Preserving Patient Access to Physicians Act of 2005

Medicare Sustainable Growth Rate (formula) SGR Reimbursement for oncology/imaging services H.R.2356/S.1081, Preserving Patient Access to Physicians Act of 2005 H.R.3547/S.1840, Safety Net Inpatient Drug Affordability Act H.R.3559, Medicare Durable Medical Equipment Access Act of 2005 H.R.5513, Home Oxygen Patient Protection Act of 2006 H.R.5647/S.3708, Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2007 H.R.6111, Tax Relief and Health Care Act of 2006

Client expense: $520,000 · Firm income: Not reported

Government targets: Centers For Medicare and Medicaid Services (CMS), Energy, Dept of, HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Homeland Security, Dept of (DHS), Natl Aeronautics & Space Administration (NASA), SENATE, Small Business Administration (SBA)

HR 2671, Healthcare Truth & Transparency Act S 2480, Contact Lens Consumer Protection Act HR 534/ S 354/ S 22, Medical Liability Reform HR 5, the HEALTH ACT CMS-1321 FC and CMS-1317 F: Medicare Program; Revisions to Payment Policies, Five Year Review of Work Relative Value Units, Changes to the Practice Expense Methodology Under the Physician Fee Schedule, and Other Changes to Payment Under Part B. CMS-1321-P (Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2007 and Other Changes to Payment Under Part B; Proposed Rule) CMS-1506-P; CMS-4125-P (Medicare Program; Hospital Outpatient Prospective Payment System and CY 2007 Payment Rates; Ambulatory Surgical Center List of Covered Procedures; Ambulatory Surgical Center Payments System and CY2008 Payment Rates CMS-1512-PN; Medicare Program; Five Year Review of Work Relative Value Units under the Physician Fee Schedule and Proposed Changes to the Practice Expense Methodology HR 2328/ HR2238/ S 3685 Children's Access to Vision Act; HR 6227/ S 3685 Kids Vision Care Act HR 2356/ HR 6111/ HR 5866/ S 1081, Medicare Fee Fix HR 3617/ S 1356, Pay for Performance HR 4042/ S 1884, ACS Payment Modernization

Client expense: $601,100 · Firm income: Not reported

Government targets: Centers For Medicare and Medicaid Services (CMS), Food & Drug Administration (FDA), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), SENATE

HR 2356, S 1081, HR 2218

Client expense: $240,000 · Firm income: Not reported

Government targets: HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), SENATE

HR 3617, Medicare Value-Based Purchasing for Physicians' Services Act of 2005; HR 4078, Maintaining Medicare Access Act of 2005; HR 5916, Patients' Access to Physicians Act of 2006; HR 4388, Tax Revision Act of 2005; HR 6408, Tax Relief and Health Care Act of 2006; HR 6111, Tax Relief and Health Care Act of 2006; S 1081, Preserving Patient Access to Physicians Act of 2005; S 1356, Medicare Value Purchasing Act of 2005. HR 4241, Budget Reconciliation Bill; HR 4297, Tax Relief Extension Reconciliation Act; HR 4719, Medicare Advantage Funding; HR 5166, Independent Pharmacy Protection Act; HR 5399, Medicare Drug Benefit Enrollment Fairness Act; HR 4939, Emergency Supplemental Appropriations Act; HR 5647, Labor-HHS-Education Appropriations Act; HR 5866, Medicare Physician Payment Reform and Quality Improvement Act; HR 6077, SCHIP Funding; HR 6098, Keep Children Covered Act; HR 6164, SCHIP Funding; H Con Res 376, Budget Resolution; S 124 Repeal of the Medicare Advantage Stabilization Act; S 1778, QI-1 Extension/Ban on Coverage of ED Drugs; S 1932, Budget Reconciliation Act; S 2255, Medicare Drug Formulary Protection Act; S 2260, Medicare Advantage Funding; S 2354, Medicare Prescription Drug Gap Reduction Act; S 2409, Home and Community Services Copayment Equity Act; S 2563, Pharmacist Access and Recognition in Medicare Act; S 2664, Pharmacy Access Improvement Act; S 2665, Medicare Prescription Drug Simplification Act; S 2810 Medicare Late Enrollment Assistance Act; S 3647, Prescription for Fairness Act; S 3897, Medicare Data Access and Research Act; S 3900, Medicare Quality Enhancement Act; S 3913, Keep Children Covered Act; S 3972, FAIR-SCHIP Act; S Con Res 83, Budget Resolution Implementation of Medicare Part C (Medicare Advantage) - Executive action concerning this issue. Medicare Part D - Executive action concerning this issue. Medicare update for physicians, stabilization fund - HR 2356, Preserving Patient Access to Physicians Act of 2005;

