Health Care Reform Implementation Update August 21, 2014

The Centers for Medicare and Medicaid Services (CMS) made announcements this week regarding the Open Payments system and the availability of Affordable Care Act (ACA) Consumer Assistance Program grant funds, issued a request for additional information to ACA enrollees with inconsistent data on their applications, and posted the responses it received to its Request for Information (RFI) regarding the evolution of the Accountable Care Organizations (ACOs). Also, the Department of Health and Human Services announced another significant appointee, and the Government Accountability Office (GAO) released a report regarding CMS’s Medicare claims review process.

AT THE AGENCIES

On August 8, the GAO released a report that calls for increased CMS oversight of the Medicare claims review process. Recovery audit contractors review providers Medicare claims to ensure payments are proper. The report specifically recommends that CMS should increase its monitoring of the Recovery Audit Data Warehouse, the current database that CMS recovery auditors and other oversight contractors use for reporting and provide information on their reviews. According to the GAO report, the contractors do not always enter complete information on their reviews into the reports, which is necessary to ensure claim accuracy. GAO also highlighted concerns that some recovery audit contractors do not always comply with the requirement to communicate providers’ rights to those providers that may have claims under review. CMS commented that the agency has agreed to develop plans to address the issues outlined in the report.

CMS informed approximately 310,000 individuals who enrolled in the federally facilitated exchange and had citizenship and immigration data inconsistencies that they must provide proof of citizenship or legal residency status to the agency by September 5. CMS said that if proof is not provided in time, coverage for the individuals will be terminated by the end of September.

On August 13 in a Frequently Asked Questions document, CMS announced the availability of $5.3 million in unspent ACA Consumer Assistance Program grant funds from 2010. CMS said it would redistribute those funds to the states that received the grants in 2010. States will be able to use the funds to re-establish, continue or expand upon activities that they began with the 2010 grant funds that they had already received.

On August 14, CMS said that its Open Payments system was back on-line for health care providers to access, a little less than two weeks after the agency took the system down to investigate data issues. The website contains information on payments that physicians and teaching hospitals receive from drug and medical device makers. CMS suspects that approximately one-third of the records in the database still have errors and will not be included on the public version of the website.

CMS announced that it would allow special enrollment periods (SEPs) for individuals who had signed up for health coverage on Healthcare.gov but were denied either because of a system error or because they resided in a state that had not expanded Medicaid, initially had income below the poverty line, and then had their income increase. CMS is encouraging individuals who believe they are eligible to contact the federal marketplace to explain their situation. Once approved, a new SEPs will last 60 days.

Kevin Thurm, a former HHS deputy director during the Clinton administration and Citigroup executive, was appointed by HHS Secretary Sylvia Burwell as HHS’s senior counselor. In this role, Thurm will work closely with senior staff on “cross-cutting strategic initiatives, key policy challenges, and engagement with external partners.”

On August 19, the Treasury Inspector General for Tax Administration (TIGTA) publically released a report that highlights problems regarding the Internal Revenue Service’s (IRS) enforcement of the medical device tax. According to the report, there is a $117.8 million discrepancy between what was expected in tax revenue and what the IRS actually collected for the medical device tax in 2013. TIGTA reported that the IRS is still struggling to determine which manufacturers who owe the tax have paid it correctly and suggested that the compliance tools for ensuring proper collection be improved.

IN THE COURTS

On August 8, Oracle Corporation, the primary developer of Oregon’s health exchange website Cover Oregon, sued the state agency operating the exchange for breach of contract (for failing to pay bills) in federal district court. The complaint Oracle filed also alleges that state officials promised to pay the company but have not done so. The state has also indicated that it may sue Oracle as well because of issues with the website.

On August 12, a federal district judge said that the state of Indiana and school corporations have standing to challenge the availability of premium tax credits for individuals enrolled in state-based exchanges. The courts dismissed the government’s argument, however, that the ACA employer mandate violates the state’s Tenth Amendment rights. Oral arguments are scheduled for October 9, 2014.

On August 18, the plaintiff in the Halbig case filed a brief with the U.S. Court of Appeals for the D.C. Circuit asking the court to deny the government’s request that the full court review last month’s decision by a three-judge panel of the court. Halbig wrote that the court should wait and see if the U.S. Supreme Court decides to accept a petition from a party in a case from the 4th Circuit that also considered the legality of premium subsidies for individuals receiving health coverage through the federal exchange.

On August 18, the 7th Circuit reversed a decision by a lower court that had ruled that Medicare could provide compensation to a Chicago teaching hospital for “pure research” provided in 1993, 1994, and 1996 — time unrelated to patient diagnosis or treatment. The appeals court agreed with HHS, which had argued that such payments could be denied under the ACA. Under the ACA, Medicare reimbursement for pure research is explicitly prohibited after 2001. However, the ACA did not specify whether such reimbursement was permitted for 1983 to 2001. In 2010, after passage of the ACA, HHS said in rulemaking that pure research was not reimbursable.

THIRD PARTIES

The National Business Group on Health announced the results of its annual survey of large employers. According to the survey, large employers are anticipating a 6.5 percent increase in health care costs for 2015 (not accounting for plan design changes). Approximately one-third of large employers are also planning to offer a consumer directed health plan (CDHP) as the only plan option available for employees in 2015. Last year, only 22 percent of large employers said they planned to only offer a CDHP for 2014.

Health Care Reform Implementation Update August 12, 2014

August recess has begun on Capitol Hill. Congressmen and women and senators are home in their districts and states, and Capitol Hill staffers are catching up on piled up work. Nonetheless, last week Congressman Kevin Brady (R-Texas) released a discussion draft of a bill that intends to stem waste, fraud and abuse in Medicare. The Centers for Medicare and Medicaid Services (CMS) released final payment rules for inpatient hospitals and hospice providers and announced that it would be restarting their recovery audit contractor program; and the Department of Health and Human Services (HHS) announced grant awards to states for the Home Visiting Program, which was established under a provision in the Affordable Care Act (ACA).

ON THE HILL

On August 7, House Ways & Means Health Subcommittee Chair Rep. Kevin Brady (R-Texas) released a discussion draft of a bill he intends to introduce regarding Medicare waste, fraud and abuse. The bill, the Protecting Integrity in Medicare Act of 2014, includes security provisions for social security numbers and provider education initiatives, locks those beneficiaries with a high risk of abusing prescription drugs into particular pharmacies to cut down on prescription drug abuse, and expands the already existing prior authorization demonstration for scheduled ambulance trips. Congressman Brady used data from the recent Medicare Payment Advisory Commission (MedPAC) report that pointed to $44 billion in improper payments to providers due to incorrect or fraudulent Medicare payment claims to support the need for the bill. According to Rep. Brady, the bill includes ideas from bipartisan members of the committee.

AT THE AGENCIES

On August 4, the CMS released final payment rules for inpatient hospitals and hospice providers. Under the inpatient hospital final rule, Disproportionate Share funds, which help to reimburse uncompensated care costs for hospitals that serve a significant number of low-income patients, are reduced. Though DSH payments are reduced, inpatient hospital payments are increased by 1.4 percent for some acute care hospitals, payments to long term care hospitals will increase by 1.1 percent or an estimated $62 million for fiscal year 2015 under the final rule. CMS chose not to replace or revise its controversial “two midnight” provision in the rule.

Under the hospice final rule, payments to hospice providers will increase by an estimated 1.4 percent in fiscal year 2015, an amount equal to $230 million. Hospice providers will also be required to notify CMS within five days of a beneficiary’s choice to use the Medicare hospice benefit, as opposed to the three-day requirement that was included in the proposed rule from earlier this year. If the notice is not filed within five days of the beneficiary’s decision, the hospice provider itself, rather than CMS, will be responsible for the costs of care during the time between the beneficiary election and when the notice was filed.

Also on August 4, CMS announced that it would restart its Recovery Audit Contractor (RAC) program on a limited basis, after putting the program on hold earlier this year. The RACs would be permitted to conduct a small number of automated and complex claims reviews including those related to spinal fusions, outpatient therapy services, durable medical equipment, and cosmetic procedures. CMS said that the RACs would not be auditing short inpatient stay claims under the restart. The agency is in the process of procuring new RAC contracts.

On August 7, CMS announced that it would delay the review deadline of its Open Payments System, which provides information on payments that doctors receive from drug and medical device makers. The agency said that the delay was needed to investigate reported issues with some of the payment data. Earlier last week, the American Medical Association and more than 100 other physician groups asked CMS for a six-month delay in the publication of the database, which the agency had previously intended to publish on September 30.

The Treasury Department’s Inspector General for Tax Administration (TIGTA) released the results of its investigation examining the IRS’s accuracy in providing taxpayer information to exchanges. TIGTA found that during the month of October 2013, the IRS was 100 percent accurate in verifying the maximum monthly premium tax credits that an individual could be eligible for under the ACA, and over 99.9 percent accurate in verifying household income and family size.

IN THE COURTS

On July 31, the parties who lost in King v. Burwell, filed a petition with the U.S. Supreme Court asking the Court to review the case. In the case of Halbig v. Burwell, the Department of Justice, which lost in that U.S. Court of Appeals for the District of Columbia, filed a review petition with the U.S. Court of Appeals for the District of Columbia asking for a rehearing before the full appellate court. The maneuvers were the result of the July 22 rulings from the two appeals courts, which came to different conclusions on the legality of the federal government providing premium subsidies for individuals receiving health coverage through the federal exchange. In Halbig v. Burwell, a three-judge panel at the U.S. Court of Appeals for the District of Columbia held that the government could not provide such subsidies to states using a federal exchange instead of a state exchange, while in King v. Burwell, a panel at the U.S. Court of Appeals for the 4th Circuit said that it could.

On August 4, Sen. Ron Johnson (R-Wis.) filed an appeal for his lawsuit in which he challenged the policy that required congressional lawmakers and their staff to obtain government-subsidized health coverage through exchanges. His suit had been dismissed last month.

On August 7, the U.S. Court of Appeals for the 9th Circuit dismissed a lawsuit regarding the Independent Payment Advisory Board (IPAB), which was created under a provision in the ACA to provide oversight of Medicare spending to prevent the program from becoming insolvent. President Obama’s administration has yet to nominate any members to the IPAB, even though the panel’s work was slated to begin this year. The lawsuit was brought by two individuals who claimed that the potential cuts to Medicare, which may be proposed by IPAB, would cause them harm, and that IPAB itself is unconstitutional. The U.S. Court of Appeals for the 9th Circuit dismissed the case on the grounds that IPAB has not yet been formed, and therefore any potential cuts to Medicare payments are “highly speculative.” The appeals court did not address the constitutionality issue.

IN THE STATES

The District of Columbia received its third grant from the Department of Health and Human Services (HHS) to continue the development of its ACA exchange. The Level One establishment grant will be used on several projects to support the ACA exchange and will boost security and IT infrastructure for the online exchange. The grant award for this third round was $25.8 million.

On August 5, Indiana state officials met with members of the Potawatomi Indian tribe to discuss ways in which to improve the state’s Medicaid waiver plan, HIP 2.0. On July 17, CMS sent a letter to Indiana officials notifying them that their Medicaid waiver application was incomplete because the state officials had not consulted with tribal representatives. The state officials were directed by CMS to meet with the Potawatomi representatives to resolve this issue.

On August 4, HHS announced that it would be providing funds to states for the ACA's Home Visiting Program. The grants will expand home visiting services to some pregnant women and parents with children under five. Forty-six states and the District of Columbia will receive a combined $106.7 million in these grants, and the program will be administered by HHS’s Health Resources and Services Administration.

State officials in Massachusetts announced that they will discontinue their efforts to merge with the federal health insurance exchange, HealthCare.gov. Maydad Cohen, the state official managing the state’s own health care exchange, said that the state’s online exchange “works” and after a meeting with CMS Administrator, Marilyn Tavenner, both agreed that the state should continue with their efforts to build and improve upon the existing site.

 

Health Care Reform Implementation Update - July 28, 2014

Last week, two courts issued contradictory rulings on the authority of the federal government to provide subsidies in states using the federal exchange. The House held hearings regarding the Affordable Care Act's (ACA) effects on Medicare Advantage plans, a Government Accountability Oversight (GAO) report on ACA subsidy applications, and whether or not a lawsuit against President Obama should move forward. At the agencies, Secretary Burwell announced a major staff appointment, and the Internal Revenue Service (IRS) released the long-awaited forms regarding the ACA employer mandate. 

ON THE HILL

On July 23, Senator Mark Warner (D-Va.) sent a letter to the Department of Treasury requesting that the agency create less burdensome regulations regarding the ACA employer mandate or delay the mandate for another year. In the letter, Senator Warner expressed his concern that regulations released in March did not address all of the problems he had expressed in earlier communications about the employer mandate regulations.

In a vote of 7-4 along party lines, the House Rules Committee passed House Resolution 676 (H. Res. 676), which allows Speaker John Boehner (R-Ohio) to advance his plan to file a lawsuit on behalf of the House against President Obama and his administration. The central focus of the lawsuit is that the president overstepped his constitutional authority when the administration delayed implementation of the employer mandate under the ACA. Now that H. Res. 676 has passed out of the committee, it is expected to be debated on the House floor this week. 

On July 23, the House Ways and Means Subcommittee on Oversight held a hearing regarding a GAO report investigating health care subsidies under the ACA. According to the report, 11 out of 12 of the fake applications submitted by GAO investigators attempting to gain approval for the subsidies were accepted. Although the GAO representatives at the hearing claim that the investigation is still underway and that the sample represented in the report is too small to “draw conclusions,” Republicans on the committee claim the report highlights that fraud is prevalent in implementation of the ACA. The GAO says that more complete results of their investigation could be released in the next several months.

On July 24, the House Ways and Means Subcommittee on Health held a hearing on the future of Medicare Advantage (MA) health plans. Republican members focused on the proposed cuts to MA plans due to provisions in the ACA that require the Centers for Medicare and Medicaid Services (CMS) to reduce payment reimbursement to private health plans. The Congressional Budget Office (CBO) has estimated that cuts to MA plans will total more than $300 billion by 2023.

On July 23, Congressman Dan Maffei (D-N.Y.) introduced the “Members Play by the Same Rules Act,” legislation, which would eliminate subsidies for congressional members who purchase ACA health coverage. The bill would also require House and Senate members to purchase ACA coverage through the exchanges designated for their home states. Congressmen Ron Barber (D-Ariz.) and John Barrow (D-Ga.) cosponsored the bill upon its introduction. 

AT THE AGENCIES

On July 24, the IRS posted to its website drafts of forms employers will have to fill out in compliance with the employer mandate. The forms signal that the IRS is planning to move forward with the twice-delayed ACA requirement that large employers provide health insurance to certain employees or pay fines for not providing the coverage.

Also on July 24, the Department of Health and Human Services (HHS) announced that health plan enrollees will receive more than $330 million this year in refunds as a result of the medical loss ratio (MLR) provisions of the ACA. Under the provisions, health plans that do not spend at least 80 to 85 percent of their premiums on medical care and quality improvement activities are required to return a portion of those expenses back to consumers. Since 2011, insurers have returned approximately $9 billion to consumers under the MLR provisions.

The Health Resources and Services Administration (HRSA) released what it called an interpretive rule regarding its 340B discount program. In the rule, HRSA restated its position that orphan drugs that are not used to treat rare diseases can be purchased at discounted rates under HRSA’s 340B program. The rule is effective immediately. In May, the U.S. District Court for the District of Columbia ruled that HRSA did not have the authority to issue a legislative rule to allow certain types of safety net providers to purchase orphan drugs at a discounted rate when they are not used as treatment for rare diseases. 

In a “frequently asked questions” (FAQ) document prepared by the Departments of Labor, Health and Human Services, and Treasury, the government clarified health plan notification requirements regarding opt-out of the ACA’s contraceptive mandate. According to the FAQ, if a health plan provided by a closely held corporation that is subject to the Employee Retirement Income Security Act (ERISA) wishes to exclude coverage of contraceptives without employee cost-sharing in the middle of a plan year, it must provide a notification to its employees of the coverage reduction. The FAQ was released in the wake of the Supreme Court’s Hobby Lobby ruling, which held that closely held, for-profit employers could assert a “religious objection” to the ACA contraceptive coverage mandate.

On July 23, Sylvia Burwell announced that Leslie Dach will be joining that Department of Health and Human Services in the newly created senior counselor position. Dach previously served as the executive vice president of corporate affairs at Wal-Mart. His new responsibilities include execution of the second open enrollment for the federal exchange.

IN THE COURTS 

On July 22, two different U.S. appeals courts came to different conclusions on the legality of the government providing premium subsidies for individuals receiving health coverage through the federal exchange. In Halbig v. Burwell, a three-judge panel at the U.S. Court of Appeals for the District of Columbia held that the government could not provide such subsidies, while in King v. Burwell, a panel at the U.S. Court of Appeals for the 4th Circuit said that it could. Following the Halbig ruling, the government announced that it would request an en banc rehearing before the full appeals court panel on the decision. At issue is an Internal Revenue Service (IRS) regulation that said that the government could provide the premium subsidies for qualifying individuals in both federal and state exchanges notwithstanding the ACA's language that subsidies can be given in states with state-run exchanges. According to a recent estimate, approximately 5.4 million of the 8 million individuals who enrolled in exchanges during the open enrollment period enrolled in the federal exchange.

Also on July 22, the Obama administration filed a legal brief saying that it plans to modify the religious objection accommodation process that is currently in place for certain religious nonprofits that object to the ACA’s contraceptive mandate. Under the current policy, nonprofits are required to fill out a form that permits a third-party to provide the coverage. The administration is developing the new process in response to a recent Supreme Court order that said Wheaton College, which sued the government because of the mandate, could simply file a letter with the government rather than fill out the form. The new process is still under development, but according to the brief, the administration will issue an interim final rule on the new process within a month.

On July 21, a judge dismissed the lawsuit brought by Senator Ron Johnson (R-Wis.) challenging the policy that required congressional lawmakers and their staff to obtain government-subsidized health coverage through exchanges. The judge wrote that Johnson did not have standing to challenge the policy because he was not injured by it.

IN THE STATES

In letters dated July 16, HHS informed all U.S. territories that they are officially exempt from the ACA requirements that states must follow. HHS had previously claimed that territories fit the definition of state and would have to abide by ACA requirements. HHS, however, reversed that decision after “a careful review” of the ACA statute. In the letters, HHS states that CMS will release regulations soon that will clarify and confirm this new position.

THIRD PARTIES

The Kaiser Family Foundation released a report showing that out-of-pocket costs for individuals on Medicare have increased significantly since 2000. The report used data from the Medicare Current Beneficiary Cost and Use file between 2000 and 2010. According to the report, long-term care facilities represent the biggest cost to seniors who are on Medicare. In order to curb these costs, the Kaiser report recommends preventing unnecessary hospitalization and improving post-acute care.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - July 21, 2014

Last week the Senate debated a bill to reverse the Supreme Court’s contraception mandate decision, a group of House Republicans introduced a bill to replace Affordable Care Act (ACA) cuts to the Medicare home health benefit with a measure that would instead base payments of value of care delivered, the Department of Health and Human Services (HHS) announced a new contract solicitation for managing Healthcare.gov  and the House passed an appropriations bill that would cut the IRS’ budget for implanting the ACA.

ON THE HILL

On July 16, Senate Democrats attempted to bring a bill to the floor that would prohibit employers from refusing to provide coverage for contraception. The bill was intended to negate the Supreme Court’s recent decision to allow closely held companies to opt-out of contraception coverage for its employees. The bill was defeated on a procedural vote of 56 to 43. There is a possibility that the bill, or similar legislation, will be brought up again in the Senate later this year.

The House Rules Committee held a hearing on July 16 to explore the legality of the lawsuit against President Obama currently being considered by House Republican leadership. The lawsuit claims that President Obama violated his Constitutional duties by delaying the implementation of the employer mandate under the Affordable Care Act (ACA). The panel of four witnesses split their opinions along party lines as to whether there is legal standing to bring the lawsuit.

On July 16 the House passed an appropriations bill that would cut the IRS’s budget by $1 billion in fiscal year 2015. Among other things, the bill would block the IRS from further implementing the ACA. President Obama has said that he will veto the bill if it makes it to his desk.

The Congressional Budget Office (CBO) released a report on July 15 that says the ACA will reduce federal health care spending. According to the report, over the next 25 years, health care spending will represent 8 percent of the gross domestic product (GDP), an amount that is .01 percent less than CBO’s projection last year. The CBO estimates that this 8 percent figure amounts to $250 billion in savings.

On July 15, Congressmen Greg Walden (R-Ore.) and Tom Price (R-Ga.), along with Reps. Cathy McMorris Rodgers (R-Wash.), Renee Ellmers (R-N.C.), David McKinley (R-W.Va.), Sean Duffy (R-Wis.), and Sam Graves (R-Mo.), Glenn Thompson (R-Wis.), Tom Latham (R-Iowa), Charles Boustany (R-La.), and Erik Paulsen (R-Minn.) introduced the “Securing Access Via Excellence (SAVE) Medicare Home Health Act.” The bill would reverse the cuts made to home health care in January and replace them with a value-based payments plan. The bill would aim to reduce hospital readmissions and would implement the value-based purchasing program by 2019. Under the bill, CMS would develop performance measures for the program and a bonus would be paid to well performing home health providers.

AT THE AGENCIES

On July 11, CMS reported that 6.7 million more individuals had enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) by May of 2014 compared to September of 2013. Of those enrolled in Medicaid or CHIP, 56 percent are children. CMS also reported that the states that had expanded Medicaid under the ACA had 17 percent more individuals enroll in the two programs.

On July 15, HHS announced that it would make up to $100 million dollars of funding available to states under the Medicaid Innovation Accelerator Program (IAP). The program would offer technical assistance to states to help accelerate payment and service delivery reforms and improve health and lower costs. The program will provide funds to help identify and advance new models of payment and care delivery, analyze data, improve quality measurement, and support state-to-state learning and federal evaluation. The IAP will focus on specific categories of Medicaid enrollees such as pregnant women, newborns, children and individuals with mental illness and those receiving long term care services.

On July 16, CMS posted a new solicitation for a contractor to oversee Healthcare.gov next year. The new contractor will be responsible for analysis, design, development, testing, maintenance and support. The solicitation also requires that the company chosen be responsible for redesigning parts of the online exchange application and constructing parts of the site that will ensure proper payments to insurers. Accenture, the current company overseeing Healthcare.gov, was awarded a one-year contract that is set to expire in the beginning of 2015. It is unclear whether the company will bid for this new contract.

On July 18, CMS released a 13-page letter addressed to all Medicare Part D Plan sponsors and Medicare hospice providers regarding Part D drug payments for Medicare beneficiaries enrolled in Medicare’s hospice program. Under Medicare payment rules, hospice covers payments for drugs related to a beneficiary’s terminal diagnosis, while Part D covers payments for drugs for other conditions. In March, CMS had issued a memorandum that required prior authorizations for all drugs needed by Medicare hospice beneficiaries in order to determine whether the drug was covered under Part D. In the July 18 letter, however, CMS recognized the difficulties experienced by both Part D sponsors and Medicare hospice beneficiaries with respect to the prior authorizations, and wrote that it “strongly encourage[s]” prior authorization for hospice patients only needing four categories of drugs, specifically analgesics, anti-nauseants, laxatives and anti-anxiety drugs.

On July 18, CMS announced that it had awarded 14 new contracts for quality improvement organizations (QIOs). This announcement is the second the phase of the new Quality Innovation Network (QIN) program through CMS. These QIOs will work with providers and communities using gathered data to improve quality of care with the specific goals of reducing admissions, promoting prevention and reducing health disparities.

IN THE STATES

On June 27 and July 9, CMS sent letters to a total of 13 states asking them to address the backlog of Medicaid enrollee applications in their states. In the June 27 letters, CMS asked six states to come up with mitigation plans for clearing their enrollment backlogs but did not offer a confirmed deadline for completion. In the July 9 letters, CMS said that it would conduct its own reviews of the states’ Medicaid eligibility and enrollment systems.

Wisconsin’s alternative to Medicaid expansion enrolled 110,000 childless adults by the end of June 2014, surpassing projections that the state would only enroll 99,000 childless adults by June 2015. Proponents claim that the larger than projected enrollee numbers illustrate the success of the program, while opponents are questioning where the state will get the funds to pay for the higher level of enrollees. Governor Walker opposed the ACA and had opted not to accept federal funds for Medicaid expansion.

In a move that could spread to other states, a new law in Kentucky will now allow nurse practitioners to prescribe routine medications without a doctor’s input. The law, which went into effect on July 15, will provide this authority to nurse practitioners who have completed a four-year collaboration with a practicing physician who was willing to oversee their work. Nurse practitioners across the country are pushing to implement similar laws in their own states, particularly in states with rural areas that may have shortage of primary care doctors.

IN THE COURTS

On July 10, the Chief Administrative Law Judge (ALJ) for the Office of Medicare Hearings and Appeals (OMHA) told lawmakers at an Oversight and Government Reform Health subcommittee meeting that it is planning to hire seven additional ALJs to deal with the current backlog of provider appeals for the Medicare claims. On July 11, OMHA announced that it would be implementing two pilot programs to assist with the backlog. One would create a new settlement conference between providers and suppliers, and the other would allow providers with a large volume of claim disputes to use statistical sampling to help expedite the process. OMHA had approximately 800,000 appeals pending as of July 1, 2014.

The U.S. Court of Appeals for the 11th Circuit announced on July 16 that it would hear oral arguments in a lawsuit challenging the delay of the ACA employer mandate provisions. The Obama administration delayed the effective date of the mandate from 2014 to 2016. Kawa Orthodontics brought the suit in in October of 2013 and claimed it had spent substantial time and money preparing for the mandate.

THIRD PARTIES

A report released by the Robert Wood Johnson Foundation and athenahealth says that the ACA has not increased new patient volume for providers. According to the report, overall visits with new patients actually decreased slightly. However, primary care doctors in states that expanded Medicaid did report an increase in Medicaid patients from 12.3 percent last December to 15.6 percent currently.

 

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - July 10, 2014

On June 30, in one of the most highly anticipated cases affecting the Affordable Care Act (ACA), the Supreme Court ruled that closely held companies could assert a “religious objection” to the ACA contraceptive coverage mandate. Members on the Hill reacted both positively and negatively, with some calling for legislative action. The Centers for Medicare and Medicaid Services (CMS) released annual payment rate and policy proposed rules for home health, end-stage renal disease, hospitals, ambulatory surgical centers and the physician fee schedule, and the Internal Revenue Service (IRS) released a final rule on tax credits for employee health insurance expenses for small employers.

ON THE HILL

Numerous congressional members reacted to the Supreme Court’s contraception mandate ruling quickly after it was announced. Senate Republican Leader Mitch McConnell (R-Ky.) hailed the decision as evidence that “the Obama administration cannot trample on the religious freedoms Americans hold dear.” Many Democrat senators said they would introduce legislation that would undermine the Supreme Court’s decision. For example, Senator Dick Durbin (D-Ill.) says that he will introduce a bill that will require corporations opting out of the contraception mandate to disclose that to employees and job applicants, and on July 9 a group of Senate Democrats introduced a bill that would not allow for-profit corporations to seek exemption from the ACA contraception mandate.

On June 27, Senators Jay Rockefeller (D-W.Va.) and Pat Roberts (R-Kan.), chairman and ranking member of the Senate Finance Committee’s Subcommittee on Health, sent a letter to CMS Administrator Marilyn Tavenner, requesting that CMS suspend recent guidance regarding Medicare Part D and hospice payments for certain drugs. Seventy senators signed the letter in which they specifically request clarification from CMS on the process it uses to authorize payments to Medicare Part D hospice patients. The letter claims that the recent updated guidance has caused confusion over who is ultimately responsible for paying for medications for hospice patients and may therefore delay access to those medications.

On June 26, Congresswoman DeLauro (D-Conn.) and Senators Sherrod Brown (D-Ohio) and Richard Blumenthal(D-Conn.) introduced a bill that would require insurance companies to finalize their Medicare Advantage (MA) physician networks 60 days before the fall open enrollment period begins and would prohibit the companies from dropping physicians from their networks without cause until the following open enrollment period. The bill, “The Medicare Advantage Participant Bill of Rights Act,” is intended to ensure that MA patients will not be forced to switch to higher cost or out-of-network doctors mid-year. The bill would also require that Medicare Advantage insurers disclose their reasons for ending contracts with providers. The legislation was introduced in response to cuts in provider networks made by UnitedHealth Group last year.

AT THE AGENCIES

On June 26, the IRS issued a final rule establishing eligibility requirements for the ACA small business tax credit. Employers are eligible if they have no more than 25 “full time equivalent” employees, the employees earn no more than $50,800 in average annual wages, and the employers contribute at least 50 percent of the cost of premiums. Once those criteria are met, the employers can claim a tax credit equal to 50 percent of the premiums they paid.

On July 1, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule that would cut Medicare payments to home health providers. According to CMS, the 0.3 percent cut amounts to $58 million. The proposed rule would also ease the requirement that physicians have to provide a detailed narrative of a patient’s circumstances to CMS before they could determine whether or not a patient was eligible for home health care.

On July 2, CMS proposed a rule regarding end-stage renal disease (ESRD) policies and payment rates that would increase total Medicare payments by 0.3 percent or $30 million in 2015, with slight variations in the increase depending on the type of ESRD facility. For example, urban facilities that treat ESRD will see a 0.4 percent increase, while rural facilities can expect payments to decrease by 0.5 percent. The rule also proposes to change payment policies related to coverage of and payment for durable medical equipment, prosthetics, orthotics and supplies, as well as to modify the quality incentive program for ESRD providers.

On July 3, CMS released a proposed update to payments under the Medicare hospital outpatient prospective payment system (OPPS) and payments to ambulatory surgical centers (ASC) for 2015. CMS proposes to raise Medicare hospital outpatient payments by 2.1 percent. The proposed rule would also increase payments to ASCs by 1.2 percent in 2015. The update intends to further the transition from a fee schedule model to a complete prospective payment system. The proposal would also continue to provide higher payments to specific types of rural and community hospitals and cut Medicare reimbursements to hospitals that do not meet certain outpatient quality reporting requirements by 2 percent.  

Also on July 3, CMS released a proposed rule on physician payments that would hold payments flat for the first three months of 2015, as was required under the “doc fix” legislation enacted earlier this year. The rule further proposes to incorporate a notice and comment process for determining changes to payment rates beginning in 2016; a new payment for non-face-to-face chronic care management services provided by primary care physicians to patients with two or more chronic conditions; and modifications to several physician quality reporting initiatives, such as the Physician Quality Reporting System, the Medicare Electronic Health Record Incentive Program and the Medicare Shared Savings Program (MSSP). With respect to the MSSP, the physician proposed payment rule would change the quality measures for the Medicare Shared Savings Program for accountable care organizations (ACOs) including increasing the total number of measures that the agency uses for quality reporting and providing additional quality improvement awards to ACOs for improving the quality of care they provide over time.

On July 7, Health and Human Services (HHS) announced that it will award $83.4 million in grants to community and tribal clinic residency programs for primary care physicians. The grants are intended for federally qualified health centers, rural clinics, tribal clinics and similar community health providers. Specifically, the grants will support graduate medical education programs at Teaching Health Centers (THCs), which are designed to expand primary care services in community-health based settings. The funding will support training for 550 residents during the 2014-2015 academic year.

Last week, the HHS Office of the Inspector General (OIG) released a report analyzing enrollment processing by the federal insurance exchange and state operated exchanges between October and December 2013. The OIG found that the federal exchange as well as some state exchanges had processed millions of applications that contained either inconsistent or erroneous information. It also reported that exchanges were unable to resolve most of the issues, particularly those related to citizenship and income. The federal exchange was unable to resolve issues, the OIG reported, because its eligibility system was not fully operational at the time. CMS agreed with the OIG’s recommendation that it develop a detailed plan on how it will resolve the inconsistencies and to make the plan public. 

CMS announced that some Medicare Part B providers could appeal certain Medicare claims decisions without first having the decision reviewed by an administrative law judge. Instead, under the pilot program, the providers could utilize “Settlement Conference Facilitation” — an alternative dispute resolution process that uses mediation principles to resolve their disputes.

AT THE WHITE HOUSE

On July 2, the White House Council of Economic Advisers released a report intended to highlight the negative effect to states that chose not to expand Medicaid under the ACA. According to the report, the states that chose to opt out of Medicaid expansion lost a total of $88 billion in federal funding through 2016. The report also said that Medicaid expansion in the opt-out states could have equated to 400,000 new jobs and 5.7 million more people with insurance. The report used data from the Urban Institute and is intended to place added pressure on the states refusing Medicaid expansion.

IN THE COURTS

The Supreme Court ruled on June 30 that closely held, for-profit employers, such as Hobby Lobby, could assert a “religious objection” to the ACA contraceptive coverage mandate. Hobby Lobby and Conestoga Wood argued in the case that four of the 20 types of contraception the ACA required them to offer in insurance plans to their employees violated their religious beliefs. The Court held that the ACA provision violated the Religious Freedom Restoration Act and the religious liberties of some small businesses. The Court also wrote that the government could directly provide birth control to women, rather than through employer-provided health coverage.

IN THE STATES

On July 1, Indiana Governor Mike Pence (R) submitted a request to CMS to expand Medicaid using a state developed plan. The proposal, the Healthy Indiana Plan 2.0, would still rely on federal funding for Medicaid expansion but is also intended to promote personal responsibility through the use of health savings accounts and patient feedback.

In a report requested by Senator Orrin Hatch (R-Utah), the Government Accountability Office (GAO) revealed information on small group policy provider premiums across states. The report concluded that Connecticut and Alaska small businesses and nonprofits pay more than other states in providing health care coverage to their workers. Connecticut’s per individual average annual premium for small business was $6,080 in 2013, compared to Kentucky’s per individual premium cost of $1,311. Senator Hatch requested the report in order to establish a baseline of small group premium costs before the ACA was implemented in an effort to illustrate premium increases after implementation occurred.

During the last week of June, the Federation of State Medical Boards (FSMB) released draft legislation that would promote the use of telemedicine across the country. The draft legislation takes the form of a compact agreement between the states that would choose to participate. Standards for physicians that would perform telemedicine services under the compact would be set by an interstate commission. FSMB members from various states have claimed that they will encourage their state legislatures to consider the draft legislation.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - June 27, 2014

Secretary Burwell continues to settle in to her new position as the Department of Health and Human Services (HHS), this week making a number of management changes at the department; CMS released the long awaited proposed rule on Annual Eligibility Redeterminations for Exchange Participation and Insurance Affordability Program; and CMS also announced that it would create a five-star ratings program for hospitals, home health agencies and end-stage renal disease providers.

ON THE HILL

On June 19, Senators Orrin Hatch (R-Utah) and Chuck Grassley (R-Iowa) released a report that details their investigation into HHS’ oversight of HealthCare.gov. The report finds that HHS wasted millions of dollars by failing to responsibly oversee the IT development of HealthCare.gov, and that political pressure from the White House to go live on October 1, 2013 trumped operational realities. According to the report, White House and CMS officials were warned that HealthCare.gov was not ready for its November 2013 release.

On June 19, a bipartisan group of senators introduced a bill that would require CMS to account for the socioeconomic status of a hospital’s patients when calculating penalties for readmission rates. The bill, the “Hospital Readmission Accuracy and Accountability Act,” is intended to maintain accountability in Medicare while mandating that CMS does not “let differences in income serve as an obstacle to improving health conditions,” according to one of the bill’s sponsors, Senator Joe Manchin (D-W.Va.). The American Hospital Association and the American Medical Association support the bill.

Secretary of Health and Human Services Sylvia Burwell sent the House Energy and Commerce (E&C) Committee a justification document outlining HHS’s legal authority to make payments in connection with CMS’s risk corridor program. Both the Government Accountability Office (GAO) and leadership from the House E&C committee had requested that HHS provide legal justification for these payments. In the justification documents to both GAO and E&C, Secretary Burwell claims that these payments are being treated as a user fee and therefore are allowable by law. The chairman of the House E&C committee Fred Upton (R-Mich.) pushed back stating that “risk corridors were not listed as a user fee in President Obama’s own FY2015 budget.”

The GAO released a report on June 18 that reveals CMS paid out $14.4 billion in improper Medicaid payments to managed care providers. According to the report, there are two main issues with CMS oversight of Medicaid payments that directly led to the improper payments. First, CMS has not updated its program integrity guidance to the states since 2000. Second, CMS does not require states to audit managed care payments, and states have requested additional guidance from CMS on how to obtain integrity monitor oversight.

In a letter to HHS, Congresswoman Tammy Baldwin (D-Wis.) and Ron Kind (D-Wis.) are requesting that the agency consider delaying the ACA employer mandate for Medicaid-dependent provider groups. The letter argues that these provider groups would see an increase in costs between 15 and 50 percent if they were subject to the mandate. The letter does not request repeal but asks HHS to work with stakeholders, such as Medicaid providers and facility directors, to discuss a solution to this problem, thus implying a request for a delay of the mandate.

AT THE AGENCIES

On June 26, CMS released a proposed rule and guidance documents regarding re-enrollment in ACA exchanges in the upcoming enrollment period. Under the proposed rule, most current enrollees would be automatically re-enrolled unless they choose to select new coverage in the new enrollment period that begins in November. Only those enrollees who have had changed life circumstances, such as marriage or employment status, would have to update their information on Healthcare.gov. The guidance documents that were released with the proposed rule give insurers suggestions for informing their customers about the upcoming enrollment period.

A statement posed on the Health Resources and Services Administration’s (HRSA’s) website says that it does not view a recent court decision regarding the ACA’s orphan drug exclusion as an invalidation of its interpretation of the statute, and that the agency would continue to stand by its interpretation. In May, the U.S. District Court for the District of Columbia ruled that HRSA did not have the authority to allow certain types of safety net providers to purchase orphan drugs at a discounted rate when they are not used as treatment for rare diseases. Last year, HRSA issued a rule that said that the ACA’s exemption did not apply to situations where the drugs were used to treat common diseases.

In an agency blog post by Patrick Conway, CMS’s deputy administrator for innovation and quality and its chief medical officer, CMS announced that it would create a “five star” ratings program for hospitals, home health agencies and end-stage renal disease providers. The program will be implemented later in 2014 and early in 2015 and be based on “established scientific standards of rigor and accuracy.” Currently, CMS has star ratings programs in place to compare nursing homes, Medicare Advantage plans, and certain physician group practices.

Last week, newly confirmed HHS Secretary Sylvia Matthews Burwell made several announcements concerning CMS staffing. She announced that a new position within CMS would be created for a “marketplace CEO” who would be responsible for both running the Center for Consumer Information and Insurance Oversight (CCIIO) and heading up management of the federally facilitated exchange. There will also be a new position for a chief technology officer.Burwell also announced that Andy Slavitt would serve as the agency’s principal deputy administrator. Slavitt was formerly with Optum/Quality Software Services Inc. (QSSI), the principal contractor for the federally facilitated exchange.

According to the Bureau of Economic Analysis (BEA), an office in the Department of Commerce, health spending slowed by an annual rate of 1.4 percent in the first quarter of 2014. This is in stark contrast to the BEA’s April estimate that it would actually increase by 9.9 percent. In the April report that predicted this increase, BEA did note that it would not be able to provide final numbers for the first quarter of 2014 until June. These new June numbers, reported by BEA on June 25, that illustrated this decline in health spending was a “surprise” to BEA and the Department of Commerce.

During an Open Door Forum on June 17, CMS officials told stakeholders that it would implement two new demonstrations to test whether a prior authorization process can be used for Medicare part B beneficiaries receiving non-emergency ambulance services and hyperbaric oxygen therapy. The non-emergency ambulance demonstration is scheduled to begin in the fall of 2014 in three states and run for three years. The oxygen therapy demonstration is scheduled to begin in early 2015 in three states. In both demonstrations, Medicare Administrative Contractors (MACs) will be required to respond to prior authorization requests within 10 days, the same timeframe that was required for the power wheelchair prior authorization demonstration. During the forum, CMS officials said that claims that have gone through prior authorization will typically not be subject to additional audits from MACs or from recovery audit contractors.

IN THE STATES

On June 20, Massachusetts state officials reached a deal with their former state exchange website contractor, CGI, to recover funds after the website experienced numerous problems. The deal includes up to $12 million in recovered funds from CGI as long as the state pledges not to pursue further legal action against the contractor.

In Virginia on June 20, Governor Terry McAuliffe vetoed portions of the budget that was passed by the state’s general assembly on June 12. The governor did sign off on most of the budget to avoid a government shut-down, but used his line-item veto power to strike language that would have prevented Medicaid expansion in the state. On June 23, using a procedural move that did not require a vote, the Virginia General Assembly was able to finalize and pass a budget without Governor McAuliffe’s line-item vetoes.

THIRD PARTIES

On June 19, the Kaiser Family Foundation released a new survey of ACA insurance enrollees. The survey asked 742 ACA enrollee respondents whether they had insurance before they enrolled in an ACA plan. More than half of the respondents, 57 percent, said that they did not have insurance before they enrolled. This contradicts the HHS estimate from May 1 that claimed that 87 percent of new ACA enrollees had lacked coverage before they signed up.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - June 3, 2014

Affordable Care Act (ACA) action on Capitol Hill this past week centered on investigations into improper ACA subsidy payments, a potential constitutional amendment proposal, and support for an appeal of the ACA in favor of a Republican-sponsored replacement. At the agencies, a high-level official departed the Department of Veterans Affairs amidst controversy, and the Centers for Medicare and Medicaid Services (CMS) announced that there will be more physician payment data releases in the future. Also this week, many states announced new contracts to assist with their state-run ACA exchange websites.

ON THE HILL

This week the Senate will vote on the nomination of Sylvia Burwell for Secretary of Health and Human Services (HHS).Burwell enjoys bipartisan support for her nomination, and it is expected that she will be confirmed.

In a May 27 letter to the HHS Office of the Inspector General (IG), Senators Orrin Hatch (R-Utah), Mitch McConnell (R-Ky.) and Tom Coburn (R-Okla.) requested an investigation into whether certain individuals were being given improper tax subsidies for their health care costs. Under the ACA, low-income individuals can apply for tax subsidies to help pay for their health care plans. The letter expresses concern that there is insufficient IRS oversight of these subsidies. Citing reports from The Washington Post and the Treasury Inspector General for Tax Administration, the senators expressed concern that the IRS has not fully implemented the systems needed to “verify the accuracy of applicant information” for the tax subsidies. The HHS IG is already required by Congress to produce a report to Congress on the subsidies by July 1, 2014.

During a Memorial Day speech, Senator Orrin Hatch (R-Utah) told a crowd of veterans and their families that he might propose a constitutional amendment that would give employers the right to deny contraception coverage to their employees if the Supreme Court does not rule in favor of Hobby Lobby in its current ACA contraception-mandate case against HHS. The Hobby Lobby suit against HHS alleges that the ACA violates the First Amendment by requiring companies to cover specific types of contraception in their health care plans. Hatch stated that if the Supreme Court did not find in favor of Hobby Lobby, its ruling would “foul up the First Amendment again.”

This past week House members from the Republican Study Committee (RSC) wore pins to highlight their support for a bill that would replace the ACA with a Republican devised alternative. The alternative bill, H.R. 3121, “American Health Care Reform Act,” is co-sponsored by 130 House Republicans. The bill was introduced by Congressman Phil Roe (R-Tenn.), who is also a physician, and would replace the ACA with an expansion of health savings accounts, medical liability reform and permission for individuals to purchase health care plans across state lines. Supporters of the bill are pushing Republican leadership to bring the bill up for a House vote in the next two months.

AT THE AGENCIES

Amid growing controversy regarding improper record keeping and extensive wait times for veterans seeking health care in VA facilities, Secretary of Veterans Affairs Eric Shinseki resigned from his post on Friday. President Obama accepted Shinseki’s resignation but has not announced his choice for a replacement nominee. In the interim, Deputy Secretary of Veterans Affairs, Sloan Gibson, will oversee the agency.

Fabien Levy, one of the press secretaries for HHS, announced his departure from the agency on May 28. Levy worked for the department for two years and resigned via email, writing that his work at HHS was the “most important work of my life.”

CMS Administrator Marilyn Tavenner, CMS Deputy Administrator for Innovation & Quality Patrick Conway, and CMS Acting Director of the Offices of Enterprise Management Niall Brennan, published an article in the New England Journal of Medicine on May 28 in which they state their support for the agency’s recent release of data on Medicare payments to individual physicians. The officials also reported that the agency will provide additional data and that the perceived harm to physicians is mitigated by the value of providing transparency to consumers.

On May 29, the HHS Inspector General released a report finding that in 2010, the Medicare program paid out $6.7 billion for health care visits that were improperly coded or that lacked proper documentation. The report found that 42 percent of diagnostic and assessment claims were improperly coded and that 19 percent of these types of claims were improperly documented. The report noted that though many coding errors are the result of legitimate mistakes, these errors tend to result in higher payments for physicians. On a related note, CMS recently conducted a “test-run” of the new ICD-10 coding system and reported that it accepted 90 percent of the claims using the new coding from the test participants. CMS will be conducting other ICD-10 test-runs before its full implementation in October of this year.

IN THE COURTS

Two patient advocacy groups filed an administrative complaint on May 29 with HHS’s Office of Civil Rights alleging discrimination against patients with HIV/AIDS. The complaint claims that four Florida health insurance companies,CoventryOne, Cigna, Humana and Preferred Medical Plan, are charging higher out-of-pocket costs for HIV/AIDS medications and requests that the federal government take action to end what it calls discrimination against individuals with HIV/AIDS. The complaint argues that these higher prescription drug costs violate provisions of the ACA that prohibit insurance companies from discriminating against enrollees based on “race, color, national origin, sex, age or disability.”

