Washington Healthcare Update

March 24, 2014

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1. Congress

House of Representatives

  • District Work Period — No Legislative Activity


  • State Work Period — No Legislative Activity

2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

Congressional Budget Office (CBO)

Centers for Medicare and Medicaid Services (CMS)

1. Congress


District Work Period — No Legislative Activity


State Work Period — No Legislative Activity

2. Administration

CMS to Test New Hospice Care Model

CMS announced that it will test a new approach to hospice care that would allow terminally ill patients to receive concurrent hospice and aggressive care treatment at the same time. This model, known as the Medicare Care Choices Model, was created under the Affordable Care Act, but unannounced until March 18. To begin the program, a request for applications was posted to enlist the participation of at least 30 rural and urban hospices, which would enroll 30,000 beneficiaries over a three-year period. This model, championed by supporters of better end-of-life care, such as Finance Committee Chairman Ron Wyden (D-OR), would expand patient choices by offering both palliative and intense treatments without costing more. Studies on beneficiary care will be limited to patients with advanced cancers, obstructive pulmonary disease, HIV/AIDs and congestive heart failure.

Five Million ACA Insurance Exchange Sign-ups

Administrator for Centers for Medicare and Medicaid Services (CMS) Marilyn Tavenner announced in a blog post on March 17 that Obamacare enrollment had reached a five million sign-up milestone. “The last several days have been the busiest since December, with the Call Center taking more than 198,000 calls on Thursday alone — the busiest day since Dec. 23 — and more than 130,000 calls over the weekend,” she said in her post. The Administrator gave no details or context to the demographics of the new enrollees, how many have paid their first month’s premiums or how many are newly insured. The Administration predicted a late surge in enrollment, as has been seen in the past with other health insurance exchange programs such as Romneycare in Massachusetts. If sign-ups continue to surge in the final two weeks of the enrollment period, the Administration will fall slightly short of the Congressional Budget Office 6-million-member sign-up goal.

White House Cites Over $9 Billion in “Donut Hole” Savings

According to CMS, since enactment of the Affordable Care Act, 7.9 million seniors and people with disabilities have saved $9.9 billion on prescription drugs, or an average of $1,265 per beneficiary. In 2013 alone, 4.3 million seniors and people with disabilities saved $3.9 billion, or an average of $911 per beneficiary. These figures are higher than in 2012, when 3.5 million beneficiaries saved $2.5 billion, for an average of $706 per beneficiary. In addition, use of preventive services has also expanded among people with Medicare. In 2013, an estimated 37.2 million people with Medicare took advantage of at least one preventive service with no cost sharing, including an estimated 26.5 million people with traditional Medicare, and more than 4 million who took advantage of the Annual Wellness Visit. This exceeds the comparable figure from 2012, when an estimated 34.1 million people with Medicare, including 26.1 million with traditional Medicare, received one or more preventive benefits with no out-of-pocket costs.

3. State Activities

Nebraska Medicaid Expansion Compromise Bill Defeated in Legislature

On March 19, the Nebraska Senate voted down a compromise bill to expand Medicaid to 54,000 additional low-income Nebraska residents. The bill, which was defeated 27-21, borrowed from conservative Medicaid expansion approaches pioneered by Arkansas and Iowa, both of which had previously received Medicaid expansion waivers from the federal government. The bill’s lead sponsor, state Sen. Kathy Campbell, is looking at 2015 for possible reconsideration of the expansion, explaining in a phone interview that after the 2014 elections, “We will have a difference of composition in the Legislature and we’ll have a new governor. I feel like I need a dialogue with those people.” Supporters of the legislation blame the bill’s failure on increased dialogue and propaganda from outside interest groups and rising anti-Obamacare sentiment. As it stands, 25 states and Washington, D.C., have expanded their Medicaid programs in 2014.

New York Announces Enrollment at Over 600K

New York state’s health insurance marketplace, NY State of Health, posted on its website on March 18 that 666,397 had enrolled in the exchange, up nearly 76,000 participants since the week before alone. Also noted on the website were figures showing that 995,038 residents had completed their applications, with as many as 70 percent identifying as uninsured when they started their application.

