CMS Releases Proposed Hospital Payment Rule

Late last Friday, April 17, CMS released the proposed FY 16 Medicare payment rule for inpatient and long-term care hospitals.  CMS estimates the proposed rule would increase Medicare payments to 3,400 acute care hospitals by about 0.3 percent, or $120 million, in 2016 compared to this year.  CMS will accept comments on the proposed rule until June 16, 2015.  The final rule will be issued by August 1, 2015.

The rule does not reverse or provide any future direction for the current short inpatient stay policies with respect to the two-midnight rule.  However, CMS noted that it is considering stakeholder feedback, as well as recent MedPAC recommendations on the two-midnight rule, defining what constitutes an inpatient hospital stay. 

As it has done the past two years, CMS proposed to assess a negative 0.8 percent adjustment off of the operating payments to recover $11 billion between FY 14 and FY 17 for past overpayments due to coding and documentation improvements.  CMS is statutorily obligated to recoup the full $11 billion.  Once that amount has been realized, CMS is required to provide positive adjustments between FY 18 and FY 23 to offset the negative adjustments. 

The proposed rule would also make changes to the hospital value-based purchasing program and to programs aimed at reducing unnecessary readmissions and the prevalence of hospital-acquired conditions.

Senators to Introduce Bill Expanding Medicare Reimbursements for Telehealth

During a Senate Commerce Committee hearing on Tuesday, April 21, Sens. Roger Wicker (R-MS) and Thad Cochran (R-MS) announced that they will reintroduce the Telehealth Enhancement Act later this year.  The measure would authorize reimbursement for hospitals and accountable care organizations covered by Medicare Advantage plans that provide telehealth and remote patient monitoring services.

The Telehealth Enhancement Act of 2013 (H.R. 3306) and 2014 (S. 2662) did not advance in either the House or Senate, but both Republicans and Democrats said during this week's hearing that they support expanding telehealth Medicare reimbursements.  Supporters of reimbursement expansion said legislation would decrease Medicare spending and improve access to care for beneficiaries living in rural areas. 

CMS Proposes Pay Increase for Rehab Hospitals

On Thursday, April 23, CMS published a proposed rule for FY 16 payments to inpatient rehabilitation hospitals, including updates to their quality reporting requirements.  The rule will increase payments to the facilities by $130 million, or 1.7 percent, in 2016, according to CMS estimates.  CMS projects the new quality reporting standards will cost the hospitals about $24 million to implement.  The proposed rule will be published in the April 27 Federal Register, and comments on the rule will be accepted through June 22.

PCORI Approves $120 Million in Research Grants

On Tuesday, April 21, the Patient-Centered Outcomes Research Institute ("PCORI")awarded  $120 million in grants to 34 comparative effectiveness studies with $58.5 million dedicated specifically to five pragmatic studies comparing practical clinical treatments.  PCORI also approved $61.6 million in awards for 29 other studies that will explore different methods to improve outcomes for conditions like arthritis, Parkinson's disease, stroke, leukemia, kidney disease and opioid addiction.  With the approval of these new grants, PCORI has awarded $854.6 million for 399 projects since it began funding patient-centered outcomes research in 2012. 

Bills Introduced This Week

Rep. Glenn Thompson (R-PA) introduced a bill (H.R. 1906) that would amend Title XVIII of the Social Security Act to include recreational therapy among the therapy modalities that constitute an intensive rehabilitation therapy program in an inpatient rehabilitation hospital. 

Rep. Cathy McMorris Rodgers introduced a bill (H.R. 1919) to establish a national Oncology Medical Home Demonstration Project under the Medicare program for the purpose of changing the Medicare payment for cancer care. 

Next Week in Congress

On Thursday, April 30, the House Energy and Commerce Committee will hold a hearing on 21st Century Cures legislation geared toward speeding the innovation of medical products.  A bipartisan discussion draft of the legislation will be released next week ahead of the hearing.  The Committee has said it hopes to bring a bill to the House floor by June.