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May 2016


Provider-Based Update: Congress Offers Encouraging Step to Reduce Scope of BBA Reimbursement Reductions






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On Wednesday, members of the House Ways and Means Health Subcommittee introduced bipartisan legislation that would provide some welcome relief to hospitals who had already invested resources to develop new provider-based departments when Section 603 of the Bipartisan Budget Act (BBA) was enacted on Nov. 2, 2015.

Specifically, H.R. 5273 includes a proposed “mid-build” exception that would grandfather in a department if the hospital had already signed a “binding written agreement with an outside unrelated party for the actual construction of such department” prior to Nov. 2, 2015.

Under the proposal, departments that meet the mid-build exception would be exempt from the BBA reimbursement reductions. We believe this proposal would also improve the likelihood that a hospital’s 340B Drug Pricing Program eligibility would be extended to these departments. A summary of the legislation can be found here.

Although it is unclear whether this proposed legislation will be enacted, there are few remaining legislative days in Congress. While there is no current Senate companion bill, House action may spur the Senate to act prior to the end of the year. The House Ways and Means Committee is now scheduled to mark up the bill today at 2:00 p.m. This is an encouraging step in the right direction and reflects a bipartisan effort to reduce the scope of the BBA reimbursement reductions.

Additionally, 51 senators issued a letter to CMS on Thursday requesting that CMS includes “flexibilities to enable hospitals to continue to serve patients in [provider-based] settings as well as provide predictability for the hospital field” when drafting its regulations that implement the BBA site neutral payment reductions. The letter specifically recommends that CMS does not apply site neutral payment reductions to existing hospital outpatient departments that relocate, rebuild or change ownership.

Polsinelli will continue to monitor these and other reimbursement developments.

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For questions regarding this information, please contact one of the authors, a member of Polsinelli’s Health Care practice, or your Polsinelli attorney.













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