Health Care Reform Implementation Update

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The Affordable Care Act (ACA) received a great deal of attention this past week in Washington. The House held numerous hearings on implementation issues, including oversight of access to care for ACA enrollees and improper subsidy payments. The Senate postponed a vote on the appropriations bill that covers funding for the Department of Health and Human Services (HHS). And the Medicare Payment Advisory Commission and the Medicaid and CHIP Payment and Access Commission released their June reports to Congress on June 13. Then yesterday, Secretary Sebelius made her first public appearance since leaving HHS at an Enroll America conference to discuss the ACA's successes and challenges. HHS also released subsidy and premium payment data for ACA plans.

ON THE HILL

On June 12, Senate Appropriation Committee Chairwoman Barbara Mikulski (D-Md.) postponed a committee vote on the Labor-HHS appropriations bill. Some Democratic senators in tough reelection races are reluctant to be on the record voting to fund the Affordable Care Act. Senator Mikulski has not yet indicated when a new vote would be scheduled.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Senator Chuck Grassley (R-Iowa) sent letters to nearly 100 health care industry stakeholders requesting information on how data transparency could assist the industry with improving services. Chairman Wyden has long supported making medical data public and supports Centers for Medicare and Medicaid Services’ (CMS's) recent release of provider and hospital pricing data.

On Friday June 13, the Medicare Payment Advisory Commission (MedPAC) released its June report to Congress, outlining its recommendations on Medicare payments and delivery systems through the traditional fee-for-service (FFS) model, Medicare Advantage (MA) plans, and Accountable Care Organizations (ACOs). The report centers on seven discussions: synchronizing Medicare payment policy across payment models, improving risk adjustment in the Medicare program, measuring quality of care in Medicare, financial assistance for low-income beneficiaries, paying for primary care using a per beneficiary payment, Medicare payment differences across post-acute settings, and measuring the effects of medication adherence on medical spending for the Medicare population. MedPAC did not make any formal recommendations in this report. The House Ways and Means Health Subcommittee on Health will hold a hearing on June 18 to discuss the June report, at which MedPAC Executive Director Mark Miller will testify.

The Medicaid and CHIP Payment and Access Commission (MACPAC) also released its June 2014 report to Congress on June 13. The main topics of discussion in the report are CHIP and the new coverage landscape, Medicaid’s role in providing assistance with long-term services and supports, Medicaid and CHIP program statistics, Medicaid and population health, and building capacity to administer Medicaid and CHIP. MACPAC formally recommends in the report that Congress extend federal funding for CHIP for an additional two years. On a related note, Senator Jay Rockefeller introduced a bill on June 11 that would extend funding for CHIP through 2019.

On June 12, Republicans from the House Oversight and Government Reform Committee released a report that says the nonprofit health insurance cooperatives (CO-OPs) created under the ACA are not meeting their enrollment goals. The report claims that the low enrollment numbers for CO-OPs will make it difficult for these organizations to pay back the $2 billion in federal loans they received to boost enrollment. Overall, CO-OPs planned to enroll 575,000 people nationwide and have only enrolled about 450,000 thus far. There are also vast disparities in CO-OP enrollment numbers across states. A CO-OP in Tennessee only managed to enroll 325 people out of its goal of 25,000 enrollees, while a New York CO-OP had only planned to enroll 18,000 and yet enrolled 112,000 individuals.

On June 12, the House Energy and Commerce Subcommittee on Health held a hearing regarding access to care for ACA enrollees. Scott Gottlieb, resident fellow at the American Enterprise Institute, was the main witness. He testified that many ACA plans will cost patients more than employer-sponsored coverage and “narrow options when it comes to their choice of doctors and drugs.” Subcommittee Chairman Fred Upton (R-Mich.), stated in his testimony that patients are paying “130 percent more in out-of-pocket costs for medicines in silver plans on health care exchanges when compared to employer-sponsored coverage.”

In a June 10 letter to CMS, Congressman Jim Renacci (R-Ohio) and 33 other members expressed their concern over the current calculation method for Medicare readmissions penalties. In the letter, the congressional members call for the calculation to be risk adjusted for providers that serve the sickest and poorest Medicare beneficiaries. Congressman Renacci had introduced a bill in January that would require CMS to recalculate penalties under a risk adjustment model. The bill was titled the “Establishing Beneficiary Equity in Hospital Readmission Program Act.”

This past week, numerous House Republicans called for a suspension of ACA subsidies citing recent reports that there are potentially millions of incidents of improper subsidy payments. Congressman Charles Boustany (R-La.) warned that tax filings for 2015 could create a “nightmare scenario” in which the IRS will have to recover improper ACA subsidy payments from individuals who were not actually eligible for them. Congresswoman Diane Black (R-Tenn.) also introduced a bill to suspend subsidy payments until the subsidy payment data is verified.

AT THE AGENCIES

On June 18, HHS released data on health insurance subsidy payments and premium costs in the 36 states that offered coverage through the federal exchange on Healthcare.gov. According to the data, subsidies and premium payments varied widely across different states. For example, average monthly premiums were $23 in Mississippi, in comparison with New Jersey, where average monthly premiums were $148. President Obama’s administration is touting the report, claiming that it reveals that the exchanges are working and encouraging competition. In a conference call about the data, HHS officials also revealed that they still do not have complete information on how many enrollees in ACA exchanges have actually paid their monthly premiums. They intend to release that data in the coming months.

