In This Issue...


House Passes Bill to Avoid 2013 Budget Cuts

On May 10th, the House of Representatives passed legislation, H.R.5652, the Sequester Replacement Reconciliation Act of 2012, to cut federal spending by $98 billion in fiscal year 2013. Under the Budget Control Act of 2011, Congress must meet certain deficit reduction goals to prevent automatic payment cuts in federal programs. To achieve the 2013 target, the House would:

  • Adopt medical liability reforms;
  • Tighten the federal contribution limits to Medicaid;
  • Cut funding for preventive services under health care reform; and
  • Consolidate employment training programs.

The legislation leaves in place a two percent cut in Medicare spending, including clinical laboratory payments. The Senate is unlikely to take up this bill before the election, when it will draft its own deficit reduction package. For a summary of the House measure, please go to the House Budget Committee Web site.

CMS Publishes Final Rule on Hospital CoP

The Centers for Medicare and Medicaid Services (CMS) recently released its final rule revising the conditions of participation (CoP) requirements that hospitals and critical access hospitals (CAHs) must meet to order to participate in the Medicare and Medicaid programs. According to CMS, the rule changes will save the health care system $940 million annually. One of revisions permits CAHs to outsource laboratory testing. The agency states:

“We believe that this change will enable CAHs to address staffing issues and to provide better access to quality health care. However, with this revision to provide CAHs with the flexibility to contract or arrange for patient services, we expect CAHs to ensure that they provide services that would facilitate timely diagnosis and treatment of their patients… We expect that delivering timely services will be best achieved by providing CAH services on-site at the CAH as much as possible, whether through CAH employees or through a contract or arrangement.”

This rule takes effect 60 days after its publication in the Federal Register. To see a copy, please go to the Federal Register Web site.

House Energy and Commerce Panel Approves User Fee Bill

On May 10th, the House Energy and Commerce Committee unanimously approved H.R.5651, the Food and Drug Administration Reform Act, to extend the current medical device user fee program for another five years. The bill, which will go to the House floor shortly, would:

  • Require the FDA to withdraw its July 2011 510(k) modifications guidance;
  • Streamline the de novo process;
  • Require FDA reviewers to provide the scientific and regulatory rationale for major decisions; and
  • Reaffirm the least burdensome requirement for FDA decisions.

In addition, the legislation requires the FDA to notify Congress 60 days prior to issuing guidance on laboratory-developed tests and grants the HHS Secretary authority to waive medical device user fees in the interest of public health. The FDA has stated that it would use that authority to waive user fees for laboratory-developed tests if it chooses to regulate them. An overview of the bill can be found on the Committee Web site.

CMS Releases Final Regulatory Reform Rule

The Centers for Medicare and Medicaid Services (CMS) released a final rule detailing rule changes to federal insurance programs to eliminate duplicative, overlapping and outdated requirements. The agency projects that the rule changes will save providers and consumers $200 million in the first year. Included among the reforms are changes to the Medicare Part A and Part B claims determinations appeals process. To see a full listing of the regulatory changes, please visit the Federal Register Web site