Despite Congress being on Easter recess, last week was a busy week in Washington. The Centers for Medicare & Medicaid Services (CMS) released its fiscal year (FY) 2018 inpatient prospective payment system (IPPS) proposed rule. The rule provides that the proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users would be about 1.6 percent. CMS proposes to distribute approximately $7 billion in uncompensated care payments in FY 2018, an increase of about $1 billion from the 2017 amount. CMS proposes to use Worksheet S-10 data from the FY 2014 cost reports in combination with insured low income days from the two preceding cost reporting periods to determine the distribution of uncompensated care payments. CMS proposes certain revisions to the Hospital-Acquired Conditions (HAC) Reduction Program, the Hospital Readmissions Reduction Program (HRRP), the EHR Incentive Programs for eligible hospitals, the Hospital Inpatient Quality Reporting (IQR) Program, and the Hospital Value-Based Purchasing (VBP) Program. For long-term care hospitals (LTCHs), CMS is evaluating whether the 25-percent threshold policy is still needed and proposes a regulatory moratorium on its implementation for FY 2018 while it conducts the evaluation. CMS also requested comments on the appropriate role of physician-owned hospitals in the health care delivery system and what regulations should be rescinded. The agency indicated that it will consider submissions to these requests for future regulatory proposals. CMS will accept comments on the proposed rule until June 13, 2017.
The Trump Administration released a final rule designed to bolster marketplace insurers and promote stability in the individual insurance market. The regulation includes numerous incentives for insurers to stay in Affordable Care Act (ACA) marketplaces. The changes include: (i) a shortened sign-up period of 45 days (November 1 through December 15), starting with coverage in 2018; (ii) limitations on special enrollment periods that enable consumers to sign up outside the normal open enrollment window; and (iii) permitting sales of less-generous policies that are likely to include lower premiums but also higher deductibles.
President Trump explained that he is considering withholding cost-sharing reduction payments to insurers, which payments are intended to subsidize out-of-pocket expenses for low-income Americans who receive insurance through the ACA marketplaces. The President threatened to withhold these payments in an apparent attempt to force Congressional Democrats to negotiate the terms of the American Health Care Act (AHCA), which would replace the ACA. House Republicans sued the Obama Administration over the payments, challenging the authority of the Executive Branch to make the payments absent a Congressional appropriation. The Department of Health and Human Services issued a statement that the “Administration is currently deciding its position” on the cost-sharing subsidies. Congressional Democrats are expected to press for inclusion of the cost-sharing subsidies in a spending bill that Congress needs to approve by April 28 in order to avoid a government shutdown.
President Trump described during several interviews that he will again push Congress to pass the AHCA before his Administration moves on to tax reform. Tax reform would be easier if the AHCA was enacted, including its roughly $1 trillion tax reduction. Before the House broke for Easter recess, it was reported that Republican House leaders agreed on a risk-sharing provision to be included in the AHCA, but was not enough of a breakthrough to bring the legislation to the House floor for a vote before the recess.