Healthcare Business News

Doc fix, two-midnight rule remain high priorities for Congress, lawmaker tells AHA

By Paul Demko
Posted: May 6, 2014 - 2:30 pm ET

Finding a permanent fix to the Medicare payment formula for doctors remains a top priority for House Republicans, according to Rep. Kevin Brady (R-Texas), who chairs a key health committee.

"We're working very hard toward a permanent solution," Brady said, speaking Tuesday at the American Hospital Association's annual membership meeting in Washington. "We hope sooner rather than later."

Brady chairs the House Ways and Means Committee's Subcommittee on Health. The nine-term incumbent indicated that there was a lot of momentum for a permanent "doc fix" at the start of the year. But negotiations broke down over how to pay for the change to the Medicare sustainable growth rate, which is expected to cost at least $130 billion over the next decade. That led to passage of a one-year patch in March that was widely criticized by legislators in both political parties and angrily denounced by the American Medical Association and other groups representing the interests of doctors at the Capitol.

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That legislation also included a six-month delay in implementation of the "two-midnights" rule, which is strongly opposed by hospitals. That rule says admitting physicians must have good reason to believe that a patient will need two nights in the hospital before Medicare will pay full inpatient rates for the stay. Lacking such documentation, Medicare auditors will generally classify the stay as outpatient observation, which pays hospitals much less and sticks the patient with a 20% copayment. The AHA and several state hospital associations have filed a pair of lawsuits challenging the rule.

Brady indicated that finding a permanent fix to the two-midnight rule would also be a priority for the House moving forward. "The time for regulatory relief on the two-midnight debacle is now," he said.

Valerie Jarrett, a senior adviser to President Barack Obama, also addressed the gathering Tuesday, touted a new Gallup poll that found the number of respondents indicating that they lacked insurance coverage had dropped to 13.4%—the lowest level since the polling firm started asking the question in 2008—as evidence that the Patient Protection and Affordable Care Act is working.

"This is an incredible trend and much more impactful than the numbers can possibly convey," said Jarrett, whose resume includes serving on the board of the University of Chicago Medical Center.

Jarrett also called for swift confirmation by the Senate of Sylvia Mathews Burwell as HHS secretary. Burwell faces her first committee hearing Thursday. She was named to replace Kathleen Sebelius, who announced her resignation last month.

In addition, Jarrett called on hospitals to pressure states that have not expanded Medicaid, as authorized under the ACA, to do so. Roughly half the states have expanded Medicaid eligibility to individuals who make up to 138% of the federal poverty threshold.

"Honestly, we need your help on this front," Jarrett said. "You could be our strongest advocates in the states that have yet to expand."

Follow Paul Demko on Twitter: @MHpdemko

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