4/23/2013
The Evolving Congressional
Healthcare Landscape
Kimberly Brandt
The Evolving
Congressional Healthcare
Chief Oversight Counsel
Landscape:
Outlook
2012/Spring 2013
Senate
Finance Fall
Committee
Minorityy Staff
Ki b l Brandt
Kimberly
B dt
Chief Oversight Counsel
Senate Finance Committee, Minority Staff
Agenda
Senate Finance Committee Overview
 Healthcare Priorities for 113th Congress
 Fraud and Abuse Issues
 Final Thoughts

Senate Finance Committee:
What is it and What does it do?
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4/23/2013
Public Opinion of Congress



A Public Policy Polling survey released in mid
January showed that 9 percent of the public
held a favorable opinion of Congress, while
85 percent held an unfavorable view.
Congress is less popular than cockroaches,
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 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
Congress:
◦ Oversees over 50% of Federal budget
◦ Confirms over 80 Presidential nominations
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Finance 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
Budget 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.
◦ 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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4/23/2013
Finance Committee Jurisdiction of Department
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)]

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
Department of Health and Human Services
Legislative Hearings
◦ Markups and approval of legislation such as the
Patient Protection and Affordable Care Act (PPACA)
and the Sustainable Growth Rate (SGR) or “Doc Fix”
 Oversight
g Hearings
g
◦ Fraud, waste and abuse issues
◦ Implementation of PPACA
 Confirmation Hearings
◦ Secretary of HHS
◦ CMS Administrator
◦ Inspector General of HHS

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Changes in Composition
Senators Conrad, Bingaman, Kyl and
Snowe have all retired and Senator
Coburn opted not to stay on Committee.
Senator Kerryy 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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4/23/2013
Priorities for 113th Congress
Three big policy areas:
◦ Healthcare (PPACA) implementation
◦ Tax Reform
◦ Entitlement Reform
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Priorities for 113th Congress
Several Key Nominations:
◦ CMS Administrator – hearing held
◦ Treasury Secretary – hearing held, confirmed
◦ HHS and IRS General Counsels – hearing held
◦ IRS and SSA Commissioners – waiting on
nominees
◦ US Trade Representative – waiting on
nominee
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Senate Finance Investigations:
Physician Owned Distributorships (PODs)


Report on PODs issued by Finance Committee
Minority staff in June 2011 and letters to CMS
and OIG were sent by Senators Baucus, Hatch,
Grassley, Kohl and Corker asking them to look
at issues related to PODs.
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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4/23/2013
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
in final Sunshine regulations.
◦ CMS included PODs in both proposed and final
Sunshine rules.
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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
113th Congress
C
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4/23/2013
PPACA Issues Still at Forefront
Focus shifting from repeal and replace to
targeted repeal (CLASS Act eliminated in
end of year and others like IPAB are
targets).
 Expect
continued
to defund
E
i d efforts
ff
d f d parts
of PPACA – most recently over $1 billion
cut from exchange related Co-Op loan
program in fiscal cliff deal.
 Numerous ongoing oversight efforts
related to PPACA provisions.

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PPACA Implementation: Exchanges

33 states in federally facilitated and state
partnership exchanges, 18 state/DC run
exchanges.
Key Issues: timeliness, data transmission,
security of data, enrollment outreach and
education,
d
cost off premiums, state and
d
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: Costs
Administration budget proposal states
that $5.8 billion will be spent from 20122014 setting up state based exchanges.
 HHS
S needs
ee s an
a additional
a t o a $2
$ billion
b o for
o the
t e
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
Oversight
High level of interest in the regulations
being promulgated as a result of PPACA.
 Focus on transparency of regulatory
p
ocess, eco
o c aand ope
at o a
process,
economic
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
Issues
Closely watching Medicaid expansion
related to PPACA – state burden, cost
implications
 Medicaid/exchange
e ca /e c a ge enrollment
e o e t issues:
ssues:
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
Reform



