Health Care Reform Implementation Update - December 19, 2013

by Cozen O'Connor

The deadline to enroll in coverage for January 1 was officially extended by a week, but the new December 23 deadline is fast approaching, and premium payments are required to be paid by the last day of 2013 for January 2014 coverage. Last week, both the Senate Finance Committee and the House Ways and Means Committee advanced legislation to permanently repeal the sustainable growth rate (SGR) formula, which is used to determine Medicare reimbursement for physicians; however, the legislation was not offset or “paid for” and is not expected to be passed until next spring, when it could be wrapped up in a larger debt ceiling package. Also in the past week, the House and Senate passed a two-year budget deal, which creates a “doc fix” (a physician payment patch so that SGR payment rates do not kick in while lawmakers continue work on a permanent repeal), extends for two years sequester cuts to Medicare, and decreases the likelihood of another government shutdown in January. The president is expected to sign the deal as well. The Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC) both held their regular monthly meetings last week, the Department of Health and Human Services released an interim final rule formalizing the Obama administration’s delay of the enrollment deadline from December 15 to December 23, and the Centers for Medicare and Medicaid Services (CMS) announced an extension of the Pre-Existing Condition Insurance Plan of a month.


On December 10, Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wis.) announced an $85 billion budget agreement to set new funding levels for the next two years, cut the deficit by $23 billion, and provide $63 billion of sequester relief. On December 12, the House passed the two-year budget deal with a vote of 332-94, and the Senate passed the budget deal on December 18th with a vote of 64-26. President Obama has indicated he will sign the legislation into law. The budget includes a three-month SGR patch. Once President Obama signs the bill, the doctor payment cut will be averted for three months.

On December 12, the House Ways and Means Committee unanimously approved a bill that would repeal and replace Medicare’s Sustainable Growth Rate formula. On December 11, Chairman Dave Camp (R-Mich.) changed the bill to avoid strong opposition by surgeon groups by including a 0.5 percent update to physician payments from 2014 to 2016, which adds between $8 and $9 billion to the cost of the bill.

The Senate Finance Committee held a markup of the SGR repeal legislation on December 12 and advanced the plan as well. The Senate Finance version of the bill did not include the 0.5 percent pay increase. It did, however, include seven amendments that: establish a five-year demonstration project allowing community behavioral health providers to be paid more under new criteria; permanently extend the Medicare Dependent Hospital program and Low-Volume Hospital program, which provide a bump to rural hospitals that treat higher numbers of Medicare patients; set a floor for the physician work index in the Medicare fee schedule; establish a demonstration project for remote patient monitoring; extend transitional medical assistance for five years; define podiatrist as a physician in Medicaid; and provide technical assistance to small rural providers in the value-based purchasing program.

The SGR-repeal bills moving through the Senate Finance and House Ways and Means Committees are not expected to be passed until next spring, when they could be wrapped up in a larger debt ceiling package.

On December 12, House Energy & Commerce Oversight Subcommittee Chairman Tim Murphy (R-Pa.), introduced the Helping Families in Mental Health Crisis Act, which focuses programs and resources on psychiatric care for patients and families most in need of services by increasing inpatient and outpatient treatment options; clarifying standards used to commit an individual to medical care; updating the existing legal framework to help families and physicians communicate during a crisis; and moving toward data-driven, evidence-based models of care so treatment is accessed not through the criminal justice system by the health care system.

On December 10, House Energy and Commerce Committee leaders sent letters to the Medicaid directors of all 50 states and the District of Columbia requesting information on the status of their Medicaid programs and current ability to provide care to the most vulnerable populations.

HHS Secretary Sebelius testified before the House Energy and Commerce Health Subcommittee on December 11 about the status and progress of the ACA rollout. Republicans on the committee grilled the secretary on those who are losing plans, the large number of pages of regulations, the total number of people who enrolled, and problems small businesses may face in the near future as a result of the ACA.

The Medicare Payment Advisory Commission, MedPAC, the independent body that advises Congress on issues affecting the Medicare program, met on December 12 and 13. The commission’s agenda included the following sessions: assessing payment adequacy and updating payments: physician, other health professional, and ambulatory surgical center services; assessing payment adequacy and updating payments: hospital inpatient and outpatient services; assessing payment adequacy and updating payments: long-term care hospital services; assessing payment adequacy and updating payments: outpatient dialysis services; skilled nursing facility services: assessing payment adequacy and updating payments; steps toward post-acute care payment reform; assessing payment adequacy and updating payments: home health care services; the Medicare Advantage program, status report, and employer bid and hospice policies; assessing payment adequacy and updating payments: hospice services; and assessing payment adequacy and updating payments: inpatient rehabilitation facility services.

