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Healthcare Policies Affecting Hospitalists, Hospitalized Patients Advance in 2015


Laws and regulations regularly impact hospitalists and hospitalized patients, which is why SHM’s Advocacy Department and Public Policy Committee (PPC) work on behalf of SHM membership, the hospital medicine movement, and its patients.

This year has seen significant positive movement within several key policy areas for all of these groups. Some of these issues have made headlines, while others happened under the radar, but SHM and its members have played an important role within each of them.

In general, observation care and related issues have received increased attention from lawmakers in no small part as a result of SHM’s efforts in this area. Early in the summer, the Centers for Medicare and Medicaid Services (CMS) responded to SHM’s efforts by proposing changes to the two-midnight rule—softening yet still retaining the rule. SHM commented positively on the proposed changes but signaled to both CMS and Congress that still more needs to be done to address problems inherent within observation policy.

As CMS and Congress work on a long-term solution to issues related to observation stays, SHM will play an important role in both proposing solutions and providing feedback for potential changes.

In July 2015, CMS proposed to pay for advance care planning (ACP). This proposal, assuming it is finalized at press time, is one that SHM has advocated for and supported for almost two years. Hospitalists should consider it a victory. The PPC, SHM members, and staff have consistently advocated for improved ACP policies in urging Medicare to recognize the value in ACP and reimburse for these critical services.

Hospitalists have also played a major part in the advocacy efforts on the Congressional level, dispelling misconceptions surrounding ACP by educating members of Congress and their staff and explaining the importance of these conversations within the healthcare system. Consistent advocacy and hospitalist involvement have led to a positive response that has been a long time coming.

These are just a few examples of areas in which SHM has seen tangible accomplishments, but there are also issues that have yet to play out and require SHM’s efforts to remain consistent in the coming years.

One of these issues is a hospitalist-specific problem within the meaningful use program. Hospital-based physicians are exempt from meaningful use and associated penalties based on their percentages of inpatient services; however, due to the way the law was written and changes in the healthcare landscape since passage, an unintended consequence has arisen.

Hospitalists who care for significant numbers of “observation” and skilled nursing facility patients (coded as outpatient services) do not qualify as hospital-based under the law and are finding themselves subject to unfair penalties. In response to SHM advocacy, CMS provided a limited hardship exception for hospitalists in 2015 and extended it into 2016. This exception saved numerous hospitalist groups an estimated $2,000 to $3,000 per hospitalist per year.

In response to SHM advocacy, CMS provided a limited hardship exception for hospitalists in 2015 and extended it into 2016. This exception saved numerous hospitalist groups an estimated $2,000 to $3,000 per hospitalist per year.

The temporary exception was limited in scope, however, and a legislative fix is needed to ensure a permanent solution. SHM will continue to meet with legislators to discuss this issue and garner interest in what we hope will result in a permanent resolution to this issue.

Finally, passage of the Medicare Access and CHIP Reauthorization Act (MACRA) in April 2015 was one of the most important laws impacting physicians to pass in years. While it finally repealed the broken sustainable growth rate, its passage was just the beginning of SHM’s advocacy efforts on the legislation.

MACRA will fundamentally change the way in which physicians are compensated and will accelerate the transition away from fee-for-service (FFS) by encouraging alternative payment model (APM) participation; however, many details remain unclear and are in need of hospitalist-specific clarification. SHM has already begun engaging with federal agencies and lawmakers as the regulations for MACRA are developed, including initiating multi-stakeholder conversations about problems facing facility-based providers in pay-for-performance programs.

SHM’s Performance Measurement and Reporting Committee has been working closely with the PPC to devise concrete proposals that will allow physician/hospital alignment within mandated quality reporting programs, and the PPC has launched an APM workgroup that is exploring the most effective avenues for hospitalists to move away from FFS and take advantage of incentives that will be available under MACRA.

Successful advocacy efforts often take time, persistence, and most importantly, patience; these victories demonstrate that endurance pays off.

SHM is clearly making headway on behalf of hospitalists and patients, and will build off of the momentum that these victories have generated. As SHM Public Policy Committee chair, Ron Greeno, stated after SHM’s most recent victories, “There are times when we all ask if our efforts are all worth it, and the clear message that we have heard in the past few weeks is a resounding ‘Yes!’”

Success does take time, however, and help from SHM members is a critical part of the equation. Your voice does make a difference.

To stay up to date and get involved with SHM’s advocacy efforts, connect with SHM’s Grassroots Network at, and join the policy discussions in the Advocacy and Public Policy community on HMX.

Josh Boswell is SHM’s director of government relations.

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