Three months after health reform legislation was signed into law and four months before mid-term elections, President Obama's decision to avert a Senate floor battle by using a recess appointment to tap Donald Berwick as the next CMS administrator brought strong support among various Medicare stakeholders and cries of outrage from Republican lawmakers. The White House said the move is aimed at ensuring momentum on health reform implementation, but Finance Committee Chair Max Baucus (D-MT), expressed disappointment the normal process was sidestepped and an internal Finance GOP e-mail complains that key questions regarding Berwick's ties with outside groups remain unanswered.

White House Press Secretary Robert Gibbs took questions Wednesday about the stalled nomination of pediatrician Donald Berwick, who also runs the Cambridge,MA-based Institute for Health Care Improvement. The following are excerpts from the official transcript.

Beneficiary advocates and insurers disagree on the scope of the 2008 mental health parity law -- including its application to "nonquantitative" treatment limits, whether plans that don't administer medical benefits are covered, and the extent to which certain Medicaid benefits fall under the law, the latter an issue for which CMS is "furiously" drafting guidance to help states sort out the law's reach, a CMS official says.

The compliance deadline for an interim final rule that puts mental-health and substance-abuse benefits on par with medical benefits kicked in July 1 shortly after a U.S. district court dismissed a lawsuit by insurance companies to block the rules. But the regulations could still change, as the judge in the case said she expects the government to update them based on comments it solicited when it issued the interim final rule.

Roughly 64 percent of the suppliers of home medical equipment such as oxygen machines and electric wheelchairs will be cut out of the Medicare market for those products in select areas of the country under a competitive bid program that CMS expects will save $17 billion over 10 years, according to CMS data. Agency officials say the losing bidders may still subcontract with winning bidders, but that isn't enough to appease DME suppliers who are seeking action on a bipartisan House bill with 252 cosponsors that would scrap the bidding program.

CMS' newly proposed physician fee schedule exempts community pharmacies from the round-two competitive bidding process for Medicare Part B diabetes testing supplies, but the agency holds out the possibility that retail durable medical equipment could still be included in future bidding rounds of bidding. While local, retail pharmacies will not have to bid to sell DME, mail-order pharmacies remain a part of the competitive-bidding program.

Enhanced Federal matching money for Medicaid remains in limbo as Senate lawmakers spar over paying for both FMAP and unemployment insurance (UI). A group of governor's descended on the Capitol late last month to urge Congress to support the funding, and Massachusetts Republican Scott Brown introduced legislation that would use stimulus funds to cover an extension to both programs.

Physicians are pushing their message to permanently repeal the sustainable growth rate update formula after the House June 24 approved 417-1 a stand-alone six-month physician pay patch that previously passed the Senate. President Barack Obama signed the bill the next day, blocking a 21.3 percent cut in Medicare physician payments that briefly went into effect. The legislation is retroactive to June 1 and runs through Nov. 30.

The drum beat on extending the enhanced federal matching rate for Medicaid (FMAP) services just got louder as the powerful hospital lobby laid plans to enter the fray with a lobbying day.

Senate Democrats were unable to win approval of yet another scaled back tax extenders package (HR 4386) that the Congressional Budget Office estimated would add $33.3 billion over ten years to the budget deficit and includes $2.1 billion in savings from changes to the average manufacturers price formula. The AMP proposal was later carved out of the bill after Republicans filibustered the legislation with the help of Nebraska Democrat Ben Nelson and folded it into the must-pass war spending bill (HR 4899), which was approved by the House July 1.

CMS released its annual proposed physician fee schedule June 25, containing mandatory double-digit cuts in payments under current law for doctors in 2011 that are again likely to be averted by Congress, but also includes a rebasing of the Medicare Economic Index that could add to reductions in pay for physicians if lawmakers fail to act.

Ambulatory surgical centers would see flat payments and hospitals paid under the Outpatient Prospective Payment System would see a slightly smaller reimbursement increase than earlier anticipated as a result of new health reform payment mandates, under a proposed rule released by CMS July 2. The rule would also add six new quality measures, revive an earlier proposal to require direct supervision of all outpatient therapeutic services, and create four new Ambulatory Payment Classifications (APCs) for partial hospitalization services.

