CONGRESSIONAL LEADERS AGREE TO POSTPONE MEDICARE CUTS UNTIL JANUARY 2011

FROM CMA — NOVEMBER 30, 2010:

The House of Representatives passed HR 5712, the Physician Payment and Therapy Relief Act of 2010, by a voice vote to stop the 23% Medicare physician payment cut before it was scheduled to take effect on December 1, 2010. The Senate passed the bill by unanimous consent prior to Thanksgiving. The bill will be signed into law by the president immediately.

Congress will remain in session until the Christmas holidays working on a legislative package that includes an extension of the Bush tax cuts and a plan to stop the 25% Medicare SGR cut that is scheduled to take effect on January 1, 2011. Both Republican and Democratic leadership met with President Obama at the White House on November 30, 2010, to begin bipartisan negotiations on the package. Both sides appear committed to passing a bill that stops the SGR cuts through 2011 and that provides an update. The 12-month SGR proposal costs approximately $17 billion, and committee staff are engaged in final negotiations on the funding offsets to cover the costs. The talks look promising at this point. CMA continues to work closely with California AARP, which recently approved radio and print ads in California to help with the SGR campaign. CMA urges all physician leaders to continue to call, write, and meet with their members of Congress if you have not already done so.

CMA is also working to include a Medicare payment locality update in the SGR package. Both senators Boxer and Feinstein are talking to senators Reid and Baucus and urging its inclusion. The House leaders have already committed to the California GPCI fix.

Last week the administration released “final interim” regulations on the 85% medical loss ratio requirements for the health plans. Secretary Sebellius has noticed the regulations and will be seeking public comment for the next 60 days. CMA strongly supports the 85% medical loss ratio requirements and that all health plan expenditures be transparent to the public in the future. It was CMA’s proposal that was originally adopted by the U.S. House of Representatives. CMA will provide a summary and additional information to in the near future. CMA’s letter to Secretary Sebellius is on CMA’s website.

Finally, the president’s bipartisan “Fiscal Commission” charged with making recommendations on potential cost-savings to government entitlement programs will release their report this week. It calls for an expansion of the Independent (Medicare) Payment Advisory Board (IPAB) charged with making cuts to the Medicare program and additional Medicare physician payment cuts. It also recommends more medical liability relief for physicians and reforms to Medicaid and the long-term care program. The recommendations are not likely to be supported by a majority of the commission, and, therefore, many recommendations are dead on arrival; however, Congress may further develop some of the recommendations and concepts and pursue legislation. CMA will continue to aggressively oppose the IPAB — an entity that is not accountable and charged with making arbitrary Medicare payment cuts. CMA will also oppose any recommendations to adopt additional Medicare physician payment cuts. CMA will push with AMA and the federation for adoption of the Medicare private contracting legislation.

CMA will keep you updated as the SGR negotiations proceed. Thank you.

FROM AMA — NOVEMBER 29, 2010:

• One-month Delay: The House of Representatives is scheduled to vote around 6:00 p.m. this evening on the 31-day SGR extension that passed the Senate on November 18. That legislation, HR 5712, the Physician Payment and Therapy Relief Act of 2010, is expected to be passed by the House.
• Status on SGR Relief for All of 2011: Bipartisan discussions are continuing between House, Senate, and White House staff on an SGR relief package that would avert any cuts for all of 2011. Negotiations are focused on budget offsets or payfors. Democratic and Republican members of Congress and staff believe a 12-month extension is a prudent course of action. It is a matter of reaching agreement on the approximately $16 billion in budget offsets that appear feasible at this time. The SGR extension has become a vehicle for other "Medicare extenders" that will require additional offsets. Tomorrow's White House meeting involving President Obama and Democratic and Republican congressional leaders will provide insight on the course of the remainder of the lame-duck session, which could last up to three weeks.
• AARP Efforts in Support of Combined 13-month SGR Extension: Today, AARP began running print and radio ads in 13 states urging Congress to act to preserve seniors' access to physicians. The print/radio ads are running in AK, AR, CA, CT, FL, IL, LA, MA, ME, NC, NM, PA, and TX. The paid media activity follows a mailing to over two million households and a phone campaign prior to Thanksgiving that generated 18,000 phone calls to congressional offices over a few days. In addition, this issue is highlighted in an electronic newsletter that will be received by three million AARP activists. AARP has also scheduled 14 tele-townhalls between November 29 and December 10. In a number states, the local AARP chapter is partnering with state medical societies to send a joint message to the media and elected officials.
• Fiscal Commission Update: On Wednesday of this week, the Fiscal Commission co-chaired by former Senator Alan Simpson and Erskine Bowles, former chief of staff for President Clinton, is expected to release a revised blueprint for deficit reduction. A preliminary draft released prior to Thanksgiving included provisions to repeal the SGR. However, the cost of SGR repeal was, in part, paid for with $24 billion in physician payment cuts over a 10-year period. Traditional medical liability reforms will also be part of the package. The deficit reduction proposal also expanded the role of the Independent Payment Advisory Board. Fourteen of the 18 members of the Fiscal Commission (majority of whom are members of Congress) must support the deficit reduction package to trigger congressional action on the proposal. It is unlikely that 14 members of the commission will support the package. However, elements of the proposal may get attention when the next Congress begins to wrestle with public demands to reduce the deficit.

FROM CMA — NOVEMBER 18, 2010:

The Senate plans to pass the measure by unanimous consent tonight, and House leaders said they would follow suit when they return from Thanksgiving break on Monday, November 29.

The agreement — announced by Senate Finance Committee Chairman Max Baucus (D-MT) and ranking Republican, Charles Grassley (R-IA) — stops the 23 percent Sustainable Growth Rate (SGR) payment cut scheduled to take effect on December 1 and continues the 2.2 percent update in payments.

Baucus and Grassley said the 30-day measure would give Congress more time to develop a longer-term extension during the month of December. When lawmakers return next month, they will consider a one-year SGR deal that prevents cuts through December 31, 2011, and provides an update.

They are working to secure a way to fully pay for the yearlong cost of stopping the cuts. Democratic leaders in the House and Senate have suggested that a year-long SGR proposal could be rolled into a larger bill that addresses the expiring Bush tax cuts. Leaders of both parties are meeting with President Obama on November 30 to negotiate the tax package.

The cost of the one-month extension is paid for by using savings from a Centers for Medicare and Medicaid Services (CMS) proposal that reduces Medicare payments for multiple therapy services provided by therapists to patients in one day.

CMA is pleased that Congress will act to stop the devastating 23 percent payment cut facing physicians on December 1. This stop-gap will allow physicians to continue to see Medicare patients and protect access to care for California’s seniors and military families.

The Medicare rates also affects private sector rates, making for an enormous impact on California physicians and patients in all sectors. CMA will continue to aggressively advocate for a longer-term fix to SGR. CMA is also working to include the California GPCI fix in the SGR bill. The GPCI provision would update the Medicare geographic payment localities in California.

CMA urges physicians to continue to call, email, and meet with their congresssional representatives during the month of December until Congress passes a yearlong fix. After that package is adopted, it will be incumbent on organized medicine to help develop an ultimate long-term solution to the unsustainable SGR payment formula.

CMA thanks all county medical societies and physicians for their advocacy to stop the SGR cuts. California physicians working together stopped the cuts. Great work so far!