Health Care Reform Implementation Update - October 29, 2013

by Cozen O'Connor
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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.

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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