tv House Panel Examines Medicare Payment Systems Changes CSPAN May 31, 2017 5:37pm-6:03pm EDT
advisory commission, which is an independent agency that advices congress on policy issues affecting the pral federal program. this is about 90 minutes. good afternoon. excuse me, the first hearing of the health subcommittee ways and means will come to order as members are aware, the full subcommittee organized this year ratified our subcommittee assignments. however, i'd like to take the opportunity to substance abuse members on my side of the aisle and we'll recognize ranking
member levin to do the same on his side of the aisle. aisle introduce members who are here right now. then we'll recognize members as they get here later. so to my right, mr. adrian smith from nebraska. and kenny from texas. that i will yield to the gentlemen from michigan. >> thank you very much. >> a veteran of this institution and brian hig bs, we welcome you back doubly. and others who will be coming. we have votes at 2:15 i think, so, i guess each of us will make a brief opening. >> we will. >> i yield back, thank you. >> thank you, mr. levin. i look forward to working with members. >> has arrived. introducing ourselves.
>> i'd like to recognize our staff and mr. levin to do so on his side of the aisle. first on the republican side, staff director emily murray. joined by our profess nar staff of o lisa, nick, stephanie parks and alyssa and also down on the end, our legislative substantiaassistant, taylor trot and whitney and abbi fin. mr. levin, you're recognized. >> no rels and mel any and from
our office. thank you. >> it is my pleasure to welcome you back. it's time we took next steps in strengthening our medicare program as the committee continues to look for ways to reform medicare, the commission's insights and analysis will be b very valuable to our efforts. today is a great opportunity for us to hear advice in order to better understand policies that will improve the program and ensure we are making good use of taxpayer dollars, this year's report brings us new information and data that should help strengthen our discussion in this area. mr. miller will highlight numerous inefficiencies in the post acute care space.
one statistic that i personally found was $30 billion with a b in the post acute line is being used inefficiently. mr. miller will highlight the x extenders. med pack has commented on these other the years. and making the decision not the fund in other areas. there are many areas in need of reform n. the medicare space and program. med pack has proposed innovative solutions and i look forward to hearing more from the report. meeting with providers recently, there's been a aresounding concern. overbearing regulations are increasing, burdening providers and seem to be driving out and
discouraging small providers in particular. i'm worried about the direction we're head ng this area. i'm hopeful my colleagues on the subcommittee, the full ways and means committee of this congress with work together with the new administration to not only spur innovation, but reduce regula toigs burdens across the medicare program. with that, i'd like to introduce today's witness, mark miller, the executive director of the payment commission, welcome back. and before i recognize ranking member levin for an opening statement, i ask unanimous consent that all members statement's be included in the record. with that, i recognize ranking member mr. levin. >> thank you very much, mr. chairman and it's a pleasure for us to work with you. and your colleagues and to you, dr. miller, thanks for joining us today. and for the important role that med pack plays in informing medicare policy. we've had a chance to look at
your report. maybe not read each page the long one b, but an excellent executive summary. and unfortunately, as mr. teaberry and i have discussed, this is the first hearing of this subcommittee. and i regret that we did not have an earlier hear iing on th consequenceal health legislation that the republicans introduced and passed. that bill as we know would have taken away coverage from 24 million americans. while handing out nearly $1 trillion in tax cuts for the wealthy. indeed, the very wealthy incorporations. it would it would cut more than 800 million from the program. it would allow states to
eliminate or weaken crucial market reforms including essential health benefits, community rating and preotectios for older workers. it was opposed by doctor, hospitals, patients, aarp, almost everybody who is our participant in the work you do, dr. miller, though all of our colleagues here on the republican side did vote for, but this hearing is about medicare, with all that is deeply harmful in the basic law or legislation, there's been much less attention paid to the bill that would do to medicare. the bill eliminated payroll tax on earners. $75 billion.
to benefit people making more than $200,000. to eliminate wealthy investors by e rim nating the tax on unearned income. which would create a shortfall in the part b trust fund. beneficiaries will be directly responsible if that were to pass for a portion of this shortfall. causing an $8.7 billion premium increase. these provisions would shorten the v the solvency of the medicare trust fund. what's more, they would fundamentally break a promise we heard over and over again from the president, that he would not cut medicare or medicaid.
