On May 3, 2021, the Centers for Medicare & Medicaid Services (CMS) published an 81-page final rule to both extend and change the Comprehensive Care for Joint Replacement (CJR) model. We previously reported on the proposed rule here. The CJR model was initially implemented by way of notice-and-comment rulemaking in April 2016; the recent
The Trump Administration’s proposed fiscal year (FY) 2021 budget calls for significant cuts to federal health spending, including a 10% decrease in Department of Health and Human Services (HHS) discretionary spending in FY 2021 and a $1.6 trillion net reduction in health entitlements over the next decade. House Budget Committee leaders have blasted the HHS provisions, and the package as a whole is unlikely to be advanced by Congress. Nevertheless, the document reflects the Administration’s current Medicare and Medicaid priorities, some of which are administrative and could be advanced without Congress. Furthermore, Medicare provider/supplier cost-saving recommendations could be incorporated into future budget agreements or potentially other entitlement reform efforts down the road.
Highlights of the Trump Administration’s major Medicare and Medicaid budget proposals are presented below.
Medicare Payment Policies
The Administration estimates that its proposed Medicare legislative package would result in $756 billion in Medicare Trust Fund savings over 10 years (net impact after offsets of $450 billion/10 years). Many of the legislative recommendations have been made in previous budget proposals. Budget provisions that would result in significant net Medicare savings include the following (net savings figures are over the 10-year period of FYs 2021-2030):
- Elimination of the Medicare Advantage (MA) benchmark cap and quality “double bonus” for plans in eligible counties [$1.2 billion].
- Reform of hospital uncompensated care payments, including basing payments on a hospital’s share of charity care and non-Medicare bad debt [$87.9 billion].
- Establishment of site neutral payments between on-campus hospital outpatient departments and physician offices for certain services (e.g., clinic visits) [$2 billion] and payment for all off-campus hospital outpatient departments under the physician fee schedule [$47.2 billion].
- Adoption of a unified post-acute care system for skilled nursing facilities (SNFs), home health agencies, inpatient rehabilitation facilities, and long-term care hospitals (LTCHs) beginning in FY 2026, with reduced annual Medicare payment updates from FYs 2021-2025 [$101.5 billion].
- Elimination of Medicare reimbursement for disproportionate share hospital (DSH) bad debt, with an exemption for rural hospitals [$33.6 billion].
- Reduced Medicare payment for hospice services under the SNF routine home care level of care. [$4.5 billion].
- An increase in the intensive care unit minimum stay threshold from three days to eight days to qualify for LTCH prospective payment system payment [$9.4 billion].
- Expansion of the durable medical equipment (DME), prosthetics, orthotics, and supplies competitive bidding program to all geographic areas and to inhalation drugs, payment of contract suppliers based on their own bids, and elimination of the surety bid bond requirement [$7.73 billion Medicare savings, $435 million in Medicaid savings]. Separate from the bidding program, the Centers for Medicare & Medicaid Services (CMS) would be authorized to update DME rates based on retail prices through rulemaking, without using the inherent reasonableness process [$1.6 billion Medicare savings, $85 million in Medicaid savings].
Other legislative proposals are intended to promote value-based care; in some cases, these proposals also would result in cost savings. For instance, the budget proposes the following:
- Basing Medicare beneficiary accountable care organization assignment on a broader set of non-physician primary care providers [$80 million].
- Consolidation of the four Medicare inpatient hospital quality programs into a single hospital quality payment program [budget neutral].
- Implementation of hospital outpatient department and ambulatory surgical center (ASC) value-based programs, with 2% of payments linked to quality/outcomes performance. Payment would be risk adjusted based on patient diagnosis severity to promote site neutrality [budget neutral].
- Creation of a risk-adjusted monthly Medicare Priority Care payment for providers eligible to bill for evaluation and management (E/M) services who provide ongoing primary care to beneficiaries. The payment would be funded by a 5% annual cut in valuations of non-E/M services [budget neutral].
