MedPAC Report Fails to Sway Congressmen

The Congress prefers not to give up its power over Medicare reimbursement even though its main advisory authority - the Medicare Payment Advisory Commission (MedPAC) - has asked it to 'loosen the reins' a little bit to allow Medicare to save money and provide better care for American citizens.

In a presentation June 23rd, 2010, MedPAC Chairman Glenn M. Hackbarth, J.D. delivered its new report Aligning Incentives in Medicare and asked the Committee on House Energy and the Commerce Subcommittee on Health for additional regulatory authority to make changes.

The changes of great interest to physical therapists focus on limiting the "in-office ancillary services" exception to the Stark II anti-kickback statutes ("the Stark loophole").

MedPAC recommends changes in the short run that limit the ability of physicians to qualify for the "in-office ancillary services" exception. MedPAC also recommends changes in the long run that reduce physicians' financial incentive to order excessive physical therapy services.

Here is part of Chairman Hackbarth's statement (from CQ.com):

"...Therefore, the preferred approach to address self-referral is to develop payment systems that reward providers for constraining volume growth while improving the quality of care.

Because it will take several years to establish new payment models and delivery systems, policymakers may wish to consider interim approaches to address concerns raised by the growth of ancillary services in physicians` offices.

The Commission had not yet made recommendations, but it does explore the pros and cons of several options in more detail:

• excluding therapeutic services such as physical therapy and radiation therapy from the IOAS exception,
• excluding diagnostic tests that are not usually provided during an office visit from the exception,
• limiting the exception to physician practices that are clinically integrated,
• reducing payment rates for diagnostic tests performed under the exception,
• improving payment accuracy and creating bundled payments, and
• adopting a carefully targeted prior authorization program for imaging services."

The House sub-committee, however, doesn't want to cede the Congress' control of Medicare to Health and Human Services (HHS) or to the Centers for Medicare and Medicaid Services (CMS).

Here is the statement of Frank Pallone, Jr., Chairman, U.S. Subcommittee on Health:

"I am not in favor of giving carte blanche to the Secretary of HHS or the CMS Administrator.

I believe that this Committee and the Members who serve on it carry out an important oversight and regulatory role and I am not eager to hand over all of our responsibilities to effectively manage this program to our good friends at HHS."

Can the Congress effect MedPACs recommendations despite the political power of the American Medical Association (AMA)?

The recent failure of Senate Republicans to support HR 4213 (American Jobs and Closing Tax Loopholes Act of 2010) on Friday June 18th lead to enactment of the 22% negative update to the Medicare Physicians' Fee Schedule for the first time in years.

Have Republicans Senators abandoned the AMA? How much political clout do doctors have left?

If the Congress wants to retain its authority to regulate Medicare but doctors are losing their influence over Congress can physical therapists step in and effectively advocate to close the Stark II "loophole"?