On the first Monday in February of any given year, it is a ritual in Washington, D.C. for the President of the United States to release the budget for the next fiscal year. This is the “official” start to the budget process that provides funding to both the mandatory and discretionary sides of the Federal budget. Coming in early April, both the House and the Senate traditionally come up with their own budget resolutions for the next fiscal year’s federal budget – and the grand debate begins.

For those that work in health care policy, the day corresponding to the release of the president’s budget is the day that we set aside time to scour the pages of this document to see what programs at the Department of Health and Human Services (HHS) are being proposed for reductions and what policy changes under Medicare are included that could lead to cuts in reimbursements to providers for the provision of various types of services. For imaging services, there are a couple of proposals that are of concern.

This first, and possibly the most problematic, is the concept of “site-neutral” payments. There are many different ways to analyze or “slice” this issue regarding what sites and services to compare. In general, policy of this type, comparing payments by site of service, is very complicated, and a little like comparing an orange to a tree, as the payment systems have different rules of construction and different sources from which the payments are developed. The president’s proposal in the 2016 budget would compare the reimbursement amounts for “off-campus” hospital outpatient departments to those of a physician office or an ambulatory surgical center, and cap the payment to the hospital at the lower amount. This type of comparison will potentially not work with regard to paying for the cost of the care actually provided to the patient.

In a hearing before the Energy and Commerce Committee on January 21, 2015, the American Hospital Association (AHA) rightly pointed out that the hospital outpatient payment system is moving away from a fee-for-single-service approach and instead is moving toward a prospective payment system that is larger payment bundles. So comparing the payment amounts of these bundles, that are meant to cover several services, with the payment amount under the physician fee schedule that is for a single service just does not make fiscal sense. There is also the extra obligation of these off-campus hospital outpatient departments to cover the costs of emergency room triage and care, as well as a set of patients that may have a higher acuity.

Also, some of these off-campus hospital outpatient departments could be in rural areas where they were explicitly placed to serve as an outpost for care to patients that might then be transferred to the acute care hospital some distance away. The president’s budget for 2016 also continues the longstanding policy feud regarding excluding certain services from the in-office ancillary exception list. Being on this list allows these services to be ordered and provided by a physician in their office using equipment that they or the practice owns.

Others, such as MedPAC, have found this policy proposal to be shortsighted and possibly in conflict with integrated patient care – and has recommended against limiting the Stark Law exception for ancillary services, citing potential “unintended consequences.” So what happens next? And if these proposals were to be considered, what would be the timeline for Congress? Each chamber’s Budget Committee is looking to introduce their resolutions by April 1, with the hope to pass them by April 15. Depending on timing and need, they may have a conference committee and look to work out a joint resolution. From there, Congress will start the process of trying to allocate funding to all government agencies and get agreement on that by October 1. Any agency not funded could be rolled into an omnibus bill or have a continuing resolution.

This omnibus bill could also be used to pass Medicare and Medicaid reforms and Congress could use a process called reconciliation to allow proposals in the omnibus bill that affect the Federal budget to be considered in the Senate with a vote of only 50 senators, versus 60. For Medicare and Medicaid policy an important date, which would line up with the appropriations process, could be September 30, as Ways and Means Committee Chairman Paul Ryan would like to get all the various budget and tax policy related deadlines to be aligned for 2015.

About the author: Jill Rathbun is managing partner at Galileo Consulting Group, in Arlington, VA. She will be commenting for DOTmed HealthCare Business News magazine on such vital issues for all health care professionals as the implications of the President’s FY 2016 budget, the new makeup of Congress, possible Medicare payment proposals from the Centers for Medicare and Medicaid Services, reports from the Medicare Payment Advisory and more