In This Issue...

MedPAC Proposes Cut in Lab Payments

The Medicare Payment Advisory Commission (MedPAC), an independent advisory panel to Congress, makes bi-annual reports to Congress recommending ways to improve the Medicare program.  In its March report, MedPAC suggests two approaches to reforming the seniors' insurance program: 

  • "First, payment reforms, such as penalties for excessive readmission rates and linking some percentage of payment to quality outcomes, need to be implemented more broadly.
  • Second, delivery system reforms that encourage high quality, better care transitions, and more efficient provision of care, such as medical homes, bundling, and accountable care organizations (ACOs), need to be monitored and successful models adopted on a broad scale."

Also included among the options to reduce Medicare spending is a proposal to cut the clinical laboratory fee schedule by ten percent to pay for a permanent fix of the ongoing problem with the physician sustainable rate growth.  MedPAC estimates that the adoption of this recommendation would generate $4 billion in savings over five years and $10 billion over ten years.   If you would like a copy of this recommendation, please go to page 392 of the MedPAC report.

House Republicans and Senate Democrats Release Budget Plans

The House Budget Committee has approved the Republican fiscal year 2014 budget plan, which would cut federal spending by $4.6 trillion over the next ten years. The GOP measure would repeal the Affordable Care Act, means-test Medicare, and establish block grants for Medicaid. The Republican proposal would also cut Medicare an additional $129 billion while retaining the $716 billion in cuts included in ACA.  The House bill would also eliminate the Independent Payment Advisory Committee, which is authorized to make cuts in Medicare spending without congressional approval.  To see a copy of the House proposal, please go to the House Budget Committee Website.

Senate Democrats are advocating a different budget approach with more emphasis on job creation than deficit reduction.   The Democratic proposal would reduce the deficit by $1.85 trillion over the next decade, with half of the savings coming from new cuts and the other half through new taxes.  Senate Democrats are proposing $275 billion in health savings.  Part of these savings could come from greater use of bundling and/or pay for performance measures.   The plan also includes $100 billion to create jobs and improve the nation's infrastructure.  A copy of the Senate proposal is available on the Senate Budget Committee Website.  Both chambers are expected to pass their budget blueprints by the end of March. 

HHS Announces Aggressive Agenda to Promote Health IT

The Department of Health and Human Services (HHS) is planning to accelerate the use of health information technology in 2013.  The Department is hoping to:

  • get 50 percent of physician offices using electronic health records this year and 80 percent of eligible hospitals receiving meaningful use incentive payments;
  • increase interoperability among providers;
  • make Medicare records available to more beneficiaries online;
  • implement the meaningful use rules, so that data can be exchanged between health systems; and
  • promote greater use of IT for program integrity purposes. 

For more information about the Department's plans, please visit the HHS Website.


  • House Energy and Commerce Subcommittee on Communications and Technology held a hearing on March 19th on how FDA regulations and taxes could affect mobile medical apps.  Check out the subcommittee website for more information.
  • HHS Announced that the Affordable Care Act has resulted in 71 million Americans with private insurance getting free preventive care.