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D.C. Report: Medicare 'Doc Fix' Program Gets Another Look, Bundled Payment Rules to Be Released Sooner Than Expected

July 25, 2011
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Sharon Canner Sr. Director of Advocacy Programs CHIME

‘Gang of Six’ Re-emerges with Deficit Plan; Entitlement and Tax Reforms Part of Plan
Leading the conversation this week, as in past weeks, is talk about the debt ceiling and negotiations surrounding long-term deficit reduction. This week saw some movement as Congress finds itself inside the two-week August 2 default deadline. On Wednesday, the newly reconvened bipartisan Gang of Six released a plan that would, among other things, stabilize the debt by 2014, immediately cut $500 billion from discretionary spending, and fully fund the Medicare ‘doc fix’. As part of the $500 billion cut, the plan would repeal the CLASS Act (.pdf); save $26 billion in entitlement program fraud, waste and abuse; and “consider Social Security reform.” Tax reforms and an elimination of the $1.7 trillion Alternative Minimum Tax were also included in the plan’s details. Ultimately, an estimated $3.7 trillion would be cut over 10 years under the plan.

After the announcement, a group of 17 medical associations praised the Senate's Gang of Six for making a Medicare "doc fix" a centerpiece of its proposal. But even with support from President Obama, the plan has an uphill battle. The Senate-led plan would first need to be introduced and passed in the House of Representatives (because all spending or revenue deals have to originate in the House) and that will be no small undertaking given the diminishing timeline and partisan air in the People’s Chamber.

Bundled Payment Rules to Be Released Sooner Than Expected
According to a CMS official, the healthcare community may not have to wait long to receive more information on bundled payment rules. During a speech at the Center for American Progress, Dr. Richard Gilfillan, the acting director of the Center for Medicare and Medicaid Innovation, said that bundled payment programs would “start small initially, but be built for scaling.” The rules are slated for a release before 2013, but Dr. Gilfillan and White House Deputy Chief of Staff Nancy-Ann DeParle indicated that Medicare will launch a series of different models for payment bundling that “[i]nterested providers can begin implementing … in hospitals and other healthcare sites beginning this year.” Dr. Gilfillan also said that he believed providers would find bundled payments more palatable than larger Accountable Care Organization arrangements because of their potential to boost profitability for specific patients.

FDA Medical Device Rule Gets Closer Look by Congress
In a meeting held this week on Capitol Hill, members of the House Energy and Commerce Subcommittee on Oversight and Investigations heard testimony on FDA Medical Device Regulations and their impact on patients, innovation, and jobs. Republicans are concerned that the FDA regulatory structure is “stifling American innovation and job creation.” In particular, the Center for Devices and Radiological Health took fire, which Subcommittee Chairman Cliff Sterns says (.pdf) has “systemic problems.” The Chairman said this has led to, “companies closing their doors and moving abroad; patients in the U.S. waiting for innovative treatments or being forced to go abroad to get them.”

For their part, Democrats called into question two studies relied upon heavily by FDA critics. Democrats say the studies were published by “industry interests” and that they do not “form an appropriate basis for policymaking.” Supporting this point was New England Journal of Medicine executive editor Gregory Curfman who said during testimony that “there are so many flaws in design and execution that the [reports'] conclusions are rendered essentially meaningless."

The FDA regulatory process was also the subject of a recent CHIME Advocacy Leadership Team Meeting. Thursday CHIME CIOs heard presentations on the FDA’s Medical Device Data Systems (MDDS) rule, where officials explained that MDDS serve as a conduit for sending and receiving medical device data to and from medical devices. They also clarified under what circumstances hospitals would be considered MDDS “manufacturers,” necessitating oversight from the FDA.

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