One repeal that both Republicans and Democrats can agree on is the need to repeal the sustainable growth rate (SGR) formula used to calculate physician payment updates under Medicare. Both the House and Senate committees with jurisdiction over Medicare have been conducting hearings to examine transitioning physicians to a more value-based system that rewards physicians for quality outcomes and efficiency of care. Most of the witnesses agreed that our payment system needs to improve care coordination, quality and efficiency. Both committees have sought input from physician stakeholder groups on experience with quality improvement programs and ways to transition physicians to a new payment model. Review AGA’s letter to the House Ways and Means Health Subcommittee.

The Ways and Means Committee is currently crafting a proposal with the goal of marking up a bill this summer. All parties agree that Congress must move on repealing the SGR since the Congressional Budget Office scored the repeal at $113 billion, more than half of what the estimate was last year, before the estimate increases.

The AGA will continue to monitor this critical issue to gastroenterologists and will continue to provide input to the committees as they craft their proposals on Medicare payment reform.

Assumes SGR Repeal
Of interest to health-care providers, the budget assumes that the sustainable growth rate (SGR) formula is repealed and replaced with a 0 percent update. The budget also states that physicians should be given a period of several years of stable payments while HHS develops new payment models that tie physician reimbursement updates to participation in quality improvement models that are ultimately based on quality and efficiency. Although this language is not binding, it demonstrates that the administration wants to continue to move toward a more value-based payment system that links payment to quality outcomes.

The language in the president’s budget is very similar to language being developed by Republicans on the House Ways and Means and Energy and Commerce Committee to reform the SGR. The committees have briefed AGA and the physician community on their proposal and have sought our input. AGA submitted comments to the committee recently in which we outlined our concerns and pointed to our development of quality improvement initiatives in gastroenterology with both Medicare and private payors.

Strengthens IPAB
The president’s budget includes language to strengthen the Independent Payment Advisory Board (IPAB), which the AGA has opposed since it was first announced since it will disproportionately impact physicians. The president lowered the target rate that triggers the IPAB to GDP + 0.5 percent. However, AGA continues to oppose IPAB and supports legislative efforts by Rep. Phil Roe, R-TN, and Sen. John Cornyn, R-TX, that would repeal the IPAB (H.R. 351/S.351).

Eliminates In-Office Ancillary Services for Some Services
The president’s budget includes language that would eliminate the in-office ancillary services exception for radiation oncology services, advanced imaging and physical therapy services since the administration states these services are rarely done on the same day. Physicians would have to meet certain accountability measures beginning in 2015 in order to perform these services.

AGA supports the current in-office ancillary services exception to the Stark self-referral laws, but is pleased that the language did not prohibit pathology services, which are integral to many GI practices. The General Accountability Office (GAO) is currently conducting a study on self-referral of pathology services. AGA had the opportunity to meet with the GAO to educate them on the importance of pathology in GI practices for quality improvement, coordinated care and more timely results.

Supports NIH Funding
The budget also includes a $471 million increase to NIH funding for a total budget of $31.3 million. AGA is pleased that the administration recognizes the importance of NIH funding and we will continue to advocate for increases that reflect biomedical research inflation.

Like the congressional budget resolutions, the president’s budget is a non-binding blueprint that reflects the administration’s spending priorities. However, the president and Congress will once again need to negotiate on spending priorities as Congress begins its appropriations process.

Stay tuned for more updates on the legislative priorities of gastroenterology through the AGA Washington Insider and AGA eDigest.

Of particular interest to gastroenterology:

• The CR rescinds $10 million for the implementation of the Independent Payment Advisory Board (IPAB), which was included as part of the Patient Protection and Affordable Care Act (PPACA). The AGA has long opposed IPAB since it would give 16 unelected and unaccountable bureaucrats unprecedented authority over Medicare spending. We support legislative efforts like Rep. Phil Roe’s and Sen. John Cornyn’s legislation (H.R. 351/S. 351) that would repeal IPAB.
• The resolution included a $71 million increase in funding for NIH and included $582.1 million for the Veterans’ Administration’s Medical and Prosthetic research program. The $71 million increase for NIH was pushed by Sen. Barbara Mikulski, D-MD, and the AGA appreciates her efforts at trying to restore some of the funding that was cut from the agency as part of sequestration.

