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Th E l i C i l H lth Th E l i C i l H lth

The Evolving Congressional The Evolving Congressional Healthcare LandscapeHealthcare Landscape

Kimberly BrandtThe Evolving Congressional Healthcare The Evolving Congressional Healthcare Landscape: Outlook Fall 2012/Spring 2013Landscape: Outlook Fall 2012/Spring 2013

Kimberly BrandtChief Oversight Counsel

Senate Finance Committee, Minority Staff

Kimberly BrandtChief Oversight CounselSenate Finance Committee Minority Staff

AgendaAgenda

Senate Finance Committee Overview Healthcare Priorities for 113th Congress Healthcare Priorities for 113th Congress Fraud and Abuse Issues Final Thoughts

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Senate Finance Committee: Senate Finance Committee: What is it and What does it do?What is it and What does it do?

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Public Opinion of CongressPublic Opinion of Congress A Public Policy Polling survey released in mid

January showed that 9 percent of the public J y p pheld a favorable opinion of Congress, while 85 percent held an unfavorable view.

Congress is less popular than cockroaches, root canals and colonoscopies,

On the bright side, Congress came out of the survey in higher standing than gonorrhea, the Kardashian family, and actress Lindsay Lohan.

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Senate Finance CommitteeSenate Finance Committee Chairman Max Baucus (MT) and Ranking

Member Orrin Hatch (UT)

24 total members including Chair and Ranking Member (13 Ds and 11 Rs)

One of the most powerful committees in CCongress:◦ Oversees over 50% of Federal budget◦ Confirms over 80 Presidential nominations

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Finance Committee JurisdictionFinance Committee Jurisdiction All proposed legislation, messages, petitions, memorials, and other matters relating

to the following subjects:

◦ Bonded debt of the United States, except as provided in the Congressional B d A f 1974Budget Act of 1974.

◦ Customs, collection districts, and ports of entry and delivery.

◦ Deposit of public moneys.

◦ General revenue sharing.

◦ Health programs under the Social Security Act and health programs financed by a specific tax or trust fund.

◦ National social security.

◦ Reciprocal trade agreements.

R ll id d i h C i l B d A ◦ Revenue measures generally, except as provided in the Congressional Budget Act of 1974.

◦ Revenue measures relating to the insular possessions.

◦ Tariffs and import quotas, and matters related thereto.

◦ Transportation of dutiable goods.

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Finance Committee Jurisdiction of Department Finance Committee Jurisdiction of Department of Health and Human Services of Health and Human Services Centers for Medicare & Medicaid Services[Medicare Parts A & B;

Medicare Advantage (Part C); Medicare Drug Program (Part D); Medicaid; Children’s Health Insurance Program (CHIP)]g ( )]

Administration for Children and Families (w/Health, Education, Labor and Pension Committee)[TANF; Child Welfare Services; Child Support & Paternity; JOBS program; Foster Care & Adoption Assistance; Maternal & Child Health Title XX Social Services Block Grant Program; Child Care and Development Block Grant; Independent Living Program; Promoting Safe and Stable Families]

National Institutes of Health and Food and Drug Administration where there is crossover with items covered by Medicare/Medicaid

Office of the Inspector General

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Finance Committee Activities Related to Finance Committee Activities Related to Department of Health and Human Services Department of Health and Human Services Legislative Hearings

◦ Markups and approval of legislation such as the p pp gPatient Protection and Affordable Care Act (PPACA) and the Sustainable Growth Rate (SGR) or “Doc Fix”

Oversight Hearings

◦ Fraud, waste and abuse issues

◦ Implementation of PPACA

C fi ti H i Confirmation Hearings

◦ Secretary of HHS

◦ CMS Administrator

◦ Inspector General of HHS

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Changes in CompositionChanges in Composition

Senators Conrad, Bingaman, Kyl and Snowe have all retired and Senator Snowe have all retired and Senator Coburn opted not to stay on Committee. Senator Kerry became Sec. of State.

They were replaced by Senators Brown (OH), Bennet (CO), Casey (PA), Isakson (GA), Portman (OH) and Toomey (PA).