Client expense: Not reported · Firm income: $180,000

Government targets: HOUSE OF REPRESENTATIVES, SENATE, White House Office

H.R.147 H.R.303 H.R.602 H.R.783 H.R.916 H.R.968 H.R.994 H.R.999 H.R.1366 H.R.2046 H.R.2076 H.R.2131 H.R.2356 H.R.4747 H.R.4949 H.R.5122 H.R.5631 H.R.5866 Improvements in the Military Retirement System and enhance Military Health Care Programs and Benefits. S. 11 S.407 S.438 S.484 S. 558 S.619 S.1081 S.1932 S.2385 S.2530 S.2617 S.2766

Client expense: $150,000 · Firm income: Not reported

Government targets: Air Force, Dept of, Army, Dept of (Other), Congressional Budget Office (CBO), Defense, Dept of (DOD), HOUSE OF REPRESENTATIVES, Navy, Dept of, Office of Management & Budget (OMB), Office of Personnel Management (OPM), SENATE, Veterans Affairs, Dept of (VA)

Medicare Fee Schedule & Pay Performance HR 3617; Medicare Provider Fee Schedule HR 2356, S. 1081, S. 1574 Family Opportunity Act HR 1443, S. 183 MFT & Counselor Medicare Reimbursement HR 1447, HR 5324, S. 784 Medicare Coinsurance Parity HR 1125, S. 1152 Medicare Modernization Act HR 1946, S. 927

Client expense: $235,025 · Firm income: Not reported

Government targets: Centers For Medicare and Medicaid Services (CMS), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), SENATE, White House Office

HR 4388, Tax Revision Act of 2005; HR 6408, Tax Relief and Health Care Act of 2006; HR 6111, Tax Relief and Health Care Act of 2006; S 1081, Preserving Patient Access to Physicians Act of 2005; S 1356, Medicare Value Purchasing Act of 2005 Medicare update for physicians - HR 2356, Preserving Patient Access to Physicians Act of 2005; HR 3617, Medicare Value-Based Purchasing for Physicians' Services Act of 2005; HR 4078, Maintaining Medicare Access Act of 2005; HR 5916, Patients' Access to Physicians Act of 2006;

Client expense: Not reported · Firm income: $100,000

Government targets: HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), SENATE, White House Office

H.R. 2356, " Preserving Patient Access to Physicians Act of 2005" H.R. 3617, " Medicare Value-Based Purchasing for Physicians' Services Act of 2005" H.R. 4241, " Deficit Reduction Act of 2005" H.R. 5955, " Medicare Access to Rural Anesthesiology Act of 2006" H.R. 5866, " Medicare Physician Payment Reform and Quality Improvement Act of 2006" H.R. 6408, " Tax Relief and Health Care Act of 2006" H.R. 6111, " Tax Relief and Health Care Act of 2006" H.R. 6184, " Medicare Academic Anesthesiology and CRNA Payment Improvement Act of 2006" H.R. 5916, " Patients' Access to Physicians Act of 2006" S. 1081, " Preserving Patient Access to Physicians Act of 2005" S. 1356, " Medicare Value Purchasing Act of 2005" S. 1932, " Deficit Reduction Omnibus Reconciliation Act of 2005" Medicare Fee Schedule; SGR; Practice Expense Methodologies-pain issues; physician work and practice expense values; teaching rule. Five Year Review of physician work values for anesthesiology services under CPT codes 00100-01999. Medicare and Medicaid hospital Conditions of Participation-Interpretive Guidelines relating to unsupervised practice by nurse anesthetists; informed consent. Medication security and post-anesthesia evaluations. Medicare anesthesia conversion factor. Value-Based Purchasing/ Pay for Performance/ Performance Measurement/ Physician Voluntary Reporting Program/ QIOs. Health Information Technology. Model Guidelines for Medicare Part D formulary. Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates. Transition to ICD-10 coding. Policy on Consultants by physicians. Ambulatory Surgical Centers; Covered Procedures and Payment Rates. S. 2990/H.R. 5246, "Medicare Teaching Anesthesiology Funding Restoration Act of 2006" H.R. 5348, "Medicare Anesthesiology Teaching Fund Restoration Act of 2006"

Client expense: $620,000 · Firm income: Not reported

Government targets: Centers For Medicare and Medicaid Services (CMS), Drug Enforcement Administration (DEA), Executive Office of the President (EOP), Food & Drug Administration (FDA), Government Accountability Office (GAO), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Justice, Dept of (DOJ), SENATE

