Washington State Medical Oncology Society Conference

1. Washington State Medical Oncology Society Conference Legislative Update Matt Farber Director, Provider Economics & Public Policy Association of Community Cancer Centers

2. Table of Contents • Congress • Action thus far in 2013 • Key actions necessary in 2013 • Outlook for remainder of 2013 • Key Issues • Sequestration • Budget • SGR • ACA implementation • Oral Parity

3. 113th Congress http://exileonmoanstreet.blogspot.com/2010/12/in-order-to-form-more-perfect-union.html

4. 113th Congress • Still a divided Congress • House controlled by GOP (they lost 8 seats in election) • Senate controlled by Democrats (55 seats) • Comparatively, the beginning of this Congress has been action packed • Debt-ceiling, Sandy relief, confirmation hearings, CR on the 2013 budget

5. 113th Congress • Congress has some significant deadlines looming in the next 2-3 months and 5 months • The Debt Ceiling • The 2013-2014 Budget • Continuation of Sequestration • Tax reform

6. Sequestration • Congress voted to delay the automatic cuts until the end of February • Since no agreement was reached, the cuts went into effect March 1, 2013 • This will mean a 2% across the board cut to Medicare payments starting on April 1, 2013 • Also, over $2 Billion cut to NIH funding • One Congressional staffer said that this may be for the best, as it will take cuts to discretionary funding off the table for the foreseeable future • Only problem with that assessment is that changes to Medicare are very much still on the table

7. Sequestration • What does it mean for you? • By now, you should have received your first payments from CMS reflecting the 2% decrease in payments • Cuts are to all items on the claim, including drugs • The cut brings drug reimbursement down to roughly ASP+4.3%

8. Cuts to Drug Reimbursement • ASP+6% to ASP+4.3% is more than 2%... • An example: A drug’s ASP is $100, so the ASP+6% is $106 • The beneficiary pays 20%, or $21.20 • Medicare would normally cover the remaining 80%, or $84.80 • After sequestration, Medicare pays $83.10 (98% of the $84.80) • $83.10+$21.20=$104.30 or ASP+4.3%

9. Drug Reimbursement • Is this fair, or even legal? • Both are fair questions: • As for fairness, the easy answer is no, but nothing about sequestration was meant to be fair. It is a blunt cutting instrument, that was never meant to go into effect • As for legality, that is a trickier question • ASP+6% reimbursement is a mandate from Congress, and therefore, the cuts may be in violation of that mandate • Tough to fight…

10. How did this happen? • If sequestration was never meant to happen, how did it happen? • Also, there was this: • Essentially, the President thought the cuts to the Defense Department were going to be enough to get the GOP to stop them

11. A little relief… • At the end of March, Congress passed a continuing resolution to fund the government until Sept. 30th • They did not stop the sequester, however, they did change a few of the cuts • Gave the DoD more flexibility with its cuts • $70 million to NIH to offset some of the cuts • $74 million to FDA so approval process will not slow down • None of this was new money

12. Sequestration • It is not too late to let your elected officials know what the 2% cut would mean to you and your patients. • Call, write, email Congress to explain how this cut would impact the services you offer • Many new members of Congress do not understand issues facing oncology • 1st District: Suzan DelBene (D); 6th District: Derek Kilmer (D); 10th District: Kenny Heck (D)

13. Washington

14. Why get Involved? • One of the big questions facing Congress is: • The keep sequestration on the books for all 10 years, or to write next year’s budget without the sequester

15. Budget • The Government has been operating on a series of continuing resolutions for a long period of time • It has been years since Congress has passed all 12 appropriations bills • The good news: Congress will not shut down… for now…

16. Budget & Debt Ceiling • To force Congress into action, the House inserted language in the recent debt ceiling bill that will withhold Senators paychecks if they do not introduce a budget • Novel idea • In case you are concerned, the money would be held in escrow • Senate introduced its budget in March

17. Congressional Budgets • The budgets introduced in the House and Senate are essentially meaningless • So is the President’s budget, for that matter • Why? • The documents are VERY partisan, so they act as starting points for negotiation

18. Debt Ceiling http://minutemennews.com/2013/01/republicans-already-losing-debt-limit-war/

19. Debt Ceiling • On Jan. 31st, the Senate voted to approve the House debt ceiling bill • Essentially, Congress is lifting the debt ceiling temporarily, until May • If Congress cannot determine spending cuts and raise level again, the government may default on its obligations in August • This is following a very similar script to 2011

20. Remainder of 2013 • In addition to the previous issues, here are some of the healthcare related issues Congress will/ may take up this year: • Repeal of the IPAB • Repeal of the device tax (both from ACA) • Drug Shortages, Drug track and trace • Prompt Pay Discount • SGR fix

21. Remainder of 2013 • Given the current environment, stand alone bills may be very difficult • However, there is bi-partisan support for many of these issues, including IPAB repeal, SGR reform • Most likely to pass if attached to larger legislative vehicle

22. SGR • The House Ways and Means Committee has floated an idea to permanently fix the SGR formula and, over time, replace it with a formula that would reward quality care • The details are still to be released fully • Most importantly, the initial proposal did not include offsets (the fix would cost roughly $140 billion) ((a BARGAIN!!))

23. SGR • This is the best chance for a long term SGR that we have seen in recent memory • Congress is reaching out to outside organizations • Lower cost • Almost universal dislike of current system

24. Affordable Care Act • The ACA is quickly moving into the implementation phase • The government is writing rules on everything from set up of exchanges to Medicaid expansion to the sunshine provisions

25. Sunshine • CMS released the long awaited final rule on sunshine on Feb. 1. • Data collection to being on Aug. 1, 2013 • CMS will release the data from August through Dec. 2013 on Sept. 30, 2014 • Payments for speaking at continuing education programs are NOT required to be reported, with certain conditions

26. Sunshine • The per person value of the meal must be reported as a payment only for covered recipients who actually partook in the food or beverage.  • Applicable manufacturers are not required to report or track buffet meals, snacks, soft drinks, or coffee made generally available to all participants of a conference or similar events where it is difficult to identify the identity of those who partook in the offering.  

27. Sunshine • CMS finalized “that small incidental items that are under $10 (such as pens and note pads) that are provided at large-scale conferences and similar large-scale events will be exempted from the reporting requirements, including the need to track them for aggregation purposes.”

28. Sunshine Exclusions •  Items “[]such as medical textbooks and journal reprints[] … do not … fall within the statutory exclusion of Educational Materials that Directly Benefit Patients or are Intended For Patient Use.  Wall models and anatomical models which are ultimately intended to be used with a patient, are excluded. • CMS clarified that “Payments or other transfers of value to residents (including residents in medicine, osteopathy, dentistry, podiatry, optometry and chiropractic) will not be required to be reported for purposes of this regulation.” 

29. Oral Parity • To date, there are 21 states and DC that have oral parity legislation • Washington passed oral parity legislation that is effective as of Jan. 1, 2012 • There is a renewed federal effort to pass oral parity legislation • The House bill will be reintroduced this month

30. Oral Parity

31. Questions?

32. Thank you Matthew Farber mfarber@accc-cancer.org (301) 984-9496 ext. 221