Medicare Transparency, Quality, Coverage, and Benefits
The budget includes a series of proposals intended to increase access to price and quality information and/or clarify Medicare coverage and payment processes. For instance, the budget would:
Continue Reading Medicare/Medicaid Policy Provisions in Trump Administration’s FY 2021 Budget Proposal
The Trump Administration’s proposed fiscal year (FY) 2020 budget includes extensive health policy provisions – as evidenced by the 162-page Department of Health and Human Services (HHS) “Budget in Brief.” This summary focuses on the major Medicare and Medicaid proposals most directly impacting providers and suppliers; note that we discuss the Administration’s proposed prescription drug reimbursement provisions in a separate blog post.
Medicare, Value-Based, and Related Reforms
The Administration estimates that its Medicare policy reforms would save approximately $811 billion over 10 years. The Administration states that these proposals are “designed to improve value-based systems of care, exercise fiscal integrity, promote competition, reduce provider burdens, improve the appeals system, and address high drug prices.” Budget provisions that would result in significant Medicare savings include the following (savings are over the 10-year period of FYs 2020-2029):
- A new process to distribute uncompensated care payments to hospitals based on share of charity care and non-Medicare bad debt. [$98.0 billion net]
- Site neutral payments between on-campus hospital outpatient departments and physician offices for certain services (e.g., clinic visits). [$131.4 billion]
- Payment for all off-campus hospital outpatient departments under the physician fee schedule (PFS) effective CY 2020. [$28.7 billion]
- A unified post-acute care system for skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals (LTCHs) beginning in 2025. [$101.2 billion]
- An increase in the intensive care unit minimum stay threshold from three days to eight days in order to qualify for payment under the LTCH prospective payment system. [$10.0 billion]
- A reduction in Medicare reimbursement of bad debt from 65% to 25% over three years beginning in FY 2020. [$38.5 billion]
- Expansion of the durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to all areas of the country. The proposal also would reimburse contract suppliers based on their own bids rather than a single payment amount. [$7.1 billion]
- Consolidation of federal spending for graduate medical education (GME) programs. [$211.8 billion in Medicare savings].
Other legislative proposals intended to promote value-based care that are not expected to have a budget impact include the following:
Continue Reading Trump Administration Calls for Medicare/Medicaid Cuts, Program Reforms in FY 2020 Budget Proposal
The House Budget Committee has approved the budget resolution providing instructions to Congressional committees on the federal spending framework for FY 2017. The resolution calls for the adoption of major reforms to the Medicare program that would cut spending by $449 billion over 10 years, while Medicaid and other health care spending would be reduced…
On February 9, 2016, President Obama is scheduled to submit his proposed fiscal year 2017 budget to Congress. Two Congressional committees have planned hearings to examine provisions of the proposed budget involving the Department of Health and Human Services (HHS), with HHS Secretary Sylvia Mathews Burwell testifying. Specifically, the House Ways and Means Committee has…
In a continuation of the Administration’s efforts to make Medicare spending data more transparent, CMS has released detailed payment information regarding physicians and other providers who order durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) for Medicare beneficiaries. The new “Referring Provider DMEPOS Public Use File” includes provider-specific Medicare Part B DMEPOS utilization,…
CMS has released detailed Medicare inpatient hospital, outpatient hospital, and physician utilization and payment data for 2013, including data analysis such as spending breakdowns by specialty and region. The hospital data set includes average hospital charges, Medicare payment, and utilization statistics for the 100 most common Medicare inpatient diagnosis related groups (DRGs). CMS also released…
On May 5, 2015, the Senate approved the conference report to accompany S.Con.Res. 11, the concurrent resolution setting forth the federal budget for FY 2016 and establishing budgetary target levels for FYs 2017 through 2025, following earlier House approval. The conference agreement, which was approved on largely party-line votes, includes nonbinding language supporting Affordable Care…
The House and Senate are considering trade legislation that would be financed in part by $700 million from extended Medicare sequestration authority – much to the consternation of the health care provider community. By way of background, under the “Protecting Access to Medicare Act of 2014” (PAMA), Congress “front-loaded” the Medicare reimbursement cuts under the…
On March 25, 2015, the House of Representatives approved (with no Democratic votes) H.Con.Res. 27, a budget resolution providing instructions to Congressional committees on the federal spending framework for FY 2016. Among other things, the resolution calls for repealing the ACA “in its entirety,” transforming Medicare into a premium-support program, and replacing the ACA Medicaid…
On February 2, 2015, the Obama Administration released its proposed federal budget for fiscal year (FY) 2016. The budget would impact all types of health care providers, health plans, and drug manufacturers if adopted as proposed – which is unlikely given Republican control of the House and Senate. Nevertheless, Congress can be expected to consider the Medicare and Medicaid savings proposals (many of which are carry-overs from prior budgets) during expected debate in the coming months on Medicare physician fee schedule (MPFS) reform legislation or during future budget negotiations. The following is a summary of the major Medicare, Medicaid, and related policy proposals contained in the FY 2016 budget proposal.
