The Federal Budget. Washington Report American Hospital Association

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1 Agenda Washington Report American Hospital Association June,. The Federal Budget.Legislative Advocacy Agenda. Rulemaking and Policy. Evolving Delivery Models U.S. Senate Democrats are Well Positioned to Gain Senate Seats Heading into Elections Vulnerability of Senate Seat, by Party The Federal Budget Sources: The Cook Political Report, Senate Race Ratings for November, ; Conversation with Charlie Cook: Election Preview, National Journal LIVE, November,

2 Bipartisan Budget Act of House & Senate Appropriations Labor, Health and Human Services, Education, and Related Agencies Hospital Options Still on Table Additional site-neutral payment policies - E&M code/hopd ($ billion) - additional APCs procedures ($ billion) - procedures performed in ASCs ($ billion) Hospital bad-debt reductions ($ billion) GME reductions ($ billion) CAH: payment reductions and qualification criteria ($ billion) Post-acute care ($ billion) Medicaid: - State provider assessments ($ billion) - Medicaid per capita caps Rural Health Open Door Forum CMS to host rural health forum on proposal to cut CAH reimbursements CMS will host a special Rural Health Open Door Forum call on June at : p.m. ET to receive input on a DHHS budget proposal for fiscal year that would reduce Medicare payments for CAHs from % to % of reasonable costs. AHA opposes the proposal and encourages CAHs to share their views on the proposal and its impact during the -minute call. Dial in instructions will be available before the call at

3 Legislative Advocacy CONGRESSIONAL CALENDAR PRESENTATION CENTER January Congressional Calendar House in session Senate in session Both chambers in session House Votes Suspended due to Snowstorm February March April May June July August September October November December AHA Advocacy Agenda. Support Health System Transformation. Protect Patient Access to Care. Sustain Gains in Health Coverage. Enhance Quality and Patient Safety. Promote Regulatory Relief Pass the Resident Physician Shortage Reduction Act (S., H.R. ), Reject options that limit states ability to partially fund their Medicaid programs using provider assessments, such as (H.R. ). Pass the Establishing Beneficiary Equity in the Hospital Readmission Program Act (S., H.R. ) Pass the Medicare Audit Improvement Act (H.R. ) Pass the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act (S. ) AHA Advocacy Agenda

4 Opioids & Behavioral Health Hospital Bill The Comprehensive Addiction and Recovery Act S. Mental Health Reform Act S. Helping Hospitals Improve Patient Care Act (H.R. ) Adjust Section of the Bipartisan Budget Act of to extend flexibility to hospital outpatient departments under development Adjust the Hospital Readmissions Reduction Program to account for socioeconomic status Extend the Rural Community Hospital Demonstration Program for five years Rural Legislative Agenda Secure the Future MDH and low-volume adjustment Ambulance add-on payment Rural Community Hospital demo Promote Regulatory Relief Direct Supervision -hour physician certification HIT and meaningful use Recovery Audit Contractors Telehealth Protect Patient Access B drug discount pricing Eliminate Medicare DSH cuts Rural Hospital Extensions Rural Hospital Access Act (S./H.R.*) - Permanently extends MDH program and enhanced low-volume adjustment Medicare Ambulance Access, Fraud Prevention and Reform Act (S./H.R.*) - Permanently extends add-on payments for ambulance services in rural areas

