Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
U.S. Senate
Patient Protection and Affordable Care Act
H.R. 3590
U.S. House of Representatives
Affordable Health Care for America Act
H.R. 3962
Status: Passed Senate on December 24 by a vote of 60-39. All
Republicans voted against passages.
Status: Passed House on November 7 by a vote of 220-215. Thirtynine Democrats voted against passage. All Republicans, except one,
voted against passage.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Coverage Expansion
HANYS’ Position: HANYS urges Congress to increase the level of coverage to at least 97% of all Americans, as per the agreement the national hospital
associations reached with the White House and Senate Finance Committee Chairman Max Baucus (D-MT).
Both Bills: Would increase insurance coverage for American citizens by increasing federal support for Medicaid eligibility and by offering subsidies to
moderate income Americans to buy insurance either through private plans, a new government-run public insurance plan (House only), or new non-profit
health insurance co-operatives (co-ops) in newly established state-based (Senate) or federal or state-based (House) health insurance exchanges.
Individual and employer mandates would also be established.
Senate
Sections: 1323, 1334, 1401, and 2001
House
Sections: 310, 323, 324, 341, 342, 343, 344, and 1701
The Senate bill would provide insurance coverage to 94% of all
Americans; up to 31 million individuals would newly access coverage.
Twenty-three million individuals would remain uncovered in 2019.
The House bill would provide insurance coverage to 96% of all
Americans; up to 36 million individuals would newly access coverage.
Eighteen million individuals would remain uncovered in 2019.
Expansion of Federal Support for Medicaid Eligibility:
Would raise the threshold for mandatory Medicaid coverage to 133% of
federal poverty level (FPL). A federal matching rate of 100% would be
provided to states for the cost of the expansion through 2016. The
federal matching rate for 2017 and beyond would vary by state based on
current levels of Medicaid coverage and would range from about 80% to
a maximum of 95%.
Expansion of Federal Support for Medicaid Eligibility:
Would raise the threshold for mandatory Medicaid coverage to 150% of
FPL. A federal matching rate of 100% would be provided to states for
the cost of the expansion in 2013 and 2014. The federal matching rate
for 2015 and beyond would be 91%.
Subsidies for Health Insurance Coverage:
Premium assistance in the form of refundable tax credits would be
provided on a sliding scale to individuals and families. The credits
would start at 2.0% of income for those at 100% of FPL and phase out
at 9.8% of income for those at 400% of FPL. A cap on annual out-ofpocket costs is provided to individuals and families that fall into these
Subsidies for Health Insurance Coverage:
Premium credits would be provided on a sliding scale to individuals and
families. Premium limits as a percentage of income would start at 1.5%
of income for those at or below 133% of FPL and phase out at 12% of
income for those at 400% of FPL. A cap on annual out-of-pocket costs
is provided to individuals and families that fall into these income
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
income categories.
categories.
Establishment of Government-regulated Private, National Health
Insurance Plans and Non-profit Health Insurance Co-operatives:
Would require the Office of Personnel Management (OPM), the agency
that oversees the Federal Employee Health Benefit Plan, to oversee a
new system of national health insurance plans offered by private
insurers, available via state exchanges. OPM would be required to offer
at least two multi-state qualified health plans (MSQHP) through the
exchanges, one of which must be non-profit. Also, federal funding for
start-up loans and grants would be provided to qualified organizations to
assist in the establishment of nonprofit, member-run health insurance
co-ops that would offer health insurance through the health insurance
exchange.
Establishment of a Government-run Public Insurance Plan and
Non-profit Health Insurance Co-operatives:
Would require the Secretary of Health and Human Services (HHS) to
develop a new, government-operated public health insurance option to
compete with private health insurance plans. Also, federal funding for
start-up loans and grants would be provided to qualified organizations to
assist in the establishment of nonprofit, member-run health insurance
co-ops that would offer health insurance through the health insurance
exchange.
Payment Rates to Providers Under the Public Plan and By Co-ops:
Health care providers would negotiate payment rates with plans that
offer coverage through the state-based exchanges or directly with the
co-op.
Payment Rates to Providers under the Public Plan and By Co-ops:
Health care providers would either negotiate payment rates with the
HHS Secretary (for public plan) or directly with the co-op.
Under the public plan, the law would require that rates negotiated with
the Secretary are not lower than aggregate average Medicare rates; and
not higher than aggregate average rates of private health insurance plans
offering insurance through the exchange.
The Secretary would have the authority to adjust payment rates under
the public option to promote better quality and more efficient care. Any
payment changes considered by the Secretary must seek to reduce cost
for enrollees, improve health outcomes, reduce health disparities,
address geographic variation in the provision of medical services,
prevent or manage chronic illnesses, or promote integrated patientcentered care.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare Update Factor Reductions
HANYS’ Position: The Medicare marketbasket reductions to New York hospitals, nursing homes, and home health agencies are of a magnitude that
would prevent the successful implementation of health reform. HANYS urges Congress to reduce and impose time limits on the proposed marketbasket
reductions.
Both Bills: The update factor for all Medicare Part A and B providers who are subject to a marketbasket or Consumer Price Index (CPI) update would be
reduced to reflect estimated gains in productivity. A measure of productivity gains for the general economy would be used (currently 1.3%) to reduce the
update for inpatient and outpatient hospitals, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, nursing homes,
home health, and hospice care providers. Further update reductions beyond the productivity adjustment would also be applied.
Senate
Section: 3401
Savings: U.S.—$147 billion over ten years
New York—$8.2 billion
House
Sections: 1101, 1102, 1103, 1131, 1153, and 1155
Savings: U.S.—$173.3 billion over ten years
New York—$10.7 billion
Productivity Offsets:
Beginning in 2012, productivity adjustments would be applied to:
• Hospital inpatient and outpatient;
• Inpatient psychiatric facilities;
• Inpatient rehabilitation facilities;
• Long-term care hospitals; and
• Skilled nursing facilities.
Hospice productivity reductions would begin in 2013.
Home health agency productivity reductions would begin in 2015.
