March 23, 2010
Sunday night, the U.S. House of Representatives voted to approve the Senate health care
reform bill, the Patient Protection and Affordable Care Act (”The Act,” or “PPACA,” H.R. 3590) by a vote of 219-212. The President signed H.R. 3590 on Tuesday, March 23. The
House then passed the Health Care and Education Affordability Reconciliation Act (the “Reconciliation Act,” or “RA,” H.R. 4872,) a negotiated set of proposed changes to H.R. 3590,
by a vote of 220-211.
Together, these two bills are designed to provide health coverage to thirty-two million people. The Congressional Budget Office (CBO) estimates the price tag for the two bills will be $940
billion over ten years but that some of that cost will be mitigated by reductions in other programs. The actual cost of the total reform package remains controversial.
The Act has completed its legislative journey and needs only the President’s signature to
become law, while the Reconciliation Act still needs review by the Senate, and is now headed there for debate in that body. Senate Majority Leader Harry Reid has indicated that the Senate
will take up the measure this week. The Reconciliation Act will be open to amendment in the Senate, and any changes made to the legislation in the Senate would require the House to
take up the Reconciliation Act again. Majority Leader Reid has indicated he has the votes to pass this measure, but the Reconciliation Act’s fate still remains unclear, given the possibility
for procedural points of order that could be raised. If the Reconciliation Act does pass the Senate, it will also be signed by the President, and its changes will modify H.R. 3590.
* * * * *
This client alert summarizes key provisions in the Act and the Reconciliation Act. Note: The sections highlighted below in red will be enacted into law only if the Senate passes the
Reconciliation Act. All other sections become law when the President signs the Act this week.
We have divided our summary into: Program Integrity, Hospital Provisions, Physician Provisions, Long-term Care and Hospice Provisions, and Cross-Provider Initiatives.
If you have any questions, please feel free to contact our Government Relations Directors, Amy Demske, (202) 857-6484, or Margo Klosterman, (202) 857-6117, or the Arent Fox
attorney who normally handles your legal or government relations matters.
We begin with these changes, which are far-reaching and will affect providers of all types.
Limitation on Medicare exception to prohibition on certain physician
referrals for hospitals – Effective December 31, 2010, physicians will be prohibited from referring to a hospital in which they share an ownership interest unless certain grandfathering provisions are met. (Sec. 6001 amended by Section 10601, PPACA and Section 1106, RA)
Transparency Reports and Reporting of Physician Ownership or Investment Interest- On March 31, 2013 and the 90th day of each Calendar Year thereafter, drug, device, biological and medical supply manufacturers will report transfers of value made to physicians or teaching hospitals. Manufacturers will also report the ownership or investment interests in a publicly traded security and mutual fund held by a physician or their immediate family.
Transfers of value may include: consulting fees, compensation for services other than consulting, honoraria, gifts, entertainment, food, travel, education, research, charitable contributions, royalty or license, current or prospective ownership or investment interest, direct compensation for serving as faculty or as a speaker for a medical education program, grants, or others defined by the Secretary.
