House Committee Advances Hospital Payment Bill

On May 24, the House Ways and Means Committee advanced the Helping Hospitals Improve Patient Care Act (H.R. 5273) that reforms how hospitals are paid for inpatient and outpatient services. The bipartisan bill moves to the House floor where it could be passed by the full House during the week of June 6. Among other provisions, the 30-page legislation would amend the Bipartisan Budget Act of 2015 to reverse the site-neutral pay cuts for hospital outpatient departments (“HOPDs”) that were “mid-build” when the bill passed last year. Mid-build is defined as “a provider that, before November 2, 2015, had a binding written agreement with an outside unrelated party for the actual construction of the department.”

The House bill would also create equal payments for certain surgical procedures rendered in hospital inpatient or outpatient facilities. It would adjust the Hospital Readmissions Reduction Program to account for patients’ socioeconomic status. The bill exempts ambulatory surgical centers (“ASCs”) from electronic health record (“EHR”) meaningful use penalties or its equivalent under the new Merit-Based Incentive Payment System. This protection will be available to eligible professionals who furnish “substantially all” of their Medicare covered professional services in an ASC. The protection would be available until CMS certifies an EHR system for ASCs.

The bill also extends the Rural Community Hospital Demonstration Extension Act from 5 to 10 years (through the end of calendar year 2021).The demonstration program provides Medicare cost-based reimbursement to certain small rural hospitals that do not qualify for cost-based reimbursement under the critical access designation. The demonstration program would reopen the application process to hospitals in any state but give priority to hospitals in low population density states.

In the Senate, 51 senators wrote to CMS last week asking that the site-neutral payment reductions not affect existing off-campus HOPDs that relocate, rebuild, change ownership or types of services and should not affect services provided by a dedicated emergency department. However, the Senate Finance Committee has given no indication that it intends to pass H.R. 5273 or move companion legislation. In the meantime, CMS is in the process of writing the regulations that will implement the site-neutral payment changes in the Bipartisan Budget Act, which will be released as part of the Physician Fee Schedule Proposed Rule sometime this summer.

House Members Urge CMS to Kill Home Health Demonstration

On May 25, Rep. Tom Price (R-GA), along with 114 other House lawmakers, wrote to HHS Secretary Sylvia Burwell and acting CMS Administrator Andy Slavitt urging them to stop their consideration of the home health prior authorization demonstration project. The proposed CMS demonstration would apply to home health providers in Florida, Illinois, Massachusetts, Michigan and Texas and would impose a requirement that prevents a Medicare patient from receiving physician-directed home care until a CMS-approved intermediary has reviewed and approved a doctor’s order. The House letter noted the proposed demonstration would delay care and create unwarranted disruptions in patient care and lead to higher costs.

Health-Related Bills Introduced This Week

Sen. Dan Coats (R-IN) introduced a bill that would establish a program to accelerate transitional coverage and payment for new technologies that offer breakthroughs for serious illness affecting Medicare beneficiaries. The bill (S. 2998) would grant new treatments approved by the FDA a three-year temporary coverage period during which the therapy would receive a guaranteed level of payment, and CMS could specify what additional data would be needed to continue coverage after the three-year period under its statutory “reasonable and necessary” standard.

Rep. Joe Kennedy (D-MA) introduced a bill (H.R. 5362) that would amend Title XIX of the Social Security Act to provide a higher federal matching rate for increased expenditures under Medicaid for mental and behavioral health services.

Next Week in Washington

The House and Senate are out next week for the Memorial Day recess but return on June 6 and 7 for a full month of activity.