Health Care Reform Implementation Update - September 17, 2013

by Cozen O'Connor

Congress has been back for a week, and already the president and Democrats are engaged in a contest with Republicans to see who will blink first. Additional spending legislation needs to be passed to keep the government running past September 30, and the debt ceiling could be hit as soon as mid-October. Expecting that a deal will not be made until the last minute, Congress is already considering canceling the September recess. At least 43 House Republicans are trying to fund the government but delay the Affordable Care Act (ACA) and all funds for it until 2015, a prospect that has already been rejected by the Democratic Senate and would be vetoed by the White House. Another group of House Republicans is planning to pass a continuing resolution that funds the government after September while prohibiting the president, the vice president, most lawmakers, staff and political appointees from receiving federal subsidies and tax credits. Meanwhile open enrollment begins in less than three weeks, the Centers for Medicare and Medicaid Services (CMS) has released a final rule on Disproportionate Share Hospital payments, the Medicare Payment Advisory Commission (MedPAC) reconvened last week, the Congressional Budget Office (CBO) released a score of a permanent doc-fix that is higher than earlier estimates, and on September 16, Governor Corbett announced Pennsylvania’s intention to adopt a version of Medicaid expansion and Gov. Rick Snyder signed Medicaid expansion into law in Michigan.


On September 13, CMS finalized the ACA rule that will reduce Disproportionate Share Hospital (DSH) payments for fiscal years 2014 and 2015. According to the CMS Fact Sheet on the final rule, “State decisions to expand Medicaid will not affect the amount of reduction in DSH allotments.”

The Department of Labor issued guidance in a frequently asked questions document affirming that employers may hire third-party vendors to implement the ACA’s requirement that employees be notified that health insurance is available through the marketplaces.

On September 10, the Board of Governors of the Patient Centered Outcomes Research Institute (PCORI) voted to fund 71 projects that will treat heart disease, cancer, obesity and other chronic conditions totaling $114 million.

On September 12, the federal data hub that will be the conduit for data inputted into insurance marketplaces completed security testing and was certified to operate when the exchanges open for open enrollment on October 1. Many have been, and others still are, skeptical that the system will protect individuals’ private data. A day earlier, at a House Committee on Homeland Security Subcommittee on Cybersecurity hearing, Chairman Patrick Meehan (R-Pa.) said “With just 20 days remaining before the hub goes live, I have grave concerns from a cybersecurity standpoint.” Chairman Meehan pointed to “increasingly sophisticated ways to steal and manipulate information.”


On September 13, the Obama administration announced that it would deny the requests of labor leaders for an exemption from the ACA that would have enabled their health care plans to receive tax subsidies.


A group of House Republicans including, some have suggested, Speaker of the House John Boehner (R-Ohio), are planning to pass a continuing resolution to fund the government past the end of September with one notable surprise, a clarification to the ACA that would require Congressional members and their staff to join the health care marketplaces established by the ACA and prohibiting most lawmakers, staff, political appointees, the president and vice president from receiving federal subsidies and tax credits. Such legislation would be similar to a bill sponsored by Reps. Ron DeSantis (R-Fla.) and Dennis Ross (R-Fla.), as well as Sen. David Vitter (R-La.). The goal, of course, is to force the Senate to be the chamber to have to make the call on whether to prevent a government shutdown or protect health benefits of their staffs.

On a similar note, 43 House Republicans are backing a plan to fund the governmentwhile delaying and defunding Obamacare for one year.  On September 12, Rep. Tom Graves (R-Ga.) introduced the Stability, Security and Fairness Resolution, which would fund the government for 2014 and delay and defund the ACA until 2015. The original cosponsors of the resolution are listed here.  However, despite momentum from House conservatives, the approach is dead on arrival in the Senate and would certainly be vetoed by the president, raising the stakes for a government shutdown.

On September 11, Senate Minority Leader Mitch McConnell (R-Ky.) submitted an amendment to an energy efficiency bill under consideration to delay the individual mandate for a year and codify the White House’s one-year delay of the employer mandate.

