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February 9, 2018

Washington, DC – Early this morning, Congress passed the Bipartisan Budget Act of 2018, a continuing resolution (CR) to keep the government open. Among other things, this budget deal raises the debt ceiling through March, 2019, removes budget caps imposed by the Budget Control Act of 2011, and keeps the government funded for another 6 weeks, through March 23. This gives Congress more time to write a larger omnibus bill to address government funding for the rest of the fiscal year. 

The Bipartisan Budget Act of 2018 (full text available here) contains a “health extenders” package, which includes a number of wide-ranging provisions relating to various health programs.  While we are still reviewing the package, here we offer our first take on some (but not all) of the provisions most relevant to Medicare beneficiaries, which we organize by “Good,” “Bad” and “Mixed.” We strongly support repeal of the therapy caps, and passage of the Steve Gleason Enduring Voices Act relating to speech generating devices.  Some of the provisions we deem harmful, however, are the so-called “pay-fors” or offsets for some of the provisions that would extend and/or improve coverage.  We note that Congress sought such offsets for important health programs in the bill despite adding over a trillion dollars to the deficit through the tax cut recently signed into law.  

THE GOOD

Repeal of Medicare Outpatient Therapy Caps – Since the Balanced Budget Act of 1997, outpatient therapy under Medicare Part B has been subject to annual dollar limits, or caps.  During most of these 20 years, an “exceptions” process has allowed beneficiaries and providers to seek coverage above the caps.  The exceptions process expired December 31, 2017.  This extenders package permanently repeals the caps. However, it continues to require providers to attach a modifier code to claims above the current cap level to indicate the services are medically necessary, and claims above a higher limit ($3,000) may be subject to a targeted manual medical review.

Steve Gleason Enduring Voices Act – This Act builds upon the successes of the Steve Gleason Act of 2015 by permanently fixing restrictions in the law that limited Medicare coverage and access to Speech Generating Devices (SGDs) – which are a crucial means of communicating for people with ALS and other degenerative diseases.  Specifically, the Gleason Act makes changes to the Durable Medical Equipment section of the Social Security Act.  It moves coverage of the SGD from the rental payment category to the purchase payment category.  When the SGD fell under the rental category, Medicare would not pay for an SGD if the user had to enter a nursing home, hospital, or hospice. By moving the SGD to a purchase payment category, the user can take their SGD anywhere and keep it for as long as necessary.

Funding For Key Programs – Some important programs are funded under the new law, including community health centers (2 years), additional CHIP funding (4 more years for a total of a 10 year extension), funding extension for low-income outreach and enrollment (MIPPA); and much needed disaster relief.      

THE BAD

Further Means Testing Medicare Premiums – Medicare beneficiaries with incomes of $85,000 (or $170,000 for a couple) already have to pay higher premiums for both Part B and Part D coverage.  The amount of the increased premium depends on how much above this threshold amount they earn.  The new law makes people earning $500,000 or more pay an even higher share of their premiums than they pay under current law.  Medicare premium increases for higher income people may sound equitable, but they diminish important support for the Medicare program and for maintaining its promise as a universal program for all who qualify.

Home Health Changes – The Budget Act includes a number of provisions relating to the Medicare home health benefit that, among other things, will implement a payment model that may further reduce access to Medicare-covered home care.  In addition to reducing a home health episode of payment from 60 days to 30 days, the law eliminates the use of therapy thresholds. This payment model, which would also discourage agencies from caring for people who haven’t had a prior hospitalization and people who need mental health care, was essentially issued as a proposed rule by CMS in 2017, but was rescinded as industry and beneficiary advocates universally raised concerns. (See our September 2017 Weekly Alert discussing the proposed rule.) 

Another home health provision will allow Medicare determinations to be based as much on the documentation in the home health agency records (and nursing home records if the patient came to home health care from a SNF), as in the documentation of the physician who knows the patient and certified the need for care is a red flag. Our experience tells us that this may well lead to unfair coverage denials. Home health records are often not complete, and payment methods too often drive agencies to want to cherry-pick patients (and perhaps document accordingly). Further, the opinion of the patient’s physician has been given great weight under the law (as ruled by many courts), in determining a patient’s need for care and qualifying for Medicare. This section will conflict with that important legacy. 

THE… MIXED BAG

Provisions Improving/Expanding Services and Coverage in Medicare Advantage Only

Many provisions of the Bipartisan Budget Act provide additional benefits only for people in private Medicare Advantage (MA) plans.  On the one hand, these provisions have the potential to improve services and care for people enrolled in MA plans.  On the other hand, this approach is unfair for the majority of Medicare beneficiaries, who are in traditional Medicare, and once again favors MA over traditional Medicare.  While there are some provisions that extend coverage within accountable care organizations (ACOs), which are outside the MA program, we urge policymakers to expand services and coverage equally for all Medicare beneficiaries, not just subsets – including those in traditional Medicare.

Repeal of the Independent Payment Advisory Board (IPAB) – IPAB, created by the Affordable Care Act, was intended to be a cost-control board tasked with recommending spending cuts if certain spending levels are triggered.  Due in part to historically slow growth in Medicare spending, the requisite spending levels have not been triggered and board members have not been appointed or convened.  Many stakeholders have had concerns about IPAB, including the delegation of Congressional authority over Medicare spending decisions, the structure of the board, and lack of judicial review.  The authorizing legislation, however, includes some important consumer protections; importantly, the law prohibits the IPAB from changing eligibility or benefits, reducing the Part D low-income subsidy, or rationing care. Such protections are absent from most Medicare “reform” or “restructuring” proposals.  Furthermore, repeal of IPAB is projected to cost $17.5 billion, which will be used by some policymakers to justify further spending cuts to Medicare.

Closing of Part D Donut Hole One Year Early – The Budget Act closes the Part D coverage gap, or “Donut Hole,” in 2019 rather than 2020, as mandated by the Affordable Care Act.  In 2019, Part D enrollees will be responsible for paying 25% cost-sharing on brand name drugs in the Donut Hole rather than 30%.  Beneficiaries will also enter the catastrophic coverage phase earlier in 2019 since more drug costs would count towards meeting the coverage threshold.  While this provision will provide additional help for beneficiaries one year sooner than under the ACA, aggressive lobbying by the drug industry reduced the share of costs borne by the industry as proposed in a previous version of the bill. As reported by Politico, “[a] last-minute lobbying push by the drug industry Wednesday night potentially saved manufacturers billions of dollars by reducing how much the companies would have paid for some seniors' drugs under the Senate's two-year budget deal” (Politico, 2/8/18).   This change, prompted by drug lobbyists, does not bode well for those who look to Congress to meaningfully address the high costs prescription drugs. 

For more information, contact Matt Shepard (mshepard@medicareadvocacy.org, 860-456-7790)


The Center for Medicare Advocacy (http://www.medicareadvocacy.org) is a national, nonprofit, non-partisan law organization that works to advance access to comprehensive Medicare coverage and quality health care for older people and people with disabilities through legal analysis, education, and advocacy.

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