Health Care Reform Implementation Update January 13, 2014

With only a few days remaining before the current Continuing Resolution (CR) expires, House and Senate Appropriations Committee leaders are trying to quickly negotiate remaining issues in the omnibus spending bill; however, they may have to buy themselves more time to finalize it by extending the current CR by a few days. Also on Capitol Hill, Republicans advanced two new Affordable Care Act (ACA) bills, one which would require the Department of Health and Human Services (HHS) to notify those whose personal data has been compromised through the health insurance exchange within two days and another that would require the secretary of HHS to provide a weekly report until March 2015 on health exchange updates. This week, Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO) is scheduled to testify before the Energy and Commerce oversight subcommittee. In the agencies, the Centers for Medicare and Medicaid Services (CMS) created the Office of Hearings and Inquiries, which will now handle complaints and appeals under the ACA insurance exchange as well as assist with Medicare complaints, inquiries and grievances; and CMS released a proposed rule that includes changes to Medicare Advantage and Part D for Contract Year 2015. Finally, CMS officially appointed Tim Love to replace Michelle Snyder as chief operating officer of CMS, and Dave Nelson to replace Tony Trenkle as chief information officer; and the administration has decided to replace CGI Federal, which created the faulty online exchange, with Accenture.

ON THE HILL

House and Senate negotiators met on January 6 to hammer out the remaining issues in their omnibus spending bill in advance of the January 15 deadline. While the two chambers came to an agreement last month on a budget bill, and the president signed it, the appropriations bill is necessary to allocate the authorized funds. Concerned they may not meet this deadline, leaders of the Appropriations Committee are considering extending the current CR by three days to buy themselves more time to finalize negotiations.

On January 6, Chairman of the Energy and Commerce health subcommittee Rep. Joe Pitts (R-Pa.) unveiled The Health Exchange Security and Transparency Act, a bill addressing the security of data on HealthCare.gov by requiring HHS to notify people within two days if their personal data has been compromised through the health insurance exchanges. On January 10, the bill passed the House with a vote of 291-122 with 67 Democrats voting with Republicans. 

On January 9, Sens. Mike Johanns (R-Neb.) and John Barasso (R-Wyo.) introduced a bill in the Senate that would require HHS to notify users within two business days if a security breach in the health insurance exchange compromises their personal information.

The House is expected to vote this week on a second bill sponsored by Rep. Lee Terry (R-Neb.), the Exchange Information Disclosure Act, which addresses Republican complaints about the lack of transparency from the administration on how HealthCare.gov is working. It would require HHS to provide a weekly report every Monday until March 2015 on how many individuals have enrolled in health insurance through the site, specified other consumer interactions with the website, as well as details on problems that occur with the website and associated health care exchanges. On January 9, the Office of Management and Budget said the Obama administration is opposed to this bill. 

On January 6, Sen. Ron Johnson (R-Wis.) announced that he is filing a lawsuit against the Office of Personnel Management arguing that the office’s policy that allows legislators and Hill staff to receive employer payments for their health plans is not authorized by the ACA.

Senate Minority Leader Mitch McConnell (R-Ky.) proposed paying for an extension of unemployment benefits by delaying the individual mandate for one year, and Sen. John Thune (R-S.D.) said he will propose an amendment to replace the Senate plan with new tax breaks and an ACA exemption. Majority Leader Harry Reid (D-Nev.) blocked Sen. McConnell from offering this amendment. Under the package offered by Sen. Reid, the unemployment benefits would be paid for largely by extending a 2 percent cut to Medicare health providers in 2024.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is scheduled to meet on January 16 and 17. The agenda includes sessions on assessing payment adequacy and updating payments for hospital inpatient and outpatient services and reforming Medicare’s prospective payment system for long-term care hospitals, the Medicare Advantage program and employer group plan and hospice policies, Medicare Accountable Care Organizations (ACOs), assessing payment adequacy and updating payment for home health care services as well as broad post-acute care payment reforms, assessing payment adequacy and updating payments for ambulatory surgical centers, hospice, inpatient rehabilitation facilities and long-term care hospitals, a status report on Medicare Part D, and financial assistance for low-income Medicare beneficiaries.

The Medicaid and CHIP Payment and Access Commission (MACPAC) a non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, is next scheduled to meet on January 23. We will provide further information on the agenda when it becomes available.

AT THE AGENCIES

Tim Love was appointed to replace Michelle Snyder as chief operating officer of CMS. Additionally, Dave Nelson was appointed to replace Tony Trenkle, who left in November, to be the chief information officer.

CMS created the Offices of Hearings and Inquires (OHI), a new office tasked with handling complaints and appeals under the ACA insurance exchanges and assisting Medicare beneficiaries with “complaints, inquiries and grievances, and in gathering information necessary to file Medicare appeals.” The office will be led by the former Medicaid Program Integrity Group Director Angela Brice-Smith. To consolidate all complaints within a single office, CMS eliminated the Office of Public Engagement and is moving the functions of that office to OHI.

On January 6, CMS released a proposed rule that includes changes to Medicare Advantage and Part D for Contract Year 2015. Among the changes, this rule proposes new criteria for identifying protected classes of drugs in Part D, changes related to the use preferred pharmacy networks, limits on the number of plans that a sponsor may offer in the same service area, and requiring Part D prescribers to enroll in Medicare. CMS states that the proposed rule would save $1.3 billion over the five years 2015-2019 if finalized. 

On January 3, as part of its more general effort to “keep guns out of potentially dangerous hands,” the Department of Justice proposed a regulation to clarify prohibitions on possessing a firearm for mental health reasons. Additionally, HHS is proposing a regulation to relax legal barriers that may prevent states from submitting information on the mentally ill to the National Instant Criminal Background Check System. 

AT THE WHITE HOUSE

On January 7, the Office of the Actuary at CMS reported that in 2012 national health expenditures grew at an annual rate of 3.7 percent, marking the fourth consecutive year of low growth. Health spending as a share of gross domestic product fell slightly from 17.3 percent in 2011 to 17.2 percent in 2012. The White House said that the ACA was partially responsible for the slowdown in health care spending growth, noting, however, that its effect was only minimal. 

IN THE STATES

Cover Oregon’s executive director resigned after one month of being on medical leave, citing the "uncertainty of [his] health” as the reason.

On January 10, CMS and Maryland announced an agreement to reward state hospitals based on performance in a move away from fee-for-service.

IN THIRD PARTIES

A new study published in Science magazine examined a group of 10,000 low-income Oregon residents who recently obtained Medicaid coverage and found that they visited emergency rooms 40 percent more than those without insurance. The data is the product of five years of research in Oregon, where 10,000 randomly chosen residents received Medicaid coverage.

On January 8, at his annual State of American Business Address, U.S. Chamber of Commerce President Tom Donohue expressed that employers are concerned about the ACA’s negative impacts and that many smaller businesses expect to be hit even harder in 2014.

IN THE COURTS

The Supreme Court set the date of March 25 for oral arguments in the cases of Hobby Lobby and Conestoga Wood, two cases in which businesses are challenging the ACA’s contraception coverage requirements.

Action on the challenge by the Little Sisters of the Poor Home for the Aged, the organization of Catholic nuns in Denver that requested an emergency stay on the contraception mandate of the ACA and were temporarily granted relief from Justice Sotomayor, has not yet been announced.

To view our compilation of recent health care reform implementation news, click here.