Federal UpdateJohn T. Supplitt, Sr. Director

February 24, 2017

Agenda

1.Political Environmenta) New Congressb) New Administration

2.Repeal and Replace3.Legislative Advocacy4.Regulatory Policy5.Ensuring Access

Political Environment

The 115th CongressRepublican House Leadership

Speaker of the House: Paul Ryan (R-WI)Majority Leader: Kevin McCarthy (R-CA)Majority Whip: Steve Scalise (R-LA)Conference Chair: Cathy McMorris Rodgers (R-WA)

Republican Senate Leadership• Majority Leader: Mitch McConnell (R-KY)• Whip: John Cornyn (R-TX) • Conference Chairman: John Thune (R-SD) • Policy Committee Chairman: John Barrasso (R-WY) • Conference Vice Chairman: Roy Blunt (R-MO)

The 115th Congress

Committee on FinanceOrrin Hatch, Chairman

Subcommittee on Health CarePat Toomey, Pa., ChairmanChuck Grassley, IowaPat Roberts, Kan.Michael B. Enzi, Wyo.John Thune, S.D.

Richard Burr, N.C.Johnny Isakson, Ga.Rob Portman, OhioDean Heller, Nev.Bill Cassidy, La.

Committee of Jurisdiction for HealthU.S. Senate Republicans

The 115th Congress

Committee on Ways & MeansKevin Brady TX-8

Subcommittee on HealthPat Tiberi, OH 12, ChairmanSam Johnson, TX 3Devin Nunes, CA 22Peter Roskam, IL 6Vern Buchanan, FL 16Adrian Smith, NE 3Lynn Jenkins, KS 2Kenny Marchant, TX 24Diane Black, TN 6Erik Paulsen, MN 3

Committees of Jurisdiction for HealthU.S. House Republicans

Committee on Energy and CommerceGreg Walden, OR 2

Subcommittee on HealthMichael Burgess, TX 26 - ChairmanBrett Guthrie, KY 2Joe Barton, TX 6Fred Upton, MI 6John Shimkus, IL 15Tim Murphy, PA 18Marsha Blackburn, TN 7Cathy McMorris Rodgers, WA 5Leonard Lance, NJ 7Morgan Griffith, VA 9Gus Bilirakis, FL 12Billy Long, MO 7Larry Bucshon, IN 8Susan Brooks, IN 5Markwayne Mullin, OK 2Richard Hudson, NC 8Chris Collins, NY 27Buddy Carter, GA 1

The Trump Administration

Rep. Mick Mulvaney, Director OMB Tom Price, M.D., Sec. HHS Seema Verma, Administrator CMS

Tax reform Infrastructure Trade reform Regulatory reform Immigration ACA … repeal and replace

Priorities of the New Administration

ProcessReconciliation• FY 2017 instructions• FY 2018 instructions• Byrd rule implications

Procedure Parliamentary rules

Elizabeth MacDonoughSenate Parliamentarian

Power of the Parliamentarian

Fiscal Cliffs and FY 2018Mid-January Congress adopts FY 2017 budget resolution

with reconciliation instructions to repeal ACA

January 27 Committees must report 2017 reconciliation bills

February 20 Target date for reconciliation bill repealing ACA to White House

March 15 DEBT CEILING SUSPENSION EXPIRESApril 28 CONTINUING RESOLUTION EXPIRES

May ?? Pres. Trump sends FY 2018 budget to Congress

June 30 Congress adopts budget resolutionSeptember ?? Committees must report FY 2018

reconciliation billsSeptember 30 FY 2018 reconciliation bill to White HouseOctober 1 FY 2018 begins

Repeal & Replace

2017 Schedule• ACA Repeal & Replace

– 2017 Reconciliation – Replacement Proposals

• 2018 Reconciliation – Tax Reform

• Medicaid• Funding the Government (April 28) • Debt Ceiling (March 15)• CHIP Reauthorization (Sept 30)• Other Priorities - Infrastructure

AHA Principles for ACA Re-examination• Maintain coverage for those covered• Replacement of coverage should be simultaneous

with any repeal, protecting people’s coverage• Any effort to repeal should restore funding

reductions to hospitals • Support continued efforts to transform delivery

system from FFS to FFV using coordinated care and integrated delivery mechanisms

Affordable Care Act

Impact of Repeal on HospitalsThe financial impact on hospitals include: A net negative impact of $165.8 billion regarding

coverage losses; A loss of $289.5 billion in Medicare inflation updates if

the payment reductions in the ACA are not restored; and

Suffering $102.9 billion in cuts if the ACA’s Medicare and Medicaid DSH payment reductions are not restored.

