Health Care Reform Implementation Update - February 13, 2013

by Cozen O'Connor

In the past week, the Congressional Budget Office (CBO) released an updated federal budget to account for new regulations from the Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS), President Obama formally renominated Marilyn Tavenner to lead the Centers for Medicare and Medicaid Services (CMS), the Obama administration proposed eliminating outdated and burdensome Medicare requirements, and Mississippi became the first state to have its exchange plans rejected.


The CBO released an updated federal budget to account for the new regulations from HHS and IRS (granting exemptions from individual mandate requirements and saying affordability requirements to employees of employer-provided health plans are for self-only plans, not family plans).  The updated budget projects an increased number of uninsured and decreased projected federal revenue from the penalty for failing to have insurance.

Also included in the CBO updated 10-year budget was a change in the cost of fixing the sustainable growth rate problem, from $245 billion to $138 billion.  The change comes just as a bill was introduced on Wednesday (2/6) by Rep. Allyson Schwartz (D-Pa.) and a bill from Ways and Means Health subcommittee chair Rep. Kevin Brady (R-Texas). Schwartz's bill would require physicians to adopt a replacement for fee-for-service, which CMS would then test and approve over a five-year period. Congressman Brady's alternative, expected soon, according to a Ways and Means Committee memo would continue wide-scale modified fee-for-service system and offer incentive payments for physicians that undertake efficiency improvements.

On Thursday (2/8), President Obama formally renominated Marilyn Tavenner to lead the Centers for Medicare and Medicaid Services.  The Senate still has to vote to confirm her.  Tavenner has been the acting administrator of CMS since November 2011, when she was nominated for the first time.  If Tavenner is confirmed by the Senate, she would be the first confirmed CMS Administrator in more than seven years.

The Essential Health Benefits, Actuarial Value, and Accreditation Final Rule and the Notice of Benefit and Payment Parameters Final Rule are now under review at the Office of Management and Budget (OMB).

On Monday (2/4), HHS and CMS issued a proposed rule that would modify or eliminate Medicare regulations deemed to be outdated or overly burdensome, particularly in ways that enable hospital workers and technicians to perform “tasks they are trained to do, without requiring the supervision or approval of a physician or other practitioner.”  A list of suggestions is included in the proposed regulation.  The reforms are expected to save hospitals and health care providers up to $3.4 billion over five years. Public comments are due April 8.

The Obama administration delayed the roll out of the Basic Health Program by one year.  The Basic Health Program aimed to benefit low to moderate-income people who did not qualify for the expanded Medicaid program.  The program would have enabled states to offer government insurance to people who did not qualify for Medicaid, but who would have a difficult time affording premiums and cost sharing (even with government subsidies) in the exchange.  On Wednesday (2/6), HHS said it was behind schedule and would not be able to get this program up and running by 2014.


Indiana Gov. Mike Pence said the only way he would approve Medicaid expansion for his state is if the state could use its "Healthy Indiana" plan to cover new members.  States have the ability to choose whether to expand their Medicaid programs under the Affordable Care Act due to the Supreme Court’s decision making the expansion optional.

On Tuesday (2/5), Pennsylvania Gov. Tom Corbett said in a letter to HHS Sec. Sebelius that he cannot recommend expanding Medicaid because of the increase in taxpayer dollars it would require.

On Monday (2/4) Ohio Gov. John Kasich, a Republicans who has criticized the Affordable Care Act, announced he will expand Medicaid in his state.

On Thursday (2/7), Michigan Gov. Rick Snyder proposed a $51 billion state budget for FY 2014, which includes a proposal to expand Medicaid.

On Friday (2/8), Mississippi became the first state to have its health insurance exchange plan rejected.  In a letter to the state, HHS cited a lack of support from Mississippi’s governor and no formal commitment to coordinate with other state agencies as the reasons for its rejection.  The state’s insurance commissioner was planning a state-based exchange for the state, however, Gov. Phil Bryant did not support it.


A group of 180 House Members, Republicans and Democrats, reintroduced a bill to end the Affordable Care Act's 2.3 percent tax on medical devices.  This provision of the ACA is projected to raise $30 billion over 10 years; however, opponents say it will hinder innovation in the medical device industry and stifle job growth.

A bipartisan group of Senators, led by Senate Finance Committee Ranking Member Orin Hatch (R-Utah) and Sen. Amy Klobuchar (D-Minn.) introduced a bill to repeal the medical device tax.

Representative Ron Kind (D-Wis.), a member of the House Committee on Ways and Means, was selected to lead the House Rural Health Care Coalition, a bipartisan group of lawmakers that will focus on improving access to health care in rural communities.

Rep. Gingrey (R-Ga.) introduced a bill to Change the Permissible Age Variation in Health Insurance Premium Rates.


In response to the Obama administration's attempt to find a compromise over the contraception requirement of the Affordable Care Act, Cardinal Timothy Dolan, president of the U.S. Conference of Catholic Bishops, said the recent proposed rules are insufficient because they only offer "second-class status" to church-affiliated organizations and institutions, unlike the full exception granted to houses of worship.

Written by:

Cozen O'Connor

Cozen O'Connor on:

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