Legislative Update: March 26, 2019

Congress returned to town yesterday after a one-week recess. They will now be in session for about three weeks until the Passover and Easter holidays.

During this work period, there will be a continued focus on the President’s proposed federal budget for fiscal year 2020. The House Budget Committee is slated to hold a hearing on the President’s budget on March 26. The Senate Budget Committee will hold similar hearings over two days, beginning on March 27.

At the same time, Committees of jurisdiction continue to hold hearings and legislative markups related to health care legislation. The Health subcommittee of the House Energy & Commerce Committee plans to consider a slew of bills related to prescription drug pricing and also proposals to increase access to health insurance coverage. This hearing will be on March 27.

Also on the docket is a House Education & Workforce Committee hearing to explore the issue of “surprise medical billing.” The date has not been announced for this hearing, but is expected the first week of April.

While Congressional efforts continue, the Medicare Payment Advisory Commission (MedPAC) released its annual March report to Congress on March 15. 

Each year, MedPAC is required to assess and make recommendations to Congress on Medicare payment adequacy related to each payment system. As part of this work, MedPAC evaluates beneficiaries’ access to care, quality of care, providers’ access to capital, Medicare payments and providers’ costs, and then makes payment policy recommendations based on these findings.

Based on this analysis, MedPAC found that Medicare profit margins for freestanding home health agencies were 15.2% in 2017 and could rise to 16% in 2018. Given this, MedPAC recommended that Congress should reduce the calendar year 2020 Medicare base payment rate for home health agencies by 5% as a way to align provider costs with Medicare payment rates.

For hospice care, MedPAC recommended that Congress should reduce the fiscal year 2019 Medicare base payment rate for hospice services by 2% as a way to bring payment rates closer to costs. The Medicare profit margin for hospice was 10.9%, up from 9.9% in 2015. The projected margin in 2019 is 10.1%. 

Finally, the Centers for Medicare and Medicaid Services (CMS) released updated information on the “Review Choice Demonstration” program for home health services. This program is a modified version of the Pre-Claim Review Program that was paused in April 2017. Under the Review Choice Program, providers in selected states will be subject to either pre-claim review, post-claim review, or can opt for minimal post-payment review with a 25% reduction for all home services.

CMS has indicated that this demonstration will begin in Illinois and that final details on the program will be published “soon,” with no further detail provided. Over time, Texas, North Carolina, Florida, and Ohio are also slated to join the demonstration.

ElevatingHOME will provide more information on the Review Choice Demonstration as it becomes available.

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