Washington Update: Monday, May 22, 2023

CMS will start IRF-RCD audits in August, starting with Alabama.

CMS has informed the IRF community that, starting in August, CMS will begin a series of audits – known as “Review Choice Demonstration” (RCD).  Initially, the program will only apply to IRF claims in the state of Alabama. However, CMS has said they then plan to roll-out the audits to Pennsylvania, California, and Texas, and eventually to other states. The RCD audits have been under discussion for several years. The day after the PHE ended, CMS announced the IRF-RCD start.

How the IRF-RCD audits will work:

Under IRF-RCD, IRFS in the affected states will have 100% of their claims reviewed by government contractors – either (at the election of each IRF) in a pre-claim review or a post-claim review process.  Palmetto – the Medicare Administrative Contractor (MAC) for Alabama -- will review an expected nine thousand claims there each year. Details on the program can eventually be found here. https://www.cms.gov/research-statistics-data-systems/medicare-fee-service-compliance-programs/prior-authorization-and-pre-claim-review-initiatives/review-choice-demonstration-inpatient-rehabilitation-facility-services

Marquette Professor Lisa Grabert calls for IRF payment changes.

A Senate committee held a hearing last week to hear how MA plans are limiting patient access to various forms of care. Marquette’s Lisa Grabert noted some MA plan abuses but also said that the IRF payment system needs to be reformed – akin to the LTCH criteria passed by Congress in 2013. The LTCH criteria law created a separate LTCH site-neutral payment system which, while policy analysts might like it, have really distorted and divided LTCHs from their original mission.

And yet… Congress calls for more Medicare “Site-Neutral” payments.

Two US House subcommittees recently held hearings, calling on CMS to do more “site-neutral” systems -- even though the LTCH experience remains a cautionary tale. The idea sounds good in theory – why should a hospital get paid more than a doctor’s office for providing the same treatment? – but when you look at the different cost structures – and our national interests in having more, not fewer, hospitals – the idea isn’t as straightforward as it first appears.

CMS LTCH Regulation comment period ends on June 9.

In April, CMS released a proposed rule changing the way CMS reimburses LTCHs for high-cost outliers. The official “comment period” ends on June 9 and the CMS final rule is expected sometime in August. The AHA, NALTH and Select Medical are united in pressing the case that this change would unintentionally discourage LTCHs form treating the sickest patients. The pandemic and inflationary costs, combined with fewer LTCHs, skewed the data upon which CMS relied.

SNFs continue fight against minimum staffing requirements.

The Biden administration has proposed making every SNF have enough adequately trained staff to provide high-quality care. But SNF operators say they can't hire people out of thin air after COVID-19 hollowed out the long-term care workforce. There's never been a federal requirement for minimum number of staffing hours per resident day. Labor unions are mounting rallies around the country and pressing the administration to finalize the reform effort.

Rep. Boyle & House Democrats try “discharge petition” to raise debt ceiling.

The debt ceiling abyss edges closer with maybe only ten days to the edge of default. Congressman Brendan Boyle (D-PA) is attempting to use a “discharge petition” to force a vote on a straightforward increase in the Federal debt ceiling. Boyle, a Democrat from Philadelphia, is the senior Democrat on the House Budget Committee and a leading voice in the debate. He first encouraged the US House to consider this time-consuming strategy last January.

Pennsylvania Election Summary: No major surprises.

Last week’s Pennsylvania elections yielded no major surprises. Democrats held on to their one seat majority in the state House. Republicans rejected an election-denying judge for the state supreme court. Democrats chose a middle-of-the-road African American woman, Cherelle Parker, to be Philadelphia’s next mayor, rejecting Helen Gym, a more progressive candidate backed by Sen. Bernie Sanders. Ms. Gym had risen in polls in the closing weeks of the campaign.

KKR-backed Envision Healthcare files for Chapter 11.

Envision Healthcare, a physician staffing firm, suffered from declining profits amid hurdles from the COVID-19 pandemic and prolonged legal battles with health insurer UnitedHealthcare. The bankruptcy wipes out private equity firm KKR’s investment in Envision. In 2018, the PE firm shelled out over $5 billion in 2018 to take Envision private, in a deal valued at $9.9 billion including debt. An Envision bankruptcy filing would be one of the steepest losses in KKR’s history.