Rural Hospital Federal Update John T. Supplitt Senior Director, AHA Section for Small or Rural Hospitals August 15, 2014 GHA Center for Rural Health

Agenda 1.Fiscal Flashpoints 2.Advocacy Agenda a.All Hospitals b.Rural Specific 3.Regulatory Policy a.Payment b.Other Policy 4.Legal Resources

Fiscal Flashpoints December 31, 2014 Medicaid physician “cliff” April 1, 2015 Medicare physician “cliff” Debt Ceiling 2015

Options for offsets and deficit reduction Prospective coding offsets ($8 billion) Site neutral payment policies  E&M code/HOPD ($10 billion)  66 additional APCs procedures ($9 billion)  12 procedures performed in ASCs ($6 billion) Hospital bad-debt reductions ($20 billion) GME reductions ($10 billion) CAH: payment reductions and qualification criteria ($2 billion) Post acute care ($70 billion) IPAB expansion ($4.1+ billion) Medicaid:  State provider assessments ($22 billion)  Medicaid DSH “rebasing” Hospital Vulnerability List

Deficit Reduction Alternatives include:Alternatives Reduce Medicare costs by changing cost-sharing structures for Parts A and B (means testing) Reform Medigap Combine Medicare Parts A and B Increase the eligibility age for Medicare Enact medical liability reform Develop programs to coordinate care for individuals eligible for both Medicare and Medicaid Eliminate barriers to integrated care models Modernize the Medicaid long-term care benefit Alternatives and Solutions

Advocacy Agenda

Protecting Access to Medicare Act  delaying the start of the Medicaid DSH cuts for one year  extending delay in the CMS 2-midnight policy through March 31, 2015  delaying implementation of the ICD-10 coding system  extending the work GPCI floor  extending the therapy cap exceptions process What’s missing from PAMA includes:  eliminating the 96-hour physician certification requirement  suspending the direct supervision of HOTS  relieving hospitals from cuts to Medicare DSH permanently  establishing beneficiary equity in hospital readmissions  fixing RAC permanently  permanent fixes for Medicare extenders PAMA contains important hospital-related provisions:  extending MDH, LVA, and ambulance add-on payments

Payment Prevents 24 percent reduction in Medicare payments to physicians (+15.8) Nothing from our list Reserve fund (-2.3) VBP for nursing homes (-2.0) Diagnostic and imaging quality program (-.2) Valuation of services in Medicare physician fee schedule (-4.4) ERSD PPS revisions (-1.8) Clinical labs (-2.5) Extends Medicaid DSH cuts into FY 2024 (-4.4) Realigns Medicare sequester at 4 percent for first 6 months of FY 2024, and zero percent for second six months (-4.9) Policy Medicare extenders (+3.6) Medicaid DSH cut delay Two midnight delay One year delay of ICD-10 Protecting Access to Medicare Act

 Medicare Audit Improvement Act H.R. 1250/S. 1012H.R. 1250S  Two-Midnight Rule Coordination and Improvement Act (S. 2082)S  Two Midnight Rule Delay Act of 2013 (H.R. 3698)H.R  DSH Reduction Relief Act of 2013 (H.R. 1920/S. 1555)H.R. 1920S  Establishing Beneficiary Equity in the Hospital Readmission Program Act of 2014 (H.R. 4188)H.R  Veteran Access to Care Act (H.R. 3230/H.R. 4810)H.R. 3230H.R Advocacy Action

Would establish a consolidated limit for medical record requests, impose financial penalties on RACs that fail to comply with program requirements, make RAC performance evaluations publicly available and allow denied inpatient claims to be billed as outpatient claims when appropriate. Medicare Audit Improvement Act H.R. 1250H.R. 1250/S. 1012S Advocacy Action

Would require CMS to implement a new payment methodology for short inpatient stays in FY Two-Midnight Rule Coordination and Improvement Act S. 2082S Two Midnight Rule Delay Act of 2013 H.R. 3698H.R Advocacy Action

Would eliminate DSH cuts for two years to allow for coverage expansions to be more fully realized and better data to become available. DSH Reduction Relief Act of 2013 H.R. 1920H.R. 1920/S. 1555S Advocacy Action

Establishing Beneficiary Equity in the Hospital Readmission Program Act of H.R. 4188H.R Would adjust the Medicare Hospital Readmissions Reduction Program to account for certain socioeconomic and health factors that can increase the risk of a patient’s readmission, such as being eligible as a dual- eligible under Medicaid as well as Medicare. Advocacy Action