Productivity Offsets:
Beginning in 2010, productivity adjustments would be applied to:
• Hospital inpatient and outpatient;
• Long-term care hospitals; and
• Hospice providers
Beginning in 2011, productivity adjustments would be applied to:
• Skilled nursing facilities;
• Inpatient rehabilitation facilities;
• Inpatient psychiatric facilities; and
• Home health agencies
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Additional Update Factor Reductions for Inpatient and Outpatient
Hospitals, Inpatient Rehabilitation Facilities, and Inpatient
Psychiatric Facilities:
Would reduce the annual update factors for these providers by 0.25
percentage points in 2010 and 2011. Updates would be reduced, in
addition to the productivity offset described above, by an additional 0.10
percentage points in 2012 and 2013 and an additional 0.20 percentage
points annually from 2014 through 2019.
Additional Update Factor Reductions for Inpatient and Outpatient
Hospitals, Inpatient Rehabilitation Facilities, and Inpatient
Psychiatric Facilities:
No comparable provision.
Additional Update Factor Reductions for Long-Term Care
Hospitals:
Would reduce the annual update factors for long-term care hospitals by
0.25 percentage points in 2010. The annual update would be reduced by
0.50 percentage points in 2011. The annual update would be reduced, in
addition to the productivity offset described above, by an additional 0.10
percentage points in 2012 and 2013, and an additional 0.20 percentage
points annually from 2014 through 2019.
Additional Update Factor Reductions for Long-Term Care
Hospitals:
No comparable provision.
Additional Update Factor Reductions for Home Health Agencies:
Would reduce the annual update factors for home health agencies by 1.0
percentage point in 2011, 2012, and 2013.
Additional Update Factor Reductions for Home Health Agencies:
No comparable provision.
Additional Update Factor Reductions for Hospice Providers:
Would reduce the annual update factors for hospice providers, in
addition to the productivity offset described above, by an additional 0.30
percentage points from 2013 through 2019.
Additional Update Factor Reductions for Hospice Providers:
No comparable provision.
Restoration of Additional Update Factor Reductions Based on
Projections of Coverage Expansion:
The additional update factor reductions applicable to inpatient and
outpatient hospitals, inpatient rehabilitation facilities, inpatient
psychiatric facilities, long-term care hospitals and hospice providers
Restoration of Additional Update Factor Reductions Based on
Projections of Coverage Expansion:
No comparable provision.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
from 2014 through 2019 could be restored if the previous year’s insured
population is more than five percentage points below projections.
Elimination of the 2010 Update Factor for Home Health Agencies,
Inpatient Rehabilitation Facilities, and Skilled Nursing Facilities:
No comparable provision.
Elimination of the 2010 Update Factor for Home Health Agencies,
Inpatient Rehabilitation Facilities, and Skilled Nursing Facilities:
Would eliminate the 2010 annual update factor for home health agencies,
and would eliminate the update for inpatient rehabilitation facilities and
skilled nursing facilities in the second, third, and fourth quarters of 2010.
Protection of Update Factors from Going Below Zero:
No provision.
Protection of Update Factors from Going Below Zero:
Would protect the update factors for each care setting from going below
zero.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare and Medicaid Disproportionate Share Hospital (DSH) Payment Reductions
HANYS’ Position: HANYS urges Congress to preserve DSH payments in a manner consistent with the continuing responsibility of hospitals to serve
all uninsured and under-insured patients, and that recognizes losses associated with Medicaid payment shortfalls. HANYS urges Congress to adopt the
House bill provisions, as the House bill preserves far more DSH payments than the Senate bill.
Both Bills: Would reduce Medicare and Medicaid DSH payments to adjust for the impact of the health care reform measures that reduce the number of
uninsured individuals.
U.S. Senate
Sections: 2551 and 3133
Savings: U.S.—$43 billion over ten years
New York—$5.5 billion
U.S House of Representatives
Sections: 1112 and 1704
Savings: U.S.— $20.3 billion over ten years
New York—$2.6 billion
Medicaid DSH Reductions:
Would reduce Medicaid DSH payments by $18.5 billion over ten years.
Medicaid DSH Reductions:
Would reduce Medicaid DSH payments by $10.0 billion over ten years.
• $1.5 billion in 2017;
• $2.5 billion in 2018; and
• $6.0 billion in 2019.
Reductions could begin in 2015.
Reductions would begin in 2017.
Reductions to a state’s DSH allotment would be triggered once the
number of uninsured is reduced in a state by 45%. The level Medicaid
DSH cuts would vary by state based on the amount of Medicaid DSH
funding distributed to states and how much of its DSH allotment each
state has spent over the past several years (based on average spending
for FY 2004-2008 as of the beginning of October 1, 2008):
Reductions to a state’s DSH allotment would be based on states’ rates of
uninsured and use of DSH funding, which would be measured by
uncompensated care and hospital Medicaid volume.
•
17.5% reduction – low DSH states that have spent more than 99.9%
of their allotment.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
•
25% reduction – low DSH states that have spent less than 99.9% of
their allotment.
•
35% reduction – DSH states that have spent more than 99.9% of
their allotment.
•
50% reduction – DSH states that have spent less than 99.9% of their
allotment.
New York State has not yet provided an official analysis of how this
provision would impact the state’s DSH program.
A state’s DSH allotment could not fall below 50% of the total allotment
in 2012, adjusted for inflation.
Medicare DSH Reductions:
Would reduce Medicare DSH payments by $24.4 billion over ten years.
Medicare DSH Reductions:
Would reduce Medicare DSH payments by $10.3 billion over ten years.
Reductions would begin in federal fiscal year 2015.
Reductions could begin in federal fiscal year 2017 if there is a reduction
in the uninsured rate that exceeds eight percentage points from 2010 to
2014.
Would base Medicare DSH payments on:
• 25% of DSH payments that would otherwise be made will continue
to be paid as “empirically justified”; and
Would require CMS would report to Congress by January 1, 2016 on the
level of Medicare DSH payments that should be made based on “the
empirical justification for Medicare DSH attributable to hospital
characteristics, including bed size.”
•
75% of DSH payments would be subject to reductions to reflect
reductions in the uninsured population. Generally, for every
percentage point reduction in the uninsured rate (in each period
evaluated), the percent of DSH funding available for the period
would be proportionally reduced. However, the calculation of the
reduction in the uninsured population has been modified to
artificially increase the reduction of uninsured by an additional 1.5
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
percentage points, therefore increasing the level of Medicare DSH
cuts when a reduction in the uninsured rate is observed.