Subtitle D: Additional Demonstrations, Studies, and Other Provisions - (Sec. 646) Amends SSA title XVIII to direct the Secretary to establish a 5-year demonstration program under which the Secretary is required to approve demonstration projects that examine health delivery factors that encourage the delivery of improved quality in patient care. (Sec. 649) Directs the Secretary to establish a pay-for-performance demonstration program with physicians to meet the needs of eligible beneficiaries through the adoption and use of health information technology and evidence-based outcomes measures Title IX: Subtitle E: Miscellaneous Provisions - (Sec. 953) Requires the Comptroller General to report to Congress on: (1) the appropriateness of the updates in the conversion factor including the appropriateness of the sustainable growth rate formula for 2002 and subsequently. Deficit Reduction Act (Section 5102) reduced reimbursements for multiple images on contiguous body parts in 2006; the DRA provision created in statute a basis for payment reductions on the imaging of contiguous body parts that CMS implemented through the rulemaking process in 2005; the DRA also requires that payment rates for imaging services delivered in physician offices do not exceed payment rates for identical imaging services delivered in hospital outpatient departments beginning in 2007. Clinic recommends that Congress repeal Section 5102, and direct MedPAC and CMS to conduct a comprehensive study of imaging and the geographic variation in services. Medicare Advisory Committee review of the scientific evidence pertaining to vertebroplasty and kyphoplasty. CMS Physician Group Practice Demonstration On September 27, 2002 the Centers for Medicare and Medicaid Services published a notice in the Federal Register informing interested parties of an opportunity to submit proposals for participation in the Medicare Physician Group Practice Demonstration (PGP) project. Marshfield Clinic submitted a proposal for this demonstration and was selected by CMS to participate in the demonstration program, effective April 1, 2005. Oppose limits on the laboratory CPI update. Ambulatory Surgical Center Medicare Payment Modernization Act of 2005, H.R. 4042/S. 1884 Legislation introduced by Representative Wally Herger (R-CA) and Senator Mike Crapo (R-ID), would amend the law to reform the method for determining Medicare payment rates for ambulatory surgical centers (ASCs). This legislation would expand Medicare beneficiaries’ access to care in ASCs. Title III: Combating Waste, Fraud, and Abuse - (Sec. 303) requires the Secretary, beginning in 2004, to make adjustments in practice expense relative value units for certain drug administration services when establishing the physician fee schedule. Title IV: Rural Provisions - Subtitle B: Provisions Relating to Part B Only - (Sec. 412) Directs the Secretary to increase the work geographic index to 1.00 for any locality for which such work geographic index is less than 1.00 for services furnished on or after January 1, 2004, and before January 1, 2007. Since this provision expires at the end of 2006 it must be extended or revised. (Sec. 413) Establishes a new five percent incentive payment program designed to reward both primary care and specialist care physicians for furnishing physicians' services on or after January 1, 2005, and before January 1, 2008 in physician scarcity areas. Directs the Secretary to pay the current law ten percent Health Professional Shortage Area (HPSA) incentive payment for services furnished in full county primary care geographic area HPSAs automatically rather than having the physician identify the health professional shortage area involved. Directs the Comptroller General to conduct a study for a report to Congress on the differences in payment amounts under the Medicare physician fee schedule for physicians' services in different geographic areas. Title VI: Provisions Relating to Part B - Subtitle A: Provisions Relating to Physicians' Services (Sec. 605) Requires the Secretary to review and consider alternative data sources than those currently used to establish the geographic index for the practice expense component under the Medicare physician fee schedule no later than January 1, 2005. (Sec. 606) Directs the MEDPAC to submit to Congress: (1) a report on the effect of refinements to the practice expense component of payments for physicians' services after the transition to a full resource-based payment system in 2002; and (2) a report on the extent to which increases in the volume of physicians' services under Medicare part B are a result of care that improves the health and well-being of Medicare beneficiaries. Subtitle C: Other Provisions - (Sec. 626) Provides that in FY 2004, starting April 1, 2004, the ambulatory surgery center (ASC) update will be the Consumer Price Index for all urban consumers (U.S. city average) as estimated as of March 31, 2003, minus 3.0 percentage points. Provides that in FY 2005, the last quarter of calendar year 2005, and each of calendar years 2006 through 2009, the ASC update will be zero percent. (Sec. 628) Provides that there will be no updates to the clinical diagnostic laboratory test fee schedule for 2004 through 2008. HR 4157, the Health Information Technology Promotion Act, introduced by Rep. Nancy Johnson (R-CT) Rep. Nathan Deal establishes