Century Cures Act passes Senate headed to the president’s desk

On the Hill

On Dec. 7, a bipartisan 21st Century Cures Act easily passed the Senate and is now headed to President Obama’s desk for signature. The president has indicated he will sign the bill into law. The legislation includes Food and Drug Administration (FDA) and Centers for Medicare and Medicaid Services (CMS) reform and additional NIH funding. The bill also includes $1.8 billion for the Cancer Moonshot project. The bill includes funding to help in the fight against the growing opioid crisis, major investments in biomedical research initiatives and funding for the administration’s Mental Health and Substance Use Disorder Parity Task Force. The bill also introduces changes to the Food and Drug Administration’s drug and medical device review process.

The Act also seeks to provide relief to long-term care hospitals (LTCHs) by offering a one-term moratorium on the previously passed 25 percent rule. The rule would have penalized LTCHs that admitted more than 25 percent of patients from a single acute care hospital. The Cures act suspends the 25 percent rule during the 2017 federal fiscal year. The legislation creates an exemption on new LTCH beds to allow for an expansion on the number of beds at satellite locations of existing LTCHs as long as the project was in place as of April 2014. Additional changes for LTCHs include: alterations to the calculation methodology for high-cost outlier payments to LTCHs, removal of length-of-stay provisions for application determinations for certain site-neutral payment policies for converted hospitals to LTCHs after December 2013 and temporarily suspending site-neutral payment polices for LTCHs specializing in spinal cord injuries and certain discharges related to severe wound care.

As Congressional Republicans begin to draft legislation to repeal and replace the Affordable Care Act, healthcare groups are beginning to voice concerns over unintended consequences a repeal may cause. The American Hospital Association and Federation of American Hospitals issued a report warning lawmakers of the danger of massive financial hits they would face. The report cites $165.8 billion that the hospital industry would stand to lose in Medicaid cuts. America’s Health Insurance Plans (AHIP) also released a report with recommendations for lawmakers regarding an ACA repeal. They stressed the need for a transition period between the ACA and its replacement due to the challenging nature of the individual health insurance market.

At the agencies

On Dec. 6, the Department of Health and Human Services’ Office of Inspector General issued a new rule regarding “safe harbors” which will prevent certain payment practices by doctors, hospitals and pharmacies from being treated as fraudulent kickbacks by Medicare and Medicaid. A safe harbor protects companies from civil and criminal punishment under the Anti-Kickback Statue, which can trigger the False Claims Act liability. Some of the now protected practices include reduced prices for emergency ambulance services given by state or locally owned companies and protections for certain payments between Medicare Advantage plans and federally qualified health centers.

In the courts

On Dec. 5, a D.C. District court judge issued a ruling in which they sided with the American Hospital Association (AHA) in their suit against the Department of Health and Human Services (HHS) to eliminate the large Medicare billing appeal backlog. Per the ruling, HHS must now reduce the backlog of pending cases by 30 percent by the end of 2017, 60 percent by the end of 2018, 90 percent by the end of 2019 and entirely by 2020. The goal-based timeline system, which was proposed by the AHA, was selected because it would “intrude as little as possible” in the directives of the HHS’s secretary. The case originates back to 2014 when the AHA sued HHS over long delays in a now million file backlog. 

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.

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