Health Care Reform Implementation Update - August 12, 2013

by Cozen O'Connor

The House Energy and Commerce Committee voted unanimously on legislation that would repeal the sustainable growth rate (SGR) formula that has historically led to annual decreases in physician payments that are fixed at the last minute each year; the Centers for Medicare and Medicaid services (CMS) announced a temporary moratorium on the enrollment of new home health provider and ambulance supplier enrollments in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) in three “fraud hot spots”; CMS Administrator Marilyn Tavenner testified at a House Energy and Commerce hearing refuting claims from lawmakers that the Affordable Care Act (ACA) was forcing employers to reduce employee hours; President Obama tapped John Koskinen to lead the Internal Revenue Service (IRS); a Congressional Research Service report found that a government shutdown would not stop the ACA’s implementation; and the House passed legislation that would prohibit the IRS from implementing the ACA and separate legislation that would require Congress to vote to approve any regulations implementing the Affordable Care Act, however these bills are not likely to pass in the Senate.


The Office of Personnel Management is preparing guidance that will allow the government to continue making contributions to health care premiums of members of Congress and their aides. This will settle concerns over whether the ACA allows the federal government to continue to pay part of the health insurance premiums for members of Congress and thousands of Hill aides when they are using health exchanges.

CMS released its annual update for inpatient psychiatric facilities, boosting their payment in 2014 by 2.3 percent. The total impact of the update is estimated to be approximately $115 million.

The Department of Health and Human Services (HHS) released information on July 29, showing that more than 6.6 million seniors on Medicare have saved in excess of $7 billion on prescription drugs as a result of the Affordable Care Act.

On July 31, an article by Marilyn Tavenner and Niall Brennan appeared on the Health Affairs Blog detailing CMS’ strategy to use health data to promote efficiency and drive improvements in access and delivery.

On July 26, CMS announced a temporary moratorium on the enrollment of new home health providers and ambulance suppliers in Medicare, Medicaid and the Children’s Health Insurance Program in three fraud hot spot areas of the country: Miami, Chicago and Houston. Existing providers and suppliers can continue to deliver and bill for services, but no new provider and supplier applications will be approved in the designated areas.


The House Energy and Commerce Committee unanimously voted on Wednesday to pass the Medicare Patient Access and Quality Improvement Act, a bipartisan bill that would repeal the sustainable growth rate formula and reform the system of Medicare physician payments. The SGR repeal bill will move to the full House for a vote, but a way to pay for the cost of repeal has yet to be determined, and the Senate has not yet indicated its position on the House bill

A Congressional Research Service report titled Potential Effects of a Government Shutdown on Implementation of the Patient Protection and Affordable Care Act was released on July 30. It found that a government shutdown would not stop implementation of the Affordable Care Act.

On August 1, the House Committee on Energy and Commerce held a hearing titled “PPACA Pulse Check,” at which CMS Administrator Marilyn Tavenner testified. Administrator Tavenner refuted claims from lawmakers that the Affordable Care Act was forcing many small businesses to reduce work hours of their employees to avoid having to comply with the ACA. Some Republican congressmen argued that the Obama administration was repeatedly failing to notice frequent reports about the ACA's effects on small business. Tavenner also assured the committee that the insurance exchanges would be ready on time regardless of the one-year delay in the employer mandate.

House Speaker John Boehner said in a House Republican Conference meeting that the House would continue a series of votes over the next few months to repeal the Affordable Care Act. These bills will be unlikely to move past the Senate

The House voted to block the Internal Revenue Service from enforcing any components of the ACA in a bill called “Keep the IRS Off Your Health Care Act.” Every Republican and four Democrats voted in its favor.

On August 2, the House voted in favor of an amendment to the Regulations from the Executive in Need of Scrutiny Act, to require Congress to approve all federal regulations relating to the implementation of the Affordable Care Act.

The Congressional Budget Office released a report on July 30 estimating that President Obama's recent decision to delay the Affordable Care Act's employer mandate will cost about $12 billion and result in half a million fewer people insured.

On August 1, the House Committee on Ways and Means held a hearing on the Obama administration’s efforts to implement the ACA, at which Daniel Werfel, Principal Deputy Commissioner and Deputy Commissioner for the IRS and Gary Cohen, Deputy Administrator and Director at the Center for Consumer Information and Insurance Oversight within CMS testified. Central issues discussed included the data hub for the health insurance exchanges and verifying whether someone qualifies for a subsidy.


On July 26, Maryland released premium rates for individual health insurance plans. Insurance regulators reduced prices for all nine insurance carriers that are filing to sell their policies in Maryland’s insurance marketplace, cutting rates by as much as 33 percent in some cases. Maryland’s cuts are among the most drastic seen across the country.

Regulators in Florida said premiums in the state will rise by 30-40 percent under the ACA. These percentages are preliminary figures and estimates. The insurance department said premium increases next year "will vary dramatically" based on the policies people have now, but increases will average 30 to 40 percent for individuals and 5 to 20 percent for small businesses.


On July 25, CVS announced it will participate in efforts to get its customers to sign up for ACA coverage, utilizing its health care fairs and pharmacies. Walgreens and Blue Cross Blue Shield have also formed a partnership through which they will promote enrollment.

Liberal groups, led by Americans United for Change and Protect Your Care, will begin a new effort this week to reverse the current narrative and put Democrats on the offensive and Republicans on the defensive over the Affordable Care Act.

On July 29, in its continued efforts to push enrollment in health plans through the ACA, Organizing for Action – an organization that was recently launched to help the White House advance political and policy objectives – launched a website dedicated to “Action August.” The team is planning call pledges, petition drives, advocacy events and other means to put pressure in home districts. House Republican leaders are also encouraging members to hold anti-Obamacare events during August.


On July 26, the U.S. Court of Appeals for the 3rd Circuit ruled against a challenge to the ACA contraception mandate made by owners of a private company, Conestoga Wood Specialties, who wished to not comply because the requirement conflicts with their religious beliefs. Though religious organizations are exempt from having to provide insurance that covers contraception, in this case, the court ruled that the owners’ religious opposition does not exempt Conestoga. Because this case was decided opposite from a recent Denver appellate court ruling, it may be a case that makes its way to the Supreme Court.

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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