PPACA Grants for Delivery System Reform

HHS announced that it will provide up to $110 million in PPACA Health Innovation Awards to twelve recipients for projects focusing on: reducing costs for dual eligibles; improving care for patients with special needs; testing improved financial and clinical models for specific types of providers; and linking clinical care delivery to preventive health and the health of different socioeconomic groups. Letters of intent to apply for the awards are due by June 6th and applications are due July 21st.

Senator Rockefeller Calls for MLR Rebates in Medicaid/CHIP

At a Senate hearing, Senator Jay Rockefeller (D-WV) promoted his legislation, S. 1787, which would follow the framework of the PPACA which requires insurers to rebate to consumers any premium income they receive under the law which falls short of the 80% MLR (minimum loss ratio) requirement. He said that the nearly $2 billion refunded under the PPACA demonstrates the need for insurers to abide by the same rule for the managed care plans they operate under Medicaid and the Children’s Health Insurance Program (CHIP) programs.

Republicans Promote Payment Reforms

At a hearing held by the House Energy and Commerce Health Subcommittee, Chairman Joe Pitts (R-PA) said that the policies in two separate pieces of legislation should be looked at because they have been proposed as possible means to pay for the reform of the Medicare physician payment system (SGR reform). Rep. Mike Rogers’ (R-MI) H.R. 2869, the Medicare Patient Access to Cancer Treatment Act of 2014, intends to provide for payment parity under the Medicare program for ambulatory cancer care services furnished in the hospital outpatient department and the physician office setting while Rep. David McKinley’s (R-WV) legislation, the Bundling and Coordinating Post-Acute Care (BACPAC) Act of 2014, would establish a site-neutral bundled payment model for PAC services. One witness from the hospital industry opposed site-neutral payments, saying that it would have devastating consequences for Medicare patients. However, the Medicare Payment Advisory Commission (MedPAC) witness said that reducing payment differentials across certain sites of outpatient care and bundling payments for post-acute care could result in cost savings and the improvement of care coordination.

House Ways and Means Takes Testimony on Hospital "Two Midnight" Rule

Subcommittee Chairman Kevin Brady (R-TX) said he does not think that hospitals are doing anything wrong in response to the Medicare less than “two-midnight policy’ which incentivizes Recovery Audit Contractors (RACs) to scrutinize such claims, thus forcing hospitals to put patients into outpatient observation status. A CMS spokesman said that the agency is reviewing the rule and examining new means of reforming the current reimbursement structure to help reduce the use of observation status by hospitals. Legislation by Reps. Jim Gerlach (R-PA) and Joseph Crowley (D-NY) would delay the enforcement of the rule until the start of the new fiscal year on October 1st.

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