On May 29, the governor of Oregon said that he asked the state’s attorney general to bring suit against Oracle, the contractor it used to build its exchange website. The governor said that the suit would be brought under the False Claims Act and that the state would seek recovery of attorneys’ fees, funds spent on building the website, and damages. Oregon paid Oracle more than $134 million to develop the Cover Oregon website, which never functioned properly.

The Center for Public Integrity (CPI), a news organization, is suing CMS for withholding public documents. CPI is requesting that CMS release information regarding program audits, billing data, and any documents that pertain to investigations of health insurance plans that may be overcharging the federal government under Medicare Advantage payments. The suit alleges that CMS has ignored CPI’s request since May 2013.

IN THE STATES

New York state is finalizing a contract with Xerox to have the company take over management of its Medicaid management system. The $500 million contract was confirmed by a New York State Department of Health spokesman. This announcement came just a week after Nevada severed its contract with Xerox over the company’s inability to effectively implement and manage the state’s ACA exchange.

Some California lawmakers would like the state to subsidize their Farmer Health Care Program so that it can continue to operate. The Farmer Health Program currently covers 10,700 farm workers in California but does not meet all of the requirements for health care plans under the ACA. In order to meet those requirements the state would need to purchase $3.2 million in supplemental insurance. Some state lawmakers do not support this subsidy, and a decision on the future of the plan will be made by June 15.

The Center for Consumer Information & Insurance Oversight (CCIIO) at CMS is requesting that Rhode Island provide the agency with a report on the sustainability of the state’s ACA exchange after the next enrollment period. The CCIIO cited media reports claiming that there are issues with the state-run exchange as the basis for their request.

Connecticut’s Chief Information Officer for its state-run exchange, James Wadleigh, announced that the state is launching a smartphone app for its exchange website. The state-sponsored smartphone app would be the first in the country and is intended to encourage young people to enroll for health plans under their ACA exchange.

Oregon announced that it will be seeking services from companies to transfer its now defunct state-run ACA exchange website to the federal exchange website, Healthcare.gov. The state plans to solicit bids from 10 companies for the estimated $35 million in work to integrate the two systems.

Maryland has approved more than $43 million in contracts to assist with improving its state-run ACA exchange website. Xerox was awarded $29.3 million to develop new technology similar to that used in the Connecticut exchange, and Deloitte was awarded $14.2 million for software development.

IN THIRD PARTIES

The Journal of the America Medical Association released HHS’s review of the nation’s overall health, which is conducted by the agency and reported on every decade. The results were mixed. On the positive side, the review found improvements in decreasing health inequity gaps between whites and minorities, infant mortality rates and adult cigarette smoking. On the negative side, adult obesity, diabetes and dental care showed no improvement over the last decade. HHS authors of the review wrote that the ACA would assist with improving the nation’s overall health over the next decade.

On May 29, the Comptroller General (CG) of the U.S. Government Accountability Office announced the appointment of three new members to the Medicare Payment Advisory Commission. The new members are Kathy Buto, Francis Crosston and Warner Thomas. The CG also reappointed two existing members and designated the commission’s vice chairman.

A report released on May 28 showed that the health care industry had a higher risk of cybersecurity breaches than any other industry. BitSight Technologies, a security ratings firm, drafted the report and claims that those in the health care industry do not make cybersecurity a priority in comparison to financial, retail and utility industries. According to the report’s findings, cyber-events in health care lasted almost a full day longer on average than cyber-events in any other industry.

The Robert Wood Johnson Foundation released data on May 28 showing that more than half of the uninsured in the United States are eligible for ACA subsidies, Medicaid or the Children’s Health Insurance Program (CHIP). Findings in the report suggest that 27 million people who would have been previously uninsured will be covered under the ACA by 2016.

A study released by the National Bureau of Economic Research found that the ACA requirement on health plans to allow adults under age 26 to remain on their parents’ policies has primarily benefited college graduates. The study authors noted that while all categories of young adults had increases in insurance coverage, only those who were college educated had “substantial new investments” in their health.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook

Health Care Reform Implementation Update - May 27, 2014

Congress held several hearings last week ranging from Sylvia Burwell’s nomination for Secretary of the Department of Health and Human Services (HHS), to Medicare payment oversight, to post-acute care in Medicare. The Centers for Medicare & Medicaid Services (CMS) released final and proposed rules on the use of electronic health records, Medicare payments for medical devices, and new requirements for health plans wishing to participate in Affordable Care Act (ACA) exchanges. Also this past week, Nevada announced that it will abandon its state-run health exchange website, and Oregon is now facing a formal investigation regarding its management of its ACA exchange website.

ON THE HILL

On May 21, the Senate Finance Committee voted 21-3 to move Sylvia Burwell’s nomination for Secretary of HHS out of committee and to the Senate floor. The three Republican senators to vote against her nomination were Senator Pat Roberts (R-Kan.), Senator John Cornyn (R-Texas) and Senator John Thune (R-S.D.). The full Senate is expected to vote on her nomination during the first week of June.

The House Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements and the House Ways and Means Subcommittee on Health each held hearings on May 19 regarding Medicare payment oversight. The hearings focused on Recovery Audit Contractors (RAC) and the apparent flaws in the Medicare claim auditing process. There was bipartisan consensus in both committees that the Medicare audit system is overwhelmed and inefficient. Citing a backlog of more than 1 million audit appeals and the large number of overturned audit decisions by administrative law judges, there was a strong push from many congressional members to reform the system. Lawmakers representing small provider groups and rural hospitals in both committees expressed particular concern that the Medicare audit process is cumbersome and undermines the financial stability of these types of health care providers.

On May 21, the House Energy and Commerce Committee held a hearing titled “Keeping the Promise: Site of Service Medicare Payment Reforms.” The hearing focused on post-acute care Medicare payments systems, and congressional members highlighted current and proposed legislation that would help to “streamline” these payment models. Among the legislation discussed, a bill that would bundle Medicare payments for post-acute care services received the most attention and bipartisan support.

Also on May 21, Republicans on the House Ways and Means Committee sent a letter to Treasury Secretary Jack Lew asking that subsidies to insurers under the ACA be suspended. Subsidies to insurers are based on income information provided to the federal government directly from individuals receiving health insurance through the ACA exchanges. In the letter, the legislators cite a report from The Washington Post that claims there may be 1.5 million cases of inaccurate income reporting from individuals, leading to fraudulent subsidy payments to insurance companies.

AT THE AGENCIES

CMS provided prospective qualified health plans (QHPs) with new instructions on network information requirements. According to these instructions, health plans applying to CMS to provide coverage in the federal exchange in 2015 will be required to provide the agency with a list of providers that will be in their networks. Additionally, all QHPs will be required to maintain what is referred to as “adequate” provider networks, both in terms of numbers and types of providers and must attest they meet this network adequacy standard as part of the certification and recertification process for QHPs. Along with the list of providers, QHPs will also have to provide information on the providers’ specialty type, address and national provider identifier number. CMS initially proposed the network adequacy reporting requirement in its draft 2015 letter to QHPs, but had not specifically included the requirement in the final letter.

HHS sent a letter to the American Hospital Association (AHA) on May 21 confirming that nonprofit foundations can, under certain circumstances, pay for ACA premiums of individuals enrolled in qualified health plans. The letter, which was in response to the AHA’s April 28 letter to HHS asking for additional guidance, said that the payments are not prohibited, so long as they comply with guidance issued in a frequently-asked-questions document by HHS on February 7 of this year. The letter also stated that HHS would not issue additional guidance on the matter.

HHS decided to stop releasing monthly updates of exchange enrollment, as it had done during the exchange open enrollment period from last October through March of this year. Because only individuals who meet certain special requirements can now enroll in exchanges, an HHS spokesperson said that the agency will look for other opportunities to share information about exchange enrollment.

On May 22, the Department of Health and Human Services announced it had selected 12 recipients to receive up to $110 million in grants under the ACA for projects designed to test innovative delivery system models. The grants were awarded under the Center for Medicare and Medicaid Innovation’s Health Innovation Awards program and range in size from $2 to 18 million over a three-year period. The projects are intended to deliver better health, improve patient care and lower costs for individuals enrolled in Medicare, Medicaid and the Children’s Health Insurance Program. Two additional rounds of awardees under the program will be announced by HHS in the coming months.

On May 22, CMS issued a proposed rule that will require prior authorizations for Medicare coverage of certain types of medical equipment, such as power wheelchairs, and will require prepayment reviews for certain types of medical equipment such as prosthetics. Under the proposed rule, prior authorizations will be required for power wheelchairs in 19 states and prepayment reviews will be required for a proposed master list of more than 130 items that are said to be frequently unnecessarily utilized. The proposed rule is expected to save the government between $100 and $740 million over the next 10 years.

On May 20, CMS unveiled a proposed rule regarding the electronic health record (EHR) incentive program. The proposed rule, if enacted, would ease restrictions on providers and hospitals on the certification year for using EHRs under the program. Many provider groups have informed CMS that the current EHR incentive program requirements are technically burdensome and discourage providers from participating. Under the proposal, CMS would allow providers and hospitals to use EHRs certified in 2011 as opposed to requiring them to use EHRs certified in 2014, a requirement that was supposed to begin this year. CMS would also delay Stage 3 of the EHR incentive program until 2017.

In a Q&A publication released mid-May on its website, the Internal Revenue Service (IRS) provided further guidance to employers seeking clarification regarding employer-sponsored health care plans. Under this guidance, the IRS informed larger employers that they may face tax penalties if they choose not to provide health insurance and simply direct their employees to sign up for health insurance using ACA exchanges, even if the employers provide funds to pay for the premiums. According to the guidance, this type of action would not satisfy the ACA, which requires large employers to offer coverage to full-time employees or pay tax penalties.

AT THE WHITE HOUSE

President Obama’s nominee for Surgeon General Dr. Vivek Murthy will likely not be appointed before the November elections. Although the Senate Health, Education, Labor & Pensions Committee voted in February to proceed with a full Senate vote on Dr. Murthy’s nomination, opposition from pro-gun advocate groups have stalled progress on the vote. In the past, Dr. Murthy has expressed strong support for gun control efforts and has been known to cite gun violence as a health issue. Groups including the National Rifle Association (NRA) have expressed their opposition to his nomination, energizing many Senate Republicans to express their opposition to Dr. Murthy’s nomination as well.

IN THE STATES

Nevada decided to abandon its state ACA exchange website and transition to the federal exchange website, Healthcare.gov. On May 20, the Nevada exchange board decided that it could not fix the numerous technical glitches of the state’s exchange website in time for the next open-enrollment period. The vendor that ran the state’s exchange, Xerox, received $75 million under its contract. Nevada plans to use Healthcare.gov for at least a year but will revisit the issue after the next open enrollment period concludes.

Louisiana state legislators passed a measure to advance Republican Governor Bobby Jindal’s national health care plan. After voting down three separate attempts to expand Medicaid in the state, support for Governor Jindal’s“America Next” plan was strong with a vote of 35-1 in its favor. GovJindal’s America Next is a national health plan, which would provide $100 billion to states that devise their own health care systems as long as plans cover people with pre-existing conditions. The vote in the Louisiana legislature directs the state health agency to develop its health plan in accordance with America Next.

IN THE COURTS

The U.S. Attorney’s Office in Portland, Ore., issued grand jury subpoenas on May 13 to Cover Oregon and the Oregon Health Authority, demanding all records related to the application or receipt of federal funds that may have been used in developing, building or administering the state’s troubled exchange website. The state received more than $300 million in federal grants for the website; however, the exchange was so flawed that residents were unable to use it to enroll in coverage causing the state to abandon the state-run exchange altogether. On May 20, the governor of Oregon publicly released the subpoenas.

The American Hospital Association (AHA) filed a complaint against HHS on May 22, seeking to compel HHS to meet statutory deadlines for administrative review of Medicare claims that are denied reimbursement. Providers have a right to contest denials through a multilevel appeals process and decisions are required to be made within certain time frames for each level of review. At the third level of appeal, an HHS administrative law judge (ALJ) reviews contested claims, and the statutory deadline for holding a hearing and issuing a decision is 90 days. AHA’s complaint alleges that there is currently a 20- to 24-week delay in simply docketing cases and that the average wait time for a hearing is approximately 16 months. AHA’s complaint also noted that the delays are expected to increase, particularly since HHS’s December 2013 announcement of a moratorium on provider appeals assignments to ALJs for at least two years.

An HHS rule that was intended to help rural and cancer hospitals gain greater access to specialized drugs for “off label” treatments was struck down by a federal judge on May 23. The ACA expanded the 340B (of the Public Health Service Act) drug discount program for certain types of hospitals, specialized clinics and facilities that provide care to underserved populations by requiring pharmaceutical companies to provide prescription drugs to these facilities at a lower cost than they would have otherwise been required to pay. So-called “orphan drugs,” which are used only for rare diseases and do not enjoy the same federal support as pharmaceuticals that are used for a wide-range of uses, are extremely costly. HHS had published a rule in 2013 that expanded the 340B program to include these orphan drugs and allow the facilities to purchase them at discounted rates when used for off-label purposes. Last week, the federal court held that Congress did not grant HHS the authority to modify the 340B program in this way.

IN THIRD PARTIES

The National Bureau of Economic Research, a nonpartisan research organization, released last week a study authored by MIT economist Jonathan Gruber and others finding that limited competition in ACA exchanges resulted in higher premium prices. For example, United Healthcare, the largest health plan in the country, did not offer any health plans in the federal exchange and only offered a few in state based exchanges, and Cigna only offered plans in less than six states. The study said that if competition was higher, the federal government would have saved approximately $1.7 billion in subsidies.

Former Republican Senator Trent Lott and former Democratic Senators John Breaux and Tom Daschle, have teamed up to promote the use of telemedicine. The three former senators are now registered lobbyists and are representing the Alliance for Connected Care, a nonprofit formed by numerous stakeholders in the health care industry to promote the use of remote health care. The former Senators are pushing for legislative and regulatory changes that would ease restrictions on the use of digital technology to assist with greater access to telemedicine to communities and patients nationwide.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook

Health Care Reform Implementation Update - May 5, 2014

Congress returned from its Spring recess and got right to work on a number of Affordable Care Act (ACA) related issues including a bipartisan bill regarding health insurance for Americans living abroad, Medicare oversight, reports on ACA enrollee data and meetings with Health and Human Services (HHS) Secretary nominee Sylvia Burwell, whose first confirmation hearing is scheduled for next Thursday before the Senate Health, Education, Labor and Pensions (HELP) Committee. The Centers for Medicare and Medicaid Services (CMS) also had a busy week releasing a number of proposed rules regarding Medicare payment rates at hospitals and other types of health facilities for fiscal year 2015. On Friday, another HHS high-level employee announced their departure from the agency. In the states, Oregon, California and Nevada made announcements about their state-run ACA exchanges. Last week also saw a number of reports from various organizations regarding projections for ACA enrollment, polling numbers for ACA approval and disapproval, and a request for clarification on HHS’s position on charitable contributions for medical payments.

ON THE HILL

On Wednesday, HHS Secretary Nominee Sylvia Burwell met with Senate Finance Committee Chairman Ron Wyden (D-Ore.). Though no date has been set for Burwell’s confirmation hearing at the Senate Finance Committee, Senate Finance is the committee that will have to vote for her nomination to go to the Senate floor. On Tuesday, Burwell met with Senate HELP Committee Chairman Tom Harkin (D-Iowa). Burwell is scheduled to testify at a Senate HELP Committee hearing regarding her confirmation on May 8. Both Wyden and Harkin have expressed their support for Burwell’s nomination. Burwell is expected to face tough scrutiny from some Republicans on both committees who continue to express concern over ACA implementation. 

On April 29, the House of Representatives passed a bill that would change requirements for insurance company coverage for Americans living abroad. Some insurers claim that ACA-compliant health plans for American expatriates would be too costly. The bill, titled the “Expatriate Health Coverage Clarification Act of 2014,” passed by a bipartisan vote of 268-150 and would exempt U.S. health plans sold to expatriates from having to comply with some ACA requirements. The White House expressed its opposition to the bill in its current form but did not definitively say that it would veto it if it made it to the president’s desk. At this time, however, a Senate vote appears unlikely.

Also on April 29, the House Ways and Means Health Subcommittee held a hearing on Medicare oversight. The HHS Deputy Inspector General for Audit Services Gloria Jarmon testified that CMS paid out $50 billion in improper payments in 2013. In her testimony, Jarmon provided details on the amount of improper payments for three major Medicare programs: $36 billion to the Medicare fee-for-service program, $11.8 billion to Medicare Advantage and $2.1 billion to the Medicare Part D program.

On April 30, the House Energy and Commerce Committee reported it had collected data illustrating that only 67 percent of ACA exchange enrollees had paid their first month’s premium by April 15. In light of these findings, the House Energy and Commerce Oversight and Investigations Subcommittee will hold a hearing on May 7 titled “Patient Protection and Affordable Care Act Enrollment and Insurance Industry.” Insurance providers and their trade groups have been asked to testify. President Obama and other Democrats pushed back against the significance of the figure highlighting that premium payments are not due until May 1. 

AT THE AGENCIES

CMS released a lengthy proposed rule regarding hospital payments on April 29 that implements several provisions included in the ACA. Under the proposed rule, hospitals would be required to release a standard list of prices for the medical services they provide or give the public access to such information after an inquiry. Payment rates for general acute care hospitals paid under the inpatient prospective payment system would also be increased by 1.3 percent, while aggregate payments would be reduced by $241 million in fiscal year 2015 due to increased oversight and penalty provisions included in the proposed rule. The proposed rule would also increase Medicare payments to long term care hospitals by $44 million, an increase of 0.8 percent during fiscal year 2015. The proposed rule also solicits comments from hospitals regarding payments for short hospital stays. Comments regarding the proposed rule are due by June 30, 2014. The hospital payment proposed rule also contains several references to an October 1, 2015 implementation date for ICD-10, leading many to comment that CMS is tipping its hand regarding the new implementation date for the coding system. Last month, Congress delayed implementation of ICD-10 in the “doc fix” rule, but did not set a new implementation date. On May 1, an HHS spokesperson stated that the agency expects to release an interim final rule soon that will require the use of ICD-10 by October 1, 2015.

On May 1, CMS released proposed rules regarding prospective payment systems for inpatient psychiatric facilities, skilled nursing facilities (SNFs) and inpatient rehabilitation facilities (IRFs). Under the proposed rules, which would set payments for fiscal year 2015, payment rates for inpatient psychiatric facilities would increase by 2.1 percent, payment rates for SNFs would increase by approximately 2 percent, and payment rates for IRFs would increase by about 2.2 percent. Under the proposed rules, inpatient psychiatric facilities would be required to report on additional quality measures, and modifications would be made to the IRF quality reporting program and the reconsideration and extraordinary waiver circumstances processes that currently affect IRF payment rates. Under the SNF proposed rule, minor adjustments would be made to the classification system that is used to set payments.

On April 30, the Bureau of Economic Analysis released data showing that consumer spending on health care surged in the first quarter of the year, resulting in its fastest growth in more than 30 years. Growth in health care spending increased by 9.9 percent in the first quarter of 2014 compared to the last quarter of 2013. Many are attributing the surge to implementation of the ACA. Without the health care-attributed increase, the nation’s gross domestic product would have fallen for the first time in three years. The analysis included ACA enrollments through February 15, 2014.

On May 2, Mike Hash, the director of the HHS Office of Health Reform, announced that he will be retiring at the end of May. He had been with the Office of Health Reform since 2011. Hash is the third high-level HHS official to announce their departure from the agency in the last month.

AT THE WHITE HOUSE

On Thursday, the Obama administration released a report showing that between October 1, 2013 and April 19, 2014, 8,019,763 people enrolled in ACA exchange plans and that Medicaid and CHIP added 4.8 million people. This same report also provided further details regarding ACA exchange enrollees: 28 percent of enrollees are young adults, 54 percent of enrollees are women, 65 percent of enrollees chose a silver-level plan, 20 percent chose a bronze-level plan, 9 percent chose a gold-level plan, 17 percent are African-American, 11 percent are Latino, 8 percent are Asian and 63 percent are Caucasian. Outgoing HHS Secretary Kathleen Sebelius attributed the enrollment figures to an “unprecedented outreach” effort in which she said she visited 100 cities.

IN THE STATES

The Oregon Legislative Counsel says that the Cover Oregon’s board of directors does not have the right to dismantle the technical-glitch plagued state-run exchange in Oregon and enroll the state in the federal health exchange. It is unclear whether the counsel’s decision is legally binding.

In Nevada, the board that runs the Silver State Health Insurance exchange delayed a decision on whether to abandon the state-run exchange and instead requested a cost analysis report on its “feasibility.” 

A proposal from the Obama administration would shift responsibility from the federal government to the states for determining who would receive a waiver from the individual mandate in the 2015 enrollment period. Seven states that run their own exchanges have protested that they do not have the technical capability for this and ask that this responsibility remain with the federal government.

A report drafted by the Robert Wood Johnson Foundation found that states that used the federal marketplace instead of creating their own state-run exchanges spent far less on outreach and enrollment efforts. The 16 states that ran their own exchanges paid an average of $17.15 per uninsured resident, while states that used the federal marketplace spent only $5.42 per resident.

The California Senate Health Committee advanced a bill that would expand the state Medi-Cal plan to include undocumented immigrants.

IN THIRD PARTIES

A new report issued by S&P Capital IQ argues that large companies will be encouraged to drop employee health plans by 2020 in favor of sending their employees to ACA exchanges. The report claims that companies would save money by paying the ACA employer penalty instead of providing their employees with health coverage. The report estimates that by 2025, publicly traded companies could save $700 billion by dropping employee health plans. 

On April 28, the American Hospital Association and Catholic Health Charities sent a letter to HHS asking it to clarify CMS guidance from February 7 and an interim final rule from March 14 regarding ACA premium subsidies provided by charitable organizations. The two organizations requested clarification in light of seemingly conflicting guidance from CMS regarding such third-party premium assistance payments.

The second-biggest health insurer in the United States, WellPoint Inc., has increased its profit forecast for 2014 and lowered its premium increase estimates due to new customers who have signed up through ACA exchanges. NewWellPoint, Inc., customers who enrolled in ACA exchanges are younger than had been anticipated and thus decreased the expected health insurance costs to the company overall. 

A Kaiser Family Foundation poll released on April 29 shows that public opinion regarding the ACA has remained largely unchanged. The poll was conducted April 15-21 and surveyed more than 1,500 adults. Overall support for the ACA remains at the exact level as the previous month’s poll with 38 percent of respondents stating a favorable view for the law

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care ActDatabook.

Health Care Reform Implementation Update - April 25, 2014

This week, the Centers for Medicare and Medicaid Services (CMS) announced that in May Jonathan Blum would be leaving his post as Deputy Administrator for CMS and Danielle Moon who leads CMS’ Medicare Advantage division would be leaving as well. Though Congress has been recess, the wheels of the Affordable Care Act (ACA) continued to turn this past week. On April 21, Senator Ron Johnson (R-Wis.) filed a lawsuit against the Obama administration’s decision to subsidize congressional staff insurance premiums, the Government Accountability Office (GAO) released a report regarding Kathleen Sebelius’s fundraising activities for Enroll America, and the Obama administration announced another enrollment extension for individuals participating in the Pre-Existing Condition Insurance Plan (PCIP). Also this week, Oregon said it would abandon its state-run online exchange marketplace, the American Hospital Association (AHA) asked CMS’s Innovation Center to modify the Medicare Shared Savings Program (MSSP), and on April 21 America’s Health Insurance Plans (AHIP) submitted a letter CMS in response to a rule regarding the risk corridors program. 

ON THE HILL

On April 21, Senator Ron Johnson (R-Wis.) and 38 Republican congressional members filed a lawsuit against the Obama administration regarding an Office of Personnel Management (OPM) decision regarding employee contributions to congressional staff health care. The lawsuit was filed in Wisconsin federal court and claims that OPM is giving “special privileges” to congressional staffers by allowing them to receive federal subsidies to assist with the costs these staffers will now accrue enrolling in ACA exchanges. The lawsuit also claims that OPM violated the law by allowing staffers to obtain health care through the Small Business Health Options (SHOP) exchanges. The U.S. Department of Justice is requesting that the lawsuit be dismissed on the grounds that Senator Johnson is not being “directly injured” by OPM’s decision.

AT THE AGENCIES

On April 22, CMS announced that Jonathan Blum, CMS’s Principal Deputy Administrator, will be leaving his post. Blum’s last date on the job is May 16. Blum joined CMS in 2009 and oversaw major reforms in the Medicare program, including those related to the Medicare prescription drug benefit and the development of accountable care organizations (ACOs). It has not been announced where he is going next. Sean Cavanaugh, the current Deputy Director at the Centers for Medicare and Medicaid Innovation (CMMI), will take Blum’s position. 

On April 25, Danielle Moon, the head of the Medicare Advantage program at CMS, also announced that she would be leaving her post at the end of May. Kathryn Coleman, the current Deputy Director of the Medicare Drug & Health Plan Contract Administration Group, will become the Acting Director of CMS’s Medicare Advantage program after Moon’s departure.

On April 21, the Government Accountability Office (GAO) released a report on Kathleen Sebelius’s efforts to raise funds for Enroll America, a private nonprofit organization created to assist individuals with enrolling for health coverage under the ACA. The report found that the soon-to-be-departing Secretary of Health and Human Services (HHS) had contacted chief executive officers of five corporations and asked them to provide financial support to the nonprofit. Before contacting the executives, Sebelius sought guidance from HHS’s Office of the General Counsel, which concluded that HHS officials are permitted to encourage the public to support certain organizations assisting with ACA enrollment. GAO itself did not analyze the legality of Sebelius’s actions.

AT THE WHITE HOUSE

On April 24, the Obama administration announced that it would extend the enrollment period for individuals that participate in the Pre-Existing Condition Insurance Plan (PCIP) program to June 30. The PCIP program was designed as a temporary program for individuals that had been rejected by insurers due to their pre-existing conditions. ThePCIP is being discontinued due to rules in the ACA that went into effect January 1, 2014, which prohibit insurers from denying coverage based on an individual’s medical record. The PCIP had been slated to end on December 31, 2013, but has been extended three times. The administration now says that PCIP benefits will expire on April 30 and that anyone who enrolls in an exchange plan by June 30 will have his or her benefits retroactively effective from May 1.  The Obama administration has expressed that patients in the PCIP are the most “vulnerable” and therefore deserve special consideration.

IN THE STATES

Oregon’s chief information officer, Alex Pettit, recommended that the state close its online ACA exchange and join the exchange marketplace managed by the federal government. Oregon’s state run exchange has been plagued by technical issues since its inception.

Utah Governor Gary Herbert announced that Medicaid expansion talks are “moving forward” with the Obama administration. Governor Herbert attended a meeting at the White House on April 17 and continues to pursue his private-sector plan for Medicaid expansion. This three-year “pilot program” would include lump-sum payments from the federal government for low-income Utah residents.

Hawaii extended the period for its citizens to enroll through the state ACA online exchange until April 30.

Idaho and New Mexico are the only two states that used the federal online marketplaces this year that are currently planning to set up their own online exchange marketplaces for the next open enrollment period. 

The success of the Small Business Health Options (SHOP) plans created by the ACA varies in state exchanges across the country. Connecticut’s SHOP plans have only attracted 78 small businesses and will only cover 330 people. Connecticut exchange officials have attributed these small numbers to poor management by the company contracted to handle the state exchanges and the seemingly high cost of the plans. Rhode Island, on the other hand, has reported an overall success for its SHOP plans, and officials there tout their early marketing efforts and robust support for these plans as the reasons for success.

In Kansas last week Governor Sam Brownback (R) signed into law a measure that would require the state legislature to approve any Medicaid expansion.  The Kansas state legislature has ended its regular session for the year and therefore any Medicaid expansion could not be approved until sometime in 2015.  

IN THIRD PARTIES

On April 21, America’s Health Insurance Plans (AHIP) filed a comment letter in response to a CMS final rule regarding CMS’s risk corridors program. The program is funded through risk corridor collections from qualified health plans. CMS announced earlier this year that the risk corridors program would be budget neutral, meaning that payments to health plans through the program would be limited by incoming collections. Last November, the Obama administration also announced a transitional policy that permits health plans that do not meet ACA requirements to continue to be sold until 2017. In the letter, AHIP commented that the transitional policy will result in lower enrollment in exchanges and lead to adverse selection. Because of the additional risk faced by exchange plans, AHIP commented that additional relief should be provided to these plans by way of a risk corridors program that is not constrained by a budget neutrality requirement.

The American Hospital Association (AHA) asked CMS’s Innovation Center to modify the MSSP so that more ACOs can receive bonuses. In the letter, dated April 17, the AHA commented that the financial risks for hospitals participating in the MSSP outweighed the financial incentives. It stated that more hospitals would participate if CMS made modifications. Under the current configuration of the program, ACOs contract with CMS to decrease health care expenditures and increase the quality of care provided. If successful, the ACOs receive a share of the savings. Some ACOs also contract to be at risk for losses, and as an incentive these ACOs receive larger bonuses if spending is below certain benchmarks. As part of its requested modifications, the AHA asked CMS to change the time period for which ACOs would not be required to be at risk from three to six years and to delay penalizing ACOs that increase rather than decrease expenditures. The AHA also noted that CMS has had problems providing data to ACOs that could be used to better manage patient care. Finally, the AHA commented that changes are needed to the Pioneer ACO program so that more providers participate. 

On a related note, an article published this week in the Journal of the American Medical Association similarly concludes that certain changes to the ACO program may be necessary to provide productive incentives to participants and to ensure ACOs can improve care efficiency. One of the authors, Dr. Michael Chernew, is the second in command at the Medicare Payment Advisory Commission (MedPAC).

The National Alliance of State Health CO-OPs (NASHCO) reported that more than 400,000 people have enrolled in the ACA-established Consumer Operated and Oriented Plans (CO-OP) Program. The CO-OP Program was intended to foster the creation of qualified nonprofit health insurance issuers to offer competitive health plans in the individual and small group markets. According to NASHCO, these numbers illustrate “that CO-OPs are indeed making a real impact on health insurance marketplaces in their states.”

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - April 21, 2014

On April 14, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) reported their findings that show a smaller rise in insurance premium costs under the Affordable Care Act (ACA) than previously expected. The CBO also released findings on the same day that show a rise in the cost estimate for permanent repeal of the sustainable growth rate formula (SGR), which is the Medicare formula used to determine physician payments. On April 15, the Census Bureau announced that it may be difficult to measure the impact of the ACA on the number of uninsured individuals in the United States because of changes in the methodology it uses to track the number of people without health insurance. On the same date, the extended ACA open-enrollment period on HealthCare.gov ended. Also on April 15, Gallup released a new poll that finds that states that have created their own exchanges and have expanded their Medicaid programs under the ACA are seeing their uninsured rates drop faster than those states that have not implemented those reforms. On April 17, President Obama announced that 8 million people have enrolled in ACA exchanges.

ON THE HILL

On April 14, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) reported their findings that show a smaller rise in insurance premium costs under the ACA than previously expected. According to these new estimates, premiums will rise less than 3 percent in 2015 and will cost the federal government nearly $5 billion less than expected over the course of this year. The CBO and JCT also found that the ACA’s coverage costs over the next 10 years are $104 billion less than expected. These findings showed that the risk corridor program, a provision of the law that is intended to assist health plans with the financial cost of the transition under the ACA, will now be budget neutral as opposed to the prior expectation that it would result in $8 billion in savings.

The CBO also released findings on April 14 that show a rise in the cost estimate for permanent repeal of the sustainable growth rate formula (SGR), which is the Medicare formula used to determine physician payments. This formula has prompted Congress to pass a temporary fix 17 times, also known as a “doc-fix,” in order to avoid steep Medicare payment cuts to physicians every year. Although there is widespread support for a permanent repeal that would avoid the annual doc fix scramble, there is little agreement on how to pay for the cost of the repeal. These new findings from CBO estimate an $8 billion increase in the cost of permanent repeal, and this cost increase will make developing a final agreement more difficult.

Although no official hearing dates have been announced, members of the Senate committees that will conduct Sylvia Burwell’s nomination hearings for Secretary of Health and Human Services have already begun crafting their questions. Senator Tim Scott (R-S.C.) reported to a news outlet that the hearing will give him an opportunity to gather more information on the ACA and is quoted as saying “The question is will the next secretary put the interests of Americans first, or the policies of the president.” On the Democrat side, Senator Sheldon Whitehouse (D-R.I.) told news sources that the hearings will be another venue in which to highlight ACA successes. It is expected that Burwell will be confirmed since only 51 votes are needed, and there are 55 Democrats in the Senate.

The Medicaid and CHIP Payment and Access Commission (MACPAC) met on April 10 to discuss long-term care issues and its plans to review how states are using home and community based service waivers. The long-term care discussion focused on how MACPAC intends to study why certain states have begun implementing long-term care services plans and other states have not. MACPAC plans to make its first statement on long-term care in its June 2014 report, but will not provide specific recommendations.

AT THE AGENCIES

In comments during a Senate Finance Committee hearing on April 10, outgoing Health and Human Services (HHS) Secretary Sebelius indicated that states that do not quickly enroll Medicaid beneficiaries deemed eligible for Medicaid by the HealthCare.gov website could see reductions in their federal Medicaid matching funds. Several states, including New Jersey and Illinois, are behind in processing Medicaid enrollments for individuals who signed up for Medicaid coverage through HealthCare.gov. Currently, the federal exchange system only determines whether an individual is eligible for Medicaid coverage and then transmits the information to the appropriate state so that the state itself can enroll the individual into Medicaid. However, the process was not fully functional at the beginning of the 2014 open enrollment period, which created a backlog for some states. State officials have asked HHS to clarify Sebelius’ comments because they did not think that the federal system is currently fully functional.

On April 11, the Center for Consumer Information and Insurance Oversight (CCIIO) within the Centers for Medicare and Medicaid Services (CMS) released frequently asked questions (FAQ) regarding the ACA risk corridors program, which is in effect from 2014 through 2016. The program is one of several created by the ACA to assist insurers with the financial risks they face under the law and provides payments to insurers that have allowable costs greater than 103 percent of a target amount. The program is funded through risk corridor collections. In the FAQ, CCIIO states that if, for a given year, the risk corridor collections are less than the payments that must be made under the program, then all risk corridor payments for the year will be pro-rata reduced and collections from the next year will be used to make up the deficiencies from the previous year.

On April 15, the Census Bureau announced that it may be difficult to measure the impact of the ACA on the number of uninsured individuals in the United States because of changes in the methodology it uses to track the number of people without health insurance. The Census Bureau says that the changes, which were first announced in September of 2013, were needed to improve the accuracy of the survey. The new methodology is expected to produce an uninsured rate that is lower than what would have been calculated under the previous methodology. Some conservative lawmakers are questioning the timing of the methodology change and believe the new methodology will be exploited to make it appear that the ACA is more successful than it would have appeared to be without the change. However, on April 16, the Census Bureau released a statement noting that the changes had been discussed for 14 years and will instead allow for a more accurate baseline assessment of changes in insurance coverage as a result of the ACA.

On April 15, CMS reopened the End Stage Renal Disease Seamless Care Organization demonstration. On that date, it issued a revised Request for Applications for the demonstration program. The agency had been planning to reopen the application process as far back as October of 2013, when it said that it would do so to increase participation and to address feedback from the kidney industry.

AT THE WHITE HOUSE

The ACA open-enrollment period on HealthCare.gov ended on April 15 at midnight. Although the open-enrollment period was supposed to have ended March 31, the Obama administration extended this deadline another two weeks. The extension was intended to give those individuals who had begun an application but could not complete it before the March 31 deadline extra time to complete the entire process. The administration has said that no other extension will be granted but did not definitively give any determination on whether they would extend the enrollment for individuals that face “special circumstances,” such as a medical condition or a natural disaster. In her Senate hearing testimony on April 10, a day before her official resignation, Secretary Sebelius reported that 400,000 more people had enrolled in the extended two-week period.

In a press conference on April 17, President Obama announced that more than 8 million people have signed up under ACA exchanges. He also reported that 35 percent of those enrollees are under the age of 35. President Obama expressed his frustration toward continued Republican opposition to the ACA and claimed that states that have not signed up for Medicaid expansion are doing so “for no other reason than political spite” adding that an additional 5 million would have been covered if the Medicaid expansion had occurred in full. A press release issued by the White House put the figure at 5.7 million.

On April 17, President Obama and Vice-President Joe Biden hosted a group of insurance commissioners at the White House to discuss overall ACA issues and the 2014 enrollment period. Discussions included topics such as ACA exchange premium increases for 2015, health plan demographics, consumer understanding of their health care options, and expanding doctor networks for individuals enrolled in exchanges.

IN THE STATES

In Pennsylvania, the public comment period on Governor Corbett’s Medicaid waiver request ended on April 11. Governor Corbett submitted the waiver to CMS in February. Under the waiver proposal, the state would use federal Medicaid funds to subsidize private insurance premiums for uninsured residents. The state would also require monthly premium payments and work search requirements for some Medicaid recipients in 2016. If approved by CMS, Pennsylvania would be the only state to alter Medicaid benefits for current enrollees. If the waiver request is granted it is expected that governors of other states such as Utah, New Hampshire and Tennessee will submit similar requests.

Gallup released a new poll this week that finds that states that have created their own exchanges and have expanded their Medicaid programs under the ACA are seeing their uninsured rates drop faster than those states that have not implemented those reforms. The survey showed a 2.5 percent drop in the uninsured in 2013 in those states that have implemented these ACA reforms. States that have implemented only one or neither of these reforms saw only a 0.8 percent drop in their uninsured rates, according to the survey.

The District of Columbia is extending the open enrollment period for their ACA exchange to April 30 for those individuals that had started an application before the end of March.

After three months of negotiations, the federal government approved $8 billion in funding forNew York state’s Medicaid program. This funding was generated by Medicaid reforms that New York state had implemented years ago, but details on which entities would receive the funding had to be worked out between the state and the U.S. Department of Health and Human Services. The money will reportedly be used to overhaul hospitals and expand primary medical care.

IN THIRD PARTIES

Spending on health care services and prescription drugs increased in 2013, according to an analysis released by IMS Holdings Inc. Spending on prescription drugs increased by 3.2 percent in 2013, to a total of $329.2 billion. The increase in spending on health care services was driven in part from increases in the number of doctor visits, particularly to see specialists, and hospitalizations. The increase in prescription drug spending was driven in part by fewer expirations in patents, increases in the prices for existing drugs, new expensive drugs entering the market and greater utilization of prescription drugs in general.

IN THE COURTS

The American Hospital Association (AHA), on April 14, filed two related lawsuits in the U.S. District Court for the District of Columbia challenging HHS’s “two midnight rule” for inpatient hospital admissions. Under the rule, CMS will only pay the higher Medicaid inpatient rate if a physician expects that a patient will be hospitalized for more than two midnights. Otherwise, hospital stays for less than two midnights will be reimbursed at the lower Medicare hospital outpatient rate. The two midnight rule was to take effect on October 1, 2013, but enforcement has been delayed until March 2015. In the first suit, the AHA and others contend that the rule is arbitrary and capricious, contrary to law, and undermines medical judgment. In the second suit, the AHA and others challenge CMS’ decision to reduce payments to hospitals by 0.2 percent based on CMS’ claim that the two midnight rule and other related policy changes would increase the number of hospital stays that the Medicare program covers.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook

Health Care Reform Implementation Update - April 14, 2014

Last Thursday Kathleen Sebelius resigned from her post as Secretary of Health and Human Services (HHS). On Friday President Obama nominated Sylvia Matthews Burwell, the Office of Management and Budget (OMB) Director.  As March came to a close, the first official open enrollment period since the individual mandate went into effect and the health insurance exchanges began operating came to a close, and the Obama administration met its goal of 7 million people signing up for health insurance. The Congress passed and President Obama signed into law a one-year “doc fix,” the Protecting Access to Medicare Act, which prevents payment cuts to doctors who provide care to Medicare beneficiaries that were slated to go into effect on April 1. Though Congress spent considerable effort to achieve a permanent fix to the formula used to determine Medicare payments to doctors, it ultimately was unable to find a way to pay for the permanent fix before April 1 and instead passed a temporary patch. The Centers for Medicare and Medicaid Services (CMS) released its final Medicare Advantage (MA) payment announcement, which increases MA rates by .4 percent.  And finally, in a historic move, CMS released data on payments to Medicare doctors.

ON THE HILL

On April 1, President Obama signed the “Protecting Access to Medicare Act,” which delays Medicare payment cuts to physicians under the sustainable growth rate formula (SGR), the formula on which doctors who see Medicare patients' payments are based, for another year. This latest “doc fix” passed the House by a controversial voice vote on March 27 and passed the Senate on March 31, the day before the previous doc fix was set to expire. There was significant pushback from many congressional members who would have preferred to see a permanent repeal of the SGR formula. Senate Finance Committee Chairman Ron Wyden (D-Ore.) was perhaps the most vocal opponent of this temporary “patch” and still plans to move forward with his bill that would permanently repeal the SGR. Chairman Wyden received strong support for his bill from numerous senators but ultimately no agreement could be reached on how to pay the $140-180 billion price tag for permanent repeal of the SGR.

Although the temporary doc fix is the main component of the Protecting Access to Medicare Act, other elements of the law will affect various areas of the health care industry as well. Of particular note is a provision that would delay ICD-10 implementation (a revision of the medical classification list by the World Health Organization) for another year despite CMS Administrator Marilyn Tavenner’s definitive statement in February that such a delay would not occur. The law also includes provisions that will create a value-based purchasing program for skilled nursing facilities, delay the enforcement of CMS’s two-midnight rule, create a framework for ordering diagnostic imaging scans, and provide relief to dialysis providers who received a payment cut last year. 

On April 3, the House passed the Save American Workers Act, which would change the definition of full-time work under the Affordable Care Act (ACA) from 30 hours to 40 hours per week. Congressional members that led the charge say that the 30-hour week definition incentivizes companies to cut work hours to 29 per week, resulting in smaller paychecks for individuals who previously worked more than 29 hours a week as well as a less productive economy. The Senate is not expected to take up the bill, and the president has already stated that he would veto it if it came to his desk.

House Budget Committee Chairman Paul Ryan (R-Wis.) released his FY2015 budget blueprint, which aims to balance the federal budget by cutting $5 trillion in spending over the next decade. The plan, called “The Path to Prosperity: A Responsible, Balanced Budget” would cut $5.1 trillion in spending, balance the budget by 2024, repeal the Affordable Care Act, reform Medicaid, SNAP (Supplemental Nutrition Assistance Program) and Medicare, and adopt parts of Ways and Means Chairman Dave Camp’s tax reform proposal. Given the proposal’s repeal of the ACA as well as its substantial reforms to entitlement programs, the plan has no chance of passing in the Senate but nonetheless serves as a vehicle for Republicans to define their priorities. On April 10, the House passed the budget measure. 

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, met on April 3 and 4. The commissioners discussed the Health and Human Services (HHS) secretary’s required report on the impact on home health payment rebasing on beneficiary access to and quality of care, team-based primary care, per-beneficiary payment for primary care, measuring quality of care in Medicare, and measuring the effects of medication adherence for the Medicare population.

The Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, met on April 10 and 11.  The commissioners discussed: improving delivery and payment: state perspectives on the Medicaid health homes initiative, managed care payment, the Children’s Health Insurance Program, administrative capacity, Medicaid and population health, long-term services and supports, Medicaid managed care encounter data and Children's Health Insurance Program Reauthorization Act (CHIPRA).

AT THE AGENCIES

Last Thursday Kathleen Sebelius resigned from her post as Secretary of Health and Human Services (HHS). On Friday President Obama nominated Sylvia Matthews Burwell, the Office of Management and Budget (OMB) Director. Burwell has a business background, which many have said is a key distinction the drivers of the ACA’s implementation should have. 

The Obama administration has extended the ACA enrollment period to April 15 for certain individuals who had begun filling out paperwork but had yet to complete the process, as well as for other individuals in particular circumstances. On March 26, the Center for Consumer Information and Insurance Oversight (CCIIO), released guidance for these extensions. CCIIO released a second guidance document that details additional grounds for extensions such as natural disasters, medical emergencies, planned system outages that occur near plan selection deadlines, display errors on the marketplace website, or enrollment errors where insurance companies do not receive a consumer’s information due to technical problems 

On April 3, HHS announced that the Social Security Administration has begun processing Medicare requests for same-sex spouses. This announcement served to clarify the effect that the Supreme Court ruling last year against portions of the Defense Against Marriage Act would have on evaluating the eligibility of same-sex couples for Medicare benefits. 

On April 7, the Centers for Medicare and Medicaid Services (CMS) announced that there would be a 0.4 percent increase in payment rates for Medicare Advantage in 2015. In February CMS had proposed a cut of 1.9 percent. The payment increase was announced after significant pushback from congressional members who expressed concern that the cuts would cause undue harm to seniors and specific concerns from Democrats who were worried that the proposed cuts would further harm their mid-term election prospects.

 On April 9, CMS released a detailed accounting of Medicare payments to 880,000 doctors. This is first time in over 35 years for this level of disclosure. The disclosure of these payments is intended to provide better transparency on the kinds of procedures performed by individual doctors and the amount of money physicians receive from the government through Medicare. Physician groups had resisted this move as a privacy violation. An injunction by the American Medical Association that had been in place since 1979 was overturned by a federal judge in May 2013, prompting the release of this data. So far, the data has revealed that a small proportion of doctors receive over a quarter of the $77 billion in Medicare payments to providers.

