5 things healthcare should know about House spending bill

The legislation to keep the federal government running past Thursday, Feb. 8, includes many provisions related to healthcare, including adjustments to the Merit-based Incentive Payment System (MIPS) and delaying Medicare cuts to hospitals while cutting billions from the Affordable Care Act’s Prevention and Public Health Fund.

The bill passed in the House by a vote of 245-182 and now heads to the Senate ahead of a Thursday night deadline to avoid another government shutdown. Here are five aspects of the bill that affect the healthcare industry:

1. Cuts to Medicare payments

Major physician groups were concerned about the spending bill’s two-year extension of Medicare’s misvalued codes policy, which reduces Physician Fee Schedule (PFS) payments if targets aren’t met on misvalued or overvalued codes identified by CMS, such as services with a significant difference in value based on the site of care.

The American Medical Association argued the policy has already held down payment updates under the PFS to just 0.7 percent from 2015 through 2018, and if the extension was granted it “would virtually wipe out the entire 2019 update.”

Those advocacy efforts only partially succeeded—the misvalued codes policy will be extended by only one year under the spending bill, meaning a reduced PFS update in 2019, but likely avoiding a decrease for 2020.

In a win for hospitals, the bill will delay cuts in Medicare Disproportionate Share Hospital (DSH) payments by two years. The reductions, first passed under the ACA, have been pushed back several times and were set to begin this year, cutting $2 billion in the current fiscal year and totaling $43 billion overall through 2025.

“A two-year delay averts a combined $5 billion in cuts, pays for itself, and gives Congress and hospitals time to work together on long-term solutions to the financial burden of uncompensated care,” said Bruce Seigel, MD, MPH, president and CEO of America’s Essential Hospitals.

2. MIPS changes

Two parts of the bill deal with MIPS, one of the payment tracks introduced by the Medicare Access and CHIP Reauthorization Act (MACRA). The spending bill will exclude Medicare Part B drug costs from payment adjustments for MIPS, which begin in 2019.

It will also provide three years of “additional flexibility” on the cost component of the MIPS score. While not included in 2017 scores, cost is set to make up 10 percent of a clinician’s total MIPS score this year.

3. Repealing Medicare’s therapy cap

The bill permanently repeals Medicare’s cap on paying for outpatient therapy services. The cap, currently set at just over $2,000, has been in place since 1997 but has several times been altered with legislation requiring a manual medical review exceptions process. With the most recent exception included in MACRA expiring at the end of 2017, the American Physical Therapy Association urged Congress to get rid of the cap for good.

4. Extends funding for graduate medical education (GME)

Originally sponsored by Rep. Cathy McMorris Rodgers, R-Washington, this included legislation would add two years and double funding for the Teaching Health Center Graduate Medical Education (THCGME) program. Rodgers said in statement that the extra funding would amount to $157,000 per student per year, or $126.5 million total over two years.

“Our rural and urban underserved communities struggle to access the medical professionals they need and Teaching Health Center programs like the Spokane Teaching Health Clinic will help create a new generation of rural doctors—trained right here in our community,” she said.

5. Funding for community health centers, but cuts to public health

The spending bill reauthorizes $3.6 billion in annual funding for community health centers for two years, which had lapsed along with Children’s Health Insurance Program (CHIP) funding in September 2017 and wasn’t renewed as CHIP was in the last short-term spending bill.

Some of the provisions of the bill are paid for by cutting $2.85 billion from the ACA’s Prevention and Public Health Fund between 2018 and 2027, a move opposed by the American Public Health Association (APHA).

“The Prevention Fund makes up 12 percent of the Centers for Disease Control and Prevention’s budget and supports key public health activities like childhood lead poisoning prevention, vaccination, smoking cessation and other programs in all 50 states,” said APHA executive director Georges Benjamin, MD. “Slashing the fund will put these critical public health programs and the people they serve at risk.”