CMS published a rule announcing modifications to payments for both low-volume and Medicare dependent hospitals. Under the ACA, a temporary payment adjustment was created for low-volume hospitals, and the adjustment was extended by the American Taxpayer Relief Act and the Pathways for SGR Reform Act. The Protecting Access to Medicare Act of 2014 (PAMA) further extended the low-volume hospital payment adjustments through the first half of fiscal year 2015 and extended the Medicare-dependent small rural hospital program through the first half of fiscal year 2015 as well. The modifications announced last week apply the payment adjustments contained in the PAMA for the first half of fiscal year 2015 to the second half of fiscal year 2014, i.e., to discharges occurring between April 1, 2014 and September 30, 2014.

CMS introduced a new initiative to help newly insured individuals understand their coverage and to help them access primary care and preventive health services. The initiative — called “From Coverage to Care” — includes resources such as videos and informational booklets.

IN THE COURTS

On June 12, HHS told a federal district court that it is not planning to submit additional briefs in the 340B Drug Pricing Program case against the Pharmaceutical Research & Manufacturers Association of America. The 340B program requires pharmaceutical companies to provide certain outpatient drugs to eligible safety net providers at reduced prices. In May, a district court ruled that HHS did not have the authority to allow rural hospitals and certain types of cancer hospitals to purchase orphan drugs at a discounted rate when they are not used as treatment for rare diseases. HHS is currently evaluating its options, including whether to appeal the court’s decision or issue an interpretive rule or other interpretive guidance.

On July 7, a district court in Wisconsin will hear arguments in a case brought by Senator Ron Johnson, who challenged the ability of the federal government to pay for a portion of the health insurance premiums of Congressional members and their staffers. Under the ACA, all Congressional members and most staffers must obtain their health coverage through the ACA exchanges. The date for the case was announced last week.

IN THE STATES

On June 12, the Virginia General Assembly passed its state budget without including a provision for Medicaid expansion. Medicaid expansion had become the key issue for debate over the budget, and Governor McAuliffe (D) had previously threatened a potential veto of any bill that would undermine the adoption of Medicaid expansion in the state. The budget bill is now awaiting Governor McAuliffe’s signature, and he has stated that he will “evaluate it carefully and take actions that I deem necessary.” Virginia’s government will shut down on July 1 if a budget bill is not passed.

In Pennsylvania on June 9, advocates for expanding Medicaid in the state held a rally in the state capital. Rally participants claimed that expanding Medicaid immediately would reduce Pennsylvania’s deficit by $500 million and would extend health coverage to 500,000 people. Governor Tom Corbett is still awaiting approval from HHS for his Medicaid expansion plan.

IN THIRD PARTIES

A study released on June 12 by the Premier Inc. health care alliance found that the measures CMS utilizes to identify and prevent hospital acquired infections is flawed. The alliance reports that the CMS measures are too tightly focused and do not provide an accurate assessment of the quality of care provided. Premier found 86 inpatient complications that were associated with large increases in inpatient mortality, costs and lengths of stay. According to Premier, the hospital acquired infections that CMS uses for pay-for-performance payment adjustments occur much less frequently than the conditions that Premier found in its own analysis. It said CMS payment policies address just one-quarter of the complications that Premier identified.

According to a report released by the Robert Wood Johnson foundation this past week, enrollment in Medicaid and CHIP have increased by 6 million people since the implementation of the ACA began.

According to a study released by Georgetown University on June 10, nine states that did not initially permit non-compliant ACA plans to be renewed are now allowing the plans to remain on the market. In November of 2013, the Obama administration gave states permission to allow non-ACA compliant plans to be renewed for a year, and in March of 2014, it extended the time period so that consumers could remain enrolled in the non-ACA complaint plans through the fall of 2017. The nine new states are in addition to 29 states that initially adopted the renewal policy when it was first announced.

Next year, a larger number of health insurers will offer coverage in ACA exchanges compared to the number of insurers offering coverage during the first enrollment period. In three states — New Hampshire, Michigan and Illinois — insurers that did not offer plans in the exchange during the last enrollment period have said they intend to do so next year. In several other states, the number of insurers that anticipate offering plans in the exchanges is also expected to increase.

A report by Accenture finds that private employers are more quickly moving their workers into ACA exchanges than was expected. The Accenture study found that three million individuals enrolled in private coverage through the ACA exchanges, three times the number that Accenture had predicted would enroll when it first estimated the number at the beginning of open enrollment last year.

In a survey conducted by the International Foundation of Employee Benefit Plans of human resources and benefits professionals, less than one percent of surveyed employers reported that they expect to discontinue offering health benefits next year. Though 78 percent of employers surveyed expected that the ACA will raise costs, 94 percent reported that they will definitely or very likely continue to offer health benefits next year.

This past week Bloomberg released the results of its survey of 1,005 people's thoughts on the ACA. A majority of the respondents, 56 percent, are still calling for repeal of the ACA. Of this 56 percent, a majority state that the law went too far, but 11 percent said that the law did not go far enough. Although a majority of the respondents support a repeal of the ACA, that opposition has fallen since 2010 when 67 percent of respondents supported repeal.

On June 11, the insurance industry group, America’s Health Insurance Plans (AHIP), released its proposal regarding catastrophic coverage plans. In the proposal AHIP requests that catastrophic insurance plans be offered on the ACA exchanges at the same subsidy levels as other plan options. Currently catastrophic plans are only available to those under 30, and ACA subsidies cannot be used to purchase them. It is likely that this proposed change would require legislative action.

Topics:  Affordable Care Act, Healthcare, Healthcare Reform, HHS, MedPAC

Published In: Elections & Politics Updates, Health Updates, Insurance Updates, Labor & Employment Updates, Science, Computers & Technology 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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