Policy Update

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The following update is provided by Hall Render:

NOSORH Seeking Reauthorization of SORHs

During April, NOSORH legislative counsel met with lawmakers on Capitol Hill to discuss reauthorization of the State Offices of Rural Health (SORH) grant program. In the House, Rep. Cresent Hardy (R-NV) and Rep. Terri Sewell (D-AL) planned introduced rural health legislation last week which included the reauthorization of the SORH grant program. The language calls for an increase in the authorization of appropriations to $15 million for fiscal year 2017. NOSORH is also working with members of the House Energy and Commerce Health Subcommittee, which has jurisdiction over the SORH, on the possible introduction of a stand-alone bill to reauthorize the SORH grant program.

On the Senate side, NOSORH has been working with the Senate Rural Health Caucus ahead of their rollout of the Rural Hospital and Provider Equity (R-HoPE) Act of 2016. Senator Pat Roberts (R-KS) would like to introduce the R-HoPE bill sometime prior to Memorial Day. The legislation is expected to include the reauthorization of the SORH grant program as well as a host of other rural health provisions.

House and Senate Appropriations Process Underway

On April 14, the Senate cleared the first hurdle in the appropriations process when the Senate Appropriations Committee approved subcommittee spending allocations for fiscal year 2017. The appropriations measure that funds the SORH grant program, the Labor-HHS-Education bill, is the largest of the non-defense bills and was cut just 0.1 percent to $161.86 billion, down from $162.1 billion.

The Senate began debate on the first appropriations bill on April 20, marking the earliest date in the modern budget process that spending legislation has reached the floor. Despite the early start, neither the Senate nor House has passed a budget that sets the total spending level for the next fiscal year. Some Republicans have argued a budget is less important this year because last year’s budget law set a total discretionary spending level of $1.07 trillion for the appropriations committees to allocate.

While the timing of the debate on the Labor-HHS-Education bill is unclear, the bill is not expected to be marked-up by the Labor-HHS Subcommittee before June. Subcommittee staff has indicated that late June may be the earliest possible date for Senate action. NOSORH has written to the Labor-HHS-Education House and Senate Subcommittees asking for the inclusion of a $5 million increase in SORH appropriations funding for FY 17.

Thanks to the many SORH who reached out to their congressional members regarding SORH appropriation.  NOSORH recently filed letters with Appropriation Chair leaders to urge support of increased appropriation to SORH.

CMS Issues Proposed Rule on Quality-Based Payment Program

On April 27, CMS released a Notice of Proposed Rulemaking to update how Medicare payments are linked to the quality and cost of care provided to beneficiaries by health care providers. The proposal is the first step in implementing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is intended to assist health providers transitioning from payment programs based on volume to a system based on quality and value. The agency’s proposed rule would implement MACRA provisions through the Quality Payment Program, a unified framework that includes the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).

Under the CMS proposal, health care providers will be given flexibility in how they participate in MIPS and will be allowed to choose six measures the agency uses to judge their performance from a range of approved quality metrics that accommodate differences in practices and specialties. The rule outlines four MIPS performance categories, which include quality, advancing care information, clinical practice improvement activities, and cost. The quality category would account for 50 percent of providers’ total score for the first year. The advancing care information metric, which allows providers to select customizable measures that are appropriate for how they use technology on a day-to-day basis, would represent 25 percent of the total year one score. The clinical practice improvement activities would account for 15 percent of the total score in the first year and would reward providers for actions taken to improve patient safety and care coordination. Cost, which would be based on Medicare claims using 40 episode-specific measures to account for differences among specialties, would represent 10 percent of the first year total score. Providers will receive payments in 2019 that are adjusted to reflect how well they met Medicare’s quality measures in 2017.

The proposed rule also provides physicians who choose to not participate in MIPS with rewards for joining APMs, which come with increased financial risks based on how the agency judges their performance in providing efficient, high-quality, and coordinated care. CMS will accept public comments on the proposal until June 26, 2016.

CMS Delays Release of New Hospital Star Ratings

On April 20, CMS announced they will postpone the release of its hospital star rating system, which is designed to rank hospitals based on their quality of care and patient experience. Following pressure from Congress and industry groups to delay the ratings, CMS will now release the hospital data to the public in July. The agency will also push back the July 2016 Hospital Compare data preview period, during which hospitals can review their ratings before they are publicized, to May 6.  Earlier in April, 60 senators sent a letter to CMS’ Acting Administrator, Andy Slavitt, urging the agency to delay the release of the overall hospital quality star ratings to provide more time to analyze the methodology.

