Memo - Congress funds government, passes 2-year budget ...
M E M O R A N D U M To:ACRMFrom:Peter Thomas, Peggy Tighe, Leif Brierley, Reva Singh and Michael LewisDate:February 9, 2018Re: Congress Passes Comprehensive Budget Agreement Including Significant Medicare and Health Policies, Funds Government Through March 23rdSummaryOn Friday, February 9, after a brief federal government shutdown, the House and Senate passed a two-year budget deal and temporarily extended federal funding through March 23, 2018. The 652-page bill also includes a number of significant Medicare policies known as “Medicare extenders” as well as related health policies. President Trump signed the agreement earlier this morning, boosting federal spending by nearly $300 billion over the next two years and suspending the federal debt ceiling for a year. The Senate voted 71-28 in favor of the comprehensive agreement. The House voted after the Senate, passing the bill 240-186 despite opposition from a number of Democrats and Republicans, each opposing the bill for separate reasons. The brief shutdown occurred despite Congressional leaders having reached a bipartisan agreement on the bill earlier in the day Thursday, as Senator Rand Paul (R-KY) held the floor for several hours in protest of the measure’s expansion of federal spending caps, a policy he opposes on principle. In the House, Minority Leader Nancy Pelosi (D-CA) used an eight-hour long floor speech on Wednesday—the longest in history—to protest the bill’s lack of inclusion of provisions to address the Deferred Action for Childhood Arrivals (DACA) program, which is set to expire in early March. Leader Pelosi, despite having negotiated the budget package, encouraged Democrats to vote against the measure because of the lack of assurances from Speaker of the House Paul Ryan (R-WI) to hold a DACA vote in the House. Last month, in the Senate, in exchange for Democratic support of the previous continuing resolution (CR), Senate Majority Leader Mitch McConnell (R-KY) agreed to hold a debate and vote on an immigration bill, which was enough for Senate Democrats to agree to another vote on the House-passed CR. Leader Pelosi sought similar assurances from Republicans in the House, but has yet to receive a formal commitment. In addition, conservative Republicans expressed strong opposition to the expanded government spending. Despite this opposition, Congress passed the spending package and the measure was signed into law. The bill sets what is expected to be the last short-term deadline for Congress to finalize appropriations for FY 2018, which ends on September 30, 2018. In addition to reopening the government through March 23, the new law:Sets expanded budget caps for FY 2018 and FY 2019Military spending increases by $80B in FY 2018 and $85B in FY 2019, for a total of $629B and $647B respectivelyNon-defense discretionary spending increases by $63B and $68B for FY 2018 and FY 2019, for a total of $579B and $597B respectively Eliminates the threat of across the board, sequester cuts for the next two yearsProvides for $6B over two years to fight the opioid epidemic and improve mental healthAuthorizes $7 billion for community health centers of over two yearsExtends the Children’s Health Insurance Program (CHIP) for 10 years, four years longer than under the current CR$5.8 billion for child care development grants$4 billion to rebuild veterans hospitals and clinics$2 billion in increased funds for the National Institutes of HealthCloses the Medicare Part D “donut hole” for beneficiaries by 2019Repeals the Independent Payment Advisory Board (IPAB)Provides $89 billion for disaster relief, andSuspends the federal debt limit for one year, until March 1, 2019The bill increases federal spending by $320 billion over ten years, according to the Congressional Budget Office (CBO). However, the CBO found that the health provisions in the bill are more than offset by the health provisions that save money, totaling $38 billion. In related developments, President Trump is expected to release his FY 2019 budget proposal next week, with an addendum that reflects the updated spending caps.The remainder of this memorandum provides an overview of selected health care provisions contained in the bill.Key Policies Contained in the Bill:Repeal of Medicare Therapy Cap: The bill permanently repeals the caps on Medicare-covered outpatient therapy services, including occupational therapy services and the separate cap on physical therapy and speech-language pathology services combined. The new policy includes a lower threshold for targeted medical review, which will be decreased from $3,700 to $3,000. The repeal is retroactive to January 1, 2018. Previously, Medicare beneficiaries requiring extensive therapy were required to request an exception to the dollar-amount cap on covered therapy services in order to continue receiving therapy.Home Health Payment Reform: The bill directs the Secretary of Health and Human Services to implement a budget-neutral, 30-day episode for payment of home health services effective January 1, 2020. The current home health prospective payment system is based on a 60-day episode.Home Health Eligibility: The bill also permits the Secretary of Health and Human Services to utilize the medical records of home health providers, in addition to those of physicians, to determine the eligibility of Medicare beneficiaries for home health services.Payment Settlement for Home Health Services: Currently, the Medicare appeals backlog for home health services—and all Medicare claim denials—is at an unsustainable level. The bill vests the Secretary of Health and Human Services with the specific authority to enter into a voluntary settlement with home health providers to help clear the backlog.Cardiac Rehab: The bill allows new guidelines for qualification of intensive cardiac rehabilitation (ICR) providers.Independence at Home Extended: The Medicare Independence at Home demonstration program receives a two-year extension under the continuing resolution. Independence at Home allows eligible Medicare beneficiaries with high needs and chronic conditions to receive home-based primary care, eliminating ER visits, transportation costs, hospitalizations, and nursing home use. In the first two years, the program yielded $32 million in cost savings for Medicare.Telehealth for Home Dialysis: The new law changes Medicare rules to permit the use of telehealth for physician monitoring of home dialysis patients.Home Infusion Therapy: The 21st Century CURES Act changed the way Medicare pays for home infusion services and created a new benefit for home infusion education