On April 10, then Secretary Sebelius testified before the Senate Finance Committee on the president’s budget with respect to HHS. Secretary Sebelius said that at least 7.5 million Americans have signed up for health coverage through the ACA exchanges. In response to questions, Sebelius said that she does not know how many of those who signed up for coverage previously had insurance or how many lost their plans because of the ACA's requirements. Additionally, Secretary Sebelius said that the decision to begin the next open enrollment period on November 15 instead of October 1 was not made for political reasons and separately said that the federal commitment to Medicaid expansion (the 100 percent match rate) was solid for the next 10 years so long as funding is not repealed by Congress. 

IN THE WHITE HOUSE

On April 1, the Obama administration announced that more than 7 million individuals had signed up for health insurance through the ACA exchanges. Supporters of the ACA touted the achievement as a huge victory for health reform, especially given the early and continuing technological issues the exchanges face. Opponents of the law are calling the figure misleading, as it does not detail how many of those who signed up were individuals who already had health insurance prior to the ACA, nor does it provide information on how many of these individuals have paid the premiums associated with the plans. According to a report by the Blue Cross and Blue Shield Association, the trade association for all Blue Cross and Blue Shield plans, 80-85 percent of individuals who have signed up for their plans under the ACA have paid their premiums. The Obama administration has yet to release actual payment data for all of the individuals across all plans that have enrolled in ACA exchanges.

Robert Gibbs, former White House press secretary, recently called into question whether or not the employer mandate under the ACA will actually be implemented, saying, “It’s a small part of the law. I think it will be one of the first things to go” at an event in Colorado. In an appearance on CNN’s “Face the Nation” on April 6, House Minority Leader Nancy Pelosi pushed back on Gibbs’ statement by assuring the public that the employer mandate would not be eliminated.

IN THE STATES

On March 25, New Hampshire lawmakers voted to become the 26th state to expand Medicaid under the ACA.

DC Health Link, the District of Columbia’s health insurance exchange, announced that it would allow residents to apply for individual or family coverage under the ACA until April 15.

On April 2, Louisiana Governor Bobby Jindal (R) introduced his replacement health care plan to the Affordable Care Act. Main features of Governor Jindal’s plan include full repeal of the Affordable Care Act, allowing the states to develop their own plans for covering individuals with preexisting conditions, a tax deduction for individuals who purchase their own insurance plans, and giving seniors funds to purchase private health insurance outside of the Medicare and Medicaid programs. Governor Jindal’s plan is a plan intended not just for Louisiana, but for the country, that you can expect to see as a primary component of his presidential campaign platform should he run. 

IN THE COURTS

While substantial attention has been paid to the case before the Supreme Court of Sebelius v. Hobby Lobby, in which Hobby Lobby as well as Conestoga Wood challenge the ACA’s requirement that private companies provide particular types of contraceptives through their health insurance plans contrary to the owner’s religious beliefs, there is another case that would be more damaging to the ACA were it to be decided in favor of the law’s challengers. On March 25, the Court of Appeals for the D.C. Circuit heard oral arguments in Halbig v. Sebelius. The case turns on a question of statutory interpretation. The ACA, as written, seems to only provide for subsidies for low-income individuals who are on state exchanges. Thirty-six states, however, are not operating state exchanges but rather are using the federal exchange. Were the courts to find that subsidies could only be given to individuals using state-run exchanges, many fewer people would be able to afford coverage through the federal exchanges. Supporters of the Affordable Care Act say that this case is a long shot for the challengers.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook

Health Care Reform Implementation Update - March 26, 2014

On Sunday, the Affordable Care Act (ACA) turned four. Unsurprisingly, Democrats celebrated the law’s birthday by touting its many successes and Republicans used it to highlight the problems the law has faced, as well as caused. The Department of Health and Human Services (HHS) extended the ACA’s hardship exemption until 2016; an Office of Management and Budget (OMB) report effectively exempted exchange subsidies from sequestration; and the White House announced that it will continue the federally run Pre-Existing Condition Insurance Plan (PCIP) program for one extra month. Additionally, though significant work has been done over the past few weeks and months to find a way to permanently repeal the Sustainable Growth Rate (SGR), on March 25 the Senate Finance Committee and House Ways and Means Committee advanced a bill that would provide a short-term fix to Medicare provider payment rates through March of 2015, which will prevent doctors who treat Medicare patients from having their payments cut as scheduled for Tuesday April 1, 2014.

ON THE HILL

On March 26, following negotiations between House Speaker John Boehner and Senate Majority Leader Harry Reid, the House advanced a bill that would temporarily fix the SGR cuts to Medicare providers. Importantly, the bill prevents the 24% cut in reimbursement that would have gone into effect for doctors who treat Medicare patients this coming Tuesday. Congressional leaders say they will continue to work towards a permanent fix for the SGR.

On March 18, leaders of the House Ways and Means and Senate Finance committees released a bipartisan discussion draft that seeks to improve Medicare payments to providers caring for Medicare enrollees who are recovering from injuries and acute illnesses. The "Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014" would require standardized data allowing Medicare to compare the quality of care among different settings and use that information to reform the payment system and specifically would affect long-term care hospitals, skilled nursing facilities, home health agencies and rehabilitation services.

The House passed a few other bills last week that would make certain changes to the Affordable Care Act. TheEquitable Access to Care and Health (EACH) Act, championed by Rep. Aaron Schock (R-Ill.), passed the House. The bill would expand the ACA’s religious conscience exemption, excusing individuals from the individual mandate if they affirm on their tax returns that “sincerely held religious beliefs” would cause them to object to medical health care that would be covered under such coverage.

The House also passed the Hire More Heroes Act of 2013, which was offered by Rep. Rodney Davis (R-Ill.). The legislation would ensure that veterans who already receive medical care through the TRICARE program, the health care program of the U.S. Department of Defense Military Health System, would not be counted towards the 50-person threshold for requiring an employer to provide health insurance to his or her employees.

Finally Rep. Lou Barletta (R-Pa.) introduced the Protecting Volunteer Firefighters and Emergency Responders Act of 2014, which passed unanimously in the House. In an effort to avoid placing an undue cost burden on organizations like volunteer fire departments, the bill would exempt emergency service volunteers from being counted as employees for purposes of the ACA.

The House Ways and Means Committee held a hearing on the president’s FY 2015 budget for HHS. In his opening statement, Chairman Dave Camp (R-Mich.) questioned Secretary Kathleen Sebelius on the cost of the ACA overall, the cost incurred by the inefficient roll-out of the ACA exchange websites, and the number of individuals that have actually made payment towards their ACA exchange health coverage. Secretary Sebelius reported that health care premiums are likely to go up, but she expects that they will be “smaller than we’ve seen prior to the passage of the Affordable Care Act.”

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, released one of its biannual reports to Congress. The Commission made specific recommendations on payments for hospital inpatient and outpatient services, ambulatory surgical center services, outpatient dialysis services, post-acute care providers, skilled nursing facilities, home health care services, inpatient rehabilitation facility services, long-term care hospital services, hospice services and the Medicare Advantage program.

The Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, also released one of its biannual reports to Congress. The commission made specific recommendations on pregnancy coverage under the ACA, children’s coverage under CHIP and exchange plans, and Medicaid non-disproportionate share hospital supplemental payments.

AT THE AGENCIES

On March 5, HHS released a technical bulletin, buried at the end of which was a further delay to the individual mandate’s hardship exemption. There is a paragraph within the bulletin that notes that a delay in enforcement of the individual mandate included in a separate December 2013 bulletin would be extended for two additional years until 2016. The rule allows Americans whose coverage was cancelled to opt out of the individual mandate until 2016.

On March 11, CMS released a final rule, the HHS Notice of Benefit and Payment Parameters for 2015, in which it says: “We intended to propose standardized methodologies to take into account the special circumstances of issuers associated with the initial open enrollment and other changes to the market in 2014, including incurred costs due to technical problems during the launch of the state and federal exchanges.” Though not much more detail was provided on the topic, many have interpreted the rule to signal that the ACA’s Medical Loss Ratio (MLR) provisions will be relaxed. The MLR provision of the ACA required health plans to spend at least 80 percent of premiums on providing medical care. The change in this rule is likely due to insurance company concerns that they have faced and will continue to face increased administrative costs for 2014 due to technological problems and last-minute administrative changes.

On March 14, CMS published a proposed rule, the Exchange Insurance Market Standards rule, which addresses several mostly unrelated issues that involve the exchanges or the ACA’s insurance market reforms. More specifically, the rule proposes standards related to quality reporting, non-discrimination, minimum certification and responsibilities of qualified health plan (QHP) issuers, the Small Business health Options Program, and enforcement remedies in federally facilitated exchanges.

On March 7, CMS released a final rule on the ACA’s Basic Health Program (Section 1331 of the ACA) as well as its methodology for funding it for 2015. The Basic Health Program provides a bridge between the ACA’s expanded Medicaid program and exchange coverage by giving states the option of establishing a Medicaid-like choice for people with incomes too high for the Medicaid expansion but in the lowest income bracket of those on the exchanges. The rule finalizes a proposal to provide funding for states that want to take up the program in 2015.

On March 10, in response to pressure from Congress and various stakeholders, CMS announced that it will not be making some proposed changes to Medicare Advantage and the Medicare Part D program (the Medicare drug benefit program) that the department was considering. CMS had proposed eliminating three drug classes from protected class status (antidepressant, antipsychotic and immunosuppressant). There was widespread concern that eliminating this protected class status could force providers to alter their treatment regimens. The rollback of these changes means that Medicare will continue to require insurers to cover nearly all medications in six classes of drugs and quickly produced praise from many health care groups.

HHS reported that ACA insurance plans have now enrolled about 5 million people. The rate of enrollment in February was not significantly stronger than the January enrollment rate and the administration’s new goal of 6 million enrollees by March 31 will be hard to obtain with only two weeks to go. The administration stated they had “no plans” to extend the enrollment period. First Lady Michelle Obama is working on an initiative to reach out to mothers and encourage them to put pressure on their young adult children to sign up under the exchanges. Healthy young adult enrollees are a key demographic for the successful implementation of the ACA.

Though CMS has named Hewlett-Packard Co. as the replacement for the current host of HealthCare.gov, Terremark, on March 7 CMS announced that it would extend Terremark’s contract to ensure a smooth transition through the end of open enrollment.

IN THE WHITE HOUSE

On March 25, the Obama administration said it will extend the open enrollment deadline of March 31 for those who tried to sign up for health insurance but had trouble completing the enrollment process.

Among the items included in a report from the Office of Management and Budget (OMB) detailing the impact on sequestration (the across-the board cuts that arose from the Budget Control Act of 2011), was an exemption from sequestration for 2015 for the ACA’s exchange subsidies. These subsidies reduce the maximum costs that ACA enrollees with household income levels below 250 percent of the federal poverty level pay out-of-pocket for insurance co-payments. The change adds about $560 million to the cost of administering the exchanges.

The Obama administration announced that it will continue the federally run Pre-Existing Condition Insurance Plan (PCIP) (a type of health insurance offered to those who are uninsured and who have been unable to obtain coverage due to a pre-existing health condition) for one extra month, allowing individuals who have not yet found new health insurance through the exchanges to be enrolled in the PCIP through April 30, 2014.

IN THE COURTS

On March 25, the Supreme Court heard oral arguments on the ACA’s requirement that most employers provide contraception in their company health plans. Hobby Lobby and Conestoga Wood argued that providing certain contraceptives required by the ACA violate their religious beliefs and argued further that for-profit businesses can exercise religious rights. The Obama administration is challenging these claims. Though we do not yet know how the justices will rule on the matter, the questions they asked yesterday indicate to many that there is a real possibility that the Supreme Court may decide businesses cannot be required to provide birth control if doing so violates their strongly held religious beliefs.

IN THE STATES

Florida’s special election race for Florida’s 13th District involved campaigning from both sides on the Affordable Care Act. Republican David Jolly’s win over Democrat Alex Sink was seen by many as a victory for those who oppose the Affordable Care Act. As a result, many Democrats are increasingly worried about their own races in this year’s upcoming elections and are reevaluating how much support or opposition to express for the Affordable Care Act.

California is still the lead in enrollee numbers for Obamacare and has enrolled twice as many people as the next closest state for a total of 868,000. Massachusetts and Nevada, which both had trouble with their initial state run exchange roll-outs, also saw enrollment rates increase for the month of February.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook

Health Care Reform Implementation Update - March 7, 2014

This week President Obama released his Fiscal Year 2015 Budget Proposal, which provides useful information on his priorities for the year but, as is normally the case, is not likely to gain much traction; the administration announced a two-year extension for individuals whose health insurance plans would have been canceled due to the Affordable Care Act (ACA); Ways and Means Chairman Dave Camp released a comprehensive tax reform plan, which also is more an indicator of his party’s priorities than of policies that will become law this year; the Obama administration announced a new delay for insurance plans that are not compliant with the ACA; and lawmakers and congressional staffers continue to work to prevent the upcoming cut to Medicare providers that results from the Sustainable Growth Rate (SGR) formula.

IN THE WHITE HOUSE

On March 4, President Obama released his Fiscal Year (FY) 2015 Budget Proposal (the Budget).  The Budget proposes $77.1 billion in discretionary funding to support the Department of Health and Human Services (HHS). This is a decrease in discretionary funding to HHS by $0.8 billion from the enacted FY 2014 funding level. Additionally, the Budget includes $402 billion in health savings over 10 years, more than $353 billion of which comes in the form of Medicare provider cuts. The Budget also includes $1.44 billion in funding for the Center for Medicare and Medicaid Innovation (CMMI) in FY 2015, an increase of $390 million above FY 2014. CMMI is tasked with improving and updating current payment and service delivery models.

Of particular note for providers is the Budget’s reduction of Medicare “bad debt” payments. Medicare currently reimburses hospitals, physicians and other providers 65 percent of bad debts. Bad debts are debts that result from Medicare patients failing to pay deductibles or coinsurance. President Obama’s Budget proposes decreasing the percentage paid to providers from 65 to 25 over a three-year period. This change was also proposed in the FY 2014 Budget but was never put into effect. 

Another provision of the Budget that would affect providers were it to go into effect is its cut to teaching hospitals and graduate medical education payments, which would amount to a decrease of $960 million in Medicare payments in 2015 and $14.6 billion over the next decade.

The President’s Budget would affect the Independent Payment Advisory Board (IPAB) as well, the board created by the ACA charged with reducing Medicare spending if it exceeds a specified target rate. The Budget changes this target rate from Gross Domestic Product (GDP) + 1 percent to GDP + .5 percent, which in simpler terms means it would reduce the extent to which Medicare spending can grow before the IPAB may step in to make changes to reduce costs. This proposed change has the potential to affect all providers depending on the types of recommendations the IPAB ultimately would make.

On March 5, the Obama administration announced another delay of the ACA. Under this new extension, those whose health insurance plans were supposed to be canceled this year will now have until 2017 to keep them. This further extends the administration’s earlier extension of these plans by an additional two years and avoids plan cancellations around this year’s mid-term elections, which vulnerable Democrats were concerned would hurt them.

AT THE AGENCIES

Gary Cohen is leaving his position at CMS as the Director of the Center for Consumer Information and Insurance Oversight (CCIIO).  In this position, Cohen led the development of the ACA insurance exchanges. Mandy Cohen (who is not related to Gary) will become the acting Director.

The Food and Drug Administration issued proposed rules to update Nutrition Facts labels for conventional foods and dietary supplements. The regulations would make calorie counts, serving sizes and percent daily value more prominent on the labels, and the serving sizes listed would be updated to reflect the amounts of food people actually consume, which tend to be larger than those listed on nutrition labels.

On February 25, the Internal Revenue Services (IRS) released a series of educational health care tax tips to help individuals understand how the ACA may affect their taxes. In the rules, the IRS guidance provides information on premium tax credits, the health care law for individuals and the health insurance marketplaces.

A new actuarial report from the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary predicts that 65 percent of small businesses will see premiums increase under the ACA. The report evaluated employers with 50 or fewer full-time employees buying outside insurance policies for their employees.

CMS posted a notice titled “Medicaid Program; Preliminary Disproportionate Share Hospital Allotments (DSH) for Fiscal Year (FY) 2014 and the Preliminary Institutions for Mental Diseases Disproportionate Share Hospital Limits for FY 2014.” Disproportionate Share Hospital Allotments (DSH) payments refer to the federal law that requires state Medicaid programs to make payments to qualifying hospitals serving a large number of Medicaid and uninsured individuals. Under the ACA, DSH funds were to be cut this year; however, those cuts were delayed in December (2013) for two years. The preliminary allotments, which vary by state, total $11.7 billion.

ON THE HILL

Though congressional leaders have nearly dismissed the possibility of tax reform in 2014, House Ways and Means Chairman Dave Camp (R-Mich.), who put significant work into advancing tax reform with Former Senate Finance Chair Max Baucus last year, released a draft tax reform proposal this week. The plan would reduce the number of tax brackets from seven to two and lower the corporate income tax rate from 35 to 25 percent. With respect to the ACA, the plan would repeal: 1. the ACA’s tax on medical devices; 2. the law’s prohibition on using health spending accounts to buy over-the-counter medicine; 3. the ACA tax credit for small employers, which allows small businesses to claim a credit for up to two years if it pays at least half of employees’ health insurance premiums and purchases coverage through a state exchange; and 4. the ACA’s tax exemption for Consumer Operated and Oriented Plans (CO-OPs), which are entities that compete as nonprofits in the health insurance market.

On March 5, the House voted 250-160 to delay the individual mandate until 2015. Twenty-seven Democrats joined Republicans to vote for the delay.

On February 25, Sens. Mitch McConnell (R-Ky.), John Cornyn (R-Texas), John Thune (R-S.D.), John Barrasso (R-Wyo.), Jerry Moran (R-Kan.) and Roy Blunt (R-Mo.) sent a letter to HHS Secretary Sebelius expressing their concerns over the changes to Medicare Advantage and the Medicare Part D program (the Medicare drug benefit program) the Department is considering.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is meeting on March 6 and 7. The meeting is broken into the following sessions: Site-neutral payments for select conditions treated in inpatient rehabilitation facilities and skilled nursing facilities, next steps in measuring quality across Medicare’s delivery systems, developing payment policy to promote use of services based on clinical evidence, per-beneficiary payment for primary care, synchronizing Medicare benchmarks across payment models, and improving risk-adjustment in the Medicare program.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, is next scheduled to meet on April 10 and 11. We will provide further information on the agenda as it becomes available.

IN THE STATES

Pennsylvania Governor Tom Corbett agreed in a letter to Secretary Sebelius that he would back off the component of his Medicaid expansion proposal that would require able-bodied beneficiaries without full-time work to participate in an employment program as a condition of their health coverage. The Governor instead proposed a pilot program to encourage those who are able to work to participate in job training and work opportunities without making this a condition for eligibility. Participation in this voluntary program would lower participants’ premiums and cost sharing.

On March 4, the Arkansas state House voted to continue allowing the state to use Medicaid dollars to buy private health care insurance for poorer residents. This was the state House’s fifth attempt to pass such legislation, which as a spending bill requires a 75 percent supermajority to pass in Arkansas. The state Senate voted 27-8 last month approve the measure.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - February 26, 2014

Though Congress was in recess this past week, congressional staff was hard at work continuing to consider ways to prevent a cut to Medicare providers’ payment rates that will be triggered by the sustainable growth rate formula on March 31, the Department of Health and Human Services (HHS) in conjunction with the Employee Benefits Security Administration and Internal Revenue Service, released proposed rules on the 90-day waiting period limitation, and the Centers for Medicare and Medicaid Services (CMS) released its annual notice on Medicare Advantage Rates and changes in payment methodology for Medicare Part D benefits for 2015.

AT THE AGENCIES

On February 21, CMS released its annual notice announcing Medicare Advantage rates and changes in payment methodology for Medicare Part D benefits for 2015.  Medicare Advantage currently covers one third of all Medicare beneficiaries.  In advance of the announcement, 40 senators including some Democrats sent a letter to the administration cautioning against large cuts to Medicare Advantage. Last year’s rate announcement received significant attention when the administration proposed 2.2 percent cuts to Medicare Advantage plans but changed course after an intense lobbying campaign by stakeholders ultimately resulting in a 3.3 increase in the rate. You can expect to see similar advocacy efforts this time around. Comments and questions may be submitted to CMS by 6:00 PM on March 7, 2014.

On February 20, the U.S. Departments of Labor, Health and Human Services and Treasury published a final rule implementing a 90-day limit on waiting periods for health coverage. A waiting period refers to the period that must pass before coverage for an individual who is eligible to enroll in a group health plan becomes effective. The final regulations require that no group health plan or group health insurance issuer impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage. The rules do not require coverage to be offered to any particular individual or class of individuals.

CMS is seeking comments on methodology it would use to adjust payment amounts for durable medical equipment, prosthetics, orthotics and supplies. Durable medical equipment is any equipment that provides therapeutic benefits to a patient in need because of certain medical conditions or illness. The proposed rule will be published in the Federal Register on February 26. 

ON THE HILL

Republicans from the House Committee on Energy and Commerce sent a letter to Treasury Secretary Jack Lew requesting  information on the recent delay of the Affordable Care Act’s (ACA's) employer mandate. The employer mandate refers to the provision of the ACA that requires employers with 50 or more full-time employees to provide these employees with health insurance. The information the lawmakers request includes all memoranda or analyses of the constitutional or statutory authority of Treasury to delay the ACA requirements that were considered or relied upon by Treasury when deciding to move forward with the second delay.

In response to the regulations published by CMS in January that would empower the agency to participate in Medicare Part D (the part of Medicare under which prescription drug coverage falls), negotiations between insurance companies and pharmacies, an alliance of drug companies, patient advocates, and Democrats and Republicans in Congress has waged a campaign against a policy that would allow insurers to limit Medicare coverage for certain classes of drugs.

Representative John Dingell (D-Mich.) announced this week that he would retire this year, marking the end of the longest congressional career in history. Dingell played a part in expanding access to health care through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and the Affordable Care Act (ACA) in the 50-plus years he served in Congress.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, met on February 20. The commissioners discussed eligibility and enrollment strategies, the use of the emergency department by Medicaid enrollees, the future of the Children’s Health Insurance Program, the need for long-term services and supports, and Medicaid and population health.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet in March. We will provide further information on the agenda as it becomes available.  

IN THE STATES

On February 19, Governor Corbett submitted Pennsylvania’s state waiver request to implement the healthy Pennsylvania initiative, an alternative to the ACA’s Medicaid expansion provisions that were made optional for states by the Supreme Court. Based on comments received by the Department of Public Welfare (DPW), the final proposal Gov. Corbett submitted contained several modifications including local funding for federally qualified health centers in the private coverage option networks, cost sharing criteria, and coverage between presumptive eligibility application date and the date the private option coverage is effective. If HHS accepts Pennsylvania’s proposal, providers in the state can expect to see more patients through this new channel.

The Arkansas legislature has been considering the future of its Medicaid program over the past week. The state Senate voted 27-8 to renew funding for the state’s Medicaid expansion for another year. The House, however, so far has failed to get the necessary three-fourths majority required in Arkansas to pass spending bills. Republican leaders in the Arkansas state House have pledged to continue to bring up the measure in the chamber until it passes.

IN THE COURTS

On February 21, the U.S. 7th Circuit Court of Appeals in Chicago ruled against the University of Notre Dame in its case arguing that it should not be required to provide health insurance for students and employees that covers contraceptives given that it is a Catholic university.  The administration made a compromise last year that attempted to create a buffer for religiously affiliated hospitals, universities and social service groups that oppose birth control under which insurers or the health plan’s outside administrator would pay for birth control, and the religiously affiliated organization itself would not be involved. Notre Dame contended that even with the buffer, this part of the law violates their constitutional rights.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook.

Health Care Reform Implementation Update - February 14, 2014

This week the Obama administration announced that it would delay the employer mandate, which requires that businesses with more than 50 full-time employees provide full-time employees with health insurance or pay a penalty, for some businesses until 2015, marking the second time the mandate has been delayed.  The House and Senate passed a measure to raise the country’s debt limit, averting the Treasury Department’s projected February 27 deadline.  Though House Republicans had considered attaching a 9-month sustainable growth rate patch (“doc fix”) to the bill, it was ultimately passed with no attached conditions.  Also, Senator Ron Wydenwas confirmed as the new Senate Finance Chairman, a position that will put him at the helm of one of the most important health policy committees in Congress.

ON THE HILL

On February 12, Senator Ron Wyden (D-Oregon) was confirmed to lead the Senate Finance Committee, taking over the chairmanship from the new ambassador to China, Max Baucus.  The Senate Finance Committee is one of the primary committees with jurisdiction over healthcare issues.

The House Ways and Means Committee advanced legislation that would change the workweek under the ACAfrom 30 hours to 40 hours.  Currently the ACA requires employers (with more than 50 employees) to provide health insurance to all full-time employees, where an employee qualifies as full-time by working 30 hours a week.  Republicans in the House and some Democrats are working to change the definition of full-time under the ACA to 40 hours a week.  This initiative is in part inspired by the significant number of employer cutbacks in employer hours to just under 30.  While a requirement that employees who work 40 hours be provided health insurance by their employers may result in similar hour reductions, hour reductions to just under 40 allow employees to work more hours than hour reductions to just under 30.  Further, a 40-hour definition fits what many believe is a more traditional full-time workweek.  This week, Rep. Dan Lipinski (D-Illinois) signed on to a Republican-led bill sponsored by Rep. Todd Young (R-Indiana), which would increase the number of hours an employee has to work to be eligible for health benefits from his or her employee from 30 to 40 hours.

The House and Senate passed legislation on February 12 to undo prior cuts to military pensions and pay for the change by extending sequestration for another year, which results in significant cuts to Medicare providers in 2024 and raises concerns among Medicare providers that sequestration-level reimbursement will eventually become the new norm.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet in March.  We will provide further information on the agenda as it becomes available.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, is next scheduled to meet on February 20.  We will provide further information on the agenda as it becomes available.

AT THE AGENCIES

On February 10, the Treasury department announced that it would delay the ACA’s employer mandate until 2016 for businesses with between 50 and 99 employees. Additionally, employers are not permitted to cut their workers to meet the threshold. This provision of the ACA was already delayed once from January 2014 to January of 2015.  Employers with 50 or fewer employees will not have to provide insurance to their employees, as was already the case.  Additionally, the regulation gives businesses with more than 100 workers additional time to prepare to provide coverage for their employees.  House and Senate Republicans responded to the additional time given to employers before they must comply with the mandates or face a penalty by renewing calls for the same treatment for the individual mandate.  Several Senate Republicans are also reaching out to the Internal Revenue Service requesting further information on how the individual mandate and its penalties will be enforced.

The regulations also detail some specific ways the employer mandate will affect school employees, saying that they may not be considered part-time (and thus an employee who does not require health insurance under theACA’s employer mandate, which only applies to full-time employees), even though schools are closed for part of the year.

Parts of HealthCare.gov will be down over President’s Day weekend for maintenance.  The deadline to sign up for coverage for March, however, is this Saturday.  In light of the upcoming deadline, the Obama administration announced a special enrollment period for people who have difficulty applying for March 1 coverage.  From 3pmSaturday through 5am Tuesday, customers will be able to access HealthCare.gov, even though they will not be able to verify their identities by the Social Security Administration.

The Department of Health and Human Services announced that about 1.1 million people signed up for health insurance through the ACA exchanges in January, bringing the total enrollment through exchanges to 3.3 million.  The administration says that 25 percent of the enrolled population is made up of the “young invincibles” it is hoping to attract, the population between 18 and 34 years old who are likely to be healthier and less expensive to the system.

On February 7, CMS announced that providers would have an extra month to demonstrate that they meet requirements for meaningful use of electronic health records.  The deadline, originally February 28, has been extended to March 31.

IN THE STATES

New York's state health agency said over 412,000 people in the state had enrolled in ACA since open enrollment began in October.  Two-thirds of these enrollees were previously uninsured.

New York Gov. Andrew Cuomo announced that New York and HHS had reached an “agreement in principle” on an $8 billion Medicaid waiver to help struggling hospitals throughout the state that otherwise would have closed, particularly those in Brooklyn.  New York had requested a $10 billion waiver.

CMS is giving the Massachusetts Health Connector (Massachusetts’ insurance exchange) a three-month extension, until June 30, for subsidized insurance programs that were set to expire to provide Massachusetts with extra time to make its troubled insurance exchange function.  CMS’ extension is in acknowledgment that the state’s exchange is not functioning.

IN THIRD PARTIES

The American Medical Association (AMA) has been lobbying forcefully in favor of the SGR repeal and replace legislation offered last week.  The AMA will not, however, speak to how this legislation should be paid for, which is the biggest obstacle to the legislation’s passing.

The Senate has been considering a proposal to extend unemployment insurance that would extend the 2% Medicare sequester cut that kicked in last year by one more year until 2024. On February 10, several of the nation's largest hospital groups joined together to send a letter that urges senators to oppose extending Medicare sequester (which refers to the automatic spending cuts to federal government spending) cuts to restore unemployment benefits.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - February 10, 2014

Last week the Congressional Budget Office (CBO) released a report on the Affordable Care Act (ACA), in which it projected a decline in the number of full-time-equivalent hours worked; the Senate Finance, House Ways and Means, and House Energy and Commerce committees released a joint sustainable growth rate (SGR) repeal and replace proposal without offsets on the same day Finance Committee Chairman Max Baucus (D-Mont.) was confirmed to be the next U.S. Ambassador to China, setting off a chain reaction of committee leadership changes that will bring Oregon Democrat Ron Wyden to the chairmanship of that committee; some House and Senate Republicans continued to draw attention to the ACA’s risk corridor and reinsurance provisions, which they characterize as enabling insurance company bailouts; and New Hampshire moved closer to Medicaid expansion.

ON THE HILL

On February 6, congressional lawmakers from the Senate Finance Committee, House Ways and Means Committee, and House Energy and Commerce Committee unveiled a bicameral, bipartisan agreement to repeal Medicare’s Sustainable Growth Rate (SGR) formula, the formula used to determine physician Medicare payments. The bill would repeal the SGR and replace it with a system focused on quality, value and accountability according to a summary from the committees and give physicians a 0.5 percent pay increase each year for five years. The bill does not provide pay-fors for the $120-$150 billion proposal or include the extra policies, or extenders, that traditionally are attached to yearly fixes to the SGR.

According to a February 4 report from the CBO, the ACA will reduce workforce hours in the United States by the equivalent of 2 million full-time jobs in 2017. The report also revised CBO’s earlier projection that 7 million people would get covered through the state and federal marketplaces in 2014 down to 6 million. Further, CBO projected that if 6 million people were to enroll, 5 million of them would receive subsidized coverage.

In the wake of the House Committee on Ways and Means’ January 28 hearing on the definition of full-time employee as those who work at least 30-hours a week and a major announcement from the Congressional Budget Office that people would work fewer hours due to the ACA, the House Ways and Means Committee is working on a bill that would change the workweek under the ACA from 30 hours to 40 hours. Advocates of this change believe it would reduce the incentive for employers to cut workers’ weekly hours below 30.

On February 5, the House Oversight Committee examined the law’s Consumer Operated and Oriented Plan (CO-OP) Program, which funds nonprofit cooperative health insurers.  Before the hearing began, the committee set the tone by releasing a report drawing attention to HHS’ funding of companies with shaky finances and management and legal troubles.

The House Oversight Committee held a hearing on February 5 at which members discussed the ACA’s risk corridor program. Sen. Marco Rubio (R-Fla.) testified at the hearing about what some Republicans are calling insurance company bailout provisions. House Republicans have debated the possibility of attaching a cancellation of the risk corridor program to legislation to raise the debt ceiling.

Following Congressman Henry Waxman’s (D-Calif.) retirement announcement last week, Reps. Anna Eshoo (D-Calif.) and Frank Pallone Jr. (D-N.J.) are both eyeing, and campaigning with their peers for, his position as the top Democrat on the House Committee on Energy and Commerce. Another possible contender is John Dingell (D-Mich.).

House Majority Leader Eric Cantor (R-Va.) is saying that the House will vote in 2015 on an ACA replacement plan and is encouraging members to consider options for addressing the ACA and jobs.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet in March. We will provide further information on the agenda as it becomes available.

 The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to Congress on Medicaid and CHIP, is next scheduled to meet on February 20. We will provide further information on the agenda as it becomes available.

AT THE AGENCIES

On January 31, the Centers for Medicare and Medicaid Services (CMS) announced that the Medicare Accountable Care Organizations (ACOs) program, the ACA development that encouraged providers to collaborate to provide cost-effective and high-quality care to patients, saved a total of $380 million in their first year. Close to half of the 114 hospital and doctor groups that began ACOs under the ACA managed to slow Medicare spending in their first year; however, only 29 saved enough money to qualify for bonus payments. Jonathan Blum, the Principal Deputy Administrator at CMS, said the ACO spending reductions were greater than were expected.

The Department of Health and Human Services (HHS) announced that with nearly 800,000 people signing up for health insurance coverage in January, more than 3 million people have now enrolled in private health plans sold through the ACA’s marketplaces. HHS’s stated goal is to have 7 million enrollees by the end of open enrollment, on March 31.

On January 30, CMS announced a temporary moratoria on the enrollment of home health agencies in Fort Lauderdale, Fla., Detroit, Dallas and Houston and on new ground ambulance suppliers in the Greater Philadelphia area. This second wave of moratoria follows a first wave of home health moratoria last year. CMS also extended for six-months the current enrollment moratoria of home health agencies in Chicago and Miami and for Houston ground ambulance supplier enrollments in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP).

The Senate held a confirmation hearing on February 4 for President's Obama’s pick for surgeon general, Vivek Murthy. Murthy is a physician at Brigham and Women’s Hospital in Boston, a software entrepreneur, and founder of Doctors for America (originally Doctors for Obama). There is some opposition from Republicans who are skeptical of Murthy’s ACA advocacy background.

On February 3, HHS issued a final rule that requires labs to provide patients with access to their own test results without going through a physician if requested.

On January 31, CMS extended by six months the partial enforcement delay of its two-midnight policy for inpatient admission and medical review criteria. The new policy was included in the 2014 Medicare inpatient payment rule and instituted a time-based presumption period for medically necessary inpatient care. The “two-midnight” rule assumes an admission is appropriate for a Medicare Part A payment if a physician expects a beneficiary's treatment to require a two-night hospital stay and admits the patient under the assumption.

IN THE WHITE HOUSE

On January 30, executives from ACA’s cooperative health insurers (CO-OPs) met with Obama administration health officials to provide an update on enrollment, as well as ideas for improving the program. The White House said many CO-OP leaders reported strong enrollment numbers.

IN THE STATES

On February 6, New Hampshire state senators said they had reached a bipartisan deal to expand Medicaid in the state, under which the state will use federal money to buy private insurance similar to the plan adopted in Arkansas. New Hampshire’s House had already voted in favor of a similar proposal.

Virginiamay be moving closer to expanding its Medicaid program. At Governor Terry McAuliffe’s first bill-signing on February 5, he made a pitch for Medicaid expansion and invited proposals from fellow state government officials. State Sen. John Watkins (R-Powhatan) offered a new proposal under which, instead of spending new federal Medicaid dollars directly on expanding the program, it would send the money into a “taxpayer recovery fund.” Early responses to Rep. Watkins’ proposal do not look overwhelmingly positive; however, we will continue to follow it and other legislative proposals in the state.

To view our compilation of recent health care reform implementation news, click here

Health Care Reform Implementation Update - January 31, 2014

This week the Congressional Budget Office (CBO) provided new scores for the three sustainable growth rate (SGR) repeal proposals from the Senate Finance, House Ways and Means, and Energy and Commerce Committees; a list of potential offsets for SGR legislation circulated Washington; the president discussed the already positive developments from the Affordable Care Act (ACA) in his State of the Union address; Utah announced its intention to expand Medicaid under the ACA tipping the balance of Medicaid-expansion and non-expansion states to more than half expanding, and 20-term congressman and long-time advocate of a health care reform Henry Waxman, announced his retirement. Additionally senator and doctor, Tom Coburn, who has spent 15 years in Congress, will retire at the end of this year.

ON THE HILL

On January 24, the Congressional Budget Office (CBO) said that the House Ways and Means SGR repeal bill would cost $121 billion over 10 years. Additionally, CBO reduced its estimate for the House Energy and Commerce SGR bill from $175 billion down to $146 billion. Then on January 25, the CBO announced the score of the Senate Finance Committee’s SGR repeal bill of $150.4 over 10 years. The higher-cost Senate Finance proposal includes close to $40 billion in Medicare extenders not included in the other two proposals.

A list of possible offsets for SGR formula repeal is being circulated around Washington. The list is extensive and is derived from policies developed by the Obama administration, the Congressional Budget Office and the Bipartisan Policy Center. All listed potential offset policies are merely options, not cuts or policy changes that will necessarily occur. Cozen O’Connor Public Strategies is happy to provide this list upon request.

On January 28, the House Ways and Means Committee held a hearing on the law’s employer mandate and its definition of a “full-time” worker. The ACA counts employees who work 30 hours a week to be full-time employees, and thus part of the group to whom employers must provide health insurance. At the hearing, retail, restaurant and other business groups argued that the ACA’s definition of full-time work is going to cause businesses to cut employee hours to avoid having to offer them health insurance. Ways and Means Ranking Member Rep. Sandy Levin (D-Mich.) argued in the hearing, “Why wouldn’t you want to cover them? Why wouldn’t you want to cover these people?” Republicans argued that the requirement will simply force employers to alter hours and employment opportunities.

The House Oversight and Government Reform Committee held a hearing titled “A Roadmap for Hackers? Documents Detailing HealthCare.gov Security Vulnerabilities,” in which the committee continued to examine the security concerns presented by the ACA.

On January 27, senior SensOrrin Hatch (R-Utah), Tom Coburn (R-Okla.) and Richard Burr (R-N.C.) released a legislative outline for a replacement plan to the ACA. The plan envisions issuing tax credits to those not working at a large company, allowing states to set up high-risk pools and significantly reshaping our Medicaid program. The plan would be paid for by capping the tax exclusion for employee health plans. It still needs legislative language and an official cost estimate, but it is unlikely to move through the Democrat-controlled Senate.

On January 28, the House voted 227-188 to pass the No Taxpayer Funding of Abortion Act, which would ban federal subsidies from going toward insurance plans that cover abortion and making the ban on federal spending on abortion permanent – something which is approved on an annual basis through the Hyde Amendment. The White House threatened to veto this bill.

Speaking in Texas on January 23, Rep. Paul Ryan said Republicans are discussing eliminating the ACA’s “insurance company bailouts” in negotiations to lift the nation's debt ceiling in February. Republicans have already introduced legislation to target the reinsurance fund and risk corridors to which Rep. Ryan alluded, which are designed to limit the risk insurers have to take and try to prevent premium spikes for consumers that result from ACA’s requirements that insurance companies accept all beneficiaries. Sen. Mike Lee also noted the “bailouts” in his official Tea Party response to the State of the Union address.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet in March. We will provide further information on the agenda as it becomes available.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, is next scheduled to meet on February 20 and 21. We will provide further information on the agenda as it becomes available.

Focused on initiatives like the faulty rollout of HealthCare.gov, Reps. Anna Eshoo (D-Calif.) and Gerry Connolly (D-Va.) are co-sponsoring a measure that calls for creating a U.S. Digital Government office, responsible for reviewing and guiding major IT projects of all federal agencies. The legislation would also make the role of U.S. chief technology officer a permanent position.

AT THE AGENCIES

The federal government is seeking a candidate to fill a new position as a CMS risk management officer. The position was inspired by the faulty rollout of HealthCare.gov.

According to an IRS notice released on January 23, Americans with limited health coverage under Medicaid and certain military health care programs will not be subject to the individual mandate penalty in 2014. 

HHS awarded nine states with a combined $201.2 million in new federal grants to support state-run and partnership exchanges. In order of grant amount received, the states receiving grants are Washington state, New Mexico, Mississippi, Arkansas, Delaware, Nevada, New Hampshire, Rhode Island and Utah.

On January 22 at the U.S. Conference of Mayors, HHS Secretary Sebelius encouraged mayors to urge their state legislatures to expand Medicaid under the ACA. Also on January 22, an HHS release said that more than 6.3 million people were determined eligible for either Medicaid or the Children’s Health Insurance Program (CHIP) between October and December.

The Federal Trade Commission (FTC) sued Kobeni Inc. due to spam emails it sent threatening federal prosecution unless the reader immediately clicked on a link to enroll in health insurance. The FTC accuses Kobeni and its president Yair Shalev of injuring consumers and deceptive representations, as well as violations of the FTC Act and the CAN-SPAM Act, failing to provide notice of opt out and failing to include a valid physical address in the spam mail.

IN THE WHITE HOUSE

On January 28, President Obama delivered his fifth State of the Union address. While health care and the ACA did not play as central a role in the speech as they have in years past, the president did note the strides that had been taken for those with pre-exiting conditions, those who are 26 and still able to remain on their parents’ health insurance plans, and that over nine million Americans had signed up for private health insurance or Medicaid coverage.

On January 23, Chris Jennings, a senior White House healthcare adviser, announced he would be stepping down from his post. An unnamed source told the Washington Post that Jennings' departure was due to health and family reasons.

IN THE STATES

On January 23, Utah Governor Gary Herbert expressed in a news conference that he backed his state’s expansion of Medicaid. Assuming the legislature is on board with Gov. Herbert, Utah would become the 26th state to agree to expand Medicaid, and a majority of states will be in this group.

IN THIRD PARTIES

On January 23, Moody’s downgraded the credit outlook for health insurance companies from “stable” to “negative.”  Some of the concerns prompting Moody’s downgrade were a rocky rollout of the exchanges, lower than expected enrollment numbers, uncertainty over who is enrolling, ever-changing regulations, troublesome back-end exchange issues and an underlying question of whether insurers are going to get paid sufficient premiums through the exchanges.

New research from the American Action Forum shows that young adults, defined as between 18 and 35 years old, may find it financially advantageous to pay the individual mandate penalty instead of purchasing insurance coverage, as long as they remain healthy.

A study from the Brookings Institution from January 27 says that the ACA will improve the “well-being and incomes of Americans in the bottom fifth of the income distribution.”  Brookings projects in its report that incomes in the bottom fifth of the distribution will increase close to 6 percent, and those in the bottom 10th of the distribution will increase over 7 percent.

Target is now planning to stop providing health insurance coverage for its part-time employees beginning in April, at which point these employees can join the ACA’s health insurance exchanges. Target's announcement follows those of Trader Joes and Home Depot among others. Target’s shift reflects the ACA requirement that employers provide health insurance to their full-time employees.

IN THE COURTS

The U.S. Court of Appeals for the D.C. Circuit granted an expedited appeal of Judge Paul Friedman's January 15 ruling. On January 15, Judge Friedman upheld the IRS rule to extend tax credits and cost-sharing subsidies for the purchase of qualifying health insurance plans in health insurance exchanges established by the federal government.

On January 24, the Supreme Court granted the Little Sisters of the Poor, a group of Catholic nuns, a temporary exemption from the birth control mandate of the ACA until the 10th U.S. Circuit Court of Appeals decides the case.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - January 24, 2014

In a high-stake but relatively uneventful series of negotiations, the House and Senate passed a continuing resolution to fund the government through September, averting another government shutdown. Also over the past week, the Director of the Center for Consumer Information and Insurance Oversight (CCIIO) Gary Cohen testified before the House Committee on Energy and Commerce subcommittee on oversight that he was confident HealthCare.gov was secure; a federal judge ruled that the Affordable Care Act’s (ACA’s) insurance subsidies are lawful in those states that did not create their own marketplaces, the Medicare Payment Advisory Commission (MedPAC) held its monthly meeting; the Department of Health and Human Services (HHS) extended the Pre-Existing Condition Insurance Plan (PCIP) by two months; and the administration released data showing that to date less than a quarter of those who have signed up for health insurance through the ACA are between the ages of 18 and 34.

ON THE HILL

Avoiding another government shutdown, and funding the government through September, the $1.1 trillion omnibus spending bill passed the House with a vote of 359-67 on January 15 and passed the Senate with a vote of 72-26 on January 16. The final omnibus spending bill will ease some of the cuts imposed by budget sequestration. Additionally, the bill includes a section that requires HHS in the president’s fiscal year 2015 budget proposal to detail all spending by the Centers for Medicare and Medicaid Services (CMS) on the exchanges since the ACA was enacted, as well as proposed uses for such funding for fiscal year 2015. The bill also reduces funding for the Independent Payment Advisory Board (IPAB) by $10 million.

On January 16, CMS’s Director of the Center for Consumer Information and Insurance Oversight (CCIIO), Gary Cohen testified before the House Committee on Energy and Commerce subcommittee on oversight that: full end-to-end testing of Healthcare.gov was completed on December 18, that he was fully confident that the site is secure, and that a temporary system was in place to allow insurers to calculate what they are owed.

House Majority Leader John Boehner (R-Ohio) predicted on January 16 that House Republicans would unveil and potentially vote on a replacement for the ACA this year.

The effort to extend emergency unemployment compensation stalled in the Senate, with Democrats and Republicans disagreeing over the amendments process. We expect lawmakers to resume consideration of this legislation, which may involve payment cuts to Medicare providers, in late January or early February.

On January 16, the House passed ACA exchange disclosure legislation, which would require weekly reports on enrollment and operation of the insurance exchanges. Among the data that must be included in these reports are the number of unique visitors to the site, new account registrations and enrollees in private exchange plans and Medicaid. The bill was sponsored by Reps. Lee Terry (R-Neb.) and Bill Cassidy (R-La.). On January 9, the Office of Management and Budget said the Obama administration is opposed to this bill.