Exclusions include: gifts under $10, product samples, educational materials, loan of a device for not more than ninety days, and items and services, a transfer of anything of value if the recipient is a patient, discounts, in-kind items for charity care, a dividend or other profit distribution. Up to $150,000 in penalties can be imposed for noncompliance and $1 million for knowingly failing to report. (Section 6002, PPACA)
Adds an additional requirement to the Medicare in-office ancillary exception that requires a referring physician to inform the patient in writing that the individual may obtain the ordered services (e.g. MRI, CT, PET) from a provider other than the ordering physician or another physicians or provider in the group. The legislation requires that the referring physician provide a patient with a list of providers who provide the referring service within a specific geographical area. (Section 6003, PPACA)
Civil Money Penalties – Provides the Secretary with authority to reduce the penalties to skilled nursing facilities and nursing facilities that self report and promptly correct deficiencies within ten calendar days of the imposition by fifty percent. Penalties will not be reduced for repeat offenders or if there is a pattern of harm that jeopardizes the health or safety of a resident. (Section 6111, PPACA)
National Independent Monitor Demonstration Project –The Secretary will develop, test, and implement a national independent monitor program to conduct oversight of interstate and large intrastate skilled nursing facility and nursing facility chains. The project will begin within 1 year of enactment and will last for 2 years. Chains wishing to participate must apply with the Secretary. (Section 6112, PPACA)
Notification of Facility Closure- Written notification must by provided by the long-term care facility to its residents, legal representatives of the residents, other resident responsible parties, the relevant state government office, any ombudsman program and the Secretary at least 60 days prior to closure. The relevant state government office will oversee the closing and ensure all residents are relocated. Failure to comply with these provisions will result in a civil monetary penalty of up to $100,000. This provision will be effective within one year of enactment. (Section 6113, PPACA)
National Demonstration Projects on Culture Change and Use of Information Technology in Nursing Homes - The Secretary will conduct two demonstration projects to develop best practices in skilled nursing facilities and nursing facilities that are involved in the culture change movement and develop best practices for facilities using information technology to improve resident care. The projects will begin within one year of enactment and will run for 3 years. (Section 6114, PPACA)
Enhanced Medicare and Medicaid Program Integrity Provisions – Increases funding for the Health Care Fraud and Abuse Control Fund to increase fraud prevention. Legislation directs the Secretary to establish an integrated data repository and provide access to the data to relevant federal agencies (e.g. CMS, HHS, VA, DoD, SSA, IHS, and DOJ); withhold matching payments to states if enrollee encounter data is not submitted to the Medicaid Management Information System; exclude providers and suppliers who provide false information in filing to become participants in federal health programs; impose civil monetary penalties up to $50,000 on provider who order or prescribe an item or services, make false statements on applications or contracts, or who know an overpayment has been made and do not return it; issue subpoenas and require attendance and testimony regarding matters under investigation; consider the volume of billing for a DME supplier or home health agency when determining surety bonds; and suspend payment to a provider or supplier pending a fraud investigation. Legislation also requires a provider to reconcile an overpayment within sixty days of receipt. (Section 6402, PPACA amended by Section 1304, RA)
Expansion of the Recovery Audit Contractor (RAC) Program – States will be required to establish contracts with one or more RACs. Each RAC will identify underpayments and overpayments and will work to recoup overpayments made for services provided by Medicaid and State Plan waivers. RACs would also be expanded to Medicare Parts C and Part D programs. (Section 6411, PPACA)
Termination of Provider Participation under Medicaid if Terminated under Medicare or Other State Plan – Beginning January 1, 2011, a medical provider or entity can be terminated from a state Medicaid program if that provider or entity was previously terminated by Medicare or by another state’s Medicaid program. (Section 6501, PPACA)
