H.R. 8 Medicare Extenders

The law includes a number of so-called Medicare extender payment provisions that had expired or were scheduled to expire at the end of 2012 as described in the Appendix. Among the extensions for 2013 are: provisions for the outpatient therapy cap exceptions process; provisions related to Medicare Advantage plans for special needs beneficiaries; provisions extending the statute of limitations on Medicare overpayment recoveries from three years to five years; Qualifying Individual (QI) program provisions allowing Medicaid to pay the Medicare Part B premiums for Medicare beneficiaries with incomes between 120-135% of poverty; Transitional Medical Assistance (TMA) provisions allowing low-income families to maintain their Medicaid coverage as they transition into employment and increase their earnings; and Special Diabetes Program (SDP) provisions funding research for type I diabetes and supporting diabetes treatment and prevention initiatives for American Indians and Alaska Natives.

113th Congress Convenes

With Republican criticism still resonating on the fiscal cliff deal, the House and Senate reconvened on January 3 to begin the 113th Congress. The House reelected Rep. John Boehner as House Speaker (with 12 Republican objections) and adopted new House Rules, H.Res. 5, which would limit the ability of the House to consider recommendations from the PPACA’s Independent Payment Advisory Board and eliminate a requirement that any IPAB replacement be offset by other Medicare cuts. The rules also exempt any repeal of the PPACA from the “Pay-as-you-go Rule” thus allowing for repeal without accounting for the impact on the deficit. The Rules Package also provides for the Chairman of the Budget Committee to set budget aggregates and allocations at the Ryan FY 2013 Budget levels until a new FY 2014 Budget is adopted. The Rules Package also enforces “spending reduction accounts” in appropriations bills so that if spending cuts are adopted during the appropriations amendment process and purported to count towards spending reduction, the money cannot be spent elsewhere during consideration of the bill. In the Senate, Senator Harry Reid remains the Majority Leader and Senator Mitch McConnell, the facilitator of the fiscal cliff deal along with Vice President Biden, remains the Minority Leader.

Appropriations Issues

With the remainder of FY 2013 appropriations and the Budget Control Act sequestration matters yet to be resolved, the House Appropriations Committee announced new subcommittee chairs, including a new assignment for Rep. Jack Kingston who will chair the Labor-HHS-Education Subcommittee. This subcommittee may consider funding reductions for PPACA programs in addition to the retrenchments included under the American Taxpayer Relief Act of 2012.

The BCA across-the-board spending cuts are pushed off until March 1st and the current continuing resolution for FY 2013 appropriations expires on March 27th. It is also likely that March 1st will turn out to be the deadline for Congress to extend the federal debt ceiling to avoid a possible default and downgrade of the federal credit rating. These critical dates set up another congressionally induced fiscal crisis demanding another compromise among congressional leaders and President Obama.

As to an extension of the debt ceiling, the President has put down the gauntlet saying that he will not negotiate over separate legislation needed for an extension of the current $16+ trillion debt limit while Republicans see this as a means to leverage tax reform and additional entitlement cuts from the President. As negotiations heat up this month and next, it is expected that Senator McConnell and other Republicans will again seek to change the basis for increasing Social Security benefits from the CPI to a so-called “chained-CPI” which would cut entitlement spending by about $112 billion over 10 years and increase revenues by about $72 billion, if the inflation adjuster is applied to federal income tax brackets. The President may be open to this change in some kind of “grand bargain” as well as to Medicare savings in the neighborhood of $400 billion over ten years (as offered during the fiscal cliff discussions). The contours of the debate over the debt limit, sequestration and FY 2013-14 appropriation levels have yet to be settled among the negotiating parties. The release of the President’s FY 2014 budget in February will give some indication of the direction in which Democrats are willing to move to reduce federal deficits in the coming years.

Democrats Demand Final Regulations on Mental Health Parity

Reps. Ted Deutch, Tim Ryan and 30 other House Democrats sent a letter to the Secretaries of Labor, Treasury and HHS demanding that their departments issue final regulations under Public Law 110-343. They said “Insurance companies are finding new and creative ways to avoid the spirit of the landmark reforms signed into law through MHPAEA, and patients and their advocates continue to plea for real enforcement….”

HHS Approves Seven State Health Insurance Exchanges

Last week HHS granted conditional approval to the applications by California, Hawaii, Idaho, Nevada, New Mexico, Utah and Vermont to operate their own health insurance exchanges under the PPACA. Arkansas was given conditional approval to operate a federal/state partnership exchange. HHS also issued additional guidelines under which states can operate partnership exchanges. This brings to 19 the total number of states and DC which will operate their own exchanges.

CMS Delays HIPAA HIT Rules

CMS announced that the agency is delaying until March 31 the enforcement of the operating rules for health plan and health claim status electronic transactions which otherwise became effective on January 1st.

December 31, 1969: | Page 1 Page 2 Page 3



 -  2018