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Government Relations Update – October 1, 2013

Pennsylvania Issues


Pennsylvania General Assembly: The Pennsylvania House and Senate reconvened on September 24, 2013, and both chambers are expected to debate the possible expansion of the Pennsylvania Medicaid program. As previously reported, the federal Medicaid program is scheduled to expand significantly on January 1, 2014 pursuant to the Patient Protection and Affordable Care Act (PPACA), unless states elect to opt out. The federal government will match additional state funding for the first three years following the expansion and then gradually reduce the matching rate to 90% by 2020. Governor Tom Corbett (R-PA) has announced that Pennsylvania will reject the expansion plan, unless it includes job search requirements for, and cost sharing (i.e., co-pays) by, Medicaid enrollees. The Hospital & Healthsystem Association of Pennsylvania (HAP) asserts that expansion will strengthen the economy, decrease hospital uncompensated care costs and improve the quality of life for the uninsured.

New Jersey Issues


United States Senate Special Election: Senator Frank Lautenberg (D-NJ) passed away on June 3, 2013. A special primary election was held on August 13, 2013, and Republican Steve Lonegan and Democrat Cory Booker were the successful candidates. They will face each other in a special general election on October 16, 2013. Mr. Lonegan is the former mayor of the Borough of Bogota. Mr. Booker is the mayor of the City of Newark. The winner of the general election will serve until January 2015 and will need to run again in November 2014 to serve a full six-year term.

Federal Issues


Proposed Changes to Telehealth Services: Medicare beneficiaries are currently eligible for telehealth services only when those services are provided from an originating site located outside of a Metropolitan Statistical Area (MSA) or within a rural Health Professional Shortage Area (HPSA) as designated by the Public Health Services Act (PHSA). Earlier this year, the Office of Management and Budget (OMB) updated the MSAs based on the 2010 census data. As a result, nearly 100 counties lost their non-MSA designation, and Medicare beneficiaries who receive care in these counties are no longer eligible for telehealth services. On July 19, 2013, the Centers for Medicare and Medicaid Services (CMS) published its proposed Physician Fee Schedule for calendar year 2014, which would address the loss of coverage in some counties and expand telehealth coverage in other ways, too.

Because the PHSA does not specifically define a “rural” HPSA designation, CMS previously interpreted it to mean an area that is not located in a MSA. This interpretation limited the designation of telehealth originating sites to those HPSAs that are not located in MSA's. CMS proposes to keep the non-MSA eligibility category, but it also proposes eligibility for HPSAs located outside of a MSA and HPSAs “located in rural census tracts [of a MSA] as determined by Office of Rural Health Policy (ORHP).” In the past, CMS has used ORHP's methods to determine rural designations more precisely. CMS believes this will allow for inclusion of additional HPSAs as areas for telehealth originating sites. CMS also proposes that the geographic eligibility determination for an originating site would be made and maintained on a yearly basis, in line with other telehealth payment policies. CMS believes this would reduce the likelihood of interruptions in service due to changes in geographic designations mid-year. CMS proposes that the geographic eligibility for an originating site be made based on the status of the area as of December 31st of the previous calendar year. Finally, CMS proposes to add transitional care management (TCM) services to the list of approved Medicare telehealth services. As currently proposed, TCM services would consist of one face-to-face visit following a discharge, in combination with non-face-to face services that may be performed by the physician or other qualified health care professional and/or licensed clinical staff under his or her direction. The American Hospital Association (AHA) and the American Medical Group Association (AMGA) submitted comments to CMS supporting these proposed changes. The final rule is expected to be published by November 1, 2013 and become effective on January 1, 2014.

Electronic Health Records: On February 17, 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act was enacted as part of the American Recovery and Reinvestment Act of 2009. The HITECH Act includes over $19 billion of incentive payments for providers who demonstrate meaningful use of electronic health records (EHRs). The EHR Incentive Program is staged in three steps with increasing requirements for each level of participation.

Stage 1 implementation requires providers to electronically capture health information in a coded format, use that information to track key clinical conditions and communicate that information for care coordination purposes. Stage 2 implementation begins on October 1, 2013 for hospitals and January 1, 2014 for physicians. This second stage requires additional electronic access to patient records and more electronic interaction between patients and clinicians. Many healthcare providers are concerned that the deadline for Stage 2 is too aggressive and that the requirements are overly burdensome. Several major EHR vendors are not ready for Stage 2 implementation and are also advocating for additional time.

On September 24, 2013, Senator John Thune (R-SD) and 17 members of the United States Senate, including Senator Patrick Toomey (R-PA), sent a letter to Kathleen Sebelius, Secretary of the Department of Health and Human Services, requesting a one year delay for Stage 2 implementation requirements. Chad Brisendine, Vice President and Chief Information Officer (CIO) for St. Luke’s University Health Network, contacted Senator Bob Casey (D-PA) and requested that he support the delay, too. The American Medical Association (AMA), the American College of Physicians, the American Academy of Family Physicians, the AHA, the College of Healthcare Information Management Executives, Premier and HAP all support the delay.

Hospital Observation Status: The final 2014 federal fiscal year Medicare inpatient prospective payment system (IPPS) rule established new criteria for determining the appropriateness of inpatient admissions. In general, CMS will presume that surgical procedures, diagnostic tests and other treatments are appropriate for Medicare Part A inpatient hospital payment when the physician admits a patient based on the expectation that the patient will require a stay of at least two midnights. On September 5, 2013, CMS released guidance on admission order and certification requirements in connection with the new “two-midnight” benchmark. The guidance addresses standards for physician certification of hospital services, such as content, timing, authorization and the medical record elements that meet the initial inpatient certification requirements. CMS also provided guidance on practitioner orders, including content, qualifications of ordering/admitting practitioner, verbal orders, “knowledge of the patient,” timing and specificity of the order.

On September 24, 2013, Congresswoman Allyson Y. Schwartz (D-13-PA) and 100 members of the House of Representatives sent a letter to CMS Administrator Marilyn Tavenner, asking for CMS to delay the requirement for six months so that the policy can be fully reviewed. The AHA also sent a letter to Administrator Tavenner on behalf of its members requesting the delay. Premier and HAP support the delay, too. Although CMS has not granted the delay, CMS announced on September 26, 2013 that “government recovery auditors will delay scrutiny of short inpatient stays for 90 days while providers get acclimated to the new policy.”


H.J. Res. 59: Continuing Appropriations for Fiscal Year 2014. On September 20, 2013, the House of Representatives passed a short-term government spending plan to keep the government operating until December 15, 2013. The bill passed by a vote of 230-189, with only one Democrat voting for the measure and no Republicans opposing it. The bill includes a controversial provision to eliminate all funding for PPACA. The Senate amended the bill to restore PPACA funding and sent it back to the House for consideration. If consensus is not reached between the House and Senate, the government will shut down when the federal fiscal year begins on October 1, 2013.