Mary Ellen Schneider

Republicans on Capitol Hill haven’t gained any traction in their plans for a wholesale repeal of the Affordable Care Act, so they are looking to take it apart piece by piece. The current target is the Independent Payment Advisory Board, a 15-member panel created under the health law to slow the growth in Medicare spending. The House Energy and Commerce Committee’s Subcommittee on Health recently approved a bill to repeal the panel and other House committees are expected to follow suit.

Alicia Ault/Elsevier Global Medical News

But while the IPAB has been derided by physicians as unelected and unaccountable, President Obama has heralded it as a major cost control tool. Despite the bill’s success so far in the House, it is not expected pass the Democratic-controlled Senate.

Meanwhile, controversy continues over the inclusion of contraceptives as a free preventive service under the Affordable Care Act. Many lawmakers aren’t satisfied with the Obama administration’s plan to overcome the objections of religious employers by requiring their health plans to provide the contraception directly. Last week, Sen. Roy Blunt (R-Mo.) offered legislation that would have allowed any employer to deny coverage for health services based on their religious or moral beliefs. The amendment was defeated in a 51 to 48 vote.

Check out this week’s podcast for all the details on these health care controversies and the latest on the deliberations of the Patient-Centered Outcomes Research Institute. 

Republicans on Capitol Hill haven’t gained any traction in their plans for a wholesale repeal of the Affordable Care Act, so they are looking to take it apart piece by piece. The current target is the Independent Payment Advisory Board, a 15-member panel created under the health law to slow the growth in Medicare spending. The House Energy and Commerce Committee’s Subcommittee on Health recently approved a bill to repeal the panel and other House committees are expected to follow suit.

Alicia Ault/Elsevier Global Medical News

But while the IPAB has been derided by physicians as unelected and unaccountable, President Obama has heralded it as a major cost control tool. Despite the bill’s success so far in the House, it is not expected pass the Democratic-controlled Senate.

Meanwhile, controversy continues over the inclusion of contraceptives as a free preventive service under the Affordable Care Act. Many lawmakers aren’t satisfied with the Obama administration’s plan to overcome the objections of religious employers by requiring their health plans to provide the contraception directly. Last week, Sen. Roy Blunt (R-Mo.) offered legislation that would have allowed any employer to deny coverage for health services based on their religious or moral beliefs. The amendment was defeated in a 51 to 48 vote.

Check out this week’s podcast for all the details on these health care controversies and the latest on the deliberations of the Patient-Centered Outcomes Research Institute. 

Republicans on Capitol Hill haven’t gained any traction in their plans for a wholesale repeal of the Affordable Care Act, so they are looking to take it apart piece by piece. The current target is the Independent Payment Advisory Board, a 15-member panel created under the health law to slow the growth in Medicare spending. The House Energy and Commerce Committee’s Subcommittee on Health recently approved a bill to repeal the panel and other House committees are expected to follow suit.

Alicia Ault/Elsevier Global Medical News

But while the IPAB has been derided by physicians as unelected and unaccountable, President Obama has heralded it as a major cost control tool. Despite the bill’s success so far in the House, it is not expected pass the Democratic-controlled Senate.

Meanwhile, controversy continues over the inclusion of contraceptives as a free preventive service under the Affordable Care Act. Many lawmakers aren’t satisfied with the Obama administration’s plan to overcome the objections of religious employers by requiring their health plans to provide the contraception directly. Last week, Sen. Roy Blunt (R-Mo.) offered legislation that would have allowed any employer to deny coverage for health services based on their religious or moral beliefs. The amendment was defeated in a 51 to 48 vote.

Check out this week’s podcast for all the details on these health care controversies and the latest on the deliberations of the Patient-Centered Outcomes Research Institute. 

Dr. Peter K. Lindenauer is used to making headlines with his research on hospital quality of care. Dr. Lindenauer, who directs the Center for Quality of Care Research at Baystate Medical Center in Springfield, Mass., led the research team that uncovered significant variations in how physicians care for patients with acute exacerbations of chronic obstructive pulmonary disease (Ann. Intern. Med. 2006;144:894-903). The following year, he and his colleagues at Baystate published research showing that patients cared for by hospitalists have slightly shorter lengths of stay without related increases in mortality or readmission (N. Engl. J. Med. 2007;357:2589-600). These days, Dr. Lindenauer, who is also an associate professor of medicine at Tufts University, Boston, is devoting much of his time to HOMERUN, the Hospital Medicine Re-engineering Outcomes Research Network, which was started by hospitalists and is being funded in part by the Association of American Medical Colleges.

Dr. Lindenauer, a member of the Hospitalist News editorial advisory board, shared his thoughts on the state of quality improvement in U.S. hospitals and offered some advice to hospitalists considering research projects.

Hospitalist News: What general areas are ripe for quality improvement research projects at the academic and community hospital levels?

Dr. Lindenauer: One natural place for hospitalists to focus on is developing and evaluating strategies for translating evidence-based care processes into routine practice. That’s something that people have been working on for awhile, but there are still opportunities there. Another important area for hospitalists is in the development and evaluation of approaches to improve patient safety and reduce harm among hospitalized patients. This includes work on hospital-acquired infections, adverse drug events, falls, and other complications of hospitalization, including venous thromboembolism.

Another topic that has been gaining attention lately is the issue of cost and utilization. Readmission is a part of that, but there are also opportunities to reduce unnecessary utilization and improve value that go beyond simply improving care transitions and reducing readmission rates. Laboratory testing and diagnostic imaging are good examples here. Another research area is patient experience. This has become even more important to hospitals since it is now part of Medicare’s Hospital Value-Based Purchasing Program. Yet, it seems like the evidence base for how we improve patient experience is still relatively limited. Efforts to improve communication and collaboration between physicians, nurses, and other care team members are great examples of this.

HN: How ambitious should hospitalists be when developing a QI project?

Dr. Lindenauer: It is very dependent on the context. It’s not critical that every quality improvement process undergo an evaluation of the sort that could allow it to be published in the Journal of Hospital Medicine or other journals. But measurement is a fundamental aspect of quality improvement, and thus every quality improvement project involves some evaluation.

It makes sense to invest more effort in a research project if you’re evaluating a strategy that is especially innovative or hasn’t been described or analyzed before. More rigorous evaluation is probably also appropriate if you’re carrying out a project or program that is especially important to the hospital because it is tackling a problem that affects a large number of patients, is associated with high costs, or has large clinical impact. Even if it’s been done before, those factors would make the topic of greater relevance and interest to reviewers at a journal and ultimately to clinicians at other hospitals. On the other hand, if you’re the 100th team to implement a rapid response team, it may not be worth the time and effort to conduct a rigorous evaluation.

HN: There’s a lot of QI work going on right now. Is the word getting out about those results and are they actually changing the way hospitalists practice?

Dr. Lindenauer: I think so. There’s obviously a lot of quality improvement work that takes place that never sees the light of day. But I also see hospitalists leading local efforts to improve transitions of care for patients who are discharged, improve the process of interdisciplinary rounds, and employ a variety of strategies to reduce catheter-associated urinary tract infections and central line associated bloodstream infections. For the most part, these QI projects have come out of the recent QI literature; out of efforts made by QI researchers to evaluate those interventions in the same rigorous way that other biomedical innovations are being evaluated. Are there opportunities to do more? The answer is undoubtedly yes. However, compared to where we were a decade ago, it seems that there is a lot more good quality improvement research being published than in the past.

HN: How do pay-for-performance programs and public reporting impact quality improvement efforts in U.S. hospitals?

Dr. Lindenauer: They certainly grab the attention of hospital leaders. There’s little doubt about that.

There’s less evidence that either strategy has been associated with more than very modest improvements in care quality. There is perhaps a bit more evidence for public reporting, but even some of the largest and most ambitious trials of public reporting, such as the EFFECT study in Canada, were largely negative (JAMA 2009;302:2330-7). So there are still significant questions about the impact of public reporting on quality improvement, as well as on patient and provider choices.

We’re about to embark on a very grand experiment in pay-for-performance through the Hospital Value-Based Purchasing Program, which was part of the Affordable Care Act. To date, the evidence for the benefits of financial incentives on hospital care is very limited. However, there are a number of factors that may have attenuated the impact of financial incentives in the hospital and it remains to be seen what will happen when these new pay-for-performance programs are implemented.

Dr. Peter K. Lindenauer is used to making headlines with his research on hospital quality of care. Dr. Lindenauer, who directs the Center for Quality of Care Research at Baystate Medical Center in Springfield, Mass., led the research team that uncovered significant variations in how physicians care for patients with acute exacerbations of chronic obstructive pulmonary disease (Ann. Intern. Med. 2006;144:894-903). The following year, he and his colleagues at Baystate published research showing that patients cared for by hospitalists have slightly shorter lengths of stay without related increases in mortality or readmission (N. Engl. J. Med. 2007;357:2589-600). These days, Dr. Lindenauer, who is also an associate professor of medicine at Tufts University, Boston, is devoting much of his time to HOMERUN, the Hospital Medicine Re-engineering Outcomes Research Network, which was started by hospitalists and is being funded in part by the Association of American Medical Colleges.