A portion of DSH funding would be maintained for hospitals with high
levels of uncompensated care.
Up to 50% of the savings achieved by reducing DSH to the empirical
level would be redistributed based on individual hospital levels of
uncompensated care, excluding bad debt.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare Readmissions Payment Policy
HANYS’ Position: HANYS opposes the readmissions provisions of both bills as each adheres to an aggressive policy of reducing payments for all
Medicare cases for hospitals with readmissions rates deemed to be higher than “expected.” The policy in each bill fails to consider that many
readmissions are unavoidable.
Both Bills: Acute care hospitals (and Critical Access Hospitals in the House bill) with higher than expected risk-adjusted readmission rates during a 30-day
performance evaluation window would receive reduced Medicare payments for every discharge. Payments would be reduced by the lower of a hospitalspecific readmissions adjustment factor or a pre-determined floor (see below). In the first year, the payment policy would be applied to readmissions related
to three conditions: heart failure, heart attack, and pneumonia. In the third year, the payment policy would be expanded to include chronic obstructive
pulmonary disease (COPD), coronary artery bypass graft (CABG), percutaneous transluminal coronary angioplasty (PTCA), and other vascular procedures.
The Secretary could expand the policy to additional conditions in future years, including all-cause readmissions.
Senate
Sections: 3025 and 3026
Savings: U.S.—$7.1 billion over ten years
New York—$800 million
House
Section: 1151
Savings: U.S.—$9.3 billion over ten years
New York—$1.1 billion
Begins:
Federal fiscal year (FFY) 2013
Begins:
FFY 2012
Maximum Payment Reduction for Individual Facility:
1.0% in FFY 2013, increasing to 3.0% in FFY 2015 and thereafter.
Maximum Payment Reduction for Individual Facility:
1.0% in FFY 2012, increasing to 5.0% in FFY 2015 and thereafter.
Methodology Change to Reflect National Data Comparisons:
No provision.
Methodology Change to Reflect National Data Comparisons:
Beginning in FFY 2014, the HHS Secretary would be authorized to
modify the adjustment methodology based on hospitals’ readmissions
performance compared to a national ranking of hospitals.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Public Reporting of Hospital-Specific Readmissions Rates:
Would require the HHS Secretary to publicly post (on Hospital Compare
Web site) all-payer readmission rates for identified conditions. This
would require hospitals to submit all-payer claims-level data to CMS,
either independently or through their state data agency. This provision
would apply to cancer, children’s, rehabilitation, long-term care, and
psychiatric inpatient facilities as well.
Public Reporting of Hospital-Specific Readmissions Rates:
No provision.
Assistance for High Readmission Hospitals:
The Secretary would be required to make a quality improvement
program available to hospitals with high severity-adjusted readmission
rates. Beginning in FFY 2011, the bill would also provide $500 million
over three years to fund a Community Care Transitions Program for
hospitals with high readmission rates and partnership organizations to
implement care transitions using evidence-based interventions for
targeted high-risk beneficiaries.
Assistance for High Readmitting Hospitals:
The Secretary would be required to provide financial assistance to
hospitals with a DSH patient percentage of at least 30%, to help them
address specific patient noncompliance issues that may be causing high
readmission rates, especially provision of transitional care services.
Post-Acute Care Providers:
Would require reporting of all-patient claims data for posting of
readmission rates on the Hospital Compare site (see above).
Post-Acute Care Providers:
Would require payment for discharges from a post-acute care provider
that are readmitted to an acute care hospital or Critical Access Hospital
(CAH) within 30 days of the initial post-acute discharge to be reduced
by 0.4% in 2012, 0.7% in 2013, and 1.0% in 2014. Would require the
Secretary to implement a Medicare readmissions payment policy for
post-acute providers similar to the Medicare acute care hospital
readmissions payment policy in 2015.
Physicians:
No provision.
Physicians:
The Secretary would be required to conduct a study and issue a report
within one year after enactment on how a Medicare readmissions
payment policy could apply to physicians.
11
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Establishment of a Medicare Value-Based Purchasing (VBP) Program
HANYS’ Position: The Secretary, under the Senate VBP provision, has tremendous discretion on the design and implementation of a VBP program.
HANYS believes that the Secretary should be required to develop the VBP methodology in consultation with the hospital field. HANYS urges that the
pool funding the VBP program be limited to 1.0% of Medicare inpatient payments.
Senate
Sections: 3001, 3006, and 3007
Budget Neutral
House
Inpatient Hospitals:
Would begin in FFY 2013.
Inpatient Hospitals:
No provision.
The VBP program would be funded by Medicare inpatient payment
reductions beginning with a 1.0% reduction in FFY 2013 and increased
by 0.25% each year until the reduction reaches 2.0% for FFY 2017 and
subsequent years.
The program would be budget-neutral, with each year’s funding pool
fully distributed to hospitals in that same year.
The VBP program would apply to all “subsection (d)” inpatient
hospitals—all hospitals under the Inpatient Prospective Payment System
(PPS) excluding psychiatric, rehabilitation, children’s, cancer, and longterm care hospitals—and would establish demonstration projects to test
VBP models for critical access and small hospitals.
The Secretary would select measures, determine the scoring
methodology, and determine the payment methodology. Hospitals that
meet or exceed a performance standard set by the Secretary would be
eligible to earn back the money initially withheld. No earlier than FFY
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
2014, the Secretary would be required to include efficiency measures
(including adjusted Medicare spending per beneficiary) as part of the
VBP program (Senate’s approach to address geographic variation in
spending). The use of readmissions measures would be prohibited.
Post-Acute Care Providers:
Would direct the Secretary to submit plans to Congress for VBP
programs for home health providers and skilled nursing facilities by
October 1, 2011.
Post-Acute Care Providers:
No provision.
Would direct the Secretary , by January 1, 2016, to establish pilot to test
the implementation of value-based purchasing programs for inpatient
rehabilitation hospitals inpatient psychiatric hospitals, long-term care
hospitals, cancer hospitals, and hospice providers. The duration and
scope of these pilot programs could be expanded by the Secretary at any
point after January 1, 2018.
