Health Care Reform Implementation Update - November 5, 2013

by Cozen O'Connor

Criticism of the Affordable Care Act’s exchange rollout continued this past week. The main line of attack has moved from the malfunctioning website to canceled plans despite President Obama’s repeated promise that those who liked their health plans could keep them. The Secretary of the Department of Health and Human Services (HHS), Kathleen Sebelius, and the Administrator of the Centers for Medicare and Medicaid Services (CMS), Marilyn Tavenner, testified before congressional committees this week and apologized for the problems in the rollout. Administrator Tavenner testified again this morning before the Senate Health, Education, Labor, and Pensions (HELP) Committee. Also in the past week, the Senate Committee on Finance and the House Committee on Ways and Means introduced a joint legislative framework to replace the Sustainable Growth Rate (SGR) physician payment formula, adopting much of what the House Committee on Energy and Commerce suggested this summer


On October 30, the Senate Committee on Finance and the House Committee on Ways and Means introduced a joint legislative framework to replace the Sustainable Growth Rate (SGR) physician payment formula that determines how Medicare pays physicians. The proposal adopts many features of H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013, that cleared the House Energy and Commerce Committee with bipartisan support this summer. The key difference between the new proposal from Finance and Ways and Means and the one from Energy and Commerce is that the Ways and Means/Finance proposal would freeze guaranteed annual physician payment updates for 10 years, whereas the Energy and Commerce measure would allow annual increases of 0.5 percent over five years. The discussion draft is now being circulated for comment until November 12.  On October 31, House Energy & Commerce leaders said they support the Finance/Ways and Means proposal.

On October 30, HHS Secretary Sebelius testified at a House Energy and Commerce Committee hearing. She apologized for the website’s malfunctioning and explained a Verizon Terremark network failure that impacted on October 28. In response to a question about costs of the website, Sec. Sebelius said $118 million had been spent on the website itself and about $56 million had been spent on additional information technology to support it. When asked about enrollment numbers, Sec. Sebelius said’s problems made reliable enrollment numbers impossible to determine at this point.

On October 30, CMS Administrator Marilyn Tavenner appeared before the House Ways and Means Committee. Administrator Tavenner apologized for’s problems and told the committee that CMS did not know about the problems until the first week of the website’s launch. Tavenner was asked repeatedly about enrollment numbers, but she did not provide the requested information and continued to say that enrollment data would not be available until mid-November. Chairman Dave Camp (R-Mich.) said that, “We now know the administration was not ready. Frankly, three years should have been enough.”  Administrator Tavenner testified again on November 5 before the Senate HELP Committee.

On October 30, Sen. Mary Landrieu (D-La.) said that she would propose legislation to ensure all Americans could keep their existing insurance coverage under the Affordable Care Act (ACA). Sen. Landrieu faces a tough election as a Democrat in Louisiana in 2014. Similarly, in the House, Chairman of the House Energy and Commerce Committee Congressman Fred Upton (R-Mich.) is introducing the “Keep Your Health Plan Act,” which would allow any insurance plans that were in effect on January 1, 2013 to continue into 2014.

The Congressional Budget Office updated its analysis of an option to raise the eligibility age for Medicare from 65 to 67.  The updated report shows that the age increase would save $19 billion over 10 years, a number that is significantly lower than its 2012 estimate of $113 billion.

House Oversight Committee Chairman Darrell Issa (R-Calif.) has been requesting documents from various entities. He subpoenaed documents from ACA contractor Quality Software Service, Inc. (QSSI), obtained a memo issued days before’s launch that reveals knowledge of security concerns and subpoenaed HHS for documents on the “technical problems” with the websites, user capacity of the site, testing information, and number of people who have enrolled or attempted to enroll on the exchanges.

Guidance on October 29 from the House’s chief administrative officer gave members of Congress until the end of the day on October 31 to decide whether their staffs would enter the DC insurance exchange. The guidance said lawmakers could designate their personal office aides as “official,” which would require them to enter the DC exchanges, or not official, which would mean they do not need to go on the exchanges. Sen. David Vitter (R-La.) proposed legislation that would require Congress to make public which of their staff members are enrolling in the insurance exchanges and which are not. In the meantime though, most of these decisions are being made privately within personal offices on Capitol Hill.

