Legislative changes impact the healthcare industry

The bipartisan Budget Act of 2015 was signed into law on November 2. Read more about how the law will impact providers, and learn the status of the PACE Innovation Act, the Medicare Payment Advisory Commission (MedPAC), and the two-year budget deal. 

On November 2, 2015, the President signed into law the Bipartisan Budget Act of 2015, and one small provision in the bill will increase the fines leveled on providers who violate Medicare’s conditions of participation. Specifically, this law requires all federal agencies to update their Civil Monetary Penalties (CMPs) based on the CMP values from the time they were last updated, and taking into consideration inflation since that time as measured by the consumer price index.  Although this provision is not specific to the healthcare industry, it is expected to impact this area more than others because many healthcare provider fines have not increased since the 1990s. Nursing homes, especially, could be impacted, as the current $10,000 a day penalty issued by CMS could increase to over $20,000 a day. This provision is set to go into effect no later than August 1, 2016, with annual updates issued by proposed rulemaking in the future.  Notably, within the language, there is a provision that will allow agencies to not raise fines if the agency determines that the social costs of such an increase would outweigh the benefits. This provision gives CMS potential leeway over the CMP values.  

On November 5-6, 2015, the Medicare Payment Advisory Commission (MedPAC) met to consider several issues, and for the first time, discussed Medicare telehealth reimbursement policies.  Additionally, as required by the Improving Medicare Post-Acute Transformation Act, the group continued its discussion of this topic, specifically debating incentives for providers to improve post-acute care, and the possibility of a third party managing post-acute care.   

On October 21, 2015, the PACE Innovation Act was passed by the House and is headed to President Obama for his signature, having been unanimously passed in August by the Senate. This bill, if enacted, would allow CMS to test potential changes to the Program of All-Inclusive Care for the Elderly (PACE), a program that has been successful since its 1990 inception. Currently, PACE integrates preventative, medical, and long-term care for the elderly, such as allowing beneficiaries to avoid institutionalization by receiving services through adult day-care centers.  Lawmakers hope that this bill will permit CMS to test and identify newer program models that continue to lower costs and admissions while improving health outcomes for the elderly.

On October 30, 2015, the Senate passed a two-year budget deal that was passed two days prior by the House, which, once signed by President Obama, will increase spending limits set by the sequester by $80 billion through FY 2017, and will suspend the debt limit until mid-March 2017.  This budget deal includes two components that are noteworthy to providers. It contains a provision mitigating a projected 52 percent spike in Medicare Part B premiums for roughly 30 percent of beneficiaries, which, if left intact, was predicted to cause states to decrease their Medicaid reimbursements to hospitals. The budget deal as negotiated, means Part B premiums for those 30 percent of beneficiaries will only rise by 14 percent. 

Additionally, the deal includes a site-neutral payment measure that will stop the current policy of CMS paying higher hospital outpatient Medicare reimbursements to those physician practices and ambulatory care centers that have been purchased by hospitals. The Medicare Payment Advisory Council (MedPAC) has previously recommended similar site-neutral payment policies.  This site-neutral payment measure will only reduce payments to those physician practices and centers that are owned by hospitals but not located on hospital campuses, and the cuts would not be applied to those practices purchased prior to the law’s enactment.  

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