Baker Tilly healthcare update January 13, 2015

At the agencies

On December 22, the Centers for Medicare and Medicaid Services (CMS) announced that 89 new accountable care organizations (ACOs) are joining the Medicare Shared Savings Program. ACOs are networks of doctors, hospitals, and other providers that agree to coordinate patient care in an effort to reduce costs while still providing improved care. ACOs were created under the Affordable Care Act (ACA) and with these new organizations joining the program, the total number of ACOs will now be 424 and will serve 7.8 million Medicare patients.

The Internal Revenue Service released a final rule regarding new requirements for not-for-profit hospitals.  This rule, released on December 29, is intended to lessen the incidences of aggressive payment collection practices at some not-for-profit hospitals. Under the new rule, not-for-profit hospitals will have to conduct semi-annual reviews of the health needs located in the surrounding community, are restricted from requesting payment while in patient’s rooms, and cannot sell medical debt to third-party collectors unless an adequate effort is made to provide financial assistance to the patient with the debt. 

On December 30, CMS announced that the current Director of the Medicare-Medicaid Coordination Office, Melanie Bella, will be leaving her position. While Bella was in the position, the Medicare-Medicaid Coordination Office began payment reform and healthcare delivery projects. Tim Engelhardt, the current Deputy Director of the Office, will serve as acting director until a replacement is found.

On December 30, the Department of Health and Human Services Center for Medicare and Medicaid Innovation (CMMI) submitted its biennial report to Congress. The report outlines programs that are in the development stage or are just underway at CMMI and that are intended to improve care to Medicare and Medicaid patients. In the report, CMMI outlines, among others, its efforts to reduce readmissions at nursing homes, its grants to states to improve care, and the use of ACOs to improve quality and efficiency of care. According to the report, 2.5 million patients and 60,000 providers will soon be participating in various CMMI programs.

On the Hill

On January 7, Congressmen Erik Paulsen (R-MN) and Ron Kind (D-WI) introduced the “Protect Medical Innovation Act,” which would repeal the medical device tax that was included as part of the ACA. The bill, which has bipartisan support, would not only repeal the tax but would refund the tax payments that medical device manufacturers have already made since its implementation in January 2013. The cost of the bill remains the key impediment to its passage, in that it would cost $30 billion in lost tax revenue.

On January 8, the House passed a bill that would amend the definition of full-time work under the ACA employer mandate from 30 hours up to 40 hours a week. Similar legislation has been introduced in the Senate, but it is unclear when the Senate will take action on the bill.

The Medicare Payment Advisory Commission (MedPAC), which advises Congress on all policies regarding Medicare, has reported that they will recommend a budget neutral per-beneficiary, per-month payment to primary care physicians. This recommendation would replace the annual Medicare pay bump and, according to MedPAC, will help to mitigate an increasing shortage of primary care physicians for Medicare patients.  MedPAC will hold its next meeting in mid-January and will release a report on this and its full suite of Medicare policy recommendations sometime in March 2015.

In the courts

On December 31, a federal judge ruled to delay a US Department of Labor rule regarding overtime and minimum wage exceptions for home healthcare workers. This delay follows the same judge’s decision to completely strike a provision of the rule that would have extended overtime and minimum wage to home healthcare workers employed by third-party business. At issue for the delay is the final rule’s use of the term “care,” which has a broad definition that includes activities such as grooming and bathing, when referring to “companionship services.” According to the complainants, this would place an undue overtime wage burden on facilities that provide home healthcare. Under the judge’s ruling, the Labor Department rule will not take effect until January 15, which gives the parties involved in the suit more time to submit briefs on a longer injunction on the rule.

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