Weekly Washington Healthcare Update

December 23, 2013

Pardon Our Dust

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***Programming Note: There will be no Weekly Washington Healthcare Update on Dec. 30 or Jan. 6***

1. Congress

House of Representatives

  • District Work Period — No Legislative Activity


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

Government Accountability Office (GAO)


1. Congress


District Work Period — No Legislative Activity


Senate Approves Two-Year Budget Deal with Short-Term “Doc Fix” Extension

The Senate passed a two-year budget agreement (H.J. Res. 59) on Dec. 18 by a vote of 64-36. The House had previously passed the legislation on Dec. 12 by a vote of 332-94. The two-year deal sets spending for the Pentagon and other federal agencies at $1.012 trillion for fiscal 2014, midway between the $1.058 trillion sought by Democrats and the $967 billion sought by Republicans. This deal will prevent another government shutdown, but it does not address the debt ceiling, which Congress must resolve by next spring. The budget agreement includes a three-month “doc fix” along with several other health “extenders.” McGuireWoods Consulting produced a comprehensive analysis of the budget deal, which you can access here.

2. Administration

DeSalvo Named National Coordinator for Health Information Technology

Last week, HHS Secretary Kathleen Sebelius announced that Dr. Karen DeSalvo, who currently serves as the City of New Orleans Health Commissioner and Senior Health Policy Advisor to Mayor Mitch Landrieu, will be the next National Coordinator for Health Information Technology at HHS. Following Hurricane Katrina, DeSalvo led projects to increase access to care by augmenting the city’s neighborhood-based medical homes for low-income, uninsured and other vulnerable populations in the New Orleans area. DeSalvo will succeed Farzad Mostashari, M.D., who stepped down in October. Acting National Coordinator Jacob Reider, M.D., will serve as chief medical officer in the National Coordinator’s office.

Guidance Allows Flexibility for Individuals with Cancelled Health Plans

On Dec. 19, CMS issued guidance clarifying for consumers in the individual market the options already available to them as a result of the president’s recently announced transition policy allowing for the renewal of cancelled plans and policies between Jan. 1 and Oct. 1, 2014. In addition, the guidance describes a new process that will be available to individuals who have had their health plan cancelled as a result of requirements under the ACA. According to the guidance, such individuals will be allowed to file a hardship waiver relieving the individual from the penalty they would otherwise face for failing to possess qualified health insurance, as required by the ACA’s individual coverage mandate. These individuals will also be eligible to enroll in catastrophic coverage. Specifically, the document states: “If you have been notified that your individual market policy will not be renewed, you will be eligible for a hardship exemption and will be able to enroll in catastrophic coverage. If you believe that the plan options available in the Marketplace in your area are more expensive than your cancelled health insurance policy, you will be eligible for catastrophic coverage if it is available in your area.”

3. State Activities

Minnesota Extends ACA Application Deadline

According to the interim CEO of Minnesota’s health insurance exchange, MNsure, consumers will have until Dec. 31 to apply for exchange coverage beginning Jan. 1. They would have until Jan. 10 to pay their first premium. “We are aware of the concerns many consumers have as we approach Jan. 1, and we are taking critical steps to ensure that Minnesotans have comprehensive, affordable health coverage when they need it,” MNsure interim CEO Scott Leitz said. “We thank the health plans for working with us, and we remind consumers to make their plan selections and payments as soon as possible to guarantee their coverage is in place.” The extension applies to individuals only, not small businesses.

Washington, Wisconsin Offered 2014 Relief on ACA Tax Credit to Small Employers

The Internal Revenue Service has eased the qualifications for the small business tax credit made available under the ACA for employers in portions of Wisconsin and Washington state. The IRS will let small businesses receive the tax credit despite not offering a qualified health plan through the Small Business Health Options Program (SHOP) Exchange, because qualified plans through SHOP will not be offered in those areas. The notice is scheduled to be published in the Internal Revenue Bulletin on Jan. 6. The notice can be read here.

4. Regulations Open for Comment

Basic Health Program: Proposed Funding Methodology for Program Year 2015

On Dec. 18, HHS released a document providing the methodology and data sources necessary to determine federal payment amounts made to states that elect to establish a Basic Health Program (BHP) as provided for under Section 1331 of the ACA, to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges. The BHP will make affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the federal poverty level (FPL) who are not otherwise eligible for Medicaid, the Children’s Health Insurance Program (CHIP) or affordable employer-sponsored coverage. Specifically, under the proposed methodology, the total federal BHP payment amount would be based on multiple “rate cells” in each state. Each “rate cell” would represent a unique combination of age range, geographic area, coverage category (for example, self-only or two-adult coverage through BHP), household size and income range as a percentage of FPL. Thus, in each coverage category and within a particular age range there would be distinct rate cells for individuals who reside in a specific geographic rating area and are in households of the same size and income range. Comments are due Jan. 22.

IRS, HHS, Labor Proposed Rule Defines “Exempted Benefits”

On Dec. 20, the Internal Revenue Service, the Department of Health and Human Services and the Department of Labor proposed rules that would amend the regulations regarding excepted benefits under the Employee Retirement Income Security Act of 1974, the Internal Revenue Code and the Public Health Service Act. Excepted benefits are generally exempt from the health reform requirements that were added to those laws by the Health Insurance Portability and Accountability Act (HIPAA) and the ACA. Specifically, the rules amend the limited excepted benefits category of excepted benefits, which may include limited scope vision or dental benefits, and benefits for long-term care, nursing home care, home health care or community-based care. For an individual to be excepted under this second category, the statute provides that limited benefits must either: (1) be provided under a separate policy, certificate or contract of insurance; or (2) otherwise not be an integral part of a group health plan, whether insured or self-insured. The proposed regulations would eliminate the requirement under the HIPAA regulations that participants pay an additional premium or contribution for limited scope vision or dental benefits to qualify as benefits that are not an integral part of a plan (and therefore as excepted benefits). The Departments invite comments on this approach. Comments are due Feb. 21.