within the Department of Health and Human Services an Office of the National Coordinator for Health Information Technology. Payment Fairness for Practice Costs The formulas by which Medicare’s payments are calculated are widely variable throughout Medicare localities, and are based upon outdated data assumptions regarding the cost and organization of medical practice. Alternatives: CMS administratively revise its measurements of the costs of practice to assure the validity and fairness of payments; a payment floor could be established for practice expense; or the present variation (.705 – 1.501) in practice expense could be channeled into a narrower corridor of adjustment Payment Equity In MMA ‘03, Congress established a floor payment mechanism for the physician work component of Medicare payment for ‘04 – ‘06 to assure that physicians in low payment localities were compensated for their work at least at the national average payment amount. This payment floor should be extended indefinitely or geographic adjustment of work should be eliminated entirely. H.R.5118 Section 5, SEC. 5. Extension of Floor on Medicare Work Geographic Adjustment. Introduced by Rep. Greg Walden Medicare Part D Call Center Requirements CMS issued a February 2006 guidance (Attachment 1) requiring customer service call centers to be open 8 a.m. through 8 p.m. 7 days per week, including holidays. Pharmacy technical help desks are required to be open 24 hours/day 7 days per week if there are network pharmacies open for this period. Medicare Prescription Drug, Improvement, and Modernization Act of 2003 - Public Law No: 108-173: Title II: Medicare Advantage - Subtitle B: Immediate Improvements - (Sec. 211) Revises the payment system, requiring all plans to be paid at a rate at least as high as the rate for traditional Medicare fee-for-service plans. Subtitle D: Additional Reforms - (Sec. 237) Provides that Federally Qualified Health Centers (FQHCs) will receive a wrap-around payment for the reasonable costs of care provided to Medicare managed care patients served at such centers. (Sec. 238) Requires the Secretary to enter into an arrangement under which the Institute of Medicine of the National Academy of Sciences shall conduct an evaluation (for the Secretary and Congress) of leading health care performance measures in the public and private sectors and options to implement policies that align performance with payment under the Medicare program. the provision of Medicare and Medicaid services and benefits to patients, incentives to promote electronic health records for all Americans, and prescription drug benefits. Tax Relief and Health Care Act of 2006 (HR 6111) coupled a tax extenders and trade bill with a number of Medicare and Medicaid provisions including a physician fee freeze, a 1.5% bonus for physicians who report performance measures, extension of the Medicare physician work adjuster floor, and extension of the therapy services cap. Sustainable Growth Rate Medicare’s SGR mechanism unfairly links physician payment updates to factors unrelated to patients’ needs and the cost of providing patient care. If the SGR formula is not changed, Medicare program trustees predict that Medicare physician payments will be cut by 31% between 2006-2013. S.1081, by Senators Jon Kyl (R-AZ) and Debbie Stabenow (D-MI), the Preserving Patient Access to Physicians Act, would replace projected Medicare payment cuts with positive updates in each of the next two years. H.R. 2356. Reps. Clay Shaw (R-FL) and Ben Cardin (D-MD) A bill to amend title XVIII of the Social Security Act to reform the Medicare physician payment update system through repeal of the sustainable growth rate (SGR) payment update system. Pay-for Reporting and Performance S 1356, Introduced by Senators Chuck Grassley (R-IA) and Max Baucus (D-MT), the Medicare Value Purchasing Act, a bill that links physician payment to quality performance, increasing payment by 2% incrementally between 2008 and 2012, and funding the performance payments by drawing funds from physicians who do not report quality performance. HR 3617, the Medicare Value-Based Purchasing for Physician Services Act introduced by Rep. Nancy Johnson (R-CT) amends Part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act to provide for value-based purchasing in the payment for physicians' services under the Medicare program. On October 28, 2005, the Centers for Medicare and Medicaid Services (CMS) proposed the Physicians Voluntary Reporting Program (PVRP). In the program CMS calls on physicians to report on a “Core Starter Set” of 16 evidence-based performance measures selected with input from the National Quality Forum, the Ambulatory Care Quality Alliance, and the National Committee for Quality Assurance, (NCQA). Information Technology S. 1418, the Wired for Health Care Quality Act introduced by Senator Michael Enzi (R-WY) - Amends the Public Health Service Act to establish the Office of the National Coordinator of Health Information Technology to coordinate and oversee programs and activities to develop a nationwide interoperable health information technology infrastructure. Provisions of the President’s FY2007 Budget and related appropriations legislation (H Con Res 376, S Con Res 83) and the Deficit Reduction Act (S 1932, HR 4241) related to implementation of the Medicare Advantage and Prescription Drug Programs,

