate bill.  The Senate must then pass the budget reconciliation bill.  Using the budget reconciliation process eliminates the need for the Senate to secure 60 votes to invoke cloture and move forward on an up or down vote on the bill, which will require just a simple 51-vote majority to pass.  Even with this strategy, Democratic leadership and the White House face immense challenges in rallying the votes needed to pass both the core reform package and the reconciliation bill in the House.   In the Senate, Republicans could launch a series of procedural maneuvers that challenge whether items in the bill conform to the budget reconciliation rules that require provisions to have a significant budgetary impact.  To dispense of some of these points of orders could require 60 votes.

Obama held a series of meetings yesterday with both progressive and conservative congressional members to drum up support among their fellow members.  House Speaker Nancy Pelosi (D-CA) also announced yesterday that the bulk of the legislative healthcare reform package has been sent to the Congressional Budget Office (CBO) for scoring. 


Finance Committee leaders introduce amendment to jobs bill with Premier-supported HIT incentive fix, FMAP extension

Senate Finance Committee leaders Max Baucus (D-MT) and Charles Grassley (R-IA) yesterday introduced a substitute amendment to the jobs bill (H.R. 4213) that contains a “fix” Premier has been urging lawmakers to include in legislation that would ensure that hospital-based providers who practice in hospital-owned outpatient centers and clinics qualify for Medicare and Medicaid health information technology (HIT) incentives.  Premier member hospitals and healthcare systems have been weighing in with their members of Congress, urging their support for legislative language that ensures that provider-based entities are eligible for incentive payments for HIT investments that were established in the American Reinvestment and Recovery Act (ARRA). Members of the House have expressed concern about the issue and Rep. Earl Pomeroy (D-ND) is urging his colleagues to sign on to a letter to Department of Health and Human Services Secretary Kathleen Sebelius asking her to address it through the regulatory process. 

The Baucus-Grassley substitute amendment would also extend the increased Medicaid Federal Matching Assistance Percentage (FMAP) provided in ARRA through June 30, 2011.  Last week, 44 senators sent a letter urging Majority Leader Harry Reid (D-NV) to include an FMAP increase extension in the jobs bill. In addition, the amendment would extend a number of other expiring healthcare provisions that are important to Premier hospitals and healthcare systems. Healthcare-related provisions included in the amendment would:

The Senate started debating amendments to H.R. 4213 on March 3 and could hold a final vote on the bill as early Tuesday.

Obama signs into law short-term extension of expiring provisions halting physician pay cut and providing COBRA healthcare subsidies

While the jobs bill the Senate is currently considering contains longer-term extensions, the President signed into law on March 2 the Temporary Extension Act of 2010 (H.R. 4691) that extends for 30 days expiring provisions that delay the scheduled 21 percent cut in Medicare physician payments and provide COBRA healthcare insurance premium subsides for the unemployed.  Among other provisions that expired at the end of February, the bill also extends unemployment compensation and the exception process for Medicare therapy caps reaching the annual cap.

The president signed H.R. 4691 on March 2 immediately after the Senate passed the bill by a vote of 78-19.  The vote, which had been held up for days, occurred after Senator Jim Bunning (R-KY) lifted the hold he had placed on the bill, objecting to the cost of the extensions that are not offset in the bill. The House passed the bill last week.

MedPAC explores ways to motivate hospitals to improve quality and efficiency

The Medicare Payment Advisory Commission (MedPAC) yesterday explored the role that Medicare could have in motivating hospitals to improve their performance. MedPAC staff identified ideas that the commission is considering, including various payment incentives, technical assistance providers might need in achieving better results, and changes to conditions of participation in the program.

The commissioners heard from two safety-net hospitals on how they have improved their quality and efficiency despite serving a challenging patient population.  Representatives from the two hospitals, Denver Health and Parkland Health and Hospital System, lamented misaligned payment incentives and the length of time it takes to get evidence-based information into the hands of providers.  They suggested that moving in the direction of better performance and efficiency could be achieved by greater use of comparative data on performance, using more outcomes vs. process measures, offering incentives for not only reaching certain targets but for improving and aligning incentives with physicians.

While the commission did not entertain any recommendations in this area during the meeting, MedPAC plans a preliminary discussion of the issue in its June “Report to the Congress,” followed by further staff work during the summer through site visits and meetings with providers. Next fall, staff will report on the status of its research.

MedPAC also delved into draft staff recommendations to restructure graduate medical education (GME) financing, an issue that has been the focus of the panel for a number of years.  Staff based its recommendation on the principles that GME should be funded out of general revenue rather than from Medicare’s payroll tax, that workforce analysis, “pipeline” strategies and program evaluation must be enhanced, and that accountability for high educational standards should be supported.  The commissioners considered four staff draft recommendations to accomplish these goals that entailed restructuring overall medical education funding, redirecting Medicare’s indirect medical education (IME) overpayment, increasing GME transparency, and modifying statutory and regulatory non-hospital provisions. 

A transcript of the meeting and the MedPAC presentations will be available on MedPAC’s Web site in the near future.

HHS releases proposed HIT certification rule

The Department of Health and Human Services (HHS)’s Office of the National Coordinator (ONC) for HIT released today a proposed rule establishing HIT certification programs. HHS is accepting comments on the proposed rule for 30 days.

As required by ARRA, hospitals and other healthcare providers must “meaningfully use” certified electronic health record (HER) technology to receive Medicare and Medicaid HIT incentive payments.  The proposed rule would establish both a temporary and permanent certification program.  The temporary program would authorize organizations to test and certify complete EHRs and/or EHR modules prior to the reporting period in which providers seek incentive payments. The second would establish a permanent certification program which would separate the responsibilities for performing testing and certification, introduce accreditation requirements, and establish requirements for certification entities authorized by ONC related to the surveillance of certified EHR technology.  In addition, the permanent certification program would leave open the possibility for certification entities to certify other types of HIT in addition to complete EHRs and EHR modules.

In releasing the rule, the ONC states that certification of HIT is intended to ensure that EHR systems “offer the necessary technological capability, functionality, and security to help users meet the meaningful use criteria established for a given phase,” as well as ensuring that these systems are secure, maintain data confidentiality and are interoperable.  Once certified, eligible hospitals and other healthcare providers would be able to use the certified EHRs to meet the statutory requirements to achieve meaningful use of EHRs.  

HHS has two separate comment periods for the proposed rule: comments on the temporary certification program are due 30 days after publication in the Federal Register and comments on the permanent certification program are due 60 days after publication in the Federal Register.

Premier has prepared a detailed summary of the proposed rule. The proposed rule, a fact sheet, and other resources on the proposed rule are available on the ONC Web site

Levin to replace Rangel as Chairman of Ways and Means Committee

Rep. Sander Levin (D-MI) will take over the chairmanship of the House Ways and Means Committee after Charles Rangel (D-NY) announced he will step down and Pete Stark (D-CA), who is next in line to assume the post, agreed to step aside.  Rangel, who is in the midst of a House Ethics Committee investigation, announced this week that he will temporarily vacate his chairmanship.  House Speaker Nancy Pelosi (D-CA) said that Stark, who has rightful claim to the chair, will hand over the spot to Levin so that he can continue to oversee healthcare reform from his chairmanship of the Health Subcommittee. Levin is currently the committee’s Trade Subcommittee chairman and received unanimous support from the panel to take up the committee gavel.  

Weekly legislative and regulatory round-up

The round-up for the week of February 27 - March 5, 2010 is available here.

The round-up for the week of February 20 - 26, 2010 is available here