CMS Issues Proposed Rule Updating Conditions of Participation for Hospitals

On June 13, CMS released a proposed rule amending the conditions that hospitals and critical access hospitals (“CAHs”) must meet to be eligible to participate in the Medicare and Medicaid programs. The agency’s proposal, which includes comprehensive requirements to reduce infections, curb the overuse of antibiotics and prevent discriminatory behavior by providers that could limit patient access to care, is expected to apply to 6,288 facilities in the United States.

CMS’s proposal would require hospitals and CAHs to establish prevention and control programs to survey, prevent and control health care-associated infections and other communicable diseases. Additionally, the rule would require hospitals and CAHs to create antibiotic stewardship programs to promote appropriate use of antibiotics. As a condition of their participation in Medicare and Medicaid, both hospitals and CAHs would be expected to designate leaders for the infectious diseases and antibiotic programs and CAHs would be required to maintain their own quality assessment and performance improvement program. The proposed rule would also improve protections for underserved and excluded patient populations by requiring hospitals and CAHs to establish and implement a policy prohibiting discrimination on the basis of race, color, religion, national origin, sex, sexual orientation, age or disability. The agency is accepting comments on its proposed rule through August 15, 2016.

House Committee Approves Mental Health Reform Bill

On June 15, the House Energy and Commerce Committee unanimously passed the Helping Families in Mental Health Crisis Act (H.R. 2646). The legislation has been stalled in the House for several years over cost, civil liberties and privacy provisions.

As passed by the committee, the legislation would establish a new leadership position within HHS to direct federal mental health and substance abuse programs. The bill would reauthorize existing treatment and suicide prevention programs and create new ones, including a minority fellowship program for mental health providers and a training program that teaches clinicians how to better comply with HIPAA. The legislation would also require HHS to clarify conditions under which covered entities may release protected mental health information and would codify a Medicaid managed care regulation allowing optional state coverage of Institutions for Mental Disease care for adults.

H.R. 2646 is expected to go before the full House in September for a vote. However, a September vote is unlikely to leave enough time for the House passed bill to be reconciled in conference with a Senate passed measure. Republicans and Democrats in the Senate remain at odds over pairing mental health legislation with gun control measures, which most believe would kill any chances of a bill being signed into law.

CMS Receives Backlash on Medicare Patient Observation Notice Draft

CMS is receiving criticism from provider, hospital and consumer representatives over its Medicare Outpatient Observation Notice (“MOON“), which will be given to patients under observation status to explain why they have not been admitted as an inpatient and how their status will affect the way Medicare pays for their care. The agency requires that the MOON be provided to patients after 24 to 36 hours of care. The NOTICE Act (H.R. 876), which will take effect on August 6, was enacted to address complaints from patients who unknowingly spent time in hospitals under observation status, resulting in higher Medicare charges and no coverage for nursing home care.

Members of the National Association of Insurance Commissioners have said the outpatient observation notice, which CMS released in April 2016, is written at a reading level that may not be appropriate for consumers. Health care providers have also raised concerns about the draft notice and have urged the agency to clarify its policies for the coverage of drugs, including self-administered medications for chronic health conditions, provided by hospitals in outpatient settings. Rep. Lloyd Doggett (D-TX), who sponsored the NOTICE Act, said that CMS’s MOON draft does not require hospitals to explain why patients are being placed under observation status instead of being admitted and does not clearly outline why observation patients are ineligible for nursing home coverage under Medicare.

CMS accepted public comment on the draft notice through June 17 and is expected to release the final notice shortly before hospitals are required to distribute it to patients. Various hospital groups have asked CMS to delay implementation.

Health-Related Bills Introduced This Week

Rep. Dave Loebsack (D-IA) introduced the Children’s Access to Mental Health Services Act (H.R. 5462) to provide federal matching funds to Child Behavioral Health Access Programs, which consist of state and regional networks of mental health providers. The legislation’s enhanced federal match for state Medicaid programs would create or expand child mental health integration programs in pediatric primary care settings.

Sens. Chuck Grassley (R-IA) and Heidi Heitkamp (D-ND) introduced a bill (S. 3060) to provide an exception from certain group health plan requirements for qualified small employer health reimbursement arrangements. The legislation would impose a limit on the amount an employer may provide to employees to purchase individual insurance or pay for other medical expenses.

Next Week in Washington

The Senate and House return on June 20 and June 21, respectively. The Senate is poised to vote on controversial gun-related amendments to the Commerce-Justice-State appropriations spending bill as early as June 20. Senate conferees will begin conference talks with the House on opioid legislation.