ANPR on PPACA Contraceptive Services

The Departments of Labor, HHS and Treasury will publish this week an Advance Notice of Proposed Rulemaking regarding the HHS PPACA-related rule requiring religious-based organizations to provide certain women’s contraceptive coverage under their fully-insured and self-insured health plans.  Under the ANPR, it is anticipated that women working for religious affiliates, such as colleges and hospitals, would have access to contraceptive services without having to make out-of-pocket payments for them and organizations that object to contraception would not have to pay for such coverage (but such costs could be offset through drug rebates, reinsurance credits and other means).  In a related final rule for student health plans, only fully-insured health plans sponsored by nonprofit, religious institutions of higher education would be treated in the same way as health plans for their employees.  In general, insured student health plans would be subject to the PPACA minimum loss ratio and coverage rules.

New CBO Estimates of PPACA Costs

The CBO and Joint Tax Committee estimates that the insurance coverage provisions under the PPACA will generate a cost of about $1.083 trillion from 2012 to 2021, about $50 billion less than estimated in March 2011.  Although Medicaid and SCHIP costs were estimated to increase by $168 billion and high-cost plan excise taxes were estimated to increase by $8 billion, net costs were reduced by the following: $97 billion in the costs for tax credits and other subsidies under health insurance exchanges; $20 billion in the projected costs for tax credits for small employers; and $107 billion in deficits from the projected revenue effects of changes in taxable compensation and penalty payments and from other changes.  The PPACA net costs for 2012-2022 are estimated to jump to $1.252 trillion.  CBO estimated that the average federal subsidy for eligible exchange enrollees would rise from $4,780 in 2014 to $7,270 in 2022.  Of note, CBO estimated that while the percentage of people insured under the age of 65 would increase from 82% to 93%, the PPACA would still leave 26-27 million uninsured in 2016.  Also, CBO, projected that 3 to 5 million fewer people would have employer-sponsored coverage from 2019 through 2022.  House Republicans were quick to use the last point to criticize the President’s promise that health reform would not cause anyone to lose their current health insurance coverage.

Final Briefs Filed by DOJ on PPACA Constitutionality

The arguments regarding the constitutionality of various aspects of the PPACA are to be heard by the U.S. Supreme Court from March 26-28.  The Administration (DOJ) and opponents of the law filed their final briefs last week on whether the court should strike down some or all of the provisions of the PPACA if the court rules the individual mandate to be unconstitutional.  A court appointed independent attorney said the other portions of the law should be upheld even if the individual mandate is struck down.  The Administration argued that only the “guaranteed issue” (GI) and “community rating” (CR) provisions should be held severable.  However, Florida and 25 other state plaintiffs argued that the independent attorney and DOJ provided no “convincing reason” for upholding the remainder of PPACA if the mandate falls.  They reasoned that the mandate, GI and CR provisions were the principal motivation for the enactment of the PPACA and that, if they are ruled out, then the entire Act should be struck down.  The DOJ and state plaintiffs also sparred over whether the Medicaid expansion should be held invalid because of an unreasonable coercion by the federal government to expand such coverage or lose federal matching funding.  Another court appointed attorney argued that the Anti-Injunction Act (AIA) precludes court jurisdiction until the individual mandate penalty is effective in 2014.

Community Based Care Participation

CMS announced that 23 new organizations will join seven others in the Community-Based Care Transitions Program (CCTP) under the Partnership for Patients program established under the PPACA.  The intent of the program is to reduce hospital readmissions; test sustainable funding streams for care transition services; maintain or improve quality of care; and document measurable savings to the Medicare program.

MedPAC Annual Report

In its annual report to Congress, the Medicare Payment Advisory Commission recommended that Congress: increase hospital inpatient and outpatient care payments by 1% in FY 2013; reduce over three years the payment rates for evaluation and management visits in hospital outpatient departments to the rates in free-standing physician offices; increase by 0.5% the payments for ambulatory surgical centers; increase by 1% the payments for outpatient dialysis services; increase by 0.5% the payments for hospice services; freeze payments for SNFs, LTC hospitals and Inpatient Rehabilitation Facilities; and restructure Medicare Part D drug low-income subsidy (LIS) copayments in an attempt to control the increasing cost of the benefit.  Of note, given the expiration at the end of this year of the current level of Medicare physician payments, MedPAC recommended that the SGR formula be disbanded and replaced with a ten-year statutory fee-schedule update as follows: freezing current primary care payment levels, reducing payment levels for all other services by 5.9% annually for three years, and freezing rates for the remainder of the period.  MedPAC recommended various ways to pay for the SGR repeal, such as applying an excise tax to Medigap policies and rebasing skilled-nursing facility payments.

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