Health Care Reform Implementation Update - March 14, 2013

by Cozen O'Connor

Last week, the Department of Health and Human Services (HHS) conditionally approved state partnership marketplaces in Iowa, Michigan, New Hampshire and West Virginia; Accountable Care Organizations wrote to the Centers for Medicare & Medicaid Services (CMS) arguing that the quality targets set by the Center for Medicare & Medicaid Innovation (CMMI) were arbitrary; and legislation implementing Medicaid expansion in Florida struggled to get through the state legislature.


On Wednesday (3/6), the Republican controlled House of Representatives passed a continuing resolution that would fund the government through the end of the fiscal year.  The measure allows the Food and Drug Administration (FDA) to fully collect medical device and generic drug user fees.  Senator Ted Cruz (R-Texas) is planning to offer an amendment to the legislation that would delay funding of the ACA.

Senators Alexander and Corker are pushing S.11, the Fiscal Sustainability Act, which would save an estimated $689 billion in health savings over 10 years and reform Medicaid and means-test Medicare.


In response to CMMI’s quality metrics for ACOs, which are the targets pioneer Accountable Care Organizations (ACOs) have to meet in order to receive bonus payments in 2013, many of the ACOs wrote to CMS arguing that at least 19 of the targets were arbitrary or unreasonable due to a lack of data to support them.  The Pioneer ACOs received payments in 2012 for reporting on the 33 metrics. In 2013 though, the ACOs will be paid for performance, not just reporting.


HHS conditionally approved state partnership marketplaces in Iowa, Michigan, New Hampshire and West Virginia.  The partnership marketplaces (formerly exchanges) will allow these states to control various marketplace components, while the federal government runs others.  Seven states have now been approved for partnership marketplaces.

On Thursday (3/7), the Minnesota Senate approved a bill implementing the state health insurance marketplace. A companion bill passed in the House on Monday (3/4).  Unlike the  House bill, which would fund the exchanges’ operating costs with a tax on exchange premiums up to 3.5 percent, the Senate bill would fund it by diverting money from an existing 75-cent state fee on a pack of cigarettes.

On Monday (3/4), the Florida House of Representatives signaled it does not plan to go along with Gov. Rick Scott's turnaround on Medicaid.  On Monday, the House Select Committee on the Patient Protection and Affordable Care Act expressed substantial doubts that the federal promises for Medicaid funding assistance could be relied on long term.

On Tuesday (3/5), hundreds of protesters marched in Austin to protest Texas Governor Rick Perry's decision not to support Medicaid expansion in his state.


In health care industry heavy Massachusetts, the Retail Association of Massachusetts and the South Shore Chamber of Commerce are urging the White House to reconsider its proposed rule on rate review, which prevents health plans from denying coverage or setting rates based on certain factors.  The Massachusetts groups argue that holding small businesses to the same rating standards as large businesses is discriminatory.  Specifically, the group’s request that nothing in the rule should be construed to preclude a state from allowing health insurance carriers to offer additional discounts and incentives if approved by the state insurance regulator.

The Urban Institute argues in a new paper that the government could save close to $90 billion over 10 years if it allowed 65 and 66-year olds to buy into Medicare if they choose to, but asking middle and high income earners to share more of the cost.

Written by:

Cozen O'Connor

Cozen O'Connor on:

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