PPACA Health Reform Update - Senators ask for Results from PPACA Innovation Center

At a Senate Finance Committee hearing, Chairman Max Baucus (D-MT) said that, while the CMS Center for Medicare and Medicaid Innovation (CMMI) has established more than thirty new programs affecting over five million Medicare beneficiaries, he and other committee members are anxious to see the results. The CMMI Director testified that the results for the Pioneer Accountable Care Organization program will be available this summer. He said that there is no simple solution to improving health care delivery and that numerous projects are underway that could help improve health care quality and lower costs. However, Senator Orrin Hatch (R-UT) appeared skeptical of the results forthcoming from the ten-year $10 billion PPACA program, saying that “CMMI is tasked with letting ‘a thousand flowers bloom.’ What I really wonder is if this is simply a euphemism for barely controlled chaos….”

Regulations Limit Waiting Periods Under PPACA

The IRS and the Departments of Treasury and Labor released proposed regulations requiring group health plans and group health insurance issuers to limit the time of any waiting periods to 90 days or less.

Court Says PPACA Preempts State Law Limiting Coverage under the Law

In a recent PPACA-related decision, the U.S. District Court for the Eastern District of Missouri held that a Missouri law that requires health insurers to offer plans that exclude contraceptive coverage conflicts with the PPACA which includes a requirement for the inclusion of preventive service contraception coverage without cost in all plans issued to individuals and employers. The court invalidated the state law provision as being in conflict with the Supremacy Clause under the U.S. Constitution.

Democrats Criticize EHB Dental Regulations

Senator Ben Cardin (D-MD) and several other Democrats sent a letter to the CMS acting administrator expressing their concern that the final regulations spelling out “essential health benefits” under the PPACA will impede the offering of “affordable and accessible” pediatric dental care. They said that the provision allowing stand-alone dental plans to impose a separate out-of-pocket limit for pediatric dental benefits is inconsistent with congressional intent. They asked CMS to make such plans more affordable under the federally facilitated exchange by requiring them to vary OOP costs by family income. In addition, Senator Cardin offered an amendment on the budget resolution to improve oral health care for children with Medicaid coverage which passed by voice vote.

House Energy and Commerce Committee Health Agenda

The Chairman of the House Energy and Commerce Committee, Rep. Fred Upton (R-MI), and the Health Subcommittee Chairman, Joe Pitts (R-PA), released a list of five “policy concepts” they said were priorities for the 113th Congress. They include: an idea in last week’s hearing to keep mobile medical applications and other health technology free from pre-market approval requirements and the PPACA medical device tax (at the hearing the FDA said it has no plans to regulate consumer smart-phones and tablet computers as medical devices and that the FDA would not consider mobile platform manufacturers or medical apps distributors, such as the iTunes App store or the Android market, to be medical device manufacturers); empowering the critically ill to structure their own treatment and clarify the use of off-label drugs; reauthorizing the animal drug and animal generic drug user fee legislation (in related news, the Senate HELP Committee voiced approval of legislation that would reauthorize FDA user fees for the review and approval of animal drugs as well as legislation to establish standards for research and transplantation of HIV-infected organs); encouraging the development of antibiotics; creating a workable framework for tracking drugs through the supply chain; and creating an FDA board of directors to assess the FDA’s performance and to make recommendations for improvement.

MedPAC Annual Report to Congress

As the House and Senate seek to implement their budget reconciliation plans, the recommendations made by MedPAC in its annual report to Congress, if implemented, are said to possibly reduce Medicare spending by $30 billion over five years. Among the recommendations: requiring outpatient care rates at hospitals to match the same care given at lower rates at physician offices ($10 billion in savings); reducing payments for skilled nursing facilities (up to $10 billion in savings); implementing the PPACA provision requiring Medicare to review hospice providers with a large number of patients who are treated for longer than six months ($1-5 billion in savings); and enforcing the PPACA provision allowing the withholding of payments because of patterns of fraudulent activity ($750 million to $2 billion in savings in 2014). The MedPAC Chairman has also testified that the SGR physician payment formula be replaced to help ensure that Medicare costs are constrained and that quality is improved. He said that the cost of a doc fix could be partially offset through reforms to SNF and home health payments.

MACPAC Recommendations to Congress

MACPAC Recommendations to CongressThe Medicaid and CHIP Payment and Access Commission (MACPAC) also released a report to Congress which contains several recommendations, including: allowing states to implement 12-month continuous eligibility for children enrolled in CHIP and adults enrolled in Medicaid to reduce administrative costs and prevent churning between health programs; and permanently funding the Transitional Medical Assistance (TMA) program to help provide certainty to states and families. The report also contains an update of MACStats information showing state-specific Medicaid and CHIP enrollment, spending, eligibility levels, benefits covered and federal matching rates.

Senators Ask for Medicare Rate Reduction Relief

Senate Finance Committee leaders Max Baucus (D-MT) and Orrin Hatch (R-UT) sent a letter to CMS criticizing the agency’s proposed rate reductions in 2014 for Medicare Advantage plans. In another similar letter, Senators Grassley (R-IA), Schumer (D-NY), Wyden (D-OR) and 19 others said the proposed reductions would reduce the ability of MA plans to coordinate care for the chronically ill. A letter from 98 House members suggested that the cuts could amount to as much as 7.8% and require beneficiaries to pay up to $90 more a month in premiums. They suggest that CMS use “administrative discretion” to correct the situation.

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