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Priorities for 113Priorities for 113thth CongressCongress

Three big policy areas:◦ Healthcare (PPACA) implementation ◦ Healthcare (PPACA) implementation ◦ Tax Reform◦ Entitlement Reform

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Priorities for 113Priorities for 113thth CongressCongress

Several Key Nominations:◦ CMS Administrator – hearing heldCMS Administrator hearing held◦ Treasury Secretary – hearing held, confirmed◦ HHS and IRS General Counsels – hearing held◦ IRS and SSA Commissioners – waiting on

nomineesUS T d R i i i ◦ US Trade Representative – waiting on nominee

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Senate Finance Investigations:Senate Finance Investigations:Physician Owned Distributorships (PODs)Physician Owned Distributorships (PODs)

Report on PODs issued by Finance Committee Minority staff in June 2011 and letters to CMS y Jand OIG were sent by Senators Baucus, Hatch, Grassley, Kohl and Corker asking them to look at issues related to PODs.

Concerns related to proliferation of business models that seemed to put personal profit first and patient safety and/or Medicare program solvency second.

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PODs, Cont.PODs, Cont. OIG letter from Senators asked them to examine

sufficiency of legal guidance on this issue.

◦ OIG responded stating they felt their legal guidance was sufficient, but agreeing to do a study looking at POD activity.

Letter to CMS requested that PODs be included in any reporting and transparency requirements promulgated reporting and transparency requirements promulgated in final Sunshine regulations.

◦ CMS included PODs in both proposed and final Sunshine rules.

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PODs, cont.PODs, cont. Over past 18 months, staff from Finance and Aging

Committees have met with dozens of stakeholders on this issue and listened to compelling arguments both pro and con POD.

On March 26, 2013, OIG issued a Special Fraud Alert concerning PODs concluding that the arrangements were “inherently suspect” and that to ensure they were legally viable would require strict scrutiny.

Still waiting on study from OIG 2013 Work Plan regarding billing for spinal fusion surgeries and PODs.

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Healthcare Priorities in the Healthcare Priorities in the 113113thth CongressCongress

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PPACA Issues Still at ForefrontPPACA Issues Still at Forefront

Focus shifting from repeal and replace to targeted repeal (CLASS Act eliminated in g p (end of year and others like IPAB are targets).

Expect continued efforts to defund parts of PPACA – most recently over $1 billion cut from exchange related Co-Op loan g pprogram in fiscal cliff deal.

Numerous ongoing oversight efforts related to PPACA provisions.

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PPACA Implementation: ExchangesPPACA Implementation: Exchanges

33 states in federally facilitated and state partnership exchanges, 18 state/DC run

hexchanges. Key Issues: timeliness, data transmission,

security of data, enrollment outreach and education, cost of premiums, state and federal readiness.◦ Will insurers play?◦ What premiums will they charge? ◦ Will people sign up for the exchanges even if the

premiums end up being higher?◦ Will CMS be ready to go live on 10/1/13?

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PPACA Implementation: CostsPPACA Implementation: Costs

Administration budget proposal states that $5 8 billion will be spent from 2012-that $5.8 billion will be spent from 2012-2014 setting up state based exchanges.

HHS needs an additional $2 billion for the federal exchanges in 2014.

The amount to run the state-based exchanges is more than double what the administration estimated a year ago.

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PPACA Implementation: Regulatory PPACA Implementation: Regulatory OversightOversight High level of interest in the regulations

being promulgated as a result of PPACAbeing promulgated as a result of PPACA. Focus on transparency of regulatory

process, economic and operational burdens associated with implementation, and role Congress should play in regulatory process.

Regulatory reform and regulatory burden issues will continue to be area of focus.

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PPACA Implementation: Medicaid PPACA Implementation: Medicaid IssuesIssues Closely watching Medicaid expansion

related to PPACA – state burden cost related to PPACA state burden, cost implications

Medicaid/exchange enrollment issues: many had hoped for a single application and eligibility process for both

Dual Eligible Issues especially related to PAPCA implementation for as many as 9 million duals – cost, potential for abuse

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PPACA Implementation: Delivery PPACA Implementation: Delivery ReformReform Accountable Care Organizations (ACOs):

will they control costs better and by how h? HHS 250 ACO i much? HHS says over 250 ACOs covering

about 4 million Mcare recipients. Some evidence shows shift to ACOs

happening faster than expected, but no real proof yet that ACOs are able to control costs.

