HHS delays Medicare bundle payment programs

At the agencies

The Department of Health and Human Services (HHS) has announced it will further delay two Medicare bundled payment programs until May 20, 2017. The two programs from the Centers of Medicare and Medicaid Services’ Innovation Center (CMMI) are focused on bundled payments for knee and hip replacements and for stroke and heart attack care. Once effective, the delayed rules will expand existing knee and hip replacement bundled payments and introduce a stroke and heart attack bundled payment program. The program expansion and introduction were initially delayed after the new administration issued a 60-day regulatory freeze to allow new leadership to review the final rule. 

The Centers for Medicare and Medicaid Services (CMS) has issued a final rule regarding supplemental payments for hospitals treating Medicaid patients, known as Medicaid Disproportionate Share Hospital (DSH) payments. The rule, which originated under the Obama Administration, targets the amount of supplemental pay that hospitals that treat a larger percentage of Medicaid beneficiaries receive in an effort to encourage treatment of Medicaid patients. The calculation under the final rule includes Medicare and third-party payments when computing how much a hospital spends on uncompensated care, which then determines how much they should receive in these Medicaid DSH payments. The final rule comes despite a federal court injunction that bars CMS from enforcing the proposed calculations.  

On the Hill

Last week, Speaker Paul Ryan (R-WI) pulled the American Health Care Act (AHCA) (the Affordable Care Act (ACA) repeal bill) from a vote once it became clear the bill did not have enough votes from House Republicans to pass, effectively defeating the bill. The AHCA was intended to replace the ACA but received criticism from both moderate Republicans and the conservative Freedom Caucus. After the defeat of the bill, the White House and a few members of Congress made statements indicating there may be future moves to repeal ACA, but no definitive plans have been outlined or announced.

Since failing to pass the AHCA, which included cost-sharing reduction (CSR) appropriations, two Republican lawmakers have signaled that they will still fund the mechanisms through other means. CSRs, also known as “extra savings,” are discounts based on beneficiary income that lower out-of-pocket expenses for deductibles, coinsurance and copayments. Senator John Thune (R-SD) and Rep. Tom Cole (R-OK) have both made comments supporting appropriations to the CSRs in an effort to prevent insurer exits from insurance exchanges. The question of the mandatory nature of the CSRs is currently on appeal, in House v. Price. 

President Trump released his proposed 2018 fiscal year budget which includes several proposed cuts to healthcare programs and federal agencies responsible for administering healthcare programs. The budget outlines a $50 million cut for CMS’s programming. The reduction would eliminate all but $3 million from the State Health Insurance Assistance Program, which provides Medicare counseling for beneficiaries. The budget also recommends cuts to the Health Resources and Services Administration (HRSA), removing $403 million from health profession and nursing training programs, and Maternal and Child Health Block Grant special projects. The budget also proposes a $100 million cut to the Mental Health Block Grant. One of the largest cuts would come from the National Institutes of Health (NIH), which the Trump budget suggests cutting by $5.8 billion.

In the courts

A Pennsylvania appeals court has ruled against the Commonwealth and in favor of Golden Gate National Senior Care LLC. The court, in a 6-1 decision, dismissed the suit filed under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. The suit alleged the nursing home company had failed to provide basic care and misrepresented the level of care it provides at its 25 in-state Golden LivingCenters facilities. The court stated that Golden Gate’s marketing statements were general statements of optimism and were not specific enough to qualify as deceptive or false advertising. The court also ruled that the Commonwealth was unable to prove that Golden Gate should be held liable for the actions of its Pennsylvania-based facilities, citing no evidence of corporate intention of wrongdoing.

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

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