House, Senate Chairman Highlight GAO Report on Medicaid Reform

Late last week, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Senate Finance Committee Chairman Orrin Hatch (R-UT) highlighted a new GAO report on Medicaid reform. The report was released by the non-partisan Government Accountability Office ("GAO") detailing policy considerations regarding per capita caps on federal Medicaid funding.

The report outlines how the design of per capita caps in Medicaid should consider coverage and flexibility, allocation of funds over time, accountability and other issues if HHS were to implement a limit on average federal Medicaid spending per enrollee. The report states that key policy choices by lawmakers include determining which types of Medicaid beneficiaries and services the caps should cover and to what extent states would be free to change their programs in exchange for the federal government limiting funding. HHS had no comments on the GAO report.

While Medicaid reform has been a relatively quiet issue this Congress, House Republicans on the Energy and Commerce Committee's Medicaid Task Force have been meeting throughout 2016 on plans to reform the program in the next session of Congress. Numerous Affordable Care Act replacement proposals have included Medicaid reforms, including block grants to states and the per capita spending allotment highlighted in the GAO report. The Medicaid Task Force is also expected to release a Medicaid reform whitepaper later this year.

Republican Chairmen Question CMS Handling of Medicare Fraud

On September 12, House and Senate Health Committee leaders sent a letter to CMS expressing concern about fraudulent Medicare spending despite recent CMS efforts to prevent improper payments. The top concern laid out in the letter is CMS's reliance on "pay and chase," in which the federal government pays a Medicare claim from a doctor or hospital before investigating whether it was a fraud. The letter asks CMS how it is addressing fraud and moving away from "pay and chase" and toward the Fraud Prevention System ("FPS"), which was established through the Small Business Jobs Act of 2010. The FPS system uses predictive analytics to identify claims and providers that present a high fraud risk to the Medicare program.

White House Reviewing Medicare Physician Pay Rule

On September 14, CMS transmitted a final rule to the White House Office of Management and Budget ("OMB") that implements the new Medicare physician pay system for doctors and other Medicare Part B providers. Review by OMB is the last step before the final rule is released to the public. The new payment system was part of the Medicare Access and CHIP Reauthorization Act of 2015 and replaced the sustainable growth rate formula as the Part B payment methodology. The final release is expected to be released by November 1.

Ways and Means Holds Hearing on the Advancement of Technology in Health Care

On September 14, the Ways and Means Health Subcommittee held a hearing to examine how the private sector is using technology to reduce health care costs. The hearing was intended to lay the groundwork for a broader look at Medicare's technology policies in the next Congress. Health Subcommittee Chairman Pat Tiberi (R-OH) stated it's going to be one of his committee's main focuses in the 115th Congress.

The Committee heard from witnesses representing four firms that sell health services and products to providers. Witnesses identified various barriers that keep the federal health program from adopting technologies that could potentially reduce the chance of errors in treatment.

Health-Related Bills Introduced This Week

Senator Shelley Moore Capito (R-WV) introduced a bill (S. 3308) that would amend Title XVIII of the Social Security Act to prohibit prescription drug plan sponsors and Medicare Advantage organizations under the Medicare program from retroactively reducing payment on clean claims submitted by pharmacies.

Next Week in Congress

The House and Senate return Monday, September 19. The Senate is expected to pass a continuing resolution early next week to keep the federal government funded through the November elections. The House could vote on an updated package of biomedical innovation bills known as 21st Century Cures (H.R. 6). The original bill passed the House last year but has been stalled in the Senate over the issue of mandatory funding for the National Institutes of Health.