Dr. Lindenauer, a member of the Hospitalist News editorial advisory board, shared his thoughts on the state of quality improvement in U.S. hospitals and offered some advice to hospitalists considering research projects.

Hospitalist News: What general areas are ripe for quality improvement research projects at the academic and community hospital levels?

Dr. Lindenauer: One natural place for hospitalists to focus on is developing and evaluating strategies for translating evidence-based care processes into routine practice. That’s something that people have been working on for awhile, but there are still opportunities there. Another important area for hospitalists is in the development and evaluation of approaches to improve patient safety and reduce harm among hospitalized patients. This includes work on hospital-acquired infections, adverse drug events, falls, and other complications of hospitalization, including venous thromboembolism.

Another topic that has been gaining attention lately is the issue of cost and utilization. Readmission is a part of that, but there are also opportunities to reduce unnecessary utilization and improve value that go beyond simply improving care transitions and reducing readmission rates. Laboratory testing and diagnostic imaging are good examples here. Another research area is patient experience. This has become even more important to hospitals since it is now part of Medicare’s Hospital Value-Based Purchasing Program. Yet, it seems like the evidence base for how we improve patient experience is still relatively limited. Efforts to improve communication and collaboration between physicians, nurses, and other care team members are great examples of this.

HN: How ambitious should hospitalists be when developing a QI project?

Dr. Lindenauer: It is very dependent on the context. It’s not critical that every quality improvement process undergo an evaluation of the sort that could allow it to be published in the Journal of Hospital Medicine or other journals. But measurement is a fundamental aspect of quality improvement, and thus every quality improvement project involves some evaluation.

It makes sense to invest more effort in a research project if you’re evaluating a strategy that is especially innovative or hasn’t been described or analyzed before. More rigorous evaluation is probably also appropriate if you’re carrying out a project or program that is especially important to the hospital because it is tackling a problem that affects a large number of patients, is associated with high costs, or has large clinical impact. Even if it’s been done before, those factors would make the topic of greater relevance and interest to reviewers at a journal and ultimately to clinicians at other hospitals. On the other hand, if you’re the 100th team to implement a rapid response team, it may not be worth the time and effort to conduct a rigorous evaluation.

HN: There’s a lot of QI work going on right now. Is the word getting out about those results and are they actually changing the way hospitalists practice?

Dr. Lindenauer: I think so. There’s obviously a lot of quality improvement work that takes place that never sees the light of day. But I also see hospitalists leading local efforts to improve transitions of care for patients who are discharged, improve the process of interdisciplinary rounds, and employ a variety of strategies to reduce catheter-associated urinary tract infections and central line associated bloodstream infections. For the most part, these QI projects have come out of the recent QI literature; out of efforts made by QI researchers to evaluate those interventions in the same rigorous way that other biomedical innovations are being evaluated. Are there opportunities to do more? The answer is undoubtedly yes. However, compared to where we were a decade ago, it seems that there is a lot more good quality improvement research being published than in the past.

HN: How do pay-for-performance programs and public reporting impact quality improvement efforts in U.S. hospitals?

Dr. Lindenauer: They certainly grab the attention of hospital leaders. There’s little doubt about that.

There’s less evidence that either strategy has been associated with more than very modest improvements in care quality. There is perhaps a bit more evidence for public reporting, but even some of the largest and most ambitious trials of public reporting, such as the EFFECT study in Canada, were largely negative (JAMA 2009;302:2330-7). So there are still significant questions about the impact of public reporting on quality improvement, as well as on patient and provider choices.

We’re about to embark on a very grand experiment in pay-for-performance through the Hospital Value-Based Purchasing Program, which was part of the Affordable Care Act. To date, the evidence for the benefits of financial incentives on hospital care is very limited. However, there are a number of factors that may have attenuated the impact of financial incentives in the hospital and it remains to be seen what will happen when these new pay-for-performance programs are implemented.

Dr. Peter K. Lindenauer is used to making headlines with his research on hospital quality of care. Dr. Lindenauer, who directs the Center for Quality of Care Research at Baystate Medical Center in Springfield, Mass., led the research team that uncovered significant variations in how physicians care for patients with acute exacerbations of chronic obstructive pulmonary disease (Ann. Intern. Med. 2006;144:894-903). The following year, he and his colleagues at Baystate published research showing that patients cared for by hospitalists have slightly shorter lengths of stay without related increases in mortality or readmission (N. Engl. J. Med. 2007;357:2589-600). These days, Dr. Lindenauer, who is also an associate professor of medicine at Tufts University, Boston, is devoting much of his time to HOMERUN, the Hospital Medicine Re-engineering Outcomes Research Network, which was started by hospitalists and is being funded in part by the Association of American Medical Colleges.

Dr. Lindenauer, a member of the Hospitalist News editorial advisory board, shared his thoughts on the state of quality improvement in U.S. hospitals and offered some advice to hospitalists considering research projects.

Hospitalist News: What general areas are ripe for quality improvement research projects at the academic and community hospital levels?

Dr. Lindenauer: One natural place for hospitalists to focus on is developing and evaluating strategies for translating evidence-based care processes into routine practice. That’s something that people have been working on for awhile, but there are still opportunities there. Another important area for hospitalists is in the development and evaluation of approaches to improve patient safety and reduce harm among hospitalized patients. This includes work on hospital-acquired infections, adverse drug events, falls, and other complications of hospitalization, including venous thromboembolism.

Another topic that has been gaining attention lately is the issue of cost and utilization. Readmission is a part of that, but there are also opportunities to reduce unnecessary utilization and improve value that go beyond simply improving care transitions and reducing readmission rates. Laboratory testing and diagnostic imaging are good examples here. Another research area is patient experience. This has become even more important to hospitals since it is now part of Medicare’s Hospital Value-Based Purchasing Program. Yet, it seems like the evidence base for how we improve patient experience is still relatively limited. Efforts to improve communication and collaboration between physicians, nurses, and other care team members are great examples of this.

HN: How ambitious should hospitalists be when developing a QI project?

Dr. Lindenauer: It is very dependent on the context. It’s not critical that every quality improvement process undergo an evaluation of the sort that could allow it to be published in the Journal of Hospital Medicine or other journals. But measurement is a fundamental aspect of quality improvement, and thus every quality improvement project involves some evaluation.

It makes sense to invest more effort in a research project if you’re evaluating a strategy that is especially innovative or hasn’t been described or analyzed before. More rigorous evaluation is probably also appropriate if you’re carrying out a project or program that is especially important to the hospital because it is tackling a problem that affects a large number of patients, is associated with high costs, or has large clinical impact. Even if it’s been done before, those factors would make the topic of greater relevance and interest to reviewers at a journal and ultimately to clinicians at other hospitals. On the other hand, if you’re the 100th team to implement a rapid response team, it may not be worth the time and effort to conduct a rigorous evaluation.

HN: There’s a lot of QI work going on right now. Is the word getting out about those results and are they actually changing the way hospitalists practice?

Dr. Lindenauer: I think so. There’s obviously a lot of quality improvement work that takes place that never sees the light of day. But I also see hospitalists leading local efforts to improve transitions of care for patients who are discharged, improve the process of interdisciplinary rounds, and employ a variety of strategies to reduce catheter-associated urinary tract infections and central line associated bloodstream infections. For the most part, these QI projects have come out of the recent QI literature; out of efforts made by QI researchers to evaluate those interventions in the same rigorous way that other biomedical innovations are being evaluated. Are there opportunities to do more? The answer is undoubtedly yes. However, compared to where we were a decade ago, it seems that there is a lot more good quality improvement research being published than in the past.

HN: How do pay-for-performance programs and public reporting impact quality improvement efforts in U.S. hospitals?

Dr. Lindenauer: They certainly grab the attention of hospital leaders. There’s little doubt about that.

There’s less evidence that either strategy has been associated with more than very modest improvements in care quality. There is perhaps a bit more evidence for public reporting, but even some of the largest and most ambitious trials of public reporting, such as the EFFECT study in Canada, were largely negative (JAMA 2009;302:2330-7). So there are still significant questions about the impact of public reporting on quality improvement, as well as on patient and provider choices.

We’re about to embark on a very grand experiment in pay-for-performance through the Hospital Value-Based Purchasing Program, which was part of the Affordable Care Act. To date, the evidence for the benefits of financial incentives on hospital care is very limited. However, there are a number of factors that may have attenuated the impact of financial incentives in the hospital and it remains to be seen what will happen when these new pay-for-performance programs are implemented.

Over the last 2 decades, policy makers have proposed several ways to change how health care is delivered in the Medicare program, but a new analysis from the nonpartisan Congressional Budget Office shows that those efforts have failed to yield significant savings.

