Ways and Means Members Introduce Bills to Bring Clarity to Hospital Payment Systems

July 29, 2015 — Press Releases   

WASHINGTON, DC — Today, House Ways and Means Chairman Paul Ryan (R-WI), Health Subcommittee Chairman Kevin Brady (R-TX), Health Subcommittee member Kenny Marchant (R-TX), and Human Resources Subcommittee Chairman Charles Boustany (R-LA) introduced three bills that take the next steps in reforming Medicare’s payment systems. This legislation builds on the comments the committee received on Subcommittee Chairman Brady’s Hospital Improvements for Payment discussion draft, the recent regulatory notices from the Centers for Medicare and Medicaid Services (CMS), and work done by the Medicare Payment Advisory Committee (MedPAC).

Congress has already acted on payment reform earlier this year, passing H.R. 2. That legislation, signed by the President, reforms the way Medicare pays physicians, making the program more accountable and putting quality first. These three bills would bring the same principles of reform to the hospital payment systems.

The Committee looks forward to receiving feedback and comments on this approach to help improve on these concepts and make payment reform a successful endeavor.

H.R. 3291, the Medicare Crosswalk Hospital Code Development Act of 2015, introduced by Chairman Ryan, will provide a better understanding of how Medicare allocates resources for ten “surgical” services that Medicare provides in both inpatient and outpatient settings. This legislation will help improve Medicare, improve transparency, and give seniors more accurate information about their out-of-pocket costs.

In introducing H.R. 3291, Committee Chairman Ryan said, “Today, Medicare uses two different payment systems that are completely incompatible. This bill will allow the program to compare what it pays for similar services, so lawmakers can make Medicare more efficient and more effective. And overall, this reform will strengthen the program for seniors, providers, and families.” 

A one-page description of the Medicare Crosswalk Hospital Code Development Act of 2015 can be found here.

A section-by-section for the Medicare Crosswalk Hospital Code Development Act of 2015 can be found here.

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H.R. 3292, the Medicare IME Pool Act of 2015, introduced by Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX), will more appropriately align incentives and protect indirect medical education (IME) payments from fluctuations in volume.

In introducing H.R. 3292, Health Subcommittee Chairman Brady said, “One of the keys to saving Medicare for the long-term is making sure we have plenty of doctors trained to practice medicine in the 21st Century. The current way Medicare reimburses hospitals that train medical students is outdated and increasingly unreliable. To make sure Congress is acting now to support the next generation of skilled physicians, we are proposing a twice-monthly, lump-sum payment formula that is more certain for the future and more closely matches up with other medical education programs.”

A one-page description of the Medicare IME Pool Act of 2015 can be found here.

A section-by-section for the Medicare IME Pool Act of 2015 can be found here.

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H.R. 3288, the Strengthening DSH and Medicare Through Subsidy Recapture and Payment Reform Act of 2015, would reform the “Disproportionate Share Hospital” (DSH) payment system to make sure hospitals in non-Medicaid expansion states are on the same playing field as those hospitals in Medicaid expansion states. Rather than redirect DSH payments from expansion states to non-expansion states, the legislation would offset the increased spending by recouping all Obamacare subsidy overpayments.

In introducing H.R. 3288, Health Subcommittee Member Marchant said, “This legislation recaptures wasted federal dollars from Obamacare and closes the DSH reimbursement gap. It only makes sense to strengthen this mission oriented program by making the payment system more responsive to volume changes as hospitals see their patient-mix change.”

In introducing H.R. 3288, Human Resources Subcommittee Chairman Boustany said, “Hospitals in all states, regardless of the state’s choice to expand Medicaid coverage, should be able to continue operating on a level playing field without being punished for treating uninsured or under-insured patients. Today in states that chose not to conform to the Obama Administration’s vision of one-size-fits-all healthcare, that’s not the case. The Strengthening DSH and Medicare Through Subsidy Recapture and Payment Reform Act will ensure that hospitals in all states are treated fairly.”

A one-page description of the Strengthening DSH and Medicare Through Subsidy Recapture and Payment Reform Act of 2015 can be found here.

A section-by-section for the Strengthening DSH and Medicare Through Subsidy Recapture and Payment Reform Act of 2015 can be found here.

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SUBCOMMITTEE: Health    SUBCOMMITTEE: Full Committee