Health Care Reform Implementation Update - October 22, 2013

by Cozen O'Connor

After 16 days of government shutdown, Congress voted to reopen the government and avert default without defundingthe Affordable Care Act, delaying the individual mandate, stripping the medical device tax from the law or requiring members of Congress and their staffs to join the ACA exchanges and lose their federal subsidies. The legislation does include a small change to income verification for determining eligibility for exchange subsidies. Additionally, now at the end of the third week of the exchange enrollment websites being up and running online, the federal exchange website is still plagued with glitches, which the Department of Health and Human Services and the president have pledged to correct and restore quickly, using a variety of outside contractors and agency staff to create a “tech surge” whose mission is to reconstruct problem areas and bring functionality to the federal exchange system. 


On October 16, Congress passed a bill that ended the government shutdown and raised the debt ceiling. The bill, H.R. 2775, funds and reopens the government through January 15, 2014 and raises the debt limit through February 7, 2014. The deal was brokered by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), and other than a change to income verification requirements, the Affordable Care Act was left intact, fully funded, and undelayed. President Obama signed the bill into law on October 17.

The deal that ended the shutdown, however, creates a new brinkmanship timeline that has some physicians worried. While the government is now funded through January 15, 2014, the Sustainable Growth Rate (SGR) formula is scheduled to cut some physicians’ Medicare payments by as much as 25 percent starting January 1. If the SGR fix, or “doc-fix,” becomes a part of the fiscal package and negotiations go down to the wire, some physicians may find Medicare payments for the 11 business days in that period cut or requiring retroactive reimbursement. If the doc-fix does not become a part of the new funding bill, then it will require its own, standalone bill to prevent the upcoming physician payment cut.

This past week, leading up to the final deal, several proposals were floated that involved modifying the Affordable Care Act.  Sen. Susan Collins (R-Maine) had proposed a plan to end the government shutdown with a bill that would repeal the medical-device tax and authorize federal agencies to reallocate sequester cuts within each agency. Democratic leaders in the Senate rejected the offer, arguing that it asked for too much in exchange for too little. On October 12, a cloture vote failed to reach the requisite 60 votes in the Senate to end debate on a Democrat-backed bill to raise the debt ceiling through 2014. The bill, which failed on a vote of 53-45, would have raised the debt limit $1.1 trillion. House Speaker John Boehner (R-Ohio) had previously proposed a short-term plan on October 10 that would have raised the debt ceiling through November 22 while suspending the medical device tax for two years and requiring the president, vice president, the cabinet and members of Congress to join the exchanges. The bill would have also delayed the tax on medical devices for two years and eliminated federal employer subsidies for health care for the president, vice president, his cabinet, members of Congress, and congressional staff. 

Republicans on the House Committee on Energy and Commerce are requesting answers from top HHS officials as to why the exchange websites continue to malfunction. In an October 10 letter, they informed HHS of their intention to schedule a hearing to address the widespread, continued issues on the website.  The hearing, titled, “PPACA Implementation Failures: Didn’t Know or Didn’t Disclose?” is scheduled on Thursday, October 24. Although invited as a witness, it is unclear if Secretary Kathleen Sebelius will testify.

On October 16, Reps. Diane Black (R-Tenn.) and Patrick Meehan (R-Pa.) sent a letter to HHS Inspector General Daniel Levinson requesting a copy of HHS’ security control assessment of the federal data hub. Reps. Black and Meehan’s letter seemed especially concerned with cybersecurity safeguards and the background checks of the Navigator program.

On October 10, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and Sen. Lamar Alexander (R-Tenn.) sent a letter to HHS Sec. Sebelius asking, among other questions, if those who have attempted to enroll in the exchanges but could not due to technical errors will still face tax penalties in 2014. 

Some Republican lawmakers, including Sen. Pat Roberts (R-Kan.), and separately Rep. John Fleming (R-La.), are calling for HHS Sec. Sebelius to resign due to exchange failures and criticized the department’s “gross incompetence” in handling the exchange rollout. 

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the administration, has reopened after weeks of being closed because of the government shutdown. Its November meetings are still scheduled. The Medicaid and CHIP Payment and Access Commission, MACPAC, was also closed during the government shutdown, and cancelled its scheduled October 17 meeting. The next MACPACmeeting is November 14.


The Obama administration said this week that to avoid individual mandate penalties you must be registered for health insurance by mid-February.

On October 15, Medicare open enrollment began and will run to December 7. Officials are concerned that the overlap with the ACA exchanges will cause beneficiary confusion.

The health exchanges continue to malfunction. It was revealed this week that CGI Federal is the IT contractor behindACA’s failing websites. is in the early stage of launching a new estimate tool to allow users to look at premium estimates before creating an account.


ACA state exchanges are experiencing fewer glitches and having more success enrolling uninsured individuals than federal exchanges. 

Ohio Governor John Kasich (R) is currently weighing the possibility of expanding Medicaid in the state without legislative approval, preparing for the likelihood that GOP lawmakers will reject it. Gov. Kasich has requested Ohio’s Controlling Board authorize the Medicaid expansion now that CMS has approved the state’s Medicaid State Plan Amendment. 


A new report from the Kaiser Family Foundation shows that 5.2 million poor, uninsured adults will fall into the coverage gap in the 26 states that have opted out of Medicaid expansion under the ACA.

On October 15, the Republican National Committee (RNC) released a Web video calling for HHS Sec. Sebelius to be fired over the problems with the rollout.  RNC Chairman Reince Priebus insisted that “If this were a company and not the government, she’d already be gone.  She should be fired.”  White House Press Secretary Jay Carney has stated that President Obama continues to have full confidence in Secretary Sebelius.


On October 15, Autocam, an Ohio company, became the fourth to request that the Supreme Court strike down the Affordable Care Act’s requirement that employers provide insurance coverage for contraception on religious liberty terms.  Preceding Autocam are Liberty University, Conestoga Wood Specialties Corp., and the Obama administration.  Autocam lost its challenge to the contraception requirement of the law in the 6th Circuit Court of Appeals.

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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