5 -Hour Rule (S. /H.R. ) Critical Access Hospital Relief Act Condition of Payment a physician must certify that a beneficiary may reasonably be expected to be discharged or transferred to a hospital within hours after admission Removes condition of payment on physician certification Maintains condition of participation on annual length of stay Direct Supervision Rural Hospital Regulatory Relief Act (H.R. ) Permanently extends the enforcement moratorium on direct supervision of outpatient therapeutic services for critical access hospitals and small, rural hospitals with or fewer beds. Sen. Pat Roberts (R-KS) Sen. Jon Tester (D-MT) Rep. Adrian Smith (R-NE) Reps. Lynn Jenkins (R-KS) Dave Loebsack (D-IA) Adrian Smith (R-NE) Direct Supervision Protecting Access to Rural Therapy Services (PARTS) Act S. /H.R. Allows a default standard of general supervision for outpatient therapeutic services Rural Community Hospital Demo Rural Community Hospital (RCH) Demonstration Extension Act (S. / H.R. ) Allows hospitals with fewer than beds to test the feasibility of cost-based reimbursement Extends demonstration for years Rep. Kristi Noem (R-SD) Sen. John Thune (R-SD) Sen. Jerry Moran (R-KS) Sen. Jon Tester (D-MT) Budget neutral Sen. Charles Grassely (R-IA) Rep. Don Young (R-AK)

6 RURAL Legislative Advocacy Vehicles Needed for: Critical Access Hospital Relief Act, H.R. /S. Protecting Access to Rural Therapy Services (PARTS) Act, H.R. /S. Rural Hospital Access Act, H.R. /S. Rural Community Hospital Demonstration Extension Act, H.R. /S. Medicare Ambulance Access, Fraud Prevention, and Reform Act, H.R. /S. Establishing Beneficiary Equity in the Hospital Readmission Program Act, S./H.R. Resident Physician Shortage Reduction Act, S./H.R. SMARTER Act, H.R. Medicare Audit Improvement Act, H.R. Regulatory Policy and Advocacy Rulemaking and Policy -Midnights CMS Certification of Necessary Providers Exclusive Use/Co-location of Visiting Specialists Star Ratings B Drug Discount Pricing Program CJR Bundled Payments of Care Health Information Technology/Telehealth Computed Radiography Standards and CT Scan Dose Management Rural Health Clinic Qualified Visits Implementing MACRA Physician Payment Regional Budget Payment Concept Life-Safety Code Update Reducing Rx Drug Prices Two-Midnight Policy Stays expected to cross > two midnights are inpatient Stays < two midnights based on physician judgement - Based on the clinical judgement of the admitting physician and medical record support for that determination Oct. : QIOs conduct patient status review Two-midnight changes effective Jan., CMS did NOT propose to reverse.% payment reduction AHA sued and courts found in our favor.

7 CAH Certification Issue CMS Guidance requires proof of compliance states may immediately use alternative ways to document that a critical access hospital (CAH) is a necessary provider. Physician Co-location Issue Regulations related to how hospitals may share space, services and staff with other providers Provider-based rules; regulations for satellite facilities, hospital Conditions of Participation; interpretive guidance Lack specificity on implementation of shared arrangements CMS has now expressed several precise interpretations of these rules that differ from prior understanding Standards about what constitutes separateness, when separate entrances are required, which services may be shared, public awareness Impact is significant Hospital Compare Star Ratings Overall star ratings have been delayed for an unspecified period of time. Rating of to stars based on ~ measures from CMS programs The rating approach is quite complex Legislators are responding to hospitals concerns B Program Key Elements Hospital eligibility including off-site clinics Definition of eligible B patient Definition of covered outpatient drugs Key Issues: Definition of eligible patient HSRA issues Mega Guidance GPO prohibition for certain hospitals Contract pharmacy arrangements Medicaid rebate and duplicate discounts Definition of covered outpatient drugs MedPAC In January, MedPAC recommended to reduce Part B drug payment rates for hospitals participating in the B Program by % Problematic and active opposition to this recommendation

