CMS Issues Final Joint Replacement Payment Rule

On November 16, CMS released a final payment rule that creates bundled payments for hip and knee replacement surgery performed at most acute care hospitals in 67 geographic areas of the country. Under a model known as Comprehensive Care for Joint Replacement ("CJR"), a hospital where a joint replacement occurs will be held accountable for the costs and quality of care from the time of surgery through 90 days after discharge.

Additionally, a joint statement by CMS and the HHS Office of Inspector General indicates that they will waive anti-kickback, physician self-referral and civil monetary penalty laws for a number of beneficiary incentives and financial arrangements under the CJR model. In certain cases, CMS will also waive the three-day rule for skilled nursing facilities, the "incident to" rule for in-home post-discharge care and limitations to telehealth payments related to geographic and originating site regulations.

CMS said it will use a retrospective payment model with one-sided risk in year one of the program so that no hospital will face penalties in the first year. In year two, the agency will link each hospital's level of incentive or penalty to a composite quality score based on the Hospital Consumer Assessment of Healthcare Providers and Systems survey, elective hip/knee arthroplasty complications within 90 days and a patient-reported outcome measure submitted voluntarily by beneficiaries.

Appropriations Debate Intensifies as Deadline Nears

House appropriators held listening sessions with various lawmakers this week on the FY 2016 Labor-HHS spending bill (H.R. 3020). The House bill, along with its Senate counterpart (S. 1696), is widely expected to be the most contentious of the 12 spending appropriation spending bills because members of Congress are expected to add partisan amendments. The listening sessions are part of a broader effort by new House Speaker Paul Ryan (R-WI) to open up the process for developing agency spending measures ahead of the December 11 deadline to fund the federal government. Congressional appropriators and staff have been meeting this week to reconcile differences between H.R. 3020 and S. 1696 so that an omnibus package can be passed before the upcoming deadline. Once that occurs, Congress is expected to recess and return in the new year.

Congress Moves a Number of Medicare/Medicaid Bills

On November 19, the Senate passed a measure extending the term of a Medicaid emergency psychiatric demonstration project (S 599). The House passed a revised version of the measure earlier this week, and the bill now is ready for President Obama's signature. The Senate also advanced a bill that would allow skilled nursing facilities to apply for support from the Universal Service Fund's Rural Health Care Program. That measure was voted out of committee and now heads to the Senate floor. Currently, the Communications Act specifies which types of health care providers are eligible to receive support from the Rural Health Care Program, and SNFs are not included.

Also this week, the House Energy and Commerce Committee advanced a number of bills for possible floor votes in December. Included in the batch are Medicaid measures dealing with terminated health care providers (H.R. 3716) and the development of state physician directories (H.R. 3821).

Tiberi Takes Over Top Spot on Ways and Means Health Subcommittee

On November 18, Rep. Pat Tiberi (R-OH) was selected to serve as chairman of the House Ways and Means Health Subcommittee. Tiberi replaces Rep. Kevin Brady (R-TX) who became chairman of the full Ways and Means Committee when Paul Ryan (R-WI) became Speaker of the House. Tiberi will preside over issues in the House relating to Medicare, Medicaid and drug prices.

Bills Introduced This Week

Sen. Chris Coons (D-CT) introduced a bill that would amend Title XVIII of the Social Security Act to encourage Medicare Beneficiaries to voluntarily adopt advance directives guiding the medical care they receive.

Next Week in Washington

The House and Senate are out next week for the Thanksgiving holiday. Both chambers return on November 30 when the Senate is expected to take up the House-passed reconciliation package (H.R. 3762) that includes repealing major elements of the ACA and defunding Planned Parenthood. Since several Senate Republicans have recently come out against the measure, which only needs 51 votes to pass, its future remains uncertain.