Baker Tilly healthcare update May 12, 2014

At the agencies

On May 7, the Centers for Medicare and Medicare Services (CMS) issued a final rule intended to reduce regulatory burdens faced by providers. Under the rule, CMS will eliminate or reduce requirements that hinder provisions of quality patient care and those that divert resources from such outcomes. The final rule will eliminate out-of-date regulations and streamline health and safety participation requirements for Medicare and Medicaid providers. For example, CMS will loosen the on-site schedule requirements for physicians at critical access hospitals, rural health clinics, and federally-qualified health centers. CMS estimates the changes contained in the final rule will result in savings of approximately $660 million per year and $3.2 billion over five years. Most of the provisions of this rule will go into effect July 11, 2014.

On May 2, Mike Hash, the director of the Health and Human Services Office of Health Reform, announced that he will be retiring at the end of May. He had been with the Office of Health Reform since 2011. Hash is the third high-level Health and Human Services (HHS) official to announce their departure from the agency in the last month.

Also on May 2, CMS released a proposed rule that would increase hospice payment rates by 1.3 percent for fiscal year 2015. The proposed rule would also require that hospices notify CMS within three days of a beneficiary’s decision to choose hospice care over regular Medicare.

HHS released a report on May 7 illustrating quality improvements at hospitals have saved lives and money. HHS announced that hospital acquired infections declined by 9 percent nationally from 2011 and 2012. It also reported that adverse drug events, falls, infections, and other hospital-related harms decreased as well. The improvements prevented approximately 15,000 hospital deaths and saved approximately $4.1 billion. HHS said the improvements were the result of policies and private-public collaborations made possible by the Affordable Care Act (ACA).

On the Hill

On April 29, the House Ways and Means Health Subcommittee held a hearing on Medicare oversight. The HHS Deputy Inspector General for Audit Services, Gloria Jarmon, testified that CMS paid out $50 billion in improper payments in 2013. In her testimony, Jarmon provided details on the amount of improper payments for three major Medicare programs: $36 billion to the Medicare fee-for-service program, $11.8 billion to Medicare Advantage, and $2.1 billion to the Medicare Part D program.

On May 8, HHS Secretary nominee, Sylvia Burwell, attended the first of two Senate hearings regarding her confirmation. The Senate Health, Education, Labor and Pensions (HELP) Committee hearing opened with Burwell’s opening statement and witness testimony from Senator John McCain (R-AZ) and Senator Joe Manchin (D-WV) who both reiterated their support for Burwell’s nomination. Although the hearing was relatively cordial, Republican senators did question Burwell on her thoughts regarding a single-payer insurance system, whether or not HHS would allow insurance plans to be sold across state lines, or allow catastrophic healthcare plans, and any changes that would be made to the current Medicaid program. Burwell continually promised to uphold and implement the ACA and would not commit to any sweeping changes. She is expected to appear before the Senate Finance Committee in the next couple of weeks.

At the White House

The American Hospital Association held its annual meeting in Washington DC this past week. Valerie Jarrett, a White House senior advisor, appeared as a surprise guest and praised the industry for their efforts educating the public about the ACA. She also revealed that the industry should expect new rules soon that will support the Administration’s efforts to “get rid of some of the burdens to you” by paring down some regulatory requirements for hospitals. Jarrett also urged hospital associations in states that are not participating in Medicaid expansion to lobby their state officials against that decision.

In the states

According to a report from the HHS Office of Inspector General, New York state incorrectly received $61 million in Medicaid funds. Between 2009 and 2011, New York state had received the funds for room-and-board costs for people with developmental disabilities, which violates Medicaid payment rules. The New York Department of Health has been asked to return the funds.

In third parties

New York Presbyterian Hospital and Columbia University Hospital have paid a combined $4.8 million in penalties for data breaches. These data breaches, which the hospitals reported to HHS in 2010, violated the Health Insurance Portability and Accountability Act (HIPAA).  Besides penalties, both hospitals have agreed to implement reforms to avoid such breaches in the future.

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