Health Care Update: Senate Patient Protection and Affordable Health Care Act Diminishes Regulatory Relief for LTACHs

Posted by Jason Greis on November 19, 2009 under Articles | Be the First to Comment |  Print

Senate Majority Leader Harry Reid (D-NV) unveiled the long-awaited Senate health care bill, titled the “Patient Protection and Affordable Health Care Act,” yesterday evening.  In a news conference held to announce the bill, Sen. Reid said that the bill embodied the Precquisident’s health care goals, calling it a “tremendous step forward.”  The bill would cost $848 billion and would reduce budget deficits by $130 billion over ten years, according to the recently released Congressional Budget Office (CBO) score.

The bill contains a number of provisions that would impact LTACHs, including among others:

• extension of MMSEA’s LTACH payment protection and LTACH development and bed expansion provisions for a period of 1 year (through December 29, 2011) (see Section 3106), instead of the 2 year budget-neutral extension lobbied for by ALTHA and NALTH and previously included in the Senate Finance Committee bill (see previous GreisGuide postings on this topic.  Posting 1  Posting 2 ).   There is no analogous provision in the House bill.
• a provision that would require LTACHs to submit quality reporting data to CMS beginning in the 2014 rate year (see Section 3004).  Failure to submit quality reporting data would allow CMS to apply a 2% rate reduction to the annually adjusted standard Federal rate for discharges occurring during the rate year;
• a provision requiring CMS to conduct a study on expanding its healthcare acquired conditions policy to payments made to LTACHs and other hospitals excluded from IPPS payment, IRFs, hospital outpatient departments, SNFs, ASCs, and health clinics (see Section 3008(b)).  The report would be due to Congress by January 1, 2012.  There is presently no timeline in the bill for implementing the study’s findings and the application of the healthcare acquired conditions policy in these settings;
• LTACHs would also be included in a national pilot program on payment bundling (see Section 3023) to be established by no later than January 1, 2013.

A more detailed analysis of the bill’s impact on LTACHs will follow shortly.

The bill would cover 31 million Americans who are currently without insurance, as well as adding new benefits to Medicare and imposing new regulations on insurance companies.  It also includes a provision for a public option that would allow states to opt out by passing legislation.  Unlike the House bill, the Senate bill does not include any new restrictions on abortion funding, but like the House bill, it will not provide assistance to illegal immigrants.

The bill pulls funding from a variety of sources, including a tax on higher-end ‘Cadillac’ health care plans, an increase in the Medicare payroll tax on high-income people, and a new five percent tax on elective cosmetic medical procedures (affectionately called the “Bo-tax”).  Individuals are required to have insurance or must pay a fine, starting at $95 in 2014 and rising to $750 in 2016, with a maximum of $2,250 for a family.  Critics of the bill have said this penalty is too weak and will cause many people to forgo insurance. Businesses with more than 50 employees would have to provide insurance or pay a fine of $750 per employee.

The CBO score estimates that 24 million people would still be uninsured in 2019.  About one-third of these people would be illegal immigrants.

Sen. Reid and other Senate leaders are still trying to nail down the 60 votes needed to allow debate to begin on the floor.  Sen. Reid has scheduled the procedural vote for Saturday evening.  Debate on the bill will likely last through much of December.

Jason S. Greis
McGuireWoods LLP
312.849.8217

Mona G. Mohib
VP Gov’t Relations – Federal
McGuireWoods Consulting LLC
202.857.2912
mmohib@mwcllc.com