House Committees Release SGR Proposals

Today, the Energy and Commerce and Ways & Means Committees released a document providing more information on their plans to repeal and replace the Medicare SGR formula.  (Background information on the SGR is available here.)  In February the Committee released an initial framework setting forth a high-level reform development processes and principles.  (A copy of that document is available here.)

The document released today provides greater detail on the Committees’ proposals to replace the SGR.  Specifically, the plan would be implemented in three phases:  Phase I would repeal the SGR and replace it with a series of stable updates.  Phase II would reward providers for the quality of care they provide.  Phase III would build upon the Phase II improvements and would also reward providers for their efficiency.  The Committees are accepting comments on their proposal by April 15th.

A permanent fix to the SGR seems more likely given the Congressional Budget Office’s (CBO) revised score estimating that a permanent fix would now cost $138 billion (almost half its 2012 estimate of $243.7 billion).  Additional information on the CBO score can be found here.

MedPAC Recommends Changes in Medicare Payments

On Friday, March 15, 2013, the Medicare Payment Advisory Commission (MedPAC) released its annual report to Congress in which it recommended annual rate adjustments for Medicare’s fee-for-service providers.  A copy of the 435-page report is available here and the executive summary is available here.

Specifically, MedPAC made recommendations related to inpatient and outpatient hospitals; physicians and other health care providers; ambulatory surgical centers; outpatient dialysis; skilled nursing facilities; home health agencies; inpatient rehabilitation facilities; long-term care hospitals; and hospice.  In addition, MedPAC’s March report also discussed the status of the Medicare Advantage and Medicare Part D programs.

MedPAC is required by Congress to provide annual “updates” – or changes to Medicare payment policies.  While MedPAC is widely seen as an influential body, its recommendations have no force of law – Congress must enact legislation to implement MedPAC’s recommendations.

Senate Confirmations of Presidential Nominees

This is the third of a three-part series on federal agency vacancies, nominations, and Senate confirmations.

As President Obama begins a new term in office, so too will a number of Cabinet secretaries and other high ranking Administration officials. While some opt to stay on for a second term, many choose to depart after four years (or perhaps might be asked to consider leaving). After considerable scrutiny and deliberation not only of qualifications but political considerations, the President makes his nominations. Administrations generally seek to appoint people whose nominations they believe will not be controversial and will sail through the confirmation process.  Although sailing through the confirmation process is something that just doesn’t happen that often anymore.  Just because a President feels that certain individuals are best suited for these roles does not guarantee that they will be appointed. Prior to assuming the helm of various departments and agencies, the nominees must be confirmed by the United States Senate. And just how does this process work?

Nominees for cabinet secretaries and other high ranking positions (CIA director, for example) are first vetted by the executive branch. Various issues are considered; conflicts of interest, adjudicated; and potentially embarrassing personal situations are identified. Once the President announces a choice for a position, the nomination is officially transmitted to the Senate where it is referred to the committee of jurisdiction for consideration. Typically, the nominee is required to provide certain background information to the committee and to appear before the committee at a confirmation hearing. The committee also requires the nominee to respond to a questionnaire designed to elicit information apart from that it receives from the executive branch.

The nominee typically arranges “courtesy calls” in advance of the hearing with all committee members. These meetings usually take place in private, outside the glare of the public spotlight and before the nominee formally appears at his or hear confirmation hearing. If a senator has concerns about the nomination he or she will typically raise them in this initial meeting and have the nominee respond informally. If the senate is satisfied with the response, the issue is not likely to be pursued at the hearing.

The confirmation process will typically address issues that have been identified in the course of this preliminary process. If the preliminary process did not identify issues of significance, the confirmation hearing will likely consist of opening statements by the members and nominee, followed by questions which often seem halfhearted and mechanical. While to the outside world, the committee may appear to be letting the nominee off the hook, a perfunctory hearing means that the committee has conducted a thorough inquiry and found nothing significant. On the other hand, if the preliminary inquiry identified issues, the hearing process will expand as necessary to flesh them out to the satisfaction of the members concerned.

Then there are the political considerations.  Sometimes a nomination hearing may prove to be contentious not because of anything that the nominee has done but because of some Senators may want to make a point on underlying issues.  For instance, we have had four acting heads of the Centers for Medicare and Medicaid (CMS) because the underlying issues regarding health care reform sunk nominees regardless of the nominees qualifications.

