The Return on Your Dues Investment

The American Hospital Association (AHA) is proud to be working for you. And as you transform health care delivery, we are transforming to better meet your needs. Below are just some of the advances we have made in the past year by working together and speaking with one voice to advocate for hospitals, health systems and the patients and communities they serve.

In the Courts…

Protecting Payments for Legitimate Differences in Sites of Care. A federal judge in September 2019 rules in favor of the AHA and hospital organizations saying that CMS exceeded its statutory authority when it reduced payments for hospital outpatient services provided in off-campus provider-based departments grandfathered under the Bipartisan Budget Act of 2015. The AHA, joined by the Association of American Medical Colleges and several member hospitals, in December filed a lawsuit against HHS for finalizing a policy to phase-in, over two years, a reduction in payments for hospital outpatient clinic visit services furnished in off-campus provider-based departments that are grandfathered (excepted) under Section 603 of the BiBA. The cut was included in CMS’s outpatient prospective payment system final rule for calendar year 2019.

Protecting 340B Resources. A federal judge Dec. 27 ruled in favor of the AHA and hospital plaintiffs saying that HHS’s "adjustment" by nearly 30 percent of 2018 Medicare payment rates for many hospitals in the 340B Drug Pricing Program was unlawful. The lawsuit argued that the 340B provisions of CMS's calendar year 2018 outpatient PPS final rule, which reduced Medicare payments to certain hospitals for outpatient drugs purchased under the 340B program by $1.6 billion a year, exceeded the agency's statutory authority. The judge granted AHA's motion for a permanent injunction and ordered supplemental briefing on the question of proper remedy. The AHA was joined by the Association of American Medical Colleges, America's Essential Hospitals, and three hospital plaintiffs in the lawsuit.

Eliminating the Medicare Claims Backlog. In response to litigation by the AHA challenging unacceptable delays in processing disputed Medicare payment claims, the U.S. District Court in November 2018 reinstated a mandamus order establishing annual deadline-based targets for reducing the backlog of Medicare appeals at the Administrative Law Judge level. The order by U.S. District Judge James Boasberg requires that the Department of Health and Human Services achieve the following reductions from its own currently projected fiscal year 2018 backlog of 426,594 appeals: a 19 percent reduction by the end of FY 2019; a 49 percent reduction by the end of FY 2020; a 75 percent reduction by the end of FY 2021; and elimination of the backlog by the end of FY 2022. The order also requires HHS to file quarterly status reports beginning Dec. 31. On July 1, 2019, HHS said it remains on track to meet the reduction targets set forth in the Court’s November 1 Order. HHS specifically reported that “[f]rom November 1, 2018 through the end of the second quarter of FY 2019, there has been a net reduction of 82,936 appeals pending at OMHA with a total of 343,658 appeals pending at OMHA by the end of the second quarter, which is a 19.4% reduction from the starting number of appeals identified in the Court’s November 1 Order (426,594 appeals).”

Requiring Transparency for 340B Manufacturers. Facing deadlines for responding to the lawsuit brought by the AHA, Association of American Medical Colleges, America’s Essential Hospitals, 340B Health and three hospital systems, the Department of Health and Human Services implemented its final rule on 340B drug ceiling prices and civil monetary penalties for manufacturers. The rule describes how ceiling prices must be calculated and allows the federal government to levy CMPs against drug companies that intentionally overcharge 340B providers. As urged by AHA, the Health Resources and Services Administration April 1 launched a new website that organizations participating in the 340B Drug Pricing Program can use to determine the maximum prices drug companies can charge them for medications sold under the program.


On the Hill…

Delaying Medicaid DSH Cuts. President Trump recently signed into public law a Continuing Resolution (CR) funding the government through Dec. 20, 2019 that also included a delay in the implementation of the Medicaid DSH cuts that were scheduled to begin fiscal year (FY) 2020, or Oct. 1, 2019. We continue to work with Congress on further relief. The House Energy and Commerce Committee July 17 passed legislation that would eliminate the Medicaid DSH cuts for FYs 2020 and 2021 and reduce the cuts from $8 billion to $4 billion in FY 2022. The AHA supports this provision and will work to delay the implementation of the Medicaid DSH cuts beyond Dec. 20.More than 300 Members of the House earlier this year expressed their support for delaying the Medicaid DSH cuts in a letter sponsored by Reps. Eliot Engel (D-N.Y.) and Pete Olson (R-Texas).

House Passes Nursing Workforce Reauthorization Act. The House of Representatives Oct. 29 passed the Title VIII Nursing Workforce Reauthorization Act (H.R. 728), legislation that would reauthorize federal programs to develop the nursing workforce for five years. The Senate Health, Education, Labor & Pensions Committee passed its version of the bill (S. 1399) on Oct. 31. The AHA and its American Organization for Nursing Leadership subsidiary support the legislation to help address a national shortage of nurses and nurse educators. 

