Washington Healthcare Update

March 17, 2014

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1. Congress

House of Representatives

Senate

2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

Congressional Budget Office (CBO)

1. Congress

House

Ways and Means Hearing President’s Fiscal Year 2015 Budget Proposal

On March 12, the House Committee on Ways and Means held a hearing to examine the President’s Fiscal Year 2015 Budget Proposal. The sole witness for the hearing was HHS Secretary Sebelius, whose testimony included highlights of the ACA, as well as the goals outlined in the President’s budget request, including investments in community health centers and the nation’s health care workforce. Sebelius also testified that there will be no extension of the individual mandate, the penalty for violating it or the end of the 2014 open enrollment period.

Witness:

The Honorable Kathleen Sebelius
Secretary
United States Department of Health and Human Services

For more information, or to view the hearing, please visitwaysandmeans.house.gov.

Health Subcommittee Hearing Examines Medicare Advantage

On March 13, the Energy and Commerce Subcommittee on Health held a hearing entitled, “Keeping the Promise: Allowing Seniors to Keep Their Medicare Advantage Plans If They Like Them.” As part of the hearing, the subcommittee reviewed various pieces of legislation addressing Medicare Advantage (MA) and the Part D prescription drug program, taking testimony from the sponsors of those bills. A second panel of outside experts discussed issues related to the ACA, and its impact on MA and other aspects of the Medicare program.

Witnesses:

Panel I
The Honorable Dennis A. Ross (FL-15)
Member of Congress

The Honorable Erik Paulsen (MN-3)
Member of Congress

The Honorable Jeff Denham (CA-10)
Member of Congress

The Honorable Jackie Walorski (IN-2)
Member of Congress

The Honorable Keith J. Rothfus (PA-12)
Member of Congress

Panel II
Mitchell Lew, M.D.
CEO and Chief Medical Officer
Prospect Medical Systems

Glenn Giese
Principal
Oliver Wyman Consulting Actuaries

Frank Little
Medicare beneficiary with a Medicare Advantage plan

Judith Stein
Executive Director
Center for Medicare Advocacy

Paul N. Van de Water
Senior Fellow
Center on Budget and Policy Priorities

For more information, or to view the hearing, please visitenergycommerce.house.gov.

Three Bipartisan Bills Would Amend ACA Provisions for Religion, Vets

In a rare moment of bipartisanship, the House passed three changes to the ACA this week. First, they passed by voice vote a bill that would expand the religious exemption for the individual mandate (H.R. 1814, theEACH Act). The second bill removes vets with TRICARE from the worker headcount that triggers the employer mandate (H.R. 3474, theHire More Heroes Act of 2014). This bill passed 401 to 1. And the final bill, which removes volunteer emergency workers from the headcount triggers (H.R. 3979, theProtecting Volunteer Firefighters and Emergency Responders Act of 2014), was passed unanimously.

Senate

Senate GOP Introduces SGR Legislation

On March 12, Republican Senators McConnell (R-KY), John Cornyn (R-TX) and Orrin Hatch (R-UT) introduced S. 2122, a bill that would replace the sustainable growth rate (SGR), the current reimbursement method utilized by the Centers for Medicare and Medicaid Services (CMS) to control spending by Medicare on physician services. The senators’ bill would fund the SGR replacement by repealing the individual mandate imposed by the Affordable Care Act (ACA). Progressing through the chamber quickly, the bill has already moved to the Senate floor for consideration and has been added to the Senate Calendar. Of note, the bill is similar to another GOP bill introduced in the House of Representatives by Rep. Michael Burgess (R-TX), which would instead delay the individual mandate for five years to pay for the fix. The Democratic counterpart for an SGR bill, S. 2000, currently has no funding allocated at this time.

Pediatric Research Bill Cleared for President’s Desk

On March 11, the Senate unanimously passed theGabriella Miller Kids First Research Savings Act, named after a Virginia girl who died of a brain tumor last year. The bill provides $126 million in funding for NIH research into childhood disease. The House passed the bill, championed by Eric Cantor (R-VA), in December. The funding comes from the Presidential Election Campaign Fund, the taxpayer fund used for financing presidential elections, including the Democratic and Republican political conventions. The bill has been sent to the President’s desk for his signature. 