Client expense: $154,366 · Firm income: Not reported

Government targets: Agency for Healthcare Research & Quality (AHRQ), Centers For Medicare and Medicaid Services (CMS), Government Accountability Office (GAO), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Health Resources & Services Administration (HRSA), SENATE, White House Office

Medicare Sustainable Growth Rate (formula) SGR. Reimbursement for oncology/imaging services. H.R.2356/S.1081, Preserving Patient Access to Physicians Act of 2005 S.1002, Hospital Fair Competition Act of 2005 S.1356, Medicare Value Purchasing Act of 2005 S.1932, Deficit Reduction Act of 2005 (SGR relief) H.R.3547/S.1840, Safety Net Inpatient Drug Affordability Act H.R.3559, Medicare Durable Medical Equipment Access Act of 2005 H.R.5246/H.R.5348/S.2990, Medicare Teaching Anesthesiology Funding Restoration Act of 2006 H.R.5513, Home Oxygen Patient Protection Act of 2006 H.R.5647/S.3708, Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2007

Client expense: $560,000 · Firm income: Not reported

Government targets: Centers For Medicare and Medicaid Services (CMS), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Homeland Security, Dept of (DHS), Natl Aeronautics & Space Administration (NASA), SENATE, State, Dept of (DOS)

HR 699, S 440, S 1932, HR 4241, H.Res.640 (Medicaid definition of physician and Deficit Reduction Omnibus Reconciliation Act of 2005) -- patient access to podiatrists HR 2356, S 1081 , S 1574 (Preserving Patient Access to Physicians Act of 2005 and Affordable Access to Medicare Providers Act of 2005) -- reimbursement for podiatrists HR 709 (Medicare Beneficiary Freedom To Contract Act of 2005) -- impact on podiatrists HR 916, S 438 (Medicare Access to Rehabilitation Services Act of 2005) -- expand podiatry benefits S 1356 (Medicare Value Purchasing Act of 2005) -- impact on practicing podiatric medicine

Client expense: $260,000 · Firm income: Not reported

Government targets: HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), SENATE

Medicare Sustainable Growth Rate (formula) SGR. H.R. 2356/S.1081, Preserving Patient Access to Physicians Act of 2005 S.1356, Medicare Value Purchasing Act of 2005 S.1002, The Hospital Fair Competition Act of 2005 - re. the moratorium on physician-owned specialty hospitals S.1932, Deficit Reduction Omnibus Reconciliation Act of 2005 (SGR relief) H.R. 3547/S.1840, Safety Net Inpatient Drug Affordability Act HR 3559, Medicare Durable Medical Equipment Access Act of 2005 S.1081/HR 2356, Preserving Patient Access to Physicians Act of 2005 S.1356, Medicare Value Purchasing Act of 2005

Client expense: $600,000 · Firm income: Not reported

Government targets: Defense, Dept of (DOD), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Homeland Security, Dept of (DHS), Housing & Urban Development, Dept of (HUD), Natl Aeronautics & Space Administration (NASA), SENATE, State, Dept of (DOS), White House Office

Kept Maryland Delegation apprised of concerns associated with the growing Medicare population and the pressures this presents for the healthcare system. Continued to appeal to CMS to adjust the Medicare Sustainable Growth Rate (formula) SGR. Met with HHS staff in the office of the Director for Medicare Services to discuss SGR and opportunities to design demo projects. Monitored the implementation of the Medicare Modernization Act – in particular, the new Part-D benefit. Also monitored: HR 2356/S. 1081”Preserving Patient Access to Physicians Act of 2005” ; S. 1356 “Medicare Value Purchasing ; S. 1002 “The Hospital Fair competition Act of 2005” re. the moratorium on physician-owned specialty hospitals; S. 354/ S. 366/S. 367/ HR 534 medical liability reform proposals; and Proposals related to “pay for performance” initiatives.

Client expense: $420,000 · Firm income: Not reported

Government targets: HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Homeland Security, Dept of (DHS), Housing & Urban Development, Dept of (HUD), Natl Aeronautics & Space Administration (NASA), SENATE, State, Dept of (DOS)