On October 30, Reps. Charles Boustany (R-La.) and Ami Bera (D-Calif.) proposed legislation that would delay for two years ACA’s health insurance premium fee. Under the ACA, a new tax is imposed on health insurance companies beginning in 2014. The expected cost of such a delay is about $15 billion, which is significantly less than the $100 billion price tag of a permanent repeal.

A group of 10 Senate Democrats led by Sen. Jeanne Shaheen (D-N.H.) sent a letter to HHS Sec. Sebelius on October 25 urging her to extend the ACA enrollment deadline due to problems with the exchange website. Senators MarkBegich (D-Alaska), Michael Bennet (D-Colo.), Dianne Feinstein (D-Calif.), Kay Hagan (D-N.C.), Michael Heinrich (D-N.M.) Mary Landrieu (D-La.), Mark Pryor (D-Ark.), Mark Udall (D-Colo.), and Tom Udall (D-N.M.) also signed the letter.

The Medicare Payment Advisory Commission, MedPAC, the independent body that advises Congress on issues affecting the administration, will meet this week on November 7 and 8. The meeting will be broken into the following sessions: synchronizing Medicare policy across delivery systems, measuring quality across Medicare’s delivery systems, Medicare accountable care organizations (ACOs), rationalizing Medicare’s payment for post-acute care, improving Medicare payment for chronically critically ill patients in hospital settings, Medicare managed care topics, initial approach to the payment update and other policy options for physicians and other health professionals, and Medicare beneficiaries’ access to hospital care and near-term changes in Medicare’s payment policies.


Traditionally, the annual Medicare physician fee schedule is released around November 1; however, it is delayed this year due to the government's shutdown, which slowed down agency work. Also delayed are three payment rules: Medicare’s End-Stage Renal Disease Prospective Payment System, the Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems rule, and the Home Health Prospective Payment System final rule for 2014.

The online exchanges continue to malfunction and to be taken offline for long stretches of time. Americans whose insurance plans have been canceled are further frustrated by their inability to see their options and sign up for plans online. Others are concerned that if the young and healthy cannot sign up soon, insurers would be forced to raise premiums to cover the costs of older, sicker individuals. Additionally, newly released documents from the House Oversight Committee show that on the first day the federal exchange was open, only six individuals enrolled.

On October 28, CMS announced that the premiums and deductibles for Medicare Part B would not increase in 2014. CMS attributed the positive projections, in part, to the ACA. Additionally, CMS announced that seniors had saved $8.3 billion on Part D prescriptions since the ACA went into effect.

CMS announced that it plans to re-open the Comprehensive End Stage Renal Disease (ESRD) Care Initiative to solicit additional participation and respond to stakeholder feedback. The new initiative will allow CMS to partner with groups of health care providers and suppliers to test and evaluate a new model of payment and care delivery specific to Medicare beneficiaries with ESRD.


As the White House appoints technical experts to resolve technical problems with the health insurance exchanges, news is surfacing that in the immediate aftermath of the ACA being signed into law, high-level advisors to President Obama, including Larry Summers, director of the White House’s National Economic Council, and Peter Orszag, head of the Office of Management and Budget, agreed with an outside advisor well known for his health policy expertise, David Cutler, who argued that to make the ACA work, those with business, technology and insurance experience should be included in developing the exchanges.

On October 30, President Obama spoke about the Affordable Care Act in Boston. With Faneuil Hall (where former Governor Romney signed Massachusetts’ health reform into law) as a backdrop, President Obama addressed criticisms that he had broken his pledge to Americans that they would be able to keep their health insurance plans if they liked them. The President also discussed the benefits of the law that are already in effect and working well.

On November 4, President Obama spoke about enrolling Americas on health insurance exchanges at an Organizing for Action event. Organizing for Action is the political nonprofit that mobilizes support for the White House agenda.


On November 1, the U.S. Court of Appeals for the District of Columbia overturned a lower court’s ruling and said that the individual owners of Freshway Foods and Freshway Logistics of Sidney, Ohio, should not have to provide coverage for contraception to their employees. The court noted that only individuals could bring these cases, not corporations. The decision came out 2-1, and the majority judges said forcing the owners to cover employees’ contraception was a violation of the owners’ religious rights.

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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