Medicaid Exclusion from Participation Relating to Certain Ownership, Control, and Management Affiliations – Providers and entities will not be eligible for Medicaid for a specific period of time if that provider or entity has failed to repay overpayments during the period determined by the Secretary; has been suspended, excluded, or terminated from participation in any Medicaid program; or is affiliated with an individual or entity that has been suspended, excluded or terminated from Medicaid participation. The exclusions will take effect beginning on January 1, 2011. (Section 6502, PPACA) Billing Agents, Clearinghouses, or Other Alternate Payees Required to Register under Medicaid – Beginning January 1, 2011, agents, clearinghouses, or other alternate payees that submit claims on behalf of health care providers will need to register with the appropriate state as well as with the Secretary. (Section 6503, PPACA)
Requirement to Report Expanded Set of Data Elements under MMIS to Detect Fraud and Abuse – Requires states and Medicaid managed care entities to report data elements from the automated data system, MMIS beginning on January 1, 2010. The Secretary will determine which elements are necessary for program integrity, program oversight, and administration. (Section 6504, PPACA)
Prohibition on Payments to Institutions or Entities Located Outside of the United States – Beginning January 1, 2011, state Medicaid programs will not be able to pay for items or services to a financial institution or entity located outside of the United States. (Section 6505, PPACA)
Overpayments – Beginning on the date of enactment, the Secretary extends the period for collection of overpayments due to fraud from sixty days to one year when final determination of the amount of overpayment has not been determined due to an ongoing judicial or administrative process. (Section 6506, PPACA)
Mandatory State Use of National Correct Coding Initiative – Requires states to make MMIS methodologies compatible with the federal National Correct Coding Initiative (NCCI.) The NCCI standard will go into effect for claims filed on or after October 1, 2010. (Section 6507, PPACA)
Medicare Prepayment Medical Review Limitations – Streamlines procedures for conducting Medicare prepayment reviews to facilitate additional reviews designed to reduce fraud and abuse. (Section 1302, RA)
CMS-IRS Data Match to Identify Fraudulent Providers – The Secretary of the Treasury will disclose, at the request of the Secretary (of HHS), the tax return information of any taxpayer who has applied for enrollment as a provider or supplier under Medicare. Information to be provided includes: identity information, seriously delinquent tax debt, and the taxable year within which that debt occurred. (Sec. 1303, RA)
Hospital Value-Based Purchasing Program - Provides a Medicare value-based purchasing incentive payment to any hospital who meets specific performance standards (tied to measurements) established by the Secretary. Under this program, a percentage of hospital’s Medicare payment would be tied to hospital performance on quality measures related to common and high-cost conditions.
A hospital could be ineligible for incentive payments if that hospital in a particular fiscal year receives a payment reduction, is found to have quality deficiencies, does not have enough relevant performance measures that apply, or does not meet the necessary caseload threshold. For the first year, value-based incentive payments would rely on five measures tied to: acute myocardial infarction, heart failure, pneumonia, surgeries, and health care-associated infections. The program starts on or after October 1, 2012. (Section 3001, PPACA)
Hospital Readmission Reduction Program – Reduces Medicare inpatient hospital payments – starting in FY 2012 – on the dollar value of each hospital’s percentage of potentially preventable Medicare readmissions measures identified by the National Quality Forum: heart attack, heart failure and pneumonia. Beginning in FY 2015, the program will be expanded to include four additional measures recommended by MedPAC: acute myocardial infarction coronary artery bypass graft, percutaneous transluminal coronary angioplasty and other vascular issues, as well as others recommended by the Secretary. The Secretary would be required to define the time period for how hospital readmissions (post discharge) are defined. (Sections 3025 as amended by 10309, PPACA)
Payment Adjustment for Conditions Acquired in Hospitals – For FY 2015 and beyond, a hospital will receive a one percent Medicare payment penalty if they fall within the top twenty-five percent of all hospitals – relative to the national average – of hospital acquired conditions determined by the Secretary. The Department of Health and Human Services (HHS) shall study the possibility of expanding the hospital acquired conditions policy to other types of facilities, and report back to Congress no later than January 1, 2012. Hospital-specific information shall be posted on the internet for public availability. (Section 3008, PPACA)
