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    Edwards Wildman Client Advisory - House Subcommittee Approves Draft of Permanent “Doc Fix”; CMS Imposes Temporary Moratoria on Home Health Agencies and Ambulance Suppliers and Providers

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    HOUSE SUBCOMMITTEE APPROVES DRAFT OF PERMANENT “DOC FIX”


    On July 23, the U.S. House of Representatives’ Energy and Commerce Health Subcommittee approved draft legislation that would reform Medicare's much-criticized physician payment system. The legislation is scheduled to be considered by the full committee on July 31. The Energy and Commerce Committee posted a video on its website titled, “Bipartisan Voices to #FixSGR.”

    Medicare Fee Schedule payments are currently determined by a Sustainable Growth Rate (SGR) formula that was adopted in the Balanced Budget Act of 1997, which the Centers for Medicare & Medicaid Services (CMS) is required to follow. Each year, calculation of physicians’ Medicare reimbursement for the following year using the formula results in substantial proposed cuts, which are routinely overridden by lawmakers in the annual ritual known as the “doc fix.” Many healthcare organizations, including the American Medical Association, Medical Group Management Association and American Hospital Association, have repeatedly urged Congress to find a permanent solution to the annual SGR problem.

    The new proposed legislation would repeal the SGR formula in favor of a fee-for-service payment system with small (1/2 of 1%) annual payment increases. Beginning in 2019, physicians and other providers would be required to report quality measures, based on which their Medicare payments would be adjusted up or down by up to an additional 1%. Providers also would have the option to deliver care through alternative payment models aimed at improving care coordination and quality of care.

    The Congressional Budget Office has said that freezing physicians’ Medicare reimbursement and preventing SGR-related cuts for 10 years would cost $139 billion. Although this cost is much lower than previously estimated, it is not clear how it would be funded.


    CMS IMPOSES TEMPORARY MORATORIA ON HOME HEALTH AGENCIES AND AMBULANCE SUPPLIERS AND PROVIDERS

    On July 26, CMS announced the imposition of temporary moratoria on the enrollment of home health agencies in the Miami and Chicago areas, and on the enrollment of new ambulance suppliers and providers in the Houston area. The unprecedented actions were authorized by a section of the Affordable Care Act that gives the Secretary of the Department of Health and Human Services (HHS) the ability to impose a moratorium when deemed necessary to prevent or combat fraud, waste, or abuse under Medicare, Medicaid, or the Children's Health Insurance Program (CHIP).

    The home health moratoria cover Miami-Dade County, Florida and some surrounding areas, and Cook County, Illinois and some surrounding areas. The ambulance moratorium covers Harris County and surrounding counties in Texas.

    In its release, CMS noted that each of the affected areas “has experienced intense, sustained criminal prosecution activity with respect to the provider and supplier types subject to these moratoria.” Because of the migratory and transitory nature of healthcare fraud, the temporary moratoria are expected to be an effective way to combat the high risk of fraud in these provider and supplier types and geographic areas.


    NEXT STEPS

    Edwards Wildman’s Healthcare Practice Group will continue to monitor healthcare news from Capitol Hill, CMS, HHS, and other federal and state agencies, and will bring you timely updates as new developments occur. 

    Edwards Wildman Palmer LLP is pleased to provide regular updates on issues affecting the Healthcare industry. Our lawyers not only provide sophisticated legal services to a broad array of clients in the healthcare industry, we also monitor and analyze federal and state legislative and regulatory processes to ensure that our clients are informed of government actions and initiatives.

    Should you have any questions on the content of this advisory, or wish to discuss any other healthcare related issue, please contact those linked above or call the Edwards Wildman Palmer LLP attorney responsible for your affairs.

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