Would offer care from a civilian health care provider at the department’s expense to any veteran enrolled in the VA health system who cannot get an appointment within the department’s current wait- time goal (14 days), or who lives more than 40 miles from a VA medical facility. Veteran Access to Care Act Advocacy Action

Rural Hospital Advocacy Agenda

Rural Hospital and Provider Equity (R-HoPE) Act Sens. Tom Harkin (D-IA), John Barasso (R-WY), Pat Roberts (R-KS) and Al Franken (D-MN) Rural Advocacy Agenda Provisions –Extend the outpatient hold harmless –Extend and increase the low-volume adjustment –Extend cost-based payment for rural outpatient labs –Extend CAH rural ambulance payments –Extend the billing for the technical component of pathology services –Reimburse CAHs for CRNA on-call services –Address 96 hour condition of payment –Implement enforcement delay of direct supervision

The Protecting Access to Rural Therapy Services Act Would protect access to outpatient therapeutic services by adopting a default standard of “general supervision” Rural Advocacy Agenda

Critical Access Hospital Relief Act AHA is working with concerned lawmakers to pass legislation that would remove the 96- hour piece of the physician certification requirement as a condition of payment. Rural Advocacy Agenda

Critical Access Flexibility Act Would give CAHs needed flexibility to accommodate fluctuations in patients through the option of meeting an average annual daily census of 20 Rural Advocacy Agenda

Improving Medicare Post-Acute Care Transformation Act of 2014 The IMPACT Act would require LTCHs, inpatient rehabilitation facilities, SNFs and home health agencies to report standardized patient assessment data and quality and resource use measures. The IMPACT Act would not require hospitals to report patient assessment data. Hospitals would use PAC quality measure data are used to inform the discharge planning process.

Regulatory Policy

OMB Bulletin No Office of Management and Budget Bulletin No Bulletin No (Who is Rural?) Revised delineations establish new CBSAs, urban counties that would become rural, rural counties that would become urban, and existing CBSAs that would be split apart. In summary there are: 34 New Micropolitan Statistical Areas 55 Deleted Micropolitan Statistical Areas 27 Micropolitan Statistical Areas now Metropolitan Statistical Areas 3Metropolitan Statistical Areas now Micropolitan Statistical Areas

IPPS Proposed Rule FY 2015 INPATIENT HOSPITAL PPS PROPOSED RULE

IPPS Proposed Rule  Solicits comments on an alternative payment methodology under the Medicare program for short inpatient stays.  Reiterates that there may be circumstances that justify inpatient admission and payment absent an expectation of care spanning two midnights.  Reiterates its 96-hour condition of payment, but now proposes to allow CAHs to complete this certification no later than one day before the date on which the claim for payment for the inpatient CAH service is submitted.96-hour condition of payment  Clarifies funding of GME for rural hospitals that are now classified as urban in the revised CBSAs  Clarifies funding of GME for urban partners of rural hospitals that are now classified as urban in the revised CBSAs

Price Transparency ACA requires each hospital to establish, update and make public a list of its standard charges for items and services it provides “Reminds” hospitals of this obligation Offers flexibility, can publicly post or be in response to inquiry Must be updated annually IPPS Proposed Rule FY15

Program Efficiency, Transparency, and Burden Reduction Conditions of Participation Conditions for Coverage Removes a regulation requiring that a hospital’s governing board include a member of the medical staff. Allows qualified dieticians to order patient diets Allows CMS-approved accrediting organizations to assess compliance with “swing bed” requirement (CAH already eligible) Removes a requirement that CAHs consult with a non-staff member in developing patient care policies Eliminates requirement for CAHs, RHCs and FQHCs that a physician must be on site at least once in every two-week period Allows long-term care facilities to apply for a deadline extension for automatic sprinkler system installation requirements

DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 411, 412, 416, 419, 422, 423, and 424 [CMS-1613-P] RIN 0938-AS15 Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; OPPS Proposed Rule Provisions in the proposed rule include: Outpatient Department fee schedule increase factor of 2.1% Transition to the new OMB CBSA delineations Making a single, "packaged payment" for ancillary services when they support a primary service Addition of one measure to outpatient quality reporting requirements and removal of three others Collecting data on site-of-service for off- campus provider-based departments Changes to data requirements for rural physician-owned hospitals Revision of the requirements for physician certification of hospital inpatient admissions

