Health Care Reform Implementation Update - June 12, 2013

by Cozen O'Connor

Discussions around reforming Medicare’s sustainable growth rate (SGR) continued this week as the Committee on Energy & Commerce held a hearing to solicit input on a draft bill for replacing the current SGR formula; the Ways and Means Committee noticed a hearing on post-acute care reform for Friday 6/15; the House of Representatives approved track and trace legislation; Dr. Gilfillan’s departure from the Centers for Medicare & Medicaid Innovation (CMMI) became public; CMS released average estimated submitted charges for 30 hospital outpatient procedures; Michigan Gov. Snyder pushed state legislators to approve Medicaid expansion in the state and the Maine state House voted for expansion.


On June 5, the House Energy & Commerce Committee held a hearing to solicit input on a draft bill for replacing the current Sustainable Growth Rate (SGR) formula. The draft bill suggests pay stability until quality measures are developed for an outcomes-based pay system.

On June 3, the House of Representatives approved a track and trace bill, which legislates how the federal government will track prescription drugs moving through the distribution chain, aiming to prevent counterfeit drugs from reaching consumers.

Republicans in the House are planning to try to pass a revamped bill on the ACA’s high-risk pool later this month. House Majority Leader Eric Cantor (R-Va.) sent a memo to his Republican colleagues saying that the House would try to pass a bill in June that would kill the Prevention and Public Health Fund. The Helping Sick Americans Now Act has been reworked from earlier this spring so that it will repeal the Prevention and Public Health fund without boosting funding for the Pre-existing Conditions Insurance Plan, and it will transfer funding only to state-based pools.

Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) say that despite a recent federal ruling affirming that Medicare data should be available to the public and federal efforts to make some data publicly available, much more still needs to be done to make Medicare claims data fully transparent. The two plan to reintroduce the Medicare Data Access for Transparency and Accountability Act (Medicare DATA Act), which would require the Secretary of HHS to issue regulations to make available a searchable Medicare payment database that the public can access at no cost.

On June 5, House Democrats met with the White House’s communications adviser for health care, Tara McGuinness, about enrollment in the law's marketplaces.

On June 5, Rep. Raul Labrador (R-Idaho), who is a member of the "Gang of Eight" working on immigration reform, informed his colleagues that he would not be able to sign on to the legislation the group plans to introduce soon. He will be leaving the group because he is concerned that the bill will not protect taxpayers from having to cover the costs of undocumented immigrants’ health care.

On June 4, Sen. Marco Rubio proposed The Right to Refuse Amendment, a constitutional amendment that would undo the individual mandate requirement of the Affordable Care Act. The proposed amendment would declare that "Congress shall make no law that imposes a tax on a failure to purchase goods or services." It is not expected that this symbolic proposal will get much traction.


On June 3, it became public news that Dr. Richard Gilfillan, who has led the Center for Medicare and Medicaid Innovation since its creation in 2010, will leave his position as director at the end of June. Patrick Conway, who is CMS’ CMO and director of the Center for Clinical Standards and Quality, will serve as acting director of CMMI in addition to his other roles.

On June 3, CMS released average estimated submitted charges for 30 hospital outpatient procedures, revealing big differences among hospitals in how much they bill patients for the same service. This data follows CMS’ recent disclosure of pricing for 100 common hospital inpatient procedures.

On June 4, at a hearing before the House Education and the Workforce Committee, Health and Human Services (HHS) Secretary Sebelius said that she spoke with companies her department is responsible for regulating about supporting, but not funding, enrollment organizations linked to the Affordable Care Act.

Two IRS officials – Fred Schindler and Donald Toda – responsible for implementing the Affordable Care Act have been placed on administrative leave due to their acceptance of free food and gifts.

Several publications flagged the discovery this week that Secretary Sebelius, as well as other officials at the Department of Health and Human Services and the Department of Labor, use secret email addresses not usually disclosed to the public. The Associated Press published one of Sec. Sebelius’ email addresses despite a request from her aides not to make it public.

Two HHS agencies – the Office of the National Coordinator for Health Information Technology and the Office of the Assistant Secretary for Planning and Evaluation – announced they are partnering together to develop a data-sharing plan for outcomes research. The Affordable Care Act made close to $200 million available for building this infrastructure.


On June 3, the Obama administration unveiled new initiatives aimed at reducing the stigma of mental illnesses. President Obama discussed bringing mental illness "out of the shadows" at a White House conference on psychological health included in a wider campaign to reduce gun violence. Also during the conference, Secretary Sebelius said that HHS officials want to finish clarifying the parity act, which would cover mental health services on a par with physical health care, by the end of the year.


Gov. Rick Snyder is prodding Michigan state lawmakers to approve Medicaid expansion in the state before the legislature’s recess begins on June 27. Snyder invited Sec. Sebelius to meet with Republican lawmakers to consider a House GOP proposal that would put a four-year lifetime cap on able-bodied adults to be on Medicaid.

On June 4, the D.C. Council voted unanimously for temporary legislation that mandates small-business owners to purchase employee health insurance through a government-run exchange. This mandate will not take effect until 2015. The temporary legislation, however, will expire in October 2014, so we expect the debate over a small-business owner mandate to reemerge then.

Pennsylvania Governor Tom Corbett wrote to Sec. Sebelius requesting an exemption to prevent close to 70,000 Pennsylvania children in the Children's Health Insurance Program (CHIP), a state-subsidized health insurance program, from having to switch to Medicaid. Community Legal Services of Philadelphia, a public interest law center, is disputing Corbett's claims.

On June 4, the Maine House approved a bill to expand the state’s Medicaid program. The amended version says the state can opt out of the Medicaid expansion if the federal government fails to live up to its promises to cover most of the cost of the added Medicaid spending.

This week, five health insurance firms announced they plan to sell insurance in Arkansas’ health insurance marketplace – Arkansas Blue Cross Blue Shield of Little Rock, National Blue Cross Blue Shield Multi-state Plan, QCA Health Plan of Little Rock (does business as QualChoice of Arkansas), Celtic Insurance Co. of Chicago (through its subsidiary NovaSys Health), and United Security Life & Health Insurance of Bedford, Ill.


At least three circuit courts of appeal have heard oral arguments on the ACA’s contraceptive coverage requirement in the past few weeks. The cases arose when businesses challenged the requirement that they provide contraceptives to employees in their health plans. We expect that any party that loses one of these cases will appeal the ruling to the Supreme Court. The Supreme Court is more likely to consider the issue if there are split decisions in the circuit courts. Another, and possibly riskier threat to the ACA, is the set of cases that argue the Internal Revenue Service is unlawfully implementing some subsidies to help individuals buy insurance since the law as written only authorizes the agency to provide subsidies to those in exchanges “established by the state.”


Because 14 states have decided not to expand Medicaid, a study in Health Affairs, which ultimately argues that states should expand their Medicaid program, estimates that 3.6 million fewer people will get insurance, with a total of 27.9 million people uninsured, and federal payments to the state could decrease by $8.4 billion.

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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