House Passes SGR Bill Without Rural Extenders, Senate Bill To Come to Floor Next Week

A once-bipartisan proposal to finally reform the deeply flawed way that Medicare pays doctors succumbed Friday to the partisan politics of Obamacare, particularly the unpopular individual mandate. The House voted 238-181 to replace the payment formula -- the complicated equation that for more than a decade has required annual "doc fixes" -- and to pay for it by delaying Obamacare's individual mandate for five years. Read the full article in Politico here.

An article posted Friday in Modern Healthcare said the legislation to pay for a permanent repeal of Medicare's physician-payment formula by delaying financial penalties for those without health insurance coverage by five years would increase the number of Americans without health insurance by about 13 million in 2018, the nonpartisan Congressional Budget Office reports. Read the article here.

S. 2110, the Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014 will likely come to the Senate Floor next week. This bill, introduced by Senate Finance chairman Ron Wyden late last week, is modified from previous Senate legislation but is similar to a strong rural bill that was reported out of the Senate Finance committee last December. S. 2110 contains a permanent fix to the SGR and includes all rural Medicare extenders (the Work geographic adjustment, Medicare payment for therapy services, Medicare ambulance services, the Medicare Dependent Hospital program and the Low Volume Hospital adjustment) and make all but the ambulance provisions permanent.

The bill’s passage is in doubt and strong grassroots support is needed. A likely partisan fight will occur over how to pay-for the bill. (Democrats support using savings from the scaling down of overseas conflicts and Republicans support eliminating the health insurance mandate in the ACA). Ranking Finance member, Orrin Hatch introduced a Republican bill (S.2122) which also contains the rural Medicare extenders but utilizes the ACA cuts as a pay-for.

House Passage of H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014

The following note regarding the passage of HR 4015 was released today, March 14th, by the National Organization of State Offices of Rural Health (NOSORH).  It provides some helpful insight into the next steps and political viability of the bill.    

Today, in a largely partisan vote, the House of Representatives passed a bill permanently repealing the Medicare Sustainable Growth Rate (SGR). H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, is the previously agreed upon bipartisan/bicameral framework put forth by the three Congressional Committees with jurisdiction over the SGR.

In addition to formally repealing the SGR, the bill:

• Authorizes annual automatic 0.5% payment update for five years (2014 – 2018).
• Consolidates the three existing Medicare quality programs into a single value-based incentive program.
• Provides incentives for providers to switch to alternative payment models (APMs) such as a 5% bonus to providers who receive a significant portion of their revenue from an APM.

Although the framework for the permanent fix has broad support, finding $138B over ten years to pay for the permanent fix has been a serious obstacle that has become increasingly partisan as today’s vote approached.

The bill passed today by the House, pays for the permanent fix with a Republican supported measure delaying the Affordable Care Act’s individual mandate for five years (starting next year). In addition to covering the cost of a permanent fix, the Congressional Budget Office has estimated that this “pay for” will save an additional $30B but will also result in 13 million more people being uninsured and an average increase of health insurance premiums between 10 and 20 percent. Democrats have attempted to use unspent war funds as the offset; however Republicans are adamantly against such a measure.

The bill still must pass through the Democrat-controlled Senate and be signed by the President in order to become law. The prospect of this bill, with a five year delay of the individual mandate as the offset, becoming law is extremely unlikely. The Democrats in the Senate are publicly opposed to this offset and the President has already stated he will veto the bill if it comes to his desk in this form.

Congress has until March 31st, when the current patch expires, to prevent automatic 24% cuts in Medicare payments to physicians under the SGR. Congress could still come together to figure out agreeable offsets for a permanent fix or they could pass another short-term patch to give them more time to come to an agreement on offsets. A nine-month patch to prevent the 24% cuts through the end of the year has been discussed.

It's Looking Likely That We'll See Yet Another SGR Patch (That Makes 18!)

Lawmakers can't agree on a way to plug the $122 billion hole in the budget that would be created by the elimination of the reimbursement cuts and "chances are not great" for a permanent fix by the March 31 deadline, says the co-chair of the GOP Doctors' Caucus.

Congress likely will not find a permanent solution for the Sustainable Growth Rate (SGR) funding formula before the deadline expires at the end of March, and will impose yet another temporary fix and re-address the issue later this year, a leading House Republican says. Read the rest of the article in Health Leaders Media here.

For more information, check out last week's article by Emily Ethridge of CQ Roll Call, or read the article by Kristin Paulson, CIVHC's Senior Manager of Policy and Initiatives, on how the Doc Fix has the potential to improve readmissions here.

