Washington Update from AHCA’S Mark Parkinson

We are passing along selected text from a communication from American Health Care Association President Mark Parkinson sent on December 11th to provide members with an update on year-end activities in Washington, DC.  It’s crunch time, with Congress working on the budget, the doc fix and therapy issues before Members head home for the year.  Although this is still a very fluid situation, this is where it stands as of Wednesday afternoon:

The Budget
For the first time in several years, it looks like Congress may actually pass a budget.  Congressman Ryan and Senator Murray have succeeded in putting together a budget deal that will go to a vote in the House tomorrow.  This budget deal would:

  • End the need to pass continuing resolutions every few months and instead fund the government through the end of next year;
  • Lift portions of the defense sequester next year;
  • Lift portions of the limits on spending by various agencies.

It does not eliminate the two percent sequester cut to all Medicare providers that went into place earlier this year.

Congress would pay for the budget deal by:

  • Increasing Transportation Safety Administration (TSA) fees from $2.50 to $5.00 per ticket;
  • Making changes to federal pensions;
  • Extending the sequester, currently scheduled to end in 2021, through 2022 and 2023.

The practical impact to us is that our two percent cut would continue in 2022 and 2023.  However, there are no immediate pay-fors from our sector.

Doc Fix (Medicare Part B)
Separately, there have been negotiations for a short-term doc fix that would extend for three months until March 31, 2014.  A proposed patch sparing Medicare physicians a 24 percent pay cut next year would cost about $8.7 billion, the Congressional Budget Office said Wednesday.  The House measure would provide doctors with a 0.5 percent payment update through March 2014 while allowing Congress several months to overhaul Medicare's flawed physician payment system.

The post-acute care sector is currently not the pay-for in this short-term doc fix.  The cost for the three month doc fix is $8.2 billion, paid for in the following ways:

  • Rebasing disproportionate share hospital (DSH) payments to save $4 billion;
  • Establishing stricter criteria for Long Term Acute Care Hospitals (LTACHs) to save $3 billion;
  • Other miscellaneous savings of $1.2 billion.

AHCA is evaluating the LTACH language, and believes that if this passes it could result in additional post-acute volume to our members that are currently providing services in markets with LTACHs.

Therapy Caps
The three month extension of the doc fix also extends the therapy cap exception for three months.  More exciting is the possibility of both a permanent doc fix and a permanent lifting of the therapy caps.  Both the House Ways and Means Committee and the Senate Finance Committee are going to take these issues up on Thursday.  Both are likely to approve permanent doc fixes, leaving the pay-for discussion for next year.  The hope is that we will come back in January and put together acceptable pay-fors and get this passed, and these issues over, once and for all.  We are also pleased that the Senate version includes significant relief in the manual review process of claims over $3,700.

It’s Not Over Yet
There is still much work to do.  We have members in town from 12 states lobbying for us, as I write this.  We have political events for most of leadership over the next 48 hours, and all of us are working very hard to close this year out in a way that you deserve.  We are hopeful that we will succeed and we will be able to send you a favorable final report in the next few days.