Health Legislation Advances in House and Senate

Last week the Senate sent to the President for his signature the bill, S. 252--the PREEMIE Reauthorization Act that expands research to prevent premature births and infant mortality, establishes a National Pediatric Research Network and that also includes Senate language in S. 1561 which authorizes funding for retiring research chimpanzees. In addition, the Senate passed S. 1557, legislation amending the Public Health Service Act (PHSA) to reauthorize through 2018 the graduate medical education (GME) programs in children’s hospitals. The Senate also cleared the way for a vote this week on H.R. 3204, legislation that would give the Food and Drug Administration (FDA) greater oversight of compounding pharmacies and that would create a national drug tracing system. In addition to taking action on H.R. 3351, the House also passed S. 330, the HIV Organ Policy Equity Act, legislation that amends the Public Health Service Act to establish safeguards and standards of quality for research and transplantation of organs infected with human immunodeficiency virus (HIV).

Questions Abound on President Obama's Administrative "Fix"

In a last-minute effort to address the problems with the Patient Protection and Affordable Care Act’s (PPACA) induced cancellation of millions of individual health insurance policies not meeting the law’s standards and to head off wholesale support among congressional Democrats for a legislative fix, the President publicly stated his mea culpa in announcing the HHS move to allow health insurers and state insurance commissioners to voluntarily proceed to renew existing health insurance policies (limited to the individual and small group markets) which do not meet the PPACA mandated standards. Whether states will allow this (the Washington state commissioner quickly said no) remains to be seen. The same goes for health insurers who have already sent out cancellation notices, changed policies to conform to the law and set premium rates assuming that the updated policies would be purchased in 2014 through the PPACA exchanges. The statement from the National Association of Insurance Commissioners (NAIC) was not reassuring: “This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond….” Pressure for the change came not only from Republicans and a growing chorus of congressional Democrats, but even from former President Bill Clinton who said the federal government should make good on the promise that those with cancelled policies should be allowed to keep them. Whether HHS’s authority to extend this relief using the law’s “grandfather” provision can pass constitutional muster is being openly questioned by the law’s opponents. HHS also said it will monitor the effect of the relief with an eye on a possible extension into 2015 provided the disruption can be minimized; particularly regarding the rates insurers will be setting for 2015 in the exchange and non-exchange markets. Under the relief rule, affected persons would have to be notified about the PPACA benefits not included under the existing plans and the alternative options available in the law’s exchanges.

Proceedings in the House Highlight Other PPACA Failures

The above-mentioned mea culpa from the President also included a statement regarding the PPACA’s exchange problems to the effect that “We fumbled the rollout”. Republicans did not accept this apology to affected individuals and criticized the President’s less than reassuring statement that the HealthCare.gov website will be fully functioning by the end of this month. HHS Secretary Kathleen Sebelius was as circumspect about the November 30th deadline for the completion of a final fix in her statement that individuals accessing the website after that date will have a “very different experience”. Republican leaders of the House Oversight and Government Reform (OGR) Committee were successful in forcing Todd Park, the White House’s chief technology officer, to testify under subpoena about the source of the federal exchange problems. Democrats, including Senator Kay Hagan (D-NC), have attempted to shift the blame for the website’s woes to the contractors by bringing the Government Accountability Office (GAO) into the picture to investigate and suggest procurement reforms. Bipartisan support for legislation to reform information technology (IT) procurement was also voiced by members of the House OGR Committee. Nonetheless, Republicans at the OGR hearing blamed Todd Park, Henry Chao (Centers for Medicare and Medicaid Services (CMS) Deputy Chief Information Officer) and other IT officers for the flawed rollout. Mr. Chao also testified that the so-called “anonymous shopping” feature was not implemented on October 1 because it had failed in testing. Citing progress to fix the website, Mr. Park said that the data hub is humming nicely and that the site can process 17,000 users per hour and successfully process new accounts. Fixing blame continued, however, with the release of CMS/contractor emails by House Energy and Commerce Chairman Fred Upton (R-MI) which contained statements by Mr. Chao and others to the effect that they knew key features of the website were not ready for primetime from the beginning. At a second hearing focusing on the website’s implementation held by the House Energy and Commerce Committee, the former Social Security Commissioner, Michael Astrue, testified that former CMS Administrator Donald Berwick had failed “to put in place the basic assignments, goals and system of accountability necessary to manage a project of this scope.” Despite the problems, HHS said that 975,407 eligible individuals had applied for coverage during the first month of operation and that 106,185 of these had actually “selected” health plans from the federal and state exchanges. Of note, another 440,000 individuals were determined to be eligible for Medicaid in 10 of the 25 states electing to expand their Medicaid programs under the PPACA. Hearings held by the House Small Business Subcommittee on Health and Technology uncovered additional PPACA-related problems that will soon be experienced by small businesses. Witnesses said that rising health insurance premiums may force a number of small employers to consider self-insuring their health plans.

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