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December 8, 2016

Congress just passed 21st Century Cures. Here are 5 ways it directly affects hospitals.

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The Senate on Wednesday voted 94-5 to pass the 21st Century Cures Act, legislation that aims to accelerate the development and regulatory approval of medical innovations.

The bill, which cleared the House last week, now heads to President Obama, who in a statement said he will sign it "as soon as it reaches [his] desk."

Hospital-specific provisions

The measure includes several provisions specific to hospitals. For instance, it would:

  • Exempt hospital outpatient departments that were under construction before Nov. 5, 2015, from scheduled Medicare reimbursement cuts under CMS' site-neutral payment rule;
  • Extend the Rural Community Hospital Demonstration Program for five years;
  • For long-term acute care hospitals, delay until Oct. 1 a rule penalizing hospitals that receive one-fourth or more of their referrals from a single source;
  • Require CMS to take patient socioeconomic status into account in the Medicare Hospital Readmissions Reduction Program;
  • Requires the HHS secretary to translate inpatient hospital codes to outpatient hospital codes for 10 surgical procedures by no later than Jan. 1, 2018.

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Funding details

The Cures Act would authorize $6.3 billion in funding over the next decade.

Of those allocations, the bill would set aside $1 billion over two years for opioid misuse prevention efforts. It also would allocate $4.8 billion for NIH over the next 10 years to help fund biomedical research, including:

  • $1.4 billion for the All of Us Research Program, formerly known as the precision medicine initiative;
  • $1.6 billion for the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative; and
  • $1.8 billion for the cancer "moonshot" initiative.

In addition, the legislation includes $500 million over the next 10 years for FDA to accelerate its drug and medical device approval processes. Specifically, the bill calls for FDA to:

  • Accelerate its review processes for breakthrough medical devices;
  • Expedite the approval of regenerative advanced therapies, or stem cell therapies;
  • Increase patient participation in the drug approval process; and
  • Streamline the review process for products that are both a drug and a device.

Bill aims to bolster mental health reform efforts

The bill also includes provisions intended to improve mental health reform efforts, such as creating new administrative positions at the Substance Abuse and Mental Health Services Administration to help coordinate mental health initiatives.

While the bill does not authorize new funding for mental health reform efforts, it does provide financial incentives to increase the number of mental health professionals in the United States and better integrate mental health and primary care services.

Further, the bill would:

  • Allow Medicare to cover short-term hospitalizations for patients with severe mental  illnesses;
  • Bolster oversight of mental health parity rules;
  • Coordinate mental health care, which currently is provided by 112 different programs funded by eight federal agencies;
  • Require the HHS secretary to clarify cases in which physicians can share patients' medical information with family caregivers; and
  • Require the U.S. attorney general to create at least one drug and mental health court pilot program.

Additional provisions

The legislation also includes several additional provisions related to Medicare, Medicaid, and health IT. For instance, the bill would:

  • Allow documentation by scribes to qualify under EHR documentation requirements;
  • Exempt physicians who practice primarily at ambulatory surgery centers from Meaningful Use requirements;
  • Create centralized enrollment standards for doctors to participate in Medicaid;
  • Seek to improve interoperability of EHRs, including by requiring EHR developers to use open APIs, test interoperability in real-world settings, and to attest that they will not block communications; and
  • Require HHS to create and maintain a centralized database of terminated Medicaid providers as a way to combat fraud.

Legislation funding

The Cures Act would divert $3.5 billion over 10 years from the Affordable Care Act's (ACA) health care prevention fund, as well as money generated by the Strategic Petroleum Reserves, to offset the allocations. The funding allocated under the bill is not mandatory, despite objections from Democratic lawmakers, and instead will be subject to Congress' annual appropriations process.

Cures Act draws widespread support

Several lawmakers and industry groups applauded the measure's passage.

Obama praised the bill's final passage, saying, "The Cures Act makes important investments that will save lives." He added, "We are now one step closer to ending cancer as we know it, unlocking cures for diseases like Alzheimer's, and helping people seeking treatment for opioid addiction finally get the help they need."

Mary Woolley, president of Research!America, said, "Finding solutions for deadly and debilitating health threats and combating insidious public health threats should be a dual imperative for our nation, and this legislation could well usher in an era of unprecedented progress on both fronts."

Similarly, Reps. Diana DeGette (D-Colo.) and Fred Upton (R-Mich.) the bill's two House sponsors, said, "A new day for medical research is on the horizon."

Todd Ebert, president and CEO of the Healthcare Supply Chain Association, praised the bill's health IT provisions. "Comprehensive EHRs with data that are accessible and interoperable across systems—and operating under appropriate privacy safeguards—will allow providers and patients to see a complete patient health picture and have access to all applicable information when making critical care decisions," he said.

Some stakeholders criticize legislation

However, some stakeholders—concerned about the bill's funding and potential to erode patient safety standards—criticized the bill.

Sen. Rosa DeLauro (D-Conn.) said, "While the bill authorizes $4.8 billion to NIH over the next 10 years—on average, a mere $480 million a year—this is barely a quarter per year of what the House passed last year. There is also no guarantee that the appropriators will follow through and provide funding each year."   

Georges Benjamin, executive director for the American Public Health Association, criticized lawmakers' decision to use ACA health care prevention funds to offset the bill's costs. "It fundamentally means that we will not have the growth in dollars for prevention that we thought that we were going to have–a lot of the more innovative things that we had hoped to do that really went to offsetting the leading causes of death aren't going to be there."

Michael Carome, director of Public Citizen's Health Research Group, said, "The bill has been sold erroneously as a common sense, bipartisan compromise that enables scientific innovation and medical breakthroughs for [the United States]. But in reality, the legislation includes a grab bag of goodies for Big Pharma and medical device companies that would undermine requirements for ensuring safe and effective drugs and medical devices."

Some critics also raised concerns that FDA reforms included in the bill will give the incoming administration broader authority to alter the drug and medical device approval process, the Wall Street Journal reports.

For instance, Jerry Avorn, a medical professor at Harvard Medical School, said, "The worry is that this could be a potentially toxic combination, a kind of one-two punch." He added, "The bill instructs FDA to use nonconventional methods to approve drugs, in the hands of a new FDA commissioner with a deregulatory bent" (DeBonis, "PowerPost," Washington Post, 12/7; Burton, Wall Street Journal, 12/7; Steinhauer/Pear, New York Times, 12/7; AHA News, 12/7; Levey, Los Angeles Times, 12/7; Ross Johnson, Modern Healthcare, 12/7; Szabo, Kaiser Health News, 12/7; Rosin, Becker's Hospital Review, 12/7; Hellman, The Hill, 12/7).

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