Homecare & Hospice: 2015 and Beyond. Agenda 5/26/2015 THE YEAR AHEAD. Colin Roskey, JD ASLTON & BIRD for the NEW ENGLAND HOMECARE & HOSPICE

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1 Homecare & Hospice: 2015 and Beyond Colin Roskey, JD ASLTON & BIRD for the NEW ENGLAND HOMECARE & HOSPICE Agenda Snapshot of the year ahead in health policy Everything you always wanted to know about King v. Burwell* Congressional news: the days of SGR fear are over, but still more reasons to be afraid are lurking Medicare home health Medicaid home care Medicare hospice Other impact issues for home care and hospice, updates on affirmative litigation *but were afraid to ask Legislative and Regulatory Timeline for Major Milestones in Health Policy THE YEAR AHEAD 1

2 Supreme Court Decision Could Upend ACA Subsidy System KING V. BURWELL Supreme Court Again Sets Course for ACA; Will Hear and Decide on Subsidies by June

3 What s this About? Supreme Court challenge to IRS Rule implementing ACA premium subsidies APA/Statutory Interpretation Case Not Constitutional Challenge to ACA Petitioners challenge IRS Rule providing subsidies for health insurance purchased through Federally Facilitated Exchanges (FFEs). In short, its about FOUR WORDS. Internal Revenue Code 36B, added by ACA, provides that the IRS is to calculate tax credits for premiums for Qualified Health Plans (QHPs) which were enrolled in through an Exchange established by the State under [section] 1311 of the [PPACA]. IRS Rule provides that qualified individuals may receive a premium subsidy if the individual is enrolled in a QHP through an Exchange, which is defined as an Exchange serving the individual market for qualified individuals... regardless of whether the Exchange is established and operated by a State (including a regional Exchange or a subsidiary Exchange) or by [HHS]. Implications Potential Implications if Supreme Court strikes down subsidies for insurance purchased on FFEs: Individuals: Forego insurance and pay tax penalty/qualified for hardship exemption? Health Insurance Market/Health Insurers: Change of risk pool and of premium and participation costs. Threaten viability of FFE marketplace. Impact on state insurance market as a whole? Health Care Providers/Hospitals: Responsible for substantially more uninsured/uncompensated care than anticipated, especially in States not expanding Medicaid under ACA. Employers: Potential liability under the ACA employer responsibility provisions ( pay or play penalties) triggered if full-time employees receives premium tax subsidy. Face different exposure to pay or play penalties depending on where employees live. King Cousins IRS Rule challenged in several lawsuits: King (Fourth Circuit) Court held IRC 36B ambiguous (Chevron Step 1) and deferred to IRS Rule as permissible exercise of agency discretion (Chevron Step 2). Halbig (D.C. Circuit) Panel decision held that, while an FFE (established under ACA 1321) could be said to have been established under ACA 1311, the statutory language did not permit FFE to be an Exchange established by the State and struck down the IRS Rule as contrary to the statute s plain language. Decision vacated when Court voted to take case en banc. State of Oklahoma ex rel. Pruitt (D. Oklahoma/Tenth Circuit) District Court decision considered King and Halbig, found the Halbig panel decision/analysis more persuasive, and held IRS Rule invalid at Chevron Step 1. Appealed to Tenth Circuit. State of Indiana (S.D. Indiana) State and some School Districts challenged IRS Rule. Cross motions for summary judgment pending. Cases held in abeyance pending Supreme Court decision in King. 3

4 Timeline Supreme Court Granted cert. November 7, 2014 Move surprised commentators no circuit split at time. Question presented: Whether IRS may permissibly promulgate regulations under IRC 36B to extend tax-credit subsidies to coverage purchased through Exchanges established by the federal government under ACA Briefing in December and January 21 Amicus Briefs filed in support of petitioners. 31 Amicus Briefs filed in support of government. American Cancer Society, HCA, Catholic Health Association, AHA, AHIP, Trinity Health, American Academy of Pediatrics, etc. Oral argument March 4, 2015 Decision expected at end of June Hard Reality in 36 states 4