On January 15, the likely replacement for Senate Finance Chairman Max Baucus (D-Mont.), Ron Wyden (D-Ore.), along with Sen. Jonny Isakson (R-Ga.), Rep. Peter Welch (D-Vt.) and Rep. Erik Paulsen (R-Minn.) unveiled The Better Care, Lower Cost Act of 2014, a proposal to revamp Medicare to focus care on the chronically ill and rein in program costs, under which Medicare providers would have the option of receiving new risk adjustments and capitated payments and to be rewarded for better outcomes.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program met on January 16 and 17. The topics covered were: assessing payment adequacy and updating payments: hospital inpatient and outpatient services, and reforming Medicare’s prospective payment system for long-term care hospitals; the Medicare Advantage program: status report, and employer group plan and hospice policies; Medicare Accountable Care Organizations (ACOs): policy options; assessing payment adequacy and updating payments: home health care services; and steps toward broad post-acute care payment reforms; assessing payment adequacy and updating payments: ambulatory surgical centers, hospice, inpatient rehabilitation facilities, and long-term care hospitals status report on part D, and financial assistance for low-income Medicare beneficiaries.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to Congress on Medicaid and CHIP, is meeting today, January 23 to discuss the following: Administrative Capacity of State Medicaid Programs; New Studies Focused on CHIP Benefits; Characteristics of Medicaid Managed Care Programs; Paying for Value in Medicaid: Lessons Gleaned from Advanced Payment Models in Four States; Medicaid and Population Health; and Early Insights into ACA Enrollment: Focus Group Highlights.

AT THE AGENCIES

On January 14, HHS announced that the approximately 85,000 people currently enrolled in the Pre-Existing Condition Insurance Plan, the high-risk insurance pools created by the ACA, will have an extra two months – until March 31 – before they lose coverage. The program was originally slated to end at the end of 2013. Given the widespread technical difficulties with HealthCare.gov, the administration decided to give people more time to enroll in insurance exchanges.

According to theNew York Times, the Obama administration has announced another ACA provision delay to the provision of the law that would fine employers who provide top executives with better health coverage than the coverage offered to other employees. Though a similar policy has long been in place for employers serving as their own insurers, the ACA extends these protections to employers who buy insurance for their workers through a third party. The report says that the Internal Revenue Service has not yet been able to issue regulations that would clarify which individuals qualify as “highly compensated.”

Under the ACA, starting in 2015 employers with 50 or more employees must offer health coverage to all employees who work 30 hours or more per week. Up until last week, “employees” included volunteer firefighters and other emergency personnel – even if they were not paid or paid only a nominal amount. Many were concerned that these requirements would have devastated some of the 50-plus-employee volunteer fire companies and other similar organizations. Last week, the Treasury Department said it would not count volunteer emergency responders as full-time equivalent employees.

The administration released new enrollment data, which shows that of the 2.2 million who have enrolled in new coverage under the ACA, only 24 percent are between the ages of 18 and 34. This concerns some watching the makeup of the risk pools, since those who are older tend to be more expensive beneficiaries to cover. The administration said the demographics of those who have signed up to date are promising, and it expects the younger individuals to sign up closer to the deadline.

IN THE STATES

According to the latest update from New York’s state Health Department, close to 330,000 people have signed up for health insurance coverage through the state’s health insurance exchange, putting the state on track to meet its goal of enrolling 1.1 million by the end of 2016, according to health officials from New York.

IN THIRD PARTIES

Douglas Holtz-Eakin, the former Congressional Budget Office (CBO) director, opened The Center for Health and Economy, a new health care-focused think tank. The think tank will score proposals introduced by lawmakers and other think tanks.

IN THE COURTS

On January 15, in the case of Halbig v. Sebelius, a federal judge ruled that the ACA’s insurance subsidies are lawful in those states that did not create their own marketplaces. The U.S. District Court Judge wrote in his decision that, “The plain text of the statute, the statutory structure, and the statutory purpose make clear that Congress intended to make premium tax credits available on both state-run and federally-facilitated Exchanges.”

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - January 13, 2014

With only a few days remaining before the current Continuing Resolution (CR) expires, House and Senate Appropriations Committee leaders are trying to quickly negotiate remaining issues in the omnibus spending bill; however, they may have to buy themselves more time to finalize it by extending the current CR by a few days. Also on Capitol Hill, Republicans advanced two new Affordable Care Act (ACA) bills, one which would require the Department of Health and Human Services (HHS) to notify those whose personal data has been compromised through the health insurance exchange within two days and another that would require the secretary of HHS to provide a weekly report until March 2015 on health exchange updates. This week, Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO) is scheduled to testify before the Energy and Commerce oversight subcommittee. In the agencies, the Centers for Medicare and Medicaid Services (CMS) created the Office of Hearings and Inquiries, which will now handle complaints and appeals under the ACA insurance exchange as well as assist with Medicare complaints, inquiries and grievances; and CMS released a proposed rule that includes changes to Medicare Advantage and Part D for Contract Year 2015. Finally, CMS officially appointed Tim Love to replace Michelle Snyder as chief operating officer of CMS, and Dave Nelson to replace Tony Trenkle as chief information officer; and the administration has decided to replace CGI Federal, which created the faulty online exchange, with Accenture.

ON THE HILL

House and Senate negotiators met on January 6 to hammer out the remaining issues in their omnibus spending bill in advance of the January 15 deadline. While the two chambers came to an agreement last month on a budget bill, and the president signed it, the appropriations bill is necessary to allocate the authorized funds. Concerned they may not meet this deadline, leaders of the Appropriations Committee are considering extending the current CR by three days to buy themselves more time to finalize negotiations.

On January 6, Chairman of the Energy and Commerce health subcommittee Rep. Joe Pitts (R-Pa.) unveiled The Health Exchange Security and Transparency Act, a bill addressing the security of data on HealthCare.gov by requiring HHS to notify people within two days if their personal data has been compromised through the health insurance exchanges. On January 10, the bill passed the House with a vote of 291-122 with 67 Democrats voting with Republicans. 

On January 9, Sens. Mike Johanns (R-Neb.) and John Barasso (R-Wyo.) introduced a bill in the Senate that would require HHS to notify users within two business days if a security breach in the health insurance exchange compromises their personal information.

The House is expected to vote this week on a second bill sponsored by Rep. Lee Terry (R-Neb.), the Exchange Information Disclosure Act, which addresses Republican complaints about the lack of transparency from the administration on how HealthCare.gov is working. It would require HHS to provide a weekly report every Monday until March 2015 on how many individuals have enrolled in health insurance through the site, specified other consumer interactions with the website, as well as details on problems that occur with the website and associated health care exchanges. On January 9, the Office of Management and Budget said the Obama administration is opposed to this bill. 

On January 6, Sen. Ron Johnson (R-Wis.) announced that he is filing a lawsuit against the Office of Personnel Management arguing that the office’s policy that allows legislators and Hill staff to receive employer payments for their health plans is not authorized by the ACA.

Senate Minority Leader Mitch McConnell (R-Ky.) proposed paying for an extension of unemployment benefits by delaying the individual mandate for one year, and Sen. John Thune (R-S.D.) said he will propose an amendment to replace the Senate plan with new tax breaks and an ACA exemption. Majority Leader Harry Reid (D-Nev.) blocked Sen. McConnell from offering this amendment. Under the package offered by Sen. Reid, the unemployment benefits would be paid for largely by extending a 2 percent cut to Medicare health providers in 2024.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is scheduled to meet on January 16 and 17. The agenda includes sessions on assessing payment adequacy and updating payments for hospital inpatient and outpatient services and reforming Medicare’s prospective payment system for long-term care hospitals, the Medicare Advantage program and employer group plan and hospice policies, Medicare Accountable Care Organizations (ACOs), assessing payment adequacy and updating payment for home health care services as well as broad post-acute care payment reforms, assessing payment adequacy and updating payments for ambulatory surgical centers, hospice, inpatient rehabilitation facilities and long-term care hospitals, a status report on Medicare Part D, and financial assistance for low-income Medicare beneficiaries.

The Medicaid and CHIP Payment and Access Commission (MACPAC) a non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, is next scheduled to meet on January 23. We will provide further information on the agenda when it becomes available.

AT THE AGENCIES

Tim Love was appointed to replace Michelle Snyder as chief operating officer of CMS. Additionally, Dave Nelson was appointed to replace Tony Trenkle, who left in November, to be the chief information officer.

CMS created the Offices of Hearings and Inquires (OHI), a new office tasked with handling complaints and appeals under the ACA insurance exchanges and assisting Medicare beneficiaries with “complaints, inquiries and grievances, and in gathering information necessary to file Medicare appeals.” The office will be led by the former Medicaid Program Integrity Group Director Angela Brice-Smith. To consolidate all complaints within a single office, CMS eliminated the Office of Public Engagement and is moving the functions of that office to OHI.

On January 6, CMS released a proposed rule that includes changes to Medicare Advantage and Part D for Contract Year 2015. Among the changes, this rule proposes new criteria for identifying protected classes of drugs in Part D, changes related to the use preferred pharmacy networks, limits on the number of plans that a sponsor may offer in the same service area, and requiring Part D prescribers to enroll in Medicare. CMS states that the proposed rule would save $1.3 billion over the five years 2015-2019 if finalized. 

On January 3, as part of its more general effort to “keep guns out of potentially dangerous hands,” the Department of Justice proposed a regulation to clarify prohibitions on possessing a firearm for mental health reasons. Additionally, HHS is proposing a regulation to relax legal barriers that may prevent states from submitting information on the mentally ill to the National Instant Criminal Background Check System. 

AT THE WHITE HOUSE

On January 7, the Office of the Actuary at CMS reported that in 2012 national health expenditures grew at an annual rate of 3.7 percent, marking the fourth consecutive year of low growth. Health spending as a share of gross domestic product fell slightly from 17.3 percent in 2011 to 17.2 percent in 2012. The White House said that the ACA was partially responsible for the slowdown in health care spending growth, noting, however, that its effect was only minimal. 

IN THE STATES

Cover Oregon’s executive director resigned after one month of being on medical leave, citing the "uncertainty of [his] health” as the reason.

On January 10, CMS and Maryland announced an agreement to reward state hospitals based on performance in a move away from fee-for-service.

IN THIRD PARTIES

A new study published in Science magazine examined a group of 10,000 low-income Oregon residents who recently obtained Medicaid coverage and found that they visited emergency rooms 40 percent more than those without insurance. The data is the product of five years of research in Oregon, where 10,000 randomly chosen residents received Medicaid coverage.

On January 8, at his annual State of American Business Address, U.S. Chamber of Commerce President Tom Donohue expressed that employers are concerned about the ACA’s negative impacts and that many smaller businesses expect to be hit even harder in 2014.

IN THE COURTS

The Supreme Court set the date of March 25 for oral arguments in the cases of Hobby Lobby and Conestoga Wood, two cases in which businesses are challenging the ACA’s contraception coverage requirements.

Action on the challenge by the Little Sisters of the Poor Home for the Aged, the organization of Catholic nuns in Denver that requested an emergency stay on the contraception mandate of the ACA and were temporarily granted relief from Justice Sotomayor, has not yet been announced.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - January 3, 2014

The new year kicked off this week with all eyes watching not only Winter Storm Hercules, but also how the new Affordable Care Act (ACA) coverage will work. According to the Centers for Medicare and Medicaid Services (CMS), more than a million people have signed up in the federal exchange. The president signed into law a two-year budget deal, that creates a three-month “doc fix” (a physician payment patch so that SGR payment rates do not kick in while lawmakers continue to work on a permanent repeal), extends for two years sequester cuts to Medicare, and decreases the likelihood of another government shutdown in January. Throughout the country, insurers spent the last week scrambling to finalize hundreds of thousands of last-minute ACA applications, given the administration’s extension of its extension of the deadline for applying to Christmas Eve. Key CMS official Michelle Snyder, who oversaw much of HealthCare.gov’s implementation, resigned effective January 3, temporarily replaced by her deputy, Tim Love. In another judicial twist, the contraception mandate was temporarily stayed on New Year’s Eve by JusticeSotomayor in response to a petition from a Catholic nun’s order in Colorado. The government is scheduled to reply this week to the temporary stay. Finally, the Obama administration announced late last month that individuals whose insurance plans had been canceled would be eligible for hardship exemptions from the individual mandate for 2014.

ON THE HILL

On December 18, with a vote of 64 to 36, the Senate passed a bipartisan budget deal. The legislation had already been passed by the House, with a vote of 332 to 94. The deal rolls back certain sequester cuts, includes a three-month SGR patch, and raises spending marginally above current levels through a combination of reforms and new, non-tax revenue. The deal does not address wider and more divisive issues of taxes and entitlement reforms. On December 26, President Obama signed the budget bill.

Senator Max Baucus, who helped author the ACA and who has served as the chairman of the Senate Finance Committee, which has jurisdiction of health issues, was nominated by the White House to be the Ambassador to China, signaling that he will likely leave his post as chairman before expected. Action on Senator Baucus’ nomination is expected this month. Sen. Jay Rockefeller (D-W.Va.) is next in line to be chair of the Senate Finance Committee; however, he is retiring at the end of next year and has told reporters he will cede the chairmanship to Senator RonWyden (D-Ore.).  Senator Wyden offered a comprehensive bipartisan Medicare reform proposal in 2011 along with Rep. Paul Ryan (R-Wis.), the latter of which is slated to take over the helm of the powerful House Ways and Means Committee next January, setting up a possible tax and entitlement reform environment in 2015 as both men lead the “A” committees that could propel such legislation forward. 

The Medicare Payment Advisory Commission, MedPAC, the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet on January 16 and 17. We will provide further information on the agenda when it becomes available. 

The Medicaid and CHIP Payment and Access Commission, MACPAC, a non-partisan federal agency charged with providing policy and data analysis to Congress on Medicaid and CHIP, is next scheduled to meet on January 23. We will provide further information on the agenda when it becomes available.

AT THE AGENCIES

On December 18, the Centers for Medicare & Medicaid Services proposed payment rules for the Basic Health Insurance Program, which provides affordable coverage for individuals earning between 133 and 200 percent of the federal poverty level. The formula, detailed in the regulations, bases payment on an applicant’s age, income and where in the state he or she resides, with CMS covering 95 percent of premiums that would account for the tax credit they would receive if they purchased insurance on the exchange. This plan was supposed to be implemented in 2014, but the Department of Health and Human Services (HHS) delayed it until 2015.

On December 23, the Obama administration extended the deadline to sign up for health coverage by a day, until midnight on Christmas Eve, in acknowledgement that the site was still facing problems. This extension followsHHS’s December 12 interim final rule that formalized the administration’s earlier announcement that the deadline to sign up for health insurance coverage for January 1 would be moved from December 15 to December 23.

On December 29, CMS Administrator Tavenner announced that nearly 1 million people signed up for health insurance through the federal exchanges between December 1 and December 24. A few days later the administration announced that enrollment had topped 1 million.

On December 23, HHS Secretary Sebelius announced that doctors, hospitals and other health care providers had formed 123 new accountable care organizations (ACOs), providing about 1.5 million more Medicare beneficiaries withACO provided care.

On December 30, the IRS and Treasury Department proposed new ACA rules that would allow charitable hospitals to maintain their tax-exempt status if they fail to satisfy various requirements under the ACA

The Office of the National Coordinator for Health Information Technology named city of New Orleans Health Commissioner Dr. Karen DeSalvo to be the new National Coordinator for Health IT. 

On December 31, the Chief Operating Officer for the Centers for Medicare & Medicaid Services Michelle Snyder, whose duties included supervising the personnel who developed the federal health insurance marketplace, retired. Snyder had intended to retire a year ago but stayed in her position to assist with challenges CMS faced in 2013.

AT THE WHITE HOUSE

On December 17, the White House announced that Kurt DelBene, a former president of Microsoft’s Office division, will lead the administration’s efforts to repair the troubled health care site upon the departure of Jeff Zients to serve as chief economic adviser.

Late on December 19, the Obama administration announced that individuals whose insurance plans had been canceled would be eligible for “hardship exemptions” from the individual mandate for 2014.  In a letter to Senators Warner, King, LandrieuHeitkamp, and Kaine, Secretary Sebelius outlined the policy. Secretary Sebelius says in the letter that the policy President Obama announced in November, which allows states and insurers to renew their 2013 health plans for 2014, has already helped many consumers who faced plan cancellations and that over half the states had accepted the option.

On December 19, the White House released new a national report and state-by-state reports that show the cost of repealing the Affordable Care Act.

The White House announced on December 23 that President Obama had signed up through the D.C. exchange for a bronze plan under the ACA that will cost him about $400 a month. According to a statement distributed by an anonymous White House official to reporters, President Obama’s health care will continue to be provided by the military, making his enrollment in an exchange plan merely symbolic.

ACA supporters, including the White House, Democratic congressmen, and advocacy organizations launched a campaign this week to highlight ACA success stories. White House officials and congressional staffers say that they have been vetting success stories of Americans so they are ready for prime time.

IN THE STATES

On December 31, Michigan’s Medicaid expansion proposal, Healthy Michigan, was approved by the federal government. The program requires cost-sharing, which makes it unique from some other states’ Medicaid programs.

IN THIRD PARTIES

America’s Health Insurance Plans (AHIP) extended the deadline for consumers in most states to pay their premiums for coverage beginning January 1 until January 10, responding to the Obama administration’s request that insurers relax some coverage rules.

IN THE COURTS

On December 31, in response to a request from Little Sisters of the Poor Home for the Aged, an organization of Catholic nuns in Denver that requested an emergency stay, Supreme Court Justice Sonia Sotomayor temporarily blocked the ACA birth control mandate that would have forced some religion-affiliated organizations to provide employee health insurance that includes contraceptive coverage beginning on January 1, 2014. Sotomayor issued an order stating that the government is “temporarily enjoined from enforcing against applicants the contraceptive coverage requirements imposed by the Patient Protection and Affordable Care Act.” The White  House said that while it defers to the Department of Justice on litigation issues, it is confident that its final rules are constitutional.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - November 14, 2013

Earlier today, President Obama announced that health insurers will be able to extend existing plans for individuals through 2014 that would have been otherwise canceled due to changes under the Affordable Care Act. This proposed fix does not guarantee that extensions will be available, but rather allows insurers to offer the extension and for state regulators to approve it.

The administration has now released enrollment numbers for the Affordable Care Act (ACA) health insurance exchanges. Coming in far below the administration’s predictions, 106,185 people have signed up for health insurance plans through the ACA. A quarter of these individuals enrolled through HealthCare.gov, while the rest signed up in state-run exchanges. Congress continues to grill those responsible for the exchanges and ACA implementation more generally at hearings and through subpoenas for documents, with Republicans, Democrats and individuals throughout the country requesting or insisting that they be permitted to keep their health insurance plans. Notably, former President Bill Clinton spoke out this week saying that President Obama should let Americans keep their health insurance plans. Meanwhile, interest and momentum are growing for a bill introduced by Senator Mary Landreiu (D-La.) and five others to allow individuals to keep their individual market plans that have been canceled as a result of ACA requirements. It is not clear what, if any, position the White House will take on this legislation.

In the past week, Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner testified before the Senate Health, Education Labor & Pensions (HELP) Committee, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius testified before the Senate Finance Committee, and top operational officials for the ACA exchanges, including Chief Technology Officer Todd Park, testified before the House Oversight and Government Reform Committee. Comments on the Senate Finance and House Ways and Means draft Sustainable Growth Rate (SGR) formula repeal were due on November 12, and MedPAC discussed its intent to avoid interfering with discussions on the topic in order to enable Congress to move more swiftly in light of the reduced Congressional Budget Office (CBO) cost of eliminating the formula this year.

ON THE HILL

On November 5, CMS Administrator Marilyn Tavenner testified before the Senate HELP Committee. Chairman Sen. Tom Harkin (D-Iowa) defended the ACA and criticized Republicans for making implementation difficult. Ranking Member Sen. Lamar Alexander (R-Tenn.) brought up the cancelations in light of President Obama’s promises. Administrator Tavenner highlighted improvements that had been made to the website including faster response times, greater ease in browsing options and ensured security. Administrator Tavenner said the administration was shooting for enrollment in October and November around 800,000. Her communications director later clarified that this number includes total enrollment in federal and state exchanges, as well as Medicaid and Children’s Health Insurance Programs (CHIP) programs.

On November 6, HHS Secretary Sebelius testified before the Senate Finance Committee. Ranking Member Orrin Hatch (R-Utah) said he wants monthly hearings with Sec. Sebelius. Sen. Roberts (R-Kan.) again called for Sec. Sebelius to resign; however, Chairman Max Baucus (D-Mont.) said she needed to remain at HHS. Additionally, Sec. Sebelius warned that she expected enrollment numbers to be low.

The House is planning a vote for November 15 on a bill sponsored by Energy & Commerce Chairman Fred Upton (R-Mich.), the Keep Your Health Plan Act. The bill has 88 co-sponsors in the House and would allow plans that existed on the individual market on January 1, 2013 to stay in effect through 2014.

On November 13, the Committee on Oversight and Government Reform held a hearing to investigate the operational challenges in the development of Healthcare.gov. Committee Chairman Darrel Issa (D-Calif.) called the website “an insult” to the online shopping sites that the online health insurance exchanges had been compared. White House Chief Technology Officer told the Committee that the technology teams were working aggressively to fix the website so it could work for the vast majority of Americans by the November 30 deadline the administration set. Committee Ranking Member Congressman Elijah Cummings (D-Md.) said that though CMS had failed to deliver what it said it would deliver, Republicans are refusing to be helpful in making the reforms work.

House Oversight and Government Reform Committee staff interviewed Henry Chao, who supervised the construction of HealthCare.gov and participated in signing off on the launch of the website, in a nine-hour closed session on November 8.

The House Committee on Oversight and Government Reform sent letters to health insurance exchanges in states running their own exchanges requesting documents related to the in-person assisters who are assisting with enrollment.

On November 5, Ways and Means Committee Chairman Dave Camp (R-Mich.) issued a subpoena to CMS requesting that it provide all data on enrollment in the exchanges. Congressman Camp first requested this information during a hearing with Administrator Tavenner and then again in a letter on November 1. Additionally, Chairman Camp sent a letter requesting that IRS Acting Commissioner Daniel Werfel disclose all information the agency has about eligibility determinations for premium tax credits under the ACA.

On November 14, the House Committee on Education and the Workforce held a hearing on how the ACA is affecting the country’s education system. The Committee highlighted news that schools at all levels are struggling under the weight of the ACA.

On November 7, HHS announced $150 million in awards under the ACA to support 236 health center sites across the country, which will help care for approximately 1.25 million additional patients.

Sens. Joe Manchin (D- W.Va.) and Mark Kirk (R-Ill.) introduced legislation that would delay the ACA’s individual mandate until January 2015. The proposal would waive the $95 penalty for 2014 entirely.

The Medicare Payment Advisory Commission, MedPAC, the independent body that advises Congress on issues affecting the Medicare program, met on November 7 and 8. The meeting was broken into the following sessions: synchronizing Medicare policy across delivery systems, measuring quality across Medicare’s delivery systems, Medicare accountable care organizations (ACOs), rationalizing Medicare’s payment for post-acute care, improving Medicare payment for chronically critically ill patients in hospital settings, Medicare managed care topics, initial approach to the payment update and other policy options for physicians and other health professionals, and Medicare beneficiaries’ access to hospital care and near-term changes in Medicare’s payment policies. Notably, during the ACO panel, there seemed to be support for a phase in over a two-sided risk model; on the topic of Medicare managed care and the issue that employer-group Medicare Advantage plans bid differently than non-employer plans, the general consensus of the commissioners was in favor of setting the employer bid to benchmark ratio equal to the nationwide non-employer ratio; and in the panel on the topic of a payment update for doctors, Chairman Hackbarth expressed that MedPAC is very supportive of Congress’s work on the SGR repeal formula and will not vote on a strategy for offsets to pay for SGR repeal in order to allow Congress to move swiftly on its proposal.

The Medicaid and CHIP Payment and Access Commission, MACPAC, a non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, will meet on November 14 and 15. The meeting is divided into sessions on the future of CHIP, long-term care, short and long-term issues for CHIP, Medicaid Interactions with the ACA, and Medicaid Non-DSH Supplemental payments.

AT THE AGENCIES

On November 8, long-awaited mental health parity final rules, which arise from the 2008 Mental Health Party and Addiction Equity Act, were released. The regulations implement requirements that treatment for mental illness and substance abuse be treated equally to physical care.

The Obama administration has decided that neither the federal insurance exchange nor the federal subsidies paid to insurance companies on behalf of low-income individuals qualify as “federal health care programs.” The significance of this categorization is that it results in the exchanges and exchange subsidies being exempt from a federal law banning rebates, kickbacks, bribes and some other financial arrangements in federal health care programs.

CMS Chief Information Officer Tony Trenkle announced his resignation on November 6, effective November 15.

AT THE WHITE HOUSE

A group of 15 Senate Democrats up for re-election in a year met with President Obama and other administration officials on November 6 about the ACA exchanges and the HealthCare.gov website. The group meeting at the White House included Sens. Mark Begich (D-Alaska), Cory Booker (D-N.J.), Chris Coons (D-Del.), Dick Durbin (D-Ill.), Al Franken (D-Minn.), Kay Hagan (D-N.C.), Mary Landreiu (D-La.), Jeff Merkley (D-Or.), Mark Pryor (D-Ark.), Jack Reed (D-R.I.), Jeanne Shaheen (D-N.H.), Brian Schatz (D-Hawaii), Mark Udall (D-Colo.), Tom Udall (D-N.M.), Mark Warner (D-Va.), and Michael Bennet (D-Colo.).

IN THE STATES

Terry McAuliffe was elected Governor of Virginia last week. Among the potential implications of McAuliffe’s election is a renewed possibility of Medicaid expansion in the state. Notwithstanding McAuliffe’s support for Medicaid expansion, the state legislature must vote to expand Medicaid before any such legislation gets to the Governor’s desk. Last year, the Virginia legislature gave control of Medicaid reform and expansion to a legislative commission made up of 10 members and controlled by Republicans. The commission has said it is open to expansion if coupled with other major reforms. In his concession speech, gubernatorial candidate Ken Cuccinelli attributed the closeness of the race to the country’s dislike of the Affordable Care Act and the faulty rollout of the exchanges.

Gov. Chris Christie was reelected as Governor in New JerseyGov. Christie had already signed off on his state's expansion of Medicaid.

IN THIRD PARTIES

New analysis by the Kaiser Family Foundation shows nearly six in 10 people eligible for the insurance exchanges next year will qualify for subsidies to help buy coverage.

Under pressure from the state of California, Blue Shield of California agreed to hold off on canceling plans for 115,000 subscribers until March 31, which marks the end of the ACA’s open enrollment period

On November 12, former President Bill Clinton said that President Obama should make changes to the ACA to allow people to keep their existing health insurance plans.

Over the past few weeks, insurers have reported that enrollees in the ACA exchanges are older than expected. To function as intended, the exchange will need a significant proportion of young enrollees as well. Some are very concerned, and others are certain that the young beneficiaries will sign up close to the deadline.

On November 5, The American Academy of Actuaries warned Congress that delaying the ACA’s individual mandate would hike premium rates. The academy has been circulating a letter around Congress warning about the potential danger of a delay in the individual mandate.

IN THE WHITE HOUSE

On November 7, President Obama offered an apology to those losing their health insurance plans and said in an interview, “I am sorry that they are finding themselves in this situation based on assurances they got from me.” Sen. Ron Johnson (R-Wis.) pushed back saying that the president’s apology was not genuine.

 

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - November 5, 2013

Criticism of the Affordable Care Act’s exchange rollout continued this past week. The main line of attack has moved from the malfunctioning website to canceled plans despite President Obama’s repeated promise that those who liked their health plans could keep them. The Secretary of the Department of Health and Human Services (HHS), Kathleen Sebelius, and the Administrator of the Centers for Medicare and Medicaid Services (CMS), Marilyn Tavenner, testified before congressional committees this week and apologized for the problems in the rollout. Administrator Tavenner testified again this morning before the Senate Health, Education, Labor, and Pensions (HELP) Committee. Also in the past week, the Senate Committee on Finance and the House Committee on Ways and Means introduced a joint legislative framework to replace the Sustainable Growth Rate (SGR) physician payment formula, adopting much of what the House Committee on Energy and Commerce suggested this summer. 

ON THE HILL

On October 30, the Senate Committee on Finance and the House Committee on Ways and Means introduced a joint legislative framework to replace the Sustainable Growth Rate (SGR) physician payment formula that determines how Medicare pays physicians. The proposal adopts many features of H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013, that cleared the House Energy and Commerce Committee with bipartisan support this summer. The key difference between the new proposal from Finance and Ways and Means and the one from Energy and Commerce is that the Ways and Means/Finance proposal would freeze guaranteed annual physician payment updates for 10 years, whereas the Energy and Commerce measure would allow annual increases of 0.5 percent over five years. The discussion draft is now being circulated for comment until November 12.  On October 31, House Energy & Commerce leaders said they support the Finance/Ways and Means proposal.

On October 30, HHS Secretary Sebelius testified at a House Energy and Commerce Committee hearing. She apologized for the website’s malfunctioning and explained a Verizon Terremark network failure that impacted HealthCare.gov on October 28. In response to a question about costs of the website, Sec. Sebelius said $118 million had been spent on the website itself and about $56 million had been spent on additional information technology to support it. When asked about enrollment numbers, Sec. Sebelius said HealthCare.gov’s problems made reliable enrollment numbers impossible to determine at this point.

On October 30, CMS Administrator Marilyn Tavenner appeared before the House Ways and Means Committee. Administrator Tavenner apologized for HealthCare.gov’s problems and told the committee that CMS did not know about the problems until the first week of the website’s launch. Tavenner was asked repeatedly about enrollment numbers, but she did not provide the requested information and continued to say that enrollment data would not be available until mid-November. Chairman Dave Camp (R-Mich.) said that, “We now know the administration was not ready. Frankly, three years should have been enough.”  Administrator Tavenner testified again on November 5 before the Senate HELP Committee.

On October 30, Sen. Mary Landrieu (D-La.) said that she would propose legislation to ensure all Americans could keep their existing insurance coverage under the Affordable Care Act (ACA). Sen. Landrieu faces a tough election as a Democrat in Louisiana in 2014. Similarly, in the House, Chairman of the House Energy and Commerce Committee Congressman Fred Upton (R-Mich.) is introducing the “Keep Your Health Plan Act,” which would allow any insurance plans that were in effect on January 1, 2013 to continue into 2014.

The Congressional Budget Office updated its analysis of an option to raise the eligibility age for Medicare from 65 to 67.  The updated report shows that the age increase would save $19 billion over 10 years, a number that is significantly lower than its 2012 estimate of $113 billion.

House Oversight Committee Chairman Darrell Issa (R-Calif.) has been requesting documents from various entities. He subpoenaed documents from ACA contractor Quality Software Service, Inc. (QSSI), obtained a memo issued days before HealthCare.gov’s launch that reveals knowledge of security concerns and subpoenaed HHS for documents on the “technical problems” with the websites, user capacity of the site, testing information, and number of people who have enrolled or attempted to enroll on the exchanges.

Guidance on October 29 from the House’s chief administrative officer gave members of Congress until the end of the day on October 31 to decide whether their staffs would enter the DC insurance exchange. The guidance said lawmakers could designate their personal office aides as “official,” which would require them to enter the DC exchanges, or not official, which would mean they do not need to go on the exchanges. Sen. David Vitter (R-La.) proposed legislation that would require Congress to make public which of their staff members are enrolling in the insurance exchanges and which are not. In the meantime though, most of these decisions are being made privately within personal offices on Capitol Hill.

On October 30, Reps. Charles Boustany (R-La.) and Ami Bera (D-Calif.) proposed legislation that would delay for two years ACA’s health insurance premium fee. Under the ACA, a new tax is imposed on health insurance companies beginning in 2014. The expected cost of such a delay is about $15 billion, which is significantly less than the $100 billion price tag of a permanent repeal.

A group of 10 Senate Democrats led by Sen. Jeanne Shaheen (D-N.H.) sent a letter to HHS Sec. Sebelius on October 25 urging her to extend the ACA enrollment deadline due to problems with the exchange website. Senators MarkBegich (D-Alaska), Michael Bennet (D-Colo.), Dianne Feinstein (D-Calif.), Kay Hagan (D-N.C.), Michael Heinrich (D-N.M.) Mary Landrieu (D-La.), Mark Pryor (D-Ark.), Mark Udall (D-Colo.), and Tom Udall (D-N.M.) also signed the letter.

The Medicare Payment Advisory Commission, MedPAC, the independent body that advises Congress on issues affecting the administration, will meet this week on November 7 and 8. The meeting will be broken into the following sessions: synchronizing Medicare policy across delivery systems, measuring quality across Medicare’s delivery systems, Medicare accountable care organizations (ACOs), rationalizing Medicare’s payment for post-acute care, improving Medicare payment for chronically critically ill patients in hospital settings, Medicare managed care topics, initial approach to the payment update and other policy options for physicians and other health professionals, and Medicare beneficiaries’ access to hospital care and near-term changes in Medicare’s payment policies.

AT THE AGENCIES

Traditionally, the annual Medicare physician fee schedule is released around November 1; however, it is delayed this year due to the government's shutdown, which slowed down agency work. Also delayed are three payment rules: Medicare’s End-Stage Renal Disease Prospective Payment System, the Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems rule, and the Home Health Prospective Payment System final rule for 2014.

The online exchanges continue to malfunction and to be taken offline for long stretches of time. Americans whose insurance plans have been canceled are further frustrated by their inability to see their options and sign up for plans online. Others are concerned that if the young and healthy cannot sign up soon, insurers would be forced to raise premiums to cover the costs of older, sicker individuals. Additionally, newly released documents from the House Oversight Committee show that on the first day the federal exchange was open, only six individuals enrolled.

On October 28, CMS announced that the premiums and deductibles for Medicare Part B would not increase in 2014. CMS attributed the positive projections, in part, to the ACA. Additionally, CMS announced that seniors had saved $8.3 billion on Part D prescriptions since the ACA went into effect.

CMS announced that it plans to re-open the Comprehensive End Stage Renal Disease (ESRD) Care Initiative to solicit additional participation and respond to stakeholder feedback. The new initiative will allow CMS to partner with groups of health care providers and suppliers to test and evaluate a new model of payment and care delivery specific to Medicare beneficiaries with ESRD.

IN THE WHITE HOUSE

As the White House appoints technical experts to resolve technical problems with the health insurance exchanges, news is surfacing that in the immediate aftermath of the ACA being signed into law, high-level advisors to President Obama, including Larry Summers, director of the White House’s National Economic Council, and Peter Orszag, head of the Office of Management and Budget, agreed with an outside advisor well known for his health policy expertise, David Cutler, who argued that to make the ACA work, those with business, technology and insurance experience should be included in developing the exchanges.

On October 30, President Obama spoke about the Affordable Care Act in Boston. With Faneuil Hall (where former Governor Romney signed Massachusetts’ health reform into law) as a backdrop, President Obama addressed criticisms that he had broken his pledge to Americans that they would be able to keep their health insurance plans if they liked them. The President also discussed the benefits of the law that are already in effect and working well.

On November 4, President Obama spoke about enrolling Americas on health insurance exchanges at an Organizing for Action event. Organizing for Action is the political nonprofit that mobilizes support for the White House agenda.

IN THE COURTS

On November 1, the U.S. Court of Appeals for the District of Columbia overturned a lower court’s ruling and said that the individual owners of Freshway Foods and Freshway Logistics of Sidney, Ohio, should not have to provide coverage for contraception to their employees. The court noted that only individuals could bring these cases, not corporations. The decision came out 2-1, and the majority judges said forcing the owners to cover employees’ contraception was a violation of the owners’ religious rights.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - October 29, 2013

 Repair work to Healthcare.gov is underway, and White House advisors are now pledging that it will be functioning smoothly by the end of November. However, the system was met with new problems over the weekend when the website’s online data center crashed on Sunday night. In addition to the tech surge to solve the health insurance exchanges, the Department of Health and Human Services (HHS) continues to work on implementing the many provisions of the Affordable Care Act (ACA).  The Center for Consumer Information and Insurance Oversight (CCIIO) came out with a new rule last week on Exchange Program Integrity and Market Standards. Marilyn Tavenner and Secretary Sebelius have agreed to appear on Capitol Hill this week to discuss health care exchanges and enrollment challenges.

 

ON THE HILL

On October 29, CMS Administrator Marilyn Tavenner will testify before the House Committee on Ways and Means, and on October 30 HHS Secretary Sebelius will address the ACA’s implementation at an Energy and Commerce hearing.

Ranking Member of the Senate Finance Committee Orrin Hatch (R-Utah) and Ranking Member of the Senate Judiciary Committee Sen. Chuck Grassley (R-Iowa) sent letters to 47 companies that worked on the federal exchange website requesting copies of contracts, project schedules, performance reports and other relevant documents by November 8.

House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) asked Google, Microsoft and three other companies to give information about their possible involvement in HHS’s “tech surge” to repair Healthcare.gov.

The Senate Finance Committee and House Ways & Means committees are planning to hold separate bipartisan meetings as early as next week to discuss plans to replace the Sustainable Growth Rate physician payment formula.

On October 22, Sen. Marco Rubio (R-Fla.) said he plans to introduce legislation that would delay the individual mandate until six months after the Government Accountability Office (GAO) can certify that the website is functional.

Reps. Darrell Issa (R-Calif.), Mick Mulvaney (R-S.C.) and Lacy Clay (D-Mo.) introduced bipartisan legislation called the Equal Healthcare Access Act. The legislation would allow all Americans to enroll in the health plans that federal employees have.

The Medicare Payment Advisory Commission, MedPAC, the independent body that advises Congress on issues affecting the administration, is scheduled to meet on November 7-8. The agenda for the meeting has not yet been posted, but we will provide further information as it becomes available. The Medicaid and CHIP Payment and Access Commission, MACPAC, is scheduled to meet on November 14.

AT THE AGENCIES

HHS finalized additional regulations for health insurance exchanges. The rule details oversight and financial standards for the exchanges and finalizes details about the timing of enrollment through exchanges and standards for vendors that conduct satisfaction surveys about insurers offering coverage through them.

The online health care exchanges continue to malfunction. On October 22, the Obama administration announced the appointment of economic adviser Jeff Zients to lead the Healthcare.gov tech surge. The administration has pledged to fix the website by November 30. In addition to the underlying structural changes being made to the Healthcare.gov website, the website is being changed to provide more information about plan choices upfront. Also, the website now provides clearer instructions on methods other than through the website for signing up for insurance. President Obama said the administration will contact those individuals who have attempted to register on Healthcare.gov but have not been able to.

Over the weekend of October 20, the administration said that about 476,000 applications had been filed through the exchanges. The number of applications submitted is likely a different number than the number of enrolled beneficiaries. Official enrollment numbers will not be released until next month. On October 24, CMS estimated that about 700,000 people had applied for insurance through the ACA exchanges. CMS did not say though how many of these applications were from state-based exchanges, as opposed to the federal exchange.

In a 600-word blog post on October 20, Sec. Sebelius said that the administration was calling on the “best and brightest” tech experts from both the private sector and the government to fix the Healthcare.gov website.

The White House said this week that starting on October 24, there would be daily briefings directed by SecretarySebelius to address technical problems.

IN THE WHITE HOUSE

The White House announced last week that it would tweak the timing of the ACA’s individual mandate penalties. Prior to the change, the health care law’s open enrollment period ran from October 1, 2013 through March 31, 2014; however, penalties would kick in in mid-February. The tweak will effectively give people the full open enrollment period to enroll in coverage without being penalized.

Insurers say the federal exchange site is generating incorrect data, making it difficult to handle incoming applications. On October 23, top White House and HHS officials met with about a dozen CEOs of insurance companies to address problems with the ACA enrollment site and the issue of flawed information being sent to insurers.

At a Rose Garden event on October 21, President Obama discussed difficulties with the ACA exchange website and expressed his frustration.

IN THE STATES

On October 16, Pennsylvania Governor Tom Corbett signed into law legislation that extends the state’s Children’s Health Insurance Program (CHIP) and eliminates the program’s six-month waiting period that affected some uninsured children.

After months of debate, a legislative oversight panel approved Gov. John Kasich’s move to spend federal money to expand Medicaid in Ohio without the approval of the Republican-held legislature. Gov. Kasich is moving forward on this proposal without state legislative support. If Ohio were to survive legal challenges to this Medicaid expansion, it would be the 24th state to expand.

Though Oregon’s online ACA marketplace is not yet operational, officials have fast-tracked enrollment for the Oregon Health Plan to sign up 56,000 new people and cut the number of uninsured in the state by 10 percent in two weeks.

IN THIRD PARTIES

The head of Americas Health Insurance Plans (AHIP) is calling for a two-year delay of the health insurance tax under the ACA.

Hundreds of thousands of individuals who purchase their own insurance are receiving cancellation letters, primarily because the plans they were previously enrolled in do not meet ACA’s requirements.

IN THE COURTS

On October 21, the D.C. District Court held a hearing on a request for a preliminary injunction in the case of Halbig v. Sebelius, which challenges the IRS rule allowing premium subsidies to states with federal-run exchanges. U.S. District Judge Paul Friedman declined to grant the requested preliminary injunction, ruling that the lawsuit could move forward and he would rule on the overall merits of the case by mid-February.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - October 22, 2013

 After 16 days of government shutdown, Congress voted to reopen the government and avert default without defundingthe Affordable Care Act, delaying the individual mandate, stripping the medical device tax from the law or requiring members of Congress and their staffs to join the ACA exchanges and lose their federal subsidies. The legislation does include a small change to income verification for determining eligibility for exchange subsidies. Additionally, now at the end of the third week of the exchange enrollment websites being up and running online, the federal exchange website is still plagued with glitches, which the Department of Health and Human Services and the president have pledged to correct and restore quickly, using a variety of outside contractors and agency staff to create a “tech surge” whose mission is to reconstruct problem areas and bring functionality to the federal exchange system. 

ON THE HILL

On October 16, Congress passed a bill that ended the government shutdown and raised the debt ceiling. The bill, H.R. 2775, funds and reopens the government through January 15, 2014 and raises the debt limit through February 7, 2014. The deal was brokered by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), and other than a change to income verification requirements, the Affordable Care Act was left intact, fully funded, and undelayed. President Obama signed the bill into law on October 17.

The deal that ended the shutdown, however, creates a new brinkmanship timeline that has some physicians worried. While the government is now funded through January 15, 2014, the Sustainable Growth Rate (SGR) formula is scheduled to cut some physicians’ Medicare payments by as much as 25 percent starting January 1. If the SGR fix, or “doc-fix,” becomes a part of the fiscal package and negotiations go down to the wire, some physicians may find Medicare payments for the 11 business days in that period cut or requiring retroactive reimbursement. If the doc-fix does not become a part of the new funding bill, then it will require its own, standalone bill to prevent the upcoming physician payment cut.

This past week, leading up to the final deal, several proposals were floated that involved modifying the Affordable Care Act.  Sen. Susan Collins (R-Maine) had proposed a plan to end the government shutdown with a bill that would repeal the medical-device tax and authorize federal agencies to reallocate sequester cuts within each agency. Democratic leaders in the Senate rejected the offer, arguing that it asked for too much in exchange for too little. On October 12, a cloture vote failed to reach the requisite 60 votes in the Senate to end debate on a Democrat-backed bill to raise the debt ceiling through 2014. The bill, which failed on a vote of 53-45, would have raised the debt limit $1.1 trillion. House Speaker John Boehner (R-Ohio) had previously proposed a short-term plan on October 10 that would have raised the debt ceiling through November 22 while suspending the medical device tax for two years and requiring the president, vice president, the cabinet and members of Congress to join the exchanges. The bill would have also delayed the tax on medical devices for two years and eliminated federal employer subsidies for health care for the president, vice president, his cabinet, members of Congress, and congressional staff. 

Republicans on the House Committee on Energy and Commerce are requesting answers from top HHS officials as to why the exchange websites continue to malfunction. In an October 10 letter, they informed HHS of their intention to schedule a hearing to address the widespread, continued issues on the HealthCare.gov website.  The hearing, titled, “PPACA Implementation Failures: Didn’t Know or Didn’t Disclose?” is scheduled on Thursday, October 24. Although invited as a witness, it is unclear if Secretary Kathleen Sebelius will testify.

On October 16, Reps. Diane Black (R-Tenn.) and Patrick Meehan (R-Pa.) sent a letter to HHS Inspector General Daniel Levinson requesting a copy of HHS’ security control assessment of the federal data hub. Reps. Black and Meehan’s letter seemed especially concerned with cybersecurity safeguards and the background checks of the Navigator program.

On October 10, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and Sen. Lamar Alexander (R-Tenn.) sent a letter to HHS Sec. Sebelius asking, among other questions, if those who have attempted to enroll in the exchanges but could not due to technical errors will still face tax penalties in 2014. 

Some Republican lawmakers, including Sen. Pat Roberts (R-Kan.), and separately Rep. John Fleming (R-La.), are calling for HHS Sec. Sebelius to resign due to exchange failures and criticized the department’s “gross incompetence” in handling the exchange rollout. 

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the administration, has reopened after weeks of being closed because of the government shutdown. Its November meetings are still scheduled. The Medicaid and CHIP Payment and Access Commission, MACPAC, was also closed during the government shutdown, and cancelled its scheduled October 17 meeting. The next MACPACmeeting is November 14.

AT THE AGENCIES

The Obama administration said this week that to avoid individual mandate penalties you must be registered for health insurance by mid-February.

On October 15, Medicare open enrollment began and will run to December 7. Officials are concerned that the overlap with the ACA exchanges will cause beneficiary confusion.

The health exchanges continue to malfunction. It was revealed this week that CGI Federal is the IT contractor behindACA’s failing websites. HealthCare.gov is in the early stage of launching a new estimate tool to allow users to look at premium estimates before creating an account.

