On January 7, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to establish a value-based purchasing (VBP) program to reward hospitals for providing safe, high-quality care. The program would provide higher reimbursements to hospitals performing well on quality measures relating to both patient experience and clinical process of care, or to hospitals making performance improvements in those areas.

Section 3001 of the new healthcare reform law – the Patient Protection and Affordable Care Act (PPACA) – authorizes the creation of the VBP program, which will take effect in Fiscal Year (FY) 2013. The program will apply to all acute-care prospective payment system (PPS) hospitals.

CMS has been soliciting stakeholder input on this process, and public comments on the VBP proposed rule are being accepted through March 8.


The Medicare Payment Advisory Commission (MedPAC) approved on January 13 a recommendation that Medicare home health recipients be required to make copayments for services. The Commission – an independent congressional agency established to advise Congress on Medicare matters – believes that the proposed copayments would serve as a check on growth in home health spending.

MedPAC did not specify a dollar amount for the copay, but discussed the possibility of $150 and stressed the need for a per-episode of care copay rather than a per-visit copay. It is believed that the per-episode copay would encourage Medicare beneficiaries to consider the need for any home health services, but not the actual number of home health visits.

The recommended copay would apply to all episodes of care that are not preceded by stays in inpatient hospitals or post-acute care facilities, but would not apply to low-income beneficiaries.

It is not clear however, whether MedPAC’s copay recommendation will gain traction on Capitol Hill, particularly given the opposition of advocacy organizations such as AARP as well as key Members of Congress.


As expected, on January 19 the House voted on H.R. 2 – legislation that would fully repeal the PPACA and related reconciliation law (Public Laws 111-148 and 111-152). Approved by a vote of 245-189, three Democrats joined all House Republicans in supporting the repeal.

The following day, the House took up a measure – H.Res. 9 – that instructs four committees to produce replacement healthcare reform legislation. Approved by a vote of 253-175, the resolution tasks the following committees with drafting such legislation: Energy and Commerce; Ways and Means; Education and the Workforce; and Judiciary. During this vote, 14 Democrats supported the measure.

H.Res. 9 instructs the four committees to report legislation guided by 13 broad directives, including efforts to overhaul the medical liability system, lower health care premiums, provide access to affordable coverage to people with pre-existing conditions, and prohibit federal funding of abortions.

Before final passage, the House voted nearly unanimously to add language directing the committees to also produce legislation addressing the so-called “doc fix” issue, in order to permanently change the formula that sets Medicare reimbursement rates for physicians.

The resolution does not include a deadline by which committees must act, but the four relevant Chairmen vowed to move quickly on holding hearings and drafting legislation. The Judiciary Committee acted first, holding the first healthcare hearing of the new Congress on January 20, on the topic of medical liability reform.


In state Medicaid news, a recent policy report has signified that as New York embarks on an overhaul of its Medicaid program, regulatory reform and an upgrade of information systems are steps that could improve eligibility and enrollment efforts.

Covering 25 percent of New York residents, Medicaid is key piece of health insurance coverage in the state. Additionally, the PPACA will add another 100,000 to the program, and there are currently around one million others who are eligible but not yet insured.

The January 10 report by the United Hospital Fund said that information systems should be upgraded in order to accommodate higher numbers of applicants with varying language skills and also to allow for real-time matching of eligibility information with existing government databases. The report also stressed the need to reform rules that could stand in the way of simplifying and streamlining the enrollment process.


As the first session of the 112th Congress progresses, we continue to follow news from Capitol Hill. In addition, we continue to monitor HHS/CMS and other agencies, as the implementation of healthcare reform measures move forward and other related matters arise. We will bring you timely updates as such developments occur.