Members of the House Ways and Means Committee Tuesday unanimously agreed to cut hospital Medicare payments across the board to pay for allowing hospitals building on-campus outpatient departments to continue receiving higher rates than nonhospital clinics.
The bill, which now goes to the full House, would slightly reduce the increase contained in the Medicare and CHIP Reauthorization Act that is scheduled to go into effect in October 2017. That increase did not fully offset the 1.5% cut that goes into effect this October.
The legislation also would adjust the Medicare Hospital Readmissions Reduction Program to avoid unfairly penalizing hospitals whose patients are disproportionately likely to return to the hospital because of socio-economic factors. That provision would be budget-neutral.
Every major hospital lobbying group—the Federation of American Hospitals, the American Hospital Association and the Association of American Medical Colleges—endorsed the legislation even as they expressed concern over the cuts.
“At the same time, while the reduction might be viewed as minor, the effects of cumulative cuts on hospitals are taking a toll, and further cuts must be avoided,” said FAH CEO Chip Kahn.
Ways and Means Health Subcommittee Chairman Pat Tiberi (R-Ohio) said the bill makes common sense given hospitals have already invested in outpatient departments with the assumption of being paid at current rates, not the lower rates put forward by a budget agreement last year.
“Nobody likes to think of healthcare as a business, but hospitals have to keep the lights on,” he said.
Subcommittee Ranking Member Jim McDermott (D-Wash.), who introduced the bill with Tiberi, said it provides an acceptable compromise and should be passed eventually. He expressed concern that it was being rushed through committee without hearings to review how it will affect providers and patients.
Rep. Charles Rangel (D-N.Y.) said he is concerned that some safety net hospitals may now be held to lower standards. Hospitals in low-income areas should receive the resources necessary to properly treat their community, he said. “Lowering the penalty doesn't deal with the problem.”