The House and Senate also approved separate and very different budget resolutions before the recess:

• The House passed a budget resolution crafted by House Budget Chair Paul Ryan, R-WI, that repeals PPACA, reforms Medicare into a premium support program, block grants the Medicaid program, lowers corporate tax rates and cuts discretionary spending.
• The Senate rejected the House budget resolution and after many hours of debate, passed a budget resolution for the first time in four years. The Senate budget resolution, crafted by Senate Budget Chair Patty Murray, D-WA, builds on many of the principles in the Simpson-Bowles deficit reduction plan by implementing a mix of spending cuts and tax increases. the proposal includes $493 billion in spending cuts from domestic programs, $240 billion from defense spending and $242 in reduced interest payments. The Murray plan also closes tax loopholes states that tax increases should only come from the wealthiest Americans and biggest corporations. The Senate budget resolution included an amendment to repeal the medical device tax. AGA opposes this 2.3 percent excise tax on medical device companies, which could limit patients’ access to emerging technologies.

Both budget resolutions are non-binding blueprints on spending priorities to help guide the appropriations process. The House, Senate and President Obama will continue to discuss and negotiate the upcoming spending bills to find the government for FY 2014 and try to achieve long-term deficit reduction.

Continue to look for more updates on the budget and appropriations process on the AGA’s Washington Insider.

The AGA applauds the passage of the Hatch amendment, even though it is merely a symbolic gesture since budget resolutions are non-binding documents. The House passed its own budget resolution crafted by Budget Chair Rep. Paul Ryan, R-WI. It reflects Rep. Ryan’s philosophy of reforming Medicare to a premium support program, block granting Medicaid, cutting spending and lowering tax rates. It does not include the device tax repeal. The Senate has already rejected the House resolution and will not likely try to reconcile their differences. The House, which did pass legislation sponsored by Rep. Erik Paulsen, R-MN, that repeals the device tax, will likely try and move that legislation again this year either as a stand-alone bill or as part of a tax reform package.

The AGA will continue to advocate for the repeal of the medical device tax, which will not only hurt patients’ access to groundbreaking technologies, but also hinder innovation of emerging GI device companies. Look for more updates on the budget process and other policy issues impacting gastroenterology on the AGA Washington Insider.

Immediate Effects

Cuts to Medicare are limited to 2 percent and will only impact providers, not beneficiaries. Recently, CMS sent a communication to providers and suppliers informing them that the implementation of the 2 percent cut will occur for all services beginning on or after April 1, 2013. So, all physicians who serve Medicare patients should expect a 2 percent reduction in payments beginning April 1. NIH will see a 5 percent cut, and AGA is carefully monitoring how the agency will implement it. Certainly, the cut will impact the number of grants that NIH is able to fund especially given that its budget has not kept pace with biomedical research inflation.

Despite both parties’ initial opposition to sequestration, there has been no effort to rescind these cuts. Now, it is unlikely to happen unless Congress and the president are able to reach the illusive “grand bargain” on deficit reduction, which they have been unable to for the past few years.

So, What’s Next?

First, Congress needs to pass a continuing resolution (CR) to keep the government running through the end of the fiscal year on Sept. 30, 2013. The most recent CR funds the government until March 27, and last week the House passed H.R. 933, which contains two appropriations bills — Defense and Military Construction-Veterans Affairs — along with the remaining unfinished appropriations bills that would fund the government through the end of the fiscal year. The Senate Appropriations Chair Barbara Mikulski, D-MD, and Ranking Member Richard Shelby, R-AL, have crafted their version of a CR, which includes a $71 million increase to NIH, but leaves the sequestration cuts in place. Sen. Tom Harkin, D-IA, may also offer an amendment to the CR that would add $211 million to the NIH budget, but does not address the underlying sequestration cuts.  The Senate is scheduled to vote on their version this week and hope to have any differences reconciled before they leave town for the spring break on March 22.

This week, House Budget Committee Chair Paul Ryan, R-WI, also released his blueprint for the Republican budget resolution, outlining spending priorities over the next decade. Included in Chairman Ryan’s plan are cuts to Medicare and Medicaid, additional cuts to discretionary spending on top of those mandated by the Budget Control Act, lowering the corporate tax rate to 25 percent, reforming Medicare to a premium support plan, and eliminating the Affordable Care Act. Many of these policies were included in the Republican Presidential platform last fall and it is safe to say that this proposal will be rejected by the Democratically-controlled Senate. The House is expected to vote on Chairman Ryan’s proposal next week.

