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Category: Congress

Push Continues to Delay Joint Replacement

From: HFMA News – 12/9/15

Hospitals are increasingly concerned about a year-end legislative push in Congress to delay for a year or more Medicare’s first mandatory bundled payment program.

The GOP Doctors Caucus urged House Speaker Paul Ryan to use an unspecified “legislative vehicle” to delay the Comprehensive Care for Joint Replacement (CJR) model, which is slated to begin April 1, 2016. The initiative, which most hospitals in 67 metropolitan statistical areas (MSAs) are required to participate in, already was delayed by three months by the Nov. 17 final rule, but providers had sought longer delays. The physician-legislators’ delay request to Ryan was sent several days later.

The pilot will hold participating acute care hospitals financially accountable for Medicare episodic spending efficiency for lower-extremity joint replacement patients.

The Doctors Caucus also sought delay of the coming Stage 3 meaningful-use requirements of the federal electronic health record incentive program.

A spokeswoman for the GOP Doctors Caucus confirmed this week that the legislative push is ongoing but declined to specify what legislative vehicle could be used to pass it. Some health policy observers have suggested it could be attached to must-pass legislation, like the so-called omnibus bill, which needs to pass by Dec. 11 to keep the federal government operating.

Tiffany Haverly, a spokeswoman for the caucus, said in an email that the caucus was seeking a delay “as long as practicable.”

“The Caucus wants there to be sufficient time for physician practices to develop the care networks necessary to make this work, and they do not think that the 90-day delay that CMS [the Centers for Medicare & Medicaid Services] issued will be sufficient to get this done,” Haverly said. The caucus had previously asked for at least a one-year delay.

Many provider advocates also had sought a delay before the final rule was issued. For instance, HFMA requested that implementation occur one year after providers received initial Medicare data. The American Hospital Association had urged a delay to July 1, 2016, and the Greater New York Hospital Association asked for a delay to 2017.

But now that the final rule has been issued, hospitals want the implementation to go forward since those organizations are planning on it, said Blair Childs, a senior vice president for Premier, a hospital quality improvement company.

Delay-Related Concerns

Hospitals also were concerned that the current delay push was being sought to change the rules and allow surgeons—not only hospitals—to take on the overall risk and reward of the bundle. For instance, Francois de Brantes, executive director for the Health Care Incentives Improvement Institute, said many healthcare leaders have voiced disappointment about the pilot’s exclusion of all but acute care facilities as episode initiators and risk owners.

Other concerns that have been raised include the lack of case mix adjustment for the various procedures that make up CJR and the lack of a severity adjustment. But those issues are not enough to require delay, according to de Brantes.

“Year one is upside-only, so just get on with it,” de Brantes said.

Concerns that the last-minute legislative push for a delay could succeed also have been raised by other organizations, including the National Coalition for Health Care Reform, which warned congressional leaders against delay in a recent letter.

“They’re talking about a year-long delay, which effectively moves it into the next administration,” Childs said. New presidential administrations—even those of the same party—routinely place holds on any pending regulatory rules, which would further delay the pilot.

Why the Delay?

The Doctors Caucus push was urged by physician groups, including those representing orthopedists, Haverly said.

The American Academy of Orthopaedic Surgeons (AAOS), which did not respond to a request for comment, previously criticized the pilot provision designating hospitals as the party responsible for an episode of care.

“The AAOS strongly believes this aspect of the rule requires change to designate that physicians–specifically orthopaedic surgeons–be the primary responsible party, or at least be equivalent in status to the acute care hospital,” AAOS stated in a September letter to CMS.

However, that approach in the existing—and voluntary—Bundled Payments for Care Initiative (BPCI) has created many problems, according to Childs.

“BPCI is a mess,” Childs said, referring to conflicts between hospitals, orthopedic surgeons, and cardiovascular surgeons vying to manage payment bundles in that program.

“The goal of bundled payment is to create alignment among providers and get folks pulling in the same direction, and BPCI is actually causing further fragmentation,” Childs said. “We see it happening in markets across the country.”

It makes little sense for non-hospital providers to lead such bundles because they are not in a position to coordinate care among providers and reengineer the care delivery process, which is a goal of bundling initiatives, Child said.