32 health systems participating in “Pioneer” ACO program threatened to quit program in late February saying that the metrics used to calculate their bonuses are too strict.

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PPACA Implementation: Health PPACA Implementation: Health TechnologyTechnology HHS has given states more than $3.5

billion in grants to build the technology billion in grants to build the technology infrastructure to operate health insurance exchanges.

IRS and HHS systems are technologically insufficient and at least $300 million is needed this year to ensure the IRS system is ready to meet basic needs for exchanges.

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PPACA Implementation: Meaningful PPACA Implementation: Meaningful Use and Electronic Health RecordsUse and Electronic Health Records One year delay until early 2014 to reach

the next stage of “meaningful use” of the next stage of meaningful use of electronic health records (EHRs).

Delay represents a second tactical retreat by the Administration on EHRs. The first was that they largely removed the requirement for ACOs to use EHRs.

Cost implications of this are huge, compliance will be an issue

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Entitlement ReformEntitlement Reform

In response to mounting concern about the nation’s rising debt and deficit the nation s rising debt and deficit, discussion about spending reductions in mandatory programs, such as Social Security, Medicaid, and Medicare are on the table.

Vastly different approaches put both by each party. Each set of these proposals recommends reducing the growth in Medicare spending over time.

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Entitlement Reform, cont.Entitlement Reform, cont.

Medicare is now projected to run out of money in 2024 five years earlier than last money in 2024, five years earlier than last year's estimate.

The Social Security trust funds are projected to be drained in 2036, one year earlier than the last estimate.

Once the trust funds are exhausted, both programs can only collect enough money in payroll taxes to pay partial benefits.

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Entitlement Reform: Why Is It Such a Entitlement Reform: Why Is It Such a Big Issue?Big Issue? They serve a lot of people (48 million on

Medicare this year and an estimated 69 million yon Medicaid during 2011, including 9 million people covered by both programs, known as dual eligibles).

They deliver benefits people greatly value. Their beneficiaries often have political clout, p ,

especially Medicare beneficiaries because seniors are much more likely to vote than the rest of us are.

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Physician Payment IssuesPhysician Payment Issues

Key issue for Members of Congress on both sides of the aisle as Congressional both sides of the aisle as Congressional Budget Office has said it will cost $330 billion over 10 years to fix.

Lots of potential solutions, but no clear answer as to how to solve the “doc fix” issue.

Got patched once again in fiscal cliff deal, but agreement is permanent fix needed.

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Competitive Bidding for DMECompetitive Bidding for DME House legislation introduced last Congress to

repeal the CMS DME competitive bidding program citing concerns that the program would push small businesses out of the marketplace and diminish seniors’ quality of care.

CMS delayed the originally scheduled start date for round two of the competitive bidding p gprogram for durable medical equipment for six months, until the summer of 2013. Winners just announced late March 2013.

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Fraud and Abuse Fraud and Abuse Issues Are on The Issues Are on The RiseRise

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Fraud and Abuse Issues Will Be Key Fraud and Abuse Issues Will Be Key Focus in 113Focus in 113thth CongressCongress Focus will be on:◦ Implementation of health reform anti fraud ◦ Implementation of health reform anti-fraud

provisions, ◦ Additional budget need for anti-fraud

initiatives; and ◦ Administration efforts to reduce improper

paymentspayments.

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Why so much focus on F/W/A?Why so much focus on F/W/A?

It is where the money is – estimates are that as much as $60B in fraud alone exists that as much as $60B in fraud alone exists in the Medicare/Medicaid programs

Last fall the Institute of Medicine issued a report saying that the healthcare system as a whole has over $750B in fraud/waste/abuse

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Strict Scrutiny from 112Strict Scrutiny from 112thth CongressCongress Demands for detail on program integrity

resource spendingC i f Concerns over appropriate measures for predictive analytics

Requests for information on PSC/ZPIC performance and evaluation

Demands for greater transparency around CMS communications with providers, especially physiciansphysicians

Concerns about provider enrollment process, and application of ACA suspension/moratoria authorities

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Finance Committee White Paper Finance Committee White Paper SolicitationSolicitation In May 2012, six Members of the Senate Finance

Committee (Baucus, Hatch, Carper, Coburn*, Wyden and Grassley) issued a call for white papers from the health care community asking for Fraud/Waste/Abuse ideas. *Sen. Coburn has since left the Finance Committee.