The CBO analyzed 10 major Medicare demonstrations involving disease management and care coordination or some type of value-based payments and found that most of the projects didn't save money.

The analysis has implications for health policy. Under the Affordable Care Act, Congress required the Centers for Medicare and Medicaid Services to pursue new payment and care delivery models including accountable care organizations and bundled payments. Congress also created the Innovation Center within the CMS to test other models of care. The idea behind the center is that Medicare officials can expand successful projects without having to return to Congress for approval.

Dr. Glen R. Stream, president of the American Academy of Family Physicians, said the Innovation Center may yield better results because its projects focus on broader care delivery concepts, such as the patient-centered medical home, rather than only certain conditions.

Looking at the six disease management and care coordination projects that Medicare had already undertaken, CBO analysts found that on average there was little to no effect on hospital admissions or regular Medicare spending. The demonstrations were more likely to reduce costs if they used care managers who had significant, direct contact with physicians and patients, but those programs didn't save enough money to cover the cost of the extra services provided. For example, in programs with significant in-person or telephone interaction between care management and patients there was an average 7% drop in hospital admissions and a 3% reduction in regular Medicare spending. But to offset the cost of the care management fees, the programs would have had to reduce regular Medicare expenditures by 13%.

In the four demonstrations that focused on changing the financial incentives for health care providers, only one project produced significant savings. A project that offered bundled payments to physicians and hospitals for heart bypass surgery reduced Medicare expenditures related to heart bypass by about 10% without an adverse impact on patient outcomes.

Over the last 2 decades, policy makers have proposed several ways to change how health care is delivered in the Medicare program, but a new analysis from the nonpartisan Congressional Budget Office shows that those efforts have failed to yield significant savings.

The CBO analyzed 10 major Medicare demonstrations involving disease management and care coordination or some type of value-based payments and found that most of the projects didn't save money.

The analysis has implications for health policy. Under the Affordable Care Act, Congress required the Centers for Medicare and Medicaid Services to pursue new payment and care delivery models including accountable care organizations and bundled payments. Congress also created the Innovation Center within the CMS to test other models of care. The idea behind the center is that Medicare officials can expand successful projects without having to return to Congress for approval.

Dr. Glen R. Stream, president of the American Academy of Family Physicians, said the Innovation Center may yield better results because its projects focus on broader care delivery concepts, such as the patient-centered medical home, rather than only certain conditions.

Looking at the six disease management and care coordination projects that Medicare had already undertaken, CBO analysts found that on average there was little to no effect on hospital admissions or regular Medicare spending. The demonstrations were more likely to reduce costs if they used care managers who had significant, direct contact with physicians and patients, but those programs didn't save enough money to cover the cost of the extra services provided. For example, in programs with significant in-person or telephone interaction between care management and patients there was an average 7% drop in hospital admissions and a 3% reduction in regular Medicare spending. But to offset the cost of the care management fees, the programs would have had to reduce regular Medicare expenditures by 13%.

In the four demonstrations that focused on changing the financial incentives for health care providers, only one project produced significant savings. A project that offered bundled payments to physicians and hospitals for heart bypass surgery reduced Medicare expenditures related to heart bypass by about 10% without an adverse impact on patient outcomes.

Over the last 2 decades, policy makers have proposed several ways to change how health care is delivered in the Medicare program, but a new analysis from the nonpartisan Congressional Budget Office shows that those efforts have failed to yield significant savings.

The CBO analyzed 10 major Medicare demonstrations involving disease management and care coordination or some type of value-based payments and found that most of the projects didn't save money.

The analysis has implications for health policy. Under the Affordable Care Act, Congress required the Centers for Medicare and Medicaid Services to pursue new payment and care delivery models including accountable care organizations and bundled payments. Congress also created the Innovation Center within the CMS to test other models of care. The idea behind the center is that Medicare officials can expand successful projects without having to return to Congress for approval.

Dr. Glen R. Stream, president of the American Academy of Family Physicians, said the Innovation Center may yield better results because its projects focus on broader care delivery concepts, such as the patient-centered medical home, rather than only certain conditions.

Looking at the six disease management and care coordination projects that Medicare had already undertaken, CBO analysts found that on average there was little to no effect on hospital admissions or regular Medicare spending. The demonstrations were more likely to reduce costs if they used care managers who had significant, direct contact with physicians and patients, but those programs didn't save enough money to cover the cost of the extra services provided. For example, in programs with significant in-person or telephone interaction between care management and patients there was an average 7% drop in hospital admissions and a 3% reduction in regular Medicare spending. But to offset the cost of the care management fees, the programs would have had to reduce regular Medicare expenditures by 13%.

In the four demonstrations that focused on changing the financial incentives for health care providers, only one project produced significant savings. A project that offered bundled payments to physicians and hospitals for heart bypass surgery reduced Medicare expenditures related to heart bypass by about 10% without an adverse impact on patient outcomes.

Imagine a wellness visit where instead of sitting down with a patient or group of patients in the office, you walk or bike with them while discussing the importance of a healthy diet and exercise.

That idea will become a reality this spring at Sanford Health, where the visits will be rolled out at Sanford-YMCA Wellness Center in Fargo, N.D.

"These group visits will happen on the track," said Dr. Bruce Pitts, president of Sanford Health Clinic North in Fargo. "They will be real visits."

The idea of working out alongside patients as part of a wellness visit came from a couple of young, active primary care physicians at Sanford, said Dr. Pitts, and the health system’s administration is giving the concept their full backing. "I can’t wait to see how it works out, because it has captured people’s imaginations around here," he said.

This type of experimentation in delivering primary care is part of a larger effort that Sanford officials began last October when they convened a two-day summit in Bemidji, Minn., to craft both a long-term agenda and a 100-day plan for revitalizing primary care. Sanford Health is an integrated health system with facilities across Minnesota, North Dakota, South Dakota, Nebraska, and Iowa. The October retreat brought together internists, pediatricians, family physicians, ob.gyns., and psychiatrists from all around the system for the first time.

The primary care summit was so well received that Sanford officials held a second retreat in late January in Fargo, with the same physicians, plus a few additions. The second meeting was a chance to see what progress had been made in the first 100 days and to develop another 100-day action plan.

"We got a lot done, but we have a lot more to do," Dr. Pitts said.

Along with the "walk with your doctor" visits, Sanford officials have also stepped up their focus on the patient-centered medical home. Since the October retreat, several of Sanford’s primary care clinics in Minnesota have achieved state certification as medical homes, and as a result are qualified to earn monthly care coordination fees for certain patients.

During the first retreat, there was also a lot of interest from physicians in learning how to integrate behavioral health services into primary care. Since then, Sanford officials have approved a systemwide plan for doing just that. For example, in the Fargo region, they are decentralizing some of their behavioral health services in an effort to make those services available in each of the primary care centers. In the Sioux Falls, S.D., region, they are recruiting more behavioral health providers.

Sanford officials have also been busy developing service agreements between specialists and primary care. The first one, which included neurologists and primary care physicians in the Fargo area, spells out how primary care physicians should work up specific conditions before referral. In exchange, neurologists pledged to see those patients within 10 days and to report back to the referring physician promptly. "It really is a contract between the specialist and primary care doctors about their roles and their responsibilities to each other," Dr. Pitts said.

While the first retreat produced a lot of big-picture ideas that will serve as ongoing projects, Dr. Pitts said that during the second retreat physicians got more focused on specific goals, such as harnessing motivational interviewing more effectively to better engage patients to make lifestyle changes. With that in mind, Sanford will launch a "train the trainer" program in motivational interviewing that will be open to all clinic staff members, not just physicians.

In the next 100 days, Sanford officials also will aim to devise better ways to add patient-generated data into the electronic health record and on developing an annual internal continuing medical education conference for primary care.

As the Sanford physicians move forward with their plans for primary care, Dr. Pitts said one thing they want to avoid is making primary care the Pontiac Aztec of medicine. Dr. Pitts said one of Sanford’s industrial engineers noted that with the Aztec automobile, Pontiac bolted on every feature that it thought young drivers would want, without redesigning the car. What they ended up with was a car no one wanted.

If health systems just add elements like behavioral health, the medical home, and the electronic health record to practices without redesigning primary care from the ground up, they risk failure, Dr. Pitts said. To address that issue over the long term, Sanford is developing "labs" within its primary care practices to test out new innovations and technology and see how they work best together.

The date for another retreat hasn’t been set yet, but Dr. Pitts said the primary care group may reconvene again this year to review the latest 100-day action plan. Eventually, though, they plan to move to annual meetings, he said.

Imagine a wellness visit where instead of sitting down with a patient or group of patients in the office, you walk or bike with them while discussing the importance of a healthy diet and exercise.

That idea will become a reality this spring at Sanford Health, where the visits will be rolled out at Sanford-YMCA Wellness Center in Fargo, N.D.

