A Deeper Dive On MACRA - Hospitals and Beneficiaries

Change AheadChanges for Beneficiaries

Medicare Advantage
Medicare law authorizes Medicare Advantage Special Needs Plans (SNPs) to be excepted from certain broad beneficiary enrollment requirements and limit membership to people with specific diseases or characteristics, and tailor their benefits, provider choices and drug formularies to meet the specific needs of those groups. Current law authorized those plans through 2016; MACRA extends that authority for SNPs through 2018.

MACRA makes two changes directly affecting Medicare program beneficiaries to help offset the cost of the other provisions in the legislation, including the SGR repeal. Generally speaking, a beneficiary’s Medicare premium for Parts B and D is a percentage of the program cost, and that percentage is determined based on income. Under MACRA, beginning in 2018, high-income beneficiaries (i.e., those with modified adjusted gross income over $133,500 for an individual and $267,000 for a couple) will be required to pay a higher percentage of their premiums. Additionally, for new enrollees only, beginning in 2020, MACRA restricts Medigap plans to covering costs above the amount of the Part B deductible.

More Changes for Hospitals

Medicare-dependent Hospitals
Under the Medicare IPPS, hospitals that treat a high percentage of Medicare beneficiaries are eligible for enhanced payments, including payments on a cost basis. Although the program has been around since 1990, Congress has periodically reauthorized it only for limited periods, and the most recent reauthorization is set to expire on March 31, 2015. MACRA reauthorizes this program for two and a half years through FY 2017.

Low Volume
Under the Medicare Hospital Inpatient Prospective Payment System (IPPS), rural hospitals with low inpatient volumes are eligible for a percentage increase to each payment. The Affordable Care Act (ACA) substantially broadened the eligibility criteria, enabling many more hospitals to qualify for these additional payments, but time limited the expansion provision. The ACA also revised the percentage increase methodology. Congress has stepped in several times since to extend that expansion, and now MACRA continues the broader eligibility criteria for low-volume hospitals—as well as the ACA methodology for calculating such payments— through FY 2017.

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