PPACA Relief for Members

With Senator Tom Coburn (R-OK) threatening to hold up the nomination on the President’s pick for the head of the Office of Personnel Management (OPM), the Administration erased the threat by announcing that this week it will release a ruling under the PPACA under which congressional members and staff will be able to continue receiving an employer-federal contribution toward their health insurance in 2014 when, under the Grassley Amendment, they will have to obtain their health insurance coverage through the state-run or back-up federally-run health insurance exchanges.

PPACA Implementation Questioned

Republicans have been critical of the Administration’s delay of the employer mandate and reporting of employment-based health coverage which would be used to verify whether or not employees opting for coverage under the exchanges are eligible for federal tax credits. In response, at a House Ways and Means Committee hearing on the implementation of the PPACA, the head of the Center for Consumer Information and Insurance Oversight (CCIIO) testified that the agency will, despite the self-verification system set forth under a final rule, issue new guidance providing that income information reported by all applicants for insurance subsidies will be verified. HHS will use income information obtained from the IRS, Social Security and Equifax to verify the self-reported income and will follow-up by asking for additional information from applicant pay stubs, etc. if the income reported cannot be verified. Nonetheless, Republicans said that individuals under the age of 26 may not know they are ineligible for subsidies if they choose coverage under the exchanges while being eligible for coverage under their parent’s health plan. The Congressional Budget Office (CBO) issued a report which includes an estimate that the delay will result in a $12 billion cost. At a House Energy and Commerce Committee hearing, the Centers for Medicare and Medicaid Services (CMS) Administrator attempted to ease Republican concerns on exchange implementation by testifying that 80% of the marketplace computer systems have been tested and that 100% will be tested by the October 1st opening day of the exchange marketplaces. CMS also said that the premium rates in the 11 states operating their own exchanges will average 18% less than under previous estimates made by the CBO. The Chairman of the House Oversight and Government Reform Committee also threatened the Treasury Department with a subpoena if the department/Internal Revenue Service (IRS) does not comply with a request for documentation on why and how the department/IRS made a decision that individual tax credit subsidies would be made available to individuals choosing health coverage under the back-up federally operated health insurance exchanges in states opting not to establish their own. HHS also announced that 80% of the potential exchange enrollees will have five or more health plan choices made available to them in October. The Small Business Administration (SBA), Department of Health and Human Services (HHS), and Department of Treasury also launched a new website, Business.USA.gov/healthcare, to help businesses determine the PPACA provisions applicable to them. The health insurance industry also appears apprehensive about its role in meeting PPACA standards and has asked HHS for a rule giving insurers a “good faith compliance period” for the regulations they must comply with relating to the online health insurance marketplaces.

PCIP Bonuses Increase

CMS announced that the Primary Care Incentive Payment (PCIP) Program established under the PPACA, gave providers $664 million in 2012, an increase over the $560 million paid out in 2011.

Comments Due on House Ways and Means Draft of Medicare Reforms

The House Ways and Means Committee has asked for comments by August 30 on a new draft of possible Medicare post-acute care (PAC) payment reforms. Similar to the recommendations made by in the President’s FY 2014 budget request, the proposed changes would: reduce market-basket updates for home health agencies, skilled nursing facilities (SNF), inpatient rehabilitation facilities (IRF) and long-term care hospitals; create site-neutral payments between IRFs and SNFs for certain procedures; modify the criteria required for IRF status (the so-called 75 percent rule); establish a SNF readmissions program; and create PAC bundled payments. The committee appears to be setting the stage to be able to introduce these changes and other proposed Medicare reforms into any budget negotiations that may arise this fall.

Medicare Part D Premium Projections

CMS announced that the average Medicare Part D drug benefit premium of $31 will likely remain unchanged in 2014, although the actual base beneficiary premium will increase from $31.17 to $32.42 per month. Enrollment under the program is scheduled to begin October 15th.

Comments Due on Senate Finance Committee Request on Mental Health Issues

Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) have asked those in the mental health community to respond by September 30 with input on the following questions: (1) What administrative and legislative barriers prevent Medicare and Medicaid recipients from obtaining the mental and behavioral health care they need? (2) What are the key policies that have led to improved outcomes for beneficiaries in programs that have tried integrated care models? and, (3) How can Medicare and Medicaid be reformed, in a cost-effective way, to improve access to and quality of care for people with mental and behavioral health needs?

CMS Finalizes FY 2014 IPPS, LTCH, SNF, IRF, IPS and Hospice Payments

Under final rules released by CMS, the FY 2014 payment rates for: Hospital Inpatient Prospective Payment System (IPPS) will increase by 0.7%, or $1.2 billion, for hospitals participating in the Hospital Inpatient Quality Reporting (IQR) program and decrease by 2% for non-participating entities; Disproportionate Share Hospitals (DSH) will be conformed to the new PPACA rules; Long-term Care Hospitals (LTCH) will increase by 1.3%, or about $72 million; Skilled Nursing Facilities (SNF) will increase by 1.3%, or $470 million and will be rebased on a new market-basket index; Inpatient Rehabilitation Facilities (IRF) will increase by 2.3%, or $170 million; IPS will increase by 2.3%, or $115 million; and Hospices will increase by 1%, or $160 million.

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