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Congress Passes End of Year Funding Package; Includes Health Care Policy Riders

Thursday, January 21, 2016   (0 Comments)
Posted by: Becky Dryden
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On Dec. 18, 2015 President Obama signed into law the Consolidated Appropriations Act of 2016 to fund the federal government for 2016. The funding bill also included a number of health care policy riders making changes to existing ACA tax policy and Medicare payment measures. Among the spending provisions in the bill, the National Institutes of Health received $32 billion. This represents a $2 billion increase over FY 15 funding levels. This is the largest increase NIH has received in more than a decade.

In addition to the NIH increase, the spending bill eliminated 18 federal programs, including preventing the administration from using discretionary funds to bail out the Affordable Care Act (ACA) Risk Corridor program as well as defunding the ACA Independent Payment Advisory Board. In addition, the omnibus included a two year suspension of the 2.3% Medical Device Tax through 2017 (tax to take effect in 2018) and a two year moratorium on the employer-sponsored healthcare insurance "Cadillac Tax." Both taxes were revenue-raising provision included in the Affordable Care Act (ACA). Although the 2.3% Medical Device Tax has received more national attention as a key target of the repeal, the "Cadillac Tax" has steadily garnered a strong level of opposition since the ACA was enacted in 2010.

The measure also included two wound care specific provisions. First, the legislation provided for a temporary halt to pending payment reductions in Medicare reimbursements provided to long-term care hospitals that provide specialized care and long-hospital stays for patients with complex conditions and non-healing wounds. Medicare reimbursement rates for long-term care hospitals were scheduled to be limited to only patients with at least three or more intensive care unit days immediately preceding their long-term care hospital stay or to those who need at least 96 hours of ventilator care. All other cases were scheduled to be paid at a lower rate regardless of the severity of illness or the intensity of care needed.

Secondly, a provision was included to allow for payment of disposable negative pressure wound therapy devices in the home health setting. The payment would be equal to the payment that currently exists for such devices in the outpatient setting, including the professional services provided. A "disposable device" is defined as: a disposable negative pressure wound therapy device that is an integrated system comprised of a non-manual vacuum pump, a receptacle for collecting exudate, and dressings for the purposes of wound therapy; and (B) a substitute for, and used in lieu of, a negative pressure wound therapy durable medical equipment item that is an integrated system of a negative pressure vacuum pump, a separate exudate collection canister, and dressings that would otherwise be covered for individuals for such wound therapy.

The provision also calls for the Government Accountability Office (GAO) to study the impact of payment for such disposable devices, including the types of disposable devices that could potentially qualify as substitutes. Additionally GAO must report on the views and information from manufactures, providers and suppliers on the incentives and disincentives under current Medicare coverage and payment policies; the implications of expanding Medicare coverage to include additional disposable devices that are substitutes for other types of DME and different payment methodologies. The report is due 18 months after the enactment. In addition, the GAO is also required to study the impact on utilization, the type of Medicare beneficiaries under the home health benefit who use the disposable devices compared to the substitute DME, and payment rates of other payers including Medicaid. The second report is due in four years.

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