8 Hips and Knee Bundling Comprehensive Care for Joint Replacement (CJR) Payment Model Acute care hospitals control the bundle Required of most hospitals in certain markets Hospitals would be responsible for quality and costs for all Medicare Part A & B services for days post discharge Health Information Technology Electronic Health Records Modified the reporting period in to a -day period to align with the calendar year Defines meaningful use for Stage and sets start date Sets new certification criteria, standards and specifications to support Stage Adopt a flexible approach to Meaningful Use at % Telehealth Key Policy Strategies Urge Congressional action on coverage and payment Advocacy for greater flexibility from CMS Promote research on the cost & benefit of telehealth Urge increased FCC funding for broadband Support state efforts to establish licensure portability CONNECT for Health Act Promoting cost savings & quality through telehealth and remote patient monitoring Eliminating restrictions created by U.S.C. (m) CT and CR Imaging Cuts Computed Radiography Payment Cuts X-ray Technology Year Implemented Payment Reduction Analog % Computed Radiography Computed Radiography Digital Radiography % % None None

9 RHC Qualifying Visits Medicare Access & CHIP Reauthorization Act MACRA abolished the SGR formula for Medicare physician payment and replaced it with: Stable payment updates physician fee schedule Two-track payment system effective in :. Merit-Based Incentive Payment System (MIPS), and. The Alternative Payment Model (APM) track Regional Budget Payment Concept CMS is seeking input on a concept that promotes accountability for the health of the population in a geographically defined community. Modeled under the Maryland All-Payer Model Testing feasibility of similar approaches for other geographical areas, which could include areas smaller than a state providers could receive a prospective budget for the care of the population of a community, accountable for the total cost of care across the entire continuum of care and health outcomes for the entire population. Life Safety Code Update National Fire Protection Association s Life Safety Code Health Care Facilities Code The American Society for Healthcare Engineering (ASHE) put together a guide detailing the implications adoption of the edition of the National Fire Protection Agency s Life Safety Code.

10 Reducing Rx Prices New Models of Delivery and Payment Reform HHS Value-based Payment From Volume to Value Target percentage of payments in FFS linked to quality and alternative payment models by and Triple Aim Better Care Smarter Spending Healthier People Moving from volume to value Pay-forperformance initiatives Alternative payment models Traditional FFS Volume CMS Framework Value-Based (Link to Quality) Hospital VBP Physician VM Readmissions HACs Quality Reporting Alternative Delivery Models ACOs Medical homes Bundled payment Comprehensive Primary Care initiative Comprehensive ESRD Value Population Health/ At Risk Eligible Pioneer ACOs in years - Global Budgets (Maryland hospitals)

11 Rural Hospital Closures MedPAC Payment Options The CMS Innovation Center State Initiatives Demonstration Projects Frontier Community Health Integration Project Value-based purchasing demo for CAHs Frontier Extended Stay Clinic Rural Community Hospital Program CMMI Challenge Grants State Innovation Models Alternative Payment Models Bundled Payments ACO Investment Model Regional/Global Budgets Georgia Free-standing Emergency Room Kansas Primary Health Centers / hour Oregon Rural Hospital Reform Initiative Minnesota CAH Payment Reform Washington New Blue H Initiative South Carolina Hospital Transformation Plan Program

12 Rural Health Initiatives Population Health Health Networks Administrative Clinical integration Advanced Payment Models Bundled payments Medicaid ACOs Medicare Shared Savings ACOs Commercial plan APMs Case Examples Task Force Update Ensuring Access to Health Care in Vulnerable Communities Task Force Confirm the characteristics and parameters of vulnerable rural and urban communities by analyzing hospital financial and operational data and other information from qualitative sources where possible; Identify emerging strategies, delivery models and payment models for health care services in rural and urban areas; Identify policies/issues at the federal level that impede, or could create, an appropriate climate for transitioning to a different payment model or model of care delivery, as well as identify policies that should be maintained. Task Force Update Task force work is ongoing Anticipated time frame for report Listening sessions January, February, March Venue for members to convene and discuss items being considered by the task force Feedback received will be incorporated into the work of the task force - Task force members will attend - AHA will provide a summary report to the task force members Potential models

13 Discussion Questions and Comments Contact Information John Supplitt Senior Director AHA Constituency Sections --