Health Care Reform Implementation Update - July 2014

by Cozen O'Connor

Last week the Senate debated a bill to reverse the Supreme Court’s contraception mandate decision, a group of House Republicans introduced a bill to replace Affordable Care Act (ACA) cuts to the Medicare home health benefit with a measure that would instead base payments of value of care delivered, the Department of Health and Human Services (HHS) announced a new contract solicitation for managing  and the House passed an appropriations bill that would cut the IRS’ budget for implanting the ACA.


On July 16, Senate Democrats attempted to bring a bill to the floor that would prohibit employers from refusing to provide coverage for contraception. The bill was intended to negate the Supreme Court’s recent decision to allow closely held companies to opt-out of contraception coverage for its employees. The bill was defeated on a procedural vote of 56 to 43. There is a possibility that the bill, or similar legislation, will be brought up again in the Senate later this year.

The House Rules Committee held a hearing on July 16 to explore the legality of the lawsuit against President Obama currently being considered by House Republican leadership. The lawsuit claims that President Obama violated his Constitutional duties by delaying the implementation of the employer mandate under the Affordable Care Act (ACA). The panel of four witnesses split their opinions along party lines as to whether there is legal standing to bring the lawsuit.

On July 16 the House passed an appropriations bill that would cut the IRS’s budget by $1 billion in fiscal year 2015. Among other things, the bill would block the IRS from further implementing the ACA. President Obama has said that he will veto the bill if it makes it to his desk.

The Congressional Budget Office (CBO) released a report on July 15 that says the ACA will reduce federal health care spending. According to the report, over the next 25 years, health care spending will represent 8 percent of the gross domestic product (GDP), an amount that is .01 percent less than CBO’s projection last year. The CBO estimates that this 8 percent figure amounts to $250 billion in savings.

On July 15, Congressmen Greg Walden (R-Ore.) and Tom Price (R-Ga.), along with Reps. Cathy McMorris Rodgers (R-Wash.), Renee Ellmers (R-N.C.), David McKinley (R-W.Va.), Sean Duffy (R-Wis.), and Sam Graves (R-Mo.), Glenn Thompson (R-Wis.), Tom Latham (R-Iowa), Charles Boustany (R-La.), and Erik Paulsen (R-Minn.) introduced the “Securing Access Via Excellence (SAVE) Medicare Home Health Act.” The bill would reverse the cuts made to home health care in January and replace them with a value-based payments plan. The bill would aim to reduce hospital readmissions and would implement the value-based purchasing program by 2019. Under the bill, CMS would develop performance measures for the program and a bonus would be paid to well performing home health providers.


On July 11, CMS reported that 6.7 million more individuals had enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) by May of 2014 compared to September of 2013. Of those enrolled in Medicaid or CHIP, 56 percent are children. CMS also reported that the states that had expanded Medicaid under the ACA had 17 percent more individuals enroll in the two programs.

On July 15, HHS announced that it would make up to $100 million dollars of funding available to states under the Medicaid Innovation Accelerator Program (IAP). The program would offer technical assistance to states to help accelerate payment and service delivery reforms and improve health and lower costs. The program will provide funds to help identify and advance new models of payment and care delivery, analyze data, improve quality measurement, and support state-to-state learning and federal evaluation. The IAP will focus on specific categories of Medicaid enrollees such as pregnant women, newborns, children and individuals with mental illness and those receiving long term care services.

On July 16, CMS posted a new solicitation for a contractor to oversee next year. The new contractor will be responsible for analysis, design, development, testing, maintenance and support. The solicitation also requires that the company chosen be responsible for redesigning parts of the online exchange application and constructing parts of the site that will ensure proper payments to insurers. Accenture, the current company overseeing, was awarded a one-year contract that is set to expire in the beginning of 2015. It is unclear whether the company will bid for this new contract.

On July 18, CMS released a 13-page letter addressed to all Medicare Part D Plan sponsors and Medicare hospice providers regarding Part D drug payments for Medicare beneficiaries enrolled in Medicare’s hospice program. Under Medicare payment rules, hospice covers payments for drugs related to a beneficiary’s terminal diagnosis, while Part D covers payments for drugs for other conditions. In March, CMS had issued a memorandum that required prior authorizations for all drugs needed by Medicare hospice beneficiaries in order to determine whether the drug was covered under Part D. In the July 18 letter, however, CMS recognized the difficulties experienced by both Part D sponsors and Medicare hospice beneficiaries with respect to the prior authorizations, and wrote that it “strongly encourage[s]” prior authorization for hospice patients only needing four categories of drugs, specifically analgesics, anti-nauseants, laxatives and anti-anxiety drugs.

On July 18, CMS announced that it had awarded 14 new contracts for quality improvement organizations (QIOs). This announcement is the second the phase of the new Quality Innovation Network (QIN) program through CMS. These QIOs will work with providers and communities using gathered data to improve quality of care with the specific goals of reducing admissions, promoting prevention and reducing health disparities.


On June 27 and July 9, CMS sent letters to a total of 13 states asking them to address the backlog of Medicaid enrollee applications in their states. In the June 27 letters, CMS asked six states to come up with mitigation plans for clearing their enrollment backlogs but did not offer a confirmed deadline for completion. In the July 9 letters, CMS said that it would conduct its own reviews of the states’ Medicaid eligibility and enrollment systems.

Wisconsin’s alternative to Medicaid expansion enrolled 110,000 childless adults by the end of June 2014, surpassing projections that the state would only enroll 99,000 childless adults by June 2015. Proponents claim that the larger than projected enrollee numbers illustrate the success of the program, while opponents are questioning where the state will get the funds to pay for the higher level of enrollees. Governor Walker opposed the ACA and had opted not to accept federal funds for Medicaid expansion.

In a move that could spread to other states, a new law in Kentucky will now allow nurse practitioners to prescribe routine medications without a doctor’s input. The law, which went into effect on July 15, will provide this authority to nurse practitioners who have completed a four-year collaboration with a practicing physician who was willing to oversee their work. Nurse practitioners across the country are pushing to implement similar laws in their own states, particularly in states with rural areas that may have shortage of primary care doctors.


On July 10, the Chief Administrative Law Judge (ALJ) for the Office of Medicare Hearings and Appeals (OMHA) told lawmakers at an Oversight and Government Reform Health subcommittee meeting that it is planning to hire seven additional ALJs to deal with the current backlog of provider appeals for the Medicare claims. On July 11, OMHA announced that it would be implementing two pilot programs to assist with the backlog. One would create a new settlement conference between providers and suppliers, and the other would allow providers with a large volume of claim disputes to use statistical sampling to help expedite the process. OMHA had approximately 800,000 appeals pending as of July 1, 2014.

The U.S. Court of Appeals for the 11th Circuit announced on July 16 that it would hear oral arguments in a lawsuit challenging the delay of the ACA employer mandate provisions. The Obama administration delayed the effective date of the mandate from 2014 to 2016. Kawa Orthodontics brought the suit in in October of 2013 and claimed it had spent substantial time and money preparing for the mandate.


A report released by the Robert Wood Johnson Foundation and athenahealth says that the ACA has not increased new patient volume for providers. According to the report, overall visits with new patients actually decreased slightly. However, primary care doctors in states that expanded Medicaid did report an increase in Medicaid patients from 12.3 percent last December to 15.6 percent currently.


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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