Health Care Reform Implementation Update - February 26, 2014

by Cozen O'Connor

Though Congress was in recess this past week, congressional staff was hard at work continuing to consider ways to prevent a cut to Medicare providers’ payment rates that will be triggered by the sustainable growth rate formula on March 31, the Department of Health and Human Services (HHS) in conjunction with the Employee Benefits Security Administration and Internal Revenue Service, released proposed rules on the 90-day waiting period limitation, and the Centers for Medicare and Medicaid Services (CMS) released its annual notice on Medicare Advantage Rates and changes in payment methodology for Medicare Part D benefits for 2015.


On February 21, CMS released its annual notice announcing Medicare Advantage rates and changes in payment methodology for Medicare Part D benefits for 2015.  Medicare Advantage currently covers one third of all Medicare beneficiaries.  In advance of the announcement, 40 senators including some Democrats sent a letter to the administration cautioning against large cuts to Medicare Advantage. Last year’s rate announcement received significant attention when the administration proposed 2.2 percent cuts to Medicare Advantage plans but changed course after an intense lobbying campaign by stakeholders ultimately resulting in a 3.3 increase in the rate. You can expect to see similar advocacy efforts this time around. Comments and questions may be submitted to CMS by 6:00 PM on March 7, 2014.

On February 20, the U.S. Departments of Labor, Health and Human Services and Treasury published a final rule implementing a 90-day limit on waiting periods for health coverage. A waiting period refers to the period that must pass before coverage for an individual who is eligible to enroll in a group health plan becomes effective. The final regulations require that no group health plan or group health insurance issuer impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage. The rules do not require coverage to be offered to any particular individual or class of individuals.

CMS is seeking comments on methodology it would use to adjust payment amounts for durable medical equipment, prosthetics, orthotics and supplies. Durable medical equipment is any equipment that provides therapeutic benefits to a patient in need because of certain medical conditions or illness. The proposed rule will be published in the Federal Register on February 26. 


Republicans from the House Committee on Energy and Commerce sent a letter to Treasury Secretary Jack Lew requesting  information on the recent delay of the Affordable Care Act’s (ACA's) employer mandate. The employer mandate refers to the provision of the ACA that requires employers with 50 or more full-time employees to provide these employees with health insurance. The information the lawmakers request includes all memoranda or analyses of the constitutional or statutory authority of Treasury to delay the ACA requirements that were considered or relied upon by Treasury when deciding to move forward with the second delay.

In response to the regulations published by CMS in January that would empower the agency to participate in Medicare Part D (the part of Medicare under which prescription drug coverage falls), negotiations between insurance companies and pharmacies, an alliance of drug companies, patient advocates, and Democrats and Republicans in Congress has waged a campaign against a policy that would allow insurers to limit Medicare coverage for certain classes of drugs.

Representative John Dingell (D-Mich.) announced this week that he would retire this year, marking the end of the longest congressional career in history. Dingell played a part in expanding access to health care through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and the Affordable Care Act (ACA) in the 50-plus years he served in Congress.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, met on February 20. The commissioners discussed eligibility and enrollment strategies, the use of the emergency department by Medicaid enrollees, the future of the Children’s Health Insurance Program, the need for long-term services and supports, and Medicaid and population health.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet in March. We will provide further information on the agenda as it becomes available.  


On February 19, Governor Corbett submitted Pennsylvania’s state waiver request to implement the healthy Pennsylvania initiative, an alternative to the ACA’s Medicaid expansion provisions that were made optional for states by the Supreme Court. Based on comments received by the Department of Public Welfare (DPW), the final proposal Gov. Corbett submitted contained several modifications including local funding for federally qualified health centers in the private coverage option networks, cost sharing criteria, and coverage between presumptive eligibility application date and the date the private option coverage is effective. If HHS accepts Pennsylvania’s proposal, providers in the state can expect to see more patients through this new channel.

The Arkansas legislature has been considering the future of its Medicaid program over the past week. The state Senate voted 27-8 to renew funding for the state’s Medicaid expansion for another year. The House, however, so far has failed to get the necessary three-fourths majority required in Arkansas to pass spending bills. Republican leaders in the Arkansas state House have pledged to continue to bring up the measure in the chamber until it passes.


On February 21, the U.S. 7th Circuit Court of Appeals in Chicago ruled against the University of Notre Dame in its case arguing that it should not be required to provide health insurance for students and employees that covers contraceptives given that it is a Catholic university.  The administration made a compromise last year that attempted to create a buffer for religiously affiliated hospitals, universities and social service groups that oppose birth control under which insurers or the health plan’s outside administrator would pay for birth control, and the religiously affiliated organization itself would not be involved. Notre Dame contended that even with the buffer, this part of the law violates their constitutional rights.

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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