Funding Emergency Preparedness Programs. The president June 24, 2019 signed the Pandemic and All-Hazards Preparedness and Advancing Innovation Act (S. 1379). The legislation includes AHA-supported provisions that:

  • reauthorize the Hospital Preparedness Program at an increased amount;
  • reserve a percentage of HPP funds to develop regional health care emergency preparedness and response systems;
  • formally keep the HPP and Public Health Emergency Preparedness Program separate under their respective agencies; and
  • change financing and uses for the Public Health Emergency Fund.

Improving Emergency Access to Controlled Medications. Congress passed the Protecting Patient Access to Emergency Medicines Act (Public Law No: 115-83). The AHA-supported legislation clarifies that emergency medical services practitioners, under a standing order issued by the EMS agency’s physician medical director, may administer medications governed by the Controlled Substances Act.

Improving Access to Care for Veterans. As supported by the AHA, Congress approved bipartisan legislation (S. 2372) to streamline and consolidate the Department of Veterans Affairs' community care programs into a permanent Veterans Community Care Program. Among other provisions, the VA MISSION Act of 2018 would require access to community care based on certain access criteria, doing away with the 40-mile limit or 30-day wait period required through the Choice Program; establish Medicare payment rates for community care, with certain exceptions for rural areas and value-based payment models; and require VA to establish prompt payment deadlines.


In the Agencies…

Modernizing the Stark and Anti-kickback Rules. As long advocated by the AHA, the Department of Health and Human Services Oct. 9 proposed modernizing the Stark Law on physician self-referral and the Anti-kickback Statute to remove unnecessary roadblocks to the kind of collaboration and coordination that enables caregivers to meet all of their patients' health care needs. Specifically, on Stark, CMS proposes creating new permanent exceptions to the law for value-based arrangements and certain other arrangements, such as donations of certain cybersecurity technology. The exceptions would apply whether the care was provided to Medicare or other patients.

On the Anti-kickback Statute, HHS' Office of Inspector General proposes three new safe harbors for remuneration exchanged between or among eligible participants in a value-based arrangement. It also proposes new safe harbors for remuneration provided in connection with patient engagement; the donation of cybersecurity technology and services; electronic health records; outcomes-based payments; telehealth for in-home dialysis; CMS-sponsored models and Medicare accountable care organizations; and an expanded safe harbor for local transportation. Final rules may be released in early 2020.

Changes in the Level of Supervision of Outpatient Therapeutic Services. As repeatedly urged by the AHA, CMS changed the minimum required level of supervision from direct supervision to general supervision for all hospital outpatient therapeutic services provided in all hospitals and CAHs in its final OPPS rule for 2020. General supervision means that the procedure is furnished under the physician's overall direction and control, but that the physician's presence is not required during the performance of the procedure. The Hospital Outpatient Payment Panel will continue to provide advice on the appropriate supervision levels for individual hospital outpatient services, and CMS retains its authority to make changes to the level of supervision required for individual services through notice-and-comment rulemaking.

Changes to Payment for Evaluation and Management (E/M) Visits. As urged by the AHA and others, CMS, in its final physician fee schedule rule for 2020, finalized a revised approach to paying for E/M services, reverting back to setting separate payment rates for all levels of E/M visits rather than blending payment rates for certain levels (as it finalized last year). Also building on changes in last year’s PFS rule related to teaching physician documentation, CMS will now permit physicians and certain non-physician practitioners to review and verify, rather than re-document, notes made in the medical record by other members of the medical team.

Updates to the Merit-based Incentive Payment System. As urged by AHA, CMS did not increase the weight of the MIPS cost category for the 2020 reporting year. CMS also indicated it does not intend to mandate participation in MIPS Value Pathways and will work collaboratively with the field to develop them.

Changes to the Medicare Shared Savings Program. CMS adopted several AHA-recommended policies, including a walk back of its proposal to add a flawed adult immunization measure, and retaining the smoking cessation measure as a reporting measure only.

Preventing Questionable Shifts in the Comprehensive Complication or Comorbidity (CC)/Major Complication or Comorbidity (MCC) Codes. CMS categorizes ICD-10-CM secondary diagnosis codes into three severity levels to represent increased hospital resource use: MCC, CC or non-CC. For 2020, CMS had proposed a change in the severity level designation for 1,492 ICD-10-CM diagnosis codes. As a result, 87% of the codes would have shifted down in severity. However, as strongly advocated by the AHA, CMS decided not to finalize its proposed changes to the severity level designations for the vast majority of ICD-10-CM diagnosis codes. Exceptions include codes related to antimicrobial resistance, which will change from a non-CC to a CC.