The Senate Budget Committee Chair, Sen. Patty Murray, D-WA, is also working on a budget resolution that will undoubtedly be different from the House blueprint. By law, both the House and Senate are required to pass a budget resolution by April 15, even though the Senate has not passed one since 2009. This year, however, a bill was passed in February withholding Senators’ and Representatives’ pay unless they pass a budget by the deadline, which may provide a little added incentive. The budget resolutions serve as a blueprint to the appropriations committees as to what they can spend as they craft their spending bills.

Assuming Congress is able to reach an agreement on the current CR, the next budget battle will be over the fiscal year 2014 budget resolutions and the ensuing appropriations process, perhaps sometime late spring.

AGA will continue to monitor this latest budget process and to advocate that the budgets include appropriate funding for NIH and biomedical research, as well as meaningful payment reform for physicians under Medicare. We are monitoring the implementation of sequestration and its impact on providers. Look for more updates in AGA eDigest and the AGA Washington Insider.

Almost everyone I speak with on Capitol Hill is resigned to the fact that sequestration will occur and most agree that nothing will happen to reverse the cuts until the American people start to feel the impact and demand action. There has been talk that Congress could address the cuts when they address the continuing resolution that funds the government through the end of the year, which will expire on March 27.

The Republicans, who months ago were railing against the automatic cuts to defense, have changed their tune and are downplaying the impact that the sequester will have. They feel as though they gave the president his wish on tax increases in the fiscal cliff deal and have not gotten any spending cuts in return. Meanwhile, the White House has been urging Congress to prevent the sequester and craft a more balanced approach that closes tax loopholes to generate more revenue and has been highlighting the impact that the cuts will have across the country.

The stalemate that the Republicans and Democrats are in is the same scenario that has stalled most of the budget talks over the past few years: Republicans are demanding entitlement reform and Democrats are demanding increased taxes.

What do these cuts mean for gastroenterology?

The sequester will mean that physicians taking care of Medicare patients will receive an automatic 2 percent across the board cut. As part of the fiscal cliff deal, physicians were given a year-long freeze, which amounted to a .6 percent increase. Therefore, physicians will now receive a 1.4 percent cut in Medicare reimbursement. Although beneficiaries were exempt from sequestration in terms of increased premiums, additional cuts on providers could impact patient access to care.

The NIH will see cuts of more than 5 percent, which will impact not only our economic competitiveness, but also hinder the next generation of researchers. NIH has indicated that up to 12,000 researchers could be impacted and grants could be cut by more than 5 percent should NIH decide to prevent furloughs for their employees.

Many believe that the impact of sequestration may not be felt right away as the agencies will be phasing in the cuts over the next few months. The key date in the negotiations will be March 27, when the continuing resolution keeping the government funded expires. Congress will have to hash out a plan to fund the government by then or else the sequester will turn into a full-blown government shutdown. As part of the American Taxpayer Relief Act of 2012, the total amount of funding for fiscal year 2013 must be equivalent to fiscal year 2012 funding or an additional sequestration goes into effect. Without a grand bargain, it is unlikely that the appropriations process would be able to fully offset the cuts from the sequestration beginning on March 1.

AGA advocates against these cuts given the impact they will have on patient care and the research community. We meet with members of Congress every day to urge them to take action to address this pending crisis. We will continue to be the voice of gastroenterology on Capitol Hill and keep you abreast as to any new developments on this latest budget impasse.

I started the day meeting with the only gastroenterologist in Congress, Rep. Bill Cassidy, R-LA. This was especially enjoyable for me, because I knew Bill when he was a resident and fellow at U.S.C. during my days as a young junior faculty member there. It was nice to reminisce with him about the old days at U.S.C. and Dr. Telfer “Pete” Reynolds, a mentor and pioneer in hepatology, and more importantly, to hear his perspective on issues important to gastroenterology. We first discussed NIH funding, which I think most will agree is critical to preserving the current and future generation of researchers, to improving both the science and practice of gastroenterology, and to maintaining the economic and scientific competitiveness of the U.S. Dr. Cassidy stated that he strongly supports the NIH and its mission, but believes that NIH’s funding should be based on factors including the impact of disease and state of the science rather than which group has the strongest lobby. For example, he pointed out that the NIH provides proportionally far less support for Alzheimer’s than for HIV. Rep. Cassidy was interested to hear about the AGA’s work on the National Commission on Digestive Diseases, which examined the burden of GI diseases in our nation and how they are funded.

