The House of Representatives has passed a short, but significant, 31-page Medicare bill, Helping Hospitals Improve Patient Care Act (H.R. 5273).
The House measure would improve traditional Medicare in a number of ways, though most of these would be technical changes to current law.
Because the bill was largely noncontroversial and thus enacted under a special procedure (“suspension of the rules”), there were no floor amendments. The House could have done more, however, such as lifting the Obamacare restrictions on the provision of patient care in high-performing physician-owned hospitals. But the Senate could easily remedy that deficiency.
Though most of the House changes are technical, they are consequential. For example, under Title I, which deals directly with Medicare Part A, the secretary of the Department of Health and Human Services would be required to apply coding for 10 surgical procedures for outpatient as well as inpatient care.
The bill would also establish a “transitional risk adjustment” for hospital payment for certain hospitals under the Hospital Readmissions Reduction Program, a creation of Obamacare. Under that program, hospitals that have an excessive number of hospital readmissions because of an ostensible failure to provide quality care to their patients are subject to Medicare payment penalties. Not all communities or patient populations, however, are the same. So the House sponsors would prevent hospitals that serve low-income communities from being unfairly penalized under current law reimbursement rules.
A new risk adjustment mechanism would correct that inequity. The bill would also prohibit the Medicare bureaucracy from imposing additional and burdensome reporting requirements. In an effort to expand access to hospital care for patients in rural communities, the bill would extend the Rural Community Hospital Demonstration program for an additional five years. It would also liberalize bed expansion for long-term care hospitals.
Under Title II, the bill makes a number of changes in Medicare Part B, the part of the Medicare program that pays doctors and funds outpatient medical services. It closes a loophole in a provision governing Medicare payments for off-campus Hospital Outpatient Departments, a provision Heritage previously cited as a positive change in the law.
The bill also provides for a separate and superior payment system for cancer patients getting outpatient care. Doctors would be exempt from the electronic health records mandate and the new Medicare incentive payment system, enacted under the Medicare Access and CHIP Reauthorization Act of 2015, for work that they do in ambulatory surgical centers. This spells regulatory relief for physicians.
Finally, under Title III, the bill would prevent (for a period of three years) the Medicare bureaucracy from terminating Medicare Advantage plans that fall short of Obamacare’s “star rating” system. The government would, however, be able to terminate health plan participation for its failure to meet 10 other performance categories.
One major weakness of the House bill is an omission: It does not repeal the 2010 Obamacare restriction on Medicare payment for physician-owned hospitals. This is an arbitrary and abusive restriction on a class of specialty hospitals that have achieved superior performance in delivering high-quality patient care. Large and powerful hospital interests, using the power of government, successfully repressed competition from high-performing rivals. The Senate can remedy this inequity.
Make no mistake. These small changes do not even begin to meet the larger challenges facing Medicare. Comprehensive Medicare reform will be unavoidable and necessary.