HR 525 HR 371 HR 2238 HR 5006 HR 3205 HR 1313  S 172 S 1081 S 1355 S 2810

Client expense: $491,294 · Firm income: Not reported

Government targets: HOUSE OF REPRESENTATIVES, SENATE

Sustainable Growth Rate Medicare’s SGR mechanism unfairly links physician payment updates to factors unrelated to patients’ needs and the cost of providing patient care. If the SGR formula is not changed during the coming year, Medicare program trustees predict that Medicare physician payments will be cut by 31% between 2006-2013. Reform proposals include reimbursement updated on a market basket basis, removal of prescription drugs from the calculation of Medicare Part B costs, and rebasing Part B to reflect current rather than cumulative costs. S.1081, by Senators Jon Kyl (R-AZ) and Debbie Stabenow (D-MI), the Preserving Patient Access to Physicians Act of 2005, would replace projected Medicare payment cuts with positive updates in each of the next two years. The bill would provide an update of not less than 2.7% in 2006 and an update in 2007 that reflects physician practice cost inflation, which is expected to be about 2.6%. H.R. 2356. Reps. Clay Shaw (R-FL) and Ben Cardin (D-MD) A bill to amend title XVIII of the Social Security Act to reform the Medicare physician payment update system through repeal of the sustainable growth rate (SGR) payment update system. Pay-for performance Currently the prevailing methods of paying for health care in the US neither incent nor reward providing high quality care. The rising costs of care coupled with the increasing awareness of poor quality care have made clear the need for a transformation in the way health care is financed. In the fee-for-service system Medicare currently reimburses for units of service, in a manner that promotes service utilization without regard to quality. This has had the unanticipated, but now recognized effect of economically stimulating growth in the numbers of services provided by physicians. Medicare must implement quality based payments for physician services, and capture the data on performance measures utilizing available claims-based data recoverable through enhanced IT functions. S 1356, Introduced by Senators Chuck Grassley (R-IA) and Max Baucus (D-MT), the Medicare Value Purchasing Act, a bill that links physician payment to quality performance, increasing payment by 2% incrementally between 2008 and 2012, and funding the performance payments by drawing funds from physicians who do not report quality performance. Information Technology Under current law the capital and operating expenses of installing and maintaining an electronic medical record are assumed to be part of the overhead expense of a medical practice. Since no more than 5 –10% of the physician population has installed EMRs, CMS’ measurement of current physician practice expenses reflect minimal expense associated with IT. Congress should provide incentives for EMR adoption, and should establish standards to facilitate the sharing and exchange of data. Payment Fairness The formulas by which Medicare’s payments are calculated are widely variable throughout Medicare localities, and are based upon outdated data and assumptions regarding the cost and organization of medical practice. CMS must administratively revise its measurements of the costs of practice to assure the validity and fairness of payments. Payment Equity Before MMA 03, Medicare’s payments were geographically adjusted based upon erroneous assumptions about the cost of hiring and retaining physicians. Congress established a floor payment mechanism for the physician work component of Medicare payment for ‘04 – ‘06 to assure that physicians in low payment localities were compensated for their work at least at the national average payment amount. This payment floor should be extended indefinitely or geographic adjustment of work should be eliminated entirely. Medicare Prescription Drug, Improvement, and Modernization Act of 2003 - Public Law No: 108-173 Title II: Medicare Advantage - Subtitle B: Immediate Improvements - (Sec. 211) Revises the payment system, requiring all plans to be paid at a rate at least as high as the rate for traditional Medicare fee-for-service plans. Makes change in budget neutrality for blended payments. Increases minimum percentage increase to national growth rate. Requires the Secretary to submit to Congress a report that describes the impact of additional financing provided under this Act and other Acts on the availability on Medicare Advantage plans in different areas and its impact on lowering premiums and increasing benefits under such plans. Subtitle C: Offering of Medicare Advantage (MA) Regional Plans; Medicare Advantage Competition - (Sec. 221) Directs the Secretary to establish regional plans to encourage private plans to serve Medicare beneficiaries in from 10 to 50 regions, including in rural areas, within the 50 States and the District of Columbia beginning not later than January 1, 2005. Includes risk corridors for plans during the first two years of the program in 2006 and 2007; a stabilization fund to encourage plan entry and limit plan withdrawals; a blended benchmark that will allow plan bids to influence the benchmark amount; and network adequacy stabilization payments to assist plans in forming adequate networks, particularly in rural areas. Subtitle D: Additional Reforms - (Sec. 237) Provides that Federally Qualified Heatlh Centers (FQHCs) will receive a wrap-around payment for the reasonable costs of care provided to Medicare managed care patients served at such centers. Raises reimbursements to FQHCs in order that when they are combined with MA payments and cost-sharing payments from beneficiaries they equal 100 percent of the reasonable costs of providing such services. Extends the safe harbor to include any remuneration between a FQHC (or