Repeal and ReplaceThe emerging GOP blueprint includes Republican mainstays like: • Expanding Health

Savings Accounts• Enacting high-risk

insurance pools• Reforming Medicaid• Tax credits to help

Americans buy insurance policies.

Repeal and Replace

Legislative Advocacy

Five objectives:1. Reduce the regulatory

burden;2. Enhance affordability and

value;3. Continue to promote

quality and patient safety;4. Ensure access to care and

coverage; and 5. Continue to advance health

system transformation and innovation.

Letters to the President-elect

Make Medicare extensions from SGR permanent:• Medicare-dependent Hospital

(MDH) program; • Enhanced adjustment for

certain low-volume hospitals• Ambulance add-on payments

for ground ambulance and super-rural areas,

• Therapy cap exceptions process, and

• Rural home-health add-on

2017 AHA Rural Advocacy Agenda

2017 Rural Advocacy AgendaReintroduce fixes for rural hospitals:• Extend enforcement

moratorium for direct supervision (S. 243/H.R. 741)

• Remove the 96-hour condition of payment

• 340B program stabilization• IT and meaningful use stage 3• Care coordination• Vulnerable community models

Telehealth. Expand Medicare coverage and payment and support research

Behavioral Health. Improve access to services, address workforce issues; and improve parity.

Medicare DSH. Relieve hospitals from cuts to Medicare disproportionate share hospitals.

CAH payments. Ensure CAHs are paid 101 percent of costs by Medicare and are paid at least the same by Medicare Advantage plans.

CAH designation. Maintain CAH designation, as currently defined.

IPAB. Exempt CAHs from the Independent Payment Advisory Board.

Provider taxes. Allow claim the full cost of provider taxes as allowable costs.

2017 AHA Rural Advocacy Agenda

Rural Advocacy Resources

Rural Advocacy Agenda

Rural Infographics

Action Alerts

Social Media

www.aha.org/RuralAdvocacy

AdvocacyUseful Tips

• Coordinate with your Government Relations Representative if a system hospital and State Association

• Tell Your Hospital Story• Use Hospital-Specific Data• Useful Anecdotes that Help Make the Case• Build a Relationship with the Congressional

Staff• Offer Yourself and the Hospital Team as a

Resource

Rural Hospital Policy Forum 2017July 20, 2017

Annual AHA Rural Hospital Policy Forum on Capitol Hill

Regulatory Policy and Advocacy

AHA identified 33 rules including;• Suspending star ratings,• Canceling stage 3 of

meaningful use,• Rescind 96-hour rule,• Allow visiting specialists

to share space in HOPDs,• Suspend e-CQM• Remove faulty quality

measures• Expand telehealth

coverage

Regulatory Relief Actions

Regulatory Highlights• Two-midnight policy • ALJ litigation decision• Medicare Outpatient Observation Notice• MACRA Final Rule• Site Neutral Regulations• Hospital Co-Location Issue• Hospital/CAH Conditions of

Participation• 340B Program • CJR and Cardiac Bundles• Regulatory Outlook - Freeze

Two-midnight policy• Eliminates two-midnight cut

– Prospective and retrospective elimination provides $3.1 Billion to hospitals over 10 years

• Policy changes, effective Jan. 1, 2016– Stays expected to cross at least two midnights are

inpatient– No changes to two-midnight presumption or benchmark– Stays less than two midnights may now be payable as

inpatient “based on the clinical judgment of the admitting physician and medical record support for that determination”

Regulatory Highlights

ALJ litigation decision• Decision issued on Dec. 5, 2016• HHS ordered to eliminate the backlog

of Medicare claims appeals pending at the ALJ level within four years – 30% by Dec. 31, 2017; – 60% by Dec. 31, 2018; – 90% by Dec. 31, 2019; and – 100% by Dec. 31, 2020