CMS Considering Independent Reviewer for Hospice, Part D Drug Payment Disputes

In a Dec. 6 memorandum to Part D plan-sponsored and hospice providers, CMS announced it is considering implementing an independent review process for hospice and Medicare Part D disputes regarding the financial responsibility for a drug given to a hospice patient. According to CMS, hospice patients should be taking drugs covered by Part D only if the patient needs treatment for a condition that is unrelated to the terminal or related conditions. CMS recently became aware that the duplicative payment issue was so common. In the meantime before the review process can be implemented, CMS expects hospice and the Part D sponsor to coordinate their benefits and follow proper protocol on providing documentation. Public comments must be submitted by Jan. 6, 2014, at noon EST. Please submit your comments to the CMS Part D mailbox at: PartDBenefitImpl@cms.hhs.gov, using the subject “Request for Comments: Part D Payment for Drugs for Beneficiaries Enrolled in Hospice.”

CMS Proposal on Use of Civil Monetary Penalties in Medicare Secondary Payer Program

CMS has issued advance notice of proposed rulemaking regarding civil monetary penalties and the Medicare Secondary Payer system. Under the Medicare law, as enacted in 1965, Medicare was the primary payer for certain designated health care services except those covered by workers’ compensation. In 1980, Congress added Section 1862(b) of the Act, which defined when Medicare is the secondary payer to certain primary plans. These provisions are known as the Medicare Secondary Payer (MSP) provisions. Section 1862(b) of the Act prohibits Medicare from making payment if payment has been made or can reasonably be expected to be made by the following primary plans when certain conditions are satisfied: Group health plans; workers’ compensation plans; liability insurance (including self-insurance); or no-fault insurance. CMS is seeking public comment and proposals on mechanisms and criteria that they would employ to evaluate whether and when the agency would impose civil monetary penalties CMPs. CMS is specifically soliciting comments and proposals from insurers, third-party administrators for GHPs, other applicable plans and the public. Comments are due Feb. 10.

Proposed Rule for Advance Premium Tax Credit, Reinsurance Parameters

HHS has announced its Notice of Benefit and Payment Parameters for 2015 Proposed Rule, which establishes the major provisions and parameters for eligibility for advance tax credits to pay for health care premiums in 2015. The proposed HHS Notice of Benefit and Payment Parameters includes payment parameters applicable to the 2015 benefit year, and proposes, among other topics, standards relating to the premium stabilization programs; advance payments of the premium tax credit; cost-sharing reductions; composite rating; privacy and security standards; the annual open enrollment period for 2015; the actuarial value (AV) calculator; the annual limitation on cost sharing for stand-alone dental plans and the Small Business Health Options Program (SHOP). Included in the rules are provisions that would, among other things, decrease the reinsurance attachment point from $60,000 to $45,000 for the 2014 benefit year due to updated estimates that allow for greater payments from the contribution fund, and modify the contribution collection schedule for the reinsurance program. The proposed rule would also establish a methodology for estimating average per capita premiums for calculating the premium adjustment percentage for 2015.

Public comments on the proposed rule will be accepted through Dec. 26.

CMS Requests Comments on Quality Measures for Plans on Exchanges

In a notice set to be published in the Nov. 19 Federal Register, the Centers for Medicare and Medicare Services is soliciting comments on quality measures for the health plans offered through the insurance exchange. The list of proposed quality rating system (QRS) quality measures has 42 measures for family/adult and 25 measures for child-only. CMS is also soliciting comments on the “hierarchical structure of the measure sets,” the elements of the QRS methodology and the integrity of the QRS ratings. CMS also said it would provide “future technical guidance” for the quality health plan issuers and exchanges related to QRS measure specifications, detailed rating methodology guidelines and data reporting and procedures. CMS previously issued rules in the March 27, 2012, Federal Register directing the exchanges to oversee the ratings. Comments on the QRS quality measures are due Jan. 21, 2014.

5. Reports


Information on Coverage of Services, Costs to Consumers and Access to Care in CHIP and Other Sources of Insurance

GAO recently released a report that provides a baseline comparison of coverage and costs to consumers in separate state Children’s Health Insurance Program (CHIP) plans and benchmark plans in select states; describes how coverage and costs might change in 2014; and describes how access to care by CHIP children compares for other children nationwide. In the report, GAO determined that the separate CHIP plans were generally comparable to the benchmark plans selected by states in 2012 as models for the benefits that will be offered through qualified health plans (QHP) in 2014. The plans were comparable in the services they covered and the services on which they imposed limits, although there was some variation. In addition, consumers’ costs for these services — defined as deductibles, copayments, coinsurance and premiums — were almost always less in the five selected states’ CHIP plans when compared to their respective benchmark plans. For example, the CHIP plan in the five states typically did not include deductibles while all five states’ benchmark plans did.

Medicare, Medicaid Advisory Commission Dual-Eligible Data Book Now Available

The Medicaid and CHIP Payment and Access Commission (MACPAC) and the Medicare Payment Advisory Commission (MedPAC) have released a new data book, Beneficiaries Dually Eligible for Medicare and Medicaid. Dual-eligible beneficiaries receive both Medicare and Medicaid benefits by virtue of their age or disability and low incomes. The data book presents information on the demographic and other personal characteristics, expenditures and health care utilization of individuals who are dually eligible for Medicare and Medicaid coverage.

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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