[UPDATED June 23, 2015 to reflect the House of Representatives actions to approve the repeal of the IPAB and medical device taxes.]
More than 400 long-term and post-acute care professionals from across the nation gathered in Washington, June 15, to let Congress know that their industry has made significant gains in the quality of care provided by skilled nursing homes and assisted living communities.
During their meetings on Capitol Hill, they shared their professional experiences and let lawmakers know that providers operate on exceedingly thin operating margins and that continued reductions in Medicare and other health programs affecting their residents ultimately will negatively affect their residents.
“Members of Congress tell us they want to hear directly from constituents, so our members have come to Washington to make sure our voice is heard,” declared Mark Parkinson, president and CEO of the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), which sponsored the congressional briefing.
“We have already seen great legislative success on key issues this year, particularly with the permanent repeal of the sustainable growth rate,” said AHCA Board Chair Len Russ. “But we can’t stop now. We must continue to have a visible presence in Washington and stand strong on the many issues that impact our profession.”
During the event, AHCA/NCAL members stressed the importance of counting observation stays in the hospital towards Medicare’s required three-day stay in order to cover skilled nursing care expenses following a hospital stay.
AHCA/NCAL supports legislation that has been introduced in both the House and Senate that would eliminate the three-day inpatient stay requirement by allowing centers that meet particular criteria to automatically qualify for a waiver of the prior hospitalization requirement.
In addition, the organization is backing the NOTICE Act, introduced in February, which would require hospitals to give formal notice to a patient within a certain period of time after classifying him or her as an inpatient or as an outpatient under observation. The Senate Finance Committee approved the bill June 23, clearing the way for consideration by the full Senate.
Parkinson said that legislation “is an important step in ensuring that beneficiaries understand what is happening to them” and issued a statement supporting the Finance Committee’s action.
Medical Device Tax Repeal
While the long-term care (LTC) professionals were taking their message to Capitol Hill, the Republican-controlled House of Representatives was considering two measures that have been high priorities by organized medicine—repeal of the 2.3 percent excise tax on medical devices and the Independent Payment Advisory Board (IPAB), both created by the Affordable Care Act in 2010.
Three days later, the House passed the device tax repeal bill 280-140, with 46 Democrats joining Republicans to support the measure. However, ditching the IPAB proved to be a bit more difficult because Democrats, many of whom agreed the board should be scrapped, objected to the GOP plan to cover the cost of repeal by reducing funding for prevention and public health. However, the House passed the bill on June 23 and sent it to the Senate.
Then there came a threat from the White House that President Obama would veto both IPAB repeal and the plan to eliminate the medical device tax, should the Senate go along with the House’s action.
“The repeal (of the device tax) would take away a funding source for financial assistance that is working to improve coverage and affordability and would increase the federal deficit by $24 billion over 10 years,” the White House said in a statement. The plan to ditch the tax does not include a plan to cover that cost, unlike the IPAB repeal initiative.
IPAB Repeal Effort
The Congressional Budget Office (CBO) estimated that the IPAB repeal cost would be $7.1 billion between FY 2016 and 2025. IPAB, designed to be a 15-member independent body that would recommend cuts to the Medicare budget if program spending exceeds a target growth rate, has not even had members nominated by the President.
Medical groups, led by the American Medical Association (AMA) have been advocating repeal of IPAB since the ACA was enacted, contending that the board would have unfettered power to slash Medicare payments without input from organized medicine.
Unlike the Medicare Payment Advisory Commission (MedPAC), which currently advises Congress on Medicare spending issues and makes policy recommendations that Congress may or may not accept, Congress would be required to implement IPAB’s recommendations or develop alternatives to meet the spending target.
Because the IPAB may not make recommendations that would ration care, restrict benefits, change eligibility criteria or increase revenues, beneficiary premiums or cost-sharing, opponents argue that it would have little choice but to cut payments to providers.
The impact, they contend, will ultimately be reduced access to specialized care and innovative therapies that improve beneficiary health and quality of life.
Opponents also argue that the board would be composed of “unelected, unaccountable officials” and may not include individuals directly involved in the provision or management of the delivery of Medicare items and services and could not include practicing physicians with clinical expertise.
When the Ways and Means Committee voted 31-8 to repeal IPAB, the AMA praised the action.