Weekly Washington Healthcare Update

October 14, 2013

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1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

1. Congress


Oversight Committee Examines IRS Role in ACA Implementation

On Oct. 9, the House Oversight and Government Reform Committee held a hearing entitled “Examining the IRS’s Role in Implementing and Enforcing ObamaCare,” during which the committee heard from Sarah Hall Ingram, who oversees the IRS’s portion of the ACA. Republicans on the committee focused on recent controversies involving the agency, including whether she disclosed confidential taxpayer information to White House officials seeking to enforce the ACA, and what part Ingram played in arriving at the decision to delay the employer mandate contained in the ACA. Ingram stated that she was unaware of any sharing of confidential tax information and had no role in the decision to delay the employer mandate.


Sarah Hall Ingram
Director, Affordable Care Act Office
Internal Revenue Service

For more information, or to view the hearing, please visit: oversight.house.gov


Postponed: Finance Committee Hearing on Post-Acute Care

As a result of the government shutdown, HELP Committee Chairman Harkin (D-IA) has postponed a hearing entitled “Transforming Medicare Post-Acute Care: Issues and Options.” The hearing was previously scheduled to take place on Oct. 8 at 10 a.m. in 215 Dirksen Senate Office Building. The hearing is postponed until further notice.


Mark E. Miller, Ph.D.
Executive Director, Medicare Payment Advisory Commission
Washington, DC

Barbara Gage, Ph.D.
Managing Director, Engelberg Center for Health Care Reform
Brookings Institution
Washington, DC

Steve Wiggins, M.B.A.
Chairman, Remedy Partners
New York, NY

Clay Ackerly II, M.D.
Associate Medical Director of Population Health and Continuing Care, Partners HealthCare
Boston, MA

For more information please visit:www.finance.senate.gov

2. Administration

RAND Corporation to Monitor ACA Effectiveness

According to documents made available Oct. 9, HHS has awarded RAND Corporation a contract using ACA funds to conduct “rapid cycle analyses of the impacts of the new health law,” using prescription drug claims data to evaluate the expansion of insurance coverage through increased Medicaid eligibility and the establishment of health insurance marketplaces. In addition, the analysis will rely on office visit claims data to analyze the impact of the ACA’s provision to increase Medicaid payment rates to primary care providers for primary care services. The analysis will be conducted over a 36-month period, at a cost of roughly $700,000.

Administration Working to Fix ACA Enrollment Glitches

In response to what has been a less-than-stellar launch of the ACA’s most sweeping health insurance reforms, the Administration has said it is taking steps to beef up computer systems and address other failures of the system that is intended to help enroll millions of Americans in qualified health insurance plans. Though no firm timelines have been offered, a spokesperson for HHS said the government is continuing to add more server capacity, moving the over-stressed part of the system from virtual machine technology to dedicated hardware and making other software changes aimed at increasing efficiency. Republicans have seized on the initial stumble as evidence that the ACA is too massive to work, while Democrats have pointed to the high number of potential applicants as proof that the law is both necessary and popular.

Medicaid and CHIP Payment Commission Cancels October Meeting

The Medicaid and CHIP Payment and Access Commission (MACPAC)has announced it will cancel its Oct. 17 meeting as a result of the government shutdown. MACPAC is a nonpartisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP and for making recommendations to the Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide range of issues affecting these programs.

3. State Activities

Rhode Island Releases Updated Enrollment Figures

Rhode Island has posted updated figures reflecting roughly the first week of open enrollment in the state’s new health insurance exchanges. According toHealthSource RI, 786 applications for coverage had been completed as of Oct. 5. Other statistics include 39,061 Contact Center calls, 233 Contact Center walk-ins and 3,811 accounts created.

California Enacts Stricter Drug Compounding Requirements

California has added new requirements for compounding pharmacies in a law recently enacted in the wake of last year’s deadly meningitis outbreak linked to a sterile compounding facility in Massachusetts. Under the new law, all sterile compounding facilities must be licensed and must submit a list of all the drugs being compounded, among other requirements. The new law also establishes disciplinary and adverse event reporting requirements as a condition for licensure. Also established are new licensure fees for nonresident sterile compounding facilities, including travel costs for CA officials, as the new law requires such facilities to be inspected by CA state officials, as opposed to existing law, which yielded to the inspection authority of other states or CA-approved accrediting agencies for facility safety verification purposes.

Florida Insurance Rates Touted by HHS

According to HHS, consumers in Florida are seeing robust competition in the newly created health insurance exchanges, resulting in lower premiums. Specifically, HHS notes that consumers can choose from 102 health plans, with the average monthly premium for the lowest-cost silver plan being $304 and for the lowest-cost bronze plan being $257.

Ohio Gov. Kasich to Subvert Legislature on Medicaid Expansion

Having failed to convince his fellow Republicans in the Ohio state legislature that an expansion of the state’s Medicaid program, as provided for by the ACA, is in their best interest, Gov. Kasich hasannounced a new plan to seek approval for the expansion from the state’s Controlling Board. Specifically, Kasich will ask the seven-member board, composed mostly of lawmakers, for permission to spend about $2.5 billion in federal funds to provide Medicaid coverage to roughly 275,000 residents.