Physicians:
Would establish a value-based payment modifier that allows for
differential payments to physicians based upon quality and cost
indicators.
Physicians:
No provision.
13
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare and Medicaid Health Care-Acquired Conditions (HAC) Payment Policies
HANYS’ Position: Payments to hospitals under the Medicare program are currently reduced for certain cases in which an infection is determined to be
health care-acquired. HANYS opposes further reductions in the Medicare payments for HACs proposed in the Senate bill.
Both Bills: Would extend the existing Medicare HAC policy to Medicaid. Medicare currently reduces payments to hospitals for cases in which one of a
select number of secondary diagnoses identified under the Medicare program was not present on admission and, therefore, considered to be health careacquired. The Senate would create a further penalty for hospitals with high HAC rates.
Senate
Sections: 2702 and 3008
Savings: U.S.—$1.5 billion over ten years
House
Section: 1751
Savings: U.S.—under $50 million over ten years
Medicare HAC Payment Policy:
Would begin in FFY 2015.
Medicare HAC Payment Policy:
No provision.
Hospitals in the worst 25th percentile of risk-adjusted HAC rates would be
subject to a 1.0% payment penalty under Medicare. The reduction would
be applied in addition to current CMS payment adjustments for HACs.
Would require the Secretary to publicly report on measures for HACs that
are currently utilized by CMS.
The Secretary would be required to study and report to Congress by
January 1, 2012, on expanding the HAC policy to inpatient
rehabilitation facilities, long-term care hospitals, hospital outpatient
departments, and other hospitals excluded from the Inpatient PPS.
Medicaid HAC Payment Policy:
Would begin on July 1, 2011.
Medicaid HAC Payment Policy:
Would begin on January 1, 2010.
Would require state Medicaid programs to adopt policies ensuring that
higher Medicaid payments are not made for cases with conditions
Similar to Senate, but would also require state Medicaid programs to
adopt policies for non-payment for any health care-acquired condition
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
covered by the Medicare HAC policy. The Secretary could exclude
conditions identified under the Medicare program determined to be
inapplicable to populations under the Medicaid program.
determined to be a non-covered service under the Medicare program.
States could include additional health care-acquired conditions for nonpayment in their Medicaid programs.
15
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Expansion of Medicare Pay-for-Reporting and Quality Reporting Programs
Senate
Sections: 3004 and 3005
Savings: U.S.—$200 million over ten years
House
Pay-for-Reporting:
Would implement pay-for-reporting programs for long-term care
hospitals, inpatient rehabilitation facilities, inpatient psychiatric
facilities, and hospice providers in 2014. Providers that do not report
would be subject to a two percentage point reduction in their annual
marketbasket update.
Pay-for-Reporting:
No provision.
Quality Reporting:
No provision.
Quality Reporting:
Requires reporting of quality and efficiency measures for cancer
hospitals in 2014.
16
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Addressing Geographic Variation in Health Spending
HANYS’ Position: HANYS supports the rigorous and thorough analysis of causes and characteristics of geographic variation in health spending.
HANYS believes any such study must take into consideration legitimate causes for variation, such as the costs associated with purchasing all of the
goods and services needed to provide care in a given market. Analysis must examine how the utilization of services is driven not by hospitals, skilled
nursing facilities, home health agencies, and hospices, but by physicians and other patient care providers who make decisions regarding which services
and how many procedures/tests are needed to provide appropriate, quality care. Only then can informed proposals be developed to address any variation
determined to be inappropriate. The findings and recommendations of such rigorous analysis should inform the development of reimbursement to
providers—not control it. Any proposals to address variation in spending that do not allow Congress and providers to have a significant voice in their
character are likely to yield unintended and unforeseen consequences that could weaken the health care delivery system.
Senate
Section: 3001
Budget Neutral
House
Sections: 1159 and 1160
Budget Neutral
Use of Efficiency Measures in VBP:
Would require the Secretary to include efficiency measures in an
inpatient hospital VBP program by FFY 2014. Measures of Medicare
spending per beneficiary adjusted for age, sex, race, severity of illness,
and other factors that the Secretary determines to be appropriate must be
included.
Use of Efficiency Measures in VBP:
No provision.
IOM Study and Development of a “Value Index”:
No provision.
IOM Study and Development of a “Value Index”:
Would direct the Institute of Medicine (IOM) to analyze the geographic
variation in per capita health care spending among Medicare, Medicaid,
privately insured, and uninsured populations and recommend Medicare
payment changes to the Secretary by April 15, 2011.
Would require IOM to consider in its study the extent to which
geographic variation can be attributed to differences in input prices,
practice patterns/utilization, patient access to health services, socio17
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
economic factors, health care outcomes, and provider organizational
models.
IOM, based on its study, would be required to consider the development
and adoption of a “value index” based on measures of quality and cost
to adjust provider payment levels on a regional or provider-level basis.
The Secretary would present Congress with a plan for implementation
of the IOM recommendations by 2013. Congress could not modify the
proposal in any way; and it would automatically take effect unless
Congress passes a joint resolution to reject it. The President would have
the authority to veto congressional disapproval.
Establishment of a Wage Index Floor for Hospitals and Physicians
in Select “Frontier” States:
No provision.
Establishment of a Wage Index Floor for Hospitals and Physicians
in Select “Frontier” States:
Would establish and apply a hospital wage index floor of 1.0 for
inpatient hospital services (for discharges on or after October 1, 2010)
and outpatient services (for discharges on or after January 1, 2011) in
"frontier" states (defined as MT, ND, NV, SD, and WY). A floor of 1.0
would also apply to the practice expense for physician services provided
on or after January 1, 2011 in these frontier states.
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare Hospital Wage Index Reform
HANYS’ Position: HANYS supports allowing hospitals in areas with low wage indexes the opportunity to receive higher wage index adjustments,
while holding all other hospitals harmless through the permanent infusion of funding into the Medicare wage index system.
Senate
Section: 3137
Budget Neutral
House
Sections: 1157 and 1158
Increase: U.S.—up to $8 billion over ten years
Would require the Secretary to report to Congress by December 31,
2011 with recommendations for comprehensive reform of the Medicare
wage index system. The plan would be required to take into account the
2001 MedPAC wage index report, including the proposed use of Bureau
of Labor Statistics data and the recommended redefinition of wage
areas.
