LeadingAge Washington Update

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 Medicare doc fix: The House Energy and Commerce Subcommittee on Health held two days of hearings on a permanent fix for the Medicare physician payment formula (the “doc fix”). Witness and subcommittee member statements are on the subcommittee website

Last year, a bipartisan group of legislators on both sides of Capitol Hill worked out a permanent reform of the payment system. The one point on which they failed to reach agreement was whether or not the $144 billion/10-year price tag needed to be offset by reductions elsewhere in the Medicare program, and, if so, what changes should be made. That issue received a lot of attention at this week’s hearings.
Some of the witnesses at the subcommittee hearing and some of the legislators who participated see a “doc fix” as an opportunity to make policy changes resulting in higher contributions by beneficiaries and less recourse to supplemental insurance coverage, all of which would be designed to lessen beneficiaries’ use of health care services and increase the amount that beneficiaries would have to pay for health care and insurance coverage. These policy changes are proposed as a means of lowering what the proponents see as an unsustainable rate of increase in Medicare spending.
Other witnesses and legislators point to the slowing rate of growth in Medicare spending over the last couple of years, arguing drastic policy changes are not needed to keep the program viable. They also argue Medicare is already cost-effective, but not inexpensive for beneficiaries, the vast majority of whom live on modest incomes.
None of the Medicare policy changes that have been proposed so far in connection with the “doc fix” would directly affect post-acute care providers. We are already living with reduced market basket adjustments and sequestration, neither of which is likely to go away any time soon.
The stakes for LeadingAge Indiana members in the “doc fix” are:
  • Some of the services members provide are reimbursed according to the physician fee schedule. A fix is necessary to prevent cuts in this reimbursement.
  • We do not want payments to post-acute care providers to become an offset for the cost of the “doc fix”. As noted, members’ reimbursement has already been cut substantially.
  • One recurring recommendation for lessening the growth of Medicare spending generally, which was raised again at this hearing, is the proposal to give beneficiaries an annual allowance to buy health insurance coverage on their own in the private market. It is argued this “premium support” approach would encourage greater thrift among beneficiaries, who would have to pay extra for more inclusive insurance policies, and would give beneficiaries the opportunity to choose the coverage that best meets their needs.
  • The degree of choice, of course, would depend on the match-up of the annual Medicare allowance to the actual cost of health insurance for people aged 65 and up in the private marketplace and the degree to which beneficiaries could afford to pay the difference. The issue for members would be the extent to which private insurance, especially the most affordable policies, would cover post-acute care.
  • LeadingAge also wants to make sure any “doc fix” legislation Congress considers addresses the therapy cap issue. Like the physician payment formula, therapy caps are a flawed attempt to rein in Medicare spending. Ideally, they should be repealed; at the very least, Congress should make permanent the exceptions process which has proved successful in controlling utilization of the benefit while allowing coverage of medically necessary services.
Congress has until March 31 to enact a permanent “doc fix” or another temporary patch. LeadingAge is working with other stakeholders to make sure the legislation addresses members’ concerns and those of the people they serve.
Older Americans Act reauthorization reintroduced in the Senate: LeadingAge is pleased a bipartisan group, Sens. Alexander (TN), Murray (WA), Burr (NC) and Sanders (VT), have introduced a new bill, S. 192, to reauthorize the Older Americans Act (OAA).
The new bill is similar to last year’s legislation. According to Peter Notarstefano, LeadingAge, this year’s bill better allocates federal funds among the states, an issue stymied OAA legislation in the last Congress.
S. 192 also provides for the following:
  • The development of a consumer-friendly tool to assist older individuals and their families in choosing home and community-based services
  • Improved federal, state, and local coordination of person-centered transportation services, with authorization of federal technical assistance.
  • Addition of elder abuse prevention and screening training, as well as updated definitions to better support the prevention of elder abuse, neglect, and exploitation.
The Senate Health, Education, Labor, and Pensions Committee plans to vote next week on approving the bill for consideration by the full Senate. We have encouraged members to contact their senators in support of the legislation. 
Overtime rule for home care workers:  The Department of Labor has filed an appeal against the court ruling which vacated the extension of Fair Labor Standards Act minimum wage and overtime requirements to home care workers.
There is no timetable yet for this appeal to be heard; likely it will be several months. In the meantime, the rule requiring the payment of minimum wage and overtime to home care workers will not go into effect. Read Jennifer Hilliard’s article here.
For an overview of the issues LeadingAge is working on, please go here


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