The Medicaid and CHIP Payment and Access Commission, MACPAC, a non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, also met on December 12 and 13. The commission’s agenda included the following sessions: overview of March Report; review of draft chapter for March Report: Medicaid and CHIP in the context of the ACA; review of draft chapter for March Report: strategies to address churning; review of draft chapter for March Report: issues in pregnancy coverage under Medicaid and exchange plans; review of draft chapter for March Report: Medicaid eligibility changes: program integrity issues; review of draft chapter for March Report: Medicaid non-DSH supplemental payments; access measures for March MACStats; examining Medicaid managed care; review of draft chapter for March Report: selected issues in children’s coverage under CHIP and exchange plans; review of draft chapter for March Report: long-term services and supports.


On December 12, HHS posted an interim final rule formalizing the administration’s earlier announcement that the deadline to sign up for health insurance coverage for January 1 would be moved from December 15 to December 23. The administration’s decision aims to avoid coverage gaps for consumers as they transition into new private health plans under the ACA. Additionally, the rule allows states to set their own deadline and gives individuals until December 31 to pay their premiums and still be covered by January 1. Comments are due by 5:00 p.m. on December 23, 2013. The interim rule also encourages insurers to be flexible in accepting premium payments later (through December 31) and to cover new members’ prescription drugs and to treat existing providers as in-network providers. America’s Health Insurance Plans (AHIP) announced that the changes could “exacerbate the challenges associated with helping consumers through the enrollment process.”

On December 18, CMS posted a proposed rule on the basic Health Program under the ACA.  The Basic Health program is an optional state coverage program for those earning between 133 and 200 percent of the federal poverty level and some immigrants who are not eligible for Medicaid but who cannot afford health plans on the insurance exchanges.

HHS began a “soft launch” of the ACA Spanish-language enrollment tool, which will allow the government to receive feedback and make updates along the way,

Due to the widespread difficulty enrolling in the online marketplaces, CMS announced a one-month extension of the temporary ACA high-risk pool program, known as the Pre-Existing Condition Insurance Plan. The Pre-Existing Condition Insurance Plan (PCIP) was established by the ACA to provide a bridge to the exchanges for those with pre-existing conditions. Though it was set to expire at the end of 2013, the administration extended it due to the continuing problems with by a month to assist the sickest people who may face a coverage gap. This program provides coverage to close to 135,000 people with high-need medical conditions.

On December 11, HHS released official data showing that about 260,000 people enrolled in ACA exchanges, bringing the total to about 365,000 in federal and state run exchanges. Though the Obama administration has advertised that this number is more than double the October sign-up rate, the number is still low due to technical issues.


On December 10, Vice President Joe Biden announced $100 million in new spending on mental health services to be allocated by the federal government for mental health services at community health centers and to improve mental health facilities.


On December 12, Iowa and the White House announced that they had come to an agreement on expanding the state’s Medicaid program under the ACA. Under the compromise with HHS, Iowa will be allowed to charge premiums to those earning between 100 and 133 percent of the federal poverty line but not to those who make less. The premiums may not exceed 2 percent of income, and enrollees have the ability to reduce these payments through involvement in a wellness program. The plan Iowa had proposed would have required Medicaid enrollees at 50 percent of the federal poverty level and above to pay premiums. Pennsylvania should take note of the outcome of Iowa’s proposal, since the draft plan Gov. Corbett posted last week also requires premiums for individuals and families earning at least 50 percent of the federal poverty level.

In response to widespread enrollment problems in signing up for health insurance through the District of Columbia'sonline health insurance exchange, House lawmakers and their staffs whose health insurance is set to terminate at the end of December will have their current plans extended to the end of January if they have not yet been able to enroll for new coverage.

Tennessee Gov. Bill Haslam sent a letter to HHS Secretary Sebelius alerting the department that the ongoing problems with ACA implementation are discouraging Tennessee from expanding its Medicaid program under theACA.

On December 12, the Michigan legislature overrode Gov. Rick Snyder's earlier veto and passed a law that bans private insurance plans in the state from covering abortion services unless individuals buy a separate rider for their coverage (if the insurance company offers the rider).


Pew survey released on December 10 showed that 54 percent of Americans disapprove of the ACA, and only 41 percent are currently in favor of it.

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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