Would direct IOM to report, within one year of enactment on the
validity and effects of the Medicare wage index for hospitals and the
geographic practice cost index (GPCI) for physicians, and make
recommendations.
The Secretary could propose policies to adjust these factors and increase
Medicare payment levels by up to $4 billion per year for two years prior
to 2014. Beginning in 2014, the new money/hold-harmless provision
would expire, and the changes to the wage index and GPCI beyond 2014
would be redistributive.
In addition, see “geographic variation” section summary above.
19
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare GME Provisions
HANYS’ Position: Increased Medicare support for training medical residents is critical, as the physician shortage in New York and throughout the
nation continues to worsen. HANYS supports the redistribution of currently unused medical residency slots along with increasing the number of overall
Medicare-supported residency slots. Preference for residency slot reallocations or increases should be given to institutions currently training physicians
in excess of their Medicare GME cap. HANYS supports the modernization of GME training language to allow Medicare support for the training of
residents in non-hospital settings.
Both Bills: GME payments to hospitals would be protected, maintaining current levels of funding for Indirect Medical Education and Direct Medical
Education in perpetuity. In addition, GME training slots for primary care would be increased through a re-distribution of unused slots. The bills would
also allow hospitals to be paid for resident training in non-hospital settings if the hospital incurs the costs of the stipends and fringe benefits for the
resident. This would eliminate current requirements for compensating supervising physicians in non-hospital settings. Further, hospitals would be
allowed to count time spent by a resident in non-patient care activities such as didactic conferences and seminars.
Senate
Sections: 5503, 5504, and 5506
Increase: U.S.—$1.2 billion over ten years
House
Sections: 1501, 1502, 1503, 1504, and 1744
Increase: U.S.—$1.5 billion over ten years
Redistribution of Unused Resident Slots:
Redistributes 65% of the currently unused training slots. Rural hospitals
with less than 250 beds and hospitals that participated in voluntary
reduction programs are exempt from reductions.
Redistribution of Unused Resident Slots:
Redistributes 90% of the currently unused training slots.
Hospitals could apply to receive up to 75 additional residency positions.
In return, the hospital would be required to use at least 75% of the
increase for primary care or general surgery residency and to maintain
its quantity of primary care residents.
Hospitals could apply to receive a maximum of 20 additional residency
slots. All additional slots would be used for primary care residents.
Priority would be given to hospitals currently training physicians above
their Medicare GME cap, hospitals with three-year primary care
residency programs, hospitals that emphasize training in non-hospital
settings or in health professional shortage areas, and hospitals in states
Priority would be given to hospitals located in states with low residentto-population ratios; hospitals in one of the top ten states for the ratio of
the total population living in a Health Professional Shortage Area
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Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
(HPSA); and hospitals located in rural areas.
with low resident-to-population ratios.
Preservation of Resident Slots from Closed Hospitals:
Resident slots from closed hospitals would be redistributed using a
process to be determined by the Secretary. Priority would be given to
other hospitals within the same Core-based Statistical Area (CBSA),
followed by hospitals within the same state. This would include
hospitals that have closed up to two years prior to enactment.
Preservation of Resident Slots From Closed Hospitals:
Same as Senate, but would not include other hospitals within the same
CBSA in the priority redistribution.
21
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Independent Payment Advisory Board (IPAB)
HANYS’ Position: HANYS opposes the creation of a new federal entity with the authority to set Medicare payment levels. It is imperative that
Congress maintain its role in determining overall funding for health services and in framing conditions for reform.
Senate
Section: 3403
Savings: U.S.—$28.2 billion over ten years.
House
Establishment of IPAB:
Would establish an IPAB to submit proposals to Congress beginning in
2015 that would reduce Medicare spending by targeted amounts (0.5
percentage point reduction in 2015 increasing to a 1.5 percentage point
reduction in 2018) if it is determined that there is excess cost growth in
the Medicare program.
Establishment of IPAB:
No provision.
Congress could modify or pass an alternative to the proposals, but
would be required to maintain the targeted level of Medicare savings for
the year. The Board’s original proposal would be implemented if
Congress does not consider the Board’s proposal.
Exemption from Board Proposals:
No provision.
Exemption from Board Proposals:
Providers such as hospitals and hospices that are scheduled to receive a
reduction to their marketbasket update in excess of a productivity-based
reduction would be exempt from any proposed reductions from the
Board through 2019.
22
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
New Requirements Applicable to Tax-Exempt Status
HANYS’ Position: HANYS believes states like New York that already have in place robust reporting requirements including implementation of
strategies to meet community needs based on the findings of periodic health needs assessments and the adoption of financial assistance, billing and debt
collection policies, should be permitted to maintain their existing programs.
Senate
Section: 9002
House
Would not establish thresholds hospitals must meet to attain or maintain
tax-exempt status.
No provision.
Would establish the following additional criteria for hospitals to
maintain their Section 501(c)(3) tax-exempt status:
• implementation of strategies to meet community needs-based on the
findings of periodic health needs assessments;
• adoption of a financial assistance policy with criteria to qualify,
basis for payment and defined collection policies;
• limitation of charges for those who qualify for financial assistance to
no more than the amounts generally billed to those with insurance,
and prohibits the use of gross charges; and
• requirement that 501(c)(3) hospitals not engage in extraordinary
collection actions.
In addition to meeting all four reporting requirements to maintain taxexempt status, a $50,000 excise tax would apply if a hospital fails to
meet the community health plan requirements.
Would require the Internal Revenue Service to review information about
a hospital’s community benefit activities at least once every three years.
23
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Would require the Secretary to report to Congress on the levels of
charity care, bad debt, unreimbursed costs of non means-tested
government programs, and the cost of community benefit activities
incurred by tax-exempt, taxable, and government hospitals.
24
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
340B Drug Discount Program Expansion
HANYS’ Position: HANYS supports the expansion of the 340B drug discount program to inpatient drugs and the extension of the program to all special
status rural hospitals, children’s hospitals, and cancer hospitals.
Both Bills: Would extend access to the 340B drug discount program to certain special status rural hospitals, children’s hospitals, and cancer hospitals.