"These group visits will happen on the track," said Dr. Bruce Pitts, president of Sanford Health Clinic North in Fargo. "They will be real visits."

The idea of working out alongside patients as part of a wellness visit came from a couple of young, active primary care physicians at Sanford, said Dr. Pitts, and the health system’s administration is giving the concept their full backing. "I can’t wait to see how it works out, because it has captured people’s imaginations around here," he said.

This type of experimentation in delivering primary care is part of a larger effort that Sanford officials began last October when they convened a two-day summit in Bemidji, Minn., to craft both a long-term agenda and a 100-day plan for revitalizing primary care. Sanford Health is an integrated health system with facilities across Minnesota, North Dakota, South Dakota, Nebraska, and Iowa. The October retreat brought together internists, pediatricians, family physicians, ob.gyns., and psychiatrists from all around the system for the first time.

The primary care summit was so well received that Sanford officials held a second retreat in late January in Fargo, with the same physicians, plus a few additions. The second meeting was a chance to see what progress had been made in the first 100 days and to develop another 100-day action plan.

"We got a lot done, but we have a lot more to do," Dr. Pitts said.

Along with the "walk with your doctor" visits, Sanford officials have also stepped up their focus on the patient-centered medical home. Since the October retreat, several of Sanford’s primary care clinics in Minnesota have achieved state certification as medical homes, and as a result are qualified to earn monthly care coordination fees for certain patients.

During the first retreat, there was also a lot of interest from physicians in learning how to integrate behavioral health services into primary care. Since then, Sanford officials have approved a systemwide plan for doing just that. For example, in the Fargo region, they are decentralizing some of their behavioral health services in an effort to make those services available in each of the primary care centers. In the Sioux Falls, S.D., region, they are recruiting more behavioral health providers.

Sanford officials have also been busy developing service agreements between specialists and primary care. The first one, which included neurologists and primary care physicians in the Fargo area, spells out how primary care physicians should work up specific conditions before referral. In exchange, neurologists pledged to see those patients within 10 days and to report back to the referring physician promptly. "It really is a contract between the specialist and primary care doctors about their roles and their responsibilities to each other," Dr. Pitts said.

While the first retreat produced a lot of big-picture ideas that will serve as ongoing projects, Dr. Pitts said that during the second retreat physicians got more focused on specific goals, such as harnessing motivational interviewing more effectively to better engage patients to make lifestyle changes. With that in mind, Sanford will launch a "train the trainer" program in motivational interviewing that will be open to all clinic staff members, not just physicians.

In the next 100 days, Sanford officials also will aim to devise better ways to add patient-generated data into the electronic health record and on developing an annual internal continuing medical education conference for primary care.

As the Sanford physicians move forward with their plans for primary care, Dr. Pitts said one thing they want to avoid is making primary care the Pontiac Aztec of medicine. Dr. Pitts said one of Sanford’s industrial engineers noted that with the Aztec automobile, Pontiac bolted on every feature that it thought young drivers would want, without redesigning the car. What they ended up with was a car no one wanted.

If health systems just add elements like behavioral health, the medical home, and the electronic health record to practices without redesigning primary care from the ground up, they risk failure, Dr. Pitts said. To address that issue over the long term, Sanford is developing "labs" within its primary care practices to test out new innovations and technology and see how they work best together.

The date for another retreat hasn’t been set yet, but Dr. Pitts said the primary care group may reconvene again this year to review the latest 100-day action plan. Eventually, though, they plan to move to annual meetings, he said.

Imagine a wellness visit where instead of sitting down with a patient or group of patients in the office, you walk or bike with them while discussing the importance of a healthy diet and exercise.

That idea will become a reality this spring at Sanford Health, where the visits will be rolled out at Sanford-YMCA Wellness Center in Fargo, N.D.

"These group visits will happen on the track," said Dr. Bruce Pitts, president of Sanford Health Clinic North in Fargo. "They will be real visits."

The idea of working out alongside patients as part of a wellness visit came from a couple of young, active primary care physicians at Sanford, said Dr. Pitts, and the health system’s administration is giving the concept their full backing. "I can’t wait to see how it works out, because it has captured people’s imaginations around here," he said.

This type of experimentation in delivering primary care is part of a larger effort that Sanford officials began last October when they convened a two-day summit in Bemidji, Minn., to craft both a long-term agenda and a 100-day plan for revitalizing primary care. Sanford Health is an integrated health system with facilities across Minnesota, North Dakota, South Dakota, Nebraska, and Iowa. The October retreat brought together internists, pediatricians, family physicians, ob.gyns., and psychiatrists from all around the system for the first time.

The primary care summit was so well received that Sanford officials held a second retreat in late January in Fargo, with the same physicians, plus a few additions. The second meeting was a chance to see what progress had been made in the first 100 days and to develop another 100-day action plan.

"We got a lot done, but we have a lot more to do," Dr. Pitts said.

Along with the "walk with your doctor" visits, Sanford officials have also stepped up their focus on the patient-centered medical home. Since the October retreat, several of Sanford’s primary care clinics in Minnesota have achieved state certification as medical homes, and as a result are qualified to earn monthly care coordination fees for certain patients.

During the first retreat, there was also a lot of interest from physicians in learning how to integrate behavioral health services into primary care. Since then, Sanford officials have approved a systemwide plan for doing just that. For example, in the Fargo region, they are decentralizing some of their behavioral health services in an effort to make those services available in each of the primary care centers. In the Sioux Falls, S.D., region, they are recruiting more behavioral health providers.

Sanford officials have also been busy developing service agreements between specialists and primary care. The first one, which included neurologists and primary care physicians in the Fargo area, spells out how primary care physicians should work up specific conditions before referral. In exchange, neurologists pledged to see those patients within 10 days and to report back to the referring physician promptly. "It really is a contract between the specialist and primary care doctors about their roles and their responsibilities to each other," Dr. Pitts said.

While the first retreat produced a lot of big-picture ideas that will serve as ongoing projects, Dr. Pitts said that during the second retreat physicians got more focused on specific goals, such as harnessing motivational interviewing more effectively to better engage patients to make lifestyle changes. With that in mind, Sanford will launch a "train the trainer" program in motivational interviewing that will be open to all clinic staff members, not just physicians.

In the next 100 days, Sanford officials also will aim to devise better ways to add patient-generated data into the electronic health record and on developing an annual internal continuing medical education conference for primary care.

As the Sanford physicians move forward with their plans for primary care, Dr. Pitts said one thing they want to avoid is making primary care the Pontiac Aztec of medicine. Dr. Pitts said one of Sanford’s industrial engineers noted that with the Aztec automobile, Pontiac bolted on every feature that it thought young drivers would want, without redesigning the car. What they ended up with was a car no one wanted.

If health systems just add elements like behavioral health, the medical home, and the electronic health record to practices without redesigning primary care from the ground up, they risk failure, Dr. Pitts said. To address that issue over the long term, Sanford is developing "labs" within its primary care practices to test out new innovations and technology and see how they work best together.

The date for another retreat hasn’t been set yet, but Dr. Pitts said the primary care group may reconvene again this year to review the latest 100-day action plan. Eventually, though, they plan to move to annual meetings, he said.

The Affordable Care Act calls for the creation of health insurance exchanges in every state to provide a one-stop shop for individuals and small businesses to compare and purchase coverage. All plans operating in the exchange must offer a minimum set of health benefits and services, known as the "essential health benefits" package. Nongrandfathered plans in the individual and small group markets that are sold outside the exchanges must also offer the essential health benefits package.

Plans must include services in 10 benefit categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive/wellness services and chronic disease management, and pediatric services (including oral and vision care). The ACA gives the HHS secretary the authority to decide on the set of services that will be covered in each of the 10 categories.

Last December, the Department of Health and Human Services issued a bulletin giving states significant authority in setting those benefits. Rather than issue a national set of essential benefits, the HHS instead instructed states to select a benchmark plan that covers all of the categories. States must choose as a benchmark plan one of the three largest small-group plans in the state, one of the three largest state-employee health plans, one of the three largest federal-employee health plan options, or the largest HMO plan offered in the state’s commercial market.

Edward F. Howard, executive vice president of the Alliance for Health Reform, explains how the benefits package may vary from state to state.

Question: How much discretion do the states have in setting benefits?

Mr. Howard: The precise answer is unknown because the HHS rule-making process is still ongoing. The states have a lot of discretion in some ways. They have to cover benefits in each of the 10 categories and they have to do it in a way that doesn’t discriminate. What they have the discretion to do is to choose from among what are in effect 10 different benchmark plans. Those plans are going to vary widely and the states can make the choice of one plan or another based on what would suit their purposes best. I don’t think there are very many people saying that the states are not going to have enough discretion; even the states don’t seem to be saying that. There are a number of consumer groups and disease groups, who believe there ought to be a national standard instead; a handful of congressional Democrats agree with them and have been making some noise on that front. But this move by the HHS was pretty clearly a way to simplify the process of getting the exchanges up and running by allowing states to avoid making changes to their existing laws on mandated health benefits in the small-group market.

