Lawmakers on Capitol Hill continue to debate and discuss Medicare issues. This week, the House Ways and Means Health Subcommittee held a hearing to discuss the competitive bidding program for durable medical equipment. (Kaiser Network)

Durable equipment includes prosthetics, orthotics, and other tools, and the Centers for Medicare and Medicare Services is tasked with selecting suppliers based on bids. The program will expand to 70 additional Metropolitan Statistical Areas in 2009. An excerpt:

Subcommittee Chair Pete Stark (D-Calif.) said that the hearing will address concerns from durable medical equipment suppliers and advocates for Medicare beneficiaries that the program is “not working as well as it is supposed to” (CQ HealthBeat, 5/5).

According to Stark, the hearing will allow lawmakers to determine whether the program requires revisions before the scheduled expansion in 2009 (Edney, CongressDaily, 5/6). Stark said, “I’d like to see the whole thing scrapped.” He added that Congress likely will take action to revise the program, with only the “question of whether we’ll do it in 2008 or 2009.” The House Small Business Committee plans to hold a hearing on the program later this month (Wilde Mathews, Wall Street Journal, 5/6).

In other Medicare news, lobbyists continue their efforts to convince Congress to delay a 10.6 percent reimbursement fee cut for Medicare physicians, although Senate action on the issue might be pushed back. (Kaiser Network)

Other matters, such as an Iraq war spending bill and bill that would delay new Medicare regulations, will push the physician fee cut issue down the priority list, according to an AARP spokesperson.

The following information was obtained from the April 11 issue of the Texas Register:

Open Meetings and Notices

The Texas Health and Human Services Commission (HHSC) has announced a hearing on proposed state-owned veterans nursing facility payment rates. The hearing is scheduled for May 6, 2008, at 9 a.m., in the Permian Basin Room of the HHSC, Braker Center, Building H, located at 11209 Metric Boulevard, Austin, Texas.

HHSC will conduct a public rate hearing to receive comment on proposed Medicaid payment rates for Freestanding Psychiatric Facilities. The hearing is scheduled for April 23, 2008, at 9 a.m. in the Lone Star Conference Room of the Braker Center, Building H, at 11209 Metric Boulevard, Austin, Texas 78758-4021.

HHSC has announced its intent to submit Transmittal Number 08-001, Amendment Number 805, to the Texas State Plan for Medical Assistance, under Title XIX of the Social Security Act. An excerpt:

The purpose of this amendment is to initiate a process by which the State will pay managed care organizations who have entered into a Medicare Risk Product Agreement with the Centers for Medicare and Medicaid Services (CMS), referred to as a “Medicare Advantage Health Plan,” or “MA Health Plan,” a monthly capitated payment in exchange for the MA Health Plan’s payment of the cost sharing obligations to health care service providers attributable to dual eligible members enrolled in the MA Health Plan’s Medicare risk product.

For details on where to send public comments for the hearings and information about the amendment, see the relevant section of the Texas Register.

A 10 percent reduction in reimbursements for Medicare physicians could be delayed for 18 months, if Democratic Congressman Max Baucus’s plan is successful. (Kaiser Network)

Medicare physicians will see their reimbursements cut by 10 percent beginning July 1, 2008. Under Baucus’s plan, the cut would be delayed until 2010, and reimbursement rates would be raised by 1.1 percent. He also wants to increase and link reimbursements for primary care physicians (PCP) to quality of care.

The Medicare Payment Advisory Commission, an independent government agency that advises Congress about Medicare issues, believes that a pay increase for PCPs will “bolster the number of PCPs, who receive relatively lower salaries than specialists, causing fewer medical students to choose primary care…”

In other Medicare news, a survey released by the Pharmaceutical Care Management Association (PMCA) revealed that reducing the time in which Medicare prescription drug reimbursements must be made would limit the ability to detect fraud. From the Kaiser Network:

For the survey, PCMA interviewed dozens of industry experts responsible for pharmacy audits and fraud investigations and found that fraud schemes have become more complicated and more difficult to detect. Experts maintain that waste, fraud and abuse in pharmacy claims accounts for 1% of medication costs, which could translate to hundreds of millions of dollars in unnecessary costs for the Medicare prescription drug benefit, PCMA said.