We also spoke about the broken Medicare physician payment system and the need for a permanent solution to the sustainable growth rate (SGR) process. This was great timing, because later that morning, Dr. Cassidy chaired a hearing on the sustainable growth rate in Medicare for the Health subcommittee of the House Energy and Commerce Committee. I pointed to the numerous quality initiatives and tools that the AGA has developed over the years to prepare our members for the inevitable arrival of a value-based payment system. The AGA wants gastroenterologists and our professional GI societies to be the ones developing practical, evidence-based quality and performance measures rather than having measures imposed on us by others. Dr. Cassidy was extremely interested in AGA’s work on developing a colonoscopy bundle and pointed to a similar bundle that was developed in Louisiana by the VA. It’s a real asset to have a gastroenterologist in Congress who understands medicine and is working on our behalf.

I also met with Sen. Tom Coburn, R-OK, (pictured right) another physician member. He expressed sentiments similar to Rep. Cassidy’s regarding the NIH and was concerned that Congress dictates to them which diseases they should fund. Sen. Coburn, like most of the legislators I met with, believed that the sequester will occur, but indicated that Congress should provide some flexibility in its implementation to allow funding of essential programs and personnel.

I also talked to Sen. Coburn about the Medicare screening colonoscopy cost-sharing problem. Although the Affordable Care Act (ACA) provided preventive services such as colonoscopy screening at no cost for Medicare beneficiaries, CMS has interpreted the legislation to mean that when a screening colonoscopy becomes “therapeutic” because a polyp is found, the patient’s co-pay is no longer waived. Sen. Coburn, himself a colon cancer survivor, stated that he was sympathetic, but suggested that, in the current period of fiscal constraints, a compromise might be to have the patient responsible for the co-payment on the differential in cost between the screening and therapeutic charges.

My marathon day on the Hill also included meetings with the offices of legislators from Connecticut including Rep. Rosa De Lauro, D-CT, Sen. Richard Blumenthal, D-CT, and Rep. Joe Courtney, D-CT. All of the legislators from Connecticut are strong supporters of NIH funding, especially given the impact funding has on the state of Connecticut. Rep. Courtney is a strong supporter of correcting the Medicare screening colonoscopy cost-sharing problem and was the lead Democratic sponsor of the Removing Barriers to Colorectal Cancer Screening bill. During my visit with Rep. Courtney, we also discussed his recent national fame: he pointed out the inaccuracy of Steven Spielberg’s movie Lincoln, which depicts representatives from Connecticut voting against the 13th amendment.

My meeting with Rep. Charlie Dent, R-PA, (pictured left) a key moderate in the House who is a member of the Appropriations Committee and serves as the co-chair of the House Biomedical Research Caucus, was very productive. Rep. Dent was co-sponsor of the Removing Barriers to Colorectal Cancer Screening bill, which was introduced last year, and we discussed the potential timing of re-introduction of the bill during this year’s Congressional session. In addition, I introduced the subject of the gut microbiome and its likely great importance in health and a host of GI and other conditions. The AGA and I believe this may be one of the most important research areas in recent history, and have made this a key research and education initiative for our organization. Rep. Dent suggested conducting a congressional briefing to the House Biomedical Research Caucus on this topic and we will follow up with his office to plan the briefing.

I also had a very pleasant meeting with Sen. Tim Johnson, D-SD, who expressed support for the NIH, the VA and an SGR fix. Sen. Johnson mentioned that as the Chair of the Senate Appropriations Subcommittee on Military Construction, VA and Related Agencies, he is extremely supportive of the research that the VA is conducting and can be helpful in ensuring that the VA continues to have the resources necessary to support its mission. I ended my day meeting with Rep. Frank Pallone, D-NJ, (pictured above left) who serves as ranking member of the House Energy and Commerce Health Subcommittee which has jurisdiction over Medicare Part B, NIH and other public health programs. Rep. Pallone is a veteran New Jersey congressman who also has strongly supported the NIH and an SGR fix. He sponsored legislation in the past commemorating the 50th anniversary of the NIDDK. He and his chief of staff also seemed fascinated hearing about the gut microbiome.