Distribution of Additional Residency Positions – Directs the Secretary, starting July 1, 2011, to redistribute residency positions that have been unfilled for the prior three cost reports and directs those slots for training of primary care physicians. In distributing the residency slots under this section, special preference will be given to programs located in states with a low resident-togeneral population ratio and to programs located in states with the highest ratio of population living in a health professional shortage area relative to the general population. (Section 5503, PPACA)
Counting Resident Time in Outpatient Settings and Allowing Flexibility for Jointly Operated Residency Training Programs - Modifies rules governing when hospitals can receive indirect medical education (IME) and direct graduate medical education (DGME) funding for residents who train in a non-provider setting. This change is being made to allow any time spent by the resident in a non-provider setting to be counted toward DGME and IME if the hospital incurs the costs of the stipends and fringe benefits. (Section 5504, PPACA)
Counting Resident Time for Didactic and Scholarly Activities and Other Activities – Changes current law to allow hospitals to count resident time spent at educational conferences and seminars toward IME costs in the provider setting and toward DGME in the non-provider setting. (Section 5505, PPACA)
Preservation of Resident Cap Positions from Closed Hospitals – Directs the Secretary to establish a process for redistributing residency slots from a hospital that closes on or after the date that is two years before the enactment of this legislation. Priority will be given to hospitals in areas that: first, are located in the same core-based statistical area contiguous to the hospital that closed, based on certain criteria; second, to hospitals located in the same state as hospitals that closed; third, to hospitals located in the same region of the country as the hospital that closed; and lastly to others if slots remain. (Section 5506, PPACA)
Medicaid DSH – Reduces funding for the Medicaid Disproportionate Share (DSH) Hospital program by $17.1 billion between FYs 2014 – 2020 and directs the Secretary to come up with a methodology for implementing these cuts. The Secretary is directed to make the cuts in a way that will be largely targeted to states that direct the lowest percentage of DSH allotments to hospitals with high volumes of uninsured and Medicaid inpatients. Low DSH states will receive a smaller percentage of reductions. The legislation creates DSH allotments for Tennessee and Hawaii for FYs 2012 and 2013. These states will lose their temporary DSH allotments after FY 2011. (Section 2551 as amended by Section 10201, PPACA and Section 1203, RA)
Improvement to Medicare Disproportionate Share Hospital (DSH) Payments – Requires the Secretary to adjust Medicare DSH payments to reflect a hospital’s uncompensated care costs. The Secretary will pay 25 percent of an empirically justified amount, as established by MedPAC. The other piece of the Medicare DSH payment reflects the product of three factors: 1) aggregate payments made to hospitals before/after passage of legislation, 2) percentage change in percent of uninsured individuals under 65, and 3) the percent of uncompensated care for a hospital as compared to all hospitals. Starting in FY 2014, a hospital’s Medicare DSH payment will be reduced to reflect expected lower uncompensated care costs relative to increases in the number of insured. (Section 1104 as amended by Section 3133, PPACA and Section 10316, RA.)
Additional Requirements for Charitable Hospitals – Establishes new requirements for non profit hospitals. The requirements include the development of a periodic community health needs assessment, the establishment of financial assistance policies, and the creation of policies that limits charges for emergency or other medically necessary care for individuals qualifying for financial assistance, and provide assurances that the hospital will not engage in extraordinary collection actions before making reasonable efforts to determine whether the individual is eligible for assistance. Non profit hospitals that fail to meet these new requirements will be subject to a $50,000 tax.
Charitable hospitals will have their records reviewed by Treasury at least once every three years and will be required to submit additional reporting in conjunction with these new requirements. Treasury, in consultation with HHS, shall submit an annual report and a report on trends to Congress on levels of charity care provided, bad debt, and unreimbursed costs for services provided with respect to mean-tested government programs by tax-exempt, taxable, and government-owned hospitals. (Section 9007, PPACA)
Medicaid Global Payment System Demonstration Project - Establishes a demonstration project in coordination with a new Centers for Medicare and Medicare Innovation at the Centers for Medicare and Medicaid Services (CMS), that will allow up to five states to adjust their current payment structure for safety net hospitals (or networks) from a fee-for-service model to a global capitated payment structure. The demonstration will run from FYs 2010 – 2012.