Senate
Section: 7101
House
Sections: 2501, 2502, and 2503
Extension of 340B Program:
Beginning January 1, 2010, would extend access to 340B program to
certain children’s and cancer hospitals, CAHs, Sole Community
Hospitals (SCHs), and Rural Referral Centers (RRCs). SCHs and RRC
must have a DSH adjustment percentage equal to or greater than 8
percent. The program is not extended to Medicare Dependent Hospitals.
Extension of 340B Program:
Similar to Senate, but would be effective upon enactment, not require
SCHs and RRCs to meet a DSH adjustment percentage threshold, and
would extend the program to Medicare Dependent Hospitals.
Expansion of 340B Program:
Would expand the 340B drug discount program to include inpatient
drugs and would require that hospitals issue credits to the state Medicaid
program for covered inpatient drugs provided to Medicaid recipients.
Expansion of 340B Program:
No provision.
25
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medical Liability Reform
HANYS’ Position: HANYS encourages Congress to take a more aggressive stance to address the burdens associated with the current medical liability
system. We urge the adoption of a medical indemnity fund, which would provide an alternative financing mechanism for specific, high-cost cases
involving neurological impairment, and a mechanism to reduce the cost of insurance for physicians. In addition, administrative compensation systems,
medical courts, and the promotion of a “sorry works” program to encourage physicians to be candid with patients without fear of reprisals, should be
actively pursued. Finally, we urge Congress to consider the establishment of caps on non-economic (pain and suffering) damages.
Senate
Section: 10607 of the Manager’s Amendment and section 6801
House
Section: 2531
Would authorize the Secretary to award $50 million in demonstration
grants to states over a period of five years, beginning fiscal year 2011,
for the development, implementation, and evaluation of alternatives to
the existing civil litigation system. Each State desiring a grant is
required to develop an alternative to current tort litigation that allows for
the resolution of disputes over injuries allegedly caused by health care
providers or health care organizations, and promotes a reduction of
health care errors by encouraging the collection and analysis of patient
safety data related to disputes resolved by organizations that engage in
efforts to improve patient safety and the quality of health care.
Would authorize the Secretary to make incentive payments to states that
adopt an effective alternative medical liability law. State alternatives to
medical malpractice litigation must consist of certificates of merit, early
offers, or both, and may not limit attorneys’ fees or impose caps on
damages. Any incentive payments received by states must be used to
improve health care in the state.
The proposal would also express a “sense of the Senate” encouraging
states to develop and test alternatives to the existing civil litigation
system and encourage Congress to consider establishing state
demonstration projects to test alternatives to the current civil litigation
system as a means to reduce providers’ medical liability insurance
burdens.
26
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare Rural Provisions
Senate
Sections: 3122, 3123, 3124, 3125, 3126, 3127, 3129, and 3131
Increase: U.S.—$200 million over ten years
House
Section: 1192
Increase: U.S—$200 million over ten years
Extension of Outpatient Hold-Harmless Payments:
Would extend outpatient hold-harmless payments for one year, through
December 31, 2010.
Extension of Outpatient Hold-Harmless Payments:
Same as Senate but would extend the payments for two years, through
December 31, 2011.
Medicare Dependent Hospitals (MDHs):
Would extend the MDH classification, which is set to expire on
September 30, 2011, for one additional year, through September 30,
2012.
MDHs:
No provision.
Clinical Diagnostic Laboratory Services:
Would reinstate reasonable cost payment for clinical diagnostic
laboratory services to rural hospitals with less than 50 beds from July 1,
2010 through June 30, 2011.
Clinical Diagnostic Laboratory Services:
No provision.
Medicare Payment Adjustment for Low-Volume Hospitals:
Would modify the current low-volume Medicare payment adjustment
for FFYs 2011 and 2012. The size of a low-volume hospital would be
increased from 1,500 to 1,600 discharges per year and the Secretary
would be required to determine the low-volume add-on amount using a
linear sliding scale ranging from 25% for low-volume hospitals with
Medicare discharges below a certain threshold, to no adjustment for
hospitals with more than 1,600 Medicare discharges.
Medicare Payment Adjustment for Low-Volume Hospitals:
No provision.
Rural Community Hospital Demonstration Program:
Would extend for five additional years, through December 31, 2014, the
rural community hospital demonstration project and increase the number
Rural Community Hospital Demonstration Program:
No provision.
27
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
of participating hospitals from 15 to 30. In addition, this provision
would expand the eligible sites to rural areas in all states.
Expansion of Community Health Integration Models in Rural
Areas:
Would remove the limit on the number of eligible counties that may
participate in the demonstration project on community health integration
models in certain rural counties within qualifying states.
Expansion of Community Health Integration Models in Rural
Areas:
No provision.
MedPAC Review of Medicare Payments for Rural Areas:
Would require MedPAC to review payment adequacy for rural health
care providers serving the Medicare program and report to Congress by
January 1, 2011.
MedPAC Review of Medicare Payments for Rural Areas:
No provision.
Medicare Rural Hospital Flexibility Program:
Would extend the “FLEX” program for an additional two years through
2012. Allows Small Rural Hospital Improvement grant program
funding to support small rural hospitals’ participation in the delivery
system reform programs outlined in this legislation (such as VBP,
bundling, and accountable care organizations).
Medicare Rural Hospital Flexibility Program:
No provision.
28
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Other Hospital and Health System Provisions
Senate
Sections: 3137, 3141, 3138, and 6411
Increase: U.S.—$200 million over ten years
House
Sections: 1145 and 1193
Increase: U.S. $500 million over ten years
Updating Outpatient Payments for PPS-Exempt Cancer Hospitals:
Would require CMS to conduct a study to determine if the outpatient
costs incurred by PPS-exempt cancer hospitals exceed the costs of other
hospitals reimbursed under outpatient PPS. If appropriate, CMS would
provide an adjustment for services starting January 1, 2011.
Updating Outpatient Payments for PPS-Exempt Cancer Hospitals:
Same as Senate.
