The Departments of Labor, Health and Human Services, and Treasury published a final rule on March 18, 2015 that amends the definition of excepted benefits to allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to individuals who are purchasing individual health insurance in the private market, including through the Affordable Care Act (ACA) Health Insurance Marketplace. The rule establishes the following pilot programs for wraparound coverage: a pilot allowing wraparound benefits only for Multi-State Plans in the Marketplace, and a pilot allowing wraparound benefits for part-time workers or retirees who enroll in an individual market plan (or Basic Health Plan coverage). There are several significant conditions and limitations to this type of coverage. The wraparound coverage must provide meaningful benefits beyond coverage of cost sharing (e.g., coverage of services considered to be out-of-network by the primary plan, reimbursement for the full cost of primary care or non-formulary prescription drugs), and may not consist of an account-based reimbursement arrangement. This type of wraparound coverage could be offered as excepted benefits to coverage that is first offered no earlier than January 1, 2016 and no later than December 31, 2018 (a year later than initially proposed), and that ends on the later of: (1) the date that is three years after the date wraparound coverage is first offered; or (2) the date on which the last collective bargaining agreement relating to the plan terminates after the date wraparound coverage is first offered.
On March 10, 2015, CMS announced the Next Generation Accountable Care Organization (ACO) Model, its latest Affordable Care Act (ACA) innovation initiative intended to promote Medicare quality improvement and care coordination. The Next Generation ACO Model differs from the existing Medicare Shared Savings Program and Pioneer ACO models in several ways. For instance, the Next Generation ACO Model:
- Provides higher levels of risk and reward, using what CMS characterizes as more stable, predictable benchmarking methods that reward both attainment and improvement in cost containment and that move away from comparisons to an ACO’s historical expenditures;
- Offers a selection of payment mechanisms to shift from fee-for-service (FFS) reimbursement to capitation; and
- Includes “benefit enhancement” tools to improve engagement with beneficiaries, including (1) greater access to home visits, telehealth services, and skilled nursing facilities; (2) opportunities to receive a reward payment for receiving care from the ACO; (3) a process to allow beneficiaries to confirm their care relationship with ACO providers; and (4) CMS-ACO collaboration to improve communication with beneficiaries about the potential benefits of ACOs.
CMS plans two rounds of applications for the Next Generation ACO Model in 2015 and 2016, with participation expected to last up to five years. Letters of Intent for the 2015 cycle are due May 1, 2015, and applications are due June 1, 2015. CMS plans an “Open Door Forum” call to discuss the new model on March 17, 2015.
On March 10, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on “Continuing America’s Leadership in Medical Innovation for Patients,” featuring testimony from NIH Director Francis Collins, MD, PhD, and FDA Commissioner Margaret Hamburg, MD.
On March 17, the HELP Committee has scheduled a hearing on “America’s Health IT Transformation: Translating the Promise of Electronic Health Records into Better Care.” The Senate Finance Committee is holding a hearing on the “Affordable Care Act at Five Years” on March 19.
The Energy and Commerce has not yet rescheduled a previously-announced hearing on the 340B drug pricing program that was cancelled due to weather.
The Centers for Medicare & Medicaid Services (CMS) has finalized its Affordable Care Act (ACA) Marketplace health plan payment parameters and essential benefit standards for 2016. The rule addresses numerous policies, including: allocation of risk corridors collections for 2016; recalibration of risk adjustment factors; revisions to reinsurance and cost sharing parameters; user fees for federally-facilitated exchanges; standards for qualified health plans, including quality improvement strategy and provider directory requirements; Small Business Health Options Program requirements; conditions that trigger rate review; clarification that coverage satisfying the minimum value requirement must include substantial coverage of inpatient hospital and physician services; medical loss ratio program revisions; new policies and procedures for enrollee requests for prescription drugs not included on a plan’s formulary; and establishment of the 2016 annual open enrollment period as November 1, 2015 through January 31, 2016. The final rule will be published on February 27, 2015. A related CMS fact sheet is available here.
On February 24, 2015, the HHS Office of Inspector General (OIG) released its “Health Reform Oversight Plan” for FY 2015, which describes the OIG’s current and planned efforts to oversee the implementation and management of HHS programs under the ACA. The plan outlines the OIG’s key tactical considerations (e.g., assessing relative risks; monitoring emerging issues and trends, conducting reviews, and addressing allegations of fraud); identifies primary focus areas, both in the health insurance Marketplaces and in other ACA-related HHS programs; and sets forth target timeframes for issuing reports on reviews related to the Marketplaces. While the report focuses on audits and evaluations, the OIG notes that it is prepared for and engaged in law enforcement operations related to ACA programs.
On February 24, 2015, CMS published its final methodology and data sources for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS is using the same methodology in 2016 as was established in the final 2015 payment notice, with updated values for several factors.
