Lawmakers Continue Push for SGR Deal in Lame Duck

More than 110 members of Congress, including the GOP Doctors Caucus, are urging House leadership to repeal and replace Medicare’s Sustainable Growth Rate (“SGR”) formula for physician payment before Congress adjourns in December.

With House Ways and Means Chairman Dave Camp (R-MI) retiring at the end of the session and the Senate Finance Committee switching from Democrat to Republican leadership, some lawmakers view the four week lame duck session as a unique time to pass the legislation before the cost of full repeal escalates.  In April, the Congressional Budget Office (“CBO”) scored the cost of repealing the SGR at $124 billion over 10 years, but lawmakers have continually struggled on how to monetarily offset the legislation.

Led by Reps. Kurt Schrader (D-OR) and Reid Ribble (R-WI), more than 110 lawmakers signed onto a letter asking Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA) to immediately move forward with the SGR deal.

Last week, the Doctors Caucus sent a letter to House leadership urging “all possible efforts be made to reach an agreement that will allow H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act, to be signed into law.”

HRSA Withdraws Pending 340B Rule

On November 14, the Health Resources and Services Administration (“HRSA”) withdrew a broad set of rules governing the 340B Drug Pricing Program. The sweeping set of rules had been submitted to the Office of Management and Budget, which is the final clearance stop before public release. Instead, HRSA intends to issue a guidance document in early 2015 addressing many of the same issues.

The guidance document will be more narrow and include more targeted areas such as civil monetary penalties for drug makers, calculation of ceiling prices and the administrative dispute resolution process.  Earlier this year a federal court found against HRSA’s ability to make a rule related to the section of the 340B Program covering orphan drugs, saying Congress would need to act to give HRSA the required authority.

MedPAC Debates Hospital Observation Status Pay Category

On November 6, the Medicare Payment Advisory Commission (“MedPAC”) discussed whether to eliminate the observation status pay category for hospitals.  While some of the MedPAC members expressed a willingness to eliminate observation status altogether, others mentioned that move could create bigger problems.

Hospital short stay policies have been problematic for hospitals, beneficiaries and the government.  Recovery Audit Contractors (“RACs”) have often retroactively denied hospitals Medicare reimbursement for admitting patients who the RACs say should have been treated as outpatients at cheaper rates.  However, hospitals often appeal the RAC decision and the backlog of appeals has continued to swell.

MedPAC Chair Glenn Hackbarth does not expect the commission to finish recommendations on short stay policies in time for its March report to Congress.  One proposal is to pay the same for observation status and one-day inpatient stays. If a patient stays at a hospital for just one day, whether for observation or admission as a patient, hospitals would be paid the same under the MedPAC proposal.

Senate Elects Leadership for 114th Congress

On November 12, the Senate voted “without dissent” to elect Kentucky Republican Mitch McConnell as Majority Leader.  Other Republican Senate leadership positions include Sen. John Cornyn (R-TX) as Senate Republican Whip, John Thune (R-SD) as Senate Republican Conference Chairman and Roger Wicker (R-MS) as Republican Senatorial Committee Chairman.  The Democrats elected Harry Reid as the Senate Minority Leader for the next Congress.

Next Week in Washington

The House and Senate return next week.  The only major task left on the agenda for this year is to provide continuing funding for the federal government, which is slated to run out of money December 11.   The House Energy and Commerce Committee will hold two hearings dealing with the government’s response to the Ebola outbreak.  The hearings come as the President seeks $6.2 billion in emergency appropriations to respond to the outbreak.

Bills Introduced This Week

No health care-related bills were introduced this week.