Baker Tilly healthcare update April 15, 2014

At the agencies

On April 10, Kathleen Sebelius resigned from her post as Secretary of Health and Human Services (HHS). President Obama has nominated Sylvia Matthews Burwell, the Office of Management and Budget (OMB) Director, to fill the position. Burwell previously held positions in the Clinton administration, as well as the private sector, including the Bill and Melinda Gates Foundation and the Walmart Foundation. The nomination is subject to Senate confirmation.

On April 7, the Centers for Medicare and Medicaid Services (CMS) announced that there would be a 0.4 percent increase in payment rates for Medicare Advantage in 2015. In February, CMS proposed a cut to Medicare Advantage payments of 1.9 percent. The turnaround was announced after significant pushback from congressional members who expressed concern that the cuts would cause undue harm to seniors and specific concerns from those who were worried that the proposed cuts would harm their mid-term election prospects. CMS Principal Deputy Administrator Jonathan Blum cited four changes that led to the reversal of the decision to cut Medicare payment rates: a new projection that now predicts that overall Medicare costs will fall more significantly than previously thought, a new accounting for the inclusion of baby boomers in the Medicare program, changes to CMS’s risk adjustment program regarding enrollee health status and demographics, and a delay in changes to in-home wellness or risk assessment visits to enrollees.

On April 9, HHS released a detailed accounting of Medicare payments to over 800,000 doctors. This is the first time in at least 35 years for this level of disclosure. The disclosure of these payments is intended to provide better transparency on the kinds of procedures performed by individual doctors and the amount of money physicians receive from the government through Medicare. Physician groups had resisted this move as a privacy violation. An injunction by the American Medical Association that had been in place since 1979 was overturned by a federal judge in May 2013, prompting the release of this data. So far, the data has revealed that a small proportion of doctors receive over a quarter of the $77 billion in Medicare payments to providers.

On the Hill

On April 1, President Obama signed the “Protecting Access to Medicare Act,” which delays Medicare payment cuts to physicians under the sustainable growth rate formula (SGR) for another year. This latest “doc fix” passed the House by a controversial voice vote on March 27 and passed the Senate on March 31, the day before the previous doc fix was set to expire. There was significant pushback from many congressional members who would have preferred to see a permanent repeal of the SGR formula. Senator Ron Wyden (D-OR) was perhaps the most vocal opponent to this temporary “patch” and still plans to move forward with his bill that would permanently repeal the SGR. Senator Wyden received strong support for his bill from numerous senators, but ultimately no agreement could be reached on how to pay the $140-180 billion price tag for permanent repeal of the SGR.

Although the temporary doc fix is the main component of the Protecting Access to Medicare Act, other elements of the law will affect various areas of the healthcare industry as well. Of particular note is a provision that would delay ICD-10 (a revision of the medical classification list by the World Health Organization) implementation for another year, despite CMS Administrator Marilyn Tavenner’s definitive statement in February that such a delay would not occur. The law also includes provisions that will create a value-based purchasing program for skilled nursing facilities, delay the enforcement of CMS’s two-midnight rule, create a framework for ordering diagnostic imaging scans, and provide relief to dialysis providers who received a payment cut last year.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.