IN THE STATES

ACA state exchanges are experiencing fewer glitches and having more success enrolling uninsured individuals than federal exchanges. 

Ohio Governor John Kasich (R) is currently weighing the possibility of expanding Medicaid in the state without legislative approval, preparing for the likelihood that GOP lawmakers will reject it. GovKasich has requested Ohio’s Controlling Board authorize the Medicaid expansion now that CMS has approved the state’s Medicaid State Plan Amendment. 

IN THIRD PARTIES

A new report from the Kaiser Family Foundation shows that 5.2 million poor, uninsured adults will fall into the coverage gap in the 26 states that have opted out of Medicaid expansion under the ACA.

On October 15, the Republican National Committee (RNC) released a Web video calling for HHS Sec. Sebelius to be fired over the problems with the HealthCare.gov rollout.  RNC Chairman Reince Priebus insisted that “If this were a company and not the government, she’d already be gone.  She should be fired.”  White House Press Secretary Jay Carney has stated that President Obama continues to have full confidence in Secretary Sebelius.

IN THE COURTS

On October 15, Autocam, an Ohio company, became the fourth to request that the Supreme Court strike down the Affordable Care Act’s requirement that employers provide insurance coverage for contraception on religious liberty terms.  Preceding Autocam are Liberty University, Conestoga Wood Specialties Corp., and the Obama administration.  Autocam lost its challenge to the contraception requirement of the law in the 6th Circuit Court of Appeals.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - October 10, 2013

 It is now the second week the exchanges have been open and the second week the government has been partially closed. The exchanges still have glitches, and Congress still has not agreed on a way to fund the government, although some evidence of cooling among leading participants was becoming evident as this update was finalized, signaling a temporary way out of at least the dreaded default possibility. The possibility of temporarily raising the debt ceiling was raised this week as a way to give Congress more time to come to a longer-term solution on both the debt ceiling and a continuing resolution. The president and Senate Democrats have been insisting that they will only negotiate once the debt ceiling is raised and government lights are back on; however, House Republicans have been insisting that negotiations be the vehicle for averting the debt ceiling and reopening the government. The House has introduced several bills that would fund individual parts of the government; however, the Senate refuses to vote on these bills and the president threatens to veto them because they want the government to be funded comprehensively, as is normally the case, and because, like the House, they want to protect their priorities.

ON THE HILL

It became clear this week that attempts to pass a continuing resolution and to deal with the approaching debt ceiling may need be tied together in any potential fix or at least considered simultaneously;  however, late breaking developments suggest that the debt ceiling crisis may be averted first, giving negotiators time to arrive at a comprehensive package that both funds the government and further extends the country’s borrowing authority. The Treasury initially projected October 17 as the day we would hit the debt ceiling; however, analysis this week points out that we may not actually default until October 31. Even if the United States technically has more time than the Treasury projected before its bills come due, many are concerned that the markets will be affected by the uncertainty of no solution by October 17. The House has been saying it will not raise the debt ceiling without negotiations, and President Obama and Senate Democrats have been asserting that they will not negotiate until a deal has been struck that addresses the debt ceiling and opens the government. As noted above, some evidence of a short term debt ceiling increase with time to resolve other fiscal issues, including funding government operations, may be emerging as a solution, but resolution remains far from clear at this point.

On October 9, House Budget Committee Chairman Paul Ryan (R-Wis.) offered a two-step plan to lift the debt ceiling and reopen the government for enough time to allow Congress to pass long-term entitlement reform. On October 9, Rep. Ryan authored an op-ed in The Wall Street Journal in which he called for modest structural changes to Social Security and Medicare as a solution to the fiscal crisis. Today, Congressman Ryan is scheduled to head to the White House, along with 17 other House Republicans, for a meeting with President Obama.

On October 6, amid calls for House Speaker John Boehner (R-Ohio) to put a clean debt ceiling bill on the floor, Rep. Boehner said there were not enough votes for it to pass in the House. President Obama and some Senate Democrats argued that there would be enough votes. Congressman Boehner has also told Republican lawmakers concerned about the looming debt-ceiling deadline that he would not allow a federal default.

The Senate Committee on Finance was scheduled to hold a hearing on October 8 on Transforming Medicare Post-Acute Care; however it was postponed, likely because of the government shutdown.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the administration, has canceled its meeting scheduled for October 10 and 11, due to the government shutdown. As of now, its November meetings are still scheduled. The Medicaid and CHIP Payment and Access Commission, MACPAC, however, remains open. We will provide more information as it becomes available.

Sen. Rob Portman (R-Ohio) raised the possibility of a plan that calls for a wide-ranging set of cuts to mandatory spending, preserves the spending cuts under sequestration and makes a change to the Affordable Care Act (ACA) that would ensure the recipients of federal health care subsidies are eligible for them. The plan is based on proposals from Reps. Diane Black (R-Tenn.) and Sen. Tom Coburn (R-Okla.) that would help prevent ACA fraud.

On October 9, the House Oversight and Government Reform Committee held a hearing at which Sarah Hall Ingram, the director of the Internal Revenue Service (IRS) Affordable Care Act office, testified. She reported that despite exchange glitches, things in the IRS office have been running smoothly since open enrollment began last week.

On October 10, House Intelligence Committee Chairman Mike Rogers (R-Mich.) warned that the federal data hub for the ACA exchanges is vulnerable to cyberattacks. Rep. Rogers cautioned that online hackers could access health records, credit histories, Social Security numbers and other sensitive information that enables identity theft.

Republicans on the House Committee on Energy and Commerce asked the Department of Health and Human Services (HHS) for enrollment data in the new exchanges. CMS confirmed this week that it would likely not release enrollment data until mid-November in order to ensure accuracy of the figures.

On October 8, the House voted 224 to 197 to create a bicameral committee similar to the Supercommittee of last year to help Congress overcome the government shutdown and come to agreement on the debt ceiling. The Office of Management and Budget (OMB) said President Obama would veto this proposal.

AT THE AGENCIES

Health exchanges are now in their second week of being online and are still full of glitches and problems, some of which the administration says are due to high traffic but others may be due to a less than perfect foundation. Last week after widespread issues with online enrollment, HHS took the Healthcare.gov application offline for the weekend to perform scheduled maintenance. Officials reported that the repairs performed over the weekend were helpful but that there were still further problems. The system was taken offline on the morning of October 8 for further Web fixes. The administration continues to request patience as glitches are worked out. Though the administration has not predicted a date when the problems would be resolved, it continues to remind potential enrollees that they have several months to enroll.

This week, the chief administrative officer (CAO) of the House sent a fact sheet on a directive from the Office of Personnel Management (OPM) to members of Congress. The OPM directive and the guidance from the CAO instruct that in 2014, members of Congress and designated congressional staff will choose from 112 options in the Gold Metal tier on the DC SHOP exchange.

IN THE STATES

Policymakers and reporters in Ohio are beginning to expect the state to expand its Medicaid program in the near term.

The Covered California exchange said that in its first week of enrollment, 16,311 applications were completed by Californians looking to obtain health insurance.

IN THE WHITE HOUSE

On October 8, President Obama delivered a statement and took questions from reporters on the government shutdown and the dispute over raising the federal debt ceiling. Earlier in the day, he called Speaker of the House John Boehner (R-Ohio) to tell him he would not negotiate until after the debt ceiling and government shutdown issues were resolved.

IN THE COURTS

The Supreme Court started its new term this week. The justices will decide soon whether to hear a new challenge to the Affordable Care Act concerning the law’s requirement that employers provide insurance coverage for contraception. At least three petitions for the Supreme Court to decide the issue have been filed. On September 5, Liberty University filed a petition asking the Supreme Court to review the 4th Circuit Court of Appeals’ decision in Liberty’s case seeking to overturn the ACA’s requirement that employers provide health insurance that covers contraception. On September 19, the Conestoga Wood Specialties Corp., a Pennsylvania company filed a petition arguing that the Religious Freedom Restoration Act prohibits the federal government from imposing the ACA’s preventive services mandate on for-profit secular companies. Also on September 19, the Obama administration took the other side of the case and asked the Supreme Court to uphold the ACA requirement that nearly all employers provide coverage of birth control and other contraceptives in health plans. This third petition greatly increases the odds that the Supreme Court will take up the case.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - October 4, 2013

Open enrollment began this week, making it possible for the first time to enroll in Affordable Care Act (ACA) online marketplaces. Technical glitches were widespread, but the problems were overshadowed by the shutdown of the federal government. After several rounds of House-Senate exchanges with a continuing resolution (CR) to keep the government open, October 1 came and went with no agreement. Knowing that this opportunity is one of Republicans’ only chances to have their ACA disputes raised on the Senate floor, Republicans have been refusing to pass a continuing resolution that does not defund or delay the law. Meanwhile Democrats are saying that the ACA is the law of the land and not open for negotiation. While the government shutdown has caused problems of its own, more problems lie on the horizon with a deal also needed on the debt ceiling, which the country is projected to hit by October 17, according to the Treasury Department. Last evening, Congressional leaders met at the White House with President Obama to discuss both the re-opening of government operations and raising the debt ceiling, but no accords were made. Democratic leaders in the Senate in addition to the president insist they will not negotiate on any aspect of either the CR or the debt ceiling increase, and will do so only after both policy priorities pass.

ON THE HILL

On September 20, the House passed a continuing resolution 230-189 to keep the government running until December 15 while defunding the ACA. The CR was then sent to the Senate. On September 23, Senate Majority Leader Harry Reid filed a procedural motion to consider the House bill. Senator Cruz vowed to “speak in support of defunding Obamacare until [he was] no longer able to stand” in order to rally votes against proceeding with the bill. After holding the Senate floor for more than 21 hours, Sen. Cruz had to relinquish the floor, and the Senate voted to proceed to a vote on the bill. Then on September 27, the Senate took three votes: to end debate on the House bill, to strip the provision that would gut the ACA, and to approve a substitute measure. On September 29, the Senate sent the spending bill back to the House. The House then voted to repeal the ACA tax on medical devices, delay the ACA law by a year, and allow employers and health care providers to opt out of contraception coverage. The House then sent the Senate a spending bill with a delay of the ACA, the change in contraception coverage, and a repeal of the medical device tax attached. When the Senate reconvened at 2:00 p.m. on September 30 (just 10 hours from the looming shutdown), within minutes it stripped the health care provisions from the spending bill and sent it back to the House. Around 8:40 p.m., the House voted to delay the individual mandate by a year and cancel insurance subsidies for lawmakers and their staffs and sent the bill back to the Senate with these additions. Around 9:30 p.m., the Senate voted to strip the health care language from the bill again and sent it back to the House. House Republicans appointed formal negotiators to participate in House-Senate negotiations, but shortly before midnight Senate Majority Leader Harry Reid said that the Senate would not appoint conferees. When the clock struck 12 on October 1, the lapse in federal appropriations caused the government to shut down. Many are concerned that the impasse will last past October 17, the date when Treasury Secretary Jacob Lew said the debt limit would be reached.

On September 30, Senate Finance Committee Chairman Max Baucus announced that the committee would host a hearing on October 8 on ways to improve post-acute care for Medicare patients. Those who are expected to testify at the hearing are Medicare Payment Advisory Commission Executive Director Mark Miller, Brookings Institute health reform center Managing Director Barbara Gage, Chairman of Remedy Partners Steve Wiggins, and Partners Healthcare’s Clay Ackerly. In June, the Finance Committee had asked stakeholders for ideas to improve the sector by August. The request yielded close to 90 responses. It is not yet clear how the shutdown will affect the hearing.

On September 25, the Senate Health, Education, Labor & Pensions (HELP) and House Energy and Commerce committees struck a deal on legislation that creates a class of compounders called "outsourcing facilities" to be regulated by the Food and Drug Administration (FDA) and creates a prescription drug “track and trace” system to ensure drugs’ authenticity and safe-keeping. On September 28, the House voted to pass a bipartisan bill that would bolster federal oversight of compounding pharmacies and institute a federal prescription drug track and trace system. The Senate is expected to pass the legislation as well.

On September 24, Chairman of the Senate Republican Conference Sen. John Thune (R-S.D.) and Ranking Member of the Health, Education, Labor and Pension (HELP) Committee Sen. Lamar Alexander (R.Tenn.) led the effort to send a letter to HHS Secretary Sebelius calling for a one-year extension for health care providers to complete the second stage of the Electronic Health Records (EHR) incentive program, which is increasing the adoption of health information technology by hospitals and physicians across the country. Sens. Thune and Alexander were joined by Sens. John Barasso (R-Wyo.), Richard Burr (R-N.C.), Saxby Chambliss (R-Ga.), Dan Coats (R-Ind.), Tom Coburn (R-Okla.), Mike Enzi (R-Wyo.), Johnny Isakson (R-Ga.), Mark Kirk (R-Ill.), Jerry Moran (R-Kan.), Lisa Murkowski (R-Alaska), Rob Portman (R-Ohio), Jim Risch (R-Idaho), Pat Roberts (R-Kan.), Pat Toomey (R-Pa.), and Roger Wicker (R-Miss.).

Following the September 19 House Energy and Commerce subcommittee on Oversight and Investigations hearing at which Gary Cohen, the head of the Center for Consumer Information and Insurance Oversight (CCIIO) testified about his agency’s preparedness for enrollment in insurance marketplaces, Republicans on the committee asked Cohen to answer further questions about navigator groups.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the administration of Medicare is scheduled to meet on October 10 and 11, however, according to its website, the commission is currently closed “due to a lapse in federal appropriations.” We will provide more information as it becomes available.

AT THE AGENCIES

On October 1, open enrollment began, and state and federal marketplaces opened for the first time. Consumers faced numerous error messages, long wait times, in many cases were unable to sign up for coverage, and in some cases entire systems went down. Notwithstanding early problems, October 1 is only the first day of a months long open enrollment period. The administration attributed the problems to the marketplaces’ popularity.

On September 30, HHS Secretary Sebelius announced that the public should be patient with ACA and reminded her listeners that “Tuesday is just the start of a six-month open enrollment period.” On October 1, Secretary Sebelius presented a similar message in the face of the widespread enrollment glitches.

On September 30, HHS announced that it would have to furlough over half of its employees in the event of a government shutdown.

On September 30, the Treasury Department issued proposed rules on how some employers and insurers report the health insurance they provide under the ACA. The purpose of the regulations is to ensure that people enroll for health coverage and that large companies offer insurance to their employees.

On September 23, Louis Lerner, the IRS employee who has been tied to and testified several times on the IRS targeting of conservative groups, announced that she was retiring from the agency. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) said Lerner would likely be brought back before the committee to answer questions about the controversy surrounding the IRS’s targeting of tea-party groups.

On September 26, the administration announced that the start date for online enrollment in the small business (SHOP) exchanges would be pushed back a month until November 1.

On September 25, HHS released average premium cost data that it says shows premium rates under the ACA are affordable, with Americans paying $328 per month on average for a mid-level plan before subsidies are considered. The report shows wide variation in potential unsubsidized monthly premiums across the featured jurisdictions.

On September 23, two years after the FDA released draft guidance on mobile medical apps, it issued final guidance on the issue. Under the final rule, the FDA will regulate only those products that transform smartphones into devices the FDA currently regulates or accessories that regulate devices.

On September 26, CMS awarded a contract to Maximus Federal Services potentially worth up to $383 million over 4 years to  manage the eligibility appeals process on the benefits for which consumers are eligible on ACA exchanges.

On September 30, the Office of Personnel Management released a final rule on how members of Congress and their staffs will get health insurance through the exchanges starting in 2014. The rule requires that they use the D.C. small business exchange regardless of their actual state of residence. These individuals will not be eligible for subsidies to buy insurance no matter their incomes, however, they will be permitted to receive federal employer contributions.

On September 30, the Office of Personnel Management (OPM) released details about the multistate plans that will be offered on 30 state exchanges in 2014. These plans will be offered by Blue Cross Blue Shield Association.

IN THE STATES

On September 25, the D.C. Health Benefit Exchange said that although consumers will be able to submit paper applications by the October 1 exchange launch, they will not have access to their premium prices until mid-November.

On September 27, CMS approved Arkansas’ proposal to use federal money to expand the state’s Medicaid program to help low-income residents buy private insurance under the ACA. Iowa still awaits approval on its own Medicaid expansion proposal.

Early online exchange glitches caused Maryland and Minnesota to delay the opening of their exchanges until the afternoon on October 1.

On September 23, Pennsylvania Gov. Corbett’s administration met with CMS and said the meeting was positive and constructive. Gov. Corbett is seeking assurances that a set of Medicaid reforms in his state can accompany any type of expansion in Pennsylvania before he agrees to expand.

Some Wisconsin residents will be losing Medicaid coverage starting in January due to a change Wisconsin made earlier this year to income eligibility for Medicaid in the state. The change moved income eligibility requirements for Wisconsin’s Medicaid program from 200 percent of poverty level to 100 percent of the poverty level. The University of Wisconsin Health and United Way of Dane County have stepped in to assist these individuals in affording private coverage on the new insurance exchange.

IN THIRD PARTIES

According to a new analysis by Avalere Health, exchanges may have higher out-of-pocket costs than expected. The six-state study shows that consumers could face high cost-sharing requirements in addition to their premiums. The White House highlighted on September 25 that premiums would be lower than expected, however, these figures do not include dollars that will be spent on co-payments, co-insurance and deductibles.

IN THE COURTS

The D.C. District Court scheduled a hearing for October 21 to decide whether to block ACA subsidies to residents of states that are not running their own health insurance marketplaces.

On September 27, Planned Parenthood and over a dozen women’s health providers filed a lawsuit to block two provisions in Texas’ abortion regulations passed this summer.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - September 24, 2013

With a week until a potential government shutdown and a week until open enrollment begins, the Affordable Care Act (ACA) is in the limelight. On September 20, the House voted for a continuing resolution that funds the government past the end of September while defunding the ACA. This week, the continuing resolution will move to the Senate, where Democrats have pledged to add ACA funding back into the legislation, at which point it would be sent back to the House. It is not clear how Democrats and Republicans in the Senate and the House will come to resolution, but they must negotiate before the end of September to avoid a government shutdown. As the pro-ACA and anti-ACA advocates battle it out on the airwaves, in Congress, and at dinner tables around the country, the law continues to be implemented: the Centers for Medicare & Medicaid Services (CMS) released proposed rules on Basic Health Plans and payment rates for federally qualified health centers, as well as new health spending projections, and Center for Consumer Information and Insurance Oversight Director Gary Cohen appeared before the Energy and Commerce subcommittee on Oversight and Investigations to answer questions about health insurance marketplaces and navigators.

ON THE HILL

On September 20, the House passed a bill 230-189 to keep the government running until December 15 while defunding the ACA. The bill will now head to the Senate, where Democrats are likely to amend it to include ACA funding, at which point it will be sent back to the House. A continuing resolution must be passed by October 1 or the government will shut down. After passing the legislation, House Republicans urged the Senate to have the same discussion. Senate Majority Leader Harry Reid (D-Nev.) said the chamber would consider the measure during the week of September 23. He also warned, however, that any legislation that defunds or delays Obamacare would be dead in his chamber. Some House Republicans have said that if this attempt at defunding Obamacare fails, they will try again using the debt ceiling negotiation.

According to the Congressional Budget Office’s (CBO’s) Long-Term Budget Outlook released on September 17, federal spending on health care programs and Social Security is projected to grow to 14 percent of GDP by 2038. This rise in spending is attributable to the aging population, rising health care costs and expansion of health insurance subsidies.

On September 19, the House Energy and Commerce subcommittee on Oversight and Investigations held a hearing at which Gary Cohen, the head of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS testified about his agency’s preparedness for enrollment in insurance marketplaces. CCIIO is the primary agency responsible for the federally facilitated marketplaces and enactment of new ACA insurance rules. In addition to the usual attacks on the ACA from its opponents and praise for the law by its proponents, members of the committee asked Cohen a few clarifying questions. Cohen said that ACA navigators were being instructed not to go door-to-door and that he would look into posting an official listing of navigators on a government website as a measure to prevent fraud.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the administration of Medicare, will meet on October 10 and 11. We will update you when the agenda becomes final.

AT THE AGENCIES

On September 17, the Office of Management and Budget (OMB) sent a memorandum to the heads of executive departments and agencies regarding planning for agency operations during a potential lapse in appropriations, a guide in case of a government shutdown.

On September 20, CMS released a proposed rule that provides guidelines by which states can begin pursuing Basic Health Plans, which gives states the option of establishing a health benefits coverage program for low-income individuals who would otherwise be eligible to purchase coverage through the health insurance marketplace. These plans are intended to benefit residents whose income fluctuates below and above Medicaid eligibility.

On September 18, CMS issued a proposed rule that would establish Medicare payment rates and a payment system for federally qualified health centers. Under the rule, federally qualified health centers would receive higher Medicare reimbursement rates beginning next year. The rule would also allow rural health clinics to contract with “non-physician practitioners,” such as nurse practitioners and physician assistants.

The CMS Office of the Actuary released health spending projections this week, published in Health Affairs. CMS said spending growth is expected to increase in 2014 with economic improvement and expanded coverage under the ACA. The finding may indicate that slowed spending is largely tied to the economy, rather than the ACA.

On September 19, CMS announced that enrollment in Medicare Advantage (MA) plans is expected to increase for the fourth year in a row. Additionally, CMS said the average MA premium in 2014 is projected to increase by only $1.64 from last year.

A new analysis from the Department of Health and Human Services (HHS) says that approximately 6.4 million individuals buying coverage on the new marketplaces will have the option to pay $100 or less each month due to subsidies.

On September 12, HHS released a report showing that 6.8 million consumers saved about $1.2 billion on insurance premiums in 2012 due to the Affordable Care Act.

The Census Bureau released its 2012 report, showing more people were insured in 2012 than 2011, due in large part to increased enrollment in Medicare.

The front page of the September 20 edition of The Wall Street Journal featured a story about the pricing glitches the health insurance marketplaces face less than two weeks out from their rollout. According to the article, four individuals familiar with the development of the health marketplace software that determines how much people will pay for subsidized coverage on the federally run exchanges are reporting that the system is still miscalculating prices.

Following the Obama administration’s announcement that multi-employer plan enrollees would not be able to get exchange premium tax credits, an issue for which unions had been lobbying, Republicans are asking questions about a draft regulation that appeared briefly on the Office of Management and Budget’s website last month. Some Republican members are suggesting that regardless of the Obama administration’s announcement that it would not grant union exemptions, the issue will reappear and unions’ requests will be granted once the 2014 reforms are in motion. On September 18, House Education & the Workforce Committee Chair John Kline (R-Mich.) and Phil Roe (R-Tenn.) asked the OMB for clarification regarding administration efforts with respect to the multi-employer plans.

The Republican Study Committee released the American Health Care Reform Act, a proposal to repeal and replace the ACA. The bill would provide $20,000 in tax deductions to families and a $7,500 deduction to individuals to enable them to buy insurance from vendors in any state. Additionally, the bill proposes allowing Americans to keep the money they save by choosing lower-cost providers.

On September 18, JPMorgan Chase & Co sent a research note to clients predicting a delay in open enrollment based on information from its Washington, D.C. contacts and comments from the administration. The administration responded later in the day that the insurance marketplaces would open for enrollment on October 1 as planned. After the administration’s announcement, J.P. Morgan backed away from its earlier predictions.

AT THE WHITE HOUSE

On September 18, state and federal officials met at the White House to discuss efforts to crack down on fraud in health insurance marketplaces. The administration announced a toll-free phone number for complaints of fraud. HHS’s Office of the Inspector General also issued a warning about potential fraud in health exchanges.

IN THE STATES

Pennsylvania Governor Tom Corbett held a press conference on September 16, during which he announced his administration is now hoping to expand the state's Medicaid program. The plan Gov. Corbett outlined would use private health insurance plans and add new requirements for all Medicaid enrollees, such as paying monthly premiums and demonstrating they are searching for jobs.

IN THIRD PARTIES

According to a Pew poll released on September 16, the awareness that health insurance marketplaces are available under the ACA is significantly higher in states with state-run programs than in those that have opted to use a federally run exchange.

Home Depot announced on September 19 that it is planning to shift about 20,000 part-time workers into the health insurance marketplaces. Home Depot said that employees working less than 30 hours a week will no longer be eligible for limited liability health coverage through Home Depot.

Walgreens, which is the largest U.S. drugstore chain, is reported to be planning to move its employees into a private health care exchange much like the ACA marketplaces.

New ads from Generation Opportunity, a Virginia group tied to the Koch brothers, seek to discourage young people from signing up for the ACA. The ads feature Uncle Sam poised to conduct pelvic, prostate and gynecological exams.

IN THE COURTS

On September 19, two different groups asked the Supreme Court to rule on the ACA birth control mandate: the federal government and Conestoga Wood Specialties Corp., a Pennsylvania company. Conestoga Wood Specialties Corp., filed a petition arguing that the Religious Freedom Restoration Act prohibits the federal government from imposing the ACA’s preventive services mandate on for-profit secular companies.

Also on September 19, the Obama administration asked the Supreme Court to uphold the ACA requirement that nearly all employers provide coverage of birth control and other contraceptives in health plans. This third petition the Supreme Court has received on the issue increases the odds that the Supreme Court will decide the case.

Health Care Reform Implementation Update - September 17, 2013

Congress has been back for a week, and already the president and Democrats are engaged in a contest with Republicans to see who will blink first. Additional spending legislation needs to be passed to keep the government running past September 30, and the debt ceiling could be hit as soon as mid-October. Expecting that a deal will not be made until the last minute, Congress is already considering canceling the September recess. At least 43 House Republicans are trying to fund the government but delay the Affordable Care Act (ACA) and all funds for it until 2015, a prospect that has already been rejected by the Democratic Senate and would be vetoed by the White House. Another group of House Republicans is planning to pass a continuing resolution that funds the government after September while prohibiting the president, the vice president, most lawmakers, staff and political appointees from receiving federal subsidies and tax credits. Meanwhile open enrollment begins in less than three weeks, the Centers for Medicare and Medicaid Services (CMS) has released a final rule on Disproportionate Share Hospital payments, the Medicare Payment Advisory Commission (MedPAC) reconvened last week, the Congressional Budget Office (CBO) released a score of a permanent doc-fix that is higher than earlier estimates, and on September 16, Governor Corbett announced Pennsylvania’s intention to adopt a version of Medicaid expansion and Gov. Rick Snyder signed Medicaid expansion into law in Michigan.

AT THE AGENCIES

On September 13, CMS finalized the ACA rule that will reduce Disproportionate Share Hospital (DSH) payments for fiscal years 2014 and 2015. According to the CMS Fact Sheet on the final rule, “State decisions to expand Medicaid will not affect the amount of reduction in DSH allotments.”

The Department of Labor issued guidance in a frequently asked questions document affirming that employers may hire third-party vendors to implement the ACA’s requirement that employees be notified that health insurance is available through the marketplaces.

On September 10, the Board of Governors of the Patient Centered Outcomes Research Institute (PCORI) voted to fund 71 projects that will treat heart disease, cancer, obesity and other chronic conditions totaling $114 million.

On September 12, the federal data hub that will be the conduit for data inputted into insurance marketplaces completed security testing and was certified to operate when the exchanges open for open enrollment on October 1. Many have been, and others still are, skeptical that the system will protect individuals’ private data. A day earlier, at a House Committee on Homeland Security Subcommittee on Cybersecurity hearing, Chairman Patrick Meehan (R-Pa.) said “With just 20 days remaining before the hub goes live, I have grave concerns from a cybersecurity standpoint.” Chairman Meehan pointed to “increasingly sophisticated ways to steal and manipulate information.”

AT THE WHITE HOUSE

On September 13, the Obama administration announced that it would deny the requests of labor leaders for an exemption from the ACA that would have enabled their health care plans to receive tax subsidies.

ON THE HILL

A group of House Republicans including, some have suggested, Speaker of the House John Boehner (R-Ohio), are planning to pass a continuing resolution to fund the government past the end of September with one notable surprise, a clarification to the ACA that would require Congressional members and their staff to join the health care marketplaces established by the ACA and prohibiting most lawmakers, staff, political appointees, the president and vice president from receiving federal subsidies and tax credits. Such legislation would be similar to a bill sponsored by Reps. Ron DeSantis (R-Fla.) and Dennis Ross (R-Fla.), as well as Sen. David Vitter (R-La.). The goal, of course, is to force the Senate to be the chamber to have to make the call on whether to prevent a government shutdown or protect health benefits of their staffs.

On a similar note, 43 House Republicans are backing a plan to fund the governmentwhile delaying and defunding Obamacare for one year.  On September 12, Rep. Tom Graves (R-Ga.) introduced the Stability, Security and Fairness Resolution, which would fund the government for 2014 and delay and defund the ACA until 2015. The original cosponsors of the resolution are listed here.  However, despite momentum from House conservatives, the approach is dead on arrival in the Senate and would certainly be vetoed by the president, raising the stakes for a government shutdown.

On September 11, Senate Minority Leader Mitch McConnell (R-Ky.) submitted an amendment to an energy efficiency bill under consideration to delay the individual mandate for a year and codify the White House’s one-year delay of the employer mandate.

Congress is facing a mid-October deadline to pass legislation that would raise the debt limit. Speaker of the House John Boehner has said that he will not agree to any deal that raises the debt limit unless there are simultaneous changes and reforms made to handle Washington’s spending problem. Some House conservatives plan to demand that no deal be made unless it strips money from the ACA.

Notwithstanding the priority House and Senate committees with jurisdiction over health care issues place on a permanent fix to the Sustainable Growth Rate (SGR) formula, the CBO’s latest report likely will make a permanent fix near to impossible this year. On September 13, the CBO said in a report that the Energy and Commerce Committee bill to repeal and replace the SGR formula would cost $175 billion over 10 years, without the added cost of traditional extended policies. It is unlikely that a bill with such a big price tag, for which no one committee has yet to describe offsets, will become law, though we do expect there to be a one or two-year fix to preserve doctors’ Medicare payment rates, likely to be negotiated in the last few days of the calendar year.

On September 11, the House passed a bill, the No Subsidies Without Verification Act, that would require a system be in place to verify eligibility for health insurance subsidies before health insurance subsidies are paid out.

On September 12, the Congressional Long Term Care Commission, organized by Congress after the CLASS Act was effectively removed from the ACA, issued a series of recommendations for addressing long-term care issues. The Commission’s primary general recommendation is to “promote services for persons with functional limitations in the least restrictive setting appropriate to their needs – building a system, including Medicaid, with options for people who would prefer to live in the community.”

The House Energy and Commerce subcommittee on Oversight and Investigations will hold a hearing on September 19 at which Gary Cohen, the head of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS will testify about his agency’s preparedness for enrollment in insurance marketplaces. CCIIO is leading the launch of the federally facilitated marketplaces and enactment of new ACA insurance rules.

On September 9, Sen. John Thune (R-S.D.) introduced the Union Bailout Prevention Act, which would block a union-backed proposed change to the ACA, and filed it as an amendment to the energy bill being deliberated by the Senate. Additionally, Senate Finance Ranking Member Orrin Hatch (R-Utah) and House Ways and Means Chairman Dave Camp (R-Mich.) wrote to Treasury Sec. Jack Lew to say they oppose any change to the health care law allowing insurance subsidies to be collected for union health plans.

IN THE STATES

Pennsylvania Governor Tom Corbett held a press conference on September 16, at which he announced that his administration is now hoping to expand the state's Medicaid program. The plan Gov. Corbett outlined would use private health insurance plans and add new requirements for all Medicaid enrollees, such as paying monthly premiums and demonstrating they are searching for jobs.

On September 6, the federal government told Gov. Corbett’s administration said that it had to shift tens of thousands of children from the Children’s Health Insurance Program (CHIP) to Medicaid. Sec. Sebelius told Gov. Corbett in a letter that the ACA requires the switch to simplify coverage for families by putting children in the same program as their families. Gov. Corbett has argued that such a switch would be difficult for children who already have doctors and relationships with those doctors. As recently as September 10, Pennsylvania’s insurance regulator, Michael Consedine said that he could not say whether the administration would comply.

On September 16, Governor Rick Snyder signed Michigan’s Medicaid expansion plan into law.

D.C. United, the District’s professional soccer team, is going to help publicize the District of Columbia’s ACA marketplace. This partnership follows last week’s news that the Baltimore Ravens will be promoting Maryland’s state marketplace.

IN THIRD PARTIES

The Medicare Payment Advisory Commission (MedPAC) reconvened this past week. The commission discussed the possibility of recommending that Medicare create a supplemental Medigap coverage plan to encourage patients to seek treatment from a single accountable care organization (ACO).

On September 9, Rite Aid announced that it will help individuals enroll in the Affordable Care Act’s new insurance marketplaces and help educate them on the law as well.

On September 11, the AFL-CIO Convention passed a resolution that expresses its support for the ACA’s goals but highlights several implementation issues with which it takes issue. Chief among the AFL-CIO’s concerns is the way the ACA treats multi-employer health care plans. In the resolution the AFL-CIO expresses that its ultimate desire is a single-payer model.

On September 10, the Service Employees International Union (SEIU) announced that the organization would assist HHS with ACA outreach in 30 cities in the coming weeks.

Time Warner Inc. is planning to move U.S. retirees from company-administered health plans to private exchanges, and instead put funds into accounts retirees can use to shop for health coverage.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - September 11, 2013

After spending the past month in their home districts listening to constituents, this week House and Senate members are back in Washington and Congress is back in session. Though the attention of many has turned to back-to-school, back-to-football, and to remembering the events of September 11 and making difficult decisions on Syria, it is not far from anyone’s mind that open enrollment begins in less than one month. The Obama administration is immersed in an all-out push to promote the Affordable Care Act (ACA): The administration is planning a $12 million ad buy in key states, this past weekend Enroll America hosted more than 200 events across the country to promote the ACA, and the Baltimore Ravens have been recruited to help push enrollment in Maryland. Additionally, regulations implementing the Affordable Care Act continue to be released, the Centers for Medicare and Medicaid Services (CMS) has been preparing to inform insurance issuers of their statuses as Qualified Health Providers, the Committee on Energy and Commerce held an ACA hearing on September 10, Senators Rand Paul, Mike Lee and Ted Cruz headlined the “Exempt America Tour” rally on September 10, and the Medicare Payment Advisory Commission will meet to discuss Accountable Care Organizations, Medicare Advantage, dual eligibiles and Medicare Part D on September 12 and 13.

AT THE AGENCIES

The Internal Revenue Service (IRS) issued a proposed rule for the reporting requirements employers will have to meet under Section 6056 of the ACA, which requires employers to report to the IRS information about their compliance with the employer shared responsibility requirements. Enforcement of the employer mandate was delayed earlier this summer until 2015.

In another proposed rule, the IRS detailed how employers and insurers who provide coverage will report to the government which individuals had what type of insurance and when, so the government can determine who is and is not complying with the ACA’s individual mandate.

On August 30, CMS released the third guidance letter for state Medicaid directors on potential paths for Medicaid shared savings programs. In the first two letters, CMS described the framework for Integrated Care Models and pathways that states may use to implement them in their Medicaid state plans or appropriate waivers and demonstrations. The third letter discusses reimbursement methodologies that can be adopted in the context of Integrated Care Models to incentivize improved quality and outcomes and reduce costs.

On September 6, it became public news that CMS program integrity chief Peter Budetti will leave his post as CMS’s first deputy administrator and director for program integrity.

CMS informed issuers of their qualified health plan (QHP) certification statuses on September 9. Further updates to come.

AT THE WHITE HOUSE

The Obama administration is planning a $12 million ad buy to promote the Affordable Care Act. The advertisements are reported to begin airing on September 30 in Arizona, Florida, Georgia, Indiana, Louisiana, Michigan, Missouri, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee and Texas, states that are largely led by Republicans and in many cases have been hostile to the ACA.

ON THE HILL

On September 6, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) released a score of the House bill to delay the individual and employer mandates by a year, H.R. 2668. The CBO and JCT estimate that the legislation would reduce federal deficits by roughly $36 billion over the 2015-2018 period and by roughly $35 billion over the 2014-2023 period.

The House Committee on Energy and Commerce’s Subcommittee on Health held a hearing on September 10 on the ACA’s “Implementation Challenges for States and Job Creators.”

Unions are becoming increasingly frustrated with a general lack of response from the Obama administration to their concerns as changes are made in implementation to respond to concerns of businesses, churches and other religious groups, and Capitol Hill. Unions argue that the ACA could cut employee hours, that Taft-Hartley health plans will be ineligible for subsidies because they are multiemployer plans, and that workers will be forced off their union health plans into the law’s potentially more costly insurance exchanges. On September 5, Chairman of the House Ways and Means Committee Dave Camp (R-Mich.) and Chairman of the Education and Workforce Committee John Kline (R-Minn.) sent a letter to the CBO and JCT requesting estimates on the cost of providing insurance subsidies to union-sponsored insurance plans.

Republicans on the House Committee on Energy and Commerce sent a records request to several groups that were recently named health care navigators requesting details about their organization and instructing the groups to schedule congressional briefings within the next two weeks. Rep. Henry Waxman (D-Calif.) wrote a letter arguing that these requests were an abuse of authority. On September 9, HHS sent a response to Energy and Commerce House members providing information on the navigator grant recipients.

IN THE STATES

Following the Michigan Senate’s approval of Medicaid expansion last month, the Michigan House approved Medicaid expansion last week. A bill will now be sent to Governor Snyder for signature. Governor Snyder (R) has been pushing for Medicaid expansion in his state despite previous resistance from a Republican-led state legislature. The bill would go into effect 90 days after the current session concludes in December if Gov. Snyder signs it.

On September 3, CMS agreed to allow Indiana to extend an existing program the state has for low-income residents, known as the Healthy Indiana Plan, until at least the end of 2014. Some view this as an indication that the state will expand its Medicaid program under the ACA.

On September 6, CMS approved a one-year extension of Oklahoma's Insure Oklahoma demonstration, which is an existing demonstration to help low-income adults afford health coverage. The demonstration was set to expire at the end of the year.

On September 3, Maryland health officials announced a new partnership with the Baltimore Ravens to promote Maryland’s insurance marketplace.

IN THIRD PARTIES

Enroll America organized 1,000 volunteers to hold more than 200 events across the country to promote the ACA this past weekend. The efforts focused attention on Arizona, Florida, Georgia, Illinois, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania and Texas.

On September 4, the Republican National Committee (RNC) launched a new website and video that highlight local news stories on the cost of insurance under the ACA. The website also features a to-the-second countdown to the “Obamacare Train Wreck.”

On September 4 speaking in Arkansas, former President Bill Clinton urged Congress to revise several issues presented by the ACA. He highlighted an error in the law that prevents a full-time employee’s family from getting subsidized health insurance on the exchange if the individual’s policy is affordable. Clinton also criticized those states that were not taking advantage of incentives for Medicaid funds. He praised Arkansas’ private option Medicaid plan that enables some Medicaid-eligible individuals to use premium assistance to purchase qualified health plans on the state’s exchange.

IN THE COURTS

On September 5, Liberty University filed a petition asking the Supreme Court to review the 4th Circuit Court of Appeals’ decision in Liberty’s case seeking to overturn the ACA’s requirement that employers provide health insurance that covers contraception.

To view our compilation of recent health care reform implementation news, click here

Health Care Reform Implementation Update - September 3, 2013

There is only one week left of Congress’ summer recess. While the members have been in their home districts, the agencies in Washington have been finalizing Affordable Care Act (ACA) regulations on everything from the individual mandate to eligibility appeals, and rallies have raged across the country both by those who oppose and those who support the ACA. Arguments continue about whether the exchanges will be ready by October 1, and whether debt ceiling legislation or a continuing resolution are plausible vehicles for opponents of the ACA to chip or hack away at the law. Meanwhile, the ACA continues to root itself into the national dialogue, even making several mentions at this week’s 50 year anniversary commemoration of the Civil Rights March on Washington and Martin Luther King Jr.’s “I Have a Dream” speech.

AT THE AGENCIES

On August 27, the Internal Revenue Service (IRS) issued a final regulation on governing compliance with the individual mandate of the ACA, “Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage.” The regulation addresses the penalty for not having minimum essential coverage under the ACA. The rule establishes a penalty per person per year of the greater of $95 or 1 percent of household income in 2014, eventually moving up to $695 per person or 2.5 percent of household income per person per year in 2016. The rule also details exceptions to the individual mandate.

On August 27, the Department of Health and Human Services (HHS) notified insurance companies that it would delay signing final agreements with the plans for the ACA’s new insurance exchanges until mid-September. These approvals are the last step in what has been a long process for insurance companies trying to sell their products on the health insurance exchanges. The delay moves this last step just a couple of weeks before open enrollment begins.

On August 28, the Centers for Medicare & Medicaid Services (CMS) posted its “Program Integrity: Exchange, SHOP, and Eligibility Appeals” final rule. The rule sets forth standards for eligibility appeals, verification of eligibility for minimum essential coverage, treatment of incomplete applications, and establishes additional consumer protections regarding privacy and security. It also clarifies the roles of agents, brokers and issuer application assisters in assisting consumers with obtaining exchange coverage; provides for the handling of consumer cases; establishes non-discrimination standards for methods of premium payment; and sets forth provisions regarding a state’s operation of the Small Business Health Options Program (SHOP) exchanges.

CMS’s 217-page manual for navigators, the Health Insurance Marketplace Navigator Standard Operating Procedures Manual, is available online. The manual provides guidance on exchanges generally, on standard operating procedures for navigators, as well as general customer service guidelines.

On August 29, in response to the recent Supreme Court ruling on the Defense of Marriage Act, HHS announced that access to care in the same nursing home as one’s spouse is extended to Medicare beneficiaries in same-sex marriages. This coverage will apply equally to all seniors in private Medicare plans who are in legally recognized marriages, regardless of where they reside.

AT THE WHITE HOUSE

The 50th Anniversary of the Civil Rights March on Washington and Martin Luther King Jr.’s “I Have a Dream” speech provided several opportunities for speakers to tout the benefits of the Affordable Care Act. Among its notable shout-outs were those from President Obama and former President Bill Clinton. In the lead up to the ceremony in a radio interview, President Obama said Martin Luther King Jr. would approve of the Affordable Care Act. In Clinton’s speech, he said that he and his listeners “cannot relax in our efforts to implement health care reform in a way that ends discrimination against those with preexisting conditions, one of which is inadequate income to pay for rising health care.”

ON THE HILL

House Republican leaders continue to consider using the national debt limit and other spending legislation as leverage to delay implementation of the Affordable Care Act. Others are pushing for a vote to fund the government without funds for the ACA. Senators Rand Paul (R-Ky.), Mike Lee (R-Utah), and Ted Cruz (R-Texas) will headline the “Exempt America Tour” rally on September 10, urging the defunding of the Affordable Care Act.

Republicans from the House Committees on Ways and Means and Energy and Commerce released a White Paper addressing possible ideas for reforming Medicare. The joint paper reviews 1) the traditional Medicare cost-sharing framework and the impact current thresholds have on beneficiaries; 2) the impact of supplemental coverage with low cost-sharing requirements that reduce incentives to seek cost-effective care; and 3) how modernizing the traditional cost-sharing features could better align beneficiary incentives, ensure beneficiaries greater out-of-pocket predictability and reduce overall Medicare costs.

On August 23, in response to the HHS Inspector General’s report that said the program for rural health care providers had become too bloated and a proposal that Medicare reimbursement rates be cut for critical access hospitals, a bipartisan group of 20 senators signed on to a letter defending these critical access hospitals. Critical access hospitals serve rural communities and populations without easy access to other health care providers.

On August 28, Sen. Rob Portman (R-Ohio) sent a letter to Sec. Sebelius and Administrator Tavenner expressing his concerns regarding the upcoming enrollment of individuals in the health insurance marketplaces. He suggests in his letter that since the infrastructure is not in place to handle the large number of individuals who will be obtaining their insurance through the marketplaces, open enrollment be delayed “until the necessary leadership and preparation are in place to ensure that the Marketplace can handle the volume on day one of enrollment.”

On August 26, Representative Ron DeSantis (R-Fla.) announced a bill that would prohibit congressmen and women and their staffs from receiving employer contributions to their health care costs under the ACA.

IN THE STATES

On August 27, the Michigan state Senate passed a plan to expand Medicaid coverage with a vote of 20-18, making Michigan the 25th state to do so as part of the ACA. Due to its late decision, Michigan may be several months behind other states expanding their Medicaid programs.

IN THIRD PARTIES

On August 29, the Rand Corporation released a new report, in which it argues that the ACA will not lead to a widespread increase in premiums in the individual health insurance market.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - August 26, 2013

In response to security concerns about personal information in the health insurance exchanges, the Centers for Medicare and Medicaid Services (CMS) released a new security agreement for the data hubs where this information will be stored. Opposition to the Affordable Care Act (ACA) continues to be voiced from many directions. Some lawmakers who oppose the ACA are pushing for answers on the employer mandate delay or encouraging the law’s defunding. The National Retail Federation, America’s Health Insurance Plans, the National Association of Health Underwriters, the National Association for Manufacturers and the U.S. Chamber of Commerce have launched a campaign highlighting the problems that will be caused by the ACA’s penalties. Notwithstanding the opposition, major provisions of the law continue to go into effect, and the countdown to open enrollment is less than 40 days.

AT THE AGENCIES

In an effort to raise awareness and enthusiasm among young consumers without health insurance for the ACA, HHS and Young Invincibles launched The Healthy Young America Video Contest on August 19 for videos urging young people to enroll in new insurance policies. Participants may submit by September 23, 2013 videos in three categories: song, short film or video infographic.

On August 20, CMS released a new agreement with state exchanges on the federal data service hub. The agreement requires state exchanges to alert the Center for Consumer Information and Insurance Oversight (CCIIO) within an hour of detecting a possible breach of personally identifiable information on the data hub. Once CCIIO is alerted, it will contact the relevant agencies about the breached data.