Question: How much state variation are we likely to see?

Mr. Howard: A lot. It reflects the fact that some states have legislated lots and lots of health benefits in the small-group market. But one of the things that the HHS Bulletin points out is that the overwhelming number of state-mandated benefits – and that number is up in the hundreds – are for items and services that are pretty common and almost universal among the states. So, in general, the variation among the mandated benefits wouldn’t produce a benchmark plan that would significantly distort the market from place to place.

Question: Does this benchmark plan approach potentially keep down costs?

Mr. Howard: Most of the real insurance experts would tell you that it won’t hold down costs. In fact, it’s likely to increase them over a national benefits standard. Analysts who have followed this issue very closely expect states to gravitate toward choosing one of the popular plans in the small-group market in that state. By definition, what that means is that the benchmark plan is going to include the state\'s mandated health benefits. If it did not and the state chose, for example, to go with the federal employees’ plan that was most used in that state, it might not have some of the state-mandated benefits. That would mean that individuals who received subsidies to purchase insurance in the exchange would have to get part of that subsidy financed by the state. So states are going to be very much inclined to go for the somewhat richer package that is included in one of their small-group plans so that they don’t have to pay for their own mandated health benefits. For at least a couple of years that benefit package is likely to be richer than it might have been had the HHS issued a national standard.

Question: The HHS has been criticized for giving the states too much flexibility. Is there a danger that the plans will not be comprehensive enough?

Mr. Howard: There’s always that danger. That’s one of the areas where we really need a little more definition of what the HHS is going to require. For example, we know that they are going to allow actuarial equivalence in the benefits. But we don’t know whether that will be within one of those 10 categories or across categories. And we don’t know how much variability they are going to allow. The adequacy of the benefit package is going to depend a lot on those subsequent decisions from the HHS.

The Affordable Care Act calls for the creation of health insurance exchanges in every state to provide a one-stop shop for individuals and small businesses to compare and purchase coverage. All plans operating in the exchange must offer a minimum set of health benefits and services, known as the "essential health benefits" package. Nongrandfathered plans in the individual and small group markets that are sold outside the exchanges must also offer the essential health benefits package.

Plans must include services in 10 benefit categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive/wellness services and chronic disease management, and pediatric services (including oral and vision care). The ACA gives the HHS secretary the authority to decide on the set of services that will be covered in each of the 10 categories.

Last December, the Department of Health and Human Services issued a bulletin giving states significant authority in setting those benefits. Rather than issue a national set of essential benefits, the HHS instead instructed states to select a benchmark plan that covers all of the categories. States must choose as a benchmark plan one of the three largest small-group plans in the state, one of the three largest state-employee health plans, one of the three largest federal-employee health plan options, or the largest HMO plan offered in the state’s commercial market.

Edward F. Howard, executive vice president of the Alliance for Health Reform, explains how the benefits package may vary from state to state.

Question: How much discretion do the states have in setting benefits?

Mr. Howard: The precise answer is unknown because the HHS rule-making process is still ongoing. The states have a lot of discretion in some ways. They have to cover benefits in each of the 10 categories and they have to do it in a way that doesn’t discriminate. What they have the discretion to do is to choose from among what are in effect 10 different benchmark plans. Those plans are going to vary widely and the states can make the choice of one plan or another based on what would suit their purposes best. I don’t think there are very many people saying that the states are not going to have enough discretion; even the states don’t seem to be saying that. There are a number of consumer groups and disease groups, who believe there ought to be a national standard instead; a handful of congressional Democrats agree with them and have been making some noise on that front. But this move by the HHS was pretty clearly a way to simplify the process of getting the exchanges up and running by allowing states to avoid making changes to their existing laws on mandated health benefits in the small-group market.

Question: How much state variation are we likely to see?

Mr. Howard: A lot. It reflects the fact that some states have legislated lots and lots of health benefits in the small-group market. But one of the things that the HHS Bulletin points out is that the overwhelming number of state-mandated benefits – and that number is up in the hundreds – are for items and services that are pretty common and almost universal among the states. So, in general, the variation among the mandated benefits wouldn’t produce a benchmark plan that would significantly distort the market from place to place.

Question: Does this benchmark plan approach potentially keep down costs?

Mr. Howard: Most of the real insurance experts would tell you that it won’t hold down costs. In fact, it’s likely to increase them over a national benefits standard. Analysts who have followed this issue very closely expect states to gravitate toward choosing one of the popular plans in the small-group market in that state. By definition, what that means is that the benchmark plan is going to include the state\'s mandated health benefits. If it did not and the state chose, for example, to go with the federal employees’ plan that was most used in that state, it might not have some of the state-mandated benefits. That would mean that individuals who received subsidies to purchase insurance in the exchange would have to get part of that subsidy financed by the state. So states are going to be very much inclined to go for the somewhat richer package that is included in one of their small-group plans so that they don’t have to pay for their own mandated health benefits. For at least a couple of years that benefit package is likely to be richer than it might have been had the HHS issued a national standard.

Question: The HHS has been criticized for giving the states too much flexibility. Is there a danger that the plans will not be comprehensive enough?

Mr. Howard: There’s always that danger. That’s one of the areas where we really need a little more definition of what the HHS is going to require. For example, we know that they are going to allow actuarial equivalence in the benefits. But we don’t know whether that will be within one of those 10 categories or across categories. And we don’t know how much variability they are going to allow. The adequacy of the benefit package is going to depend a lot on those subsequent decisions from the HHS.

The Affordable Care Act calls for the creation of health insurance exchanges in every state to provide a one-stop shop for individuals and small businesses to compare and purchase coverage. All plans operating in the exchange must offer a minimum set of health benefits and services, known as the "essential health benefits" package. Nongrandfathered plans in the individual and small group markets that are sold outside the exchanges must also offer the essential health benefits package.

Plans must include services in 10 benefit categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive/wellness services and chronic disease management, and pediatric services (including oral and vision care). The ACA gives the HHS secretary the authority to decide on the set of services that will be covered in each of the 10 categories.

Last December, the Department of Health and Human Services issued a bulletin giving states significant authority in setting those benefits. Rather than issue a national set of essential benefits, the HHS instead instructed states to select a benchmark plan that covers all of the categories. States must choose as a benchmark plan one of the three largest small-group plans in the state, one of the three largest state-employee health plans, one of the three largest federal-employee health plan options, or the largest HMO plan offered in the state’s commercial market.

Edward F. Howard, executive vice president of the Alliance for Health Reform, explains how the benefits package may vary from state to state.

Question: How much discretion do the states have in setting benefits?

Mr. Howard: The precise answer is unknown because the HHS rule-making process is still ongoing. The states have a lot of discretion in some ways. They have to cover benefits in each of the 10 categories and they have to do it in a way that doesn’t discriminate. What they have the discretion to do is to choose from among what are in effect 10 different benchmark plans. Those plans are going to vary widely and the states can make the choice of one plan or another based on what would suit their purposes best. I don’t think there are very many people saying that the states are not going to have enough discretion; even the states don’t seem to be saying that. There are a number of consumer groups and disease groups, who believe there ought to be a national standard instead; a handful of congressional Democrats agree with them and have been making some noise on that front. But this move by the HHS was pretty clearly a way to simplify the process of getting the exchanges up and running by allowing states to avoid making changes to their existing laws on mandated health benefits in the small-group market.

Question: How much state variation are we likely to see?

Mr. Howard: A lot. It reflects the fact that some states have legislated lots and lots of health benefits in the small-group market. But one of the things that the HHS Bulletin points out is that the overwhelming number of state-mandated benefits – and that number is up in the hundreds – are for items and services that are pretty common and almost universal among the states. So, in general, the variation among the mandated benefits wouldn’t produce a benchmark plan that would significantly distort the market from place to place.

Question: Does this benchmark plan approach potentially keep down costs?

Mr. Howard: Most of the real insurance experts would tell you that it won’t hold down costs. In fact, it’s likely to increase them over a national benefits standard. Analysts who have followed this issue very closely expect states to gravitate toward choosing one of the popular plans in the small-group market in that state. By definition, what that means is that the benchmark plan is going to include the state\'s mandated health benefits. If it did not and the state chose, for example, to go with the federal employees’ plan that was most used in that state, it might not have some of the state-mandated benefits. That would mean that individuals who received subsidies to purchase insurance in the exchange would have to get part of that subsidy financed by the state. So states are going to be very much inclined to go for the somewhat richer package that is included in one of their small-group plans so that they don’t have to pay for their own mandated health benefits. For at least a couple of years that benefit package is likely to be richer than it might have been had the HHS issued a national standard.

Question: The HHS has been criticized for giving the states too much flexibility. Is there a danger that the plans will not be comprehensive enough?

