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House Ways and Means Introduces Bipartisan Hospital Payment Reform Legislation

May 20, 2016

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PRESS CONTACTS
Len Marquez, Senior Director, Government Relations

House Ways and Means Health Subcommittee Chair Pat Tiberi (R-Ohio) and Ranking Member Jim McDermott (D-Wash) May 18 introduced the Helping Hospitals Improve Patient Care Act of 2016 (H.R. 5273), hospital legislation that includes a narrow Sec. 603 [see Washington Highlights, Dec. 18] exemption for “mid-build” off-campus hospital outpatient departments (HOPDs), and allows for consideration of socioeconomic status (SES) in the Medicare Hospital Readmissions Reduction Program (HRRP), among other provisions.

A statement from AAMC President and CEO Darrell G. Kirch, MD, praised the committee for its introduction of the legislation and called the “mid-build” exception and SES provision “crucial to ensuring that the nation’s medical schools and teaching hospitals are able to better serve their communities and provide health care for all Americans.”

H.R. 5273 includes a provision that would require the Secretary of Health and Human Services (HHS) to implement a transitional risk adjustment methodology to serve as a proxy of SES for the HRRP until an analysis required by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT) is completed. Studies would examine the effect of individuals' socioeconomic status, race, health literacy, limited English proficiency, and patient activation on quality and resource use.

Currently, the HRRP requires the Centers for Medicare and Medicaid Services (CMS) to penalize hospitals that have “excess” readmissions compared with expectations. However, CMS does not consider SES when determining the “expected” number of readmissions and neglects to address strong evidence that links low SES to higher rates of readmission.

Additionally, H.R. 5273 would exempt HOPDs that were defined as “mid-build” prior to Nov. 2, 2015, helping those affected by a “site-neutral payment policy” passed by the Bipartisan Budget Act of 2015 (BBA ‘15).The legislation defines “mid-build” as a provider that has a binding written agreement with an outside, unrelated, party for the actual construction of the HOPD, and would require such sites to attest to meeting requirements of being provider-based by July 1, 2016. If sites qualify, they will receive full HOPD payment rates beginning Jan. 1, 2018. Additionally, off-campus HOPDs that submitted a voluntary attestation prior to Dec. 2, 2015, will receive the full HOPD payment rate beginning Jan. 1, 2017.

The bill also includes several provisions introduced by the Committee with bipartisan support over the past year, including provisions specific to rural community hospitals, long-term care hospitals, and cancer hospitals, among others.

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