Congress Passes Budget Bill - Targets Off-Campus Hospital Departments

Around 3 AM on October 30, the Senate passed a sweeping two-year budget deal that also extends the federal debt limit to March 2017. The agreement, which passed the House on Thursday, October 29, helps avert a government shutdown and a default on the nation's debt. The deal raises discretionary spending caps by $80 billion above the sequester level for FY 2016 and 2017. President Obama is expected to sign the deal into law as early as today.

One of the areas impacted by the budget deal is Medicare coverage of services provided in off-campus hospital departments. Currently, Medicare pays for items and services provided in both on- and off-campus hospital outpatient departments as hospital services when those departments are in compliance with 42 CFR §413.65 (the Medicare "provider-based rule"). With some limited exceptions, including ED services, applicable items and services furnished in off-campus outpatient departments starting January 1, 2017 will be excluded from coverage as hospital outpatient services. Specifically, the budget deal language does not include applicable items and services that are furnished on or after January 1, 2017 by an off-campus outpatient department of providers.

The day President Obama signs the bill into law will be recognized as the date of enactment, and only off-campus hospital departments billing for applicable services before that date will be able to receive Medicare payment as a hospital after January 1, 2017. The Hall Render website has a more extensive summary detailing this provision.

CMS Proposes New Discharge Planning Requirements

On October 29, CMS released a proposed rule that would require hospitals to develop a written discharge plan for every inpatient and many outpatients. CMS says the proposed requirement is intended to help reduce readmissions. The CMS proposal would require hospitals to develop a specific, written discharge plan, including medication reconciliation instructions, for all inpatients and specific categories of outpatients within 24 hours of admission. Hospitals would also have to establish a process for following up with patients who went home or were transferred to another facility.

The rule would also add new discharge planning requirements for critical access hospitals, which currently are not required to have any such process in place. The rule applies to hospitals, critical access hospitals, long-term care hospitals, inpatient rehabilitation facilities and home health agencies.

The proposed rule will have a 60-day comment period after the date of publication in the Federal Register. The proposed rule is scheduled to be published in the Federal Register on November 3, 2015.

Ryan Elected House Speaker

On October 29, Rep. Paul Ryan (R-WI) was elected as the 54th speaker of the House. The former Budget and Ways and Means Chairman replaces John Boehner who is retiring from Congress at the end of the month. Ryan's ascension to Speaker from Ways and Means Chairman means the top spot on the primary house committee with health care jurisdiction is vacant. A House steering committee composed of the Speaker, the Majority Leader and the current Ways and Means committee members could vote on the new Chairman as early as next week. Reps Kevin Brady (R-TX) and Pat Tiberi (R-OH) are running for the slot.

Medicare Home Health Final Rule Released

On October 29, CMS issued a final rule for Medicare home health agencies. According to the final rule, home health agencies will receive a pay cut of 1.4 percent in 2016, a smaller reduction than the 1.8 percent that was proposed in July. The final rule also eased up on a mandatory value-based purchasing program for home health services in response to criticism from lawmakers. The demonstration program will now withhold 3 percent of the home health services payments for an incentive or penalty payment in the program's first year, down from 5 percent in the original program. The pilot will still begin in January 2016 in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee.

Bills Introduced This Week

Rep. Kevin Brady (R-TX) introduced a bill (H.R. 3831) to extend the annual comment period for payment rates under Medicare Advantage. The Securing Fairness in Regulatory Timing Act of 2015 would increase the amount of time stakeholders have to review and provide feedback on the program from 45 days to 60 days.

Next Week in Congress

The House and Senate return on Monday, November 2 for a full work week. With the two-year budget deal and debt limit passed, Congress will turn its attention to the annual spending bills. Congress is currently in the fourth week of a continuing resolution ("CR") that provides funding at a rate based on the previous year's funding. Congress has until December 11 to either extend the CR or pass an FY 2016 spending bill, which will fund agencies of the federal government that includes CMS.

Next week, the House Energy and Commerce Health Subcommittee will mark up Rep. Tim Murphy's (R-PA) comprehensive mental health legislation. The subcommittee will also hold a hearing entitled "Examining Legislation to Improve Medicare and Medicaid" on Tuesday, November 3. On the same day, the Ways and Means Subcommittee on Health will hold a hearing on the status of the consumer operated and oriented plan program.