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  • Washington Highlights

    Omnibus Fails to Address Site-Neutral HOPD Provision, Includes Medical Device Tax Moratorium

    Len Marquez, Senior Director, Government Relations

    Despite agreeing on the $1.8 trillion omnibus spending and tax extenders package (see related story) Congressional negotiators failed to include an AAMC-supported technical correction to address a new Medicare “site-neutral” hospital outpatient department (HOPD) payment provision. The HOPD site-neutral policy was included in the two-year budget agreement enacted in November [see Washington Highlights, Oct. 30].

    Effective Jan. 1, 2017, any HOPD that enters into a Medicare provider agreement, but is not on the main campus of a hospital and is located more than 250 yards away from the main campus, must seek reimbursement through the Ambulatory Surgical Center (ASC) prospective payment system or the Medicare Physician Fee Schedule (PFS). The technical correction would have expanded the grandfather provision to include HOPDs that were “under development.”

    The overall package also addresses a number of tax policy and tax provisions originally enacted as part of the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), including a $15 million cut to the 15-member Independent Payment Advisory Board (IPAB) tasked with developing specific proposals to achieve savings in the Medicare program.

    H.R. 2029 additionally includes a two-year delay of the 2.3 percent excise tax on high-cost health plans, also known as the “Cadillac tax,” from its scheduled start in 2018 until 2020 at a cost of roughly $16 billion. The omnibus funding bill would also suspend the law’s annual tax on insurers at a cost of $12.1 billion, which took effect in 2014, for one year in 2017.

    The Protecting Americans From Tax Hikes (PATH) Act of 2015, passed separately by the House Dec. 17 before being combined and passed by the Senate Dec. 18 (see related story) includes a two-year moratorium on the 2.3 percent excise tax imposed on the sale of medical devices at a cost of roughly $4 billion. The tax, included in the ACA, will not apply to sales during calendar years (CY) 2016 and 2017.