TITLE VII FUNDING, MEDPAC REPORT, DHHS AND MEDICARE DRUG PRICES, HOSPITAL PAY-FOR-PERFORMANCE PILOT PROGRAM

Following Intense Advocacy Campaign on Behalf of Title VII Geriatrics Health Professions Program Funding, President Signs Measure Restoring Funds 

In a victory for older Americans, President Bush signed legislation in February that restored funding for Title VII Geriatrics Health Professions Programs, federal initiatives that train a wide array of healthcare providers to better meet the unique healthcare needs of older adults. The Senate and House had earlier approved the legislation, which was part of a $463.5 billion budgetary Continuing Resolution (CR).

The legislation earmarks $31.5 million for Title VII Geriatrics Health Professions Programs for the remainder of FY 2007, restoring funding to FY 2005 levels. Congress eliminated funds for the programs in FY 2006, with disastrous results.

Title VII Geriatrics Health Professions funds support the nation’s Geriatric Education Centers (GECs), geriatric faculty fellowships, and Geriatric Academic Career Awards (GACAs). After a year without federal funding, both GECs and fellowship programs were at risk of closing.

The restoration of funding came in the wake of a concerted, year-and-a-half-long advocacy initiative on behalf of the programs that involved members of the American Geriatrics Society (AGS), the Association of Directors of Geriatric Academic Programs (ADGAP), and others committed to quality healthcare for older Americans. In record numbers, members and others joined AGS advocacy campaigns to urge lawmakers to restore funding for the programs. Please note, GECs will have to reapply for FY 2007 Title VII Geriatrics Health Professions Programs funding, according to the Health Resources and Services Administration (HRSA), which is now drafting applications for the funds and will post these on its website at https://bhpr.hrsa. gov/interdisciplinary/).

President Bush’s proposed 2008 budget would both eliminate all funding for Title VII Geriatrics Health Professions Programs next year, and make unprecedented cuts in Medicare spending that would further limit older Americans’ access to quality healthcare. AGS, ADGAP, and other concerned organizations are already advocating for continued—and increased—Title VII Geriatrics Health Professions Program funding in FY 2008 and other measures to ensure quality care to older citizens.

MedPAC Report Outlines Alternatives to the Sustainable Growth Rate But Stops Short of Recommending a Single Solution

In its long-awaited March 1 report to Congress, the Medicare Payment Advisory Commission (MedPAC) outlined alternatives to the controversial formula Medicare uses to calculate payments to physicians caring for beneficiaries. But the report, Assessing Alternatives to the Sustainable Growth Rate, (SGR), stopped short of recommending a particular fix.

Intended to control growth in expenditures for physicians’ services, the SGR, in essence, calls for cuts in Medicare physician fees whenever growth in these expenditures exceeds growth in Gross Domestic Product. Relying on the formula to contain costs is problematic, the report notes, because Congress regularly overrides SGR-mandated cuts in payments, providing temporary relief to physicians, but setting the stage for higher SGR-triggered cuts in subsequent years. This past December, Congress blocked a SGR-mandated 5% cut in 2007 physician payments, freezing rates at 2006 levels and offering a 1.5% bonus to physicians reporting basic quality data. The move now leaves Congress facing the prospect of an even heftier scheduled cut for 2008. President Bush’s proposed 2008 budget assumes a 10% cut in physician payments next year, though legislators have already gone on the record in opposition to the proposal.

The MedPAC report failed to recommend a specific alternative to the SGR because “significant disagreement exists within the Commission about the utility of expenditure targets,” the agency reported. Instead, it outlined two possible approaches for Congress. The first would involve repealing the SGR and coming up with a new protocol for updating physician payments. The second would involve replacing the SGR with a new expenditure target system.

“If the Congress chooses to pursue this path, the Commission has concluded that the target system should not apply solely to physicians,” the authors of the report advised. “Rather, it should ultimately apply to all providers. Controlling total Medicare expenditures and producing the optimal mix of services requires that all types of providers work together, not at cross purposes, to keep costs as low as possible while increasing quality.”

Any payment policies Congress adopts should reward all providers for efficiency and offer incentives for improved quality and care coordination, MedPAC further advised. “Polices such as pay for performance that link payment to the quality of care physicians furnish should be implemented,” Commissioners added. “At the same time, Medicare should encourage coordination of care and provision of primary care, allow gain sharing arrangements, bundle and package services where appropriate to reduce overuse, [and] ensure that prices are accurate,” among other things.

Regardless of which approach Congress ultimately takes, Washington must give the Centers for Medicare and Medicaid Services sufficient time, financial resources and “administrative flexibility” to develop, institute and refine payment systems that “improve value for both beneficiaries and taxpayers,” MedPAC concluded.

House Passes Bill to Require DHHS to Negotiate Drug Prices for Medicare Drug Benefit, But Measure Has Yet to Emerge from Senate

Legislation that would require the Department of Health and Human Services (DHHS) to negotiate lower drug prices with pharmaceutical companies on behalf of beneficiaries enrolled in Medicare’s prescription drug benefit won approval of the House of Representatives in January. As this issue of Annals of Long-Term Care: Clinical Care and Aging went to press, however, the measure had yet to emerge from the Senate, where it faces significant opposition. President Bush and the pharmaceutical industry strongly oppose direct DHHS-drug company negotiations.

The legislation the House has approved would override a provision in the Medicare Modernization Act of 2003 prohibiting the department from negotiating Medicare drug prices with pharmaceutical firms. The bill, however, does not call for changes that would allow the department to require a specific formulary—which some argue could undercut its ability to negotiate with pharmaceutical companies. Proponents of the bill argue that DHHS will still have leverage with drug makers and maintain that the bill will generate large savings.

According to the Bush administration and others critical of direct drug pricing negotiations, the private sector can do a better job of lowering drug prices for Medicare beneficiaries than the government can.

Recent Kaiser Family Foundation and AARP polls have found that at least 85% of Americans support direct government drug price negotiations for Medicare beneficiaries.

Hospital Pay-for-Performance Pilot Program Shows Improvements in Quality of Care, Is Extended for Additional Three Years

Second-year results from Medicare’s three-year hospital pay-for-performance pilot program showed such significant improvements in quality of care that the Centers for Medicare & Medicaid Services (CMS) recently extended the program for another three years.

Of the 266 U.S. hospitals participating in the program— the Premier Hospital Quality Improvement Demonstration—the vast majority provided better care for patients, CMS reported. The demonstration program focuses on five areas: treatment for heart attack, heart failure and pneumonia; hip and knee replacement; and coronary artery bypass graft.

In the second year of the program, more patients were getting recommended care in these areas, according to CMS. More patients were getting vaccines to prevent pneumonia, for example, and more patients admitted for heart attacks were getting aspirin at the hospital. All told, participating hospitals saw 1,300 fewer deaths treating heart attack patients alone and scored higher on a range of quality measures than other U.S. hospitals.

Following release of the second-year results, CMS awarded bonuses totaling nearly $8.7 million to the 115 hospitals that ranked in the top 20% in the five designated areas.

The system, however, isn’t perfect, even the heads of high-ranking participating hospitals acknowledge. It tends, they say, to evaluate hospitals based on whether they’re offering certain treatments rather than whether care is actually benefiting patients.

The three-year extension will allow CMS to look at new ways to measure and promote quality in hospital settings.