(Section 2705, PPACA)
Demonstration Project to Evaluate Integrated Care Around a Hospitalization - Establishes an HHS demonstration project for up to eight states, to evaluate the use of bundled payments for the provision of integrated care for a Medicare beneficiary with respect to an episode of care that includes a hospitalization and for concurrent physicians services provided during a hospitalization. The demonstration shall begin January 1, 2012 and ends December 31, 2016. (Section 2703, PPACA)
Improvements to the Physician Quality Reporting Initiative - Extends the PQRI program until CY 2014 for physicians reporting quality data to Medicare. Establishes an informal appeals process for providers seeking review of a denial for unsatisfactory data submission. The legislation also provides a timely feedback process for submitting satisfactory data and establishes a means for participation for physicians completing a qualified Maintenance of Certification program with their specialty board of medicine. The legislation seeks to coordinate ongoing PQRI and electronic health records (EHR) quality reporting efforts. Beginning in 2014, physicians who do not submit measures to PQRI will have their Medicare payments reduced. (Section 3002, PPACA)
Improvements to the Physician Feedback Program – Continues and expands the feedback program for physicians participating in Medicare. The Secretary will use claims and other data to provide a physician or physician group with confidential reports that measure the resources involved in furnishing care to beneficiaries. The Secretary may include information on the quality of care furnished to beneficiaries by a physician. These reports shall compare as appropriate, patterns of resource use of individual physicians to those of their peers. (Section 3003, PPACA)
Establishes a value-based payment system which will be phased in starting in CY 2015 that adjusts Medicare fee schedule payments based on the quality of care furnished compared to costs during a given performance period. Measures for quality and cost will be established by the Secretary. (Section 3007, PPACA)
Extension of the Work Geographic Index Floor and Revisions to the Practice Expense Geographic Adjustment under the Medicare Physician Fee Schedule – Extends a floor on the geographic index for physician work through December 31, 2010. Adjusts the practice expense geographic practice cost index in 2010 to reflect three-fourths of the difference between the relative costs of employee wages and rents in each of the different fee schedule areas and the national averages. For CY 2011, the adjustment would reflect half of the difference between the relative costs of employee wages and rents in each of the different fee schedule areas and the national averages. The bill includes a hold harmless provision that would protect any areas adversely affected by the adjustment in CYs 2010 or 2011. The Secretary would improve the methodology for calculating PE adjustments beginning in CY 2012. (Section 3102, PPACA)
LONG-TERM CARE AND HOSPICE
Quality Reporting for Long-Term Care Hospitals (LTCH), Inpatient Rehabilitation Hospital and Hospice Programs - Establishes a path toward value-based purchasing for long-term care hospitals, inpatient rehabilitation facilities, and hospice providers by requiring the Secretary to implement quality measure reporting programs for these providers beginning in FY 2014.
Providers under this section are required to submit a report on quality measures determined by the Secretary (in conjunction with a consensus-based entity under contract, e.g. the National Quality Forum.) Providers will be given an opportunity to review data prior to it being made public on the CMS website. Providers who do not submit quality measures are subject to a two percentage point reduction in their annual market basket update or federal discharge rates. The 2% reduction penalty may bring the update below zero and thus reduce the rate for the upcoming year below the level of the previous year. (Section 3004, as amended by Section 3401, PPACA)
Value-Based Purchasing for Skilled Nursing Facilities and Home Health Agencies – Directs the Secretary, prior to October 1, 2011, to report to Congress regarding the development of a plan to convert skilled nursing facilities, home health agencies and ambulatory surgical centers to a value-based purchasing program. In evaluating a value-based model, the Secretary will account for the quality and efficiency of care, the reporting of quality measures, payment structure, and the public disclosure of information while developing the plan. Readmissions will not be considered as a quality or efficiency criteria. (Section 3006 amended by Section 10301 and 10335, PPACA)
Independence at Home Demonstration Program – Establishes an “independence at home” demonstration program to test a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams designed to reduce expenditures and improve health outcomes. The program will test whether an “independence at home” model reduces preventable hospitalizations; prevents hospital readmissions; reduces emergency room visits; improves health outcomes commensurate with the beneficiaries’ stage of chronic illness; improves efficiency of care; reduces the cost of health care services; and achieves beneficiary and family caregiver satisfaction. The demonstration will run for two years and will test services provided to approximately 10,000 beneficiaries. (Section 3024, PPACA)
Extension of Certain Payment Rules for Long-Term Care Hospital Services and the Moratorium on the Establishment of Certain Hospitals and Facilities – Extends the policy (referred to as the 25 percent rule) – limiting the proportion of patients who can be admitted from a co-located or host hospital during a cost reporting period and be paid under the LTCH Prospective Payment System – to freestanding and grandfathered LTCH hospitals from three to five years. The moratorium on the establishment of new LTCH hospitals, satellite facilities and hospital beds in such facilities is also extended from three years to five years. The (Section 3106 amended by Section 10312, PPACA)
Hospice Reform – Revises payments by January 2011, for hospice care based on the Secretary’s collection of the following data:
z Charges and payments, z Number of days of hospice care for Part A beneficiaries,
z The number of days attributed to each type of services,
z Cost of each type of service,
z Amount of payment for each type of service,
z Charitable contributions and revenue to a hospice program,
z The number of hospice visits,
z The type of practitioner providing the visit,
z The length of the visit and basic visit information, and
z Other data deemed appropriate.