the republicans have also neglected to address other important issues that medicare faces. and let me comment briefly on perhaps the most important one. the prescription drug spending crisis. i hope we can spend some time today on that. skyrocketing drug costs have devastating consequences for the middle class and for federal health programs. the medicare trustees have told us that program spending in part d increased by 15% in 2015 alone in part b, jo has found medicare often pays more for fi fission administrative trugs and other federal payers including medicaid and the va.
mr. mike demannarks, a teacher in delaware county and some eighth grade students. can you stand up in the back? you back there? did you leave already? left? >> oh, no. they heard a guy from michigan and all bolted. just kidding. >> that's carrying rivalry too far. >> mr. miller. >> michigan beat ohio state. >> it's been a while. mr. miller, you're recognized for five minutes. thank you. >> chairman, ranking member levin, distinguished members and mark miller, on behalf of the commission, i'd tlik thank you for asking us to testify today. as you've mentioned, we're a small, independent, congress congressional support ago agency. our work in all instances is guided by three principles.
assuring beneficiary access to high quality care. protecting the taxpayer dollar and paying providers an plans in a way to accomplish these goals. medicare spending is about $350 billion annually. the rates per beneficiary, the medicare program is projected to grow faster and don't raise issues of affordability. for both the taxpayer and beneficiaries that finance the program. each year, we produce analysis on access, supply, utilization, private equity markets, recommendations across a range of service sectors, the commission has paid particular
attention to the post acute care sector. in patient facilities and long-term care hospitals. commission has made recommendations to equity of p systems for patients and providers, improve quality measurement, and also to direct the secretary's attention to program integrity issue. for 2018, he recommend a two-year payment freeze for skilled nursing facilities, a 5% payment reduction for home health agencies and a 5% reduction for in-patient rehabilitation agencies. it's 13% or more and has been that way for over a decade. in each sector, we are again recommending that changes in the payment system would be made so that we pay more on the basis of patient need, and that will result in greater equity across different types of providers. we believe that if the congress were to follow this recommendation, something like
$30 billion in the next ten years could be avoided. the commission has recommended moving away from the silo and towards a unified payment system for post acute care providers, and on the basis of patient need, rather than site of care. and also it would increase the potential to measure quality of care more accurately. part c and d, managed care and medicare has continued to show strong growth, currently accounting for 31% of enrollment, multiple plans available in every town of the u.s. they're bidding below fee for service which is a significant improvement since 2010. the dollar value of extra benefits that they provide has been increasing and the commission has made a few recommendations in this area. most notably to recapture payments from excess coding that targets plans that are most aggressively engaged in that coding. and we've also recommended
increasing the overall benchmark in m.a., in order to treat plans more fairly. in part d, drug program, beneficiary enrollment, has been increasing and there continues to be access to stand alone plans and plans for the low-income population. overall, spending growth is about 7% annually. but the portion of the program paid exclusively by the government has been increasing at an annual rate of 20%. this is because the number of beneficiaries reaching the catastrophic cap has accelerated over the last few years. the commission has made three recommendations in this area to address this problem, but most notably, we recommend shifting more risk to the plans for these catastrophic costs and couple that with additional tools for the plans to manage that risk. with respect to extenders, i will note that over the last several years, the commission has done work on ambulance
payments, including the more targeted rural assistance policy. therapy caps, striking a balance between caps restraints and exceptions for hnineedy beneficiaries. and we have caps on each of the special needs categories and several proposals for rural hospital payment adjustment. and with that, i'm happy to take your questions. >> thank you, sir. mr. miller, your testimony reflected some of the medicare extenders and writing, and these programs need addressing and determined if we should extend them or not. they've been extended several times in the past without any policy modification. for members, that's a vote that's occurring, my belief is. so we'll begin asking questions and mr. miller has agreed to
that. if you need to skedaddle over there, please come back after the vote. so, mr. miller, can you talk through each extender and what med pack has concluded about each one of them. >> in five minutes, that's a little bit difficult, but -- what i do want to say quickly, all of this has analysis and detailed work behind it, but i'll just try and hit you with the top line. special needs plans, we've made recommendations for each of the categories. we've recommended continuing the institutional special needs plan. with respect to part d special needs plans, we've recommended that you continue those, but you have a requirement for integrated care between medicare and medicaid. for the chronic care special needs plans, we have said that dominant conditions like aids and esrd, they make sense, but
