Health Care Provisions In Fiscal Cliff Legislation

Although physicians averted a nearly 27% reduction in reimbursement under Medicare, the Fiscal Cliff Legislation included a number of changes in reimbursement that in additiona to the “doc fix.”  Many of those chanced will not make health care providers very happy.  For example, the Wisconsin Hospital Association reported on friday about “Troubling Hospital Cuts” that are included in the Fiscal Cliff legislation.  Although some important programs benefiting rural providers were extended, other provisions were included that will not be as positive for hospitals and some other providers.

Some of the health care provisions that were included in the Fiscal Cliff Legislation include:

  • Medicare contractors will be given an additional 2 years to pursue overpayments from providers.  Previous law limited the recovery time period to three years.  The Fiscal Cliff legislation extended the period that Recovery Audit Contractors and other contractors can look at to assess overpayments against providers.
  •  The exceptions process relating to outpatient therapy services cap is extended for an additional year. The cap is also extended to therapy furnished as part of outpatient services provided by a critical access hospital.
  • Limitations were placed on reimbursement for stereotactic radiosurgery.
  • A new competitive pricing system for Medicare diabetic supplies is created.
  • The temporary increase in ambulance costs un certain rural areas was extended for another year.
  • A reduction by 10% in reimbursement for many non-emergency ambulance transports.  The legislation also calls for the preparation of a study on existing cost reports for ambulance services furnished by hospitals and critical access hospitals.  The existence of this study provides evidence that future reforms in ambulance service reimbursement may be on the way.
  • The reduction in reimbursement for certain advanced imaging services is increased from 75& to 90%.
  • CMS is required to adjust bundled payments for end stage renal disease to reflect changes in utilization and current sales prices of certain drugs and biologicals. Implementation of the oral-only ESRD-related drug requirement was delayed through the end of 2015.
  • The Medicare-Dependent and Low-Volume Hospital programs were extended.  Although the extension in for only a short time, these important additional payments for rural hospitals are being extended.
  • Implementation of a system to recoup payments made to hospitals under that result from the shifting of PPS payments to MS/DRG system. The new provisions permit recoupment from hospitals for “upcoding” or “coding creep.” This change is estimated to cost hospitals nationwide around $10.5 billion to be recouped for 2014 through 2017.

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