CMS Releases Medicare Trustee Report

On June 22, CMS released its annual Medicare Trustees Report that projects the long-term finances of the Hospital Insurance and Supplementary Medical Insurance Trust Funds. The report estimates that Medicare’s hospital trust fund will run out of money in 2028, two years earlier than the panel’s 2015 report stated. Medicare’s trust fund pays for hospital visits, nursing home care and other services rendered under Part A of the program.

The Trustees Report also indicated that, overall, Medicare’s costs have grown at a historically low rate in the past several years. Total Medicare costs are expected to increase from 3.6 percent of GDP in 2015 to 5.6 percent in 2040 as a result of an influx of enrollees and the rising price of drugs. However, Medicare spending has not increased fast enough to trigger the Independent Payment Advisory Board (“IPAB”), which has the authority to make cuts to payments made through the program. The report projects that the IPAB will not go into effect until 2017.

House Speaker Ryan Unveils Major Health Reform Proposal

On June 22, House Speaker Paul Ryan (R-WI) released a sweeping proposal of health care reforms. The 37-page white paper is part of a series of policy outlines that Speaker Ryan has designed to show what Republicans support if a Republican wins the White House. House Democrats came out immediately against the proposal.

In addition to repealing most of the 2010 Affordable Care Act, Republicans would repeal the ban on physician-owned hospitals, repeal the Independent Payment Advisory Board and end the Center for Medicare & Medicaid Innovation (“CMMI”). The proposal would combine Medicare Parts A and B with a unified deductible and repeal the fiscal year 2018 and 2019 Medicare disproportionate share hospital cuts.

In addition, the white paper calls for massive Medicaid financing reforms through per capita allotments and block grants. It also calls for other Medicaid reforms, such as decreasing the federal match for the expansion population, changing the 1115 waiver process, repealing Medicaid disproportionate share hospital cuts and establishing a national uncompensated care pool.

Health Care Cost Transparency Legislation Introduced in the House

On June 21, Reps. Michael Burgess (R-TX) and Gene Green (D-TX) introduced the Health Care Price Transparency Promotion Act of 2016 (H.R. 5547) directing states to provide increased price transparency data for health care services. The bill would require states to create laws for the disclosure of information on hospital charges, to make that information publicly available and to provide patients with estimated out-of-pocket costs for health care services.

The legislation would also provide for additional research on health care services and costs, including: the types of cost information that consumers find helpful in making health care decisions; how such information varies according to consumers’ health insurance coverage; and the most efficient and effective ways that cost information can be distributed to consumers. The bill has been referred to the House Energy and Commerce Committee, but its future is uncertain given the limited number of days left on the legislative calendar.

HHS Announces Funding for Quality Payment Program

On June 20, HHS announced that it will award $20 million to assist eligible providers and small practices in transitioning to the Quality Payment Program under the Medicare Access and CHIP Reauthorization Act (“MACRA”). In 2015, MACRA authorized $100 million in funding over five years for the Direct Technical Assistance Program. Entities eligible to apply for assistance from HHS include quality improvement organizations, regional health collaboratives and regional extension centers. The agency has especially encouraged eligible providers and practices in rural and health professional shortage areas to apply. Proposals to receive funding for the Quality Payment Program are due on July 28.

MedPAC Releases Annual Report to Congress

Late last week, the Medicare Payment Advisory Commission (“MedPAC”) issued its annual report to Congress examining issues related to the Medicare program and the health care delivery system. Under the Improving Medicare Post-Acute Care Transformation Act of 2013, the panel is required to also include in its report a proposal for a prototype design to consolidate payment systems for skilled nursing facilities, inpatient rehabilitation facilities, home health agencies and long-term care hospitals. MedPAC’s proposed prototype would base reimbursement rates for post-acute care services on patients’ clinical characteristics rather than the site at which the services were provided. CMS is expected to use the panel’s prototype to develop a new prospective payment system by 2023.

MedPAC also made a series of recommendations, including reducing Part B drug dispensing and supplying fees and making changes to the Part D program, to decrease Medicare spending and protect beneficiaries. In addition, the panel proposed that CMS give isolated rural hospitals the option to convert to an outpatient-only model to address declining inpatient admissions and recommended that the agency expand waivers in CMS innovation programs to include more telehealth services.

Health-Related Bills Introduced This Week

Rep. Jason Smith (R-MO) introduced a bill (H.R. 5559) to amend section 1206 of the Pathway for SGR Reform Act of 2013 to clarify the application of rules on the calculation of hospital length of stay for certain moratorium-excepted long-term care hospitals.

Rep. Earl Blumenauer (D-OR) introduced a bill (H.R. 5555) to amend Titles XVIII and XIX of the Social Security Act to improve end-of-life care and advanced illness management.

Next Week in Washington

The House is adjourned until July 5. The Senate returns on June 27 for a full week of work. On June 28, CMMI Director Patrick Conway will testify on the Medicare Part B drug demonstration before the Senate Finance Committee. The pilot project has faced huge pushback from congressional Republicans as well as some Democrats.