Health Care Reform Implementation Update - February 10, 2014

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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.
 

Topics:  Affordable Care Act, CMS, Congressional Budget Office, HHS, Max Baucus, Medicaid Expansion, Medicare

Published In: Elections & Politics Updates, Health Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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