Extension of Section 508 Legislative Medicare Wage Index
Reclassifications:
Would extend for one year, through FFY 2010, special Section 508
Medicare hospital wage index reclassifications. Would require CMS to
recalculate the FFY 2010 wage indexes for those hospitals that
reclassify under Section 508 to include their data in the reclassified
wage index values. If the resulting reclassified wage index value is
higher than the value currently published, the Secretary must
retroactively adjust payments for those hospitals. The recalculation
must be done by April 1, 2010 and the retroactive adjustment must be
made prior to December 1, 2010.
Extension of Special Section 508 Legislative Medicare Wage Index
Reclassifications:
Same as Senate but would extend the reclassifications for two years,
through FFY 2011.
Restoration of Medicare Hospital Wage Index Reclassification
Thresholds:
Would direct the Secretary to restore for FFY 2011 the FFY 2008
Medicare hospital wage index reclassification thresholds used to
compare hospitals’ average hourly wages (AHWs), for the purpose of
determining wage index reclassifications (the AHW comparison
Restoration of Medicare Hospital Wage Index Reclassification
Thresholds:
No provision.
29
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
criterion was made stricter over the past two years).
Application of Budget Neutrality for the Medicare Hospital Wage
Index:
Would require that the application of budget neutrality associated with
the effect of the Medicare wage index rural floor and imputed rural floor
be applied on a national, rather than state-specific, basis through a
uniform, national adjustment to the area wage index. (The current
methodology that applies the wage index floor budget neutrality
adjustment at the state level was adopted by CMS in FFY 2009.)
Application of Budget Neutrality for the Medicare Hospital Wage
Index:
No provision.
Expansion of the Recovery Audit Contractor (RAC) Program:
The RAC program, which currently audits Medicare Part A and Part B
claims, would be expanded no later than December 31, 2010, to include
audits of the Medicaid program and Medicare Parts C and D.
Expansion of the RAC Program:
No provision.
30
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
State Fiscal Relief
HANYS’ Position: HANYS supports an extension to the temporary increase in the Federal Medical Assistance Percentage (FMAP) provided under the
American Recovery and Reinvestment Act (ARRA) of 2009 to help states cover the increased cost associated with Medicaid expansion under both bills.
Senate
House
Section: 1749
Increase: U.S.—$23.5 billion over six months
New York—$3.4 billion
No provision.
Would extend for six months, the temporary increase to the Federal
Medical Assistance Percentage provided in the ARRA.
31
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Establishment of Delivery System Reform Pilot Programs and Demonstration Projects
Both Bills: Would require the HHS Secretary to conduct programs to test alternative structures and payment methodologies for bundled services. The
bundles could include hospital, post-acute care, and physicians’ services. Provider participation would be voluntary. Additional funding would also be
provided to CMS to develop innovative provider reimbursement methodologies.
Senate
Sections: 2704, 2705, 2706, 2707, 3021, 3022, and 3023
Savings: U.S.—$4.9 billion over ten years
House
Sections: 1152, 1301, 1730A, and 1907
Savings: U.S.—$2.7 billion over ten years
Medicare Payment Bundling Pilot:
Participation would be voluntary.
Medicare Payment Bundling Pilot:
Participation would be voluntary.
Would direct the HHS Secretary to implement a national pilot program
for bundling payments in 2013.
Would require the Secretary to expand, by January 1, 2011, the current
Acute Care Episode (ACE) bundled payment demonstration project to
include post-acute care services and additional sites, geographic areas,
and conditions. The current demonstration is testing bundled payments
for a limited number of procedures and includes only hospital and
physician care.
CMS would select eight conditions to be included in the pilot program.
The bundled service would include care delivered three days prior to
hospital admission, and would extend through 30 days following
discharge; and would cover:
• acute care inpatient services including readmissions;
• outpatient hospital services including emergency room;
• physician care, including services in and out of the hospital; and
• post-acute care, including home health services, skilled nursing
facility, inpatient rehabilitation, and long-term care hospital
services.
The Secretary could choose to apply the ACE bundled payments to:
• hospitals and physicians;
• hospitals and post-acute care providers;
• hospitals, physicians, and post acute care providers; or
• combinations of post-acute providers.
An entity comprised of providers including a hospital, a physician
group, a skilled nursing facility, and a home health agency, could
submit an application to join the pilot program. The Secretary is
If it is determined that the ACE demonstration has improved quality and
reduced costs, the Secretary would have the authority to implement the
mechanisms and reforms tested under the pilot program, on a voluntary
32
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
basis, to as large a geographic scale as practical and economical.
required to consult with representatives of small rural hospitals and
Critical Access Hospitals regarding their participation in the pilot
program.
The Secretary would develop the bundled payment rates and could test
payments based on bids submitted by the entities. Annual payments
under the pilot to a single entity could not exceed what would otherwise
be paid for the same services under the current Medicare program(s).
The pilot program would last five years, and could be extended for
providers participating at the end of the five-year period if the Secretary
determines the extension would result in improving (or not reducing)
the quality of patient care and reducing spending. In 2016, CMS would
report on the results of the pilot program and make recommendations to
Congress for its expansion.
Secretary Plan for Bundling:
No provision.
Secretary Plan for Bundling:
Would require the Secretary to develop a plan for bundling payments for
post-acute services (defined as skilled nursing facilities, inpatient
rehabilitation facilities, long-term care hospitals, hospital-based
outpatient rehabilitation facilities, and home health agencies) no later
than three years after the date of enactment. The plan must consider
how and whether to include acute care hospitals and physicians in the
bundle, the scope of the included services, and the payment
methodology. It must also determine the quality measures that would be
appropriate for reporting by hospitals and post-acute providers.
Accountable Care Organizations (ACOs):
Participation would be voluntary.
Would establish a program, beginning in 2012, to allow groups of
providers to be recognized as ACOs and share in the cost savings they
achieve for the Medicare program.
ACOs:
Participation would be voluntary.
Would establish a pilot program, beginning in 2012, that would allow
physician practices to qualify as ACOs and share in the cost savings
33
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
they achieve for the Medicare program.
Hospitals could take the lead in formation of an ACO and ACOs could
include:
• group practice arrangements;
• networks of individual physician practices;
• partnerships or joint-venture arrangements between hospitals and
practitioners; and
• hospitals employing practitioners.
Hospitals cannot take the lead in forming an ACO. Hospitals and other
providers must be affiliated with the physician group to participate in
the ACO.
