Proposed Reporting Rule for Charity Hospitals Released
On April 3, the Internal Revenue Service and Department of Treasury published a proposed rule on the health care law’s community health needs assessment requirements for charitable hospitals, related excise tax and reporting requirements, and the consequences for failing to complete them.
The Affordable Care Act requires charitable hospitals with nonprofit status to do a needs assessment. Recently, some members of Congress have raised concerns that these hospitals are getting tax breaks without providing significant service to their communities. The proposed rule will be published in the April 5, 2013 Federal Register, which means hospitals will have 90 days to comment or request a public hearing.
CMS Reverses Course on Medicare Advantage Rate
On April 1, CMS announced it will boost Medicare Advantage (“MA”) payments by 3.3% in 2014.
In February, CMS had proposed a 2.3% cut, which was the largest in the program’s history. But the proposal came under pressure from the more than 120 lawmakers, who largely pushed back on the agency’s need to address the “doc fix” issue. The rate increase assumes that Congress will offset the 25% cuts in physicians’ payments and pay the same in 2013 as it is paying this year.
CMS’s MA rate adjustment is an annual exercise that projects the expected cost of insuring beneficiaries in the coming year and adjusts the MA benchmark accordingly.
House Committees Circulate Sustainable Growth Rate Reform Proposals for Feedback
On April 3, the House Energy and Commerce and Ways and Means Committees outlined additional details of a proposal to repeal the current Sustainable Growth Rate system and replace it with a system of physician payment in the Medicare program.
On February 7, the committees outlined a framework to reform the current Medicare. The updates incorporate feedback received from stakeholders on the February 7 proposal. The committees are seeking additional feedback on this updated proposal and have asked the provider community for input by April 15.
The current proposal specifies a process to reward providers for high-quality and efficient care in the fee for service program. The proposal also includes processes to determine quality and efficiency measures that focus on evidence while being flexible and specialty-specific, and it addresses the need for timely performance feedback to allow providers to identify improvement opportunities and optimize incentive payments.
Automatic 2% Medicare Cuts Begin
As a result of sequestration-related federal budget cuts, health providers will be reimbursed 98 cents on the dollar for any Medicare-fee-for-service claims with dates of service or dates of discharge on or after April 1, 2013. The payment reductions are part of the sequester that went into effect on March 1, 2013.
Additionally, drugs administered on the physician claim, such as chemotherapy or other cancer drugs that must be given at the physician’s office, are also subject to the cut.
Before sequestration took effect, physicians were reimbursed for a total of 100% of the average sales price of the drug, plus 6% to cover overhead and storage costs. Medicare would cover 80% of the cost, with the remaining 20% coming from the beneficiary. Under sequestration, the 2% reduction in reimbursement is taken off of the 80% reimbursement that Medicare normally pays.
Bills Introduced This Week
No legislation was introduced this week as Congress was on recess. The House and Senate resume on April 9 and prepare for the Administration’s long-awaited budget roll-out on April 10.
For more information, please contact John F. Williams, III at 317-977-1462 or jwilliams@hallrender.com.
Please visit the Hall Render Blog at http://blogs.hallrender.com/ for more information on topics related to health care law.
