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January 16, 2017

U.S. House Introduces Updated Value-Based Incentive Legislation


The House Ways & Means Health Subcommittee recently released updated draft legislation that would establish value-based incentive payments for Medicare post-acute care (PAC) providers such as skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), home health agencies (HHAs), and long-term care hospitals (LTCHs) – similar to efforts that are presently underway in the acute care setting.

The revised discussion draft – the Medicare Post-Acute Care Value-Based Purchasing Act of 2015 (H.R. 3298) – was first introduced by full Committee Chairman Kevin Brady (R-TX) and Rep. Ron Kind (D-WI) in July 2015. The Subcommittee’s updated draft reflects feedback provided by stakeholders, including feedback received during a hearing held in September 2015, in which the Subcommittee explored different Medicare Part A policies and ways to improve PAC quality.

During that hearing, Committee members on both sides of the aisle asked witnesses for recommendations to incentivize higher-quality care in post-acute settings so that patients receive the treatment they need, at a cost they can afford. Steve Guenthner, president of Almost Family (a post-acute care provider), said, “Value-based purchasing is the natural next step in the evolution of patient-centric Medicare policy, especially when it rewards providers for patient-focused outcomes, balanced against the cost incurred to achieve those outcomes … We need to change the policy question from ‘how should we pay providers’ to ‘how we should care for patients.’”

Dr. Gregory Worsowicz, chairman of the board for the American Academy of Physical Medicine and Rehabilitation, noted, “I would ask you, whatever programs we put in place, we coordinate them…we don’t suboptimize what we are doing and restrict [doctors] with so many regulatory issues [they’re] hamstrung on what [they] can do or chasing incentives that may not align with others.”

Previously several provider groups, including the American Hospital Association (AHA), voiced concerns about the lack of “valid, reliable quality measures” under the bill’s proposed PAC value-based purchasing (VBP) program and raised a number of broader methodological considerations. The AHA also felt it was “premature” to move forward with a PAC VBP when efforts to collect mandated data pursuant to the expanded reporting requirements under the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 were still ongoing.

Highlights of the updated legislation include:

  • Mandating that the Department of Health & Human Services (HHS) establish a value-based purchasing (VBP) program for PAC providers beginning on or after Oct. 1, 2019;
  • Outlining changes to the requisite performance measures, with HHS directed to use measures related to Medicare spending per beneficiary, discharge to community, and all condition risk-adjusted potentially preventable hospital readmissions, with the option to phase-in quality measures and geographic measures after Oct. 1, 2021;
  • Modifying the previous bill’s methodology by which value-based incentive payments are made by establishing an initial two-track performance-risk system, with varied payment withholds (to be redistributed) depending on whether a provider is “high performance-risk PAC provider” a or “low performance-risk PAC provider” for each performance year. By Oct. 1, 2026, HHS is required to establish, via rulemaking, a single reduction method to apply across PAC providers.

According to the press release, the Committee continues to encourage stakeholders to provide feedback on the latest draft of the legislation, though does not specify a date by which comments are due.

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