The House Ways and Means Committee this week passed the AHA-supported Helping Hospitals Improve Patient Care Act, H.R. 5273, bipartisan legislation that would adjust Medicare's readmissions program to factor in patients’ socioeconomic status and allow more off-campus hospital outpatient departments (HOPD) currently under construction to continue receiving payment at outpatient prospective payment rates.

The bill, which is fully paid for with spending offsets, also would provide a five-year extension of the Rural Community Hospital Demonstration program.  

The Hospital Readmissions Reduction Program, a part of the Affordable Care Act, reduces Medicare reimbursements for hospitals deemed to have excess readmissions. Hospitals are slapped with a reduction in payment of up to 3% if their 30-day readmission rates exceed what was expected for heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease and hip and knee replacement.

Hospitals contend that Medicare needs to account for socioeconomic and other social risk factors beyond hospitals’ control when measuring hospitals’ performance in the program.

Under the legislation, readmissions penalties would be adjusted by comparing hospitals with similar populations of Medicare and Medicaid patients. Those adjustments would eventually change to a “more refined” method based on federal analysis required by the Improving Medicare Post-Acute Care Transformation Act.

Introduced by subcommittee chairman Rep. Pat Tiberi, R-Ohio, and ranking member Jim McDermott, D-Wash., H.R. 5273 also attempts to address hospital concerns on payment changes made by the Bipartisan Budget Act, P.L. 114-74, which was enacted into law last year.

The law created site-neutral payments for new provider-based HOPDs – those that come into being after the Nov. 2 enactment of the legislation. The new payment policy takes effect Jan. 1, 2017.

Under Section 603 of the budget law, off-campus outpatient facilities operating before Nov. 2, 2015 are “grandfathered” and can continue to be paid at the HOPD rate, while newer facilities are capped at the lower physician payment or ambulatory surgical center rate. H.R. 5273 would move the grandfather date through the end of 2016, or 60 days after enactment, whichever is later.


Support for HOPD, equity, rural provisions. A day before the committee’s markup, the AHA expressed support for the legislation’s HOPD, equity and rural hospital provisions.

“For those select HOPDs that would qualify, this legislation is a significant relief, and we are supportive of the legislation on their behalf,” wrote AHA Executive Vice President Tom Nickels. ”Unfortunately, because hospital construction projects take a long time to bring to completion, some HOPDs that were underway on Nov. 2, 2015 will not be completed by Dec. 31, 2016 in order to qualify for the grandfather.”

Nickels said the association wants to work with the committee to “find additional ways to address this issue.” The AHA recognizes that “by taking this good first step in H.R. 5273, taking a future step to address these other facilities would be made far more possible,” he added.

Among other provisions, the bill, would delay the Centers for Medicare & Medicaid Services’ authority to terminate Medicare Advantage contracts based on star ratings for three years, and allow cancer hospitals to continue being paid at Medicare’s cancer hospital rates at new off-campus locations