All in all, the day was educational for me and hopefully productive for gastroenterology. We made inroads by discussing the AGA’s development of tools for the future of practice, such as quality measures, clinical service lines, and a colonoscopy bundle in the context of the current debate around an SGR fix; we sparked interest in an important area of research, the gut microbiome, which hopefully will lead to a congressional briefing on the topic; and we re-kindled interest in the colonoscopy cost-sharing issue and re-introduction of a bill designed to remedy the problem. I’m hopeful that my visit will help strengthen GI’s voice on Capitol Hill.

According to a recent  USA Today article, the influx of rookie legislators was the result of a combination of factors, including wave elections, redistricting and contentious primaries. Congress already faces a lack of bipartisanship and obstructionism, which prevents legislation from being passed. Without years of congeniality and familiarity between members of Congress, further gridlock is expected to continue. According to The Cook Political Report, 39 percent of the U.S. House of Representatives has less than three years of experience. AGA will have to spend a considerable amount of time educating these new members on the complexities of health-care issues that will affect the future of GI.

In 2010, the rise of the Tea Party brought in a wave of new legislators. Many experienced GOP members lost their seats in bitter primaries. In 2010 and 2012, many moderate Democrats lost their seats due to redistricting and increasing polarization. Several of these new Congressional members now hold leadership positions on influential committees that used to take years to obtain. Congress also saw prominent members retire because they could no longer handle the combative nature between parties and the increasingly intense campaign cycles. Sen. Olympia Snowe, R-ME, was a centrist who Time magazine named one of the greatest senators of all time in 2006. In an interview regarding her retirement, she stated, “I’ve been around for a while, and I’ve seen how Congress can work and should work. We’ve departed from that markedly, and we’ve lost the importance of consensus-building and compromise.”

Congress is not only facing hyper-polarization between parties, but the GOP House leadership is dealing with a new obstructionist class of lawmakers. Many of the newer House GOP members were elected as anti-establishment candidates, and House Speaker John Boehner, R-OH, has the tough job of wrangling these novice members to vote for bipartisan deals. Speaker Boehner faces opposition and discontent within his own party. Unlike in 2010, when he was unanimously voted as Speaker of the House, about a dozen Republican members voted against him or abstained. In fact, in the year end deal to prevent the fiscal cliff, Speaker Boehner was only able to pass it with the help of the chamber’s Democrats since the majority of his caucus opposed the deal.

Veteran legislators also have the benefit of institutional and legislative knowledge that only experience can provide. Newcomers will be relying heavily on staff, lobbyists and constituents to help educate them on complicated policy issues. It’s up to AGA and its members to make sure these new lawmakers of Congress are informed on the significant legislative issues facing GI. It is crucial for Congress to realize how legislation affects the quality of patient care.

To get involved, please contact Lauren DePutter, AGA Government and Political Affairs Manager, at (240) 482-3221 or ldeputter@gastro.org.

The drama unfolded over the holidays when House Speaker John Boehner, R-OH, who failed to push through his own “plan B” that would have increased taxes on those making more than $1 million a year, told the Senate to come up with a plan. Senate Minority Leader Mitch McConnell, R-KY, and Vice President Joseph Biden worked on a compromise plan that included increasing taxes on individuals making more than $400,000 a year and couples earning $450,000 a year. The plan also permanently fixed the alternative minimum tax, made changes to the estate tax, and extended the research and development tax credit that was popular among businesses. The deal prevented the Medicare physician payment cut of 26.5 percent for a year and prevented to the automatic spending cuts to NIH and other government programs from being implemented for two months. The plan easily passed the Senate, with 89 senators voting in favor of it. However, up until the last hour on New Year’s Day, it was uncertain whether the House would take up the plan. The House Republicans were divided, and many in leadership opposed the plan since it did not address spending cuts. However, in the end, the speaker brought the bill up for a vote, which ended up passing the House with the majority of Democratic members supporting it.

