For hospitals and health systems, there’s some good, bad and ugly in legislation that is moving swiftly through Congress to change how Medicare pays physicians.
The House of Representatives yesterday passed by voice vote a bill that would postpone a 24 percent cut to physician payments — slated to take effect on Tuesday — until April 1, 2015.
Hoping for a long-term solution to the sustainable growth rate, which seemed to be in the works earlier this year, the AMA opposes the bill and urged House members to vote it down. The nation’s largest doctors group is weary of this Band-Aid approach, which has seen multiple short-term patches to the convoluted payment system.
Looking beyond SGR, the legislation, which is expected to be approved by the Senate early next week, includes several provisions that impact hospitals and health systems.
“There are some good elements and some bad elements,” says Tom Nickels, senior vice president for federal relations at the AHA.
First the good: Medicare extenders — the Medicare-dependent hospital program, low-volume adjustment and ambulance add-on payments — were continued until April 1, 2015.
The bill also extends the delay for CMS to enforce the controversial two-midnight rule until March 31, 2015. And, it would prevent RACs from auditing two-midnight inpatient claims for six months.
Nickels says that the AHA was also pleased with what was left out of the bill, namely cuts that had been discussed surrounding graduate medical education, the critical access hospital program and bad debt.
Now some of the bad and ugly: While the bill would delay DSH payment cuts for a year (2017), it tacks another year of cuts on the back-end (2024). Also in 2024, Medicare cuts enacted under the sequester would double to 4 percent, but only for half of the year.
And then this: delaying the transition to ICD-10 until October 2015. If enacted, this would mark the second consecutive year in which ICD-10 was pushed back.
“A delay is not good at this time,” says Stephen Stewart, CIO at Henry County Health Center, a critical access hospital in Iowa. “ICD-10 is too far down the implementation path.”
Stewart worries about having to essentially double-spend on training for physicians and other staff if a delay goes into effect. And, as the AHA’s Nelly Leon-Chisen writes in this month’s H&HN, hospitals and insurers should be moving into the testing stage.
“Members are doing everything they can to get this done,” Nickels adds. “This would bring that work to a grinding halt.”
Stewart would rather see lawmakers turn their attention to delaying penalties for Stage 2 of the meaningful use program. That, he says, would provide more appropriate relief for the heavy IT work load providers are carrying.
The AHA, Nickels suggests, will look for policy options to keep ICD-10 on track for this year.
With the SGR legislation essentially off the table this year, Nickels says that the AHA will also have to look for alternative vehicles to address key issues impacting hospitals. That includes two rules challenging rural hospitals: one requiring a physician at a CAH to certify at the time of admission that a Medicare beneficiary will be discharged or transferred within 96 hours; and a rule requiring direct supervision by a physician or nonphysician provider, such as a nurse practitioner, for outpatient physical therapy services.