Congress is facing a mid-October deadline to pass legislation that would raise the debt limit. Speaker of the House John Boehner has said that he will not agree to any deal that raises the debt limit unless there are simultaneous changes and reforms made to handle Washington’s spending problem. Some House conservatives plan to demand that no deal be made unless it strips money from the ACA.

Notwithstanding the priority House and Senate committees with jurisdiction over health care issues place on a permanent fix to the Sustainable Growth Rate (SGR) formula, the CBO’s latest report likely will make a permanent fix near to impossible this year. On September 13, the CBO said in a report that the Energy and Commerce Committee bill to repeal and replace the SGR formula would cost $175 billion over 10 years, without the added cost of traditional extended policies. It is unlikely that a bill with such a big price tag, for which no one committee has yet to describe offsets, will become law, though we do expect there to be a one or two-year fix to preserve doctors’ Medicare payment rates, likely to be negotiated in the last few days of the calendar year.

On September 11, the House passed a bill, the No Subsidies Without Verification Act, that would require a system be in place to verify eligibility for health insurance subsidies before health insurance subsidies are paid out.

On September 12, the Congressional Long Term Care Commission, organized by Congress after the CLASS Act was effectively removed from the ACA, issued a series of recommendations for addressing long-term care issues. The Commission’s primary general recommendation is to “promote services for persons with functional limitations in the least restrictive setting appropriate to their needs – building a system, including Medicaid, with options for people who would prefer to live in the community.”

The House Energy and Commerce subcommittee on Oversight and Investigations will hold a hearing on September 19 at which Gary Cohen, the head of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS will testify about his agency’s preparedness for enrollment in insurance marketplaces. CCIIO is leading the launch of the federally facilitated marketplaces and enactment of new ACA insurance rules.

On September 9, Sen. John Thune (R-S.D.) introduced the Union Bailout Prevention Act, which would block a union-backed proposed change to the ACA, and filed it as an amendment to the energy bill being deliberated by the Senate. Additionally, Senate Finance Ranking Member Orrin Hatch (R-Utah) and House Ways and Means Chairman Dave Camp (R-Mich.) wrote to Treasury Sec. Jack Lew to say they oppose any change to the health care law allowing insurance subsidies to be collected for union health plans.


Pennsylvania Governor Tom Corbett held a press conference on September 16, at which he announced that his administration is now hoping to expand the state's Medicaid program. The plan Gov. Corbett outlined would use private health insurance plans and add new requirements for all Medicaid enrollees, such as paying monthly premiums and demonstrating they are searching for jobs.

On September 6, the federal government told Gov. Corbett’s administration said that it had to shift tens of thousands of children from the Children’s Health Insurance Program (CHIP) to Medicaid. Sec. Sebelius told Gov. Corbett in a letter that the ACA requires the switch to simplify coverage for families by putting children in the same program as their families. Gov. Corbett has argued that such a switch would be difficult for children who already have doctors and relationships with those doctors. As recently as September 10, Pennsylvania’s insurance regulator, Michael Consedine said that he could not say whether the administration would comply.

On September 16, Governor Rick Snyder signed Michigan’s Medicaid expansion plan into law.

D.C. United, the District’s professional soccer team, is going to help publicize the District of Columbia’s ACA marketplace. This partnership follows last week’s news that the Baltimore Ravens will be promoting Maryland’s state marketplace.


The Medicare Payment Advisory Commission (MedPAC) reconvened this past week. The commission discussed the possibility of recommending that Medicare create a supplemental Medigap coverage plan to encourage patients to seek treatment from a single accountable care organization (ACO).

On September 9, Rite Aid announced that it will help individuals enroll in the Affordable Care Act’s new insurance marketplaces and help educate them on the law as well.

On September 11, the AFL-CIO Convention passed a resolution that expresses its support for the ACA’s goals but highlights several implementation issues with which it takes issue. Chief among the AFL-CIO’s concerns is the way the ACA treats multi-employer health care plans. In the resolution the AFL-CIO expresses that its ultimate desire is a single-payer model.

On September 10, the Service Employees International Union (SEIU) announced that the organization would assist HHS with ACA outreach in 30 cities in the coming weeks.

Time Warner Inc. is planning to move U.S. retirees from company-administered health plans to private exchanges, and instead put funds into accounts retirees can use to shop for health coverage.

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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