On August 23, the IRS released a proposed rule, Tax Credit for Employee Health Insurance Expenses of Small Employers. The proposed regulations provide guidance on the tax credit available to certain small employers that offer health insurance coverage to their employees under section 45R of the Internal Revenue Code, enacted by the ACA.

ON THE HILL

On August 21, Rep. Mark Meadows (R-N.C.) and 79 colleagues sent a letter to Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) pressing them to defund the ACA as part of a government funding bill.

On August 21, five Republican members of the House Energy and Commerce Committee sent a letter to Treasury Secretary Jack Lew pushing for more details on the administration’s decision to delay the ACA’s employer mandate. The signing members are Energy and Commerce Chairman Rep. Fred Upton (R-Mich.), and Reps. Tim Murphy (R-Pa.), Joe Pitts (R-Pa.), Marsha Blackburn (R-Tenn.) and Michael Burgess (R-Texas). The members had previously written a letter to the Treasury but have not heard back.

The Government Accountability Office released a report requested by Sen. Tom Coburn (R-Okla.) examining the efficiency and effectiveness of contractors CMS uses to conduct post-payment claims reviews to identify improper payments. GAO recommends that CMS examine ways to make the review processes more consistent among different types of contractors.

A Government Accountability Office report finds that the U.S. Postal Service’s proposal to run its own health care plan in lieu of a federal plan could add slight financial strain to Medicare.

On August 21, Congressman Bill Cassidy, M.D. (R-La.), sent a letter to HHS Secretary Sebelius protesting the Obama administration’s granting of ACA navigator funds to Planned Parenthood. In a statement, Rep. Cassidy said “Every federal dollar that goes to Planned Parenthood, regardless of its stated purpose, offsets their costs to provide abortions.”

IN THE STATES

Notwithstanding Medicaid expansion, many who are currently eligible for Medicaid may lose Medicaid coverage. Maine, Rhode Island, Wisconsin and Vermont are planning to scale back some of their eligibility in January, meaning more than 150,000 will lose access to the program.

Last week the New York Department of Health announced the name of its health benefit exchange. It will be called the “NY State of Health.”

On August 23, Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds formally requested a federal waiver to expand its Medicaid program in a way that would allow those between 100 and 138 percent of the federal poverty level to use federal dollars to buy coverage on the health exchange Iowa is running in partnership with the federal government.

On August 20, Rhode Island released rate information for insurance policies sold through the ACA’s exchanges. Rhode Island residents will be able to choose among 12 insurance plans offered through two insurance companies, Blue Cross & Blue Shield of Rhode Island and Neighborhood Health Plan of Rhode Island. The cost of insurance varies by type of plan and the individual’s age. A plan with a $5,800 annual deductible and a 30 percent co-pay would cost a 21-year-old consumer $169 per month and a 45-year old $244 per month. Rhode Island residents are now able to compare premiums and details of plans by plan and age through HealthSourceRI.com.

On August 19, Montana state officials released prices for insurance under its exchange. According to the released rates, a mid-level plan would cost a 30-year-old somewhere between around $200 a month to $300 a month. The released rates do not include the up-front federal tax credits that will be available to many.

Though Louisiana had pursued funds under the ACA for long-term care reform, it withdrew its application this week citing complicated federal stipulations associated with the program.

IN THIRD PARTIES

The National Retail Federation, America’s Health Insurance Plans, the National Association of Health Underwriters, the National Association of Manufacturers, and the U.S. Chamber of Commerce have launched a campaign called the Affordable Coverage Project, whose slogan is The Health Insurance Tax Will Hurt. The campaign focuses on three main populations it argues will be harmed: families, seniors and small business.

On August 20, the Kaiser Family Foundation released its annual Employer Health Benefit Survey. The results showed that health insurance premiums have grown slowly in 2013, by 4 percent for an employer-sponsored family health plan. For some, this finding should stifle criticism that the ACA will increase health premium costs. Others are quick to highlight, however, that many of the ACA’s largest changes, especially for employers, have not yet gone into effect.

Heritage Action for America began a nine-city tour this week to urge lawmakers to defund the ACA. Heritage Action also announced a $550,000 defunding advertisement campaign that will fund advertisements in 100 congressional districts under Republican control.

According to a new study from the RAND Corporation, an estimated 300,000 fewer people or merely .2 percent of the population will have employer-sponsored health insurance in 2014 as a result of the employer mandate delay. Additionally, the study finds that the government will collect about $11 billion less in penalties.

According to a Kaiser Family Foundation report released on August 14, nearly half of those who currently buy their own health insurance would be eligible for tax credits next year under the ACA.

On August 15, Organizing for Action released a television advertisement touting the ACA. The ad is the group’s third this summer in support of the law.

A new study from the Commonwealth Fund found that the majority of young adults between the ages of 19 and 29 are unaware of the health insurance exchanges (marketplaces).

IN THE COURTS

An Oklahoma judge granted a temporary injunction from a state law that put restrictions on the emergency contraceptive drug Plan B One-Step. The Oklahoma Coalition for Reproductive Justice and Jo Ann Mangili, the mother of a 15-year old girl, sued the state arguing that the bill violates the Oklahoma Constitution’s ban on including more than one subject in a bill.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - August 19, 2013

With less than 50 days until open enrollment begins, tensions in Washington and around the country are high among health care stakeholders.  Businesses, individuals and even some in the government are concerned about whether all the pieces of the Affordable Care Act (ACA) will come together in time for individuals to enroll in exchange plans come October 1. The administration is working around the clock to ensure health reform works, but problems abound. The administration has delayed another key provision of the ACA by a year so that limits on consumer out-of-pocket costs will not kick in until 2015. The Inspector General’s Office at HHS released a report showing that the government is several months behind on testing data security for the exchanges. The heads of health information technology and patient-centered outcomes research who have both been heavily involved in ACA implementation are stepping down from their posts. Partisan tensions continue to boil, especially with respect to the ACA, which many fear will lead to difficulties in passing a budget to keep the government running.

AT THE AGENCIES

The Obama administration delayed another key provision of the Affordable Care Act until 2015. The ACA includes a consumer protection that caps the out-of-pocket insurance costs for consumers. The limit on these costs, which include deductibles and co-payments, is $6,350 for an individual and $12,700 for a family, but is now delayed. The delay, buried in pages of language on the Department of Labor’s website went largely unnoticed until this week.

On August 7, the Office of Personnel Management proposed a rule that amends the Federal Employees Health Benefits Program regulation regarding coverage for members of Congress and congressional staff and details how the federal government can continue to contribute to their health insurance plans. The proposed rule would allow the government to continue to pay for a significant part of their health insurance. Public comments on the rule are due September 9. Committee on Ways and Means Chairman Dave Camp issued a statement in response arguing that the proposed rule is another indicator of the ACA not working.  A day later, the chief of the D.C. health exchange said she welcomed Capitol Hill staff onto the D.C. exchange.

On August 2, the Centers for Medicare and Medicaid Services (CMS) issued final Medicare 2014 payment rules for inpatient stays at acute-care hospitals and long-term care facilities, as well as for hospice care. The rules increase hospital inpatient payments by 0.7 percent, increase long-term care hospital payments by 1.3 percent, and increase hospice payments by 1.7 percent.

On August 15, HHS announced $67 million in approximately 120 navigator grants to 105 organizations. Navigators are tasked with educating the public about the ACA. A list of the navigator grant recipients by state can be found here.

On August 2, the Inspector General’s Office at HHS released a report showing the federal government is several months behind on testing data security for the insurance exchanges scheduled to launch October 1. The report warns that the data hub may contain unidentified security risks when open enrollment in the marketplaces begins.

On August 5, HHS announced the launch of a new feature on Healthcare.gov, My Account. According to HHS, consumers can now open accounts on Healthcare.gov, which is the first step in purchasing coverage through the federal exchange.

It became public this week that Dr. Farzad Mostashari, who has served as the head of the Office of the National Coordinator for Health Information Technology at HHS for the past four years, will leave his post. Additionally, the first chairman of the Patient-Centered Outcomes Research Institute, which was created by the ACA, will step down at the end of the year.

On August 1, HHS’s Office for Civil Rights published a request for information for a rulemaking on non-discrimination requirements under Section 1557 of the ACA.

In a final rule on disclosure of taxpayer information under the ACA, the Internal Revenue Service announced that it would share “return information” with states and other agencies to help verify income, which can help determine eligibility for tax credits through the insurance exchanges.

ON THE HILL

On August 2, the House Ways and Means Committee released draft legislation of President Obama's proposals to strengthen Medicare. The proposal addresses the following changes to post-acute care (PAC): 1) Reducing market basket updates for home health agencies (HHAs), skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals; 2) Creating site neutral payments between IRFs and SNFs for certain procedures; 3) Modifying the criteria required for IRF status; 4) Establishing an SNF readmissions program; and 5) Creating PAC bundled payments. The committee encourages the public to submit comments to any of the draft legislative proposals at entitlementreform@mail.house.gov.

On August 4, House Budget Committee Chairman Republican Rep. Paul Ryan cautioned his party that they would be better off “delaying and ultimately replacing” the ACA rather than threatening a government shutdown over funding.

More than 200 House members signed a letter to CMS expressing concern over CMS’s proposed rule from July 1 that would cut funding for dialysis by 9.4 percent.

IN THE STATES

On August 6, Arkansas submitted a waiver application to CMS requesting to expand the Medicaid population through the state’s health insurance exchange.

Massachusettsresidents are paying more for their insurance, despite the plans decrease in value, a report from the Center for Health Information and Analysis found.

IN THE WHITE HOUSE

On August 9, President Obama held a press conference at which he accused Republicans of making repeal of the ACA their “holy grail” and said that Republicans’ “unifying principle is making sure 30 million people don’t have health care.”

On August 6, the White House launched a new website that helps employers determine the requirements and penalties they face.

IN THIRD PARTIES

On August 5, The Employers for Flexibility in Healthcare Coalition, which is led by the Retail Industry Leaders association, sent a letter to HHS, the Treasury Department, and the Labor Department expressing appreciation of the one-year delay in the employer mandate and requesting more information on it.

On August 6, WebMD announced the launch its new online Health Care Reform Center, which will educate consumers on the ACA and guide them through purchasing coverage in the insurance exchanges. The site incorporates videos, subsidy calculators, countdowns and state-specific information to help simplify the ACA.

According to a Kaiser Family Foundation report released on August 14, nearly half of those who currently buy their own health insurance would be eligible for tax credits next year under the ACA.

On August 15, Organizing for Action released a television advertisement touting the ACA. The ad is the group’s third this summer in support of the law.

IN THE COURTS

On August 6, Liberty University requested that the 4th Circuit Court of Appeals stay its ruling upholding the health care law in Liberty’s case while Liberty applies to have the Supreme Court hear it. On the same day, the court granted Liberty’s request, leading some to believe that the 4th Circuit believed the Supreme Court was considering taking the case. Then on August 7, the 4th Circuit Court of Appeals reversed itself and denied the stay.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - August 12, 2013

The House Energy and Commerce Committee voted unanimously on legislation that would repeal the sustainable growth rate (SGR) formula that has historically led to annual decreases in physician payments that are fixed at the last minute each year; the Centers for Medicare and Medicaid services (CMS) announced a temporary moratorium on the enrollment of new home health provider and ambulance supplier enrollments in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) in three “fraud hot spots”; CMS Administrator Marilyn Tavenner testified at a House Energy and Commerce hearing refuting claims from lawmakers that the Affordable Care Act (ACA) was forcing employers to reduce employee hours; President Obama tapped John Koskinen to lead the Internal Revenue Service (IRS); a Congressional Research Service report found that a government shutdown would not stop the ACA’s implementation; and the House passed legislation that would prohibit the IRS from implementing the ACA and separate legislation that would require Congress to vote to approve any regulations implementing the Affordable Care Act, however these bills are not likely to pass in the Senate.

AT THE AGENCIES

The Office of Personnel Management is preparing guidance that will allow the government to continue making contributions to health care premiums of members of Congress and their aides. This will settle concerns over whether the ACA allows the federal government to continue to pay part of the health insurance premiums for members of Congress and thousands of Hill aides when they are using health exchanges.

CMS released its annual update for inpatient psychiatric facilities, boosting their payment in 2014 by 2.3 percent. The total impact of the update is estimated to be approximately $115 million.

The Department of Health and Human Services (HHS) released information on July 29, showing that more than 6.6 million seniors on Medicare have saved in excess of $7 billion on prescription drugs as a result of the Affordable Care Act.

On July 31, an article by Marilyn Tavenner and Niall Brennan appeared on the Health Affairs Blog detailing CMS’ strategy to use health data to promote efficiency and drive improvements in access and delivery.

On July 26, CMS announced a temporary moratorium on the enrollment of new home health providers and ambulance suppliers in Medicare, Medicaid and the Children’s Health Insurance Program in three fraud hot spot areas of the country: Miami, Chicago and Houston. Existing providers and suppliers can continue to deliver and bill for services, but no new provider and supplier applications will be approved in the designated areas.

ON THE HILL

The House Energy and Commerce Committee unanimously voted on Wednesday to pass the Medicare Patient Access and Quality Improvement Act, a bipartisan bill that would repeal the sustainable growth rate formula and reform the system of Medicare physician payments. The SGR repeal bill will move to the full House for a vote, but a way to pay for the cost of repeal has yet to be determined, and the Senate has not yet indicated its position on the House bill

A Congressional Research Service report titled Potential Effects of a Government Shutdown on Implementation of the Patient Protection and Affordable Care Act was released on July 30. It found that a government shutdown would not stop implementation of the Affordable Care Act.

On August 1, the House Committee on Energy and Commerce held a hearing titled “PPACA Pulse Check,” at which CMS Administrator Marilyn Tavenner testified. Administrator Tavenner refuted claims from lawmakers that the Affordable Care Act was forcing many small businesses to reduce work hours of their employees to avoid having to comply with the ACA. Some Republican congressmen argued that the Obama administration was repeatedly failing to notice frequent reports about the ACA's effects on small business. Tavenner also assured the committee that the insurance exchanges would be ready on time regardless of the one-year delay in the employer mandate.

House Speaker John Boehner said in a House Republican Conference meeting that the House would continue a series of votes over the next few months to repeal the Affordable Care Act. These bills will be unlikely to move past the Senate

The House voted to block the Internal Revenue Service from enforcing any components of the ACA in a bill called “Keep the IRS Off Your Health Care Act.” Every Republican and four Democrats voted in its favor.

On August 2, the House voted in favor of an amendment to the Regulations from the Executive in Need of Scrutiny Act, to require Congress to approve all federal regulations relating to the implementation of the Affordable Care Act.

The Congressional Budget Office released a report on July 30 estimating that President Obama's recent decision to delay the Affordable Care Act's employer mandate will cost about $12 billion and result in half a million fewer people insured.

On August 1, the House Committee on Ways and Means held a hearing on the Obama administration’s efforts to implement the ACA, at which Daniel Werfel, Principal Deputy Commissioner and Deputy Commissioner for the IRS and Gary Cohen, Deputy Administrator and Director at the Center for Consumer Information and Insurance Oversight within CMS testified. Central issues discussed included the data hub for the health insurance exchanges and verifying whether someone qualifies for a subsidy.

IN THE STATES

On July 26, Maryland released premium rates for individual health insurance plans. Insurance regulators reduced prices for all nine insurance carriers that are filing to sell their policies in Maryland’s insurance marketplace, cutting rates by as much as 33 percent in some cases. Maryland’s cuts are among the most drastic seen across the country.

Regulators in Florida said premiums in the state will rise by 30-40 percent under the ACA. These percentages are preliminary figures and estimates. The insurance department said premium increases next year "will vary dramatically" based on the policies people have now, but increases will average 30 to 40 percent for individuals and 5 to 20 percent for small businesses.

IN THIRD PARTIES

On July 25, CVS announced it will participate in efforts to get its customers to sign up for ACA coverage, utilizing its health care fairs and pharmacies. Walgreens and Blue Cross Blue Shield have also formed a partnership through which they will promote enrollment.

Liberal groups, led by Americans United for Change and Protect Your Care, will begin a new effort this week to reverse the current narrative and put Democrats on the offensive and Republicans on the defensive over the Affordable Care Act.

On July 29, in its continued efforts to push enrollment in health plans through the ACA, Organizing for Action – an organization that was recently launched to help the White House advance political and policy objectives – launched a website dedicated to “Action August.” The team is planning call pledges, petition drives, advocacy events and other means to put pressure in home districts. House Republican leaders are also encouraging members to hold anti-Obamacare events during August.

IN THE COURTS

On July 26, the U.S. Court of Appeals for the 3rd Circuit ruled against a challenge to the ACA contraception mandate made by owners of a private company, Conestoga Wood Specialties, who wished to not comply because the requirement conflicts with their religious beliefs. Though religious organizations are exempt from having to provide insurance that covers contraception, in this case, the court ruled that the owners’ religious opposition does not exempt Conestoga. Because this case was decided opposite from a recent Denver appellate court ruling, it may be a case that makes its way to the Supreme Court.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - July 30, 2013

Some Republicans are threatening not to pass any debt ceiling deal that does not defund the Affordable Care Act and Democrats say they will not pass any deal that does; the full House Energy and Commerce Committee is slated to vote on legislation that would repeal the Sustainable Growth Rate (SGR) formula that historically has led to annual decreases in physician payments that Congress ultimately corrects, however offsets from other areas, particularly from healthcare, are still needed to pass the bill off the House floor; and the Obama administration is meeting with groups throughout the country including many celebrities to promote the Affordable Care Act (ACA).

ON THE HILL

The Affordable Care Act is becoming the center of a debate that threatens to shut the federal government down this fall. Some Senate and House Republicans are proposing to block any continuing resolutions that would keep the federal government running if they do not defund Obamacare. More than 60 House Republicans have signed on to a letter being circulated by Rep. Mark Meadows (R-N.C.) urging House Republican leadership to defund implementation and enforcement of the ACA.

On July 22, a group of congressional Republicans, led by the Senate Health, Education, Labor and Pensions Committee ranking member Lamar Alexander (R-Tenn.) and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) along with Sens. Mike Enzi (R-Wyo.), Johnny Isakson (R-Ga.) and Richard Burr (R-N.C.), and Reps. Tim Murphy (R-Pa.) and Joe Pitts (R-Pa.) wrote to HHS Secretary Sebelius requesting disclosure of potential exchange insurance rates in 34 states.

On July 23, two House Education and the Workforce subcommittees (the Subcommittee on Health, Employment, Labor, and Pensions and the Subcommittee on Workforce Protections) held a joint hearing on potential fallout from the Obama administration’s decision to delay the ACA’s employer mandate. The hearing is archived here.

On July 25, Rep. Pat Meehan (R-Pa.) introduced a bill that would delay “the implementation, operation, and coordination of a Federal Data Services Hub or any similar database system for determining or verifying eligibility under the Patient Protection and Affordable Care Act.”

On July 23, the House Energy and Commerce Health Subcommittee approved its draft Sustainable Growth Rate (SGR) repeal legislation with one technical amendment from last week. A vote for the full Energy and Commerce Committee is scheduled for July 31.

Also on July 23, House Energy and Commerce Chairman Fred Upton (R-Mich.) announced that CMS Administrator Marilyn Tavenner will testify on August 1 at a committee hearing examining the implementation of the Affordable Care Act.

On July 25, Chairman Dave Camp (R-Mich.) announced that the Ways and Means Committee will hold a hearing on August 1 on the current status of the Obama administration’s efforts to implement the ACA. The committee will hear testimony from Daniel Werfel, principal deputy commissioner and deputy commissioner for services and enforcement at the Internal Revenue Services (IRS) and Gary Cohen, deputy administrator and director at the Center for Consumer Information and Insurance Oversight within the Centers for Medicare & Medicaid services.

AT THE AGENCIES

HHS Deputy Director Chiquita Brooks-LaSure, speaking at a Small Business and Entrepreneurship Committee hearing, said that the small business exchanges would be up and running by October 1.

AT THE WHITE HOUSE

The Obama administration continues its outreach on the Affordable Care Act. On July 22, President Obama met with members of Organizing for Action, made up of volunteers who worked on his campaigns, and with celebrities interested in helping promote health reform and requested their help in making sure the Affordable Care Act is properly put in place. On July 23, Michelle Obama appealed to Latinos to enroll in health insurance plans in a speech to the National Council of La Raza, which is the largest national Hispanic civil rights and advocacy organization in the United States. The Obama administration has also recruited the Washington Nationals baseball team mascot, Teddy Roosevelt, and CVS Caremark to help with enrollment outreach.

IN THE STATES

Louisiana Governor Bobby Jindal wrote and published in The Times-Picayune an op-ed titled “Why I opposed Medicaid expansion.” Gov. Jindal makes a six-part argument that 1) moving individuals currently enrolled in private plans to government-run plans will discourage self-sufficiency and undermine the safety-net purpose of Medicaid, 2) policies should be designed so that “more people are pulling the cart than riding in the cart,” 3) Medicaid expansion could cost Louisiana taxpayers up to $1.7 billion in the first 10 years of implementation, 4) states should retain the ability to make the policy and budgetary decisions for themselves, 5) there are better ways to improve health care outcomes for the uninsured in a cost-effective way, and 6) it is bad economic policy to borrow money from China.

A committee of Michigan state senators issued a Medicaid expansion blueprint, including long-term eligibility limits on enrollees that are the least poor. This limitation follows the Michigan House’s lead. The Medicaid expansion legislation that passed in the Michigan House set a 48-month lifetime limit for people earning between 100 and 133 percent of the poverty level.

To view our compilation of recent health care reform implementation news, click here

 

Health Care Reform Implementation Update - July 23, 2013

With only two weeks before Congress’ August recess and just a little more than two months before October open enrollment begins, Washington is busy sorting through, implementing and, in some cases, fighting the Affordable Care Act (ACA). The Department of Health and Human Services released final rules for navigators, non-navigator assistance personnel and certified application counselors, all of whom will help connect people with health insurance plans through the ACA’s online marketplaces; the House Ways and Means Committee released bipartisan proposals to reform Medicare to cut costs; the House Energy and Commerce Committee released draft Sustainable Growth Rate (SGR) reform legislation last week and voted for it today; the House passed symbolic bills that would delay the employer mandate (which has already been delayed by the Obama administration) and the individual mandate; and CMS announced results from the first performance year of the Pioneer Accountable Care Organization (ACO) program.

AT THE AGENCIES

On June 17, the Department of Health and Human Services published final rules for navigators, non-navigator assistance personnel and certified application counselors, who are tasked with helping people understand the ACA and determine their coverage options through its insurance marketplaces. The rules finalize training and certification standards.

On July 16, CMS announced results from the first performance year of the Pioneer ACO program. Compared with other ACO models, the Pioneer ACOs assume two-sided risk, where participants can share in savings and also are penalized for expenses. CMS reported that all 32 participants in the program were able to boost the quality of care, though not all of them were able to produce savings in the first year. Nine of the 32 ACOs are dropping out of the program because they did not produce savings. Seven of the nine are applying to participate in a different Medicare Shared Savings Program that allows for more time before penalties for not reducing spending kick in.

ON THE HILL

On July 19, the House Ways and Means Committee released bipartisan proposals to reform Medicare. The proposal comes after several hearings on Medicare reform. It outlines three key policies, closely mirroring President Obama’s proposals in his 2014 budget: increasing premiums for wealthier seniors, increasing the Part B deductible, or establishing a home health co-pay.

The Republican-led House passed two bills delaying key provisions of the ACA, H.R. 2667, which would delay the ACA’s employer mandate for a year, and H.R. 2668, which would delay the ACA’s individual mandate by a year. The bills are not expected to become law since they would require approval by the Democrat-led Senate and President Obama (who has pledged to veto this legislation were it to make it to his desk). President Obama’s pledge to veto the employer-mandate delay was viewed by some as inconsistent, given that his administration recently announced that the employer-mandate would be delayed. Republicans used the legislation to force Democrats to take a politically uncomfortable vote concerning both the individual mandate and the employer mandate.

On July 17, at a hearing on Information Sharing and the Affordable Care Act held by the House Oversight and Government Reform Subcommittee on Energy Policy, Health Care, and Entitlements and the House Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies, CMS Administrator Marilyn Tavenner updated Congress on the status of data hub HHS will use to assist the insurance marketplaces to use IRS tax data and other federal government data to verify applicants’ eligibility. Administrator Tavenner told the subcommittees that “… the hub is not a database; it does not retain or store information.” Many House Republicans have suggested or stated that they remain unconvinced.

The House Energy and Commerce Health Subcommittee released draft SGR reform legislation. On July 23rd, Energy and Commerce approved the draft legislation.  If Congress does not come up with a “doc fix,” as it has done each year since the origin of the SGR, physicians treating Medicare patients will face a 24.4 percent cut in reimbursement rates in 2014.

AT THE WHITE HOUSE

The Administration is continuing its ACA outreach efforts. In new developments, senior White House adviser David Simas attended an event hosted by Campus Progress to answer college activists’ questions, and HHS Secretary Sebelius attended the National Association for the Advancement of Colored People (NAACP) convention, where she called on leaders there to get the word out about the ACA.

The Office of Management and Budget (OMB) issued a statement of administration policy saying President Obama would veto the House bills delaying the employer and individual mandates.

On July 15, the Health and Human Services (HHS) Department released a video saying the implementation of the ACA is running on schedule.

IN THE STATES

On July 11, Massachusetts Governor Deval Patrick announced that he would not block the repeal of the employer mandate in his state. Massachusetts’ 2006 health care law included a provision that required employers with more than 10 workers to provide health insurance coverage or pay Massachusetts $295 per employee. The Massachusetts 2014 budget planned on repealing the state budget because the federal employer mandate would be in place by then. Patrick’s announcement is significant because this means Massachusetts will not have an employer mandate for 2014, unlike it has in the years since its health care law was enacted.

New York announced this week that insurance premiums would drop 50 percent next year for individuals buying their own coverage in the health insurance marketplaces. It is not expected that all or most states will see such a significant drop in premiums. Unlike most states, New York has barred insurers from rejecting those with pre-existing conditions. Because New York did not simultaneously require all individuals to buy health insurance, those who choose to buy insurance tended to be the sickest and oldest, and due to the high costs of coverage individuals buying insurance in New York faced very high prices. Under the Affordable Care Act, everyone will be required to buy insurance, which will lessen the adverse selection, and accompanying high prices, New York previously saw. On a related note, on July 18, the Obama administration highlighted that rates in the 11 states that have released them so far, premiums for average plans are 18 percent less expensive than predicted by the Congressional Budget Office (CBO).

A group of Michigan state senators are now studying the Medicaid expansion issue and tentatively planning to hold a vote in late August. The state House has already voted to expand Medicaid in the state.

On July 18, Texas Governor Rick Perry signed into law a bill that would ban abortions after 20 weeks of pregnancy, require abortion clinics to meet the same standards as hospital surgical centers, and mandate that a doctor performing abortions be admitted at a hospital within 30 miles of where the abortions are performed. These restrictions are among the most stringent in the nation.

IN THIRD PARTIES

According to an outlook report by Avalere Health, complications in setting up health insurance marketplaces could initially lead to lower enrollment.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - July 16, 2013

Affordable Care Act Takes Ones Step Back: Employer Mandate Delayed Until 2015

Business Relieved; Congress Seeks Answers, Seeks Similar Relief for Individuals

Capitol Hill and the agencies went back and forth last week on the impact and consideration involved in delaying the Affordable Care Act’s (ACA) employer mandate; votes in the House are expected this week on it, as well as a vote to repeal the individual mandate; the Centers for Medicare and Medicaid Services (CMS) filed final rules on eligibility for exchange subsidies delaying certain core attestation provisions for the same, Medicaid and the Children’s Health Insurance Program (CHIP) as well as proposed rules on Medicare’s physician fee schedule, the hospital outpatient prospective payment system and the ambulatory surgical center payment system; and the Department of Health and Human Services (HHS) announced $150 million in grant awards to 1,159 health centers in the United States to enroll uninsured Americans in new ACA health coverage options.

 AT THE AGENCIES

As we wrote last week, the Obama administration announced on July 3 that the ACA employer mandate, which requires businesses with more than 50 full-time employees to provide their employees with health insurance, would be delayed from 2014 until 2015. This will give businesses more time to comply with complicated regulations, and also may benefit Democrats up for reelection in the 2014 midterm elections, in which Republicans are likely to highlight key Obamacare burdens.

On July 9, the Internal Revenue Service (IRS) issued a formal notice of its July 2 announcement to postpone the ACA’s employer mandate and issued guidance explaining the impact of the delay.

On July 5, CMS issued a final rule laying out Medicaid and CHIP eligibility and outlining how, for purposes of determining eligibility for health insurance exchange subsidies, it will be determined whether people have access to affordable coverage from their employers. Under the rule, the government will not be able to access comprehensive data on employer-provided coverage, but rather will rely on the word of the applicant and check the information provided against other official sources, such as tax returns, and random outreach to employers for verification.

On July 8, CMS filed a proposed rule (which will be published on July 19) titled “Revisions to Payment Policies under the Physician Fee Schedule, Clinical Laboratory Fee Schedule and Other Revisions to part B for CY 2014.” The proposal would update payment policies and rates for services provided under the Medicare Physician Fee Schedule beginning January 1, 2014. In a fact sheet, CMS said the proposal would make changes to several of the quality reporting initiatives that are associated with physician payments: the Physician Quality Reporting System, the Medicare Electronic Health Record Incentive Program, and the Physician Compare tool on the Medicare.gov website.

On July 8, CMS filed another proposed rule (which will be published on July 19) for Medicare and Medicaid Programs, titled “Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Procurement Organizations; Quality Improvement Organizations; Electronic Health Records (EHR) Incentive Program; Provider Reimbursement Determinations and Appeals.” Under the hospital proposal, total calendar year 2014 hospital outpatient prospective payment system payments are projected to increase by $4.37 billion, or 9.5 percent, CMS said in its fact sheet. For ambulatory surgery centers, the 2014 Medicare payments are projected to increase by approximately $133 million, or 3.51 percent, as compared with CY 2013.

The Obama administration has notified insurers that due to a computer system glitch, ACA penalties for tobacco use will be delayed by at least a year.

HHS Secretary Sebelius announced $150 million in grant awards to 1,159 health centers in the United States to enroll uninsured Americans in new health coverage options made available by the ACA.

ON THE HILL

The Congressional Research Service (CRS) published a report clarifying the various penalties faced by employers under provisions of the ACA. The report details key terms of the employer shared responsibility provision, as well as methods of calculating full-time equivalent employees. The memo also provides guidance on calculating seasonal and part-time workers for determining the number of full-time equivalent employees.

On July 9, House Ways and Means Chairman Dave Camp (R-Mich.), Education and the Workforce Chairman John Kline (R-Minn.), Budget Chairman Paul Ryan (R-Wis.), Energy and Commerce Chairman Fred Upton (R-Mich.), along with Speaker John Boehner (R-Ohio), House Majority Leader Eric Cantor (R-Va.), House Majority Whip Kevin McCarthy (R-Calif.), House Republican Conference Chair Cathy McMorris Rodgers (R-Wash.), House Chief Deputy Whip Peter Roskam (R-Ill.), House Republican Conference Vice Chair Lynn Jenkins (R-Kan.), and House Republican Policy Committee Chairman James Lankford sent a letter to President Obama requesting details on the decision to delay the employer mandate.

On July 10, the Treasury Department responded to the inquiry from House Republicans with a letter defending the legality of the decision to delay implementation of the employer mandate. The response highlighted “the Treasury Department’s longstanding administrative authority to grant transition relief when implementing new legislation like the ACA” and stated “Administrative authority is granted by section 7805(a) of the Internal Revenue Code.”

On July 10, the House Ways and Means Health Subcommittee held a hearing examining the Obama administration’s employer mandate delay. In his opening statement, Chairman Kevin Brady (R-Texas) said, “The Treasury Department’s announcement confirms our concerns – ObamaCare is simply not ready. The committee has serious questions about how and why this alarming decision was made and the effect that delaying this key provision will have on other provisions of the law – specifically the directive that individuals purchase government-approved health care or pay a tax.” As has been the case with many ACA hearings, Democrats defended the law, and Republicans attacked it. Republicans pointed to the need for delay as evidence that the ACA is plagued with problems, and argued that delaying the law for businesses but not for individuals was fundamentally unfair. Democrats argued that the delay is a positive development, a result of the administration listening to the vocal business community saying it needs more time, and that the delay will help the ACA work as it is supposed to work.

The past week has seen several cries from Republicans, most notably from House Majority Leader Cantor, House Speaker Boehner, and Sen. John Thune (R-S.D.) to continue with the ACA delays – permanently. The Republican critics of the ACA pointed to the June jobs report as further evidence that the employer mandate was hurting the economy. On July 3, Speaker Boehner, Majority Leader Cantor, Majority Whip McCarthy and Republican Conference Chairman McMorris Rodgers issued a statement, which ended by saying, “It’s time for a permanent delay of Obamacare.”

On July 11, House Speaker Boehner announced that the House will vote next week whether to delay implementation of both the employer and individual mandate in the health care law. This tactical move will force House Democrats, who likely will vote for the employer mandate delay (as it has been endorsed – and implemented – by the Obama administration), to support or not support the same delay for individuals.

Chairman of the House Committee on the Budget Ryan, Chairman of the House Committee on Ways and Means Camp, Chairman of the House Committee on Energy and Commerce Upton, Ranking Member of the Senate Committee on the Budget Jeff Sessions (R-Ala.), Ranking Member of the Senate Committee on Finance Orrin Hatch (R-Utah), and Ranking Member of the Senate Committee on Health, Education, Labor and Pensions Lamar Alexander (R-Tenn.) sent a letter to CBO Director Doug Elmendorf asking for CBO to provide a cost and budget estimate of the administration’s decision to delay enforcement of the employer mandate.

IN THE STATES

Following the Pennsylvania Senate’s June 30 vote to include expanded Medicaid in its welfare code, the Pennsylvania House on July 1 voted to strip the legislation of the Medicaid-expanding language and sent the bill back to the state Senate, which, on July 3, voted for the bill as altered by the House.

On July 8, Vermont regulators announced the state’s final 2014 rates for plans on the ACA’s exchanges. Residents will pay on average (not accounting for federal subsidies) about $400 a month for an individual “silver” plan in the state’s health insurance exchange. The only two insurers selling on Vermont’s exchange in 2014 will be Blue Cross Blue Shield of Vermont and MVP Health.

 IN THIRD PARTIES

According to the Robert Wood Johnson Foundation’s annual report, “Health Information Technology in the United States,” the number of hospitals using electronic health records jumped about 17 percent from 2011 to 2012.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - July 3, 2013

The Obama administration announced yesterday it was delaying the Affordable Care Act’s (ACA) Employer Mandate, which requires employers with 50 or more full-time workers to provide affordable health insurance to its employees or pay a fine; the House Committee on Energy and Commerce released a more detailed legislative framework on repealing Medicare’s sustainable growth rate (SGR), which is the reimbursement formula for Medicare physicians; CMS confirmed that nine of the 32 Pioneer Accountable Care Organizations (ACOs) may be exiting the program; and proposed rules on 2014 payments to home health agencies and end-stage renal disease dialysis providers were released.

AT THE AGENCIES

The Obama administration announced on July 3 that the ACA employer mandate, which requires businesses with more than 50 full-time employees to provide their employees with health insurance, will be delayed from 2014 until 2015.  This will give businesses more time to comply with complicated regulations, and also will benefit Democrats up for reelection in the 2014 midterm elections, in which Republicans are likely to highlight key Obamacare burdens.

On July 2, HHS Secretary Sebelius announced nearly $32 million in Connecting Kids to Coverage Outreach and Enrollment Grants to 41 state agencies, community health centers, school-based organizations and nonprofit groups in 22 states.  The grants will be used to identify and enroll children eligible for Medicaid and the Children’s Health Insurance Program (CHIP).

On June 26, the Department of Health and Human Services (HHS) issued a final rule explaining the eligibility requirements for individuals seeking an exemption from the individual shared responsibility provision of the ACA.  Individuals may receive exemptions through a health insurance marketplace or the tax filing process, depending on what type of exemption they seek.

On June 28, the Obama administration released its final ruling on whether religious organizations will be required to offer contraceptives through their health insurance plans under the Affordable Care Act.  The ruling says that most employers will have to provide contraception as part of their health insurance plans.  Churches and other houses of worship will be exempt from this requirement,  and religious nonprofit entities, such as hospitals and universities with religious affiliations, will have to offer contraception through their health insurance plans, however will not directly have to “arrange, contract, pay or refer” for this.

Nine of the 32 Pioneer Accountable Care Organizations (ACOs) may exit the program, intended to change the way medical providers are paid to manage care for patients with chronic conditions.  The Pioneer ACO model is one of three such models, and it is the one that carried the most risk (and the most opportunity for gain).  Four of the nine exiting ACOs may move to the Medicare Shared Savings Program, one of the other three ACO models, which does not penalize ACOs for failing to meet cost and performance goals as the Pioneer ACO program does.

On July 1, CMS issued a proposed rule that would update and make revisions to payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to beneficiaries for calendar year 2014.  The proposed rule would decrease dialysis facility payments by $970 million in calendar year 2014.

A proposed rule from CMS that came out on June 27 would cause home health agencies to see a 1.5 percent reduction in their Medicare payments for 2014 and decrease overall payments by $290 million next year compared with 2013 levels.

ON THE HILL

The House Energy and Commerce Committee released a more detailed legislative framework to repeal Medicare’s sustainable growth rate.  The Committee on Energy and Commerce released a draft bill back in May and invited comments from stakeholders through June 10.  On June 28, the Committee unveiled draft legislation incorporating this feedback.  The draft legislation would repeal the SGR formula that is used to calculate payments for physicians participating in the Medicare program and replace it with a fee-for-service system in which providers would develop quality measures.  Energy and Commerce has requested stakeholder feedback by July 9.  Chairman Fred Upton (R-Mich.) indicated that the committee is in the process of addressing the need for a means of paying for the change.

On June 28, House Committee on Ways and Means Chairman Dave Camp (R-Mich.), Health Subcommittee Chairman Kevin Brady (R-Texas), and Oversight Subcommittee Chairman Charles Boustany (R-La.) along with Republican members of the committee sent a letter to HHS Sec. Sebelius expressing concerns about the readiness and ability of the government to protect sensitive taxpayer health and financial information that will be housed in the new Federal Data Services Hub, which is integral in running the state and federal exchanges scheduled to open this October.

Senate Minority Leader Mitch McConnell (R-Ky.) and Republican Whip John Cornyn (Texas) wrote letters to the commissioners of the NFL, MLB, NBA, NHL, PGA and the chairman and chief executive officer of NASCAR, stating “Given the divisiveness and persistent unpopularity of the health care law, it is difficult to understand why an organization like yours would risk damaging its inclusive and apolitical brand by lending its name to its promotion.”  On June 28, a spokesman for the NFL said the league has no plans to work with the White House on implementation of “Obamacare.”

On June 26, Secretary Sebelius participated in a press conference hosted by Democratic Leader Nancy Pelosi (Calif.) to celebrate, inspired by Independence Day, the health independence of American families.

In the Weekly Republican Address, Sen. Pat Roberts (Kan.) discussed the Affordable Care Act and said Americans are concerned about how such a “massive federal government takeover of health care” can work.  Sen. Roberts centered his address on the point “Health care as you know it will change.”

On June 27, a group of 28 Republican senators told HHS Secretary Sebelius to stop helping Enroll America until she answers questions about steps she has taken on behalf of this nonprofit.  Some Republican lawmakers believe Sec. Sebelius’s fundraising requests to health care companies for Enroll America were unethical.

IN THE STATES

On June 30, the  Pennsylvania state Senate approved Medicaid expansion legislation.  The legislation was then sent to the state House, where, as expected, on July 1 the House voted to remove the Medicaid expansion language that the Senate had inserted into the welfare code.  The Medicaid issue continues to hold up the passage of the welfare code, which authorizes funding for a wide array of health programs in the state.

On June 27, the Mississippi Legislature returned in special session to sort out the state’s plans for its Medicaid program, which was set to expire on June 30 at midnight due to the legislature’s failure to reauthorize the program (because of partisan disagreement on expanding Medicaid under the ACA).  The Mississippi House voted along party lines, rejecting a Democratic push to consider Medicaid expansion.  However, the House voted overwhelmingly to reauthorize the state’s traditional Medicaid program.  In addition, the House plan eliminates the requirement for the state’s Medicaid program to be renewed every few years.  The plan will now move to the state Senate.

Rhode Island Health Insurance Commissioner Christopher Koller approved 2014 premiums he said were "significantly lower" than those requested, however they still represent increases from previous years.

On June 28, the Massachusetts Legislature approved a measure requiring Gov. Deval Patrick to seek a waiver from the ACA’s rating rules, which prohibit insurance companies from using certain rating factors to calculate premiums, starting next year.

In Montana, Democrats failed by a single vote to bring a Medicaid expansion vote to the floor.  After the vote, one Democrat said he actually intended to vote to bring the measure to the floor but made a mistake.  Now, a coalition of labor, health and other advocacy groups is taking first steps to put a voter initiative on the 2014 ballot to expand Medicaid coverage in Montana.

Michigan Governor Rick Snyder is pressuring state Senate Republicans to hold a summer vote on Medicaid expansion.  The Majority Leader, Randy Richardville, said his caucus needs more time to study the proposal the House was able to develop and debate over several weeks.

IN THE COURTS

The 10th Circuit Court of Appeals in Denver reversed a lower-court ruling that rejected Hobby Lobby, which has 525 retail stores across the country employing more than 13,000 full-time workers, and its sister company Mardel’s request for temporary protection from the ACA regulation that requires employers to include contraception coverage as part of its employees’ health care coverage.  The 10th Circuit judges said the Oklahoma Court should have granted the companies an injunction in the face of serious financial penalties.

On June 28, Judge Beryl Howell of the U.S. District Court for the District of Columbia dismissed a case, in which Matthew Sissel argued that the ACA’s individual responsibility provision violated the Origination Clause of the Constitution and exceed Congress’s Commerce  Clause authority.

IN THIRD PARTIES

UnitedHealth Group Inc., which is the largest insurer in the country, announced that it will leave California's individual health insurance market before major ACA changes kick in, forcing close to 8,000 customers to find a new provider.

To view our compilation of recent health care reform implementation news, click here.

 

Health Care Reform Implementation Update - June 27, 2013

The countdown is on now. Less than 100 days until the Affordable Care Act’s (ACA) main provisions go into effect, and Organizing for Action and Enroll America kicked outreach efforts to the uninsured into high gear last week. Also in the past week, Sens. McCaskill and Coburn lobbied their peers for support of the Hospital Payment Fairness Act, which addresses the wage-index adjustments made by the ACA; the House Ways and Means Health Subcommittee held a hearing on the Medicare Trustees Report and the sustainability of the Medicare program; Sens. Donnelly and Collins proposed a bill that would change the full-time employee standards for purposes of the ACA; the Michigan Senate adjourned for the summer without voting on Medicaid expansion; and the Mississippi legislature was called in for a special session beginning June 27 to take up the Medicaid issue.

 ON THE HILL

One of the Affordable Care Act provisions, which its critics call the “Bay State boondoggle,” requires that urban hospitals get Medicare wage reimbursements at least as high as those going to rural hospitals in the state. The provision benefits nine states, with Massachusetts faring the best, and has caused other states to lose tens of millions of dollars each year since it has been in effect. Sens. Claire McCaskill (D-Mo.) and Tom Coburn (R-Okla.) are supporting legislation that would undo the effects of this ACA provision. The two have been sending letters to other senators in an effort to encourage them to support the Hospital Payment Fairness Act of 2013. Legislation to undo the provision has also been introduced by House Ways and Means Health Subcommittee Chair Kevin Brady, and Reps. Pat Tiberi (R-Ohio), Peter Roskam (R-Ill.), Vern Buchanan (R-Fla.), Aaron Schock (R-Ill.), Tom Reed (R-N.Y.), Mike Kelly (R-Pa.), Jim Renacci (R-Ohio) and Morgan Griffith (R-Va.). The House Republicans’ bill would amend title XVIII of the Social Security Act to apply budget neutrality on a State-specific basis in the calculation of the Medicare hospital wage index floor for non-rural areas. Some affected parties prefer solutions that are not offered by either piece of legislation.

On June 20, the House Ways and Means Health Subcommittee held a hearing on the 2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. In the hearing, Congressman Brady (R-Texas) expressed concern that those in their early 50s could not be guaranteed Medicare. Congressman McDermott (D-Wash.) pointed out that people have always expressed this concern over the course of his 25 years serving. Dr. Edward Blahous explained that the Medicare Trustees Report projected Medicare would have enough money until 2026, two years later than originally projected.

On June 19, Sens. Joe Donnelly (D-Ind.) and Susan Collins (R-Maine) proposed a bill that would change the ACA requirement that employers offer coverage to employees working more than 30 hours per week to 40 hours per week instead. The sponsors argue that a 40-hour/week threshold better matches our  definition of full-time employee.

 House Oversight Committee Chairman Darrell Issa (R-Calif.) subpoenaed documents on a federal attempt to boost consumer oriented and operated plans (CO-OPs), which are nonprofit health plans that compete with traditional health insurance. Rep. Issa is seeking details on how participants were reviewed and accepted for participation in the CO-OP program.

 On June 18, the House voted to impose a nationwide ban on abortions after 22 weeks of pregnancy over Democratic  opposition to a bill they view as representing a significant Republican attempt to restrict abortion rights. 

House Resolution 763 to repeal the annual fee on health insurance providers enacted by the Patient Protection and Affordable Care Act, which was originally introduced in February by Rep. Boustany (R-La.) and Rep. Jim Matheson (D-Utah) now has 222 cosponsors.

