On December 18, 2015, President Obama signed into law the Consolidated Appropriations Act of 2015, which includes a wide range of government spending and tax provisions. As previously reported, the Act includes the following Medicare and Medicaid provisions:

  • The Act “incentivizes” the transition from traditional x-ray imaging to digital radiography by reducing by 20% the Medicare hospital outpatient prospective payment system (OPPS) and physician fee schedule payment for the technical component (including the technical component portion of a global service) of film x-rays beginning in 2017. In addition, the OPPS payment and physician fee schedule payment for the technical component of an x-ray taken using “computed radiography technology” will be reduced by 7% during 2018 through 2022, with a 10% reduction applicable beginning in 2023. The term “computed radiography technology” is defined to mean cassette-based imaging that utilizes an imaging plate to create the image. In addition, the Act reduces the discount in payment for the professional component of multiple imaging services furnished on or after January 1, 2017 from 25% to 5%.
  • It limits state Medicaid durable medical equipment (DME) reimbursement amounts to the applicable Medicare fee-for-service payment rates, including applicable competitive bidding rates, beginning January 1, 2019.
  • The Act authorizes separate Medicare payment to home health agencies when they use cost effective disposable alternatives to negative pressure wound therapy equipment, beginning in 2017.
  • The law modifies Medicare reimbursement policy for hospitals located in in Puerto Rico and allow such hospitals to participate in the Medicare Electronic Health Record (EHR) Incentive Program.
  • The Act rescinds funds from the Medicare Improvement Fund (MIF), which was established by the Medicare Improvements for Patients and Providers Act to fund improvements in the Medicare fee-for-service program.

With regard to the ACA, the Act imposes a two-year moratorium on the ACA’s 2.3% excise tax on medical devices; as a result, the tax will not apply to sales during the period beginning on January 1, 2016 and ending on December 31, 2017. The Act also delays for two years the excise tax on high-cost employer-sponsored health coverage (the so-called “Cadillac tax”); it is now scheduled to apply beginning in 2020. The Act also provides a one-year moratorium on the annual excise tax imposed on health insurers for calendar year 2017, restricts risk corridor funding, and cuts funding for the Independent Payment Advisory Board by $15 million, among other provisions.