and services. However, the payment change became effective last year (2017), while the new benefit doesn’t take effect until 2021. The new law bridges this gap by authorizing a transitional Medicare payment for home infusion education and services, set at the base code plus three additional units.Clinical Documentation for Orthotics and Prosthetics: The new law recognizes the clinical notes of the orthotist or prosthetist as part of the patient’s medical record for purposes of determining medical necessity of Medicare-covered orthotics and prosthetics.Accreditation of Dialysis Facilities: Currently, dialysis providers are not allowed to utilize outside accreditation agencies to obtain certification for Medicare participation, while other providers can do so. The new law allows dialysis facilities to seek outside accreditation from Medicare-approved agencies.Coverage of Speech-Generating Devices: The new law permanently repeals the Medicare rental cap on speech-generating devices and reclassifies them as “routinely purchased durable medical equipment,” thereby eliminating the 2018 sunset provision in the Steve Gleason Act of 2015.Extensions for community health centers, the National Health Service Corps, and teaching health centers that operate GME programs: This section extends the funding for Community Health Centers ($3.6 billion), the National Health Service Corps ($310 million), and the Teaching Health Center Graduate Medical Education Program ($126.5 million), each for two years (FY 2018 and FY 2019). Payment for early discharges to hospice care: This section adds hospice as a setting of care to the post-acute care transfer policy. The policy provides that if patients are transferred to hospice after a short stay in the hospital, the hospital will be paid less. The policy is set to begin October 1, 2023. Home health market basket reduction: This section requires the FY 2020 market basket update for home health agencies to be 1.4%. Without this section, the home health market basket would be higher.Reduction for non-emergency ESRD ambulance transports: This section increases the current law payment reduction for non-emergency dialysis ambulance transports to 23%. Extension of target for relative value adjustments for misvalued services and transitional payment rules for certain radiation therapy services under the physician fee schedule: This section extends the policy to identify misvalued codes in the physician fee schedule for one more year. This policy is an extension of a 2010 Congressional mandate that CMS develop metrics to identify codes in the physician fee schedule that were misvalued. Payment for outpatient physical therapy services and outpatient occupational therapy services furnished by a therapy assistant: This section pays for Part B therapy services at 85% of the rate that would have otherwise been paid for a physician if the services are provided, at least in part, by a physical and occupational therapy assistant who is acting within their state license and Medicare supervision requirements. Changes to long-term care hospital payments: This section delays the current law on blended payment rates for two years and instead implements the FY 2017 blended rate of 50% for site neutral and 50% for Long-Term Care Hospitals (LTCH). The current, now delayed, law states that site neutral discharges for LTCHs are reimbursed a blend of the site neutral payment rate, 75%, and the LTCH rate, 25%. This section also reduces the LTCH market basket update by 4.6% for FY2018 through FY2026.Treatment of lottery winnings and other lump-sum income for purposes of income eligibility under Medicaid: This section requires that a state Medicaid program consider lottery winnings of at least $80,000 for purposes of determining an individual’s eligibility for state Medicaid under Modified Adjusted Gross Income (MAGI) rules. Impacted individuals will still qualify if denial would cause undue medical or financial hardship. Modifying reductions in Medicaid DSH allotments: This section eliminates Medicaid DSH reductions for FY 2018 and FY 2019, which are a combined $5 billion. The $4 billion DSH reduction for FY 2020 remains. The bill adds $6 billion in additional DSH reductions for FY 2021 through FY 2023, to offset the FY 2018 and FY 2019 eliminations. Prevention and Public Health Fund: This section adjusts funding for the public health fund to the following levels: FY 2018 and FY 2019: $900 million; FY 2020 and FY 2021: $1 billion; FY 2022 and FY 2027: $1.1 billion.CHIP Funded for Additional 4 Years: The part of the new law includes an additional four years of funding for the Children’s Health Insurance Program (CHIP). Two previous CRs, passed on December 22, 2017 and January 22, 2018, had provided funding for CHIP through March 2018 originally, and then extended it through an additional six years. With the addition of four more years, States now have even longer-term assurance of CHIP funding, a program which covers an estimated 9 million low-income children nationwide. Unresolved IssuesWhile the new law provides much-needed relief across a number of Medicare priorities, Congress has again delayed action on key Affordable Care Act (ACA) relief measures, including:ACA Stabilization: In December, Senator Susan Collins (R-ME) committed to vote for the tax reform bill in exchange for a promise from Senate Majority Leader Mitch McConnell (R-KY) that the Senate would take up ACA stabilization measures proposed by Senators Lamar Alexander (R-TN) and Patty Murray (D-WA), as well as Senators Susan Collins (R-ME) and Bill Nelson (D-FL). This package of ACA provisions would shore up the individual insurance markets by resuming cost-sharing reduction (CSR) payments to insurers for high-risk enrollees and addressing state reinsurance programs to smooth over the costs of high users of care. The bill did not address ACA stabilization.The fate of so-called “Dreamers” under the DACA program remains to be addressed after President Trump announced late last year that he would end the program by March of 2018, unless Congress acts. ConclusionAfter many months of stalemates and high stakes negotiations, an agreement on the budget caps allowed many long-delayed legislative provisions to be attached to this massive continuing resolution. Although the process continues to be less than desirable, the outcome is highly significant. For those whose priorities did not make it into this bill, the omnibus spending bill expected by March 23rd is another vehicle that presents additional legislative opportunities. ................
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