The star ratings include 11 quality measures from the Hospital Consumer Assessment of Healthcare Providers and Systems survey, including patient satisfaction with the responsiveness of hospital staff, hospital comfort and cleanliness, transition of care, and communication. CMS will host a call with hospitals and providers on May 12 to assist them with interpreting the star ratings data and explain the methodology in detail.

CMS Issues Final Rule for Medicaid Managed Care

On April 25, CMS released its final rule on Medicaid and CHIP managed care plans. The rule, which is the first major update to Medicaid and CHIP managed care in over ten years, introduces new standards for provider networks, enrollee protections, quality measures, external quality review, and medical loss ratios.

The final rule also removed the Institutions for Mental Diseases (IMD) exclusion, which prohibited Medicaid reimbursement for patients in facilities with more than 16 beds, giving states more flexibility to allow managed care beneficiaries to receive mental health services in inpatient psychiatric hospitals or short-term crisis residential facilities. Under the rule, states will be allowed to cover managed care enrollees who stay no more than 15 days in an inpatient facility providing mental health care. States will also be required to set standards to make sure that patients have sufficient access to health care providers, and insurers will be required to maintain up-to-date provider directories.

CMS Unveils New Primary Care Initiative

On April 11, CMS introduced a five-year primary care initiative to improve the way that nearly 25 million patients receive care and reduce health care spending by an estimated $2 billion. The Comprehensive Primary Care Model, which is slated to be implemented in January 2017, will give primary care practices the ability to opt into one of two payment tracks in an effort to move away from the current fee-for-service system.

In the first track, the CMS will pay practices a fee of $15 per patient each month in addition to fee-for-service payments. In the second track, the agency will pay practices a fee of $28 per patient monthly as well as a combination of reduced Medicare fee-for-service payments and upfront comprehensive primary care payments. Practices in the second track will also be required to sign an agreement with CMS to support the use of enhanced health information technologies. The agency expects the second track will result in $2 billion in savings over the course of the five-year initiative.

The primary care program will involve over 20,000 health care providers and as many as 5,000 practices in 20 regions throughout the country. CMS will begin to solicit applications from primary care practices in the selected regions on July 15.

Rural Health Related Bills Introduced in April

Sens. Johnny Isakson (R-GA), Lamar Alexander (R-TN), Mark Warner (D-VA), and Sherrod Brown (D-OH) introduced budget-neutral legislation to correct a Medicare payment formula that results in disproportionately low reimbursements to hospitals in rural and low-income areas. The Fair Medicare Hospital Payments Act of 2016 (S. 2832) would create a national minimum area wage index to measure differences in hospital wage rates across different labor markets. The bill would implement a 0.874 area wage index based on the relative hospital wage level in a hospital’s geographic region compared to the national average.

Senator Shelley Moore Capito (R-WV) introduced a bill that is intended to improve access to hospice care in rural areas. The bill (S. 2786) would amend title XVIII of the Social Security Act to provide a technical fix to enable rural health clinics and federally qualified health centers to receive payment for physicians’ services in hospice care under Medicare Part B.

Rep. Larry Bucshon (R-IN) on April 15 introduced the Ensuring Access to General Surgery Act of 2016 (H.R. 4959) directing the HHS Secretary to conduct a study on the designation of surgical health professional shortage areas. The legislation requires the Secretary to evaluate whether the current designation of health professional shortage areas results in accurate assessments of the adequacy of local general surgeons to address the needs of underserved populations in urban, suburban, or rural areas. The study will be used to determine if another measure of access to general surgeons by underserved populations, such as hospital service areas, would provide more accurate assessments of physician shortages and whether a new surgical health professional shortage area designation should be established.

Rep. John Duncan (R-TN) introduced the HEALTHIER Act (H.R. 4819) to assist charitable organizations providing free healthcare to those in need by providing a one-time grant of $1,000,000 to any state that allows licensed medical professionals to travel to other states to volunteer their services. Ten states currently have similar laws in place.


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