Agencies Announce New PPACA Regulations

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that, among other things, defines privacy and security obligations for non-exchange entities and that also is designed to help exchanges better manage personally identifiable information. The rule also proposes the framework for 2015 cost-sharing reductions, premium tax credits, and reinsurance and risk adjustments. Under the proposal, insurers would be required to pay a 3.5% premium user fee for 2015, the same as for 2014. As previously announced, and denounced by Republican Members of Congress, the rule also would exempt self-administered, self-insured group health plans (mainly union-negotiated Taft-Hartley plans and state and local government plans) from the user fee. To address the possible losses that insurers could incur in their exchange-plan-related risk pool as a result of the above-described “transitional rule”, CMS said it is considering making adjustments to the reinsurance and risk corridor programs for 2014-2016 to avoid insurer losses and unanticipated premium increases for PPACA-compliant plans. In addition, the proposed rule contains provisions relating to the annual open enrollment period for 2015, the actuarial value calculator and annual limits for certain dental plans. The Internal Revenue Service (IRS) also released a separate, but related, final rule which spells out the actual amount of the user fees that insurers and self-insured plans will have to pay over 2014-2018. The aggregate amount to be collected is $8 billion for 2014; $11.3 billion each for 2015-2016, $13.9 billion for 2017 and $14.3 billion for 2018.

Lawsuits Opposing PPACA Women's Preventive Services Reaches Supreme Court

The U.S. Supreme Court announced that it will hear one hour of oral argument on the constitutionality of the so-called contraceptive mandate under the health law in connection with two lawsuits brought by for-profit employers (two of 96 lawsuits filed in federal courts). In the Sebelius v. Hobby Lobby Stores, Inc. case, the Justice Department asked the court to decide whether the Religious Freedom Restoration Act allows the religious objections of its business owners to deny employees PPACA-mandated contraceptive coverage. In the Conestoga Wood Specialties Corp. v. Sebelius case, the question presented is whether the religious owners of a family business have free exercise rights that are violated by the application of the contraceptive coverage mandate. The court has not set the date for oral arguments in the two cases.

CMS Finalizes CY 2014 Medicare MD Payment Cuts

CMS issued a final rule under which Medicare physician payments will be reduced by 20.1% unless Congress passes another extension or a long-term solution to the problems created by the current SGR (sustainable growth rate) formulation. The Senate Finance Committee is scheduled on December 12th to mark up the bi-partisan SGR reform legislation crafted by the tax committees in the two chambers. CMS also said that an extra primary care payment would be made in 2015 for non-face-to-face complex chronic care management services for Medicare beneficiaries having at least two significant chronic conditions. Future notice will be made to solicit comments on the latter payment policy. In addition, the rule proposes to make adjustments to payment rates for more than 200 codes as part of a “misvalued codes” initiative. CMS said it will defer for future consideration a possible rule that would cap physician practice expense payments when such payments would otherwise be greater when performed in a hospital outpatient department or ambulatory surgical center. CMS also said that physician groups of ten or more who do not participate in the Physician Quality Reporting System (PQRS) will have their payments reduced by 2% in 2016 under the value-based payment modifier rule.

CY 2014 Medicare Outpatient/ASC Payment Rates Issued

CMS issued final rules stating that hospital outpatient department payment rates will increase by 1.7% in calendar year (CY) 2014, amounting to an increase of about $4.4 billion over this year. Failure by hospitals to meet the hospital outpatient quality reporting requirements will also result in a 2% payment penalty. CMS also said that CY 2014 payments to ambulatory surgical centers would rise by about $143 million over this year.

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