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From Health Law Daily, May 19, 2016

Lawmakers lend hospitals helping hand to improve patient care

By Anthony H. Nguyen, J.D.

House lawmakers introduced a bipartisan piece of legislation aimed to develop outpatient facilities and allow hospitals to treat more low-income and cancer patients. “The Helping Hospitals Improve Patient Care Act” (HHIPCA) (H.R. 5273) would advance reforms for hospitals and other Medicare providers. Specifically, the proposed legislation would address two issues affecting mid-build hospitals and cancer centers that arose with the enactment of the Bipartisan Budget Act of 2015 (BBA) (see Budget deal shields Part B premiums, slashes ACA requirement, November 3, 2015), as well as other provisions impacting the Medicare Hospital Readmissions Reduction Program (HRRP).

Mid-build hospitals. Section 603 of the BBA closed a loophole relating to Medicare payments for off-campus hospital outpatient departments (HOPDs), but the law did not take into account facilities that were “mid-build” as of the date of the enactment, i.e., November 2, 2015. Section 201 of the HHIPCA would allow providers that were already building new off-campus outpatient facilities to be grandfathered into the outpatient payment rates, as historically done with other Medicare payment systems. The proposed provision is offset by a slight reduction in the hospital inpatient documentation and coding adjustments as implemented in the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (see Ding dong, the SGR is dead!, April 15, 2015).

HOPDs and cancer centers. Section 202 of the HHIPCA would maintain the separate payment system for cancer hospitals providing an exemption from the HOPD policy that was created in the BBA. Cancer hospitals, thus, would continue to be paid at cancer hospital rates at new off-campus locations. In addition, cancer HOPDs must attest by July 1, 2016, provider-based status as required by regulations under 42 C.F.R. sec. 413.65. HHS will audit the accuracy of the attestation. This provision, too, would be offset by reductions as outlined in MACRA.

Medicare Hospital Readmissions Program. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) established the HRRP, which reduces payments made to acute care hospitals that have excess readmissions for patients with certain conditions. Readmissions are costly for the Medicare program, adding an estimated $17 billion in expenditures that the program considers avoidable (see Study finds no correlation between reduced readmissions, increased observation stay rates, February 25, 2016).

The HRRP penalized hospitals for having higher readmission rates than expected within 30 days of discharge. In order to prevent penalizing hospitals that serve low-income patients, Section 102 of the HHIPCA would factor in socioeconomic status within the Medicare HRRP. HHS would be required to implement a transitional risk adjustment methodology to serve as a proxy of socioeconomic status used in the MHRP.

In addition, HHS would compare the performance of hospitals that service similar proportions of dual-eligible individuals in applying adjustments under the MHRP until reports and data required by the Improving Medicare Post Acute Care Transformation Act of 2014 (IMPACT) are made available (see New law to make an ‘IMPACT’ on quality of post-acute care, October 6, 2014). Once the IMPACT studies are completed, HHS would be able to adjust performance using the latter’s more refined methodology.

Other provisions. The bill also includes a number of other provisions, including a “mid-build” exception to the current law on increasing the number of beds for long-term care hospitals (LTCHs); modification of the treatment of ambulatory surgery center patient encounters for the meaningful use program; a three year delay in CMS authority to terminate contracts for Medicare Advantage plans failing to achieve minimum quality ratings as CMS conducts research and reports on socioeconomic status and quality ratings; and a requirement that CMS report Medicare enrollment data by congressional district.

Lawmakers noted that the bill also includes an extension of the rural community hospital demonstration program and direction that CMS improve the notice provided to individuals upon Medicare eligibility. In addition, the legislation requires a cross walk of ten inpatient surgical codes that will be linked to outpatient surgical codes.

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