The following Congressional panels have held hearings recently on various health policy issues:
- The House Science, Space, and Technology Committee held a hearing entitled, “Can Americans Trust the Privacy and Security of their Information on HealthCare.gov?”;
- The Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on the reemergence of vaccine-preventable diseases; and
- The Energy & Commerce Committee held hearings on ICD-10 implementation and federal mental health programs.
Earlier this month, the House of Representatives approved H.R. 596, a bill to repeal the Patient Protection and Affordable Care Act (PPACA) and health care-related provisions in the Health Care and Education Reconciliation Act of 2010 and restore the laws as if the health reform provisions had never been enacted. The bill also directs the House Committees on Education and the Workforce, Energy and Commerce, Judiciary, and Ways and Means to develop alternative legislation to, among other things, lower health care premiums, ensure access to affordable health coverage for people with pre-existing conditions, and reform. The President has promised to veto the bill if it reaches his desk.
Three health policy hearings are scheduled for February 26, 2015:
- The Energy and Commerce Committee is holding a hearing on the Obama Administration’s proposed FY 2016 budget for the Department of Health and Human Services (HHS);
- The Senate HELP Committee is holding a hearing entitled “Medical and Public Health Preparedness and Response: Are We Ready for Future Threats?”; and
- The House Oversight and Government Reform Committee is holding a hearing entitled “From Health Care Enrollment to Tax Filing: A PPACA (Patient Protection and Affordable Care Act) Update."
CMS warns requirement to report/return overpayments is in effect even without regulations
The Centers for Medicare & Medicaid Services (CMS) needs more time to finalize its February 16, 2012 proposed rule on reporting and returning of Medicare overpayments, according to a CMS notice to be published on February 17, 2015. The 2012 rule would provide details on implementation of an Affordable Care Act (ACA) provision requiring enrolled providers and suppliers (and certain other enrollees) receiving Medicare funds to report and return Medicare overpayments by the later of 60 days after the date on which the overpayment was identified or, if applicable, the date any corresponding cost report is due. Although the requirement to refund an overpayment already exists in federal law, the proposed rule would clarify what constitutes “identification” of an overpayment, the mechanics of when and how an overpayment must be returned, and the period of time subject to repayment. CMS had received a large number of comments from providers and suppliers and their industry associations that the proposed rule’s refund reporting policies and procedures would impose significant administrative burdens.
The Social Security Act requires public notice if an agency will take more than three years to finalize a proposed rule. CMS states that “the complexity of the rule and scope of comments warrants the extension of the timeline for publication” for an additional year (until February 16, 2016). Specifically, CMS has “determined that there are significant policy and operational issues that need to be resolved in order to address all of the issues raised by comments to the proposed rule and to ensure appropriate coordination with other government agencies.” The agency warns stakeholders, however, that “even without a final regulation they are subject to the statutory requirements found in section 1128J(d) of the Act and could face potential False Claims Act liability, Civil Monetary Penalties Law liability, and exclusion from Federal health care programs for failure to report and return an overpayment.”
The Government Accountability Office (GAO) has released its latest update to its “High-Risk Series” reports, which again lists Medicare as a high-risk program, in part because of the program’s substantial size and scope, and its wide-ranging effects on beneficiaries, the health care industry, and the U.S. economy. The latest report highlights five areas of particular concern to the GAO:
- Payments and provider incentives in original Medicare (specifically referencing physician feedback reports, physician self-referral policy, high-expenditure Part B drugs, end stage renal disease (ESRD) bundled payments, and low-volume payment adjustments for dialysis facilities);
- Medicare Advantage (MA) and other Medicare health plans (including concerns about MA plan payment adjustments and excess payments to Special Needs Plans);
- Program design effects on beneficiaries (addressing coordination for dual-eligible beneficiaries, dual-eligible special needs plans, and access to preventive services);
- Program management (including implementation of durable medical equipment competitive bidding and oversight of Centers for Medicare & Medicaid Services (CMS) contracts); and
- Oversight of patient care and safety (including the use of clinical data registries and oversight of vulnerable Medicare beneficiaries in nursing homes and long-term care hospitals (LTCHs)).
The GAO makes a series of recommendations to Congress and CMS to address program risks. Specifically, GAO recommends that Congress consider directing the HHS Secretary to require providers who self-refer intensity-modulated radiation therapy services to disclose to their patients that they have a financial interest in the service. The GAO also recommends that Congress better align Medicare beneficiary cost-sharing requirements with U.S. Preventive Task Force recommendations.
Specific recommendations for CMS include:
- Disseminating physician performance feedback reports more frequently;
- Improving the timeliness and efficacy of CMS’s monitoring of the accuracy of ESRD low volume payment adjustments;
- Improving the accuracy of the adjustment made for differences in diagnostic coding practices between MA and Medicare fee-for service (FFS) programs;
- Establishing specific plans for using MA encounter data to risk adjust payments or for other purposes;
- Evaluating the extent to which dual-eligible special needs plans have provided appropriate care to the population they serve; and
- Expanding validation surveys at LTCHs to assess accreditation organization identification of deficiencies.
