Health Care Reform Implementation Update

by Cozen O'Connor
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Congress begins its summer recess this week, but last week legislators were busy holding hearings on management issues regarding HealthCare.gov, introducing legislation to increase payments to primary care doctors under Medicaid, and voting to support House Speaker John Boehner’s lawsuit challenging President Obama’s constitutional authority to delay the employer mandate. Also last week, the Centers for Medicare and Medicaid Services (CMS) released final rules on the 2015 Medicare payment rates for skilled nursing facilities, inpatient rehabilitation facilities, and inpatient psychiatric facilities and officially extended the deadline of the ICD-10 coding system to October 1, 2015, and trustees for the Medicare trust fund released a positive update on Medicare’s financial outlook. 

ON THE HILL 

On July 30, Senators Patty Murray (D-Wash.) and Sherrod Brown (D-Ohio) introduced a bill that would extend the increase in payments to primary care doctors who treat Medicaid patients. A provision in the ACA implemented payment increases to these physicians to match their rates with Medicare rates through the end of 2014. This bill would extend those payment increases for another two years and would also increase the payment rates for nurse-midwives, nurse practitioners and physician assistants who often act as primary care providers for Medicaid patients. 

In a report released on July 30, the Government Accountability Office (GAO) identified major mistakes made in the management of the contractors responsible for the creation and launch of the federal ACA exchange website HealthCare.gov. The report provides specific examples of how and why increased costs and schedule problems were attributed to “changing requirements and inconsistent oversight” within CMS. On Thursday July 31, the House Energy and Commerce Oversight and Investigations Committee questioned CMS officials about the report. Many of the questions from members focused on the cost of these “flaws.” The cost of the contract to the main contractor overseeing the site, Accenture, grew from $91 million in January to more than $175 million.

On July 30, the House voted to support Speaker John Boehner’s lawsuit against President Obama. The lawsuit challenges that the president violated his constitutional authority when he delayed the employer mandate under the ACA. The final vote was 225-201.

On July 29, Katherine Iritani, director of Health Care at the GAO appeared before the House Oversight and Government Reform Subcommittee on Health to discuss a GAO study that calls for increased oversight of Medicaid financing. According to Director Iritani, states are using methods that may be inconsistent with federal requirements to receive federal matching funds for state Medicaid programs. Although Iritani agreed that the states participating in these types of payment practices are not violating the law, she did testify that increased reporting requirements and oversight are needed to ensure that states are complying with all regulations and using legitimate methods to obtain federal matching funds for Medicaid. 

AT THE AGENCIES 

On July 31, HHS posted a final rule that officially extends the deadline for implementation of the ICD-10 coding system to October 1, 2015. The ICD-10 coding system had been slated for implementation on October 1, 2014, but HHS previously indicated it would extend this deadline after input from health care industry stakeholders requesting an extension. 

CMS released its final rule regarding 2015 Medicare payment rates for skilled nursing facilities, inpatient rehabilitation facilities and inpatient psychiatric facilities on July 31. All of these types of facilities will see Medicare payment increases, and the rates are nearly identical to the rates CMS proposed in May. For fiscal year 2015, skilled nursing facilities will see a 2 percent increase in Medicare rates, inpatient rehabilitation providers will receive a 2.4 percent increase in rates, and inpatient psychiatric facilities will receive a 2.5 percent increase in Medicare payments.

On July 28, trustees for the Medicare trust fund reported that the financial outlook for Medicare has improved. White House officials touted the ACA as the reason for the improved financial outlook, but trustees neglected to affirm this claim. According to the report, Medicare funding will run out four years later than previously expected. 

On July 29, CMS announced that it will extend a temporary moratorium on the Medicare enrollment of home health care agencies and ambulance providers in certain locations for another six months. Under a provision in the ACA, CMS has the authority to suspend enrollment of these providers in an effort to control fraud and abuse. This announcement extends the moratorium for home health and ambulance providers in specific locations within Florida, Illinois, Michigan, Texas, Pennsylvania and New Jersey. CMS has enacted this same moratorium in Philadelphia, Detroit, Dallas, Miami, Chicago and Houston. 

On July 29, HHS made an announcement regarding a provision in the ACA that gradually closes the gap in coverage that forces Medicare beneficiaries to pay some out of pocket prescription costs. According to the data from HHS, seniors have saved $11.5 billion in prescription drugs since the ACA was implemented in 2010. The gradual decrease of this so-called “donut-hole” will occur until 2020. 

IN THE COURTS 

On July 29, the U.S. Court of Appeals for the District of Columbia denied a lawsuit by the Pacific Legal Foundation that claimed the ACA was unconstitutional because the legislation did not originate in the House. The Origination Clause of the U.S. Constitution requires that any bill that would raise revenue be introduced in the House. The judge in this case ruled against this claim by arguing that raising revenue was not the intent of the ACA and therefore the Origination Clause did not apply in this case. 

West Virginia’s Attorney General Patrick Morrissey filed a lawsuit against President Obama claiming the president overstepped his authority when his administration instituted a “fix” that allowed people to keep health plans that did not meet the law’s minimum coverage standards and required states to determine whether a health plan adheres to requirements under the ACA. The lawsuit alleges that the ACA requires the federal government to make such determinations and that this fix is an overreach of President Obama’s power. 

IN THE STATES

On July 25, New Mexico’s health exchange board announced that it will not launch its own exchange for the upcoming November 2015 ACA open enrollment period. New Mexico will use the federally run exchange via HealthCare.gov for another year.

On July 29, it was reported that CMS is seeking to recoup $1.3 billion in Medicaid funds from New York state. According to CMS, New York did not provide adequate justification for these costs, and the state did not comply with federal reporting requirements. The funds in question were distributed to the state in 2010. Governor Cuomo (D-N.Y.) has promised to appeal the decision.

THIRD PARTIES

The American Medical Association (AMA) has notified CMS that it has a number of issues regarding the Sunshine Act, specifically with the database that tracks payments made to doctors from manufacturers and teaching hospitals. The payment database was created by an ACA provision that is intended to increase transparency of physician payments. The data is slated to go public on September 30, 2014, and providers have until August 27 to review and verify the data. According to the AMA, the database portal has numerous technical glitches and burdensome login issues, and the provider group is requesting a delay of the public release of the data.

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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