Continue Reading Obama Administration Releases FY 2016 Budget Proposal with Medicare/Medicaid Provisions
The Medicare Payment Advisory Commission (MedPAC) has released its 2014 Data Book on Health Care Spending and the Medicare Program. The volume provides detailed information regarding national health care and Medicare spending and utilization, sector profit margins, Medicare and dual-eligible beneficiary demographics, Medicare quality, Medicare beneficiary and other payer liability, and related issues.
On March 4, 2014, the Obama Administration released its proposed federal budget for fiscal year (FY) 2015. Virtually all types of health care providers, health plans, and drug manufacturers would be impacted by the budget provisions if adopted as proposed – an unlikely scenario given the Republican House leadership’s reaction to the document. Nevertheless, the Medicare and Medicaid savings proposals (many of which are carry-overs from prior budgets) could resurface as spending offsets in the pending negotiations on Medicare physician fee schedule reform legislation or in future budget negotiations. Highlights of the Administration’s Medicare and Medicaid legislative proposals include the following (all savings estimates are for the 10-year period of FYs 2015-2024):
Continue Reading Obama Administration Proposes FY 2015 Budget with Medicare, Medicaid Savings Provisions
On February 11, 2014, Congress approved a one-year extension of Medicare sequestration cuts as part of a bill (an amendment to S. 25) to restore certain military retiree pension benefits. Under the legislation, current 2% across-the-board cuts to Medicare provider payments would be extended through 2024 (instead of 2023). While the savings from the…
The Congressional Budget Office (CBO) has raised the specter that pending legislation to reform the Medicare physician fee schedule statutory update formula could increase the likelihood that the Affordable Care Act’s (ACA) Independent Payment Advisory Board (IPAB) mechanism would be triggered – potentially resulting in as much as $0.6 billion in Medicare provider cuts during …
As part of its ongoing efforts to make Medicare data more transparent and accessible, CMS has ended its blanket restriction on disclosure of information about Medicare payments to individual physicians when requested under the Freedom of Information Act (FOIA). Instead, CMS will now consider on a case-by-case basis whether exemption 6 of FOIA, which requires…
According to the HHS Office of Inspector General (OIG), the Medicare program continues to make inappropriate payments on behalf deceased beneficiaries and beneficiaries who are unlawfully-present in the country. First, despite safeguards intended to prevent and recover Medicare payments made on behalf of deceased beneficiaries, Medicare inappropriately paid $23 million in 2011 for claims with…
On October 16, 2013, the House and Senate approved H.R. 2775, the Continuing Appropriations Act of 2014. Under the resolution, the federal government was reopened, after being closed since October 1, 2013. The resolution also funds government operations through January 15, 2014 and suspends the debt limit through February 7, 2014. In the only health…
The Medicare Payment Advisory Commission (MedPAC) has released its 2013 Data Book on Health Care Spending and the Medicare Program. The publication provides information on national health care and Medicare spending and utilization, Medicare and dual-eligible beneficiary demographics, Medicare quality, Medicare beneficiary and other payer liability, and related issues.
CMS has posted estimated hospital-specific charges and average Medicare payments for 30 Ambulatory Payment Classification (APC) Groups paid under the Medicare Outpatient Prospective Payment System (OPPS) for calendar year 2011. National and state-level summaries are also available.