Direct Supervision of HOTS CMS’ June 5 Statement on HOP Panel RecommendationsJune 5 Statement Next Meeting Aug Accepted Direct to General G0176, Activity therapy 36593, Declotting by thrombolytic agent 36600, Arterial puncture, withdrawal of blood for diagnosis 94667, Manipulation chest wall; initial demonstration and/or evaluation 94668, Manipulation chest wall; subsequent Extended Duration to General 96370, Subcutaneous infusion for therapy or prophylaxi Direct to Extended Duration 36430, Transfusion, blood or blood components Remaining Extended Duration 96369, 71 Subcutaneous infusion for therapy or prophylaxis Not Accepted Direct to General , Chemotherapy administration, 96409, 11 Chemotherapy; intravenous, push techniques 96413, 15, 16, 17 Chemotherapy intravenous infusion techniques 97597, Debridement open wound

Physician Fee Schedule Transitions the Ambulance Fee Schedule to the new OMB CBSA and RUCA delineations for the purpose of payment calculations Adds several codes to the telehealth list: –Psychotherapy services –Prolonged service office; and –Annual wellness visit Removes employment requirements for services furnished "incident to" RHC and FQHC visits, effectively allowing them to contract, rather than employ, non-practitioner staff

Meaningful Use of EHRs CMS Proposed Rule: Meeting meaningful use in Rule released May 20 Recognizes that delays in certification have created a timeline challenge for providers Win: Greater flexibility in 2014 would allow more hospitals and physicians to both receive incentives in 2014 and avoid future Medicare payment penalties More to do: Address Stage 2 challenges in 2015

Hospitals p CAHs p RHCs and FQHCs p ASHE: Performing an Emergency Power Systems Hazard Vulnerability AnalysisVulnerability Analysis Emerg. Preparedness/Life Safety Adopts 2012 Life Safety Code Adopts 2012 Health Care Facilities Code Some exceptions apply

Outpatient Therapy Caps ATRA subjects CAHs to the therapy cap beginning Jan. 1, 2014 Pathway for SGR Reform Act of 2013 –Therapy cap exceptions process extended –Temporary application of the therapy cap to hospital outpatient departments 1 SUBJECT: Applying the Therapy Caps to CAHs

340B Orphan Drug Lawsuit 1.HRSA Issues Orphan Drug Final Rule – July PhRMA Sues HRSA – Sept AHA supports HRSA in amicus brief – Dec US Federal Court Decided in Favor of PhRMA – May 23, HRSA will continue to allow purchase of orphan drugs through the 340B program

340B Drug Discounts 340B Drug Discount Program Recent anti-340B report examines the charity care levels of 340B hospitals  Finds 24% of 340B hospitals provide charity care that represents 1% or less of their total patient costs.  Advocates for eligibility changes to further limit 340B AHA Response 340B hospitals provide essential health care services that cannot be boiled down.  S-10 is still in development stages  62% of all uncompensated care is provided by 340B hospitals

CAHs – Payment Policy for Swing-bed Services The OIG will compare reimbursement for swing-bed services at CAHs to the same level of care obtained at traditional SNFs CAHs – Beneficiary Costs for Outpatient Services The OIG will determine the costs to Medicare beneficiaries for outpatient services received at CAHs. Medicare reimburses CAHs at 101 percent of their reasonable costs for services provided. RHCs – Compliance with Location Requirements The OIG will determine the extent to which RHCs do not meet basic location requirements and the extent to which Medicare reimbursements to such clinics are occurring. Analysis of salaries included in hospital cost reports The OIG will review data to identify salary amounts included in operating costs reported to and reimbursed by Medicare. HHS OIG FY 2014 Work Plan

Legal Actions

AHA Litigation AHA Legal Actions in Process 1.CMS hospital rebilling policyhospital rebilling policy 2.The two-midnight ruletwo-midnight rule unlawful arbitrary standards and documentation requirements 0.2 percent cut to FY 2014 IPPS payments 3.Statutory deadlines for timely review of Medicare claims denialsdeadlines for timely review 4.Federal court decision that will exclude all drugs with an "orphan" designation from the 340B Drug Pricing Programcourt decision

Shirley Ann Munroe Award

John Supplitt Senior Director AHA Section for Small or Rural Hospitals Contact Information