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 Providers Claim Partial Victory in ‘Doc Fix’ Readmissions Standards

Long term and post-acute care advocates were able to claim at least a partial victory in Congress’ decision to punt on a permanent overhaul of Medicare’s physician pay rate. 
Late Monday, the Senate formally passed yet another in a series of “patches” to the sustainable growth rate formula. Since 2003, there has been an annual ritual in Washington where lawmakers, seeing a deadline approach that would drastically slash doctors’ Medicare pay rates, toy with some kind of permanent overhaul only to kick the can farther down the road.
American Health Care Association President and Chief Executive Officer Mark Parkinson, whose group made the “doc fix” its top legislative priority at the beginning of the year, says while it was “unfortunate” that providers will continue to have to shoulder the burden of protecting doctors’ Medicare rates, Monday’s bill “at least … avoids arbitrary cuts to the profession.”
Nearly everyone involved in the past few months of furious lobbying—from doctors to frontline caregivers to seniors’ groups—wanted some kind of lasting solution. As disappointing as the latest “patch” may be, though, long term and post-acute care could at least claim a key win in the new bill’s readmission standards.
“We are pleased to see our readmissions proposal serve as the framework for the value-based purchasing program included in this short-term doc fix,” Parkinson says. “Skilled nursing providers are already making progress in this area, so we believe we can make this sacrifice through this more targeted cut.”
Earlier drafts of readmission standards would have dropped a heavy ax on the sector, with as much as 3 percent across-the-board cuts as “incentive” to curb unnecessary trips back to the hospital.
Even as hopes fizzled for a lasting solution to the “doc fix,” Parkinson and his allies were able to convince congressional leaders that a gentler readmissions program would not only save money but improve quality of care.
Under the legislation passed Tuesday:
  • Readmissions penalties won’t take effect until fiscal 2019; • Beginning in fiscal 2017, federal regulators will calculate “risk-adjusted” measures to come up with some kind of readmissions standards for individual homes and centers;
  • Federal authorities will have to let providers know how they’re doing on those readmissions standards at least two years before any penalties can be assessed, and also post the information on Nursing Home Compare;
  • Providers will see a 2 percent cut beginning in fiscal 2019, but up to 70 percent of that cash will go into a rewards pool;
  • Caregivers who either reduce their readmission rates or offer low ones from the beginning will be eligible for bonuses from the rewards pool beginning in fiscal 2019.
In the worst cases, it means that providers that struggle with readmission rates will collect 98 percent of their promised Medicare funds; providers who do well at curbing readmissions could collect all of their promised funds and more.
Parkinson and others had been optimistic that a permanent solution to the doc fix was ahead of them because, in late December, congressional leaders from both parties agreed in principle to scrap the annual “patch” and replace the law with a 10-year framework.
Everyone knew that the current “fix” would expire March 31 and that, in any case, it was doubtful that much meaningful legislation would be passed in spring or summer given the upcoming congressional elections, so this time felt like the real thing.
In the meanwhile, though, things got complicated: Senate Finance Committee Chairman Max Baucus, D-Mont., was appointed to serve as U.S. ambassador to China. His replacement, Sen. Ron Wyden, D-Ore., was every bit as committed to a permanent reform as Baucus, but the mechanics of the staff shake-up, and the brief limbo into which Baucus was consigned as he waited for Senate confirmation, added a level of uncertainty to the proceedings.
On the House side, Republican leaders ran into fierce opposition from the powerful House Republican Doctors’ Caucus, who saw the doc fix as “their” issue.
Now, advocates and activists will have to wait until the next Congress is seated before they’ll be able to broach the subject of a permanent fix. In the meanwhile, some experts are predicting that the GOP will take the Senate in November’s elections. That might simplify the politics in Congress, but it might also make compromise more difficult because an energized Republican Congress is less motivated to compromise with a president who has just two years left in his term. 
What's more, House Ways & Means Chairman Dave Camp, R-Mich., announced on Monday that he would retire. Several veteran congressmen have done similarly. That means that providers will have to acquaint themselves with new leaders in any case.
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