 AT THE AGENCIES

On June 26, the Department of Health and Human Services (HHS) issued a final rule explaining the eligibility requirements for individuals seeking an exemption from the individual shared responsibility provision of the ACA. Individuals may receive exemptions through a health insurance marketplace or the tax filing process depending on what type of exemption they seek.

On June 24, HHS launched a new version of Healthcare.gov in an effort to familiarize Americans with the process of signing up for health insurance in the online marketplaces. The website features a chat service, through which individuals are available to answer questions.

The Center for Medicare & Medicaid Services (CMS) Innovation Center hosted webinars last week on Round Two of the Health Care Innovation Awards. Slides from the webinars can be found by scrolling to the bottom of the page here.

On June 19, the Government Accountability Office (GAO) released reports examining CMS efforts to establish federally facilitated health insurance partnerships and federal and state efforts to establish SHOP exchanges. The reports cast doubt on the timely kickoff of health insurance marketplaces under the ACA. Notwithstanding the reports, on June 20, Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight at CMS, said that the health insurance marketplaces were on track to open at the scheduled time.

On June 20, HHS announced that 77.8 million consumers saved $3.4 billion up front on their premiums as insurance companies operated more efficiently. As part of the announcement, HHS also said that consumers across the country will save $500 million in rebates, with 8.5 million enrollees due to receive rebates. The savings are due to the Affordable Care Act’s Medical Loss Ratio rule, which requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. 

IN THE STATES

The Centers for Medicare and Medicaid Services approved Florida’s plan to move a majority of its Medicaid population into managed care.

 On June 17, the former administrator of CMS, Don Berwick, formally launched his campaign for Massachusetts governor.  Berwick previously served as acting administrator of the CMS but was never confirmed by the Senate.

On June 20, the Republican-led Michigan state Senate adjourned for the summer without voting on Medicaid expansion, which Michigan Gov. Rick Snyder had been pressing. According to the Michigan Free Press, Gov. Snyder will not try to legally force the Senate to return from summer vacation for a vote.

On June 20, mayoral candidate Anthony Weiner proposed making New York City a laboratory for a single-payer system if he is elected. As a Congressman, Weiner advocated for Medicare-for-all style health care.

The Mississippi Legislature will return in special session on June 27 to try to fund and re-authorize the Division of Medicaid before it expires on June 30 at midnight. Mississippi’s Medicaid program was not funded or reauthorized for the new fiscal year because of disagreement in the state House over voting on Medicaid expansion. Democrats wanted to vote on expansion, while Republicans wanted to reach a deal with Democrats on Medicaid reauthorization without voting on expansion before the vote.

IN THE WHITE HOUSE

Last week, the fundraising advocacy group that was born out of Obama’s election campaign, Organizing for Action, began rolling ads that highlight provisions of the Affordable care Act.  Enroll America, which is made up of a coalition of insurers, health providers  and activists, launched outreach efforts to raise awareness of the Affordable Care Act and encourage individuals to enroll. Enroll America plans to target the uninsured through door knocking, television and radio advertising, and partnerships with churches, civic groups, hospitals and celebrities.

IN THE COURTS

On June 17, the Supreme Court issued a long-awaited ruling, coming out 5-3 with its decision that “pay for delay” arrangements, where drug companies pay competitors to temporarily keep their products off the market, are not shielded from antitrust attack but also are not presumptively unlawful.

IN THIRD PARTIES

Robert Wah, a DC-area reproductive endocrinologist and ob-gyn was nominated by The American Medical Association as the president-elect.

On June 19, Avalere health released an analysis of new premiums under the ACA, which shows premiums in nine states coming in below the Congressional Budget Office’s estimates.

The association that represents U.S. safety-net hospitals, previously the National Association of Public Hospitals and Health Systems, announced on June 20, that it was changing its name to America’s Essential Hospitals.

A poll released on June 19 by the Kaiser Family Foundation shows that only about one in 10 uninsured people have heard "some" or "a lot" about ACA exchanges.  Half of those surveyed said they have heard nothing at all about them.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - June 18, 2013

Last week the House Committee on Ways & Means Health Subcommittee held a hearing on Medicare overhaul proposals affecting post-acute care; the Congressional Budget Office (CBO) wrote to House Budget Committee Chairman Paul Ryan announcing that it will not update its 10-year budget baseline in August, which extends the low cost estimate of the Medicare Sustainable Growth Rate from February; the Medicare Payment Advisory Commission (MedPAC) released its annual Report to the Congress on Medicare and the Health Care Delivery System; proposed rules from the Centers for Medicare & Medicaid Services on exchange, SHOP, premium stabilization programs and market standards were filed; the Arizona legislature passed Medicaid expansion; and the Obama administration decided to stop its attempts to block over-the-counter access to the morning-after contraceptive pill.

ON THE HILL

On June 13, Sen. Ron Wyden (D-Ore.), who could take over the Senate Finance Committee in 2015, announced  that he is planning to tackle Medicare reform by focusing on chronic disease. He suggested that ACOs should be encouraged to specialize in particular chronic conditions.

On June 14, the House Committee on Ways & Means Subcommittee on Health held a hearing focused on reforming payment for care delivered after a hospitalization in the Medicare program.

On June 12, Sens. Marco Rubio (R-Fla.) and Orrin Hatch (R-Utah) offered several immigration amendments, one of which would limit immigrants’ access to health subsidies under the Affordable Care Act. Immigrants who came to the United States illegally and go through the legalization process would be prevented from getting these subsidies for five years after they receive green card status.

The Federal Bureau of Investigation (FBI) is beginning to pay attention to congressional staffers in its pursuit of tracking down the connection between the Medicare Advantage rate announcement and Wall Street's early knowledge of it.

AT THE AGENCIES

On June 13, the Congressional Budget Office wrote to Chairman of the Committee on the Budget Paul Ryan saying that it will not update its 10-year budget baseline in August. This is a positive development for providers because it means the lower price of replacing the Medicare SGR unveiled in February will run through November.

The Centers for Medicare and Medicaid Services (CMS) will be publishing a proposed rule on Exchange, Shop, Premium Stabilization Programs, and Market Standards on June 19.  The proposed rule provides financial integrity and oversight standards with respect to Affordable Insurance Exchanges; Qualified Health Plan issuers in federally facilitated exchanges; and states with regard to the operation of risk adjustment and reinsurance programs. It also proposes additional standards with respect to agents and brokers.

Surgeon General Regina Benjamin announced that she plans to leave the position she has held since 2009. The Deputy Surgeon General, Boris Lushniak, will be the acting surgeon general while a replacement is sought.

On June 10, the IRS issued final regulations to implement the ACA's tax on indoor tanning beds. The Affordable Care Act includes a 10 percent tax on the use of tanning beds.

According to data released by CMS, since March 2011, CMS has expelled 14,633 providers from participating in Medicare due to fraud control efforts. The ACA established new screening and review requirements for Medicare participation.

A new report by the Department of Health and Human Services’ Office of Inspector General shows that if the U.S. Medicare program had paid the lowest rates negotiated by private insurers for lab tests instead of Medicare rates, $1 billion would have been saved in 2011.

On June 13, the Medicare Payment Advisory Commission issued its Report to Congress: Medicare and the Health Care Delivery System is available here.

IN THE STATES

On June 13, the Arizona legislature approved Medicaid expansion legislationOn June 17, Gov. Jan Brewer signed the legislation into law.

Democrats in the Pennsylvania legislature are doing everything they can to force a vote on Medicaid expansion. On June 10, Democrats tried to offer a Medicaid amendment to the state budget to this effect, however the House declined to allow a vote on the proposal. Meanwhile, Governor Corbett continues to negotiate with the Obama administration. On June 12, a coalition of 120 groups brought a delegation of medically vulnerable uninsured Pennsylvanians to Harrisburg to tell their personal stories and urge the legislature and Governor Corbett to expand the state’s Medicaid program.

On June 10, Colorado, which is one of only 16 states setting up its own health insurance marketplace, named 58 organizations to make up the state’s “assistance network” for health marketplace enrollment.

The Ohio Department of Insurance announced that it predicts health insurance premiums in 2014 to rise by 88 percent. The department estimated that the average individual premium will increase from $223 per month to $420 per month under the ACA. A study from Milliman last week suggested a similar outlook, arguing that individual premiums will increase between 25 and 40 percent under the ACA. The announcement was made shortly before President Obama announced the lower-than-expected premium rates in California.

On June 7, Alabama Gov. Robert Bentley signed an executive order to create a commission to review the Medicaid pharmacy program and make recommendations on how to contain the costs in the $600 million program. The commission is to report back to Gov. Bentley by December 1. The governor remains opposed to Medicaid expansion in his state.

Mississippi’s current Medicaid program is set to expire on July 1. Partisan disagreement over Medicaid expansion is keeping the state from moving forward on any Medicaid legislation, putting Mississippi’s current Medicaid population at risk. Democrats in the state want a vote on expansion. Republicans, on the other hand, want to reach a deal with Democrats on Medicaid reauthorization without voting on extension before the vote.

According to Gov. Neil Abercrombie’s office, HHS and CMS have approved Hawaii’s health insurance marketplace plans.  Hawaii’s online marketplace is called the Hawaii Health Connector.

On June 12, the Maine House passed a Medicaid expansion plan that would allow the state to expand Medicaid for three years, while the federal government covers the full cost.  At that point, legislators would have to vote to renew it.  Gov. Paul LePage has said he will veto this legislation.  The plan passed the House 97-51 – had there been two more votes in its favor, it would have had enough support to override the governor’s veto.

Oregon Gov. John Kitzhaber signed legislation designed to address regulatory issues related to biological medicine interchangeability.  While the U.S. Food and Drug Administration (FDA) oversees approval of biologic medicines, policies governing whether one product may be substituted in place of a doctor’s prescription and whether a pharmacist must notify a consumer are covered by state law.

California Insurance Commissioner Dave Jones is seeking to prohibit Anthem Blue Cross from operating on the state’s health exchange for small businesses because of its excessive, repeated rate hikes.

IN THE WHITE HOUSE

On June 7, President Obama made a speech in California touting the benefits of the ACA and encouraging the uninsured to enroll.  California is a crucial state for enrollment with its nearly six million uninsured individuals.  It is also the largest insurance marketplace in the United States.

IN THE COURTS

On June 11, the Obama administration decided to stop its attempts to block over-the-counter access to the morning-after contraceptive pill.  The Justice Department will now begin putting into effect a judge’s order to have the FDA certify the drug for nonprescription use, rather than appealing the judge’s ruling.

IN THIRD PARTIES

Enrollment in Medicare Advantage plans increased by close to 10 percent in 2013 compared with 2012, according to a Kaiser Family Foundation/Mathematica Policy Research study released June 10.

 

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - June 12, 2013

Discussions around reforming Medicare’s sustainable growth rate (SGR) continued this week as the Committee on Energy & Commerce held a hearing to solicit input on a draft bill for replacing the current SGR formula; the Ways and Means Committee noticed a hearing on post-acute care reform for Friday 6/15; the House of Representatives approved track and trace legislation; Dr. Gilfillan’s departure from the Centers for Medicare & Medicaid Innovation (CMMI) became public; CMS released average estimated submitted charges for 30 hospital outpatient procedures; Michigan Gov. Snyder pushed state legislators to approve Medicaid expansion in the state and the Maine state House voted for expansion.

ON THE HILL

On June 5, the House Energy & Commerce Committee held a hearing to solicit input on a draft bill for replacing the current Sustainable Growth Rate (SGR) formula. The draft bill suggests pay stability until quality measures are developed for an outcomes-based pay system.

On June 3, the House of Representatives approved a track and trace bill, which legislates how the federal government will track prescription drugs moving through the distribution chain, aiming to prevent counterfeit drugs from reaching consumers.

Republicans in the House are planning to try to pass a revamped bill on the ACA’s high-risk pool later this month. House Majority Leader Eric Cantor (R-Va.) sent a memo to his Republican colleagues saying that the House would try to pass a bill in June that would kill the Prevention and Public Health Fund. The Helping Sick Americans Now Act has been reworked from earlier this spring so that it will repeal the Prevention and Public Health fund without boosting funding for the Pre-existing Conditions Insurance Plan, and it will transfer funding only to state-based pools.

Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) say that despite a recent federal ruling affirming that Medicare data should be available to the public and federal efforts to make some data publicly available, much more still needs to be done to make Medicare claims data fully transparent. The two plan to reintroduce the Medicare Data Access for Transparency and Accountability Act (Medicare DATA Act), which would require the Secretary of HHS to issue regulations to make available a searchable Medicare payment database that the public can access at no cost.

On June 5, House Democrats met with the White House’s communications adviser for health care, Tara McGuinness, about enrollment in the law's marketplaces.

On June 5, Rep. Raul Labrador (R-Idaho), who is a member of the "Gang of Eight" working on immigration reform, informed his colleagues that he would not be able to sign on to the legislation the group plans to introduce soon. He will be leaving the group because he is concerned that the bill will not protect taxpayers from having to cover the costs of undocumented immigrants’ health care.

On June 4, Sen. Marco Rubio proposed The Right to Refuse Amendment, a constitutional amendment that would undo the individual mandate requirement of the Affordable Care Act. The proposed amendment would declare that "Congress shall make no law that imposes a tax on a failure to purchase goods or services." It is not expected that this symbolic proposal will get much traction.

AT THE AGENCIES

On June 3, it became public news that Dr. Richard Gilfillan, who has led the Center for Medicare and Medicaid Innovation since its creation in 2010, will leave his position as director at the end of June. Patrick Conway, who is CMS’ CMO and director of the Center for Clinical Standards and Quality, will serve as acting director of CMMI in addition to his other roles.

On June 3, CMS released average estimated submitted charges for 30 hospital outpatient procedures, revealing big differences among hospitals in how much they bill patients for the same service. This data follows CMS’ recent disclosure of pricing for 100 common hospital inpatient procedures.

On June 4, at a hearing before the House Education and the Workforce Committee, Health and Human Services (HHS) Secretary Sebelius said that she spoke with companies her department is responsible for regulating about supporting, but not funding, enrollment organizations linked to the Affordable Care Act.

Two IRS officials – Fred Schindler and Donald Toda – responsible for implementing the Affordable Care Act have been placed on administrative leave due to their acceptance of free food and gifts.

Several publications flagged the discovery this week that Secretary Sebelius, as well as other officials at the Department of Health and Human Services and the Department of Labor, use secret email addresses not usually disclosed to the public. The Associated Press published one of Sec. Sebelius’ email addresses despite a request from her aides not to make it public.

Two HHS agencies – the Office of the National Coordinator for Health Information Technology and the Office of the Assistant Secretary for Planning and Evaluation – announced they are partnering together to develop a data-sharing plan for outcomes research. The Affordable Care Act made close to $200 million available for building this infrastructure.

IN THE WHITE HOUSE

On June 3, the Obama administration unveiled new initiatives aimed at reducing the stigma of mental illnesses. President Obama discussed bringing mental illness "out of the shadows" at a White House conference on psychological health included in a wider campaign to reduce gun violence. Also during the conference, Secretary Sebelius said that HHS officials want to finish clarifying the parity act, which would cover mental health services on a par with physical health care, by the end of the year.

IN THE STATES

Gov. Rick Snyder is prodding Michigan state lawmakers to approve Medicaid expansion in the state before the legislature’s recess begins on June 27. Snyder invited Sec. Sebelius to meet with Republican lawmakers to consider a House GOP proposal that would put a four-year lifetime cap on able-bodied adults to be on Medicaid.

On June 4, the D.C. Council voted unanimously for temporary legislation that mandates small-business owners to purchase employee health insurance through a government-run exchange. This mandate will not take effect until 2015. The temporary legislation, however, will expire in October 2014, so we expect the debate over a small-business owner mandate to reemerge then.

Pennsylvania Governor Tom Corbett wrote to Sec. Sebelius requesting an exemption to prevent close to 70,000 Pennsylvania children in the Children's Health Insurance Program (CHIP), a state-subsidized health insurance program, from having to switch to Medicaid. Community Legal Services of Philadelphia, a public interest law center, is disputing Corbett's claims.

On June 4, the Maine House approved a bill to expand the state’s Medicaid program. The amended version says the state can opt out of the Medicaid expansion if the federal government fails to live up to its promises to cover most of the cost of the added Medicaid spending.

This week, five health insurance firms announced they plan to sell insurance in Arkansas’ health insurance marketplace – Arkansas Blue Cross Blue Shield of Little Rock, National Blue Cross Blue Shield Multi-state Plan, QCA Health Plan of Little Rock (does business as QualChoice of Arkansas), Celtic Insurance Co. of Chicago (through its subsidiary NovaSys Health), and United Security Life & Health Insurance of Bedford, Ill.

IN THE COURTS

At least three circuit courts of appeal have heard oral arguments on the ACA’s contraceptive coverage requirement in the past few weeks. The cases arose when businesses challenged the requirement that they provide contraceptives to employees in their health plans. We expect that any party that loses one of these cases will appeal the ruling to the Supreme Court. The Supreme Court is more likely to consider the issue if there are split decisions in the circuit courts. Another, and possibly riskier threat to the ACA, is the set of cases that argue the Internal Revenue Service is unlawfully implementing some subsidies to help individuals buy insurance since the law as written only authorizes the agency to provide subsidies to those in exchanges “established by the state.”

IN THIRD PARTIES

Because 14 states have decided not to expand Medicaid, a study in Health Affairs, which ultimately argues that states should expand their Medicaid program, estimates that 3.6 million fewer people will get insurance, with a total of 27.9 million people uninsured, and federal payments to the state could decrease by $8.4 billion.

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - June 4, 2013

Medicare Trustees released their annual report finding that the Medicare trust fund will be exhausted in 2026, two years later than was predicted last year; over the past two weeks, as Washington has investigated the Internal Revenue Service’s (IRS) use of targeting, lawmakers have been working to ensure similar targeting cannot occur at the agencies implementing the Affordable Care Act (ACA); with bipartisan support Marilyn Tavenner became the first confirmed Centers for Medicare and Medicaid Services (CMS) Administrator in almost seven years; the House of Representatives voted to repeal the ACA for the 37th time; 17 of the 27 states running their own Preexisting Condition Insurance Plans (PCIPs) decided to let the federal government take control and responsibility; and the Center for Medicare & Medicaid Innovation (CMMI) is starting to accept letters of intent from parties interested in its second round of innovation grants.

ON THE HILL

After a Treasury Department audit found that the IRS had singled out conservative groups for special scrutiny, some lawmakers have been tying the targeting to Affordable Care Act implementation. The House GOP campaign committee launched ads in some districts where Democrats are vulnerable in midterm elections claiming Democrats are planning to “Put the IRS in charge of your healthcare.” The IRS is, in fact, responsible for implementing major pieces of health reform – at least 40 provisions in the ACA add or amend provisions of the tax code. The IRS’s tasks include collecting information on who has insurance from employers and insurers, determining who qualifies for subsidies or Medicaid, and figuring out who must pay a penalty. Notwithstanding the large role the IRS will play in implementing the ACA, the Department of Health and Human Services (HHS) responded to these suggestions saying that “The Affordable Care Act maintains strict privacy controls to safeguard personal information. The IRS will not have access to personal health information.”

Sen. John Thune (R-S.D.) sent a letter to Attorney General Eric Holder and Treasury Secretary Jack Lew requesting they disclose whether Sarah Hall Ingram, the former commissioner of the office responsible for tax-exempt organizations between 2009 and 2013 had “inexplicably been promoted to oversee the IRS’ Affordable Care Act office.” Thune goes on to request that the IRS stop enforcing regulations drafted under Ingram’s supervision and that the IRS cease working on health care law regulations until the Department of Justice confirms that Ingram is not being investigated.

House Ways and Means Oversight Subcommittee Chairman Charles Boustany (R-La.), Rep. Diane Black (R-Tenn.), Rep. Ralph Hall (R-Texas) and Rep. Mike Kelly (R-Pa.) introduced the Stopping Government Abuse of Taxpayer Information Act “to protect Americans from political targeting at all government agencies charged with the implementation and enforcement of the Patient Protection and Affordable Care Act.”

On May 14, the Congressional Budget Office (CBO) released the news that the cost of repealing the sustainable growth rate (SGR) would not be as high as once expected, indicating to many that the momentum behind achieving repeal is likely to continue this year. The Medicare Payment Advisory Committee’s (MedPAC’s) Executive Director said to the Senate Finance Committee that CBO’s reduced cost estimate of repealing the SGR may alter recommendations it has previously made to Congress for transitioning the Medicare payment system. At the time MedPAC made its initial recommendations the estimated cost was $300 billion over 100 years, but the CBO has revised this estimate to $138 billion over 10 years.

The House Ways and Means Subcommittee on Health held a hearing on May 21, in which there was discussion of three ways to utilize beneficiary cost sharing in Medicare in anticipation of a deficit reduction package. The three areas identified as targets for cost sharing were increasing income related premiums for Medicare Parts B and D, increasing the annual Medicare Part B deductible, and establishing a home health copay.

The House of Representatives voted 229 to 195, largely along partisan lines, to repeal the Affordable Care Act for the 37th time. The vote gave some freshmen congressmen their first opportunity to vote for repeal, which will give them the ability to campaign on these grounds as midterm elections near.

Ways and Means Health Subcommittee Chair Kevin Brady (R-Texas) and Ways and Means Oversight Subcommittee Chair Charles Boustany (R-La.) wrote a letter to HHS Sec. Sebelius expressing concern over the potential for privacy violations by health insurance exchange navigators and non-navigator assisters. In the letter, they request further detail on what information these entities will be able to access.

At a House Oversight hearing on May 21, Center for Consumer Information and Insurance Oversight (CCIIO) Director Gary Cohen said he was confident that HHS has authority, despite lack of explicit statutory instructions, to set up navigator and assister programs to help with enrollment in state-based exchanges.

AT THE AGENCIES

On May 31, the Medicare Trustees released their 2013 report, projecting that the trust fund that finances Medicare’s hospital insurance coverage will remain solvent until 2026, which is two years beyond what was projected in last year’s report. The improved outlook can be attributed to lower-than-expected Part A spending in 2012 and lower projected Medicare Advantage program costs. At this juncture it does not appear that action will be triggered from the Independent Payment Advisory Board (IPAB). This report is likely to influence upcoming congressional debates over the debt ceiling, proposals to reduce the deficit and the future of entitlement programs.

On May 31, CMS released a final rule on Small Business Health Options Program (SHOP) exchanges along with an application that provides small employers with easy-to-understand access to health insurance options for their employees.

HHS announced a second round of Center for Medicare & Medicaid Innovation (CMMI) innovation awards, through which up to $1 billion are now available for payment and delivery system models that improve care and lower costs. Specifically, CMMI is seeking proposals in the following categories: Models that are designed to rapidly reduce Medicare, Medicaid and/or CHIP costs in outpatient and/or post-acute settings; models that improve care for populations with specialized needs; and models that improve the health of specific populations through activities focused on engaging beneficiaries, such as prevention, wellness, and comprehensive care that extend beyond the clinical service delivery setting.

On May 15, the Senate approved President Obama’s nominee to run CMS, Marilyn Tavenner. Tavenner is the first confirmed CMS administrator since 2006.

On May 29, implementing a component of the ACA, HHS finalized rules for wellness programs offered through employer health care plans. The final rule closely mirrored the proposed rule. Under the rules, employer health plans may offer rewards to workers who satisfy certain fitness goals. The rule increases the maximum possible reward for successful completion of a health-contingent wellness program from 20 percent to 30 percent of an employee’s premiums.

The Office of Management and Budget (OMB) has begun reviewing final rules on Medicaid, Exchanges, and Children’s Health Insurance Programs; Conditions of Participation for Community Mental Health Centers; Exchange Functions: Eligibility for Exemptions and Miscellaneous Minimum Essential Coverage Provisions; Inpatient Psychiatric Facility Prospective System; and Home Health Prospective Payment System Rate.

The Medicare Fraud Strike Force has found $223 million of alleged Medicare fraud, charging 89 individuals in eight cities , according to the Department of Health and Human Services.

IN THE STATES

The ACA established the Preexisting Condition Insurance Plan (PCIP) to provide health insurance coverage for Americans whose preexisting conditions made them uninsurable in the private market until 2014, when insurance that does not underwrite based on health status will become available. In February of 2013, due to the quick consumption of the program budget, HHS increased cost sharing under the program and suspended new enrollments in the federal program. Last week, HHS informed states that they would have to renegotiate their PCIP contracts and accept limited funding to continue their programs. Concerned that they would get stuck with the tab if they operated these plans themselves, 17 states opted to discontinue their programs and turn their enrollees over to the federal program, while 10 will continue to administer the PCIP in their states.

Two states that had planned to run their own state health exchanges have appealed to the federal government for help. The health insurance board chairmen in Idaho and New Mexico said they could not prepare the computer systems by October 1, 2013 and would need help from the federal government. Thirty-six states’ exchanges will now be run in full or in part by the federal government. New Mexico will run its exchange in partnership with the federal government. Though Idaho will receive assistance from the federal government, Idaho Gov. Butch Otter said it will still be a “state-run exchange.”

Pennsylvania Governor Tom Corbett pushed back last week against the Pennsylvania’s Independent Fiscal Office’s (IFO) report, which claimed Medicaid expansion would provide the state as much as $515 million in savings, revenue or underestimated costs to the state. Bev Mackereth, the Acting Secretary of the Department of Public Welfare, sent a letter to the Independent Fiscal Office explaining that the Department had “serious concerns” about some of the assumptions contained in the IFO report. One of Gov. Corbett’s top aides said that if Pennsylvania is to expand Medicaid, it likely will not happen until January 2015. Mackereth said that the administration would need that much time to negotiate with the federal government and create the program.

Four insurers – Aetna, CareFirst Blue Cross Blueshield, Kaiser Permanente and United Healthcare – are planning to offer almost 300 different health insurance policies through the D.C. Health Benefit Exchange.

On May 23, Maine’s Democratic-controlled legislature passed a bill to expand the state’s Medicaid program. Maine Governor Paul LePage (R) immediately began veto procedures.

IN THE COURTS

On May 16, Liberty University argued before the 4th U.S. Circuit Court of Appeals panel that it would face millions of dollars in penalties if it were to refuse to provide employee health insurance. Providing the required insurance, however, would violate the university’s religious beliefs because it is required to cover contraceptives and other drugs the university argues cause abortions.

 

 

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - May 15, 2013

Last week the Senate agreed to vote on Marilyn Tavenner’s nomination to lead the Centers for Medicare and Medicaid Services (CMS); the Department of Health and Human Services (HHS) announced an initiative that will give consumers information on what hospitals charge and posted an initial set of data on CMS’ website; two major Medicare authorizing committees launched significant sustainable growth rate (SGR) reform initiatives; HHS opened the door to a bifurcated exchange approach by allowing Utah to operate its small business exchange itself with the federal government operating the individual exchange; Kentucky Gov. Steve Beshear and West Virginia Gov. Earl Ray Tomblin announced that their states would expand Medicaid; and the Florida legislature closed its session without passing a bill to expand Medicaid.

ON THE HILL

On May 10, the bipartisan leadership of the Senate Finance Committee announced a hearing on May 14 to address ways to reform the SGR, including witness testimony from the Medicare Payment Advisory Commission’s (MedPAC’s) Executive Director Mark Miller, health care consultant and former Government Accountability Office (GAO) analyst Bruce Steinwald, and the Brookings Institution’s Kavita Patel.  It also solicited feedback in an open letter to stakeholders, which asks for specific solutions to improving the Medicare Physician Fee Schedule.  Submissions are due by May 31 to the dedicated mailbox at sgrcomments@finance.senate.gov.

After repeated rejections from Congress for additional funds to set up the Affordable Care Act (ACA), HHS Secretary Sebelius has been reaching out over the past few months to ask health industry executives, community organizations and church groups to make donations to groups like Enroll America that are working to enroll those without insurance and increase awareness of the law.  On May 11, the ranking Republican on the Senate Committee on Health, Education, Labor and Pensions, Sen. Alexander (R-Tenn.), said that Sec. Sebelius’s “fundraising and coordinating with private entities to implement the new health care law may be illegal.”

On May 8, the House Ways and Means Subcommittee on Health discussed ideas for reforming Medicare’s SGR with a group of influential medical practitioners and experts.  Subcommittee Chairman Kevin Brady (R-Texas) said the system "fails to take into account the quality of the care provided or how efficiently that care was furnished."  The committee’s ranking member, Rep. Jim McDermott (D-Wash.) said "we need a policy that rewards quality, not just quantity.  We need a policy that incentivizes team-based, coordinated care, with a strong primary care component."

On May 7, Sen. Tom Harkin (D-Iowa) said he would allow Marilyn Tavenner’s nomination to head CMS to go forward.  He had previously put a hold on Marilyn Tavenner’s nomination because he was upset about cuts the administration had made to the ACA’s prevention and public health fund.  The Senate agreed to vote on Tavenner after an hour of debate, although a specific date for the vote has not been set.

Health care also has taken a place in the immigration debate in which Senators have been engaged.  Part of the debate focuses on the economic impact of allowing undocumented illegal immigrants to become legal immigrants – many lawmakers have expressed concern over the cost of providing Medicare, Medicaid or subsidies for the new health marketplaces to a large group of newly legalized immigrants.  Sen. Orrin Hatch (R-Utah) filed an amendment that would bar the group from receiving ACA subsidies for five years after becoming legal.  Sen. Jeff Flake (R-Ariz.) filed an amendment that would require HHS to ensure those with registered provisional immigration status are not receiving means-tested public benefits and would revoke the registered provisional immigrant status of anyone in that status convicted of fraudulently claiming or receiving federal means-tested benefits.  Other lawmakers are concerned that if this group is denied these subsidies, some of them may get health care in emergency rooms, which could be more costly. 

In response to instances of counterfeit drugs and stolen – and then spoiled – drugs being sold in pharmacies, Congress is working on “track and trace” legislation to help ensure the authenticity and safety of prescription drugs.  Committees in the House and Senate have released draft versions of bills that would require manufacturers to place bar codes on packages of drugs they ship.  The bar codes would be scanned by wholesalers and other middlemen on their way to the pharmacy, at which point the pharmacy would track the drug by its barcode to ensure its authenticity and safety.

On May 7, Rep. Bill Cassidy (R-La.) filed legislation to attempt to create more financial and efficiency accountability for Medicaid funding.  The first version of Rep. Cassidy’s Medical Accountability and Care Act died in Congress last year.

House Majority Leader Eric Cantor (R-Va.) said that the House will vote again to repeal the Affordable Care Act.  The House has already voted more than 30 times to repeal the law, but freshmen congressmen have not yet had an opportunity to vote on the issue.

Conservative House Republicans are exploring options for delaying the Affordable Care Act as part of the debt ceiling fight.  Members of the Republican Study Committee met with the Congressional Budget Office (CBO) to inquire how much savings could be generated from delaying exchange and Medicaid expansion.

IN THE WHITE HOUSE

On May 10 in a Mother's Day-themed event at the White House, President Obama targeted women and young people to promote the benefits of the Affordable Care Act for women – free cancer screenings and contraceptives, among the major perks.  President Obama urged mothers to encourage their adult children to sign up for the health insurance exchanges that open this fall.

On May 9, the Obama administration pledged $150 million for community health centers to provide in-person enrollment assistance to uninsured patients.

AT THE AGENCIES

On May 8, as part of the agency’s efforts to make health care more affordable and accountable, HHS Secretary Sebelius announced a three-part initiative that will, for the first time, give consumers information on what hospitals charge.  New data was released and posted on the CMS website for the 100 most common Medicare inpatient stays, that shows significant variation across the country and within communities in what hospitals charge for common inpatient services.

HHS also announced that it has made about $87 million available to states to enhance their rate review programs and further health care pricing transparency.  The Robert Wood Johnson Foundation, a nonprofit focused on public health issues, is planning a data visualization challenge that would further the dissemination of the data to a larger audience.

IN THE STATES

Notwithstanding the Missouri Governor’s support of Medicaid expansion, the Missouri legislature did not include expansion measures in its 2014 budget.  Neither the state House or Senate included expansion in their blueprints.  They have opted instead to create committees to study the issue for the remainder of the year and report on the impact of expansion in early 2014, which delays any decision on the matter to after the January 1 start date.

On May 9, the Idaho health insurance exchange board met.  The board is working to determine how it can set up a state exchange even with very little done so far.  It has been discussing possibly partnering with the federal government in some ways, while still remaining a “state-based exchange and remaining in control.”

On May 9, Kentucky Governor Steve Beshear announced that his state will expand the Medicaid program to adults earning up to 133 percent of the federal poverty level, covering an additional 300,000 people. 

On May 9, West Virginia Governor Earl Ray Tomblin announced that West Virginia would expand its Medicaid program, making him the 26th governor to back the expansion.  Governor Tomblin’s office expects the expansion to cover more than 91,000 people in the state.

After months of discussions with state leaders in Utah, HHS agreed on May 10 to let the state run its own small business health exchange but for the federal government to run the individual exchange, as the state requested, potentially opening the door to a bifurcated exchange approach for other states as well.

California has delayed its plan to launch a program to test new ways to coordinate care for dual eligbiles.

IN THE COURTS

On May 7, Dr. Steven Hotze of Houston sued the United States over the Affordable Care Act.  Dr. Hotze argues that the law violates the U.S. Constitution’s origination and takings clause, which were not part of the arguments before the Supreme Court in June.  He also argues that the ACA violates the constitutional requirement that revenue bills originate in the House.

IN THIRD PARTIES

The Urban Institute is out with a new proposal to curb deficit spending.  The report says that capping the tax exclusion for employer-sponsored health coverage could save hundreds of millions of dollars annually.  The proposal is controversial, with some arguing that this would change the health insurance market.

An article from May’s issue of Health Affairs by David Cutler and Nikhil Sahni argued that if the slowed rate of health care spending growth persists, public-sector health spending will be as much as $770 billion less than predicted.

---------

To view our compilation of recent health care reform implementation news, click here.

 

Health Care Reform Implementation Update - May 6, 2013

Last week the Centers for Medicare & Medicaid Services (CMS) issued new proposed regulations on FY 2014 payment updates and regulatory policy changes for inpatient and long term care hospitals, skilled nursing facilitates, hospices and inpatient rehabilitation facilities; the Internal Revenue Service (IRS) released a proposed rule on the minimum value of coverage employers must provide to their employees; the Center for Consumer Information and Insurance Oversight (CCIIO) issued guidance explaining the role agents and brokers will play in health insurance marketplaces; Hill leadership, while technically out of session, was busy debating how federal employees will interact personally with insurance marketplaces; and the Department of Health and Human Services (HHS) shortened the application for health coverage in response to concerns that initial enrollment forms were too long.

 

ON THE HILL

A provision of the Affordable Care Act (ACA) requires lawmakers and their staff to participate in the health-insurance marketplaces. At the end of last week, questions were raised about whether, under the ACA, congressional employees will be able to continue having their health insurance premiums subsidized by the government, or whether they will have to pay 100 percent of their premiums in 2014. Congressional leaders are discussing possible exemptions for Capitol Hill staffers but are sensitive to the potential for political backlash from a decision to exempt them.

On May 1, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Senate Finance Committee Ranking Member Orrin Hatch (R-Utah) released Making Medicaid Work, a blueprint to modernize the Medicaid program. 

 

IN THE WHITE HOUSE

Speaking at a news conference at the White House on April 30, President Obama said the Affordable Care Act is already benefitting most Americans, even if they do not know it. Major provisions of the Affordable Care Act, however, do not take effect until 2014.

 

AT THE AGENCIES

CMS announced that the application for health coverage has been simplified and significantly shortened. The application for individuals without health insurance has been reduced from 21 to three pages, and the application for families was reduced by two-thirds. Also, CMS announced that for the first time consumers will be able to fill out one simple application to see their entire range of health insurance options, including plans in the Health Insurance Marketplace, Medicaid, the Children’s Health Insurance Program (CHIP) and tax credits that will help pay for premiums.

This week, CMS, as is usual, issued proposed rules for FY 2014 for inpatient and long term care hospitals, skilled nursing facilitates, hospices and in-patient rehabilitation facilities.  In general, the rules propose modest positive updates and appear to be in line with initial expectations, notwithstanding some novel policy proposals. As always, the rules are proposed and will not be finalized until later this summer. Cozen O’Connor Public Strategies has evaluated the inpatient and long term care hospital rule, and a summary is available here. We will be writing similar summaries of the other rules in the days ahead. Please be advised that there is ample opportunity to comment on these proposals before they go into effect on October 1.

On April 30, the IRS released a proposed rule on the health insurance premium tax credit enacted by the Affordable Care Act. Under the Affordable Care Act, some employees will be eligible for premium tax credits if the coverage provided by the employer does not provide “minimum value.” The rule spells out how to determine the value of coverage an employer must provide in order not to trigger the employer mandate penalty by proposing inputs that will be used to determine whether minimum value has been met.

The Center for Consumer Information and Insurance Oversight (CCIIO) issued a document explaining the role agents and brokers will play in the health insurance marketplaces. The guidance suggests that agents and brokers, including web brokers, will be a major source of marketplace assistance for individual consumers using the marketplaces.

On April 30, the Food and Drug Administration (FDA) eased requirements for purchase of Plan B emergency contraception. Those who are 15 years and older will not need a prescription to get this emergency contraception, which lowers the current age restriction by two years. 

 

IN THE STATES

House Bill 818 passed through the Pennsylvania House by a vote of 144-53.  The bill is designed to prevent health plans on Pennsylvania’s insurance exchange, when the law kicks in, from including abortion services. The bill reads, “No qualified health plan offered in this Commonwealth through the health insurance exchange shall include coverage for the performance of any abortion.” The Pennsylvania Senate will consider the bill soon.

On April 24, a Louisiana house health panel voted along party lines to defeat a measure that would expand the state’s Medicaid program. A parallel discussion took place in the state Senate Health and Welfare Committee. The senators moved to delay a vote on the bill because they would like to have a representative from the Department of Health and Hospitals answer questions first.

Legislation that would let optometrists, pharmacists and nurse practitioners perform medical tasks currently reserved for doctors passed through the California Senate Business, Professions and Economic Development Committee on April 29.

The dominant insurer in Maryland, CareFirst BlueCross BlueShield, says proposed premiums for new policies for individuals are going to rise by 25 percent on average next year.

 

IN THE COURTS

On May 2, a group of small business owners and self-employed individuals from six states filed a lawsuit against the federal government arguing that the IRS did not have the authority to impose an employer coverage requirement or the associated penalties in those states with a federally facilitated exchange. The lawsuit was filed in D.C. District Court.

 

IN THIRD PARTIES

A new study from the Brookings Institution, Bending the Curve, outlines reforms designed to reduce health care spending by improving care and promoting value-based payments.

Forty-two percent of those surveyed in a new Kaiser Family Foundation poll did not know that the Affordable Care Act continues to be the law. Some responded that it had been repealed by Congress; others said it was overturned by the Supreme Court.

A new study from The New England Journal of Medicine, The Oregon Experiment – Effects of Medicaid on Clinical Outcomes, received a lot of press attention this week. The study compares thousands of low-income people in Oregon receiving Medicaid with an identical population that did not. The study shows that those with Medicaid coverage spent more on health care, but were not, however, healthier. A 2008 Medicaid expansion in Oregon based on lottery drawings from a waiting list provided a unique opportunity for this randomized-controlled trial.

 

---------

To view our compilation of recent health care reform implementation news, click here.

Health Care Reform Implementation Update - April 26, 2013

Marilyn Tavenner received bipartisan support from members of the Senate Committee on Finance in her confirmation hearing to lead the Centers for Medicare and Medicaid Services (CMS) though a full Senate vote is being held up, the president released his FY 2014 budget proposal with health care reform and specified reimbursement reductions to providers and manufacturers totaling $400 billion over 10 years sprinkled throughout it, and Department of Health and Human Services (HHS) Secretary Sebelius received a warm welcome from the Senate Committee on Health, Education, Labor & Pensions but faced tough questions from members of the House Committee on Ways and Means and Senate Finance Committee Chair Max Baucus, who announced his retirement this week but called the secretary’s health reform implementation efforts a “train wreck.”

IN THE WHITE HOUSE
On April 10, the president released his FY 2014 budget proposal. As is always the case, the president’s budget is a non-binding proposal meant to serve as a guide for Congress to the president’s priorities. The budget would give HHS about $1.5 million for setting up marketplaces and helping consumers navigate them. It also would reduce growth in Medicare spending by $371 billion over the next decade. Changes to Medicare include requiring higher cost sharing for new Medicare beneficiaries, making wealthier seniors pay more of their Part B and D premiums, closing the doughnut hole by 2015 instead of 2020 as in the Affordable Care Act, and cutting payments to hospitals and other providers for bad debt and graduate medical education over the next 10 years. The budget also suggests delaying the planned reduction to hospitals in disproportionate share payments to offset the charity care they provide. The proposal would eliminate the Center for Disease Control and Prevention’s Preventive Health and Health Services Block Grant Program, and expand and simplify the tax credits provided to small businesses for their non-elective contributions to employee health insurance. The budget requests $305 million for the IRS to pay for IT to implement the health law – in total, the plan calls for about $440 million and nearly 2,000 more workers to implement the law.

AT THE AGENCIES
On April 9, the Senate Finance Committee held a confirmation hearing for President Obama’s nominee to lead CMS, Marilyn Tavenner. Tavenner has been the CMS acting administrator on an interim basis for over a year.  It has been about six years since the Finance Committee last held a confirmation hearing for a CMS administrator.  Tavenner is expected to be confirmed.  Sen. Orrin Hatch, the ranking Republican on the Senate Finance Committee, said he supports Tavenner’s nomination.  House Majority Leader Eric Cantor introduced Tavenner and expressed strong support in his introduction.  Tavenner said she would run the agency as a business.  On April 23, the Senate Finance Committee voted to approve Tavenner’s nomination. Then on April 24, Sen. Harkin delayed Tavenner’s full vote in response to CMS’s use of the public health and prevention money for ACA implementation. We do not expect this to be a permanent problem for Tavenner and expect her to be confirmed in the near future.

On April 8, CMS issued a pair of proposed rules that would extend the safe harbor exception for donated electronic health records systems from December 31, 2013 to December 31, 2016, when the Medicare meaningful use incentive program also ends.

ON THE HILL
On April 24, bipartisan members of the Senate Committee on Finance released an analysis outlining a comprehensive overview of the policy and legislative recommendations received from 146 stakeholders in the health care community on ways to improve federal efforts to combat waste, fraud, and abuse in the Medicare and Medicaid programs.

On April 12, Sec. Sebelius testified at a hearing before the House Ways and Means Committee on the president’s budget.  She told the committee that the federally run insurance exchange would be up and running by October 1.  Sec. Sebelius explained that the exchange data hub was “basically built and paid for” but also that implementation funding was still a challenge. Though many expect House Republicans will be unwilling to provide additional funding for reform implementation, members of the committee did not explicitly say so at the hearing.

On April 17, Secretary Sebelius testified before the Senate Committee on Finance. Chairman Max Baucus questioned the law’s implementation and said he “see[s] a huge train wreck coming down.” Sen. Baucus was a key architect of the Affordable Care Act. Then on April 23, Sen. Baucus announced that he would not seek reelection in 2014.

House Republicans were pushing H.R. 1549, The Helping Sick Americans Now Act, which would divert money from the ACA's Prevention and Public Health Fund to fund the Pre-Existing Condition Insurance Plan through the remainder of the year. In February, HHS had announced it was suspending enrollment because its $5 billion appropriations were depleted. The House canceled a vote on the bill on April 24, when it became clear there were not enough votes.

On April 24, CMS Center for Consumer Information and Insurance Oversight (CCIIO) Director Gary Cohen testified before the House Energy and Commerce oversight subcommittee. House Republicans expressed deep concern to Cohen that the health insurance exchanges would not be ready in time for open enrollment, and Cohen assured them that HHS was on schedule.

IN THE STATES
Five states were awarded $275.6 million from the Obama administration to continue building health insurance exchanges.  Hawaii received $128.1 million, Illinois received 115.8 million, Arkansas received $16.5 million, New Hampshire received $5.4 million and Rhode Island received $9.8 million.

On April 18, the Ohio House of Representatives passed its budget in House Bill 59 without Governor Kasich's proposed Medicaid expansion. The House is calling for a separate debate on this issue and the budget includes an amendment that will make it possible to revisit the issue.

On April 16, the Arkansas House voted 77-23 to approve an appropriation bill that plans on Medicaid expansion in the state, and on April 17 the Arkansas Senate approved a "private option" Medicaid expansion as well, 28-7.  Unlike traditional Medicaid or the expanded Medicaid originally envisioned by the ACA's drafters, the Medicaid expansion proposed in Arkansas would use federal Medicaid dollars to buy private coverage in insurance exchanges.  On April 23, Arkansas Gov. Mike Beebe signed the plan into law.  The Obama administration has agreed to the plan in principle but has not yet given final approval.  Arkansas officials will travel to Washington soon to present the plan.

On April 16, North Dakota Governor Jack Dalrymple(R) signed legislation to expand Medicaid in the state. The expansion is expected to grow the program from covering about 65,000 a month to 85,000 a month.

On April 16, the Iowa Senate Ways and Means Committee advanced a bill that would extend a state tax break to small businesses that cover their employee's health care costs.

IN THIRD PARTIES
A new study by the Kaiser Family Foundation predicts that by 2019, annual health care cost growth will be over 7 percent, compared to the 3.9 percent between 2009 and 2011.  The study attributes most of this disparity to the poor economy, but suggested that structural changes in the health care system may be playing a role as well.

A new study from Families USA says that almost 26 million individuals will be eligible for tax credits through the ACA to help them purchase health insurance in marketplaces.