for diabetes, congestive heart failure, we would create greater flexibilities in the regular m.a. plans to replicate a special needs model in the regular plans and would discontinue those. on therapy -- or on hospital payment, there's a low volume adjuster, which we originally made recommendations that the congress should take up, which it did. and with all respect our point here is that it hasn't been constructed properly. it tees off the number of medicare admissions, when it should key off the total admissions. and i can take that up in questions just in the interest of keeping moving along. we also think there are adjusters like medicare dependent hospitals, that those types of adjusters and the two concerns there, often you can get to adjuster that are aimed at the same problem. medicare dependent hospital, a low volume adjuster as the case
may be. we think you should be conscious of duplication, and when the adjuster goes to the provider, be conscious of the distance it is from another provider. because you don't want to be sending a subsidy within two hospitals and you're basically propping up two operations that are having a hard time meeting their fixed cost. on ambulance, we generally let the extenders expire and reorganize the fee schedule to focus more on -- less on basic life support transports and more on advanced life support, basically rebalance the payments there, and then we also took one of the adjusters for rural providers and target it to low density counties where you'd have a harder time covering your fixed cost. i can stop anytime. >> no, keep going. >> on the therapy cap, what we
said there was there's an extreme variation in the utilization of out-patient therapy. we think it's a very valuable benefit and we think there is evidence that it helps beneficiaries, but we also think it's relatively open to abuse. so we would adjust the caps downward to about the 70th percentile distribution, but couple that with a review of exceptions that make specific decisions about the exceptions outside of the cap instead of a blanket check-box type of exception. i'm going to stop there. i'm sure i've left something out. >> we can come back to it, if you remember later, or we can ask you a question in the second round. we've had private discussions in the past about the free-standing emergency departments that are popping up around parts of the country, and there seems to be a
new one popping up every month or so in my state of ohio. this is a topic that i know med pack will be publishing in its june report and be released about a month from now. can you give us a preview? are you allowed to do that? >> i'll do that. i'll also go back a little bit in history. we've talked about this in our june 16 report and we've also talked about it in our march -- or the report we're talking about here. this is the one where we said that we should be collecting claims identified for on and off campus. because we're really blind right at the moment and kind of analyzing this phenomenon. the commission is very concerned about this. there has been a lot of growth. there's concern that growth is occurring in markets where they're saturated or relatively high income, not necessarily for populations. and in june, we won't have additional recommendations, but
we're going to identify three or four issues for us to think about and then come back with recommendations. so one thing we're beginning to get concerned about is that the mission of an off-campus emergency room may not in the patient population and the intensity of service, may not look like your standard on-campus emergency room. and so maybe we need to start thinking about a payment structure that reflects the fact that they have a different patient mix and in some ways, a different mission. the second thing is, i'll hold that one for last. but the second thing is, in the legislation that the congress passed on site neutral, where the congress was saying after a certain date if you purchase the physician practice you don't get the richer out-patient rate. we're concerned there's a provision in there that if you attach services to an emergency room, you can actually get around that prohibition and we'll be discussing that.
lastly, in the rural areas, we think there may be a role for free standing emergency rooms in isolated rural communities, or in isolated rural communities that don't have the patient population to support a full-scale in-patient operation. and we have ideas that we've been talking through, where you could restructure that in-patient subsidies and support free-standing emergency rooms in isolated rural areas. but it's not that free-standing emergency rooms have no role anywhere. we have concerns about their growth in certain areas of the country and then we think we've probably not got quite the right incentive in the rural areas. >> so if you have the diane black main hospital with the main emergency department, and then ten miles away, you have the free-standing emergency department, does medicare get data on the visits to that
ten-mile-away facility, or is it part of the main hospital emergency? >> it's all mashed together. >> so medicare, you at med pack, you can't discern if i go to the free-standing one or the main one? >> we cannot. and we are concerned about that, and that was the recommendation we made here in this report, to say that cms should begin to develop a modifier, so when the claim comes in, we know it's occurring on or off campus. >> right. thank you. thanks so much. when we get back, i'll yield to mr. levin for his questioning and we'll be back in a few minutes. thank you. this hearing is recessed until we get back. thank you.
>> come back to order, we've been joined by a few of my colleagues who weren't here when i did the introduction, so i want to just recognize the members who are here now. peter roskam from illinois, erik paulsen from minnesota. did i say that right? and tom reed from new york. with that, i will yield five minutes to the