The deal also was a small victory for registries —  the new law recognizes clinical data registries, such as the AGA Digestive Health Outcomes Registry®, in improving patient care and health-care quality outcomes. Beginning in 2014, physicians can report via registries to adhere to the Physician Quality Reporting System and other federal quality programs.

The AGA, along with other medical specialty societies that also have registries, worked with the House Ways and Means Committee to draft this language to give physicians more options in reporting true quality outcomes data. The House Ways and Means Committee and the Senate Finance Committee have been supportive of registries; this language stemmed from AGA’s testimony to the House Ways and Means Health Subcommittee in July during which we shared many of our quality improvement program initiatives, such as the AGA Registry. Registries would not necessarily have to use National Quality Forum-endorsed measures, although the secretary would have to consider whether the registry adheres to minimum standards related to physician feedback and transparency of specifications and risk-adjustment methodologies. The secretary is also required to consider whether the registry requires the submission of data from participants covered under multiple payors. We will continue to monitor the regulatory process on this issue and remain engaged with CMS as they develop their minimum standards and recognition process.

The initial fight on the fiscal cliff may be temporarily over, but another major budget battle looms as the 113th Congress needs to address raising the debt limit, as well as the automatic spending cuts. Since Congress only focused on the tax portion of the fiscal cliff, spending and entitlement reform will be the focus of the next round of discussions. Medicare reform will undoubtedly be on the table as Congress will be looking for long term savings to the program for deficit reduction. AGA and the entire medical community will continue to advocate that meaningful Medicare reform cannot be achieved without addressing permanent physician payment reform. We will continue to work with our champions in Congress to ensure that the issue is addressed in a comprehensive manner that ensures the long term solvency and stability of the Medicare program.

AGA will also continue to push for adequate funding for NIH and other federal research programs that not only help improve our nation’s health-care delivery system, but also boost our country’s economic competitiveness. NIH continues to be a smart investment for our nation to ensure economic growth and we will continue to convey that message.

We thank all of you who took time out of your busy schedules to make your voices heard during the fiscal cliff debate — you made a difference. We will continue to call on you in the future to help advocate for the science and practice of gastroenterology. Continue to look for updates as this debate continues in the 113th Congress on the AGA Washington Insider and AGA eDigest.

Obama’s offer would also prevent the nearly 30 percent cut in Medicare physician reimbursements scheduled for Jan. 1, 2013, but at this time it is unclear how long the fix would be and at what rate. We have been hearing that a one year freeze to the physician cuts would cost around $25 billion over ten years. Some of the “pay fors” initially discussed for the physician fix were causing some heartburn in the physician community and among hospitals. For example, one idea was to equalize evaluation and management payments in the hospital setting, which is estimated to save $15 billion over ten years. However, the hospitals are adamantly opposed to this, as are primary care physicians.

The physician community has been emphasizing that the Medicare cut needs to be prevented, but that we oppose cutting physicians to pay for physicians. Since the physician doc-fix will likely be part of a larger deficit reduction package, the cost of the fix will need to be offset and Congress will likely look for savings within the Medicare program. So, the physician community again faces a scenario in which Congress will “rob Peter to pay Paul,” and is even discussing eliminating an increase in primary care reimbursement in Medicaid — a telling sign of the times since both sides have been empathetic to primary care’s plight for increased reimbursement at the expense of other specialties. Having said that, it will be nearly impossible for one specialty to receive a bigger increase at the expense of another given Congress’ reluctance to weigh in on deeming values to particular procedures and services.

The speaker has announced that he will also push a “plan B” measure, absent a deal with the president, to ensure that taxes do not go up on households earning below $1 million. The speaker has indicated that he will continue to negotiate with the president, but this plan may give some members of the Republican party cover as a larger package is being ironed out.

The AGA continues to closely monitor this extremely fluid process and will keep you up to date on the latest developments. In the interim, it is not too late to contact your legislators to encourage them to stop the cuts to Medicare physician reimbursements and NIH. We thank those members who have taken the time to reach out to Congress and urge you to continue to do so until a deal is reached that prevents the cuts. You can contact your legislator either via email or through the AGA toll-free hotline at 1-855-806-2387. Learn more about the AGA Virtual Advocacy Campaign.

Stay tuned for more developments on the AGA Washington Insider and AGA eDigest.