Following the confirmation hearing, the committee reports the nomination, usually with its recommendation, to the full Senate for confirmation or rejection by a simple majority. If the nominee is approved, he or she is sworn in and immediately begins their duties.  Stay tuned to see who gets appointed to what and how long it takes for confirmation…

CMS Releases Sequester Guidance

It’s been one week since the sequester provided under the Budget Control Act of 2011 has been in effect.  (For additional information on the sequester, see here.)  This afternoon, CMS released the following notice to all health care professionals:

To All Health Care Professionals, Providers, and Suppliers

Mandatory Payment Reductions in the Medicare Fee-for-Service (FFS) Program – “Sequestration”

The Budget Control Act of 2011 requires, among other things, mandatory across-the-board reductions in Federal spending, also known as sequestration. The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months. As required by law, President Obama issued a sequestration order on March 1, 2013. The Administration continues to urge Congress to take prompt action to address the current budget uncertainty and the economic hardships imposed by sequestration.

This listserv message is directed at the Medicare FFS program (i.e., Part A and Part B). In general, Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment. Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

The claims payment adjustment shall be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction. The Centers for Medicare & Medicaid Services encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare’s reimbursement.

Questions about reimbursement should be directed to your Medicare claims administration contractor. As indicated above, we are hopeful that Congress will take action to eliminate the mandatory payment reductions.

Please continue to check back for more information. We will be providing updates as the sequestration unfolds.

Repost – Dewonkify: Sequestration

Word: Sequestration (related words:  sequester; sequestered)

Definition:  A fiscal procedure rarely included in budget-related legislation that calls for automatic spending cuts to all federal discretionary and most mandatory federal spending programs, ranging from Medicare to military spending.

Used in a Sentence: “Sequestration Now in Mainstream Consciousness

History: The Budget Control Act of 2011, enacted August 2011, authorized an increase in the federal debt ceiling in exchange for $2.4 trillion in deficit reduction over the next ten years. This total includes $1.2 trillion in spending cuts identified by the legislation, with an additional $1.2 trillion that was to be determined by a bipartisan group of Senators and Representatives known as the “Super Committee.” In the event the Super Committee failed to reach agreement, the bill created a trigger mechanism to implement spending cuts through sequestration. In November 2011, the Super Committee announced it could not reach an agreement and, as such, the scheduled sequestration would move forward in January 2013 unless Congress acted to stop it prior to December 31, 2012. To see the budgetary impact of various proposals to replace the sequester, click here for a Congressional Research Service report. Additionally, the Office of Management and Budget released a report in August on the impact of sequestration on federal agencies. For more on sequestration and the fiscal cliff, click here.

Presidential Nominations

This is the second of a three-part series on federal agency vacancies, nominations, and Senate confirmations.

Article II, Section 2 of the Constitution grants the President the power to appoint a number of positions including:

  • Ambassadors;
  • Federal judges, including Supreme Court Justices;
  • Cabinet members/federal department heads; and
  • Other specified positions within the federal government, including certain military posts, officers within cabinet and independent agencies, other positions within the Foreign Service and uniformed civilian services, U.S. attorneys, and U.S. marshals.

The President now appoints more than 300 positions within the 14 cabinet agencies and more than 100 positions in independent and other agencies (the Central Intelligence Agency, National Labor Relations Board, National Science Foundation, Securities and Exchange Commission, etc.). Each session of Congress, approximately 4,000 civilian and 65,000 military nominations are submitted by the President.

For most Presidential appointment with Senate confirmation (PAS) positions, the term of service ends with the term of the appointing President. Some independent agency positions have fixed terms and Supreme Court justices are nominated for life.

Once the President makes a nomination to a one of these positions, the nominee must be confirmed by the Senate. The Constitution gives the Senate sole approval power for Presidential nominations. Presidential nominations must be acted upon within the same Congress (two-year period) in which they are nominated otherwise the nomination “dies,” as do bills at the end of a Congress.

