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Legal Insights and Perspectives for the Healthcare Industry

As part of emergency funding to combat the threat of the 2019 Novel Coronavirus (COVID-19), last week Congress waived many of the telehealth restrictions for Medicare services in certain situations. This monumental change could—depending on how it is implemented—radically alter how telehealth is performed in connection with the government’s most ubiquitous healthcare program. In a win for telehealth advocates, Congress waived the originating site and geographic limitations for coverage of Medicare telehealth services, which heretofore have prevented most commercial forms of telehealth from reaching Medicare beneficiaries. Specifically, Congress allowed the secretary of HHS to waive the originating site and geographic restrictions in Social Security Act § 1834(m) in “emergency areas.” However, only practitioners (or their group practice partners) who have seen a particular patient and billed Medicare for such service within a three-year period are eligible to take advantage of this waiver. In other words, only a practitioner’s established patients who have received Medicare services in the past (and who are in a designated emergency area) are eligible for this program.

The Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare issues, recently finalized and approved a series of recommended updates on January 16 that include payment reductions for hospice and home health.

Hospice

MedPAC recommendation: Hold Medicare base payment rates for hospice steady with no increase, and wage-adjust and reduce the hospice aggregate cap by 20%.

MedPAC addressed its concerns that “hospice payment rates may be higher than needed to ensure appropriate access to care” and recommended no payment update for hospice in fiscal year 2021. With respect to the aggregate cap, MedPAC recommended a wage-adjusted cap to improve equity across providers because high-wage-index areas are more likely to exceed the cap than low-wage-index areas (e.g., a hospice in San Francisco will reach the aggregate cap more quickly than one in Topeka, Kansas). MedPAC further asserted that a 20% cap reduction will improve payment accuracy by focusing payment reductions on hospices with long stays and high margins, characterized by MedPAC in its December meeting as “disproportionately for-profit, freestanding, urban, small and newer entrants into the Medicare program.” If adopted, this would be the first major aggregate cap change in many years.

Home Health

MedPAC recommendation: Reduce the calendar year (CY) 2020 Medicare base payment rate for home health agencies by 7%.

While acknowledging major revisions to home health payments in 2020, including a new unit of payment (Patient-Driven Groupings Model (PDGM)), the removal of therapy as a payment factor, and a new case mix system, MedPAC officials cautioned in the December meeting that Medicare has a history of overpaying for home health “since the PPS was established.” To that end, MedPAC commissioners voted in January to recommend that Congress reduce the CY 2020 Medicare base payment rate for home health agencies by 7% for CY 2021. Noting “home health payment adequacy indicators are positive,” MedPAC officials concluded that their recommended reduction “should not affect the willingness of providers to serve beneficiaries.” However, the agency also recognized that it “may increase cost pressures for some providers.”

What’s Next?

The recommendations will be included in the MedPAC’s March 2020 report to Congress on Medicare payment policy. Mandated by law, these reports hold great sway with Congress and the Centers for Medicare and Medicaid Services (CMS). However, neither Congress nor CMS is required to follow the MedPAC recommendations.

The US House of Representatives unanimously voted to approve HR 647, the Palliative Care and Hospice Education and Training Act (PCHETA), on October 28. This legislation would amend the Public Health Service Act to increase the number of permanent faculty in palliative care at accredited medical, nursing, and social work schools and other programs (including physician assistant education programs); promote education and research in palliative care and hospice; and support the development of faculty careers in academic palliative medicine. PCHETA now moves to the Senate where a similar measure, S 2080, has been referred to the Committee on Health, Education, Labor, and Pensions. However, given the fast approaching deadlines for Congress to fund the government and reauthorize expiring programs, this legislation may not receive attention in the near term. We will continue to monitor the bill’s progress and keep you apprised of any new developments.

With bipartisan bills introduced in both the US House of Representatives and the US Senate on October 30, Congress appears ready to expand access to telehealth benefits for Medicare beneficiaries. The Creating Opportunities Now for Necessary and Effective Care Technologies for Health Act of 2019 (CONNECT Act) may eliminate significant barriers Medicare beneficiaries currently face in accessing and utilizing telemedicine. The CONNECT Act acknowledges the potential for telehealth services to promote the “three pillars” of healthcare—expanding access, improving quality, and reducing spending—particularly at a time where healthcare workforce shortages make it difficult for many Medicare beneficiaries to access the care they need.

The 116th Congress convened on January 3 with Democrats controlling the House for the first time since 2011 and Republicans maintaining their majority in the Senate. Divided government typically constrains Congress’s ability to pass broad, new legislative initiatives, while also limiting the scope of the legislation that does pass. Healthcare policy, especially, has been a point of partisan contention in the past. However, there are several areas where some degree of cooperation is possible in the 116th Congress and will likely impact the healthcare industry and health policy in 2019.