2. Administration

February Federal Exchange Data Brings Total Enrollment to 4.2 Million

In aMarch 11 announcement by the Department of Health and Human Services (HHS), the Obama Administration revealed that total enrollment for the federal health insurance exchanges has reached 4.2 million. With 1.8 million additional enrollees remaining for the Administration to meet its March 30 goal, the Administration would have to nearly double its daily signup rate for February to meet its benchmark. The data represented an improvement of 942,833 signups between Feb. 2 and March 1 and continues a string of three consecutive months with enrollment gains. From a state perspective, California and Florida continue to report large enrollment growth, with 1.19 million and 0.99 million total enrollees respectively in each state. Of note, in February, 27 percent of signups were young adult enrollees (aged 18 to 34), a number fairly consistent with January’s signup rates. While uncertainty remains, Administration officials say they expect a bump in the rate of enrollment in March because other health care programs such as Medicare Part D and Massachusetts Romneycare program also saw pronounced spikes before key deadlines. Moreover, the Administration has yet to announce how many individuals have paid their premiums, an important indicator of the number of citizens actually covered by health insurance.

CMS Reverses Stance on Proposed Part D Changes

The Centers for Medicaid and Medicare Services hasdecided not to take up the proposed changes to the Medicare Part D program. In January, CMS proposed several changes to the Medicare Part D that would have limited the number of drug plans available. The proposed changes received harsh criticism from members on both sides of the isle, including 40 bipartisan senators, as well as key congressional committees and more than 350 health care organizations. CMS Administrator Marilyn Tavenner told Congress on March 10, 2014, that she would abandon the changes and stated that “given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time.”

3. State Activities

California Boasts Highest Exchange Enrollment

California has 868,000 people enrolled in its exchange, which is the highest enrollment of all the states. Florida comes in second with 442,000 enrolled. In February, Massachusetts saw enrollment grow by nearly 60 percent, although they had some issues with the rollout in January. Likewise, Nevada’s enrollment in January was very low due to technical problems, but the state’s enrollment climbed by only 25 percent in February.

New Mexico Exchange Won’t Release Individual Information to Insurers

New Mexico Health Insurance Exchangewill not release to commercial insurance companies the names and contact information of about 10,400 people formerly insured under the low-cost State Coverage Insurance program. Many of these people are currently uninsured because the State Coverage Insurance program ended in January as a result of the Affordable Care Act. The insurance companies want the information so they can contact these potential customers and convince them to enroll under the state exchange. The Health Insurance Exchange Board will not release the information due to privacy concerns, however.

Arkansas “Private Option” Enrollment Rises

Participant numbers have climbed in Arkansas’ private sector based version of Medicaid expansion. According to data released March 8 by the Arkansas Department of Human Services, 110,000 people have enrolled in the program, with 98,000 participants in private plans and 13,400 participants in traditional Medicaid. Moreover, an additional 26,500 residents were deemed eligible for Medicaid and are waiting appropriate processing. Worth noting, last week, the Arkansas’ legislature narrowly voted to uphold the “private option” Medicaid expansion; this program uses federal dollars set aside in the Affordable Care Act (ACA) to purchase private health plans for eligible low-income residents. In 2014, Arkansas received about $915 million to fund its private option.

New York Releases Data on Exchange Enrollment

New York’s health insurance exchange, NY State of Health, reported March 10 that it had successfully enrolled almost 600,000 residents. Of the 590,639 New Yorkers enrolled, more than 70 percent of the enrollees had previously been uninsured. According to the same data, more than 900,000 have completed their enrollment applications and are still waiting appropriate processing.

HHS OIG to Investigate Troubled Maryland Exchange

The Health and Human Services’ Office of the Inspector General (OIG) announced it would be investigating Maryland’s health insurance exchange, Maryland Health Connection, as a means to expand federal government oversight over poorly performing health insurance exchanges established through the Affordable Care Act (ACA). In particular, OIG will be looking into the contracting process, which awarded a $193 million contract to Noridian Healthcare Solutions to build the exchange. Maryland’s exchange has been criticized as being one of the worst-performing exchanges in the country, particularly with regard to successful enrollment. As of last week, the exchange had enrolled only a disappointing 39,000 residents, despite the millions of federal dollars funneled into the exchange. The state has previously received a waiver from federal health officials to wait six months before conducting re-determinations.

4. Regulations Open for Comment

HHS Proposes Health Information Technology Certification Requirements

On Feb. 26,HHS published a notice of proposed rulemaking to introduce the beginning of the Office of National Coordinator for Health Information Technology’s (ONC’s) more frequent approach to health information technology certification regulations. Under this approach ONC intends to update certification criteria editions every 12 to 18 months in order to provide smaller, more incremental regulatory changes and policy proposals. The 2015 Edition EHR certification criteria proposed in this rule would be voluntary. No EHR technology developer who has certified its EHR technology to the 2014 Edition would need to recertify to the 2015 Edition in order for its customers to participate in the Medicare and Medicaid EHR Incentive Programs (EHR Incentive Programs). Furthermore, eligible professionals, eligible hospitals and critical access hospitals that participate in the EHR Incentive Programs would not need to “upgrade” to EHR technology certified to the 2015 Edition in order to have EHR technology that meets the Certified EHR Technology (CEHRT) definition. Instead, the 2015 Edition EHR certification criteria would accomplish three policy objectives: 1) They would enable a more efficient and effective response to stakeholder feedback; 2) they would incorporate “bug fixes” to improve on 2014 Edition EHR certification criteria in ways designed to make rules clearer and easier to implement; and 3) they reference newer standards and implementation specifications consistent with promoting innovation and enhancing interoperability.

