'Doc Fix' Bill Passed

Since the Clinton era, doctors’ Medicare rates have been bound to the nation’s Gross Domestic Product in an effort to contain public health care spending and prevent reimbursement to doctors from getting too far ahead of the economy. To prevent physician’s rates from being cut, Congress has patched the doc fix 16 times in the past 11 years.

Yet this bipartisan Band-Aid had leaks. Compound interest was not taken into account, such that the reimbursement rate stood at 17 percent below the 2001 rate. As such, many doctors stopped taking new Medicare patients.

A postponement in passing either a patch or a permanent fix in the Senate left providers on April 1 with a no-joke possibility that they would not receive their reimbursement.

Mark Parkinson, president and chief executive officer (CEO) of the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), said his group has long advocated for a permanent solution to physicians’ pay rates under Medicare’s sustainable growth rate formulas, but would be “disappointed if Congress merely patched over the problem while still cutting" the sector.

Fortunately, this was not the case. The bill passed both the House and Senate.

The total package is estimated to cost $200 billion over 10 years. Institutional providers such as hospitals and LT/PAC providers will absorb $35 billion, while another $35 billion would be paid by hiking premiums on more affluent senior citizens. The remaining $130 billion has no designated offset to date.

CMS 'Competence-Based' Rules Challenged, Outcome Still Unknown

In the middle of a typical Washington sweltering summer, the Centers for Medicare & Medicaid Services (CMS) unveiled a set of regulations that got many providers and advocates hot under their collars.

The agency’s 403-page list of rules would require the nation’s 15,000 LT/PAC centers to focus on what regulators are calling a “competence-based” approach to elder and rehabilitative care. Included in the mandate were items such as a base care, discharge, and medication plans for each patient. 

AHCA was among the thousands that urged CMS to take a closer look at its proposals.

“These proposed regulations will have a deleterious effect on every skilled nursing care center,” Parkinson said. “CMS is asking for too much, too soon, and at too great a cost to providers.”

In fact, the comment deadline itself made news when the website went dead as the public comment deadline neared.

The agency eventually extended the public comment deadline to October. Most comments appeared to run to the negative, stating that more paperwork than outcomes would result.

LT/PAC provider advocates remain cautiously optimistic about the agency going back to the drawing board on these rules.

“It’s a great sign that CMS is willing to listen to all concerns,” said AHCA Senior Director for Grassroots and Member Advocacy Matthew Smyth. “It’s an even better sign that so many residents, frontline caregivers, and other advocates have been willing and able to express those concerns. We all want long term care to work for everyone, and the more voices heard, the better the outcome will be.”

Observation Stays Still In Question

Another loophole in Medicare is being mended: The Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, recently signed into law, requires hospitals to notify Medicare beneficiaries of their outpatient status within 36 hours of admission.

Medicare covers post-acute care in a skilled nursing facility (SNF) if the beneficiary had three consecutive days of hospitalization as an inpatient.  In a workaround purported to save Medicare dollars, hospitals may choose to classify beneficiaries as being under "outpatient observation," even though these patients may spend multiple nights in the hospital and receive the same type and level of care as inpatients.

AHCA/NCAL Senior Vice President of Government Relations Clifton Porter II said he was glad to see attention being drawn to this issue. “Millions are at risk for getting stuck with thousands of dollars in medical bills because of their classification status in the hospital,” he said.

Several studies have questioned this policy’s efficacy. One study that came out this year looked at 28 Medicare Advantage plans, which have the flexibility to maintain or eliminate the three-day rule. Plans that implemented the rule waiver resulted in a 10 percent reduction in the average hospital length of stay and no rise in the average number of hospital admissions and readmissions, the average SNF stay length, or the likelihood of using SNFs.

Sens. Sherrod Brown (D-Ohio), Susan Collins (R-Maine), Bill Nelson (D-Fla.), and Shelley Moore Capito (R-W.V.) and Reps. Joe Courtney (D-Conn.) and Joe Heck (R-Nevada) have introduced the Improving Access to Medicare Coverage Act of 2015 (S.843/HR 1571) to further address observation stays. The act would deem an individual receiving “outpatient" observation services in a hospital to be an inpatient with respect to the Medicare three-day stay requirement.

Care For The Nation’s Finest: Veterans Care Remains On Table

The nation’s finest—veterans—do not always have access to the best long term care, especially if they live in rural or small towns. Many vets have to drive several hundred miles to the nearest Veterans Affairs (VA) center even if there is a closer facility.

To date, separate bill drafts, one in the Senate (S 2000) and several others in the House, are working their way through Congress to solve this issue. The Senate draft would grant VA the legislative authority to enter into provider agreements similar to those used by Medicare, without the burdensome task of following complex federal contracting requirements.  Provider agreements will be available in circumstances where needed to ensure veterans can acquire quality health care as close to home as possible.

AHCA member Fred Benjamin testified at the U.S. Senate Committee on Veterans’ Affairs on the VA provider agreement discussion draft.

AHCA has been working with VA and Capitol Hill on the issue for several years.

“Once we can enter into the agreements, the number of providers serving veterans will increase in most markets, expanding the options among veterans for nursing center care and home- and community-based services,” says Dana Halvorson, AHCA’s senior director of not for profit and constituent services. “It is simply time we get VA provider agreements across the finish line so those most in need can receive quality care close to home. It is the least we can do for those that have served our nation so bravely.”

Medicare Payment Reform Issues Persist

Medicare turned 50 this year, but it may be in need of a makeover. In January, Health and Human Services (HHS) Secretary Sylvia Burwell announced measureable goals and a timeline to move the program, and the health care system at large, toward paying providers based on the quality rather than the quantity of care they give patients.

Toward that end, HHS plans to tie 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and 50 percent of payments to these models by the end of 2018. Providers shared their thoughts during a Provider-hosted Executive Roundtable discussion at AHCA’s annual meeting this year in San Antonio.

Also this year, CMS reported that 20 Pioneer and 333 Medicare Shared Savings Program (MSSP) ACOs, both in their second year, generated net savings of more than $411 million in 2014. Additionally, 97 ACOs qualified for payments of more than $422 million by meeting their quality standards and savings threshold. Yet, while more than a quarter of the MSSP ACOs—92 out of 333—will receive payments, the majority (241) will receive no return on their investment, claimed a press release issued by the National Association of ACOs (NAACOS).

“Consequently, they will struggle to stay in the program,” said the NAACOS release. “We estimate that 40-50 ACOs will leave the program this year.” According to CMS game rules, ACOs must stay in the program for three years. As they are approaching year three, health care analysts are curious how many will stay or go.

Bundling options, according to Parkinson, aren’t just coming—they’re here to stay. 

“To prosper,” Parkinson said, providers will “need to own [their] part of the bundle.”

CMS proposed rules on Medicare bundled payments for knee and hip replacements, which AHCA and some providers feel may be out of joint.

“While AHCA supports the concept of bundled payments generally,” association Senior Vice President Mike Cheek said in a letter to the agency, “we believe it is too early for CMS to propose a mandatory model and too premature to design a model with the hospital as the bundle owner.”

AHCA looks forward to working with the newly elected House Speaker Paul Ryan (R-Wis.) on payment reform.

But first, the association needs to tango with MedPAC, which is asking to freeze future increases to Medicare payment rates for SNF providers.

“Elected officials need the benefit of knowing Medicare Ad​vantage plans, Accountable Care Organizations, and CMS demonstrations such as the new Comprehensive Care Joint Replacement rule will only continue eroding overall payment,” said Parkinson.