Mr. Howard: There’s always that danger. That’s one of the areas where we really need a little more definition of what the HHS is going to require. For example, we know that they are going to allow actuarial equivalence in the benefits. But we don’t know whether that will be within one of those 10 categories or across categories. And we don’t know how much variability they are going to allow. The adequacy of the benefit package is going to depend a lot on those subsequent decisions from the HHS.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President had promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President had promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President had promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Federal efforts to root out health care fraud in the Medicare and Medicaid programs last year paid off – to the tune of more than $4 billion.

In a report released on Feb. 14, the departments of Justice and Health and Human Services detailed how they were able to recover nearly $4.1 billion in improper and fraudulent payments from government health programs during fiscal year 2011. The eyebrow-raising figure is the largest health care fraud recovery that the federal government has made in a single year.

"We’re regaining the upper hand in our fight against health care fraud," HHS Secretary Kathleen Sebelius said during a press conference to release the report.

HHS also announced a proposed regulation that would require Medicare providers and suppliers to report and return self-identified overpayments within 60 days or when a corresponding cost report is due, whichever date is later.

The regulation, mandated by the Affordable Care Act, sets a deadline for returning overpayments for the first time. Some examples of the overpayments include being paid twice for the same service, a payment for an excluded or unnecessary service, or a payment made to the wrong person. Physicians and other providers who fail to return overpayments within the specified time period could face civil monetary penalties under the False Claims Act or be excluded from participating in federal health care programs.

The fraud crackdown isn’t just good policy, Ms. Sebelius said, it’s also a good investment. Between 2009 and 2011, the federal government recovered more than $7 for every $1 spent on fraud prevention and recovery activities. That return on investment is about $2 higher than the historical average.

Fraud prevention has been a cabinet-level priority since 2009, Ms. Sebelius said. Prior to that, health care scams were growing in scope and sophistication, and the government was falling behind in prevention and recovery efforts. Now, HHS employs technology to identify suspicious claims in real time and stop payments when needed.

HHS and Justice also are looking to expand the successful Medicare Fraud Strike Force teams that are currently working in Miami, Los Angeles, New York, Baton Rouge, Detroit, Houston, Tampa, Chicago, and Dallas.

In addition, over the last 3 years, HHS has issued regulations aimed at preventing fraud. For example, providers who have been terminated from a state Medicaid program or the Medicare program are now also being terminated from all Medicaid programs. HHS is also performing a more rigorous screening of providers in the durable medical equipment and home health industries.

"The days when you could rent an office, acquire some Medicare numbers, and start sending out claims for motorized wheelchairs that people didn’t need and often didn’t get are coming to an end," she said.

Federal efforts to root out health care fraud in the Medicare and Medicaid programs last year paid off – to the tune of more than $4 billion.

In a report released on Feb. 14, the departments of Justice and Health and Human Services detailed how they were able to recover nearly $4.1 billion in improper and fraudulent payments from government health programs during fiscal year 2011. The eyebrow-raising figure is the largest health care fraud recovery that the federal government has made in a single year.

"We’re regaining the upper hand in our fight against health care fraud," HHS Secretary Kathleen Sebelius said during a press conference to release the report.

HHS also announced a proposed regulation that would require Medicare providers and suppliers to report and return self-identified overpayments within 60 days or when a corresponding cost report is due, whichever date is later.

The regulation, mandated by the Affordable Care Act, sets a deadline for returning overpayments for the first time. Some examples of the overpayments include being paid twice for the same service, a payment for an excluded or unnecessary service, or a payment made to the wrong person. Physicians and other providers who fail to return overpayments within the specified time period could face civil monetary penalties under the False Claims Act or be excluded from participating in federal health care programs.

The fraud crackdown isn’t just good policy, Ms. Sebelius said, it’s also a good investment. Between 2009 and 2011, the federal government recovered more than $7 for every $1 spent on fraud prevention and recovery activities. That return on investment is about $2 higher than the historical average.

Fraud prevention has been a cabinet-level priority since 2009, Ms. Sebelius said. Prior to that, health care scams were growing in scope and sophistication, and the government was falling behind in prevention and recovery efforts. Now, HHS employs technology to identify suspicious claims in real time and stop payments when needed.

HHS and Justice also are looking to expand the successful Medicare Fraud Strike Force teams that are currently working in Miami, Los Angeles, New York, Baton Rouge, Detroit, Houston, Tampa, Chicago, and Dallas.

In addition, over the last 3 years, HHS has issued regulations aimed at preventing fraud. For example, providers who have been terminated from a state Medicaid program or the Medicare program are now also being terminated from all Medicaid programs. HHS is also performing a more rigorous screening of providers in the durable medical equipment and home health industries.

"The days when you could rent an office, acquire some Medicare numbers, and start sending out claims for motorized wheelchairs that people didn’t need and often didn’t get are coming to an end," she said.

Federal efforts to root out health care fraud in the Medicare and Medicaid programs last year paid off – to the tune of more than $4 billion.

In a report released on Feb. 14, the departments of Justice and Health and Human Services detailed how they were able to recover nearly $4.1 billion in improper and fraudulent payments from government health programs during fiscal year 2011. The eyebrow-raising figure is the largest health care fraud recovery that the federal government has made in a single year.

"We’re regaining the upper hand in our fight against health care fraud," HHS Secretary Kathleen Sebelius said during a press conference to release the report.

HHS also announced a proposed regulation that would require Medicare providers and suppliers to report and return self-identified overpayments within 60 days or when a corresponding cost report is due, whichever date is later.

The regulation, mandated by the Affordable Care Act, sets a deadline for returning overpayments for the first time. Some examples of the overpayments include being paid twice for the same service, a payment for an excluded or unnecessary service, or a payment made to the wrong person. Physicians and other providers who fail to return overpayments within the specified time period could face civil monetary penalties under the False Claims Act or be excluded from participating in federal health care programs.

The fraud crackdown isn’t just good policy, Ms. Sebelius said, it’s also a good investment. Between 2009 and 2011, the federal government recovered more than $7 for every $1 spent on fraud prevention and recovery activities. That return on investment is about $2 higher than the historical average.

Fraud prevention has been a cabinet-level priority since 2009, Ms. Sebelius said. Prior to that, health care scams were growing in scope and sophistication, and the government was falling behind in prevention and recovery efforts. Now, HHS employs technology to identify suspicious claims in real time and stop payments when needed.

HHS and Justice also are looking to expand the successful Medicare Fraud Strike Force teams that are currently working in Miami, Los Angeles, New York, Baton Rouge, Detroit, Houston, Tampa, Chicago, and Dallas.

In addition, over the last 3 years, HHS has issued regulations aimed at preventing fraud. For example, providers who have been terminated from a state Medicaid program or the Medicare program are now also being terminated from all Medicaid programs. HHS is also performing a more rigorous screening of providers in the durable medical equipment and home health industries.

"The days when you could rent an office, acquire some Medicare numbers, and start sending out claims for motorized wheelchairs that people didn’t need and often didn’t get are coming to an end," she said.

President Obama is asking Congress to enact a budget that would cut more than $360 billion from Medicare, Medicaid, and other federal health programs over the next decade.

The president’s fiscal year 2013 budget proposal seeks to shrink the growth in federal spending in the Medicare and Medicaid programs, in part by reducing payments to providers to cover patients’ unpaid copayments and deductibles, by requiring drug manufacturers to provide the same drug rebates for Medicare Part D as they do for Medicaid, and by reducing payments to inpatient rehabilitation facilities for conditions that can be treated in skilled nursing facilities. The proposal also seeks to cut payments for certain advanced imaging modalities.

Official White House Photo by Pete Souza

Through a package of reductions in provider payments, the Health and Human Services department estimates that the federal government would save more than $5 billion in fiscal year 2013 and about $267 billion by 2022, according to budget documents.

"Our budget helps reduce the deficit by $366 billion over 10 years, almost all of which comes from reforms to Medicare and Medicaid," HHS Deputy Secretary Bill Corr said during a news conference. "These are significant, but they are carefully crafted to protect beneficiaries."

The 2013 budget proposal includes many of the same health care policies President Obama presented to Congress last September as part of his deficit reduction plan. That plan called for $320 billion in cuts to federal health programs. This time around, the proposed savings projections are higher in part because the budget forecast has shifted forward by 1 year and in part due to increased fraud prevention activities, Mr. Corr said.

Graduate medical education also would take a hit under the president’s budget proposal. Specifically, the proposal would cut about two-thirds of the current funding – from $265 million in 2011 to $88 million in 2013 – for the Children’s Hospitals Graduate Medical Education Payment Program, which supports residency training in freestanding children’s hospitals. While the reduced spending is expected to fund the same number of residencies as in previous years, the money would only be used to pay for the direct costs of residency training, such as salaries and benefits of supervising faculty members. The proposed budget would cut about $177 million from the program in indirect costs, which include subsidizing the reduced productivity of hospital staff involved in training residents.

