January 2, 2013

 
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LEGISLATIVE ALERT: "Fiscal Cliff" Deal Avoids 26.5+% Medicare Cut

The "fiscal cliff" bill, known as the American Taxpayers Relief Act, freezes Medicare physician payment rates for 2013 thereby avoiding a 26.5% cut in reimbursement scheduled for January 1, 2013 in accordance with the "sustainable growth rate" (SGR) formula.  With the geographic adjustment factors, the cut could have been greater than 30% in some parts of Maine.  The Congressional Budget Office (CBO) estimates the cost of the freeze to be $25 billion over 10 years with most of it coming in 2013-2014.

You can find more information on the Medicare payment aspect of the "fiscal cliff" deal on the AMA web site at:  http://www.ama-assn.org/ama/pub/advocacy/grassroots-advocacy.page.

The following are the "pay-fors" that cover, at least in part, the cost of the freeze.

Documentation and Coding (DCI) adjustment.  This provision will phase in the recoupment of past overpayments to hospitals made as a result of the transition to Medicare Severity Diagnosis Related Groups (MS-DRGs).   Savings: $10.5 billion.

Rebase End Stage Renal Disease (ESRD) payments.  This provision incorporates recommendations from the General Accountability Office by re-pricing the bundled payment to take into account changes in behavior and utilization of drugs for dialysis. Savings: $4.9 billion.

Therapy Multiple Procedure Payment reduction.  This provision further reduces payment for subsequent therapies when therapies are provided on the same day.  Savings: $1.8 billion.

Payment for Certain Radiology Services.  This provision would equalize payments for stereotactic radiosurgery services provided under Medicare hospital outpatient payment system.  Savings: $0.3 billion.

Adjustment of Equipment Utilization Rate for Advance Imagining Services.  This policy would increase the utilization factor used in the setting of payment for imaging services in Medicare from 75% to 90%.   Savings: $0.8 billion.

Competitive Prices for Diabetic Supplies.  This proposal would apply competitive bidding to diabetic test strips purchased at retail pharmacies.     Savings: $0.6 billion.

Adjust Payment Adjustment for Non-Emergency Ambulance Transports For ESRD Beneficiaries.  This provision reduces the payment rates for ambulance services by 10% for individuals with ESRD obtaining non-emergency basic life support services involving transport, based on a recent General Accountability Office report.  Savings: $0.3 billion

Increase statute of limitations for recovering overpayments.  This provision increases the statute of limitations to recover overpayments from three to five years, based on recommendations from the Office of Inspector General at the Department of Health and Human Services.  Savings: $0.5 billion.

Medicare Improvement Fund. This provision eliminates funding for the Medicare Improvement Fund. Savings: $1.7 billion.

Rebase Medicaid Disproportionate Share Hospital (DSH) payments to extend the changes from the Affordable Care Act (ACA) for an additional year.  This proposal rebases DSH allotments to maintain the level of changes achieved in the ACA, and determines future allotments off of the rebased level using current law methodology. Savings: $4.2 billion.

Repeal of Class Program.  The provision repeals the Community Living Assistance Services and Supports (CLASS) program established by the Affordable Care Act.  This provision has no scoring implications.

Commission on Long Term Care. The provision establishes the Commission on Long Term Care to develop a plan for the establishment, implementation, and financing of a high quality system that ensures the availability of long-term services and supports for individuals.  This provision has no scoring implications.

Coding Intensity Adjustment.  Under current law, Medicare Advantage plans receive risk-adjustment payments that are further adjustment to reflect differences in coding practices between Medicare fee-for-service and Medicare Advantage.  This provision increases this coding intensity adjustment.  Savings: $2 billion.

Consumer Operated and Oriented Plan (CO-OP). This provision will rescind all unobligated CO-OP funds under section 1332(g) of the Affordable Care Act.   This provision also creates a contingency fund of 10 percent of the current unobligated funds to be used to further assist currently approved co-ops that have already been created.  The provision does not take away any obligated CO-OP funds.  Savings: $2.3 billion

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