entity controlled by an FQHC) and an MA organization. (Sec. 238) Requires the Secretary to enter into an arrangement under which the Institute of Medicine of the National Academy of Sciences shall conduct an evaluation (for the Secretary and Congress) of leading health care performance measures in the public and private sectors and options to implement policies that align performance with payment under the Medicare program. Title III: Combatting Waste, Fraud, and Abuse - (Sec. 303) requires the Secretary, beginning in 2004, to make adjustments in practice expense relative value units for certain drug administration services when establishing the physician fee schedule; (2) require the Secretary to use the survey data submitted to the Secretary as of January 1, 2003, by a certain physician specialty organization; and (3) require the Secretary, beginning in 2005, to use supplemental survey data to adjust practice expense relative value units for certain drug administration services in the physician fee schedule if that supplemental survey data includes information on the expenses associated with administering drugs and biologicals the administration of drugs and biologicals, the survey meets criteria for acceptance, and the survey is submitted by March 1, 2004, for 2005, or March 1, 2005, for 2006. Title IV: Rural Provisions - Subtitle B: Provisions Relating to Part B Only - (Sec. 412) Directs the Secretary to increase the work geographic index to 1.00 for any locality for which such work geographic index is less than 1.00 for services furnished on or after January 1, 2004, and before January 1, 2007. (Sec. 413) Establishes a new five percent incentive payment program designed to reward both primary care and specialist care physicians for furnishing physicians' services on or after January 1, 2005, and before January 1, 2008 in physician scarcity areas. Directs the Secretary to pay the current law ten percent Health Professional Shortage Area (HPSA) incentive payment for services furnished in full county primary care geographic area HPSAs automatically rather than having the physician identify the health professional shortage area involved. Directs the Comptroller General to conduct a study for a report to Congress on the differences in payment amounts under the Medicare physician fee schedule for physicians' services in different geographic areas. Subtitle D: (Sec. 432) Amends SSA title VII to expand the functions of the Office of Rural Health Policy to include administering grants, cooperative agreements, and contracts to provide technical assistance and other necessary activities to support activities related to improving health care in rural areas. Title VI: Provisions Relating to Part B - Subtitle A: Provisions Relating to Physicians' Services - (Sec. 605) Requires the Secretary to review and consider alternative data sources than those currently used to establish the geographic index for the practice expense component under the Medicare physician fee schedule no later than January 1, 2005. Requires the Secretary to select two physician payment localities for such purposes, one to be a rural area and the other one will be a statewide locality that includes both urban and rural areas. (Sec. 606) Directs the MEDPAC to submit to Congress: (1) a report on the effect of refinements to the practice expense component of payments for physicians' services after the transition to a full resource-based payment system in 2002; and (2) a report on the extent to which increases in the volume of physicians' services under Medicare part B are a result of care that improves the health and well-being of Medicare beneficiaries. Subtitle C: Other Provisions - (Sec. 626) Provides that in FY 2004, starting April 1, 2004, the ambulatory surgery center (ASC) update will be the Consumer Price Index for all urban consumers (U.S. city average) as estimated as of March 31, 2003, minus 3.0 percentage points. Provides that in FY 2005, the last quarter of calendar year 2005, and each of calendar years 2006 through 2009, the ASC update will be zero percent. Provides that upon implementation of the new ASC payment system, the Secretary will no longer be required to update ASC rates based on a survey of the actual audited costs incurred by a representative sample of ASCs every five years. Provides that subject to recommendations by the General Accounting Office, the Secretary will implement a revised payment system for payment of surgical services furnished in ASCs. Requires the new system to be implemented so that it is first effective on or after January 1, 2006, and not later than January 1, 2008. Requires the Comptroller General to conduct a study for a report to Congress that compares the relative costs of procedures furnished in ambulatory surgical centers to the relative costs of procedures furnished in hospital outpatient departments. (Sec. 628) Provides that there will be no updates to the clinical diagnostic laboratory test fee schedule for 2004 through 2008. Subtitle D: Additional Demonstrations, Studies, and Other Provisions - (Sec. 646) Amends SSA title XVIII to direct the Secretary to establish a 5-year demonstration program under which the Secretary is required to approve demonstration projects that examine health delivery factors that encourage the delivery of improved quality in patient care. (Sec. 649) Directs the Secretary to establish a pay-for-performance demonstration program with physicians to meet the needs of eligible beneficiaries through the adoption and use of health information technology and evidence-based outcomes measures Title IX: Subtitle E: Miscellaneous Provisions - (Sec. 953) Requires the Comptroller General to report to Congress on: (1) the appropriateness of the updates in the conversion factor including the appropriateness of the sustainable growth rate