The 2013 budget proposal also continues implementation of the Affordable Care Act. Officials at the Centers for Medicare and Medicaid Services are asking Congress for $574 million in new funds to begin certifying state-based insurance exchanges and begin work on the exchanges that will be run by the federal government. The proposal also would cut about $4 billion from the health law’s Prevention and Public Health Fund over 10 years, starting in 2014.

The president’s budget proposal already faces opposition on Capitol Hill. Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, called the proposal "irresponsible" and said the plan would spend too much, tax too much, and borrow too much. He also accused the administration of using budget gimmicks to overstate the level of deficit reduction by counting savings that have already been enacted.

"This budget does nothing to prevent the bankruptcy of critical programs, threatening the health and retirement security of current and future seniors," Rep. Ryan said in a statement. "Worse, it continues the president’s policy of letting an unaccountable board of bureaucrats cut Medicare in ways that will lead to denied care for seniors. The broken promises and recycled gimmicks contained in this budget have dramatically widened this president’s growing credibility deficit."

Overall, the HHS 2013 budget proposal totals $940.9 billion, with proposals for $76.7 billion in discretionary spending. It includes $829.4 billion in mandatory and discretionary funding for the Centers for Medicare and Medicaid Services, up about $72 billion from 2012. Proposed funding for National Institutes of Health is level at $30.9 billion. The proposal would increase funding for the Food and Drug Administration by about 17% to $4.5 billion in 2013. The bulk of that increase would be funded through new industry user fees, some of which are currently pending in Congress.

The president also requested $11.2 billion for the Centers for Disease Control and Prevention, an increase of $39 million from 2012. The total includes about $900 million from the Prevention and Public Health Fund.

The administration’s budget proposal also reaffirms support for finding a permanent replacement for the Sustainable Growth Rate (SGR), the formula used in setting Medicare payments to physicians. The proposal sets aside $429 billion over the next decade to account for adjusting the SGR to prevent significant Medicare physician pay cuts.

President Obama is asking Congress to enact a budget that would cut more than $360 billion from Medicare, Medicaid, and other federal health programs over the next decade.

The president’s fiscal year 2013 budget proposal seeks to shrink the growth in federal spending in the Medicare and Medicaid programs, in part by reducing payments to providers to cover patients’ unpaid copayments and deductibles, by requiring drug manufacturers to provide the same drug rebates for Medicare Part D as they do for Medicaid, and by reducing payments to inpatient rehabilitation facilities for conditions that can be treated in skilled nursing facilities. The proposal also seeks to cut payments for certain advanced imaging modalities.

Official White House Photo by Pete Souza

Through a package of reductions in provider payments, the Health and Human Services department estimates that the federal government would save more than $5 billion in fiscal year 2013 and about $267 billion by 2022, according to budget documents.

"Our budget helps reduce the deficit by $366 billion over 10 years, almost all of which comes from reforms to Medicare and Medicaid," HHS Deputy Secretary Bill Corr said during a news conference. "These are significant, but they are carefully crafted to protect beneficiaries."

The 2013 budget proposal includes many of the same health care policies President Obama presented to Congress last September as part of his deficit reduction plan. That plan called for $320 billion in cuts to federal health programs. This time around, the proposed savings projections are higher in part because the budget forecast has shifted forward by 1 year and in part due to increased fraud prevention activities, Mr. Corr said.

Graduate medical education also would take a hit under the president’s budget proposal. Specifically, the proposal would cut about two-thirds of the current funding – from $265 million in 2011 to $88 million in 2013 – for the Children’s Hospitals Graduate Medical Education Payment Program, which supports residency training in freestanding children’s hospitals. While the reduced spending is expected to fund the same number of residencies as in previous years, the money would only be used to pay for the direct costs of residency training, such as salaries and benefits of supervising faculty members. The proposed budget would cut about $177 million from the program in indirect costs, which include subsidizing the reduced productivity of hospital staff involved in training residents.

The 2013 budget proposal also continues implementation of the Affordable Care Act. Officials at the Centers for Medicare and Medicaid Services are asking Congress for $574 million in new funds to begin certifying state-based insurance exchanges and begin work on the exchanges that will be run by the federal government. The proposal also would cut about $4 billion from the health law’s Prevention and Public Health Fund over 10 years, starting in 2014.

The president’s budget proposal already faces opposition on Capitol Hill. Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, called the proposal "irresponsible" and said the plan would spend too much, tax too much, and borrow too much. He also accused the administration of using budget gimmicks to overstate the level of deficit reduction by counting savings that have already been enacted.

"This budget does nothing to prevent the bankruptcy of critical programs, threatening the health and retirement security of current and future seniors," Rep. Ryan said in a statement. "Worse, it continues the president’s policy of letting an unaccountable board of bureaucrats cut Medicare in ways that will lead to denied care for seniors. The broken promises and recycled gimmicks contained in this budget have dramatically widened this president’s growing credibility deficit."

Overall, the HHS 2013 budget proposal totals $940.9 billion, with proposals for $76.7 billion in discretionary spending. It includes $829.4 billion in mandatory and discretionary funding for the Centers for Medicare and Medicaid Services, up about $72 billion from 2012. Proposed funding for National Institutes of Health is level at $30.9 billion. The proposal would increase funding for the Food and Drug Administration by about 17% to $4.5 billion in 2013. The bulk of that increase would be funded through new industry user fees, some of which are currently pending in Congress.

The president also requested $11.2 billion for the Centers for Disease Control and Prevention, an increase of $39 million from 2012. The total includes about $900 million from the Prevention and Public Health Fund.

The administration’s budget proposal also reaffirms support for finding a permanent replacement for the Sustainable Growth Rate (SGR), the formula used in setting Medicare payments to physicians. The proposal sets aside $429 billion over the next decade to account for adjusting the SGR to prevent significant Medicare physician pay cuts.

President Obama is asking Congress to enact a budget that would cut more than $360 billion from Medicare, Medicaid, and other federal health programs over the next decade.

The president’s fiscal year 2013 budget proposal seeks to shrink the growth in federal spending in the Medicare and Medicaid programs, in part by reducing payments to providers to cover patients’ unpaid copayments and deductibles, by requiring drug manufacturers to provide the same drug rebates for Medicare Part D as they do for Medicaid, and by reducing payments to inpatient rehabilitation facilities for conditions that can be treated in skilled nursing facilities. The proposal also seeks to cut payments for certain advanced imaging modalities.

Official White House Photo by Pete Souza

Through a package of reductions in provider payments, the Health and Human Services department estimates that the federal government would save more than $5 billion in fiscal year 2013 and about $267 billion by 2022, according to budget documents.

"Our budget helps reduce the deficit by $366 billion over 10 years, almost all of which comes from reforms to Medicare and Medicaid," HHS Deputy Secretary Bill Corr said during a news conference. "These are significant, but they are carefully crafted to protect beneficiaries."

The 2013 budget proposal includes many of the same health care policies President Obama presented to Congress last September as part of his deficit reduction plan. That plan called for $320 billion in cuts to federal health programs. This time around, the proposed savings projections are higher in part because the budget forecast has shifted forward by 1 year and in part due to increased fraud prevention activities, Mr. Corr said.

Graduate medical education also would take a hit under the president’s budget proposal. Specifically, the proposal would cut about two-thirds of the current funding – from $265 million in 2011 to $88 million in 2013 – for the Children’s Hospitals Graduate Medical Education Payment Program, which supports residency training in freestanding children’s hospitals. While the reduced spending is expected to fund the same number of residencies as in previous years, the money would only be used to pay for the direct costs of residency training, such as salaries and benefits of supervising faculty members. The proposed budget would cut about $177 million from the program in indirect costs, which include subsidizing the reduced productivity of hospital staff involved in training residents.

The 2013 budget proposal also continues implementation of the Affordable Care Act. Officials at the Centers for Medicare and Medicaid Services are asking Congress for $574 million in new funds to begin certifying state-based insurance exchanges and begin work on the exchanges that will be run by the federal government. The proposal also would cut about $4 billion from the health law’s Prevention and Public Health Fund over 10 years, starting in 2014.

The president’s budget proposal already faces opposition on Capitol Hill. Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, called the proposal "irresponsible" and said the plan would spend too much, tax too much, and borrow too much. He also accused the administration of using budget gimmicks to overstate the level of deficit reduction by counting savings that have already been enacted.

"This budget does nothing to prevent the bankruptcy of critical programs, threatening the health and retirement security of current and future seniors," Rep. Ryan said in a statement. "Worse, it continues the president’s policy of letting an unaccountable board of bureaucrats cut Medicare in ways that will lead to denied care for seniors. The broken promises and recycled gimmicks contained in this budget have dramatically widened this president’s growing credibility deficit."