Received nearly 200 submissions – over 2000 pages of paper!

Released high level summary of submissions in January available at www.finance.senate.gov and today releasing more detailed analysis of the recommendations from nearly 150 submissions.

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Finance Committee White Paper Finance Committee White Paper OverviewOverview The May 2012 solicitation letter requested input from

stakeholders in three areas: program integrity reforms, payment reforms, and enforcement reforms.

Most stakeholders did not differentiate between program integrity and payment reforms.

Based on our review of the 146 white papers we Based on our review of the 146 white papers, we identified the following five broad themes: improper payments, beneficiary protection, audit burden, data management, and enforcement.

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80

90

100

110Other

Contractors

Beneficiaryapers

Figure 2: Frequency of Recommendations by Topic Areas and Contributing Stakeholders

0

10

20

30

40

50

60

70Beneficiary Advocacy Groups

Anti‐Fraud Entities

Suppliers

Providers/InsurersNumber of white pa

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TopicsImproper Payment Audit Burden Enforcement

Beneficiary Protection

Data Management

Number of papers with recommendations addressing topic 106 54 34 34 31

Percent of papers with recommendations addressing topic 76% 39% 24% 24% 22%

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Finance Committee White Paper Finance Committee White Paper SolicitationSolicitation The 5 themes varied across different

types of stakeholders types of stakeholders. Most of the papers discussing audit

burden were submitted by providers and suppliers (83 percent).

Most of the papers discussing data management were submitted by contractors (58 percent).

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GAO Request on CMS AuditsGAO Request on CMS Audits

A bi-partisan, bi-cameral group of 12 Members of Congress requested that Members of Congress requested that GAO conduct a study of the various Medicare audits being conducted by CMS (RACs, MACs, ZPICs, and CERT).

Does not include Medicaid at this time. Goal is for GAO to assess the efficiency

and effectiveness of CMS audit process.

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GAO Request, cont.GAO Request, cont.

What process does CMS use to determine whether the contractors’ audit criteria and methodologies are valid, clear and consistent?

How does CMS coordinate among these contractors to ensure they are not duplicative? Are providers subject to multiple audits and, if so, how frequently does that occur?

Does CMS have a strategic plan to coordinate and oversee all of the audit activities and, if so, how is the plan implemented and overseen?

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PPACA Implementation: Program PPACA Implementation: Program Integrity ProvisionsIntegrity Provisions CMS has not implemented or is not using

several key tools from PPACA:several key tools from PPACA:◦ Moratorium authority◦ Mandatory compliance programs◦ Ordering and referring (set to go live this

summer)

Surety bond requirements are not being enforced (OIG report showing virtually no enforcement of surety bond requirement and minimal collections)

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Reducing Improper PaymentsReducing Improper Payments Congress exercising vigilant oversight in

ensuring CMS is reducing improper g g p ppayments.

Administration had set goal of reducing Medicare improper payments by 50% by July 2012 – this was not met. Error rates are still high – 70% and above for certain DME.

Efforts to fight fraud are also tied to improper payment reduction as it puts more money back into the Medicare trust fund.

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Data Issues Still Top ConcernData Issues Still Top Concern

Implementation of CMS’ Fraud Prevention System and how effective it is in deterring System and how effective it is in deterring fraud, waste and abuse has been focus of Members.

Eliminating barriers to sharing data and exploring ways to better consolidate and mine data are top priorities for many Members.

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Final ThoughtsFinal Thoughts

Healthcare reform and fraud/waste/abuse will continue to be key issues for the will continue to be key issues for the foreseeable future.

Entitlement reform and budget issues will also shape the debate.

Next two years are going to be very active and unpredictable, but could end up having a significant impact on the healthcare system as a whole.

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Contact InformationContact InformationContact Information

Kim_brandt@finance.senate.gov

Kim_Brandt@finance.senate.gov

202/224-4515

Kim_Brandt @ finance.senate.gov

202/224-4515

202/224-4515