Framework for PPACA "Essential Health Benefits"

The CMS Center for Consumer Information and Insurance Oversight issued a bulletin providing guidance on how the agency will proceed in setting requirements under the PPACA for the minimum “essential health benefits” for “non-grandfathered” individual and small group health insurance plans offered both inside and outside state health insurance exchanges.  CMS did not indicate a timetable for when final regulations will be promulgated.  In general, the guidance indicates that each state would be able to establish essential benefit “benchmarks” from among: one of the three largest small group plans in the state; one of the three largest state employee health plans; one of the three largest federal employee health plan options; or the largest health maintenance organization in the state’s commercial market.  States would have the flexibility to change their benchmark EHB to keep up with innovations in care and coverage.  Also, plans would be allowed to modify coverage within a benefit category as long as they do not reduce the value of the coverage.  When selected benchmarks do contain all of the required categories of benefits, CMS is said to be considering allowing states to fill in missing categories from among other eligible benchmark plans.  Republicans were quick to criticize the guidance.  Senator Orrin Hatch stated “There is no question essential health benefits will increase the cost of insurance for almost every American.  The framework proposed by the Administration takes away the right of individuals to choose the health care plan that best fits their needs.  Unfortunately, the partisan health care law is bending the health care cost curve in the wrong direction with more mandates, regulation, and price controls.”  Republicans are also expected to take up other PPACA concerns next year, including renewed efforts to repeal the long-term care CLASS Act and restraining the regulations defining minimum loss ratios.

Physician Payments Sunshine Act

Proposed rules under this portion of the PPACA were issued by CMS last week.  The rules would require applicable manufacturers of drugs, devices, biologicals and medical supplies covered by Medicare, Medicaid and SCHIP to report annually to HHS as to payments or transfers of value provided to physicians or teaching hospitals.  Also, manufacturers and group purchasing organizations would be required to disclose to CMS physician ownership or investment interests.   The reported information would be made available on a public website.

FDA Issues PPACA Report

The FDA released a draft report, Quantitative Summary of the Benefits and Risks of Prescription Drugs: A Literature Review, designed to address a PPACA requirement to determine whether the addition of quantitative summaries of the benefits and risks of prescription drugs in standardized format to promotional labeling or print advertising would improve health care decisionmaking by clinicians and patients and consumers.  Among other things, the report said that the numeric presentation of risk-benefit information was associated with a positive impact on several outcomes relative to nonnumeric presentation of such information.  However, the report stated that no format, structure or graphical approach to presenting risk-benefit information emerged as being superior.

MedPAC Payment Recommendations

The Medicare Payment Advisory Commission is considering recommendations under which Medicare payments made to hospital outpatient departments in FY 2013 would be reduced to align with the rates paid for patient visits to freestanding physician offices in order to equalize Medicare payment rates for evaluation and management (E&M) services in the two settings and help stem hospital acquisition of physician practices.  MedPAC also recommended that the payment update for all inpatient and outpatient services be only 1% in 2013 in contrast to the 2.9% under current law.  As to SNF payments in 2013, the recommendation was for Congress to eliminate the marketbasket update and direct CMS to revise the prospective payment system.  Options for ambulatory surgical center payments include: having Congress implement a 0.5% increase in payment rates for ASC services in 2013 along with required cost reporting; or requiring a value-based purchasing (VBP) program for ASCs no later than 2016.  The commission is expected to again recommend changes for home health agencies as they did for 2011, including the adoption of beneficiary copayments.  The commission also discussed potential recommendations which would encourage the use of generics under Part D.  The commission did not provide specific payment recommendations for Medicare Part B physician payments, but indicated that any fix for the SGR problem should be paid for through reimbursement cuts for specialists and a freeze for primary care doctors.  In related news, CMS announced that 30% of dialysis facilities evaluated in a pay-for-performance program will have their Medicare reimbursements reduced from 0.5% to 2.0%.

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