2012 has a lot in store

2012 will be a busy year for GHG and our clients.  The first Legislative agenda item will be the Medicare physician Sustainable Growth Rate (SGR) fix.  The 27 percent physician fee schedule cut has only been postponed for the first  2 months in 2012.  The big question is how the Congress will choose to pay for the doc fix.  Medicare Advantage cuts were on the table briefly as part of the House discussion, but the House ended up cutting Medicare payments to hospitals to cover their one year fix.

The Innovation Center has a lot of activities on the docket for 2012. 32 Accountable Care Organization (ACO) Pioneers are starting this month and organizations that are interested in the ACO Shared Savings model must submit their applications by January 20, 2012 for an April 1, 2012 start date or March 30 for a July 1, 2012 start date. Some of the applicants for the Shared Savings program will also be submitting an application for the  Advanced Payment ACO model.  Applications for the Health Care Innovation Challenge grants are due January 27 for the first round and if the $1 billion is not fully awarded there will be a second round of applications due in the summer.  Due to the large provider response, CMS has extended the deadline until April 30, 2012 for applications for the Bundled Payments for Care Improvement program for models 2 — 4.

 CMS will release the Advance Notice of MA and Part D Payment changes and the Call Letter around  February 17  with final rates and the final Call Letter issued in April.  We would also expect CMS to issue final regulations for MA and Part D Benefit Programs for CY 2013 in the first quarter of 2012. 

Applications for new Medicare Advantage plans and service area expansions for CY 2013 are due February 23, 2012 followed by bids on June 4, 2012.  

Work will continue on implementing meaningful use and the Medicare Advantage and provider value based purchasing initiatives that reward quality and penalize failure to meet targets.

 On the Health Care Reform front the first six months of 2012 will focus on the Supreme Court review of the ACA.  Oral arguments will begin March 26 and a decision is expected in late June.  States will continue their work on developing the infrastructure for the Exchanges. CMS must certify that sates have made sufficient progress by January 2013.  The Exchanges will go live in October 2013 for coverage and subsidies to begin January 1, 2014.

 HHS will develop a back up federal Exchange for states that aren’t certified.  The federal government is also building a data hub to support the Exchanges that will link Social Security, IRS and Medicaid data to facilitate eligibility and subsidies.

CMS will have to issue final regulations and guidance on policies that will govern the Exchanges.  While states will have flexibility on the Essential Benefits that plans must offer in the first two years, additional regulatory guidance is expected from HHS.

 The presidential election in November will underscore future changes that we can expect, especially in the area of Medicare reform and additional budget cuts.  Most observers expect the big cuts to start in 2013. The conventional wisdom is that it won’t be the 2 percent sequester for Medicare that was passed in the Budget Control Act of 2011 but substantially higher cuts to both the public and private Medicare plans.

Jean LeMasurier
Jean LeMasurier

Jean LeMasurier is Senior Vice President of Public Policy at Gorman Health Group (GHG). In this role, her focus includes health policy and health care reform, including changes resulting from the Affordable Care Act (ACA). Jean’s strategic planning and consulting services have been critical inputs to strategy for Medicare Advantage (MA) Health Plans and Prescription Drug Plans (PDPs), Medicaid managed care plans, pharmaceutical companies, and employers on legislation and regulatory impacts of changes in Medicare and Medicaid. Jean brings GHG clients more than 30 years of experience with the Centers for Medicare & Medicaid Services (CMS).

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