Comments must be received by April 28, 2014.

CMS Seeks Comment on Expansion of Competitive Bidding Program

On Feb. 24,CMS announced that it will seek public comment as it moves toward nationwide implementation of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The Competitive Bidding Program, established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Medicare Modernization Act or MMA), has saved more than $400 million for beneficiaries and taxpayers in its first two years of operation and is projected to save an additional $17.2 billion for beneficiaries and $25.8 billion for the Medicare program over the next 10 years.

Currently, competitive bidding is in effect for a national mail order program for diabetic testing supplies and for additional items in 100 areas across the country. By 2016, Medicare must implement competitive bidding or competitive bidding pricing for included items to non-competitive bidding areas. CMS is soliciting public comment on the methodology it would use to comply with the statute when using competitive bidding pricing information to adjust payment amounts in non-competitive bidding areas. In addition, CMS is requesting comments regarding ideas for potentially simplifying the payment rules and enhancing beneficiary access to items and services under the competitive bidding programs for certain durable medical equipment (DME) and enteral nutrition.

Comments are due March 28.

FDA Public Docket for Interoperable Rx Tracking System

FDA has established a public docket to receive information and comments on standards for the interoperable exchange of information associated with transactions involving human prescription drugs in a finished dosage form (prescription drugs) to comply with new requirements in the Drug Supply Chain Security Act (DSCSA). FDA is seeking information from drug manufacturers, repackagers, wholesale distributors, dispensers (primarily pharmacies) and other drug supply chain stakeholders and interested parties, including standards organizations, State and Federal agencies, and solution providers. In particular, stakeholders and other interested parties are requested to comment about the interoperable exchange of transaction information, transaction history and transaction statements, in paper or electronic format, for each transfer of product in which a change of ownership occurs. This action is related to FDA’s implementation of the DSCSA. Comments are due April 21, 2014.

IRS, HHS, DOL: Guidance Issued with Final Proposed Rules on 90-Day Waiting Periods Under ACA

On Feb. 20, the Internal Revenue Service (IRS), Department of Health and Human Services (HHS) and Department of Labor (DOL) released their final proposed rule clarifying the relationship between a plan’s eligibility criteria and the 90-day waiting period limitation. In order to be in compliance with the Affordable Care Act (ACA), in the rule, insurers offering group health insurance coverage cannot institute a waiting period that surpasses 90 days. The final rule, which goes into effect on April 25, applies to plan years starting Jan. 1, 2015, or after. “This is a common sense measure that helps workers access employer-sponsored health insurance while providing employers flexibility,” said DOL’s Assistant Secretary of Employee Benefits Security Administration Phyllis C. Borzi. Also of note, the rule limits the maximum allowed length for the employment-based orientation period to no more than one month. Comments on the proposed rules are due by April 25, and the rule is expected to be published in the Federal Register on Feb. 24.

Children’s Hospital Graduate Medical Education (CHGME) Information Collection

The Health Resources and Services Administration (HRSA) has announced plans to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB) in which data will be collected on the number of full-time equivalent residents in applicant children’s hospitals’ training programs to determine the amount of direct and indirect medical education payments to be distributed to participating children’s hospitals. Assessment of the hospital data ensures that appropriate CMS regulations and Children’s Hospitals Graduate Medical Education (CHGME) program guidelines are followed in determining which residents are eligible to be claimed for funding. The audit results impact final payments made by the CHGME Payment Program to all eligible children’s hospitals. Indirect medical education payments will also be derived from a formula that requires the reporting of discharges, beds and case mix index information from participating children’s hospitals. The CHGME Payment Program was enacted to provide federal support for graduate medical education (GME) to freestanding children’s hospitals. This program attempts to provide support for GME comparable to the level of Medicare GME support received by other, non-children’s hospitals. Comments are due April 11, 2014.

5. Reports

CBO

H.R. 4015, SGR Repeal and Medicare Provider Payment Modernization Act of 2014

According to arecent CBO estimate, H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, a bill that would repeal the ACA’s individual mandate until 2019, would result in 13 million fewer individuals with health insurance while simultaneously saving the government $169.5 billion, as a result of fewer individuals enrolling in Medicaid or collecting health insurance subsidies. These savings would fully offset the cost of replacing the flawed SGR physician payment formula, which is estimated to cost $138 billion over 11 years.

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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