The following information was obtained from the April 4 issue of the Texas Register:

Notices and Public Hearing

The Texas Health and Human Services Commission (HHSC) has issued a correction to a public notice about its intent to submit Transmittal Number 08-000, Amendment Number 804, to the Texas State Plan for Medical Assistance, under Title XIX of the Social Security Act in the February 1, 2008, issue of the Texas Register (33 TexReg 1001). The correct notice reads:

HHSC announced its intent to submit Transmittal Number 08-006, Amendment Number 810, to the Texas State Plan for Medical Assistance, under Title XIX of the Social Security Act. The proposed amendment is effective February 1, 2008.

Additionally, HHSC issued a notice that it adopted the following per diem reimbursement rates:

Large State-Operated ICF/MR Facilities-Medicaid Only clients

Proposed interim daily rate: $381.26

Large State-Operated ICF/MR Facilities - Dual-eligible Medicaid/Medicare clients

Proposed interim daily rate: $365.09

HHSC will hold a public hearing on April 22, 2008, at 9 a.m. to receive public comment on proposed payment rates for Supported Employment and Employment Assistance Services in the Deaf-Blind with Multiple Disabilities (DBMD) Program waiver. For more information on the notices and the public hearing, see the relevant section of the Texas Register, and scroll down for each entry.

Adopted Rules

HHSC has adopted an amendment to §355.8063, Reimbursement Methodology for Inpatient Hospital Services, which updates the Medicaid reimbursement methodology for freestanding psychiatric facilities, effective January 1, 2008. See the relevant section of the Texas Register for details.

The Texas Board of Nursing has adopted an amendment to 22 Texas Administrative Code §223.1 (Fees). See the relevant section of the Texas Register for more information.

Next year, average reimbursements for private Medicare Advantage plans will increase by 3.6 percent, the Centers for Medicare and Medicaid Services (CMS) announced on Monday. Last year’s increase averaged 3.5 percent. (Associated Press)

Approximately 22 percent of Medicare beneficiaries are enrolled in the private Medicare program.

In related Medicare news, the American Association for Homecare believes CMS should delay implementing a Medicare competitive bidding program for durable equipment. The group contends that hundreds of suppliers were improperly disqualified from participating because of errors made during the initial selection process. (Kaiser Network)

An excerpt:

CMS currently pays for durable medical equipment based on a listed price. Under the program, durable medical equipment companies will submit bids to CMS, which will select suppliers based on cost and volume or on the potential savings for Medicare beneficiaries. The 2003 Medicare law mandated the program as part of a larger effort to implement competitive bidding for CMS reimbursements. The program, scheduled to take effect on July 1, likely will result in an average 26% decrease in the prices of medical equipment in the 10 MSAs…

Acting CMS Administrator Kerry Weems said that the agency received more than 6,300 bids from medical equipment suppliers to participate in the program and will announce the winners of contracts by May. In addition, he said that small medical equipment suppliers, which CMS defines as suppliers with gross annual revenue of $3.5 million or less, accounted for 64% of those that won contracts.

On Monday, the Centers for Medicare and Medicaid Services (CMS) announced new rules that will allow low-income Medicare Part D prescription drug program beneficiaries to remain enrolled in their current plans instead of facing reassignment at the end of the year. The new rules will be effective May 31, 2008. (Source)

The new rules apply to beneficiaries eligible for the low-income subsidy under Part D. Under the existing rule, beneficiaries in plans that charge no premium are automatically switched to another no-premium plan if their current plan decides to start charging a premium. Switching over may cause disruption in coverage.