Neurologists are pushing Congress and HHS to fix what they consider an oversight in the health reform law that left them ineligible for the 10 percent Medicare bonuses for primary care doctors. Stakeholders still hope that there could be a legislative fix to the omission, and have also asked HHS Secretary Kathleen Sebelius to consider an administrative solution.

The pharmaceutical industry's two leading trade groups nominated the same four people -- top officials at Pfizer, Amgen, Merck and GlaxoSmithKline -- to sit on the board of a new comparative effectiveness panel created by the health care reform law. The industry's nominees also overlap with recommendations from the Personalized Medicine Coalition, which additionally suggested that FDA drug center chief Janet Woodcock serve on the panel.

Two House Republicans are asking the Medicare Payment Advisory Commission whether CMS has the authority to waive anti-kickback restrictions on nationwide health reform demonstration programs, including gainsharing between physicians and hospitals, congressional sources say, and MedPAC's answer is likely to be "yes." The MedPAC chair tells Inside CMS the agency has such authority, but cautions it is unclear whether enough doctors would volunteer to expand pilots to nationwide demos and whether CMS has enough funding to implement such large-scale initiatives.

CMS is touting increased Medicaid funding, free federal assistance and a streamlined enrollment process in a bid to convince states to take advantage of the newly extended federal initiative aimed at providing home and community-based services for Medicaid beneficiaries. CMS is hoping to get the 29 states that participated in the initial "Money Follows the Person" demo to continue in the new phase authorized by the health reform law, and is laying plans to competitively select additional states, according to a letter sent to state Medicaid directors.

CMS should ramp up and launch a home visit demonstration project that VA doctors have shown can save Medicare money well in advance of the health reform law's 2012 deadline, top Democrats who pushed for the inclusion of the provision in the reform law said in a June 29 letter to CMS.

The home infusion industry is using a Government Accountability Office report to push for legislation that would create a Medicare demonstration program that reimburses for home infusion services. The report recommends that HHS study home infusion reimbursement, but Rep. Eliot Engel (D-NY), who requested the GAO report, says that study should take the form of a congressionally mandated demonstration project.

The Obama administration June 25 took the first step in establishing the much-discussed member-run insurance co-ops promoted by Senate Budget Committee Chair Kent Conrad (D-ND) when the Government Accountability Office appointed 15 members to the plan's advisory board.

CMS is opening the window for physicians and other providers to participate in Medicare after President Barack Obama on Friday signed legislation that offers a 2.2 percent increase in payments from June 1 through November 30.

CMS has put together an ambitious timetable for implementing regulations to award bonus payments to Medicare Advantage plans, including a February 2011deadline to name the contracts which will see the extra reimbursement in 2012 and late March of next year for a final rule on the policy, according to a document obtained by Inside CMS.

House Democrats voted July 1 to restrict "pay for delay" drug-patent settlements as part of the war supplemental. The estimated savings is $2.1 billion.

An insurance industry official bristled at an image on the Obama administration's new healthcare.gov website that features a photo of a briefcase full of cash with a caption: "Stopping Overpayments to Big Insurance Companies."

CMS compared the 3rd Quarter Average Sales Prices (ASPs) for Part B drugs this year to the previous quarter and found that "for the most part" the average prices remain stable, according to a note the agency sent to congressional health staff June 25.

Radiologists fear steep payment cuts they are slated to see from CMS, due partly to a health reform bill provision aimed at reducing health care costs, could also be picked up by private insurers. An American College of Radiology official said the imaging industry continues to question the data used by lawmakers during health reform to justify the payment policy, and fears that private insurers will piggy-back their rates on the fee schedule proposed by CMS last week, which permanently changes a key factor in reimbursement, relative value units, for diagnostic imaging services.

The Senate Finance Committee's latest probe into the Medicare Part D program is focused on why a New York health insurer failed to outstanding pharmacy claims despite being paid $66 million from the Medicare prescription drug program during February and March this year.