Health Care Reform Implementation Update - January 3, 2014

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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, Landrieu, Heitkamp, 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.

Topics:  ACOs, Affordable Care Act, CMS, Healthcare, Healthcare Reform, Healthcare.gov, Medicaid, Medicare

Published In: Constitutional Law Updates, 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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