Beginning in October 2013, the Secretary will implement revisions to the methodology for determining payment rates for routine home care and other services. Beginning January 2011, a physician or nurse practitioner will be required to have a face-to-face encounter with a patient to recertify hospice care in order to extend services beyond 180 days. The Secretary will establish procedures for hospice services provided beyond a 180 days at facilities where the percentage of patients receiving care exceeds acceptable levels determined by the Secretary. (Section 3132, PPACA)
Medicare Hospice Concurrent Care Demonstration Program- Establishes a three- year demonstration program that will allow hospice beneficiaries to receive all other Medicare-covered services while in hospice care. The demonstration will be open to fifteen hospice programs and must represent both rural and urban areas. The Secretary will evaluate the potential for improved patient care, quality of life and cost-effectiveness in determining whether the program should be continued beyond three years. (Section 3140, PPACA)
Required Disclosure of Ownership and Additional Disclosable Parties Information - Beginning on the date of enactment, skilled nursing facilities paid by Medicare and nursing facilities paid by Medicaid are required to make facility-specific financial information available to the Secretary, Office of the Inspector General, and relevant state government on demand. Within two years, the Secretary will provide a standard format for the reporting of this information to the government. One year following the release of a standard format, all information will be made public through the Secretary. Requested information could include ownership or control interest, including direct or indirect interest and interest in intermediate entities; whole or part interest in any mortgage, deed of trust, note, or other obligation secured, that exceeds five percent of the total property or assets of the entity; the name, title and period of service of each member of the governing body of the facility; the name, title, and period of services for each person or entity who is an officer, director, member, partner, trustee, or managing employee of the facility; and organizational structure of each disclosable party of the facility and a description of the relationship of each such additional disclosable party to the facility and to one another.
An additional disclosable party includes any person or entity who exercises operational, financial, or managerial control over the facility; provides policies or procedures for any of the operations of the facility; provides financial or cash management services to the facility; leases or subleases of real property to the facility; owns a whole or part interest more than five percent of the total value; or provides oversight or administrative services, management or clinical consulting services, or accounting or financial services to the facility. (Section 6101, PPACA)
Accountability Requirements for Skilled Nursing Facilities and Nursing Facilities - No more than three years after enactment, facilities shall establish compliance and ethics programs to prevent and detect criminal, civil, and administrative violations. The legislation lays out specific information that must be included in the program. (Section 6102, PPACA)
Nursing Home Compare Medicare Website- The Secretary shall make information about turnover and tenure; state surveys and certifications; and a summary of complaints submitted available on the organization’s website for review by the public. The nursing facility must also provide information about any criminal violations committed by the facility or one of its employees. The Secretary shall setup the website within one year of the legislation’s enactment. (Sections 6103 and 6105, PPACA)
Reporting of Expenditures – The Secretary will modify the reporting form for expenditures on wages and benefits for direct care staff of skilled nursing facilities one year after the date of enactment. The reporting will provide a break down of registered nurses, licensed professional nurses, certified nurse assistants, and other medical and therapy staff. The information will be made available to interested parties upon request. The modified form will be required for the reporting period at least two years after enactment. (Section 6104, PPACA)
Standardized Complaint Form – The Secretary will develop a standard form for residents to use when filing a complaint with the state. The forms will be made available to a resident of a facility or any person acting on behalf of a resident, though a complaint will still be able to be filed by these parties without using the standard form. States must establish a complaint resolution process to handle each complaint filed and to ensure the resident is treated properly after the complaint is filed. (Sections 6103 and 6105, PPACA)
Ensuring Staffing Accountability – Within two years of enactment, facilities will submit staffing information to the Secretary based on payroll and other verifiable and auditable data including: the category of work a certified employee performs, the resident census data, a regular reporting schedule, hours of care provided per resident per day, and employee turnover and tenure. (Section 6106, PPACA)