Massachusetts Fires Exchange Contractor

On March 17, Sarah Iselin, the chief state official overseeing fixes to Massachusetts’ state troubled exchange website, Health Connector, announced that the state was dropping its engagement with contractor CGI. CGI was hired by the state to create and subsequently repair the state’s online insurance exchange website after a botched enrollment deployment in October 2014. Massachusetts has paid $15 million of a $69 million contract with CGI. Connector officials have not said how much taxpayers will have to pay to fix problems with the health exchange. Currently, hundreds of employees at Optum, a technology company hired to manage enrollment problems at both the federal and state levels, have been poring through a backlog of paper applications, now at 21,000. Moreover, the state is expected to ask the federal government for another extension for its failing website, with new hopes of getting the site functioning by next fall’s enrollment period beginning in 2015.

4. Regulations Open for Comment

NEW – Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond

On March 14, CMS issued a proposed rule to address various requirements applicable to health insurance issuers, Affordable Insurance Exchanges (“Exchanges”), Navigators, non-Navigator assistance personnel and other entities under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act). Specifically, the rule proposes standards related to product discontinuation and renewal, quality reporting, non-discrimination standards, minimum certification standards and responsibilities of qualified health plan (QHP) issuers, the Small Business Health Options Program and enforcement remedies in Federally-facilitated Exchanges. It also proposes: a modification of HHS’s allocation of reinsurance contributions collected if those contributions do not meet projections; certain changes to the ceiling on allowable administrative expenses in the risk corridors calculation; modifications to the way CMS calculates certain cost-sharing parameters, rounding those parameters down to the nearest $50 increment; certain approaches CMS is considering to index the required contribution used to determine eligibility for an exemption from the shared responsibility payment under Section CMS-9949-P 2 5000A of the Internal Revenue Code; grounds for imposing civil money penalties on persons who provide false or fraudulent information to the Exchange and on persons who improperly use or disclose information; updated standards for the consumer assistance programs; standards related to the opt-out provisions for self-funded, non-Federal governmental plans and the individual market provisions under the Health Insurance Portability and Accountability Act of 1996; standards for recognition of certain types of foreign group health coverage as minimum essential coverage; amendments to Exchange appeals standards and coverage enrollment and termination standards; and time-limited adjustments to the standards relating to the medical loss ratio program. Comments are due April 18, 2014.

NEW – Interim Final Rule – Patient Protection and Affordable Care Act; Third-Party Payment of Qualified Health Plan Premiums

On March 19, HHS issued an interim final rule requiring issuers of qualified health plans (QHPs), including stand-alone dental plans (SADPs), to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other Federal and State government programs that provide premium and cost-sharing support for specific individuals, and Indian tribes, tribal organizations and urban Indian organizations. Comments will be accepted until May 18; however, the interim final rule is effective as of March 14, 2014.

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


Senate Finance SGR Replacement Legislation Estimated to Cost $215 Billion

According to CBO, the SGR reform proposal supported by Senate Finance Committee Chairman Ron Wyden would cost $180.2 billion over 11 years. In addition to the bipartisan SGR fix agreed to by both House and Senate committees, the bill includes Medicare extenders and additional funding for Medicaid programs and anti-fraud measures. The $180 billion price tag excludes $35 billion in interest, and the bill does not include provisions to offset its cost.


Medicare-Medicaid Coordination Office Fiscal Year 2013 Report to Congress

According the third annual report from the Medicare-Medicaid Coordination Office, Congress should pursue an integrated appeals process for individuals who are enrolled in both Medicare and Medicaid (“dual eligibles”). In addition, Congress should ensure retroactive Medicare Part D coverage of newly eligible low-income beneficiaries, the majority of whom are Medicare-Medicaid enrollees, by making “The Medicare Part D Demonstration for Retroactive and Point of Sale Coverage for Certain Low-Income Beneficiaries” (LI NET Demonstration) a permanent program. The purpose of the Medicare-Medicaid Coordination Office, which was created under the ACA, is to bring together Medicare and Medicaid in order to more effectively integrate benefits, and improve the coordination between the Federal Government and states to ensure access to quality services for dual eligibles. The ACA set forth the specific goals and responsibilities for the Office, including the annual submission of a Report to Congress.

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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