On Friday (4/19), Alan Simpson and Erskine Bowles, who lead President Obama's 2010 National Commission on Fiscal Responsibility and Reform, released a new deficit reduction proposal.  The plan aims to cut the deficit by a total of $5.2 trillion over 10 years.   The proposal is similar to the original Simpson-Bowles plan but more modest.  It would cut deficits by $2.5 trillion.

The Bipartisan Policy Center issued a report on health care cost containment with recommendations for the next phase of health reform.  The plan suggests over 50 recommendations, which would cut the federal deficit by about $560 billion over the next 10 years.

Health Care Reform Implementation Update - April 12, 2013

While Congress was in recess, the Centers for Medicare and Medicaid Services (CMS) surprised many when it changed course on Medicare Advantage payment rates – switching from a 2.3 percent reduction to a 3.3 percent increase, the Department of Health and Human Services (HHS) announced a one-year delay for the small business health options program exchange to offer multiple health plans, and HHS released a final rule detailing the expanded Medicaid program and confirming that the federal government would cover 100 percent of the expenses for newly eligible Medicaid beneficiaries.

 

AT THE AGENCIES

On Monday (4/1), CMS surprised many when it announced that it would change the 2.3 percent cut to Medicare Advantage rates to a 3.3 percent increase.  Prior to the news, health insurers were predicting painful changes for Medicare Advantage customers.  The initial rates included in the proposed regulation assumed that there would be significant cuts in physician payments, and in turn lower Medicare costs, because of the Sustainable Growth Rate.  The switch follows a report from the Congressional Research Service, which said CMS could assume that Congress would avoid major cuts to Medicare physician reimbursements at the end of the year, and letters from Senate Finance Committee Chairman Max Baucus, Ranking Member Orrin Hatch and 98 House members to CMS expressing concern about the proposed rates.

On Wednesday (4/3), CMS released a proposed rule that outlines standards for navigators in federally facilitated and state partnership markets.  Navigators will help educate consumers on available health coverage options and will assist them in shopping for health insurance.

On Tuesday (4/2), CMS published an update to the clinical quality measures for hospitals participating in the meaningful use program for electronic health records (EHRs).  Prior to the update, hospitals were required to use EHR systems that met the clinical quality measure specifications of the December 2012 interim final rule.  Now, however, CMS is encouraging the use of updated clinical quality measures.

HHS announced a one-year delay to a requirement of the small business health options program (SHOP) exchange this week.  Though small businesses were supposed to be able to choose from multiple health plans through insurance exchanges beginning in 2014, HHS granted an extra year for the requirement to offer multiple plans on SHOP exchanges.

On Friday (3/29),  HHS released a final rule describing the methodology states will use for claiming a higher match rate for newly eligible Medicaid beneficiaries.  The regulation implements the ACA provision that authorizes states to expand Medicaid to adults under 65 with incomes up to 135 percent of the federal poverty level.  The federal government will cover the full cost of newly eligible beneficiaries for the next three years, and afterward the federal contribution will gradually be phased down to 90 percent by 2020.

The National Association of Insurance Commissioners had its annual spring meeting on Friday (4/5).  At the meeting, a draft paper titled "Rate Increase Mitigation Strategies" was presented.  The paper addresses the "rate shock" that may be caused by the ACA.

 

ON THE HILL

On Thursday (4/4), Sen. Chuck Grassley (R-Iowa) sent a letter pressing CMS for information about how a Wall Street analyst was able to learn about the Medicare Advantage rates in advance of CMS’s official announcement.

On Friday (4/5), Reps. Joe Pitts (R-Pa.) and Michael Burgess (R-Texas) of the House Ways and Means Subcommittee on Health released a press release offering suggestions for making health reform more affordable.  Suggestions offered in the release include creating a premium increase safety valve, allowing state coverage compacts, giving Americans coverage options like those of members of Congress, ensuring consumers who like their insurance can keep it, prioritizing coverage for Americans with pre-existing conditions over wasteful spending, and replacing price controls with market-based solutions and incentives.

 

IN THE STATES

Vermont posted its partnership plan proposals this week, listing the prices residents can expect for health insurance coverage  in 2014.  The Vermont Department of Financial Regulation posted a summary sheet that compares what Blue Cross Blue Shield Vermont and MVP Health Care – two carriers that have filed proposed rates with the department – might charge for coverage for singles, couples, single parents with children, and couples with children.

An amendment to a bill that lays out health care exchanges passed the Virginia House and Senate.  The amendment bars health insurance plans sold through a federal exchange from covering most abortions.

Pennsylvania Gov. Tom Corbett met with Sec. Sebelius on Tuesday (4/2) to discuss Medicaid expansion.  Neither HHS nor Gov. Corbett publicly reported any developments after the meeting.  Gov. Corbett said the meeting was “meaningful,” that he asked the secretary for  answers to key questions and that he is still considering the options for Pennsylvania.

On Friday (4/5), Center for Consumer Information & Insurance Oversight (CCIIO) Director Gary Cohen sent Massachusetts a letter granting it permission to phase in certain rules Massachusetts business leaders had argued would have led to rate shock in 2014.  Massachusetts will be permitted to phase out certain rating standards such as age, smoking status and wellness.

 

IN THE COURTS

On Thursday (4/4), the Department of Justice filed a brief in the 4th Circuit Court of Appeals arguing that the Anti-Injunction Act prevents the court from hearing the case of Liberty University, which continues to challenge the ACA’s employer mandate and argues that the reform law provided federal funding for abortions.

Federal Judge Edward Korman ruled on Friday (4/5) that the most common morning after pill be made available over the counter for all ages, rather than requiring a prescription for girls 16 and younger.  The Food and Drug Administration has recommended this type of unrestricted access for years, however both President Obama and Sec. Sebelius have supported restricting over the counter access to morning after pills for those younger than 17.

 

Health Care Reform Implementation Update - March 26, 2013

Last week, as the Affordable Care Act turned three, the drumbeat of concern over Medicare Advantage cuts grew louder when Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch – as well as 98 house members – wrote to the Centers for Medicare and Medicaid Services (CMS) expressing concern about rates for Medicare Advantage plans, MedPAC released its March report to Congress, the House and Senate passed a continuing resolution to fund the government through September 2013 at current law levels including sequestration, and the House and Senate each passed a 2014 budget.

 

ON THE HILL

Rep. Paul Ryan's (R-Wis.) budget passed the House of Representatives on Thursday (3/21).  No Democrats voted for the plan.  The bill would balance the budget in 10 years by cutting domestic spending and reforming Medicare.  The budget would reform Medicare starting in 2024 by giving seniors a choice between traditional Medicare coverage or a private plan with similar benefits.  The House budget would also convert Medicaid into a block grant program such that states would receive a lump sum for their programs instead of the open-ended federal medical assistance percentages they now receive.  Though the budget does not eliminate the entire Affordable Care Act, it does assume that Congress would eliminate the parts of the Affordable Care Act that subsidize insurance coverage for the uninsured.

On Saturday (3/23) just before 5:00 a.m., the Senate passed its first budget in four years, with no Republicans voting for it and four Democrats voting against it.  The four Democrats, all of whom are up for re-election in 2014, were Mark Pryor (Ark.), Kay Hagan (N.C.), Mark Begich (Alaska) and Max Baucus (Mont.).  The Senate budget would boost infrastructure spending by $100 billion to bolster the economy and raise taxes to bring $975 billion over 10 years into the government.  The budget trims spending modestly and includes an expedited track for passing tax increases.  The Senate budget includes health care cuts as well – accelerating payment reforms that tie provider reimbursement to patient outcomes, reducing waste and fraud, and encouraging greater provider engagement.

The drumbeat of concern over Medicare Advantage cuts grew louder on (3/15) when Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch sent a letter to CMS Acting Administrator Tavenner raising concerns about the proposed Medicare Advantage cuts and 98 bipartisan House members sent a separate letter to Tavenner, also requesting changes to the Medicare Advantage rates.  These rates are expected to be finalized by April 1, 2013.

The Director of CMS’s Center for Medicare and Medicaid Innovation (CMMI), Dr. Richard Gilfillan, testified before the Senate Finance Committee on Wednesday (3/20).  At the hearing, Dr. Gilfillan said the results of the Pioneer Accountable Care Organization demonstration will be available this summer.  Dr. Gilfillan also said that CMMI was currently analyzing data from the multi-payer advanced primary care practice and federally qualified health center advanced primary care practice demonstrations.

Last week, the House and Senate approved a continuing resolution to prevent a government shutdown and keep agencies funded through the end of the fiscal year and sent it to the White House to be signed into law.

 

AT THE AGENCIES

Health and Human Services (HHS) Sec. Sebelius announced that the third anniversary of the Affordable Care Act saw more than 6.3 million Medicare beneficiaries save over 6.1 billion on prescription drugs, and 71 million Americans in private health insurance plans receive coverage for at least one free preventive health care service.

On Monday (3/18), the Departments of Health and Human Services, Labor and Treasury issued a proposed rule under the Affordable Care Act that prohibits health plans from imposing waiting periods over 90 days on enrollees before coverage begins.

On Friday (3/15), the Medicare Payment Advisory Commission (MedPAC) released its March report to Congress.  In the past, the commission’s recommendations have formed the basis for payment changes later in the year.

 

IN THE STATES

The Colorado state exchange board approved a 1.4 percent fee on all health policies sold through the state’s health exchange.  The revenue would be used to fund the exchange after federal backing runs out.  The board expects the exchange to cost between $22 and $24 million per year to run.

On Saturday (3/23), the Maryland House of Delegates gave initial approval to a measure that would expand Medicaid eligibility to 133 percent of the federal poverty line and create a funding mechanism for the state's health marketplace.  The funds will come from an existing state-regulated 2 percent tax on insurance plans.

On Thursday (3/21), the Michigan State Senate Health Policy Committee approved a bill that would allow health care providers and institutions to refuse to provide service on moral, religious or conscientious grounds.  This bill already passed the state Senate in December.

 

IN THE COURTS

Tom Monaghan and his company, Domino's Farm Corp., sued the federal government in December 2012, arguing that complying with the Affordable Care Act’s mandate requiring employee insurance plans to provide coverage for contraception violated his legal rights.  On March 15, U.S. District Judge Lawrence P. Zatkoff found that the company and Monaghan could be irreparably harmed if the mandate was enforced while the lawsuit is pending and issued a preliminary injunction.

 

IN THIRD PARTIES

This month's tracking poll from the Kaiser Family Foundation shows that the public is more confused about the Affordable Care Act than ever, in particular about items that are or are not part of reform.

The Health Care Incentive Improvement Institute issued a report card evaluating states on the requirements state laws put on hospitals and providers for transparency in health care costs.  The report gave 29 states failing marks and seven a D.  Two states, Massachusetts and New Hampshire, received an A.

Health Care Reform Implementation Update - March 14, 2013

Last week, the Department of Health and Human Services (HHS) conditionally approved state partnership marketplaces in Iowa, Michigan, New Hampshire and West Virginia; Accountable Care Organizations wrote to the Centers for Medicare & Medicaid Services (CMS) arguing that the quality targets set by the Center for Medicare & Medicaid Innovation (CMMI) were arbitrary; and legislation implementing Medicaid expansion in Florida struggled to get through the state legislature.

 

ON THE HILL

On Wednesday (3/6), the Republican controlled House of Representatives passed a continuing resolution that would fund the government through the end of the fiscal year.  The measure allows the Food and Drug Administration (FDA) to fully collect medical device and generic drug user fees.  Senator Ted Cruz (R-Texas) is planning to offer an amendment to the legislation that would delay funding of the ACA.

Senators Alexander and Corker are pushing S.11, the Fiscal Sustainability Act, which would save an estimated $689 billion in health savings over 10 years and reform Medicaid and means-test Medicare.

 

AT THE AGENCIES

In response to CMMI’s quality metrics for ACOs, which are the targets pioneer Accountable Care Organizations (ACOs) have to meet in order to receive bonus payments in 2013, many of the ACOs wrote to CMS arguing that at least 19 of the targets were arbitrary or unreasonable due to a lack of data to support them.  The Pioneer ACOs received payments in 2012 for reporting on the 33 metrics. In 2013 though, the ACOs will be paid for performance, not just reporting.

 

IN THE STATES

HHS conditionally approved state partnership marketplaces in Iowa, Michigan, New Hampshire and West Virginia.  The partnership marketplaces (formerly exchanges) will allow these states to control various marketplace components, while the federal government runs others.  Seven states have now been approved for partnership marketplaces.

On Thursday (3/7), the Minnesota Senate approved a bill implementing the state health insurance marketplace. A companion bill passed in the House on Monday (3/4).  Unlike the  House bill, which would fund the exchanges’ operating costs with a tax on exchange premiums up to 3.5 percent, the Senate bill would fund it by diverting money from an existing 75-cent state fee on a pack of cigarettes.

On Monday (3/4), the Florida House of Representatives signaled it does not plan to go along with Gov. Rick Scott's turnaround on Medicaid.  On Monday, the House Select Committee on the Patient Protection and Affordable Care Act expressed substantial doubts that the federal promises for Medicaid funding assistance could be relied on long term.

On Tuesday (3/5), hundreds of protesters marched in Austin to protest Texas Governor Rick Perry's decision not to support Medicaid expansion in his state.

 

IN THIRD PARTIES

In health care industry heavy Massachusetts, the Retail Association of Massachusetts and the South Shore Chamber of Commerce are urging the White House to reconsider its proposed rule on rate review, which prevents health plans from denying coverage or setting rates based on certain factors.  The Massachusetts groups argue that holding small businesses to the same rating standards as large businesses is discriminatory.  Specifically, the group’s request that nothing in the rule should be construed to preclude a state from allowing health insurance carriers to offer additional discounts and incentives if approved by the state insurance regulator.

The Urban Institute argues in a new paper that the government could save close to $90 billion over 10 years if it allowed 65 and 66-year olds to buy into Medicare if they choose to, but asking middle and high income earners to share more of the cost.

 

Health Care Reform Implementation Update - February 27, 2013

As Washington and the rest of the country brace for cuts from the sequester to kick in on March 1, Florida Gov. Rick Scott surprised many and confirmed others' predictions by announcing his state will expand its Medical program, and the Department of Health and Human Services (HHS) issued long-awaited final rules on essential health benefits, as well as pre-existing conditions and premium rate bands.

AT THE AGENCIES
On Friday (2/22), HHS released final rules implementing the provisions of the Affordable Care Act (ACA) that require insurers to cover those with pre-existing conditions without charging higher prices. 

Friday’s final rules also crystalize regulations on how insurers may set their premiums.  Under the ACA, only certain, very limited criteria may be used to set premiums.  With respect to age, the law says plans can only charge older patients three times more than younger ones, even though older patients are notoriously much more expensive to treat than younger ones.  Though many interest groups fought this provision when it was included in the proposed rule, it nonetheless remains in the final rule.  America’s Health Insurance Plans (AHIP) says this outcome will cause insurance for young people to spike “overnight.”  The rules do ensure young adults will have access to a catastrophic coverage plan, which will offer lower premiums and less generous coverage for those who do not seek much health care outside of an emergency situation.

On Wednesday (2/20), HHS issued a long-awaited final rule on essential health benefits (EHB).  The final rule outlines the standards for essential health benefits that insurers must cover in and out of health insurance marketplaces beginning in 2014.  Insurers must cover 10 broad care categories, which include emergency services, maternity care, mental health and substance abuse services, and preventive and wellness services.  As in the proposed rule, individual and small group plans for 2014 and 2015 must cover at least one drug in every therapeutic category and class or the same number of prescription drugs in each category and class as the state's EHB benchmark plan, whichever is greater.  Many states require at least two drugs per class.

The final regulation does not differ much from the proposed regulation.  One change uncovered by the American Cancer Society Cancer Action Network concerns colonoscopies.  Under both the proposed and final regulations, colonoscopies are deemed a preventive service that insurers have to cover without copayment.  What was previously unsettled, however, was whether if a doctor discovered a polyp and removed it during the procedure, whether this too would be included.  The final regulation says insurance companies cannot charge patients for the removal of a polyp during a recommended colonoscopy.

The Medicaid and CHIP Payment and Access Commission (MACPAC) named Anne L. Schwartz, PH.D., as its new executive director.  Schwartz has been the acting executive director for the past four months.

On Thursday (2/21), the Center for Medicare and Medicaid Innovation announced that it is awarding $300 million to 25 states through the State Innovation Models Initiative, which supports the development and testing of state-based models for multipayer payment and health care delivery system transformation to improve health system performance.  Six states will receive awards for Model Testing, three for Model Pre-Testing, and 16 for Model Design.  Of the $300 million, more than $250 million will go to Arkansas, Maine, Massachusetts, Minnesota, Oregon and Vermont.

IN THE STATES
Friday (2/15) was officially the last day for states to report to the federal government that they wanted to participate in running health insurance marketplaces in their states in partnership with the federal government.  The federal government will be running more than half  – 26 – of the state’s health insurance marketplaces.

Florida Gov. Rick Scott, a Republican and leading critic of the Affordable Care Act, announced on Wednesday (2/20) that his state would expand  Medicaid coverage.  A day after Gov. Scott’s announcement, Sec. Sebelius said that states are opting to expand Medicaid because the offer is “simply too good to pass up.”

On Tuesday (2/19), Oklahoma State Representative Mike Ritze (R) introduced legislation that would declare the Affordable Care Act unconstitutional and void in the state.  Ritze's motivation is the law’s mandate that requires employers to provide birth control coverage in health insurance plans.  The legislation was approved 7-3 by the House Public Health Committee.

ON THE HILL
Still no deal on the Hill to prevent the sequester, set to begin March 1.  Medicaid is protected from the cuts, but Medicare spending will be cut by 2 percent through reductions in payments to hospitals, physicians and other care providers.  Additionally, according to the Congressional Budget Office (CBO), other health-related programs like medical research, mental health treatment and approvals for new drugs are subject to 5 percent or more in cuts.

IN THIRD PARTIES
On Thursday (2/21), 17 major medical specialty groups recommended that doctors reduce their use of 90 widely used unnecessary tests and treatments.  The list includes recommendations not to induce labor or perform a Cesarean section before a woman’s 39th week of pregnancy unless it is medically necessary, not to automatically use CT scans to examine children’s minor head injuries, and to avoid routine preoperative testing for low-risk surgeries without a clinical indication.

On Thursday (2/21), Time Magazine ran the longest article by one writer the magazine has ever published, "Bitter Pill: Why Medical Bills are Killing Us."  The cover story provides in-depth discussion of the country’s high medical costs and the major problems hospitals, insurance companies and the pharmaceutical industry are facing.

 

Health Care Reform Implementation Update - February 19, 2013

Last week another marketplace deadline came and went, Illinois became the 21st state approved to operate a health insurance marketplace, and U.S. senators pressed the HHS official responsible for the bulk of exchange implementation for information.

 

AT THE AGENCIES

On Friday (2/15), the Obama administration said the state-based high-risk pools from the ACA will close to new applicants in the next few days or weeks as funding is beginning to run low.  The 100,000 or so people who are already enrolled in these pools will not, however, be affected.

On Friday (2/15), CMS issued its annual projection of Medicare Advantage and Part D premiums and rates for calendar year 2014.  CMS said that for the first time since the Part D program began, the standard Part D deductible will go down from $325 in 2013 to $310 in 2014, and cost- sharing amounts will also be lower. Comments are due on March 1.

CMS also issued a proposed rule that would implement medical loss ratio requirements for the Medicare Advantage Program and Medicare Prescription Drug Benefit Program under the ACA.

On Friday (2/8), the Obama administration released details on some of the nonmilitary cuts that will take effect due to sequestration from the Budget Control Act of 2011.  Among other things, the cuts would result in the loss of 12,000 research positions funded by National Institutes of Health grants and the end of treatment for 373,000 individuals with mental illness.

 

IN THE STATES

Technically, the deadline to apply for a state-federal partnership exchange/marketplace was Friday 2/15.  HHS has shown, however, that it is willing to be flexible on deadlines in return for state participation in implementing health reform.

Long-awaited decisions on three state exchanges came on Friday (2/15).  Govs. Chris Christie of New Jersey, Rick Scott of Florida, and Bill Haslam of Tennessee said they would not embrace partnership models for their exchanges. Because the states also are not choosing to run their own exchanges, they will default to federally run exchanges.

On Wednesday (2/13), New Hampshire Governor Maggie Hassan officially applied for a partnership exchange in a letter to HHS Sec. Sebelius.

On Wednesday (2/13), Wisconsin Gov. Scott Walker announced he will not propose expanding Medicaid in his state, and instead proposed tightening income eligibility for Medicaid, lifting a cap on a program that covers childless adults, and forcing more people to buy insurance through a government-run marketplace in order to cover the state’s low-income uninsured population.  The plan outlined by Walker would cover non-disabled adults up to 100 percent of the federal poverty level, down from its current 200 percent federal poverty level limit for state assistance, and allow those above 100 percent to purchase coverage through the exchanges.

On Wednesday (2/13), Illinois became the 21st state (including the District of Columbia) to be approved to operate a health insurance exchange, with enrollment to begin in October 2013.  Illinois’ exchange will be a partnership marketplace.

On Wednesday (2/13), the Georgia House passed House Bill 198 that would require health insurance navigators to be licensed in order to help uninsured Georgians and businesses use the health insurance exchange.

North Carolina Gov. Pat McCrory said on Tuesday (2/12) that the Medicaid program in his state is too troubled to expand, and he does not want to play a part in implementation of an insurance exchange in his state.  On Wednesday (2/13), the state House gave tentative approval to legislation blocking the expansion of Medicaid and the development of a health insurance exchange.

 

ON THE HILL

On Thursday (2/14), Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services, testified before the Senate Finance Committee.  Cohen said HHS is making great progress and will be ready for people across the country to obtain high-quality affordable health care coverage beginning on October 1.  Sen. Orin Hatch (R-Utah) argued that the health insurance exchanges required by the ACA are going to increase health care costs.  Sen. Bill Nelson (D-Fla.) pushed Cohen for information about why funding for co-ops under the ACA was eliminated in the tax compromise.  Sen. Maria Cantwell (D-Wash.) questioned Cohen on the delay to implementation of the Basic Health Program, which would have enabled states to offer government insurance to people who did not qualify for Medicaid but who would still have had a difficult time affording premiums and cost sharing in the exchange.  Sen. Ron Wyden (D-Ore.) expressed disappointment that the administration had not extended the law’s definition of “affordable” coverage to family plans.

In an effort to shelter health care programs, Food and Drug Administration (FDA) funding, and several other items from the sequester, set to kick in on March 1, Senate Democrats crafted a proposal, the American Family Economic Protection Act, which includes a combination of revenue increases and equally split cuts to defense and non-defense discretionary spending.  Republicans criticized the proposal, especially for the increases in taxes it requires.

On Friday (2/15), Reps. Charles Boustany (R-La.) and Jim Matheson (D-Utah) reintroduced a bill to repeal the health insurance tax in the Affordable Care Act.  The Congressional Budget Office (CBO) valued the tax at $100 billion over 10 years.  Boustany also sponsored the bill in the last Congress and gathered 226 cosponsors.  The bill, however, never came up for a vote.

 

IN THIRD PARTIES

About 50 leading conservative voices signed on to a memo calling for Congress to defund the Affordable Care Act in the next continuing resolution.

Health Care Reform Implementation Update - January 23, 2013

In the past week, the health insurance exchanges were rebranded as “health insurance marketplaces;” HHS extended the deadline for states to opt into administering their own marketplaces and announced $1.5 billion in new grants to states for building them; and CMS released a proposed rule that details eligibility standards for marketplaces, Medicaid and CHIP.

 

AT THE AGENCIES

On Monday (1/14), Sec. Sebelius announced that the deadline for states to opt into administering marketplaces (exchanges) under the Affordable Care Act would be waived or extended. The administration said it is trying to encourage states to share the responsibilities of running the marketplaces, supervising health plans and assisting consumers.

CMS released a proposed rule on Monday (1/14) that provides further detail on state marketplaces, Medicaid and the Children's Health Insurance Programs (CHIP). Sec. Sebelius said the rule is intended to “give states more flexibility to implement the law in a way that works for them.” The rule details options for coordinating Medicaid, CHIP and marketplace communications regarding eligibility to consumers.

On Thursday (1/17), HHS announced $1.5 billion in new grants to states building insurance exchange marketplaces under the Affordable Care Act. The states that received funding are California, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon and Vermont.

CMS announced that physicians who were excluded from the meaningful use program because of the way they process Medicare claims (assigning reimbursement and billing to critical access hospitals) are now eligible to participate in the electronic health record meaningful use program.

On Thursday (1/17), the HIPAA omnibus rule was posted on the Federal Register public inspection desk. The package substantially modifies HIPAA privacy, security and enforcement rules and increases penalties for noncompliance. The final rule will be effective in March 2013.

On Wednesday (1/16), HHS kicked off an effort to raise awareness of the individual mandate with a website relaunch and a switch in the name of health insurance exchanges to health insurance marketplaces.

 

IN THIRD PARTIES

A coalition of 21 hospital associations sent a letter to the White House asking it to help fight a provision of the Affordable Care Act. The provision at issue allows hospitals in Massachusetts to dramatically boost their Medicare payments at the expense of other states. In their letter, the hospital associations argue that “scarce Medicare funding should reward value and efficiency in healthcare, not be diverted based on manipulation of obscure payment formulas.”

On Tuesday (1/15), the new nonprofit coalition, Enroll America, launched and announced its campaign to ensure that those who are eligible sign up for new insurance under the Affordable Care Act. Enroll America is an outgrowth of various Affordable Care Act support groups, especially Families USA.

 

IN THE COURTS

On Tuesday (1/15), HHS and other named agencies appealed the preliminary injunction that was granted by U.S. District Judge Reggie Walton, to Tyndale House Publishers, a Christian publishing company, in November. Tyndale does not want to provide its employees with contraceptives as required by the Affordable Care Act.

 

Health Care Reform Implementation Update - January 14, 2013

 

The Obama administration gave eight more states conditional approval to operate health insurance exchanges, bringing the total number of fully or partially approved exchanges to 20; HHS approved 106 new accountable care organizations; and Congress reached a deal on the fiscal cliff that includes a “doc fix,” cuts the Community Living Assistance Services and Supports Program (CLASS), and slashes funds for the Consumer Operated and Oriented Plan program (CO-OP).

 

IN THE STATES

On Monday (1/7), Florida Gov. Rick Scott met with HHS Sec. Sebelius to discuss whether Florida will assist with the implementation of the state exchange and expand its Medicaid program in accordance with the Affordable Care Act. Gov. Scott is concerned about expanding the state’s Medicaid program, which already consumes close to 30 percent of the state’s budget, because he knows the expansion would be difficult or impossible to reverse and fears that the state portion of spending will grow over time. Scott said, "Growing government is never free." Prior to Scott’s meeting with Sec. Sebelius, however, Scott projected health reform could cost state taxpayers $26 billion, and after the meeting his administration released new cost estimates of $3 billion.

On Friday (1/4), Montana Governor-elect Steve Bullock unveiled state budget changes. Bullock intends to keep the proposed expansion of Medicaid under the ACA intact.

In response to Utah’s request from mid-December that the federal government allow Utah to run its own exchange by utilizing its already-existing exchange, the Obama administration gave conditional approval but said it would have to go beyond the services already offered.

On Thursday (1/3), Gov. John Hickenlooper announced a plan that would expand Medicaid in Colorado in accordance with the Affordable Care Act. The governor said that expansion would cost Colorado about $128 million over 10 years, however, his administration has identified more than $280 million in cuts and savings to the Medicare program to cover the change.

New Mexico Gov. Susan Martinez, who is a Republican, said the state will act in accordance with the Affordable Care Act and expand its Medicaid program.

According to the state budget California Gov. Jerry Brown released Thursday (1/10), it would cost California $350 million to participate in Medicaid expansion under the Affordable Care Act. These projected costs result largely from “the woodwork effect,” the increase in program participation from those individuals who were already eligible.

Former CMS Administrator Don Berwick said Tuesday (1/8) he is considering running for governor of Massachusetts in 2014.

 

ON THE HILL

On Tuesday (1/1), the House of Representatives approved the Senate’s last-minute fiscal cliff package. The deal includes a one-year doc fix, which prevents the 27 percent cut to physician Medicare payments. Such “doc-fixes” have been made every year since 2003. Physicians are happy the cuts will not go into effect this year but are disappointed the fix did not go beyond the usual one-year patch. Hospitals are less happy – the doc fix was paid for, in part, by cutting $15 billion in Medicare and Medicaid payments to hospitals over the next 10 years.

Additionally, the CLASS Act, which was intended to provide long-term care insurance, was eliminated. The executive branch had already said it would not proceed in implementing the CLASS Act because it was financially unsustainable.

Another loser in the fiscal cliff deal was the Affordable Care Act’s Consumer Operated and Oriented Plans (CO-OPs). Though the federal government has already awarded more than $2 billion in CO-OP loans, no state-level CO-OP is fully funded or operational yet.

On Thursday (1/10), President Obama signed the Strengthening Medicare and Repaying Taxpayers (SMART) Act into law, which changes the way Medicare collects money from those whose negligence caused a patient to incur medical bills.

 

AT THE AGENCIES

HHS issued a split decision on Governor Paul LePage's request for the state of Maine to eliminate health insurance for about 37,000 Medicaid recipients to account for the $20 million budget gap the state faces. The Obama administration partially approved Maine's request and allowed it to eliminate coverage for 12,592 working parents with earnings between 133 and 200 percent of the federal poverty level.

On Thursday (1/3), HHS gave eight more states conditional approval to operate the health care exchanges they laid out in blueprints to the federal government. The approved exchanges include the state-based exchanges of California, Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah, and the partnership exchange of Arkansas. This brings the total number of states approved to fully or partially operate their exchanges to 20, 18 state-based and two partnership exchanges.

HHS approved 106 new accountable care organizations under the Affordable Care Act. According to an HHS press release, the new ACOs will benefit 4 million Medicare beneficiaries.

On Thursday (1/10), HHS issued a new report showing that Medicare’s costs are rising at an historically low rate while seniors receive more benefits.

On Wednesday (1/9), a White House official said that Kathleen Sebelius will remain the Secretary of HHS.

 

 

Health Care Reform Implementation Update - December 27, 2012

 

The extended deadline for states to submit plans to run their own insurance exchanges is now behind us. A total of 18 states submitted blueprints to run their own exchanges. The 32 remaining states have until February 15, 2013 to indicate they want to set up a partnership exchange. The states that do not submit partnership applications will have federal exchanges. HHS has now conditionally approved 11 states and the District of Columbia to run their own exchanges. Meanwhile, health care providers wait at the edge of their seats to see if the fiscal cliff talks will include a “doc-fix” to avoid the 26.5 percent cut to Medicare claims starting January 1, 2013.

 

IN THE STATES

The deadline for states planning to run their own health insurance marketplaces come 2014 was Friday December 14, 2012. A total of 18 states said they will plan their own exchanges. The states that submitted new blueprint applications the week of the extended deadline are California, Hawaii, Idaho, Minnesota, Mississippi, Nevada, New Mexico, Rhode Island, Vermont and Utah. Some states submitted prior to the Friday deadline, and on Friday, the government conditionally approved those of the District of Columbia, Kentucky and New York. Colorado, Connecticut, Massachusetts, Maryland, Oregon and Washington had already been approved. The 32 remaining states have until February 15, 2013 to indicate they want to set up a partnership exchange.

On Friday (12/14), Iowa Governor Branstad announced Iowa would enter into a partnership with the federal government on its health care exchange.

On Wednesday (12/12), Ohio announced it secured federal approval to participate in CMS’ State Demonstrations to Integrate Care for Dual Eligible Individuals. Ohio is the third state to be approved by CMS for the demonstration project, following Massachusetts and Washington.

On Tuesday (12/11), Utah Gov. Gary Herbert sent a letter asking the Obama administration to approve the health insurance exchange already in place in Utah.

  

ON THE HILL

As part of the fiscal cliff negotiations, the White House has called for a permanent fix to the sustainable growth rate as well as $400 billion in health care cuts. Rep. Phil Gingrey (R-Ga.), who serves as co-chairman of the GOP Doctors Caucus said he believes there will be some physician payment fix in fiscal cliff negotiations, likely a one-year fix.

On Thursday (12/13), House Minority Leader Nancy Pelosi (D-Calif.) held a press conference during which she said raising the Medicare age was not on the table in the fiscal cliff negotiations. She further argued that Medicare and Social Security reform do not belong in the negotiations at all.

On Wednesday (12/19), the American Medical Association sent a letter to Senate Majority Leader Harry Reid urging Congress to act immediately to avert the Medicare payment cut to physicians. A cut of 26.5 percent on Medicare claims is scheduled to go into effect starting January 1.

  

AT THE AGENCIES

Early in December, 11 governors asked for a meeting with President Obama to negotiate for greater control over their Medicaid programs. The governors were interested in having the flexibility to expand Medicaid more modestly than the Affordable Care Act envisions. A few days later, Acting CMS Administrator Marilyn Tavenner and other CMS officials announced that if states do not expand their Medicaid systems pursuant to ACA requirements, they would not qualify for the full 100 percent funding under ACA either.

The Patient-Centered Outcomes Research Institute announced it is awarding more than $40 million over the next three years to 25 comparative-effectiveness research projects.

A new report by the Government Accountability Office identifies three key examples of the overlap between the CMS Innovation Center and efforts from other CMS offices. To decrease the risk of CMS duplicating payments for services, the GAO recommended CMS Acting Administrator Marilyn Tavenner direct the Innovation Center to review and eliminate areas of duplication expeditiously.

Ten Republican senators wrote the Obama administration urging it to extend the 30-day comment period and allow more review time for three recently proposed regulations: the essential health benefits rule, the health insurance market rules, and the HHS notice of benefit and payment parameters for 2014 rule. The director of the Center for Consumer Information and Insurance Oversight at CMS said he would not consider extending the comment period because interested parties need clarity to be prepared for October.

A temporary (three-year) $63-per-person fee will hit health plans serving about 190 million Americans starting in 2014. The fee, buried in a new regulation, is intended to help pay for individuals with pre-existing conditions. This fee will have to be paid by individual beneficiaries or employers.

 

 IN THIRD PARTIES

The Kaiser Family Foundation posted a new fact sheet that examines the similarities and differences between the Massachusetts and Washington five-year demonstrations to integrate care and align financing for dual eligible beneficiaries.

Findings from a new study by The Commonwealth Fund show the cost of family health coverage rose substantially faster than income between 2003 and 2011.

  

IN THE COURTS

On Friday (12/14), the founder of Domino's Pizza filed a lawsuit in federal court suing the federal government over the Affordable Care Act's mandatory contraception coverage. The founder currently offers health insurance to his employees that excludes contraception and abortion coverage.

 

Health Care Reform Implementation Update - December 12, 2012

 

As the year’s end approaches, the Hill is a flurry of activity with representatives from various health groups trying to ensure that whatever solution Congress finds to the fiscal cliff problems does not negatively affect them and those they represent.  More proposed rules were published this week – among them, one on reducing incentives for insurers to avoid enrolling unhealthy people and another on establishing a multistate insurance plan program for exchanges.

 

AT THE AGENCIES

The Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordination for Health Information Technology (ONC) issued a proposed rule that tweaks the meaningful use criteria health care providers need to meet to qualify for payment under the federal Electronic Health Record (EHR) incentive program.  It adds an alternative meaningful use criterion for the electronic transmission of structured lab results from hospitals to ambulatory care providers who ordered the lab test.  Another change is to the ONC’s 2014 EHR certification criteria – the change calls for an update to the data element catalogue, which is what identifies which data is needed to calculate the clinical quality measures included in the EHR incentive payment program’s meaningful use requirements.

A CMS proposed rule, published on Friday (12/7), details a risk adjustment methodology to reduce incentives for health insurers to avoid enrolling people with pre-existing conditions.

A proposed rule, published on Wednesday (12/5), by the Office of Personnel Management provides guidance on establishing a multistate insurance exchange program.  The proposed rule highlights five main objectives: ensuring a choice of a least two high-quality products to consumers, promoting competition in the health insurance market, offering plans from the same issuer to families or small businesses residing/operating in more than one state, providing effective contractual oversight of the multistate plans, and working cooperatively with states and HHS to ensure a “level-playing field” for qualified health plans and multistate plans.

The Internal Revenue Service released new proposed regulations and a set of frequently asked questions regarding some of the new taxes intended to help pay for the Affordable Care Act.  The regulations address the Net Investment Income Tax, which applies at a rate of 3.8 percent to some net investment income for individuals, estates and trusts that are above certain statutory thresholds.  The IRS also released proposed regulations on the additional Medicare tax, which also applies to individuals and couples that fall above certain thresholds.

 

ON THE HILL

Negotiations to avert the fiscal cliff continue on the Hill.  Around Washington, people are expecting to see large cuts in spending on Medicare and Medicaid.  Other items flagged as potential negotiating tools are the Medicaid provider tax and graduate medical education.

The House Small Business Committee will be releasing documents with guidance to small businesses to assist them in complying with the law.  This past week, on Thursday (12/6), the committee released a list of provisions that will go into effect in the next two years.

Rep. Phil Roe (R-Tenn) and Rep. Phil Gingrey (R-Ga.) will serve as co-chairs of the House's GOP Doctors Caucus for the 113th Congress.  The Caucus’ stated goal is “to play an effective role in protesting the largest overhaul of our nation’s health system in history.”  Rep. Gingrey is currently a co-chair of the caucus, and Rep. Roe will be replacing current co-chair Rep. Murphy.

 

IN THE STATES

On Monday (12/3), 11 Republican governors sent a letter to President Obama requesting a meeting to discuss the impact of the Affordable Care Act.  Among the signees of the letter were Florida Gov. Rick Scott, Louisiana Gov. Bobby Jindal, Ohio Gov. John Kasich, Virginia Gov. Bob McDonnell and Arizona Gov. Jan Brewer.

On Thursday (12/6), New Jersey Gov. Chris Christie vetoed state legislation to set up a health care exchange.

In an address to the South Dakota state legislature on Tuesday (12/4), Gov. Dennis Daugaard strongly expressed his opposition to expanding the state’s Medicaid program.

Ohio Gov. John Kasich notified HHS that Ohio would not run a health exchange.  Though high level officials had already suggested this was the route Ohio would take, the state had not yet reported the decision to the federal department.


To view our compilation of recent health care reform implementation news, click here.

 

Health Care Reform Implementation Update - December 4, 2012

HHS is quickly moving to implement the Affordable Care Act.  Rules are out in the past two weeks that charge insurance companies to participate in federal exchanges, prohibit discrimination based on pre-existing conditions, detail essential health benefit requirements, and expand employment-based wellness programs.  In addition, in response to Liberty University’s request, the Supreme Court ordered the 4th Circuit to examine the constitutionality of ACA’s employer requirements.


AT THE AGENCIES

On Friday (11/30), HHS issued new rules that charge insurance companies monthly fees to sell plans through federally run insurance exchanges.  These fees will be pegged to the number of customers each insurer has in the exchange.

On Tuesday (11/20), HHS released three proposed rules implementing the Affordable Care Act.  Comments may be submitted during the 90-day comment period.  One of the rules details ACA’s guaranteed issue and community rating requirements.  The rule would prohibit health insurance companies from discriminating against individuals because of pre-existing or chronic conditions, gender or occupation starting in 2014.  Under the rule, the only factors by which insurers can underwrite are family size, geography and whether or not the individual smokes.  In addition, insurers may not charge seniors more than three times what they charge young people – currently, insurers in 42 states charge seniors five or more times what they charge young adults.

Another of the proposed rules outlines coverage of essential health benefits, which are the minimum package of benefits the Affordable Care Act says must be included in health insurance plans.  The categories of benefits that must be included are inpatient and outpatient care, emergency services, maternity and childhood care, prescription drugs, preventive screenings and lab work, mental health and substance abuse treatment, rehabilitation for physical and cognitive disorders, and dental and vision care for children.  Much of this information was already known.  One surprise, however, is that health insurance plans will have to cover the same number of prescription drugs as the benchmark plan in their states, which means there will be a greater number of prescription drugs covered in each class of drugs.

Finally, HHS also released a proposed rule that implements and expands employment-based wellness programs to promote health and help control health care spending.  Under the regulation, employers may reward employees for annual exams or regular workouts, but they may not punish people who do not engage in these activities.


IN THE STATES

According to a report released Monday (11/26) by the Kaiser Family Foundation, states that expand their Medicaid rolls would see only modest cost increases compared with the expense to the federal government.  Part of the states' concern over costs, however, is that the federal government could increase the percentage of the bill states have to cover in later years in response to fiscal woes.  The report also says that states would face increased Medicaid costs even if they do not expand their Medicaid programs.

On Friday (11/16), Georgia Gov. Nathan Deal said Georgia would not build a state exchange because it has "no interest in spending … tax dollars on an exchange that is state-based in name only."

Wisconsin Gov. Scott Walker, Texas Gov. Rick Perry, Maine Gov. Paul LePage and Arizona Gov. Jan Brewer also each sent letters to HHS Sec. Sebelius saying that their states would not set up state-based insurance exchanges.  This means the federal government will set up the exchanges in these states.  Gov. Perry also said he will not expand Medicaid.

On Friday (11/16), Michigan Gov. Rick Snyder announced he is planning to move forward with a partnership exchange, however, he has not foreclosed the option of a state-based exchange if the federal deadline is again moved or the state House votes for the bill.

Oklahoma Gov. Mary Fallin announced that Oklahoma would not pursue the creation of a state-based exchange or expand its Medicaid program.

On Monday (11/19), Pennsylvania Gov. Tom Corbett said that expanding Medicaid pursuant to the Affordable Care Act would cost the state millions of dollars that it does not have.  The state has not officially made its decision yet, though.  The state is particularly concerned about the “woodwork effect” – even though the federal government will cover the costs associated with newly eligible beneficiaries, many new beneficiaries will also “come out of the woodwork” who were previously eligible.  These individuals would have to be paid for by Pennsylvania since the federal assistance is only for individuals who are newly eligible.  This concern is by no means unique to Pennsylvania.

On Thursday (11/29), Missouri Gov. Jay Nixon said that he plans to expand Medicaid in the state.


IN THE COURTS

On Monday (11/26), the Supreme Court ordered the 4th Circuit Court of Appeals to examine the constitutionality of the Affordable Care Act’s employer requirements and mandatory coverage of contraceptives without a co-pay.  This was in response to Liberty University’s request that the Supreme Court reopen arguments against the employer mandate and contraceptive coverage mandate.

On Monday (11/19), a federal judge ruled against Oklahoma City-based Hobby Lobby in its attempt to block enforcement of contraceptive health insurance provisions of the Affordable care Act.  Hobby Lobby’s attorneys said they plan to appeal the ruling to a federal appeals court in Denver.
 

 

Health Care Reform Implementation Update - August 1, 2012

Over the past week, analysts at the Congressional Budget Office said they expect that the Supreme Court’s decision, which struck down the requirement that states expand their Medicaid programs, will result in 3 million more uninsured and reduce costs by $84 billion; and the House Appropriations Committee released its fiscal 2013 budget for HHS, allocating $68.3 billion to the agency and defunding the Affordable Care Act.

AT THE AGENCIES

On Tuesday (7/17), the House Appropriations Committee released a draft of its fiscal 2013 budget for HHS. The draft includes $68.3 billion for HHS, defunds the Affordable Care Act and ends HHS' Agency for Healthcare Research and Quality as of October 1.

On Thursday (7/26), HHS announced a new plan to crack down on health care fraud. The Department of Health Human Services and The Department of Justice will be partnering with over a dozen health insurers and industry groups to prevent fraudulent health care schemes.

On Thursday (7/19), HHS Secretary Sebelius announced an opportunity to help states design and test improvements to their health care systems. Through the initiative, states will work with a broad coalition of employers, insurers, community leaders, service organizations and health care providers to design or test multi-payer payment and delivery system improvements to health care systems for Medicare, Medicaid and CHIP beneficiaries.

ON THE HILL

On Tuesday (7/24), the Congressional Budget Office (CBO) said that 3 million fewer Americans will gain health insurance through the health reform law because the Supreme Court loosened the law's requirement that states expand Medicaid coverage, and the CBO’s revised budget reflecting the change includes an $84 billion reduction from its March 2012 estimate. The CBO also said that the proposed repeal of the Affordable Care Act would increase the deficit by $109 billion between the years of 2013 and 2022.

IN THE STATES

Virginia Attorney General Ken Cuccinelli is pointing to language in the Affordable Care Act that suggests if a state does not set up a state-based insurance exchange, its citizens will not be able to be fined for not participating. The fines in the law, Cuccinelli argues, apply only to failure to participate in a state-based exchange, but not a federally established one.

Alaska Governor Sean Parnell announced on Tuesday (7/17) that Alaska will not set up an insurance exchange program because it is too expensive.

On Wednesday (7/18), Arkansas Governor Mike Beebe said he is still inclined to move forward with an expansion of Medicaid under the Affordable Care Act, but the matter will be decided by a vote in the Legislature next year.

On Tuesday (7/17), Kentucky Governor Steve Beshear signed an executive order to create the Kentucky Health Benefit Exchange, effective January 1, 2014.

THIS WEEK      

On Thursday (8/2) from 10:00 a.m. to 12:00 p.m. at 1333 H St. NW, the Center for American Progress will host a discussion titled, "Cutting Health Care Costs: Leading Experts to Propose Bold Solutions."

On Friday (8/3) from 12:15 to 2:00 p.m. in the Columbus Club at Union Station, the Alliance for Health Reform will hold a briefing titled, "Medicaid Managed Long-Term Services and Supports: Are More Caution and Oversight Needed?" RSVP by noon on August 2.


To view our compilation of recent health care reform implementation news, click here.