Health Care Reform Implementation Update - March 26, 2013

by Cozen O'Connor

Last week, as the Affordable Care Act turned three, the drumbeat of concern over Medicare Advantage cuts grew louder when Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch – as well as 98 house members – wrote to the Centers for Medicare and Medicaid Services (CMS) expressing concern about rates for Medicare Advantage plans, MedPAC released its March report to Congress, the House and Senate passed a continuing resolution to fund the government through September 2013 at current law levels including sequestration, and the House and Senate each passed a 2014 budget.


Rep. Paul Ryan's (R-Wis.) budget passed the House of Representatives on Thursday (3/21).  No Democrats voted for the plan.  The bill would balance the budget in 10 years by cutting domestic spending and reforming Medicare.  The budget would reform Medicare starting in 2024 by giving seniors a choice between traditional Medicare coverage or a private plan with similar benefits.  The House budget would also convert Medicaid into a block grant program such that states would receive a lump sum for their programs instead of the open-ended federal medical assistance percentages they now receive.  Though the budget does not eliminate the entire Affordable Care Act, it does assume that Congress would eliminate the parts of the Affordable Care Act that subsidize insurance coverage for the uninsured.

On Saturday (3/23) just before 5:00 a.m., the Senate passed its first budget in four years, with no Republicans voting for it and four Democrats voting against it.  The four Democrats, all of whom are up for re-election in 2014, were Mark Pryor (Ark.), Kay Hagan (N.C.), Mark Begich (Alaska) and Max Baucus (Mont.).  The Senate budget would boost infrastructure spending by $100 billion to bolster the economy and raise taxes to bring $975 billion over 10 years into the government.  The budget trims spending modestly and includes an expedited track for passing tax increases.  The Senate budget includes health care cuts as well – accelerating payment reforms that tie provider reimbursement to patient outcomes, reducing waste and fraud, and encouraging greater provider engagement.

The drumbeat of concern over Medicare Advantage cuts grew louder on (3/15) when Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch sent a letter to CMS Acting Administrator Tavenner raising concerns about the proposed Medicare Advantage cuts and 98 bipartisan House members sent a separate letter to Tavenner, also requesting changes to the Medicare Advantage rates.  These rates are expected to be finalized by April 1, 2013.

The Director of CMS’s Center for Medicare and Medicaid Innovation (CMMI), Dr. Richard Gilfillan, testified before the Senate Finance Committee on Wednesday (3/20).  At the hearing, Dr. Gilfillan said the results of the Pioneer Accountable Care Organization demonstration will be available this summer.  Dr. Gilfillan also said that CMMI was currently analyzing data from the multi-payer advanced primary care practice and federally qualified health center advanced primary care practice demonstrations.

Last week, the House and Senate approved a continuing resolution to prevent a government shutdown and keep agencies funded through the end of the fiscal year and sent it to the White House to be signed into law.


Health and Human Services (HHS) Sec. Sebelius announced that the third anniversary of the Affordable Care Act saw more than 6.3 million Medicare beneficiaries save over 6.1 billion on prescription drugs, and 71 million Americans in private health insurance plans receive coverage for at least one free preventive health care service.

On Monday (3/18), the Departments of Health and Human Services, Labor and Treasury issued a proposed rule under the Affordable Care Act that prohibits health plans from imposing waiting periods over 90 days on enrollees before coverage begins.

On Friday (3/15), the Medicare Payment Advisory Commission (MedPAC) released its March report to Congress.  In the past, the commission’s recommendations have formed the basis for payment changes later in the year.


The Colorado state exchange board approved a 1.4 percent fee on all health policies sold through the state’s health exchange.  The revenue would be used to fund the exchange after federal backing runs out.  The board expects the exchange to cost between $22 and $24 million per year to run.

On Saturday (3/23), the Maryland House of Delegates gave initial approval to a measure that would expand Medicaid eligibility to 133 percent of the federal poverty line and create a funding mechanism for the state's health marketplace.  The funds will come from an existing state-regulated 2 percent tax on insurance plans.

On Thursday (3/21), the Michigan State Senate Health Policy Committee approved a bill that would allow health care providers and institutions to refuse to provide service on moral, religious or conscientious grounds.  This bill already passed the state Senate in December.


Tom Monaghan and his company, Domino's Farm Corp., sued the federal government in December 2012, arguing that complying with the Affordable Care Act’s mandate requiring employee insurance plans to provide coverage for contraception violated his legal rights.  On March 15, U.S. District Judge Lawrence P. Zatkoff found that the company and Monaghan could be irreparably harmed if the mandate was enforced while the lawsuit is pending and issued a preliminary injunction.


This month's tracking poll from the Kaiser Family Foundation shows that the public is more confused about the Affordable Care Act than ever, in particular about items that are or are not part of reform.

The Health Care Incentive Improvement Institute issued a report card evaluating states on the requirements state laws put on hospitals and providers for transparency in health care costs.  The report gave 29 states failing marks and seven a D.  Two states, Massachusetts and New Hampshire, received an A.

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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