4. Regulations Open for Comment

Basic Health Plan Proposed Rule

On Sept. 20, CMS issued aproposed rule to guide the introduction of Basic Health Plans, as required by Section 1331 of the Affordable Care Act. The Basic Health Program provides states the flexibility to establish a health benefits coverage program for low-income individuals who would otherwise be eligible to purchase coverage through the state’s Affordable Insurance Exchange (Exchange, also called a Health Insurance Marketplace). The Basic Health Program would complement and coordinate with enrollment in a Qualified Health Plan (QHP) through the Exchange, as well as with enrollment in Medicaid and the Children’s Health Insurance Program (CHIP). This proposed rule sets forth a framework for Basic Health Program eligibility and enrollment, benefits, delivery of health care services, transfer of funds to participating states and federal oversight. Additionally, this rule would amend other rules issued by the Secretary of the Department of Health and Human Services (Secretary) in order to clarify the applicability of those rules to the Basic Health Program. Comments are due by Nov. 19, 2013.

CMS Proposed Rule for Federally Qualified Health Center Payments

On Sept. 18, CMS released aproposed rule that establishes a new Prospective Payment System (PPS) and increases Medicare reimbursement payments for federally qualified health centers (FQHC). In the rule, Medicare payments would increase 30 percent for FQHC services provided to beneficiaries in medically underserved areas. Under the PPS, Medicare would pay the FQHCs a single encounter-based rate per beneficiary per day for all services provided. The proposed rate would be calculated based on an average cost per encounter, which is estimated to be $155.90, adjusted for geographic variation, with additional consideration given to new Medicare beneficiaries.

“These health centers serve some of our most vulnerable populations,” HRSA Administrator Mary Wakefield said in a Sept. 18 statement. “We are excited about our collaboration with CMS to create a payment system that enables these vital health centers to keep doing such important work.” CMS estimates that during the first five years of implementation, the annual Medicare spending for the FQHCs would be $33 million in 2014, increasing to at least $200 million every year afterward until 2018. Comments on the proposed rule are due on Nov. 18, 2013.

IRS Proposed Rule — ACA Employer Information Reporting Mandates

On Sept. 5, the IRS issuedproposed regulations providing guidance to employers that are subject to the information reporting requirements under Section 6056 of the Internal Revenue Code (Code), enacted by the Affordable Care Act. Section 6056 requires those employers to report to the IRS information about their compliance with the employer shared responsibility provisions of Section 4980H of the Code and about the health care coverage they have offered employees. Section 6056 also requires those employers to furnish related statements to employees so that employees may use the statements to help determine whether, for each month of the calendar year, they can claim on their tax returns a premium tax credit under Section 36B of the Code (premium tax credit). In addition, that information will be used to administer and ensure compliance with the eligibility requirements for the employer shared responsibility provisions and the premium tax credit. The proposed regulations affect applicable large employers (generally meaning employers with 50 or more full-time employees, including full-time equivalent employees, in the prior year), employees and other individuals.

IRS will accept comments on specific aspects of the proposed rule, such as whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility, and how the quality, utility and clarity of the information to be collected may be enhanced. A public hearing will be held at 10 a.m. on Nov. 18.

IRS Proposed Rule — Reporting On ACA Minimum Essential Coverage

On Sept. 5, the IRS issuedproposed regulations providing guidance to providers of minimum essential health coverage that are subject to the information reporting requirements of Section 6055 of the Internal Revenue Code (Code), enacted by the Affordable Care Act. Health insurance issuers, certain employers and others that provide minimum essential coverage to individuals must report to the IRS information about the type and period of coverage and furnish related statements to covered individuals. These proposed regulations affect health insurance issuers, employers, governments and other persons that provide minimum essential coverage to individuals. Under the proposed rules, health insurance issuers are not required to submit Section 6055 information returns on minimum essential coverage they provide in the individual market through the ACA health insurance exchanges, or marketplaces; however, sponsors of self-insured group health plans are required to report minimum essential coverage under the proposed rule. In addition, self-insured group health plans or arrangements covering employees of related corporations are treated as sponsored by more than one employer and each employer must report for its employees.

IRS will accept comments on specific aspects of the proposed rule, such as whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, whether the information will have practical utility, and how the quality, utility and clarity of the information to be collected may be enhanced. A public hearing will be held at 10 a.m. on Nov. 19.

IRS Proposed Rule — ACA Small Business Tax Credit

The IRS has issuedproposed rules on the ACA’s small-business tax credit, available only to certain businesses with 25 or fewer full-time employees purchasing health coverage through a SHOP exchange. Under the proposed rule, for taxable years beginning during or after 2014, the maximum credit for an eligible small employer other than a tax-exempt eligible small employer is 50 percent of the eligible small employer’s premium payments made on behalf of its employees under a qualifying arrangement for QHPs offered through a SHOP exchange. For a tax-exempt eligible small employer for those years, the maximum credit is 35 percent. The employer’s tax credit is subject to several adjustments and limitations as set forth in this preamble.

In addition, all employees (determined under the common law standard) who perform services for the employer during the taxable year are taken into account in determining FTEs and average annual wages, including those who are not performing services in the employer’s trade or business. An employee’s hours of service for a year include hours for which the employee is paid, or entitled to payment, for the performance of duties for the employer during the employer’s taxable year. Hours of service also include hours for which the employee is paid for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. Hours of service do not include the hours of seasonal employees who work for 120 or fewer days during the taxable year, nor do they include hours worked for a year in excess of 2,080 for a single employee.

Comments are due Nov. 21, 2013.

If you have any questions, please contact Stephanie Kennan, Senior Vice President, or Brian Looser, Assistant Vice President, at McGuireWoods Consulting.

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering state and federal government relations, national/multistate strategies, infrastructure and economic development, strategic communications and grassroots issue management services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and in 2010 was ranked in the Top 20 of The National Law Journal‘s “The Influence 50,” an annual report of the top public affairs firms in Washington, D.C.

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