New Medicare bill would adjust readmissions program, outpatient payments

New legislation introduced in the House Ways and Means Health Subcommittee contains several changes for Medicare policies most affecting hospitals, including allowing “mid-build” off-campus outpatient facilities to be reimbursed at current rates under the Medicare outpatient prospective payment system (OPPS).

Introduced by subcommittee chairman Rep. Pat Tiberi, R-Ohio, and ranking member Jim McDermott, D-Wash., the bill attempts to address hospital concerns on payment changes made by the federal budget passed in 2015.

“The Helping Hospitals Improve Patient Care Act takes responsible steps to strengthen Medicare and give hospitals and healthcare providers the certainty they need to best serve their patients. It is fully paid for and includes many bipartisan provisions that are priorities to members of the Ways and Means Committee,” Tiberi said in a statement.

The 2015 budget changed which facilities could be reimbursed under OPPS, removing eligibility for off-campus hospital outpatient departments beginning in 2017. Instead, they’ll receive lower physician fee schedule or ambulatory surgical center payments, a move Congress estimated will save $9 billion over 10 years.

This legislation would provide an exemption to outpatient facilities which are under construction or have binding contracts to begin construction. If a facility provides proof that it meets this standard by July, it will be grandfathered into the current outpatient payment rates.

The other major component of the bill deals with considering socioeconomic status under Medicare’s Hospital Readmissions Reduction Program. HHS would be required to “implement a transitional risk adjustment methodology to serve as a proxy” for considering a patient’s standing based on factors such as education and income until a report ordered in 2014 is completed.

“This provision provides a bridge to improved consideration of socioeconomic status in the Hospital Readmissions Reduction Program to prevent penalizing hospitals that serve low-income patients, without masking socioeconomic disparities,” the bill’s summary stated.

The bill’s other provisions include:

·         A five-year extension of the Rural Community Hospital Demonstration program

·         Allowing under construction or planned long-term care hospitals to be exempted from the current moratorium on bed expansion

·         Keeping payments for cancer centers separate from the OPPS changes included in the 2015 budget

·         Delaying the authority to terminate Medicare Advantage contracts based on star ratings for three years

·         Requiring HHS to publish Medicare enrollment data by congressional district, zip code, and state on annual basis

The legislation has the support of the American Hospital Association.

“They clearly grasped the unintended consequences of last year’s Bipartisan Budget Act that severely impacted hospital outpatient facilities under development and jeopardized access to patient care,” AHA Executive Vice President Tom Nickels said in a statement. “We agree with their policy that the readmissions program needs to be adjusted to account for socioeconomic status. We will continue to review the legislation and work with the committee to help improve patient care.”

Some of the payment changes would be paid for by reducing other reimbursements. For example, keeping “mid-build” outpatient facilities under the older, higher payment rate system would be offset by “a slight reduction” in the adjustments for coding and hospital inpatient documentation implemented by the 2015 Medicare Access and CHIP Reauthorization Act (MACRA).