Washington Update - April 2013

Sequester Affects Programs for Older Adults

The sequester—the sweeping, automatic federal budget cuts that took effect March 1—continued to make headlines as this issue of Annals of Long-Term Care® went to press.

In mid-March the House and Senate passed and President Obama signed a stop-gap funding plan without which the government would not have had funds to keep operating. The American Geriatrics Society (AGS) has been advocating for, and will continue to advocate for, adequate funding for Medicare and other essential healthcare programs for older Americans.

The sequester affects hospitals and providers in a variety of ways. Veterans’ programs, Medicaid, and Medicare entitlements are exempt from direct sequestration cuts. But Medicare providers face a cut that is not to exceed 2%. A proposed 8.2% across-the-board cut to domestic programs—including Title VII and VIII Geriatrics Workforce Training Programs and the National Institute on Aging—was later reduced to a 5.1% cut.

Cutting Medicare funding in an attempt to shrink the deficit will simply shift healthcare costs to the private sector, Department of Health and Human Services Secretary Kathleen Sebelius noted in a recent White House briefing.

Medicare and Medicaid are not driving increased healthcare costs, the Secretary explained. In fact, expenditures for these essential programs are increasing more slowly than private-sector healthcare costs. “You don’t do anything about the trajectory the US is on...unless you concentrate on the (actual) underlying costs,” she added.

The secretary cited new findings indicating that, with the Affordable Care Act in place, the Medicare spending rate is the lowest it has been in 50 years. In addition, Medicaid spending dropped 2% in 2012.

In a related development, the Washington Post reported last month that the Affordable Care Act has also helped hospitals reduce readmission rates. Data show that, nationwide, hospital readmissions of Medicare patients within 30 days of discharge dropped to 17.8% in November after remaining fixed at 19% for more than 5 years.

The Affordable Care Act continues to face harsh criticism from Republicans, however. In March, Senator Ted Cruz (R-Texas), Marco Rubio (R-FL), and other legislators vowed to again attempt to repeal or defund it.

President Obama named the final three members of the 15-member Commission on Long-Term Care in March. Two months earlier, lawmakers repealed the Community Living Assistance Services and Supports (CLASS) Act—legislation that called for creating a nationwide, voluntary, long-term care insurance program for older adults and others needing long-term care. Deeming CLASS financially unviable, Congress called for the creation of the commission, charging it with developing a viable alternative. The commission has 6 months to come up with a plan for long-term care, including recommendations for financing care. See the AGS Viewpoint on page 10 for more information on this Commission and its appointed members.

The Centers for Medicare & Medicaid Services (CMS) will postpone making rules for stage 3 of the Meaningful Use of Electronic Health Records (EHRs) initiative until next year, CMS Acting Administrator Marilyn Tavenner announced in early March. In the meantime the agency will continue to evaluate progress with earlier stages of the initiative. The agency also announced that it had issued a request for information from stakeholders regarding how new payment models impact the use of EHRs.

According to a recent study cited in JAMA Internal Medicine, there may be a drawback to EHRs: the records may have the unintentional side effect of creating information overload for doctors in certain circumstances. Nearly one-third of doctors surveyed from June 2010 to November 2010 reported missing an alert and, as a result, creating a delay in patient care. The study also noted, however, that primary care doctors who were more comfortable with electronic record systems were less likely to report missing alerts.

On March 14, Representatives Aaron Schock (R-IL) and Allyson Schwartz (D-PA) introduced the Training Tomorrow’s Doctors Today Act. The legislation would create 15,000 new Graduate Medical Education (GME) slots around the country over 5 years. If enacted into law, this would be the first increase in GME slots in nearly 15 years. The number of federally funded residencies has been frozen since 1997.

Because the American Geriatrics Society’s (AGS) Hill visits focused on educating staff about geriatrics as a primary care discipline and the need for a workforce that is competent to care for older adults, the Training Tomorrow’s Doctors Today Act now includes geriatrics as a primary care discipline. In addition, the General Accountability Office (GAO) conducts a study to address the competency of the physician workforce to care for older adults upon completion of residency training.

The GAO report is to be completed and sent to Congress within two years, with recommendations for legislation and administrative action as the Comptroller General determines appropriate. The inclusion of the study draws timely congressional attention to the competency issue, which will help bolster one of the AGS’s primary GME goals—ensuring that Medicare dollars devoted to GME produce clinicians who are competent to care for older adults. 

In addition to increasing the number of GME slots, the bill also increases flexibility for hospitals administering residency programs, creates a 2% IME payment adjustment based on patient care measures, increases transparency and accuracy in the GME program, and directs the GAO to conduct several reports related to the workforce (including the aforementioned one concerning older adults).

AGS very much appreciates the efforts of Representatives Schock and Schwartz for strengthening the nation’s GME program and helping ensure continued access to primary care. Given the growing shortage of primary care providers—including geriatricians, at a time when the population is aging—the society recognizes the GME system plays an important role in building the healthcare workforce.

American Geriatrics Society (AGS) President James Pacala, MD, and CEO Jennie Chin Hansen, RN, MS, voiced their support for the bipartisan Medicare Physician Payment Innovation Act of 2013 in an early February letter to Representative Allyson Schwartz (D-PA) and Senator Joe Heck, DO (R-NV). The lawmakers have proposed the legislation as an alternative to the current, untenable Sustainable Growth Rate formula.

“[The] AGS is very encouraged by the legislation’s strong emphasis on primary care, which is the cornerstone of high quality, effective and coordinated care in older adults with chronic and complex conditions,” the letter notes. “We also commend the provisions to accelerate the development, evaluation, and transition to new payment and delivery models.”

In a related development, Representative Fred Upton (R-MI), chair of the House Energy and Commerce Committee, told physicians that he hopes to send “doc fix” legislation to the House floor this summer.

In his February State of the Union Address, President Obama mentioned two potential changes to Medicare. Touching on current policy that charges wealthier Medicare beneficiaries more for their coverage, the President noted his support for making additional changes in this vein to raise additional funds for the program.

The President also proposed that drug companies provide dual-eligible Medicare beneficiaries the same drug discounts that beneficiaries who are solely eligible for Medicaid now enjoy. Drug companies, however, criticized the plan on the grounds that the change would necessitate their cutting back on research. According to the Congressional Budget Office, the change would, if enacted, result in savings of $112 billion over 10 years.