CMS Issues Final Regulations for Stark Law Modifications

Late on October 30, CMS issued the CY 2016 Physician Payment final rule. The comprehensive rule provides clarification and establishes two new exceptions to the Stark Law in regards to the Self-Referral Disclosure Protocol, which should ease the compliance burden for hospitals. The compliance revisions in the final rule were at the heart of the legislation pushed by the Hall Render Stark Law Correction Coalition, which seeks to bring more predictability and certainty to the outcome of technical violations of the Stark Law. A detailed summary of the modifications that affect arrangements impacted by the Stark Law can be found on the Hall Render web site.

Budget Deal Includes Exclusion of Hospital Payments for New Off-Campus Hospital Departments

The Bipartisan Budget Act of 2015 (H.R. 1314) that was signed into law on November 2 includes a provision that prohibits new provider based off-campus hospital outpatient departments from being reimbursed through the Outpatient Prospective Payment System (“OPPS”). The Hall Render website has a detailed summary of the exclusion, the impact on providers and facilities, and a discussion of issues related to implementation.

CMS Finalizes Changes to the Two-Midnight Rule

On October 30, CMS finalized significant changes to its two-midnight admissions policy in the OPPS final rule. Under the two-midnight rule, CMS generally considers hospitalizations of less than two midnights as outpatient cases and expects beneficiaries to stay in the hospital for at least two midnights for Medicare to reimburse hospitalizations as inpatient stays.

In the final rule, CMS did introduce an exception policy that allows Medicare Part A reimbursements to be determined on a case-by-case basis for hospitalizations that do not meet the two-midnight requirement. For hospitalizations to be payable under Medicare, admitting physicians must provide documentation in patients’ medical records that supports their determination that inpatient hospital care is necessary despite an expected length of stay that is less than two midnights. Documents submitted under the new two-midnight exception policy will be subject to review by a Quality Improvement Organization.

Brady to Chair Ways and Means Committee

On November 4, the House Republican Steering Committee elected Rep. Kevin Brady (R-TX) as the Chairman of the Ways and Means Committee. Brady replaces Paul Ryan, who was elected last week as Speaker of the House.

Earlier this summer, Brady introduced hospital payment legislation that the committee was looking to move this fall. The legislation included a site-neutral payment bill (H.R. 3291) that requires CMS to relate similar inpatient and outpatient services for 10 DRGs on surgeries.

Brady was previously the Chairman for the Ways and Means Subcommittee on Health. Rep. Pat Tiberi (R-OH) is expected to take over the Health Subcommittee top spot.

Pitts Announces Retirement

On November 6, Rep. Joe Pitts (R-PA) announced his that he will not seek reelection to Congress in 2016. Pitts, who has served 10 terms in Congress, has chaired the Energy and Commerce Health Subcommittee since 2011. Rep. Brett Guthrie (R-KY) is vice chairman of the Health Subcommittee and expected to replace Pitts as chairman in 2017.

House Committee Looks to Mark Up Medicare/Medicaid Bills

On November 3, the House Energy and Commerce Subcommittee on Health held a hearing to examine legislation dealing with Medicare/Medicaid. The committee discussed H.R. 2878, the

instruction to not enforce Medicare’s direct supervision requirement for outpatient therapeutic services furnished at critical access hospitals and small rural hospitals, which would extend through CY 2015. The Senate companion, S. 1461, was approved by the Finance Committee in June.

Other bills considered included H.R. 2151, which would require States to conduct audits on non-DSH supplemental payments and issue guidance to states that identify permissible methods for calculation of non-DSH supplemental payments to providers.

Health-Related Bills Introduced This Week

Rep. Tom Price (R-GA) introduced legislation (H.R. 3940) to authorize a blanket meaningful use significant hardship exception for the 2015 reporting period due to a delay in CMS’s publication of the Stage 2 meaningful use rule.

Sen. Chuck Grassley (R-IA) introduced a bill (S. 2228) to strengthen oversight of 340B Drug Pricing Program. The legislation would permit review of certain Medicare payment determinations for disproportionate share hospitals.

Next Week in Washington

The House is out next week, but the Senate returns on November 9 when they will kick off debate on their first fiscal 2016 appropriations bill to come to the floor this year.