5 +9M Consumers Effected What If? Court could find for government Obama Administration 2: ACA Opponents 0 Court could find no standing for petitioners and punt Lower court cases would be revived Court could issue a decision for petitioners but include a reasonable stay for states and/or Congress to fix the four words problem, or for secondary markets to develop supporting state based exchange function ( workaround ) Court could find for petitioners and eliminate subsidies immediately The Most Powerful Republican in Health Care? 5

6 Congress Scraps Decades Old Driver of Bad Health Policy Outcomes THE END OF THE SGR MACRA On March 26, 2015, the House of Representatives passed H.R. 2, the Medicare and CHIP Reauthorization Act (MACRA) by a vote of ; on April 14 the Senate voted 92-8 The legislation repeals Medicare s Sustainable Growth Rate (SGR) formula for physician payments and makes significant additional reforms to Medicare s physician payment system, broad emphasis on quality. The bill would also provide funding authority for the Children s Health Insurance Program (CHIP) and provide both permanent and temporary extensions to other lapsing Medicare/Medicaid payment and coverage policies. Only one-third (roughly $70 billion) of the legislation s $213 billion in new spending costs are paid for with other spending offset policies. MBI or home care and hospice set at 1.0 in Upside for Medicare Home Health: Two year extension of 3% rural add on (through 17). Downside: Imposition of surety bond requirement (no less than $50,000). Bold Plans for Value Pay THE FUTURE OF QUALITY 6

7 HHS Goals HHS set a goal of tying 30 percent of traditional FFS Medicare payments to quality or value through alternative payment models by the end of 2016 and tying 50 percent of those models by the end of 2018 HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 ACOs, bundles, readmission reduction, value based purchasing Significant Regulatory Changes Underway MEDICARE HOME HEALTH Medicare Home Health Nutshell Rates: CY 2016 PPS rule to retrench on rebasing adjustment, anticipate case mix recalibration, productivity adjustment F2F: Narrative requirement eliminated, but ongoing issues with F2F encounter implementation Quality: CMS Star Rating System, CoPs Payment Reform: Value Based Purchasing Pilot Compliance: Focus on Home Health 7

8 Anticipating Release of Major Medicaid Managed Care Regulation MEDICAID HOME CARE Medicaid Home Care Nutshell Rebalancing continues with ACA incentives to low balance states, new HCBS benefit option Dual eligible, integration demonstration programs proliferating from CMS/CMMI National movement to Medicaid managed care Upside: Expanded service use; downside: rate compression, restrictions, narrow networks Signature health policy regulation addressing needs of diverse Medicaid populations served by managed care in proposed rule this June Stable Year Ahead Despite Continued Calls for Change HOSPICE 8

9 Hospice Nutshell Legislative development: IMPACT Act sets a CoP requirement for surveys at least every 3 years; modifies annual cap update formula to pay for increased survey costs CMS Proposed FY 16 Rule: Estimated 1.3 percent ($200 million) increase for FY Does not account for sequestration. No payment reform. Comments due June 29, 2015 MedPAC: Recommends elimination of inflation update, speed new payment model (U-Shape), provide hospice benefit within MA plans MA provision most likely to gain traction this year Face to Face relief: (PA, NP, CNS for subsequent certifications) under consideration in Congress Congress and Federal Courts OTHER CRITICAL ISSUES IN HOMECARE AND HOSPICE Congressional Advocacy Resist extension of sequestration Bad precedent in current trade policy negotiation Resist copayments or across-the-board proposed payment reductions Face to face relief Rebasing relief Nurse practitioners Tele-monitoring 21 st Century Cures Post acute bundling BPCI BACPAC 9

10 Federal Courts Victories Takeaway: community is making significant strides asserting it and its patients rights in judicial arena DoL Overtime Lawsuit. Oral argument in DC Court of Appeals held on May 7, decision expected late June/early July. Supreme Court could be next step under any outcome. Face to Face Lawsuit. Motions underway after District Court granted subject matter jurisdiction to NAHC (major victory). Oral arguments set for August, decision expected early September. Litigation addresses past claims denials and continuing audits Thank You Very Much! COLIN ROSKEY