Health Care Reform Draft Legislation Issued By House Committees
Eliminating the Stark law’s rural provider exception for hospitals, increasing penalties for false statements on provider/supplier enrollment applications, and mandatory reporting requirements for overpayments are just a few of the proposed ways to reform the nation’s health care, according to draft legislation released Friday. A U.S. House of Representative “tri-committee” (comprised of Ways and Means, Energy and Commerce, and Education and Labor) released an 850 page “discussion draft” outlining suggested reforms for the health care system. Given President Obama’s (somewhat) urgent message to Congress on the importance of health care reform, expect to see many such proposed bills circulating in the near future.
Some of the highlights are as follows:
Stark or “Physician Self-Referral” law changes
The draft legislation eliminates the rural provider exception for hospitals and the “whole hospital” exception under the Stark laws. Physician-owned hospitals with provider agreements in effect as of January 1, 2009, would be grandfathered under the proposed legislation, although any increases in physician ownership percentages would be prohibited and hospitals would be greatly restricted in their ability to add operating or procedure rooms/beds. Grandfathered hospitals would also be subject to significant reporting and disclosure requirements, including a requirement to disclose to patients in writing if the hospital does not have 24/7 on-premises physician coverage.
Enhanced Penalties
In an effort to combat fraud and abuse, enhanced monetary penalties and administrative sanctions are created for false statements on provider/supplier enrollment applications, false statements in claims data, and delaying inspector general investigations in connection with all federal health care programs, including managed care organizations, Medicare Advantage Plans, prescription drug plan sponsors, etc. These enhanced monetary penalties/sanctions are in addition to other civil liability, such as suits under federal or state False Claims Acts.
Comparative Effectiveness Research
Under this provision, the Secretary of Health and Human Services would establish a Center for Comparative Effectiveness Research (the “Center”) within the Agency for Healthcare Research and Quality. The Center would be responsible for conducting, supporting and synthesizing research (including research conducted under the Medicare Prescription Drug, Improvement and Modernization Act of 2003) with respect to the outcomes, effectiveness, and appropriateness of health care services in order to determine how health care can be managed in the most effective matter. Such “comparative effectiveness research” has been met with strong opposition from physicians, who say that such bureaucratic mandates will impinge upon their autonomy and medical judgment.
Physician Payment Sunshine Provisions
The proposed legislation requires that manufacturers/distributors of “covered” drugs, devices, biological, or medical supplies disclose financial relationships between physicians and other health care entities. Such provisions would require disclosure of all monies given to physicians for research, product development, etc. Companies would not be required to report if free samples are given, however.
Ensuring enhanced quality of care in nursing homes/hospice programs
If a hospice program is determined to not be in compliance with certain standards of care, then the Department of Health and Human Services would be permitted to take action ranging from terminating the hospice’s participation certificate to appointing temporary management of the program, along with other sanctions. In addition, the proposed legislation promotes transparency of information on skilled nursing facilities/nursing facilities in general by requiring the disclosure of ownership and implementing effective compliance and ethics programs.
Mandatory Compliance Programs
All providers and suppliers would be required to adopt compliance programs with certain delineated core elements as a condition of program participation.