Kerry Weems, CMS Acting Administrator, said, “It’s important that we provide stability and predictability in the prescription drug program, particularly for the beneficiaries who receive Medicare’s extra help. By changing the method that we use to determine the benchmarks for the low-income subsidy, we are able to ensure that there will continue to be a wide choice of zero-premium plans available to these beneficiaries.”

For more information, you may download a PDF copy of the 28-page final regulation.

The Kaiser Network recently highlighted a story from the Wall Street Journal about fraud in private sector Medicare and Medicaid managed care plans. (Kaiser Network)

In the 1990s, the federal government moved more Medicare and Medicaid beneficiaries to managed care plans in the private sector to reduce costs. Although some believed the private sector would have incentives to conduct business ethically and prevent fraud, others believe a new kind of fraud has cropped up. An excerpt:

The Journal reports that traditional fraud prevention for government programs consisted of “policing doctors, hospitals, dialysis centers and the like to catch overcharges or billing for treatment never provided.” However, according to the Journal, “[m]anaged care fraudsters profit by … shortchanging patients or physicians to cut costs while collecting preset fees from the government,” as well as by “refus[ing] to enroll unhealthy people, skimp[ing] on paying doctors or deny[ing] patients care.” Regulators say “they are realizing they must become more attuned to more-complex scams carried out by sophisticated corporations,” the Journal reports.

In an effort to retain tax cuts and tax breaks proposed by President George W. Bush, congressional Republicans have proposed a fiscal year 2009 budget that would cut Medicare and Medicaid spending. (Kaiser Network)

In anticipation of the Bush administration’s tax cuts expiring at the end of 2010, Democrats have proposed a budget of $3 trillion to fund domestic programs. Yesterday, both sides of the aisle began debating competing budget proposals.

In other Medicaid news, a hospital coalition has filed suit in federal court to prevent the implementation of Medicaid rule changes that would reduce payment to “safety-net” hospitals by $5 billion over five years. From the Kaiser Network:

The rule would limit federal Medicaid payments to so that they would not exceed the cost of providing care. The rule change would apply to hospitals funded by local governments. However, the hospitals argue that the cuts would make it more difficult for public hospitals to offset the cost of treating the uninsured by increasing Medicaid charges.

A spokesman for the Centers for Medicare and Medicaid Services said the Bush administration’s rule would “bring greater transparency to the financing of the Medicaid program.” Hospital groups involved in the lawsuit include the American Hospital Association and the National Association of Public Hospitals and Health Systems.

Although President George W. Bush twice vetoed bills that would have expanded the State Children’s Health Insurance Program (SCHIP), Democrats in the House of Representatives are still trying to find ways to expand the program. (Kaiser Network)

Last week, Charles Rangel, chair of the House Ways and Means Committee, said the House budget reconciliation bill would include provisions to expand SCHIP and stop a 10 percent Medicare physician payment reduction. The measure would increase SCHIP funding by $50 billion and delay the physician payment cut for two years.

According to a recent Government Accountability Office (GAO) report, Medicare Advantage (MA) plans can cost more than traditional Medicare for certain services like home health care, nursing homes, and certain hospital stays. (Kaiser Network)

Under MA plans, the government pays a subsidy to private insurance companies to offer such plans, whose purpose is to keep premiums very low. In light of the GAO’s findings, the Centers for Medicare and Medicaid Services announced that it will collect additional data on private MA plans.

Democrat and House Ways and Means Health Subcommittee Chair Peter Stark and other members of his party believe reimbursement reductions are in order. “I see no reason that they have to be grossly overpaid and under-regulated.”

Republican Rep. Dave Camp (pictured above) didn’t hold back in his criticism of the report. “Clearly it’s a fake report with fake conclusions, and we’re having a fake hearing on it so we can all run to the media and make certain pronouncements…The report only looks at hypothetical beneficiaries, who use only certain types of services and enroll in a narrow selection of plans.”

Go to the GAO’s web site to download the 12-page report and/or read the abstract.