Overall, the HHS 2013 budget proposal totals $940.9 billion, with proposals for $76.7 billion in discretionary spending. It includes $829.4 billion in mandatory and discretionary funding for the Centers for Medicare and Medicaid Services, up about $72 billion from 2012. Proposed funding for National Institutes of Health is level at $30.9 billion. The proposal would increase funding for the Food and Drug Administration by about 17% to $4.5 billion in 2013. The bulk of that increase would be funded through new industry user fees, some of which are currently pending in Congress.

The president also requested $11.2 billion for the Centers for Disease Control and Prevention, an increase of $39 million from 2012. The total includes about $900 million from the Prevention and Public Health Fund.

The administration’s budget proposal also reaffirms support for finding a permanent replacement for the Sustainable Growth Rate (SGR), the formula used in setting Medicare payments to physicians. The proposal sets aside $429 billion over the next decade to account for adjusting the SGR to prevent significant Medicare physician pay cuts.

Following weeks of protest by religious leaders, the Obama administration has changed its policy that nonprofit religious organizations, such as universities and hospitals, must provide insurance coverage for contraception to their employees.

Under a new plan, announced Feb. 10 by the President, these organizations will not be required to offer contraception as part of their health coverage. Instead, the health plans they contract with will offer employees contraception directly and free of change, without involvement from the employer.

Photo ©Tina Sbrigato/iStockphoto.com

"These employers will not have to pay for, or provide contraceptive services," President Obama said during a news conference. "But women who work at these institutions will have access to free contraceptive services, just like other women, and they’ll no longer have to pay hundreds of dollars a year that could go towards paying the rent or buying groceries."

The change will be cost neutral for health plans, senior administration officials said, because contraception pays for itself through the prevention of unintended pregnancies.

Churches and other houses of worship remain exempt from the requirement to provide copayment-free insurance coverage for contraceptive services, per the original regulations.

The controversy began last summer when the Obama administration issued an interim final rule outlining the women’s preventive services that health plans would be required to cover without copayment under the Affordable Care Act. The list of covered services included all Food and Drug Administration-approved contraceptives. Many religious organizations objected, saying that the proposal did not offer a broad enough exemption for religious employers, including Catholic hospitals and charities that object to contraception on religious grounds.

The tension mounted in January when the Health and Human Services department announced plans to finalize the rules with little change. Instead of broadening the exemption, they offered nonprofit religious employers an extra year – until Aug. 1, 2013 – to comply with the rule.

During the news conference, President Obama said it had always been his intention to use that year to work with nonprofit religious employers on an accommodation. But given the recent and fierce reaction to the interim final rule, he asked aides to speed up the process.

"This is an issue where people of goodwill on both sides of the debate have been sorting through some very complicated questions to find a solution that works for everyone," he said. "With today’s announcement we’re done that. Religious liberty will be protected and a law that requires free preventive care will not discriminate against women."

The Planned Parenthood Federation of America issued a statement saying that the change would still protect women’s access to affordable contraception.

Sister Carol Keehan, president and chief executive officer of the Catholic Health Association of the United States, which was a backer of the Affordable Care Act, also praised the announcement, saying it protected the religious liberty and conscience rights of Catholic institutions. "The framework developed has responded to the issues we identified that needed to be fixed," she said in a statement.

Tony Perkins, president of the Family Research Council, said the changes were nothing but gimmicks.

"This President is tone deaf to the very real religious and moral objections of millions of Americans," Mr. Perkins said in a statement. "This new proposal still requires religious entities that are not exempt as a church to subsidize and pay insurance companies so they can give free birth control to their employees. However, it won’t be free, because the insurance companies will increase the premium and administrative costs to the employer."

Following weeks of protest by religious leaders, the Obama administration has changed its policy that nonprofit religious organizations, such as universities and hospitals, must provide insurance coverage for contraception to their employees.

Under a new plan, announced Feb. 10 by the President, these organizations will not be required to offer contraception as part of their health coverage. Instead, the health plans they contract with will offer employees contraception directly and free of change, without involvement from the employer.

Photo ©Tina Sbrigato/iStockphoto.com

"These employers will not have to pay for, or provide contraceptive services," President Obama said during a news conference. "But women who work at these institutions will have access to free contraceptive services, just like other women, and they’ll no longer have to pay hundreds of dollars a year that could go towards paying the rent or buying groceries."

The change will be cost neutral for health plans, senior administration officials said, because contraception pays for itself through the prevention of unintended pregnancies.

Churches and other houses of worship remain exempt from the requirement to provide copayment-free insurance coverage for contraceptive services, per the original regulations.

The controversy began last summer when the Obama administration issued an interim final rule outlining the women’s preventive services that health plans would be required to cover without copayment under the Affordable Care Act. The list of covered services included all Food and Drug Administration-approved contraceptives. Many religious organizations objected, saying that the proposal did not offer a broad enough exemption for religious employers, including Catholic hospitals and charities that object to contraception on religious grounds.

The tension mounted in January when the Health and Human Services department announced plans to finalize the rules with little change. Instead of broadening the exemption, they offered nonprofit religious employers an extra year – until Aug. 1, 2013 – to comply with the rule.

During the news conference, President Obama said it had always been his intention to use that year to work with nonprofit religious employers on an accommodation. But given the recent and fierce reaction to the interim final rule, he asked aides to speed up the process.

"This is an issue where people of goodwill on both sides of the debate have been sorting through some very complicated questions to find a solution that works for everyone," he said. "With today’s announcement we’re done that. Religious liberty will be protected and a law that requires free preventive care will not discriminate against women."

The Planned Parenthood Federation of America issued a statement saying that the change would still protect women’s access to affordable contraception.

Sister Carol Keehan, president and chief executive officer of the Catholic Health Association of the United States, which was a backer of the Affordable Care Act, also praised the announcement, saying it protected the religious liberty and conscience rights of Catholic institutions. "The framework developed has responded to the issues we identified that needed to be fixed," she said in a statement.

Tony Perkins, president of the Family Research Council, said the changes were nothing but gimmicks.

"This President is tone deaf to the very real religious and moral objections of millions of Americans," Mr. Perkins said in a statement. "This new proposal still requires religious entities that are not exempt as a church to subsidize and pay insurance companies so they can give free birth control to their employees. However, it won’t be free, because the insurance companies will increase the premium and administrative costs to the employer."

Following weeks of protest by religious leaders, the Obama administration has changed its policy that nonprofit religious organizations, such as universities and hospitals, must provide insurance coverage for contraception to their employees.

Under a new plan, announced Feb. 10 by the President, these organizations will not be required to offer contraception as part of their health coverage. Instead, the health plans they contract with will offer employees contraception directly and free of change, without involvement from the employer.

Photo ©Tina Sbrigato/iStockphoto.com

"These employers will not have to pay for, or provide contraceptive services," President Obama said during a news conference. "But women who work at these institutions will have access to free contraceptive services, just like other women, and they’ll no longer have to pay hundreds of dollars a year that could go towards paying the rent or buying groceries."

The change will be cost neutral for health plans, senior administration officials said, because contraception pays for itself through the prevention of unintended pregnancies.

Churches and other houses of worship remain exempt from the requirement to provide copayment-free insurance coverage for contraceptive services, per the original regulations.

The controversy began last summer when the Obama administration issued an interim final rule outlining the women’s preventive services that health plans would be required to cover without copayment under the Affordable Care Act. The list of covered services included all Food and Drug Administration-approved contraceptives. Many religious organizations objected, saying that the proposal did not offer a broad enough exemption for religious employers, including Catholic hospitals and charities that object to contraception on religious grounds.

The tension mounted in January when the Health and Human Services department announced plans to finalize the rules with little change. Instead of broadening the exemption, they offered nonprofit religious employers an extra year – until Aug. 1, 2013 – to comply with the rule.

During the news conference, President Obama said it had always been his intention to use that year to work with nonprofit religious employers on an accommodation. But given the recent and fierce reaction to the interim final rule, he asked aides to speed up the process.

"This is an issue where people of goodwill on both sides of the debate have been sorting through some very complicated questions to find a solution that works for everyone," he said. "With today’s announcement we’re done that. Religious liberty will be protected and a law that requires free preventive care will not discriminate against women."

The Planned Parenthood Federation of America issued a statement saying that the change would still protect women’s access to affordable contraception.

Sister Carol Keehan, president and chief executive officer of the Catholic Health Association of the United States, which was a backer of the Affordable Care Act, also praised the announcement, saying it protected the religious liberty and conscience rights of Catholic institutions. "The framework developed has responded to the issues we identified that needed to be fixed," she said in a statement.

Tony Perkins, president of the Family Research Council, said the changes were nothing but gimmicks.

"This President is tone deaf to the very real religious and moral objections of millions of Americans," Mr. Perkins said in a statement. "This new proposal still requires religious entities that are not exempt as a church to subsidize and pay insurance companies so they can give free birth control to their employees. However, it won’t be free, because the insurance companies will increase the premium and administrative costs to the employer."