The ACO could share in the Medicare cost savings if it meets quality
performance standards and if Medicare expenditures for beneficiaries in
the ACO are less than a target spending level or a target rate of growth.
In addition, the Secretary is given authority to develop other ACO
payment models, including partial capitation.
To qualify, the organization must act as the primary care provider for at
least 5,000 Medicare fee-for-service beneficiaries. ACO providers
would agree to participate for at least three years.
The pilot program could cover a multi-year period of between three and
five years. The Secretary may extend the duration of the agreement for
successful ACOs and could issue regulations to permanently implement
one or more ACO models if such models would result in estimated
Medicare expenditures below estimated Medicare spending in the
absence of such expansion.
Hospitals and other providers of the ACO could share in the Medicare
cost savings they achieve if the ACO meets quality performance
standards established by the Secretary and average per capita Medicare
expenditures are below a benchmark based on the claim history and
characteristics of the patients assigned to the ACO.
CMS CMI:
Generally the same as the Senate, but would set funding levels at $350
million for FFY 2010, $440 million for FFY 2011, $550 million for
FFY 2012, and, for each subsequent year, the prior year amount
adjusted for overall Medicare expenditure growth.
CMS Center for Medicare and Medicaid Innovation (CMI):
Would establish by 2011, the Center for Medicare and Medicaid
Innovation (CMI) to test innovative payment and service delivery
models to improve the coordination, quality, and efficiency of health
care services provided to Medicare and Medicaid beneficiaries. Gives
preference to models for which there is evidence that the model
addresses a defined population for which there are deficits in care
leading to poor clinical outcomes or potentially avoidable expenditures.
The “Secretary may, through rulemaking, expand (including
implementation on a nationwide basis) the duration and the scope of a
model that is being tested or a demonstration project to the extent
determined appropriate by the Secretary, if the Secretary determines that
such expansion is expected to reduce spending under the Medicare
34
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
and/or Medicaid program without reducing the quality of care; or
improve the quality of care and reduce spending; and the Chief Actuary
of CMS certifies that such expansion would reduce the Medicare and/or
Medicaid program.”
It would require the Secretary, every other year beginning in 2012, to
report to Congress on the model tested under the CMI and make
recommendations for legislative action to facilitate the development and
expansion of successful payment models.
Funding would be set at $5 million in FFY 2010, $10 billion for the
period FFY 2011 through 2019 and an additional $10 billion for each
subsequent ten-year period.
Medicaid Payment Demonstrations:
The Secretary would be authorized to conduct the following Medicaid
demonstration projects:
• Medical home pilot project; and
• Accountable care organization pilot program.
Medicaid Payment Demonstrations:
The Secretary would be authorized to conduct the following Medicaid
demonstration projects:
• Medicaid bundled payment demonstrations to evaluate integrated
care around a hospitalization, in up to eight states;
• Medicaid global payment demonstrations for safety net hospitals in
up to five states;
• Pediatric Accountable Care Organization demonstrations; and
• Medicaid emergency psychiatric demonstration projects.
35
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare Home Health Agency Payment Changes
HANYS’ Position: HANYS opposes the massive reductions to home health agencies. The magnitude of the cuts, relative to the size of these provider
sectors, would create a crisis in New York for patients seeking quality post-acute care. Lack of access to home health services for Medicare beneficiaries
could lead to otherwise potentially preventable hospital readmissions.
Both Bills: Would reduce payments through rebasing home health agency payment rates. Rebasing would take into account changes in the average
number and types of visits per episode, intensity of visits, and growth in cost per episode.
Senate
Section: 3131
Savings (figure includes temporary payment increase for home health
services provided to Medicare beneficiaries in rural areas):
U.S.—$39.4 billion over ten years
New York—$1.9 billion
House
Section: 1154
Savings: (figure includes temporary payment increase for home health
services provided to Medicare beneficiaries in rural areas):
U.S.—$54.7 billion over ten years
New York—$2.8 billion
Payment Rebasing:
Reduced rebased payments would be phased in over four years,
beginning in 2014, and the reductions could not exceed 3.5% each year.
Payment Rebasing:
Reduced rebased payments would begin in 2011. Would require a 5.0%
reduction to payments in 2011 if rebasing is not ready.
Cap on Outlier Payments:
Beginning in 2011, would establish a 10% cap on the reimbursement a
home health provider can receive from outlier payments.
Cap on Outlier Payments:
No provision.
Acceleration of Regulatory Case-Mix Adjustment:
No provision.
Acceleration of Regulatory Case Mix Adjustment:
Accelerates the regulatory adjustment for case mix currently scheduled
for 2011 so that it occurs in 2010.
Rural Home Health Add-on:
Would provide a 3% add-on payment for home health service provided
to Medicare beneficiaries in rural areas from April 1, 2010 through
December 31, 2015.
Rural Home Health Add-on:
No provision.
36
Comparison of the Coverage, Medicare, and Medicaid Provisions
U.S. House and Senate Federal Health Reform Legislation
December 2009
Medicare Skilled Nursing Facility Payment Changes
Senate
Section 10325 of the Manager’s Amendment
House
Section: 1111
Budget Neutral
Delay in Implementation of RUG-IV:
Would temporarily delay implementation of Version 4 of the Resource
Utilization Groups (RUG-IV) for one year, from FFY 2011 to FFY
2012. Would require the Secretary to implement a component of RUGIV specific to therapy furnished on a concurrent basis and changes to the
look-back period to ensure that only those services furnished after
admission to a skilled nursing facility are used as factors in determining
a case mix classification under the Skilled Nursing Facility Prospective
Payment System.
Delay in Implementation of RUG-IV:
No provision.
Other SNF Payment changes:
Would reduce the FFY 2010 RUG weights to account for payment
increases resulting from the transition from 44 RUGs to 53 RUGs on
January 1, 2006.
Other SNF Payment changes:
No provision.
Beginning on or after January 1, 2010, skilled nursing facilities would
receive a 10% increase for non-therapy ancillary (NTA) services and a
5.5% decrease for the therapy case-mix component. Establishes an
outlier payment adjustment for NTA services and therapy services with
payments not to exceed 2% of total SNF PPS payments.
37