President Obama's Budget Includes Largest Increase of National Health Service Corps Ever

President Obama will propose boosting the National Health Services Corps (NHSC) from 8,900 a year to 15,000 a year over the next five years, as well as spending $5.23 billion to train 13,000 primary care residents over the next 10 years, in his budget next week, administration officials told USA TODAY. The budget, which Obama will reveal Tuesday, marks the first time Medicare funds will be used to increase the number of medical residents, and it's the largest-ever proposed increase of the corps, officials said.

The administration hopes to boost both team-based care, as well as send residents out to rural areas and areas with lower access to care, officials said. The president's budget proposal:

• Adds $5.23 billion over 10 years to train 13,000 primary care residents in high-need communities, and in team-based care, such as an accountable care organization.
• Extends higher payments to Medicaid providers, including physician assistants and nurse practitioners, by one year at a cost of about $5.44 billion.
• Adds $3.95 billion over the next six years in the National Health Services Corps to support growing the program from 8,900 primary care providers in 2013 to at least 15,000 annually starting in the 2015 fiscal year.

"This is a booster shot unlike any other before now," said Mary Wakefield, administrator of the Health Resources and Services Administration.

The proposal also addresses a shortage of mental health providers by offering residencies for psychiatrists, psychiatric nurse practitioners and other mental health providers as part of the team-based approach.

Read the article in USA Today.

Rural Providers on Edge as Sequestration Deadline Gets Closer

Sequestration, the automatic and across-the-board federal spending cuts that were specifically designed to be so painful that they never would occur, are likely to take effect on March 1st. This is different than what we were hearing just a few weeks ago. The 2% mandated cuts to Medicare totaling more than $2.9 billion in 2013 will disproportionately ill-effect the small rural providers that rely on federal government funding to keep their doors open.

According to Maggie Elehwany, the National Rural Health Association's vice president of government affairs and policy, says all signs are pointing towards sequestration going into effect putting rural providers on edge. Read the article in HealthLeaders Media here.

NBC Political Director Says Rural/Urban Divide “Stark”

NBC political director and chief White House correspondent, Chuck Todd, declared the “Rural-Urban political divide is as stark as it has ever been.” Speaking to a Washington, D.C. news radio station Monday, Todd said today’s divided nation is no longer “red state verses blue state, it’s rural verses urban.” He added that many of the politically divisive issues such as gun control and abortion stem from rural and urban differences that are “cultural.” Chuck Todd has been invited to speak during the National Rural Health Association's 24th annual Rural Health Policy Institute next month. Join other Coloradans in DC to continue the discussions about rural health and meet with Colorado's elected officials. Click here for more details on the Policy Institute. You can listen to Chuck Todd’s full interview here.

NRHA's Rural Health Policy Institute

With health reform, the fiscal cliff and a new Congress set to decide the future of healthcare, change is coming to rural America. NRHA's Rural Health Policy Institute is a great opportunity for you to educate your elected officials, advocate for your facilities and continue the fight to protect rural healthcare. The Colorado Rural Health Center is the state contact for NRHA's 24th Rural Health Policy Institute, so come with CRHC staff as we learn more about rural health policy and visit our elected officials on the hill!

Policy Update from NOSORH

"Fasten your seatbelts, it's going to be a bumpy year!" Bill Finerfrock said during his "Exploring Rural Health Policy Issues" webinar on Nov. 13th. The NOSORH-sponsored webinar was one of the daily webinars offered during the week-long celebration of National Rural Health Day 2012.

At the center of the presentation was a "Washington Update," where Finerfrock gave a run-down on coming changes in House Committee memberships including Ways and Means, and Appropriations, and possible changes in Cabinet-level posts including Defense, State, Justice and Treasury. Finerfrock said that issues that were left unresolved prior to Congressional Adjournment include Bush Tax Cuts, Payroll Tax Cuts, the SGR "fix" (sustainable growth rate fix for Medicare), and Sequestration, which, combined, form what the press is calling the "fiscal cliff." Finerfrock said he thinks Congress will do something to avoid the fiscal cliff. However, if they don’t, the consequences would include a 26.5 percent cut in physician fee schedules, which would have an adverse effect on rural health clinics. Sequestration would also cause a 7- 8 percent annual cut in affected non-defense programs. At this point, he said, there is nothing to do but wait and see. The NOSORH-sponsored webinar was one of the daily webinars offered during the week-long celebration of National Rural Health Day 2012.

For a viewable recording of Finerfrock’s full webinar, click here; for a copy of Finerfrock’s presentation during the webinar, click here.

Source: The Branch: An Update for State Offices of Rural Health and our Partners. December 2012. NOSORH.