Premier and other hospital groups have raised those concerns to CMS, and such concerns are likely the reason CJR was designed to put hospitals in charge, according to Childs. Despite the support of some physician groups for a delay, he said, many employed and allied orthopedic surgeons support the hospital-led approach.

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Push Continues to Delay Joint Replacement

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Senate Approves two-year Bipartisan Budget Agreement

From: Washington Post – 10/31/015

Article Excerpt:

The Senate voted early Friday morning to approve a two-year budget deal that would increase spending limits and avert a damaging default, essentially ending the budgetary battles that have defined President Obama’s relationship with Congress in recent years.

The legislation passed by a vote of 64-35 after overcoming objections from conservative senators, including presidential candidates Rand Paul (R-Ky.) and Ted Cruz (R-Texas), that forced a rare series of votes at 1 a.m. Obama has until Nov. 3 to sign the agreement before the debt-limit deadline set by the Treasury Department.

The agreement, unveiled earlier this week, is the result of tightly held negotiations between congressional leaders in both parties and the White House.

Obama released a statement Friday morning saying he would sign the bill “as soon as it reaches my desk.”

“I applaud the Democrats and Republicans who came together this morning to pass a responsible, long-term budget agreement that reflects our values, grows our economy and creates jobs,” he said in the statement. “This agreement is a reminder that Washington can still choose to help, rather than hinder, America’s progress.”

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Summary of Medicare Impact of Bipartisan Budget Act of 2015

From: Toyon Associates – 10/30/15

The Senate, following the House of Representative’s lead, approved the two-year bipartisan budget agreement this morning (article below). The legislation will be signed by the President by November 3rd.  The impetus of the Medicare legislation was a 52% increase in Medicare Part B premiums for 17 million beneficiaries that was about to occur.

Based on the Congressional Budget Office’s analysis, the elimination of the Part B premiums increase would be a loss of $7.25 billion in FFY 2016 & 2017. This loss in revenue therefore needed to be offset by other funding cuts and/or revenue increases.  To pay for the loss Congress implemented the following:

  • Extended the 2% sequestration for Medicare services one more year into FFY 2025
  • Extends a Medicaid policy requiring brand drugs to provide rebates when prices increase more than inflation to generic drugs.
  • Of most interest to our Hospital Clients – Implemented a Site-Neutral Payment Policy

One other provision implemented that results in a funding loss was the repeal of the requirement that certain large employers automatically enroll workers into health plans offered by the company. This was an original requirement of the Affordable Care Act that was repealed in this legislation.

This legislation was part of a larger package that impacted the increase to the Federal Government’s borrowing authority that was to cap out next week as well as spending in other areas of the federal budget.

Site-Neutral Payment Policy

The origination of this particular legislation came from MedPac where there was concern expressed with hospitals purchasing physician office practices and subsequently converting them to hospital based departments. The Medicare reimbursement as hospital based is significantly higher than the comparable service at a physician office.

Section 603 of this legislation eliminates this practice, but does so on a prospective basis. What this means is that if you have a physician office practice or other acquired clinic type organization that is in place and billing as a hospital based department as of the implementation date of this law, these services will continue as hospital based.

However, if you did purchase a physician practice and have not already been operating it as a hospital based department by the legislation implementation date (on or before November 3, 2015), then the service will not be treated as a hospital based department for Medicare reimbursement purposes.

Our office has been responding to a number of questions from our clients on this issue. Section 603 is implementing this change by utilizing already existing Medicare regulations that define the meaning of a hospital based campus.  They refer to 42CFR413.65(a)(2).  The Campus reference states:

 “Campus means the physical area immediately adjacent to the provider’s main buildings, other areas and structures that are no strictly contiguous to the main buildings but are located within 250 yards of the main building…”

It is not clear how this will be implemented through the revised Medicare regulation. Is it possible that a physician practice purchased that is within 250 yards of the main campus could still be converted to hospital based?  Probably not likely, but we will just have to see how CMS creates the new regulations.

The CBO projects the savings from this site neutral payment policy to save $9.3 billion from 2017 through 2025.

If you have any questions about this legislation contact Wayne Shin at 925-685-9312.


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