Following the President’s announcement of a nomination, high-profile nominees (Supreme Court nominees, Cabinet Secretary nominees) generally make the rounds on Capitol Hill prior to their confirmation hearing. Some nominees may meet with just Senate leadership and Members on relevant committees while others, depending on how controversial their nomination is seen, may attempt to meet with nearly all 100 Senators. When Sonia Sotomayor was nominated to the Supreme Court in 2009, she met with a large number of Senators; in contrast, Senator John Kerry, who was recently nominated to serve as Secretary of State, did not hold as many formal meetings during his nomination and confirmation process. During this time, Senators also review the nominee’s background and credentials in preparation for a hearing and vote.

Congress – In or Out?

Congress is regularly lampooned for its frequent recesses, and with some reason.  The House was in session for only 153 days in 2012, and the Senate 152.  And in each case, more than a dozen of those “legislative days” were in fact pro forma sessions where no legislative business occurred.

Of course, Members of Congress are not simply vacationing during these down periods.  Most use the time to go home to their districts and meet with their constituents.  This too is an important part of their responsibilities as public servants.  But the frequent recesses and short work weeks can create confusion about when, exactly, Congress will be in D.C.

As a general rule, the House and Senate come into session each week late on Monday and conclude legislative business late on Thursday.  This allows Members from far-flung states to travel to and from home on weekends.  In addition, each chamber currently has seven extended “state work periods” planned for 2013:

  • President’s Day Week (February 18-22)
  • The two weeks surrounding Easter (March 25 – April 5)
  • April 29 – May 3
  • Memorial Day Week (May 27-31)
  • Independence Day Week (July 1-5)
  • August Recess (August 5 – September 6)
  • Columbus Day Week (October 14-18)

You can view the Senate calendar here and the House calendar here.

Because this is not an election year, both chambers will be in during October and November, with a likely adjournment in early to mid-December.

However, while these schedules are a good guide, the recess dates – and the general Congressional workweek – are always subject to change if and when major legislation must move.  This has often been the case in recent years, and is likely to continue into this year as we press up against deadlines for sequestration, funding the government, and extending the federal debt limit.  If you want to see whether the House or Senate is in for a given day, you can check the daily schedules on the main page at and

New Score, New Hope for SGR Fix?

Yesterday, the Congressional Budget Office (CBO) released its Budget and Economic Outlook for fiscal years 2013 through 2023 (a copy is available here).  Included in the report was a reference to Medicare payments for physician services – the so-called “doc fix” that has plagued the health policy world since 2002.  (For additional information on the SGR, see DBR’s dewonkify and DBR blog posting on CBO’s August 2012 SGR score.)

In the report, CBO now estimates that a 10-year freeze to physician payments would cost $138 billion – significantly lower than the $243.7 billion CBO estimate released on November 1, 2012 (available here).  Why the change?  As explained in footnote 21 on page 31, CBO now estimates lower spending on physician services.  The amount of the SGR cut depends on the difference between actual spending and targeted spending (if actual spending is higher than targeted spending, it results in a cut to physician payments).  However, CBO now estimates that actual spending will be less than the spending targets, which means that physicians could see an increase in reimbursement beginning in 2015.

All of this is good news for those that wish to repeal and replace the SGR.  Today, Representatives Allyson Schwartz (D-PA) and Joe Heck (R-NV) introduced The Medicare Physician Payment Innovation Act, legislation that would permanently address the SGR issue.  Similar to legislation they introduced in the 112th Congress, this bill would permanently repeal the SGR.  All physician payments would be frozen until 2014.  Between 2015 and 2018 primary care services would receive a 2.5 percent increase in reimbursement, while all other physician services would receive a 0.5 percent increase.  Centers for Medicare & Medicaid Services (CMS) would test and evaluate new payment models and by October 1, 2017, would issue a menu of options available to providers.  (Additional information on the Schwartz-Heck legislation can be found here).

Temporary Executive Appointments

This is the first of a three-part series on federal agency vacancies, nominations, and Senate confirmations.

Presidents maintain innumerable responsibilities and one of the most important but least-appreciated is selecting qualified people to help him run the federal government.  Many of the leadership positions are at the “political” level and require Senate confirmation.  While nominations can occur at any time when there is a vacancy to be filled, the shift between a first and second presidential term is a very common time for political appointees to step-down and for new people to be nominated to serve.  This piece focuses on how presidentially appointed, Senate-confirmed executive branch positions (PAS positions) may be filled temporarily before a permanent, confirmation occurs.  Vacancies are filled in one of three ways.