GAO Study and Report on Five-Star Quality Rating System – The GAO’s Comptroller General will report to Congress within 2 years regarding results of a study into the Five-Star Quality Rating System and to suggest actions to be taken to improve the system. (Section 6107, PPACA)
The Secretary will carry out a program similar to the pilot program included in the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The nationwide program will be implemented and maintained by states. It will require a background check, including fingerprinting, to be completed for each employee that has direct contact with patients in a long-term care facility. (Section 6201, PPACA)
Pilot Testing Pay-for-Performance program for certain Medicare Providers – Before January 1, 2016, the Secretary will test value-based purchasing at the following facilities: psychiatric hospitals, long-term care hospitals, rehabilitation hospitals, PPS-exempt cancer hospitals, and hospice programs. The program may be expanded after January 1, 2018 at the discretion of the Secretary. (Section 10326, PPACA)
Medicare Shared Savings Program - Creates a shared savings program by January 1, 2012 to promote accountability for a patient population, coordinate items and services under Parts A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery. Under this program, groups of providers and suppliers meeting certain criteria may work together to manage and coordinate care for Medicare fee-forservice beneficiaries through Accountable Care Organizations (ACOs.) ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings. (Section 3022, PPACA)
National Pilot Program on Payment Bundling – Establishes a pilot program to encourage hospitals, physicians, and other providers improve the coordination, quality and efficiency of health care services – and save money – through bundled payment models. Acute care inpatient services; physician services (in and outside an acute care hospital); outpatient services, including emergency care; post-acute care services including home health, skilled nursing facility, inpatient rehabilitation, inpatient hospital services provided by a long-term care hospital will be included in the pilot program, which will commence January 1, 2013 and run five years. It will focus on up to ten conditions selected by the Secretary.
The Secretary will submit a plan to Congress by January 1, 2016 to expand the pilot program, if doing so will improve patient care and reduce spending. The Secretary may at any point after January 1, 2016, expand the duration and scope of the pilot program if it is determined that the expansion is expected to reduce spending without reducing the quality of care, is certified by the CMS Chief Actuary that such an expansion would reduce program spending, and if the expansion does not deny or limit the coverage or provision of benefits. The pilot program will separately test the continuing care hospital model using certain criteria. (Sections 3023 as amended by Section 10308, PPACA)
Extension of Gainsharing Demonstration – Extends the gainsharing demonstration project established by the Deficit Reduction Act of 2005 until September 30, 2011. The gainsharing demonstration provides for up to six demonstration projects to test and evaluate methodologies and arrangements between hospitals and physicians designed to govern the utilization of inpatient hospital resources and physician work to improve the quality and efficiency of care provided to beneficiaries and to develop improved operational and financial hospital performance with sharing of gains as specified in the project. A final report is due to Congress by September 30, 2012. (Section 3027, PPACA)
Hospital Wage Index Improvement – Reduces the annual market basket update by a measure of productivity growth in the general economy, generating more than $156 billion in savings over ten years. The bill applies productivity cuts to the market basket update starting in 2010 for inpatient hospitals, skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities, psychiatric hospitals and outpatient hospitals. (Section 3137, PPACA as amended by Section 1105, RCA.)
Revision of Certain Market Basket Updates and Incorporation of Productivity Improvements into Market Basket Updates that do not Already Incorporate such Improvements – Incorporates a productivity adjustment into the market basket update for inpatient hospitals, home health providers, hospice providers, inpatient psychiatric facilities, long-term care hospitals, and inpatients rehabilitation facilities. The beginning of the productivity adjustment varies, depending on provider type. The provision provides additional market basket reductions for certain providers, and incorporates a productivity adjustment into payment updates for Part B providers who do not already have such an adjustment. (Section 3401, as amended by Section 10319, PPACA and Section 1105, RCA)
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