Weekly Health Care Wrap-Up: 5.28.10
Federal Health Care Update
Doc Fix/Medicaid Extension Debate Drags On
Lawmakers on Capitol Hill this week failed to muster the votes for a package of tax extenders that includes a Medicare “doc fix” to stave off cuts to Medicare physician payments. As a result, any final action on the bill will have to take place following next week’s Memorial Day recess. In the meantime, the cuts will go into effect on June 1, although the process allows for a small lag time before physicians would actually see any reductions.
The Medicare fix was included as part of a bicameral package unveiled last week costing $200 billion -- $145 billion of which was to be treated as “emergency” spending and not offset with savings or revenue increases. Opposition from Republicans and fiscally-conservative Democrats has caused Democratic leadership to trim the package several times. The American Medical Association (AMA), as well as several other physicians groups, ultimately supported the Patient Protection and Affordable Care Act (PPACA), despite the fact that it did not reform what almost all agree is a flawed SGR. During the past weeks, these groups have pushed Democrats to honor the promises made to the physician lobby during the health care reform debate and initiate a long-term fix for Medicare reimbursement.
Another closely-watched element in the bill has been the extension of the temporary increase in Federal Medical Assistance Percentage (FMAP) rates for states under the Medicaid program. Governors have pushed hard to see the current boost, which will expire on December 31, extended through June of 2011. The uncertainty on an extension left several states to pass FY 2011 budgets without knowing how much support to expect from the federal government for their cash-strapped Medicaid programs. While the increase was included in several earlier versions of the tax extenders bill, reports late this week indicate it is likely to be dropped from the package amid the concerns of budget hawks.
Regulation Watch
NAIC Recommendations on MLR Likely Delayed. The National Association of Insurance Commissioners (NAIC) was tasked under PPACA with developing a definition and methodologies for determining a medical loss ratio (MLR). These recommendations were expected by June 1; however, NAIC has indicated that while it will respond to Health and Human Services (HHS) Secretary Kathleen Sebelius by that date, it will not offer final definitions or methodologies. Under PPACA, insurers are required to report their MLRs to the Secretary by 2011 and issue rebates if they do not meet standards set by the law.
Part D Donut Hole Discount. The Centers for Medicare and Medicaid Services (CMS) released a notice containing a draft model agreement for the Part D donut hole discounts included in PPACA. CMS will hold a public meeting on the subject June 1. The notice is available here.
Biotech Tax Credit. The Internal Revenue Service (IRS) issued guidance this week on the process for firms interested in qualifying for $1 billion in refundable tax credits for biotech research included in PPACA. More information on the tax credit is available here.
From the States
PPACA implementation efforts continued apace in the states this week. Thus far, at least 20 states have taken steps to begin studying their responsibilities and opportunities under the new law. Recent developments include:
Wisconsin. The state’s Department of Health Services issued an RFP with provisions related to the establishment of an American Health Benefits Exchange. The primary purpose of the document is to solicit proposals for maintenance and enhancement of Wisconsin's Client Assistance for Re-employment & Economic Support (CARES) system -- essentially the eligibility determination information technology for the state's human service programs. However, the RFP also solicits information on developing a system to include Health Insurance Exchange functions down the road. A copy of the full RFP can be found here.
Rhode Island. Lieutenant Governor Elizabeth Roberts announced the formation of a Health Care Reform Implementation Task Force comprised of consumer advocates, business leaders, physicians, nurses and other health care providers, labor leaders, insurers, government agency leaders, legislators and policymakers. As Lieutenant Governor, Roberts does not have any official role in implementing reform. However, she has been active on the issue over the last few years, including her sponsorship of a study on establishing a health insurance exchange in the state last year. More information is available here.
Connecticut. The Board of Directors of the SustiNet Health Partnership in Connecticut released a report on how the passage of PPACA would affect SustiNet's implementation. SustiNet was established in 2009, over the veto of Republican Governor Jodi Rell, as a state-based exchange for low-income individuals and small businesses. The legislation creating SustiNet required a report from the board to the state legislature within 60 days of the passage of federal health care reform. A full copy of the Board's report can be found here.
MLA Health Care News
Anti-Fraud Provisions in PPACA
The Patient Protection and Affordable Care Act (PPACA) includes several anti-fraud enforcement provisions, as well as numerous amendments to existing criminal, civil and administrative laws that regulate the health care industry. Significantly for health care providers and suppliers, most of the new anti-fraud provisions are immediately enforceable, having taken effect on March 23, 2010, when the Act was signed into law.
McKenna Long & Aldridge Partner Michael Sheininger and Associate Brad Samuels recently published a brief summary of some of the more significant fraud and abuse enforcement provisions of which providers and suppliers should be aware in Law360. The article is available here.
Spotlight: DOJ on Antitrust in Health Care Reform
Christine A. Varney, assistant attorney general in the antitrust division of the Department of Justice (DOJ), continued that department's tough stance toward the insurance industry recently, saying it was “more important than ever” that the Antitrust Division work to prevent “anticompetitive” behavior in the insurance industry. She also reiterated the Obama administration’s support for repeal of the McCarran-Ferguson Act as it relates to health insurers. The House passed legislation earlier this year repealing McCarran-Ferguson's health insurance provisions; similar legislation has yet to be approved by the Senate.
In addition, Varney addressed how antitrust laws could impact accountable care organizations (ACOs), promising that the DOJ will work “closely with HHS and providers to offer whatever guidance may be needed to ensure that providers pursue beneficial integrated ACOs without running afoul of antitrust laws.” ACOs are one payment model that many believe could help move the Medicare program away from fee-for-service payment, while reducing costs and improving quality. Yet, many providers have expressed concern with pursuing the model under current anti-trust laws. The text of Varney’s speech is available here.
Calendar: Looking Ahead
- Mon. May 31: Congress is on recess May 31-June 4. The tax extenders bill that includes the "doc fix" will not be completed until the week of June 7. The Medicare "doc fix" and COBRA extension both expire during the break.
- Tues. June 1: National Association of Insurance Commissioners (NAIC) Actuarial Subgroup Conference Call at 3 pm ET. CMS holds public meeting on Part D gap coverage discount program in Baltimore, MD.
- Wed. June 2: Department of HHS conference call to launch the Community Health Data Initiative, a national effort to help communities harness the power of information to improve health.
Quotes of the Week...
“Senators are more interested in heading home for the holiday than in preventing a Medicare meltdown for seniors.”
--AMA President J. James Rohack on the Medicare "doc fix" delay.
"We think more of it needs to be paid for.”
-- Blue Dog Rep.Stephanie Herseth Sandlin (D-S.D.) on the cost of the legislation including the Medicare "doc fix."