• Court upholds timeline on Feb. 9• Appeals settlement reopened

Regulatory Highlights

Medicare Outpatient Observation Notice

Outpatient Observation Services

MACRA abolished the SGR formula for Medicare physician payment and replaced it with:• Stable payment updates

physician fee schedule• Two-track payment system

effective in 2019:1. Merit-Based Incentive

Payment System (MIPS), and

2. The Alternative Payment Model (APM) track

Medicare Access & CHIP Reauthorization Act

AHA MACRA resources: http://www.aha.org/macra

Regulatory HighlightsMACRA Final Rule

• Started Jan. 1, 2017, clinicians “pick their own pace”

• Few advanced APMs qualify for incentives in 2017

• More data reported in 2017 means better chance of payment increase

• Fewer clinicians than expected subject to MIPS in the first year

• Expectations will ramp up over time

Site Neutral Regulations• Outpatient PPS final rule implements site-

neutral provisions – Establishes site-neutral payment rates for certain off-campus

provider-based hospital outpatient departments (HOPDs)– In 2017, these HOPDs will be paid under the physician fee

schedule at newly established rates (generally 50 percent of the outpatient PPS rate)

• Legislative extension for effective date for some HOPDs

• Does not apply to CAHs

Regulatory Highlights

Hospital Co-Location Issue• A number of current regulations affect how

hospitals may share:

• Space• Services• Staff

• CMS has expressed several precise interpretations of these rules that differ from prior understanding

• Status update

Satellite rules, HwH, CoPs, provider-based rules

These rules lack specificity

Regulatory Highlights

Hospital/CAH Conditions of Participation

• Implement antibiotic stewardship programs• Augment infection prevention and control

regulation• Update QAPI requirements, including QAPI for

CAHs;• Make changes related to the content of hospital

medical records;• Allow qualified dieticians/nutrition professionals in

CAHs to order patient diets• Require hospitals and CAHs to implement written

policies to prohibit discrimination and to inform patients of their right to be free from discrimination.

340B Program

CJR and Cardiac BundlesComprehensive Care for Joint Replacement

(CJR) Cardiac Bundle Payment Models• Acute care hospitals control the bundle• Required of most hospitals in certain markets• Hospitals would be responsible for

quality and costs for all Medicare PartA & B services for 90 days post discharge

• Heart attack and cardiac bypass surgery services• Surgical treatments for hip and femur fractures

beyond hip replacement• New bundles go into effect July 2017

2017 Regulatory Outlook

• Regulatory freeze- New regulations- Regulations currently at Federal Register- Those that have not taken effect

• Regulatory relief- One in, Two out

Executive Orders

Regulatory Tracker

Ensuring Access to

Health Care

Confirm the characteristics and parameters of vulnerable rural and urban communities

Identify emerging strategies, delivery models and payment models for health care services in rural and urban areas

Identify policies/issues at the federal level that impede, or could create, an appropriate climate for transitioning

AHA Board Task Force ReportEnsuring Access to Health Care

in Vulnerable Communities Task Force

AHA Board Task Force Report

AHA Board Task Force Report

Public Policy Changes• Creation of new Medicare payment methodologies and

transitional payments;• Creation of new and expansion of existing federal

demonstration projects; • Modification of existing Medicare Conditions of Participation to

allow for the formation of the strategies;• Modification of laws that prevent integration of health care

providers and the provision of health services;• Modification of the existing Medicare payment rules that

stymie health care providers’ to coordinate care; and• Expansion of Medicare coverage and payment for telehealth.

To learn more about the work of the AHA Task Force on Ensuring Access in Vulnerable Communities, please visit www.aha.org/ensuringaccess.

AHA Board Task Force Report

Task Force Action Plan

Draft schedule for the release of new tools:

• Jan – Indian Health Service• Feb – Inpatient/Outpatient Transformation Model• Mar – EMC/FSED• April – Virtual care strategies• May – Social determinants of health• June – Global budgets• July – Frontier health system• Aug – Rural hospital – Rural health clinic• Sept – Urgent care

Task Force Action Plan

Discussion

Questions and Comments

Contact Information

John SupplittSenior Director

AHA Constituency Sections312-422-3306

jsupplitt@aha.org