Accountable Care Organizations (ACOs):
will they control costs better and by how
much? HHS says over 250 ACOs covering
about 4 million Mcare recipients.
Some evidence shows shift to ACOs
h
happening
faster
f
than
h expected,
d but
b no reall
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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4/23/2013
PPACA Implementation: Health
Technology
HHS has given states more than $3.5
billion in grants to build the technology
infrastructure to operate health insurance
g
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
Use and Electronic Health Records
One year delay until early 2014 to reach
the next stage of “meaningful use” of
electronic health records (EHRs).
 Delay
e ay represents
ep ese ts a second
seco tactical
tact ca retreat
et eat
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 Reform
In response to mounting concern about
the nation’s rising debt and deficit,
discussion about spending reductions in
mandatoryy pprograms,
g
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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4/23/2013
Entitlement Reform, cont.
Medicare is now projected to run out of
money in 2024, five years earlier than last
year's estimate.
e Soc
a Security
Secu ty trust
t ust funds
u s are
ae
 The
Social
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
Big Issue?



They serve a lot of people (48 million on
Medicare this year and an estimated 69 million
on Medicaid during 2011, including 9 million
people covered by both programs, known as
dual eligibles).
eligibles)
They deliver benefits people greatly value.
Their beneficiaries often have political clout,
especially Medicare beneficiaries because
seniors are much more likely to vote than the
rest of us are.
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Physician Payment Issues
Key issue for Members of Congress on
both sides of the aisle as Congressional
Budget Office has said it will cost $330
billion over 10 yyears 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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4/23/2013
Competitive 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
program 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
I
Issues
Are
A on The
Th
Rise
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Fraud and Abuse Issues Will Be Key
Focus in 113th Congress

Focus will be on:
◦ Implementation of health reform anti-fraud
provisions,
◦ Additional budget need for anti-fraud
initiatives; and
◦ Administration efforts to reduce improper
payments.
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4/23/2013
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
in the Medicare/Medicaid programs
ast fall
a the
t e Institute
st tute of
o Medicine
e c e issued
ssue a
 Last
report saying that the healthcare system
as a whole has over $750B in
fraud/waste/abuse

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Strict Scrutiny from 112th Congress





Demands for detail on program integrity
resource spending
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
physicians
Concerns about provider enrollment process, and
application of ACA suspension/moratoria
authorities
Finance Committee White Paper
Solicitation

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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4/23/2013
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Finance Committee White Paper
Overview

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
identified the following five broad themes: improper
payments, beneficiary protection, audit burden, data
management, and enforcement.
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Figure 2: Frequency of Recommendations by Topic Areas and Contributing Stakeholders
110
Other
Numb
ber of white papers
100
Contractors
90
80
Beneficiary Advocacy Groups
Anti‐Fraud Entities
70
60
50
Suppliers
40
30
Providers/Insurers
20
10
0
Topics
Improper 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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4/23/2013
Finance Committee White Paper
Solicitation
The 5 themes varied across different
types of stakeholders.
 Most of the papers discussing audit
bu
e were
we e submitted
sub tte by providers
p ov e s and
a
burden
suppliers (83 percent).
 Most of the papers discussing data
management were submitted by
contractors (58 percent).

37
GAO Request on CMS Audits
A bi-partisan, bi-cameral group of 12
Members of Congress requested that
GAO conduct a study of the various
Medicare audits beingg conducted byy 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.



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
t t
t ensure they
to
th are nott duplicative?
d li ti ?
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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4/23/2013
PPACA Implementation: Program
Integrity Provisions

CMS has not implemented or is not using
several key tools from PPACA:
◦ Moratorium authority
p
pprograms
g
◦ Mandatoryy compliance
◦ 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)
40
Reducing Improper Payments



Congress exercising vigilant oversight in
ensuring CMS is reducing improper
payments.
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.
41
Data Issues Still Top Concern
Implementation of CMS’ Fraud Prevention
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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4/23/2013
Final Thoughts
Healthcare reform and fraud/waste/abuse
will continue to be key issues for the
foreseeable future.
t t e e t reform
e o and
a budget
bu get issues
ssues will
w
 Entitlement
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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Information
Contact Contact
Information
[email protected]
202/224-4515
[email protected]
@ finance.senate.gov
202/224-4515
202/224-4515
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