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  • Congressional Committee Takes First Steps on Payment Reform

    Addressing the flawed sustainable growth rate (SGR) brings Congress 1 step closer to overhauling the Medicare Part B payment system out of its current fee-for-service model. On July 31, the House Energy and Commerce Committee unanimously passed HR 2810, the Medicare Patient Access and Quality Improvement Act of 2013, to repeal the SGR.

    The committee's first move, in what is expected to be a months' long process, was to pass the specific policy provisions relating to repealing and reforming the SGR. In its current form the bill does not address Medicare "extenders," Medicare therapy cap repeal, or how to pay for the $139 billion cost of the legislation. Congressional indications are that the House and the Senate will begin to discuss these items following the planned congressional August recess. During deliberations of the legislation within the committee, several congressional champions for therapy pushed for inclusion of therapy cap repeal in the final legislation.

    HR 2810 includes 3 phases for payment reform:

    • Phase I repeals the current SGR formula and provides for a period of stable provider payments.
    • Phase II establishes a Quality Update Incentive Program (QUIP) to tie quality measures to payment.
    • Phase III analyzes new payment models to move providers out of the current fee-for-service system.

    With the February announcement from the Congressional Budget Office that the cost to repeal the flawed SGR formula had decreased from $243 to $139 billion, legislators have shown increased interest in repeal and reforming the current Medicare payment system. APTA has worked with the committee and provided feedback based on our SGR priorities as this legislation was being created. APTA continues to advocate for inclusion of a long-term solution to the therapy cap as this moves forward and will keep members informed as proposals move forward through Congress this fall. Members are encouraged to sign up for APTA's advocacy network, PTeam, to show support for APTA's policy priorities in this and other pieces of key legislation.

    Latest GAO Report on Self-Referral Bolsters Argument for Closing Loophole

    Yet another report from the Government Accountability Office (GAO) concludes that when physicians provide certain services in their own facilities instead of referring the service to an outside lab, the number of procedures increases, and costs go up. GAO released "Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny" yesterday.

    This third of 4 reports in GAO's self-referral investigation covered prostate cancer–related intensity-modulated radiation therapy (IMRT) services between 2006 and 2010. Among the findings are that self-referred services grew by 46% annually, from 80,000 in 2006 to 366,000 in 2010, while non-self-referred services decreased by 1% each year, from 490,000 to 466,000. In 2009, providers who self-referred Medicare patients with prostate cancer were 53% more likely to refer the patients for IMRT than for other less costly treatments. GAO estimated that, even including a $91 million decrease in expenditures by the non-self-referring provider groups, the higher rate of IMRT by self-referrers led to an overall increase in IMRT Medicare costs of $47 million between 2006 and 2010. The report also suggested that financial interest in one type of treatment over other less costly procedures may negatively affect a provider's decision-making process and, ultimately, patient care. Additional findings and conclusions are in the report.

    Studies such as this have prompted at least 1 member of Congress to act. Yesterday Rep Jackie Speier (D-CA) introduced the Promoting Integrity in Medicare Act, announcing during a press conference that it is intended to remove physical therapy and other health care services from the in-office ancillary services (IOAS) exception, which allows for self-referral. APTA and its partners in the Alliance for Integrity in Medicare, or AIM Coalition, strongly support this move to exclude these services from the IOAS exception.

    In its first 2 reports, GAO investigated self-referral in advanced imaging services and anatomic pathology, also concluding financial self-interest was driving the increases in referrals and spending.

    APTA anticipates the last—and most telling for our profession—report in the series, on physical therapist services, later this year.

    New Law Averts Doubling of Federal Student Loan Rates

    Instead of jumping to 6.8%, federal undergraduate student loan interest rates rise this year from 3.4% to 3.9%, as a result of the Bipartisan Student Loan Certainty Act. Graduate rates drop from 6.8% to 5.4% and Parent PLUS rates to 6.4%. For all 3 programs, the interest rate is fixed for the life of the loan.

    After a month of negotiations, US House of Representatives passed the bill on July 31, and the President Obama now is expected to sign it. (The Senate passed the bill earlier in July.) This legislation lowers interest rates for undergraduate and graduate Stafford loans and for Parent PLUS loans beginning July 1, 2013.

    Interest rates will be calculated using a formula based on the 10-year Treasury note. Students lock in the rate in effect at the time they take out a loan, but future rates could vary based on the market. With this in mind, this legislation also puts a cap on interest rates in the future: 8.25% for undergraduates, 9.5% for graduates, and 10.5% for PLUS loans.