Congressmen Negotiate SGR Package

Lawmakers on the House side of the Capitol continue to negotiate a package that would prevent an anticipated cut to Medicare physician payments and include a permanent repeal of payment system. Bipartisan leaders on the House Committee on Ways and Means and the House Committee on Energy and Commerce released joint statements on Friday afternoon confirming ongoing discussions to permanently repeal the Sustainable Growth Rate (SGR) formula. If the negotiations are fruitful, legislation could be released in the House this coming week. Some conservative lawmakers have expressed concern over the cost of the proposed package and a potential approach that would only provide for partial offsets. Senate Democrats have also expressed concern over various elements of the package, including offsets that would cut Medicare benefits and a short-term extension of the Children’s Health Insurance Program (CHIP). The current patch expires on March 31.

House Considers Trauma Bills

On Monday, the House will consider several health care bills under suspension of the rules: H.R. 639, Improving Regulatory Transparency for New Medical Therapies Act, as amended; H.R. 647, Access to Life-Saving Trauma Care for All Americans Act; H.R. 648, Trauma Systems and Regionalization of Emergency Care Reauthorization Act; H.R. 284, Medicare DMEPOS Competitive Bidding Improvement Act of 2015, as amended; and H.R. 876, Notice of Observation Treatment and Implication for Care eligibility Act, as amended.

This Week’s Hearings:

• Tuesday, March 17: The Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a hearing titled “America’s Health IT Transformation: Translating the Promise of Electronic Health Records Into Better Care.”

• Thursday, March 19: The Senate Committee on Finance will hold a hearing titled “The Affordable Care Act at Five Years.”

Regulatory Activity

CMS Announced Next Generation Model for ACOs

On Tuesday, March 10, the Centers for Medicare and Medicaid Services (CMS) Innovation Center unveiled the latest step toward alternative payment models – the Next Generation Accountable Care Organization (ACO). Next Generation builds on current Medicare ACO initiatives by offering stronger financial incentives for quality and efficient care, while imposing a higher level of risk on providers.

Notably, Next Generation ACOs will be qualified to waive certain Medicare payment requirements, including geographic restrictions on telehealth services. Currently, Medicare beneficiaries must be located in a rural area in order to be eligible to receive reimbursement for telehealth services. The Next Generation benefit enhancement would allow providers to offer telehealth services to beneficiaries in specified facilities or their homes, regardless of their geographic location. This waiver has been praised by telehealth advocates, who see the policy as a critical step forward in expanding the use of telehealth services in Medicare.

CMS is accepting applications for the Next Generation ACO Model through two rounds of applications in 2015 and 2016, with participation expected to last up to five years.

IRS Clarifies Charitable Hospital Reporting Requirements

On Wednesday, March 11, the Internal Revenue Service (IRS) released Revenue Procedure 2015-21, which provides guidance for charitable hospital organizations that fail to meet the requirements under the Affordable Care Act (ACA). Section 9007 of the ACA, enacted as § 501(r) of the Internal Revenue Code, imposes requirements on charitable hospitals, including conducting community health needs assessments every three years and establishing a financial assistance policy.

In a two notices released on December 31, 2013, IRS proposed how to address a charitable hospital’s failure to meet the § 501(r) requirements. The notice invited comments on the procedure for charitable hospitals to correct and disclose failures to meet the requirements, and asked whether disclosure should be required in ways other than the Form 990, Return of Organization Exempt from Income Tax.

In response to the comments received, this revenue procedure clarifies that a minor or inadvertent error that results in the failure to meet the requirements of § 501(r) may be remedied by correcting and disclosing the failure. Entities that file a Form 990 should disclose the failure, the steps made to correct the failure, and a description of new practices or procedures implemented to prevent the failure from recurring. Charitable hospitals that are not required to file a Form 990 should make such information “widely available on a web site” by the date that the Form 990 would have been due.

This revenue procedure is effective as of March 10, 2015.

Wakefield Tapped as HHS Acting Deputy Secretary

On Thursday, March 12, the Department of Health and Human Services (HHS) named Mary Wakefield as the acting replacement of Deputy Secretary Bill Corr, who will leave the agency at the end of March. Wakefield is a trained nurse and she currently serves as Administrator of the Health Resources and Service Administration (HRSA). Wakefield has reportedly stated that expanding health care access to hard-to-reach, rural areas will continue to be one of her top priorities.