  • Under the Federal Vacancies Reform Act of 1998 (P.L. 105-277);
  • By recess appointment; or
  • Through provisions regarding position-specific temporary appointments specifically provided for by law.

It is important to note that these methods do not require the temporary appointee to undergo the usual Senate confirmation process.  The Vacancies Act allows for three ways that a vacant position may temporarily be filled:

  • The first assistant to such a position may automatically assume the functions and duties of the office;
  • The President may direct an officer who is occupying a different advice and consent position to perform these tasks; or
  • The President may select an officer or employee who is occupying a position in the same agency – such an employee must be making a salary equal to or greater than the GS-15 level and must have been with the agency for 90 days of the preceding year.

Appointees under the Vacancies Act have full authority to perform the duties and functions of the office.  However, such temporary appointments only last for 210 days after the date of the vacancy, or 210 days after the Senate reconvenes if in recess when vacancy occurs.  The 210 day time restriction may be waived if:  (1) the first or second nomination to the position is pending before the Senate; or (2) a permanent nomination has been rejected or withdrawn, the temporary appointment may be extended for an additional 210 days.

For example, in April 2010 during his first term, President Obama nominated Dr. Donald Berwick to serve as the Administrator of the Centers for Medicare & Medicaid Services (CMS) in the U.S. Department of Health and Human Services (HHS).  Berwick’s nomination faced significant opposition from Republicans in the Senate, and it was doubtful whether the Senate would vote to confirm his nomination.  Facing such opposition and the need for an Administrator as CMS was facing health care reform implementation, in July 2010, the President appointed Berwick to the top CMS post through a recess appointment.  Because Berwick had been appointed through a recess appointment, he was unable to serve his position indefinitely (as he would have had he received Senate confirmation).  Thus, on December 2, 2011, Dr. Berwick resigned as CMS Administrator because it was unlikely that the Senate would confirm his nomination.  Since then Marilyn Tavenner has served as the Acting Administrator for CMS, after having served as the CMS Principal Deputy Administrator.

Additionally, for temporary appointments filled in the first 60 days after a new President is inaugurated, the 210 restriction period does not begin until after the first 90 days following the inauguration.  So, for example, anyone the President nominates for a position between now and the end of March, the 210 day “clock” does not start until 90 dates following the inauguration.

For more information on temporary appointment procedures, see the January 2008 Congressional Research Service Report (CRS) “Temporarily Filling Presidentially Appointed, Senate-Confirmed Positions” (available through Open CRS).

On Friday, January 25, 2013, a federal appeals court ruled that President Obama’s 2012 recess appointments to the National Labor Relations Board (NLRB) were unconstitutional. The three-judge panel ruled that, as pro forma sessions were held during the “recess” that these appointments were made, the Senate remained in session and therefore these nominations violated the Constitution. The court stated that recess appointments must be made during official recess, defined as the break between sessions of Congress. It has been suggested that this ruling may limit the Presidential ability to bypass the Senate in the appointment process.

Amy Walker and Anna Howard contributed to this posting.

House Passes Debt Ceiling Bill

This afternoon, the House of Representatives passed (by a vote of 285-144) legislation that would temporarily suspend the debt ceiling until May 19, 2013.  (A copy of the recorded vote is available here.)  As previously reported, the U.S. hit its debt limit at the end of the 2012 and Treasury Secretary Geithner was utilizing “extraordinary measures” to avoid default on the nation’s obligations.  (For more information click here.)

Under the legislation (H.R. 325) the debt ceiling would be suspended until May 19, 2013.  In addition, as of April 15, 2013 Members of Congress would have their paychecks suspended until their House of Congress passes a budget resolution.  In other words, if by April 16th the House of Representatives passes a budget, but the Senate does not, then House members will receive their paychecks, but Senators will not (until such time as they pass a budget or until the last day of the 113th Congress).

Senate Majority Leader Harry Reid (D-NV) has indicated the Senate will pass the legislation.  In its Statement of Administrative Policy (available here) the White House indicated that it will not oppose the legislation, but urged Congress to enact a long-term solution to the “self-inflicted fiscal crisis.”  A Congressional Budget Office (CBO) analysis of the legislation is available here.