Medicare Promoting Interoperability Program (PIP) Changes. As urged by the AHA, CMS adopted a reporting period of a minimum of any continuous 90 days for the 2021 reporting period for hospitals and CAHs in the Medicare PIP attesting to CMS. The agency also finalizes the removal of Verify Opioid Treatment Plan measure beginning in CY 2020. CMS also will retain the Query of Prescription Drug Monitoring Programs measure as optional and available for bonus points, and change the reporting of the measure to a yes/no attestation to reduce provider burden.

Calculation and use of cost-to-charge ratios for certain imaging services. Consistent with AHA’s recommendation, CMS will not fully implement in CY 2020 a new methodology for calculating payment for MRIs and CT scans that would have resulted in an immediate and significant reduction in payment for these imaging services for hospitals, ASCs and physician offices.  Instead, to address concerns AHA raised in its comments, CMS is finalizing a two-year blended phase-n approach in which half the payment impact will be applied in CY 2020 and the full impact will be delayed until CY 2021.

Revisions to the Laboratory Date-of-Service Policy: Consistent with the AHA’s recommendation, CMS did not finalize two proposals that would have dramatically narrowed the current laboratory “date-of-service” (DoS) exception policy. Specifically, CMS will not change the “test result” requirement which would have required ordering physicians to somehow be able to predict in what settings the results of a patient’s laboratory test will be used in the future. In addition, CMS will not limit the exception only to advanced diagnostic laboratory tests, a proposal which would have reduced access and timely care for beneficiaries who need to have molecular pathology testing done. Instead, in the final rule, CMS only excluded from the exception molecular pathology testing performed by laboratories that are blood banks and blood centers from the existing exception to the laboratory DoS policy. This means that the hospital will always have to bill for these laboratory tests under arrangements and the blood bank or center performing the test will have to seek payment from the hospital.

CMS Delays Activating Certain OPPS Claims Edits. As urged by the AHA, CMS delayed system edits that would require hospitals and health systems with multiple locations to include on outpatient prospective payment system claims for services provided in off-campus provider-based departments the exact same provider address entered in the Medicare Provider, Enrollment, Chain and Ownership System for that location. The edits were originally scheduled to take effect in July.

HHS Rescinds Two Administrative Simplification Standards. As urged by AHA, HHS Oct. 25 issued a final rule rescinding the standard unique health plan identifier (HPID) and other entity identifier (OEID), as recommended by the National Committee on Vital and Health Statistics. The agency delayed enforcement of a 2012 final rule implementing the two administrative simplification standards in 2014 to consider the recommendation. HHS proposed rescinding the identifiers last December based on extensive input from the field, saying the identifiers would be costly and burdensome to implement and would not add value since the field can already route claims and other HIPAA transactions using existing payer IDs. AHA agreed with the agency and urged it to quickly rescind the identifiers.

New Technology Add-on Payments (NTAPs). As urged by AHA, CMS finalized its proposal to change the NTAP from 50% to 65% of the marginal cost of the case, capped at 65% of the cost of the technology. (For certain antimicrobial new technologies, CMS finalized increasing the NTAP from 50% to 75%.) This change will apply to all technologies approved for NTAPs, including Chimeric Antigen Receptor (CAR) T-Cell therapy, which is a cell-based gene therapy that genetically engineers a patient’s own T-cells to attack certain cancerous cells. Specifically, the policy will increase the maximum NTAP for CAR-T from $186,500 to $242,450 per case. The AHA is pleased that CMS is taking steps to address the extraordinarily high cost of CAR-T and other new technologies. While this policy is not a permanent solution, it will help in the short-term to reduce the financial burden shouldered by hospitals and health systems to ensure access to these life-saving therapies. We will continue to advocate for a longer-term approach to ensure access to CAR-T for Medicare patients.

Revisiting Compounding Rules. As urged by AHA, the United States Pharmacopeia postponed the official effective date of several new and revised standards pertaining to pharmaceutical handling until further notice while it reviews appeals to the standards. Those standards include general chapters <795>, <797> and <825>. In addition, due to the pending appeals, USP new general chapter <800> will remain official but only informational and will not be applicable until the appeal is complete. The AHA in November 2018 urged USP to the delay the official dates of both USP <797> and <800> due to expedited implementation and compliance concerns.  

Improving the Rural Community Hospital (RCH) Demo. As urged by AHA, the Center for Medicare and Medicaid Innovation reinstated the case-mix adjustment for the target payment amounts in the RCH program. This update restored millions of dollars in funding for these small rural hospitals, which are already financial vulnerable.

Protecting Home Health Payments. Successfully urged CMS to reduce its proposed behavioral offset for implementation of the redesigned home health payment system from -8.01% to -4.36%. While we support the general approach of the redesigned home health PPS, we remain concerned that CMS is proceeding with a prospective behavioral adjustment that is not based on actual evidence.


November 2019