News Story

Local, State, Federal

The Bill Box
CMS Releases Proposed 2008 HOPPSs
Oregon Payor Reinstates CAD Payments
Kaiser Family Foundation Launches health08.org

The Bill Box

By Cat Vasko

House Approves Amendment to Block Medicare Inpatient Reimbursement Cut

On July 19, the House voted 412-12 to approve an amendment to an FY08 Labor-HHS-Education appropriations bill that would block the 2.4% cut in Medicare inpatient hospital reimbursement proposed by the Centers for Medicare and Medicaid Services (CMS). The rule contains a behavioral offset provision that assumes hospitals will bill Medicare for services reimbursed at higher rates in response to changes that tie payments to the severity of a patient’s condition.

Rep Jerry Weller (R-Ill) opined that the cut was a preemptive strike against hospitals, and said the amendment would ensure that “any adjustments made for coding changes will be based on the actual experiences of the hospitals, not mere conjecture.”

But because the bill provides 3% more than the Bush administration requested for the National Institutes of Health (NIH), and 8% more for the Centers for Disease Control and Prevention (CDC), Bush has threatened to veto it.

“The underlying bill obviously has issues, and I don’t know what the fate of it is,” said Federation of American Hospitals president Chip Kahn. But if it is not passed this time around, “it will come back in an omnibus,” Kahn predicted.

CHAMP Bill Passes House; Bush Vows to Veto

The new Children’s Health and Medicare Protection (CHAMP) Act of 2007, designed to extend and expand funding for children’s health care under the State Children’s Health Insurance Program (SCHIP), passed the House on August 1. But the bill could result in reimbursement cuts of up to 40% for interventional radiology procedures.

“While SIR supports the cause of extending and expanding funding for indigent children, this legislation includes language promoting a ‘fix’ to the SGR method of calculating physician reimbursement that would cause a major loss of access for Medicare beneficiaries to many types of minimally invasive therapies,” the Society of Interventional Radiology (SIR) states in a “call to action” posted on its Web site.

“This current piece of legislation does not recognize the difference between older, more invasive, less targeted therapies (whether major surgeries or minor procedures) and the newer, less invasive, highly targeted therapies that will form the basis of personalized medicine,” the statement continues.

The legislation would enact 21% cuts for procedures including minimally invasive surgeries and 21% cuts for imaging-related surgeries. President Bush has vowed to veto both the House and Senate versions of the bills, which have yet to be reconciled; the Senate version would cost around $15 billion less than the House version and has the support of key Republican Senate leaders, including sponsors Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa).

New Bill Would Revise Medicare QIO System

A new Senate bill introduced by Max Baucus (D-Mont) and Charles Grassley (R-Iowa) would revise the Medicare quality improvement organization (QIO) system by making it illegal for QIOs to conduct investigations of beneficiary complaints about health care providers when they serve as consultants for those providers.

“It seems there is a consensus that the QIO program could be doing more to help improve the quality of care,” Baucus said.

S 1947 would establish new Medicare Provider Review Organizations (MPROs) to investigate complains from beneficiaries; CMS could contract with current QIOs to serve as MPROs, but not in the same states in which QIOs serve as consultants for providers. CMS currently pays about $300 million annually to contract with 53 QIOs, which are theoretically charged with investigating complaints from Medicare beneficiaries. But recent studies by the Government Accountability Office (GAO) and others on these organizations show that they tend to focus more on their work as consultants for health care providers than on complaints.

Grassley called the current QIO system “a program in desperate need of reform,” noting that it costs “more than $1 billion every 3 years with little measurable results.”

Oregon Payor Reinstates CAD Payments

By Cat Vasko

In late June, insurer ODS Co, Portland, Ore, sent a ripple of panic through the radiology world when the company announced its decision not to reimburse for computer-aided detection (CAD) on any imaging study, including mammography.

Less than a month letter, ODS revoked the decision in a July 18 letter to health care providers in its network, assuaging the fear felt by many that the decision would prompt other third-party payors to re-fuse to reimburse for CAD.

The original decision was inspired by an April 5, 2007, New England Journal of Medicine study. The report showed that CAD made no significant improvement to the overall diagnostic accuracy of sites using it. Many in the industry, however, questioned its methodology, particularly in light of the volume of preexisting clinical validation of CAD.

ODS Medical Director Csaba Mera, MD, said in the letter that the company had changed its decision after detailed review of additional literature on the subject. “While some controversy remains around the value of CAD for mammography, we will await the results of additional well-designed studies to make any changes in our coverage of CAD for mammography,” he wrote.