GAO Says Certain PPACA Risk Corridor Payments Require Action by Congress

The Government Accountability Office (GAO) responded to a request by Senator Jeff Sessions (R-AL) and House Energy and Commerce Committee Chairman Fred Upton (R-MI) as to whether or not the U.S. Department of Health and Human Services (HHS) is legally justified to make payments for the Patient Protection and Affordable Care Act (PPACA) risk corridor program by collecting user fees without first gaining congressional approval through appropriations. The GAO legal opinion said that Congress must include language in the FY 2015 appropriations measures for the temporary risk corridor payments to continue. A statement released by the House Energy and Commerce Committee said that the GAO opinion demonstrated that “the administration lacks a congressional appropriation to use taxpayer dollars to cover insurance company losses in 2015 under the health law’s risk corridor program.” The opinion is likely to create another hurdle for Congress to overcome with respect to the appropriations process in the lame duck session.

House Committee and Court Strike Blow to Certain PPACA Subsidies

House Government Reform and Oversight Committee Chairman Darrell Issa (R-CA) sent a letter to Treasury Secretary Jacob Lew saying that “Despite numerous requests, the Treasury Department has repeatedly demonstrated an unwillingness to voluntarily provide” documents related to the Treasury/Internal Revenue Service (IRS) decision allowing residents in states electing not to establish an exchange to receive PPACA tax credit subsidies and “As a result, I am forced to issue the enclosed subpoena to compel the Department to turn them over.” The documents, if found to include legal opinions that the subsidies lack statutory authority, could bolster arguments by plaintiffs who have challenged the regulation in court. Even without the documents, the U.S. District Court for the Eastern District of Oklahoma granted summary judgment to Oklahoma which brought suit on the issue stating that the IRS rule is “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law….” This decision reaches a similar conclusion in Halbig v. Burwell which has been vacated pending an en banc review by the DC Circuit Court.

IRS Issues Final Rules on Benefits Exempted from PPACA Insurance Reforms

In final rules issued by the IRS which define benefits exempted from the market reforms imposed by the PPACA, the agency said that limited excepted benefits, such as limited-scope vision or dental benefits and long-term care benefits, meet the definition if participants in an employer’s primary health-care plan are allowed to decline the benefits or the claims for the benefits are administered under a separate contract from claims administration for any other benefits under the plan. Employee Assistance Programs (EAPs) also meet the exempt criteria if: they don’t provide significant benefits in the nature of medical care; their benefits can’t be coordinated with the benefits under another group health plan; they can’t require employee premiums or contributions as a condition of participation; and they can’t impose cost-sharing requirements. The regulations are effective as of December 1, 2014.

Open Payments Data Released Amid Reports of Errors

Last Tuesday the Centers for Medicare and Medicaid Service (CMS) released data under the Open Payments website which disclosed to the public drug and device maker payments to physicians and hospitals totaling nearly $3.5 billion during the last five months of 2013. Nearly 40% of the 4.4 million individual payments did not identify the recipient because CMS could not verify the payment was made to a single physician or teaching hospital. It was also disclosed that the website initially suffered from technical problems similar to those experienced under HealthCare.gov, but CMS said that fixes will soon enable users to search payments by manufacturers to providers sorted by specialty, location and types of payments received.

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