formula for 2002 and subsequently. Requires the report to examine the stability and predictability of such updates and rate and alternatives for the use of such rate in the updates; and (2) all aspects of physician compensation for services furnished under Medicare and how those aspects interact and the effect on appropriate compensation for physician services. Subtitle B: Miscellaneous (Sec. 1012) Directs the Secretary to establish the Commission on Systemic Interoperability to develop a comprehensive strategy for the adoption and implementation of health care information technology standards, that includes a timeline and prioritization for such adoption and implementation. Authorizes appropriations. Medicare Advisory Committee review of the scientific evidence pertaining to vertebroplasty and kyphoplasty. CMS Physician Group Practice Demonstration On September 27, 2002 the Centers for Medicare and Medicaid Services published a notice in the Federal Register informing interested parties of an opportunity to submit proposals for participation in the Medicare Physician Group Practice Demonstration (PGP) project to test a hybrid payment methodology that combines Medicare fee-for-service payments with a bonus pool derived from savings achieved by improvements in patient care management. Marshfield Clinic submitted a proposal for this demonstration and was selected by CMS to participate in the demonstration program, effective April 1 2005. Request for an advisory opinion regarding the “Stark Law” Section 1877(g)(6) of the Social Security Act and Sections 411.370 et seq. of Title 42 of the Code of Federal Regulations. Whether Marshfield Clinic's physician-shareholders have an ownership or investment interest in Marshfield Clinic for purposes of the Stark Law. On March 4, 2005 CMS published a proposed rule that would enable Competitive Acquisition of Outpatient Drugs and Biologicals Under Medicare Part B. The proposed rule would implement provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 that require the implementation of a competitive acquisition program for certain Medicare Part B drugs not paid on a cost or prospective payment system basis. Beginning January 1, 2006, physicians will generally be given a choice between obtaining these drugs from vendors selected through a competitive bidding process or directly purchasing these drugs and being paid under the average sales price system. Oppose limits on the laboratory CPI update. On April 4, 2005, the HHS Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) published a Request for Public Comment in the Federal Register on a draft report on coverage and reimbursement of genetic tests and services. SACGHS is proposing to make the following recommendations: Medicare beneficiaries who lack current signs, symptoms, or personal histories of illness stand to clinically benefit from predictive and predispositional genetic tests and services. As such, SACGHS recommends that preventive services, including predispositional genetic tests and services, meeting evidence standards should be covered under Medicare. Reforming Medicaid Potential changes that will make Medicaid a more cost-effective and high quality program include the following: · Prescription Drug Improvements. The goal of reducing both state and federal expenditures will require policy changes that impact all segments of the pharmaceutical marketplace, including increased rebates from manufacturers, reforms to the Average Wholesale Price (AWP), and tiered, enforceable co-pays for beneficiaries. · Asset Policy. Many individuals are utilizing Medicaid estate planners or other means in order to shelter or transfer assets and therefore qualify for Medicaid funded long-term care services. Medicaid reform must include changes that increase the penalties for inappropriate transfers, restrict the types of assets that can be transferred, and encourage reverse mortgages, as well as other policies that encourage individuals and their families to self-finance care rather than rely on Medicaid. · Cost Sharing. Medicaid’s cost-sharing rules, which have not been updated since 1982, prevent states from utilizing market forces and personal responsibility to improve health care delivery. These provisions should be modified to make Medicaid look more like the State Children’s Health Insurance Program (SCHIP), where states have broad discretion to establish enforceable premiums, deductibles, or co-pays. · Benefit Package Flexibility. The Medicaid benefits package remains “one-size-fits-all.” Many states have found that the flexibility built into the SCHIP program allows for greater efficiencies without compromising quality of care. Extension of this flexibility to services for appropriate Medicaid populations would allow states to provide more targeted services while managing the program in a way that prevents sweeping cuts in the future. · Comprehensive Waiver Reforms. Reforms are needed to increase efficiency and reduce costs, increase the ease with which states obtain current waivers, expand the ability to seek new types of changes, and change the federal statute to eliminate the need for many waivers altogether. · Judicial Reforms. The right of states to locally manage the optional Medicaid categories is clearly defined in both policy and law, and the federal government should remove legal barriers that impede this fundamental management tool.

Client expense: $190,405 · Firm income: Not reported

Government targets: Agency for Healthcare Research & Quality (AHRQ), Agriculture, Dept of (USDA), Centers For Medicare and Medicaid Services (CMS), Congressional Budget Office (CBO), Food & Drug Administration (FDA), Government Accountability Office (GAO), HOUSE OF REPRESENTATIVES, Health & Human Services, Dept of (HHS), Health Resources & Services Administration (HRSA), SENATE