Multiple Questions Remain About Expansion of Medicaid in 2014

Governors and state Medicaid administrators have raised multiple Medicaid implementation issues connected to the Supreme Court’s decision that HHS cannot withhold current Medicaid funding if states refuse to expand coverage as allowed for under the PPACA.  In one missive, the Republican Governors Association sent HHS a letter including 25 questions about the expansion and the National Governors Association requested answers to the following: will states that expand Medicaid coverage up to a level below 133% of the FPL receive the enhanced FMAP available for “newly covered” populations; will states be allowed to phase in Medicaid coverage up to 133% FPL in years after 2014 and still receive the enhanced FMAP; if a state opts not to expand Medicaid what other Medicaid provisions of the PPACA will apply; and what options and federal assistance are available for states that do expand Medicaid coverage.  HHS responded in part by saying that there will be no deadline for states to decide on expanding Medicaid under the PPACA and that, if a state opts out of the expansion, then the PPACA allows for individual coverage mandate hardship exemptions for persons below the poverty level who lack affordable coverage options.  In addition, HHS said that a state can receive extra federal funding for Medicaid information technology costs and state insurance exchange implementation costs even if the state has not decided whether to expand Medicaid eligibility or to run its exchange.  HHS is scheduling a number of meetings with states to discuss the above issues.  A number of Republican governors continue to resist committing to Medicaid expansion with Texas Governor Rick Perry alerting HHS that his state will not conform to the Medicaid expansion option.  Also, a number of Republican-led states have served notice they will not establish state-based exchanges, although 15 states recently notified HHS that they will do so (i.e. California, Colorado, Connecticut, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon, Rhode Island, Vermont, and West Virginia).  Three states--Washington, Utah and Massachusetts--already have exchanges.

GAO Pronounces HHS MA Demo Off-Base

In a letter released by Senator Orrin Hatch, the GAO said it found that HHS has failed to demonstrate that the agency has the legal authority to authorize and implement the $8.3 billion Medicare Advantage Quality Bonus Payment Demonstration project which the administration has used to quell Republican angst over Democrats’ move under the PPACA to reduce Medicare Advantage payments from previous levels.  The GAO recommended in April 2011 that the basis for the program was flawed and should be scrapped.  Another HHS demonstration project has come under attack by both MedPAC and Senator John D. Rockefeller who has asked HHS to immediately abandon the upcoming Medicare/Medicaid dual-eligible demonstration project.

Calls for New Medicare Physician Payment System

The Senate Finance Committee held the third in a series of hearings seeking answers on how to replace the current Medicare physician payment “sustainable growth rate” system.  Representatives from several notable physician groups testified that a new payment system should include incentives for better quality of care through payment bundling, value-based compensation and medical homes.  The AMA also recommended that physicians who want to participate in new Medicare payment and delivery reform pilot projects be given the option to do so on a rolling basis to better manage short turnaround times.  To avoid the 27% cut in 2013 Medicare Part B physician payments, Chairman Max Baucus said the committee will have to act one way or another, regardless that “improving the physician payment system is no easy task.”

ACOs on the Rise

CMS announced that eighty-nine new accountable care organizations have been selected to participate in the second wave of the Medicare Shared Savings Program (MSSP), thus bringing the total number of participants to 154.  About one-half of the new ACOs are physician-led organizations serving fewer than 10,000 patients.  New applications will be accepted annually and, for 2013, the application period is from August 1 through September 6.

Final EFT Standards Announced

CMS announced that the interim final rule adopting health care electronic funds transfer standards will stand as a final rule.  All health plans covered under HIPAA must comply by January 1, 2014.

Recently Introduced Health Legislation

S. 3368 (MEDICAL MARIJUANA), to amend the Food and Nutrition Act to prohibit the provision of funds made available to carry out that act in any state that allows income deductions for controlled substances, including medical marijuana; ROBERTS; to the Committee on Agriculture, Nutrition, and Forestry, July 10.

H.R. 6079 (REFORM), to repeal the Patient Protection and Affordable Care Act and health care-related provisions in the Health Care and Education Reconciliation Act of 2010; CANTOR; jointly, to the committees on Energy and Commerce, Ways and Means, Education and the Workforce, Natural Resources, the Judiciary, House Administration, Rules, Appropriations, and the Budget, July 9.

H.R. 6097 (TAXATION), to exempt employers from any excise tax and certain suits and penalties in the case of a failure of a group health plan to provide coverage to which an employer objects on the basis of religious belief or moral conviction; SENSENBRENNER; jointly, to the committees on Energy and Commerce, Ways and Means, and Education and the Workforce, July 10.

S. 3376 (OVER-THE-COUNTER DRUGS), to amend the Federal Food, Drug, and Cosmetic Act to prevent the abuse of dextromethorphan, and for other purposes; CASEY; to the Committee on Health, Education, Labor, and Pensions, July 11.

H.R. 6103 (MEDICARE), to amend Title XI of the Social Security Act to increase fines and penalties for Medicare fraud to augment Medicare fraud enforcement activities, such as the Health Care Fraud and Enforcement Action Team (HEAT) program; HOCHUL; jointly, to the committees on Ways and Means and Energy and Commerce, July 11.

H.R. 6107 (VETERANS’ HEALTH), to amend Title 38, U.S. Code, to improve the ability of health care professionals to treat veterans via telemedicine; RANGEL; to the Committee on Veterans’ Affairs, July

12.H.R. 6118 (LABORATORIES), to amend Section 353 of the Public Health Service Act with respect to suspension, revocation, and limitation of laboratory certification; GRIMM; to the Committee on Energy and Commerce, July 12.

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