Proposed Bill Seeks Medicare Payment Reform for Hospitals
Proposed payment reform aims at adjusting Medicare Payment by allowing hospitals to treat a greater number of low-income and cancer patients.
- Potential reform is coming to help hospitals avoid getting penalized for high admission rates among low-income patient populations.
On May 18, two members of the House of Representatives Health Subcommittee — Representatives Pat Tiberi (R-OH) and Jim McDermott (D-WA) introduced a bill with the purpose of reforming Medicare reimbursement for hospitals. Known as the Helping Hospitals Improve Patient Care Act, the proposed bill would target specifically the work of hospitals in treating disadvantaged and cancer patient as well creating more outpatient facilities.
“The Helping Hospitals Improve Patient Care Act takes responsible steps to strengthen Medicare and give hospitals and healthcare providers the certainty they need to best serve their patients,” said Tiberi.
The bill's design would keep hospitals from being penalized based on the patient populations they serve. For instance, patients’ socioeconomic status would be taken into account when calculating readmission rates. The pending legislation would also better account for socio-economic factors by comparing the performance of hospitals that serve similar groups of patients that receive both Medicare and Medicaid.
Some hospitals currently struggle with complying with the Hospital Readmissions Reduction Program, which requires CMS to reduce payments to the Acute Care Hospital Inpatient Prospective Payment System hospitals with excess readmissions. This proposed bill could allow for more flexibility for hospitals tackling readmission rates.
In addition to allowing for adjustments to readmissions rates, the act also contains provisions that address payment rates for off-campus hospital outpatient departments and off-campus cancer centers. This bill specifically would give relief to hospital outpatient departments in dedicated cancer centers.
The bill would also provide cancer hospitals with an exemption from the hospital outpatient department policy created in the Bipartisan Budget Act of 2015. Under this new legislation, cancer hospitals would continue to be paid at cancer hospital rates at new off-campus locations. “This provision is offset by a slight reduction in the payments cancer hospitals currently receive as calculated by their payment to cost ratio.” the Committee on Ways and Means explained.
Portions of the legislation take aim at an exception to current regulations for increasing the number of beds in long-term care hospitals. Likewise, the proposed act also includes an extension to the rural community hospital demonstration program, and it proposes to modify the treatment of ambulatory surgery center patient encounters. The legislation proposes to require “a cross walk of ten inpatient surgical codes” that would be linked to outpatient surgical codes, the Committee on Ways and Means said.
If implemented, the bill would also delay CMS ability to end Medicare Advantage programs that are unable to achieve minimum quality ratings, the Committee said in a review of the proposed bill.
The American Hospital Association (AHA) praised the representatives for creating legislation that addresses issues that impact readmission rates and hospital outpatient facilities. AHA also argued that last year’s Bipartisan Budget Act jeopardized access to patient care. Additionally, AHA agreed that readmissions programs should be adjusted to account for socioeconomic status.
“The Helping Hospitals Improve Patient Care Act makes important changes that will allow hospitals to continue to provide high-quality care to patients as we implement recent payment reforms,” said McDermott.
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