In addition, the GAO lists the following recommendations for CMS to exercise Affordable Care Act authorities to reduce the risk of improper Medicare payments:
- Require a surety bond for certain types of at-risk providers and suppliers;
- Publish a proposed rule for increased disclosures of prior actions taken against providers and suppliers enrolling or revalidating enrollment in Medicare, such as whether the provider or supplier has been subject to a payment suspension from a federal health care program;
- Establish core elements of compliance programs for providers and suppliers;
- Improve automated edits that identify services billed in medically unlikely amounts;
- Develop performance measures for the Zone Program Integrity Contractors who explicitly link their work to the agency’s Medicare FFS program integrity performance measures and improper payment reduction goals;
- Reduce differences between contractor postpayment review requirements when possible;
- Monitor the database used to track Recovery Auditor activities to ensure that all postpayment review contractors are submitting required data and that the data the database contains are accurate and complete;
- Require Medicare administrative contractors to share information about the underlying policies and savings related to their most effective edits; and
- Efficiently identify and implement an information technology solution that addresses the removal of Social Security numbers from Medicare beneficiaries’ health insurance cards.
Next week, the House is expected to take up H.R. 596, a bill to repeal the Patient Protection and Affordable Care Act and health care-related provisions in the Health Care and Education Reconciliation Act of 2010 and restore the laws as if the health reform provisions had never been enacted. The bill also directs the House Committees on Education and the Workforce, Energy and Commerce, Judiciary, and Ways and Means to develop alternative legislation that meets various policy goals, including, among others: lowering health care premiums through increased competition and choice; preserving a patient's ability to keep his or her health plan if he or she likes it; providing people with pre-existing conditions access to affordable health coverage; reforming the medical liability system; increasing the number of insured Americans; expanding state flexibility to administer the Medicaid program; and expanding incentives to encourage personal responsibility for health care coverage and costs.
Although the Congressional Budget Office (CBO) typically releases a budget estimate for legislation scheduled for a floor vote, CBO announced today that it is unable to do so in this case. CBO explains that estimating the budget impact of this legislation would take weeks of CBO and Joint Committee on Taxation staff time “because there are hundreds of provisions in the laws that would be repealed and those provisions are in various stages of implementation.” The CBO did not point out that President Obama would undoubtedly veto the legislation if it were to reach his desk.
On January 27, 2015, the House Energy and Commerce Subcommittee on Health held a hearing on bipartisan public health legislation, including:
- Ensuring Patient Access to Effective Drug Enforcement Act (to improve enforcement efforts regarding prescription drug diversion and abuse);
- Improving Regulatory Transparency for New Medical Therapies Act (to amend the Controlled Substances Act to improve the efficiency, transparency, and consistency of the Drug Enforcement Agency’s process for scheduling new drugs);
- Veteran Emergency Medical Technician Support Act (to provide demonstration grants to states with a shortage of emergency medical technicians (EMTs) to streamline licensing requirements for military veteran EMTs);
- Trauma Systems and Regionalization of Emergency Care Reauthorization Act (to reauthorize grants supporting state and rural development of trauma systems and authorize new regionalized emergency care model pilot projects); a bill to reauthorize language from the Public Health Service Act to fund trauma care centers; and
- National All Schedules Prescription Electronic Reporting (NASPER) Reauthorization Act (to reauthorize programs to support state prescription drug monitoring programs).
On January 28, 2015, the Senate Finance Committee unanimously approved H.R. 22, the “Hire More Heroes Act," which is intended to allow businesses to hire veterans without them counting as a full-time employee under the Affordable Care Act (ACA) if the veteran already has medical coverage through the TRICARE program or the Veterans Administration. The House approved the legislation earlier this month.
Looking ahead, the following hearings are scheduled next week:
- A February 3 Energy and Commerce Oversight and Investigations Subcommittee hearing entitled “Examining the U.S. Public Health Response to Seasonal Influenza”; and
- A February 4 Senate Finance Committee hearing to consider the HHS budget request and review the Department’s operations, including ACA implementation. HHS Secretary Sylvia Burwell is scheduled to testify.
On January 8, 2015, the House of Representatives approved H.R. 30, the “Save American Workers Act.” The legislation would amend the ACA’s definition of “full-time employee” for purposes of the requirement that certain employers provide health care coverage for their full-time employees. Specifically, the bill, which was approved on a 252 to 172 vote, would define full-time employee as an employee who is employed on average at least 40 hours of service a week, rather than the ACA’s 30 hours. The Administration has promised to veto the legislation if it reaches the President’s desk.
This vote followed unanimous House passage of a separate bill, H.R. 22, the “Hire More Heroes Act of 2015.” H.R. 22 is intended to encourage businesses to hire veterans by permitting an employer, for purposes of determining whether the employer is an applicable large employer and thus required to provide health care coverage to its employees under the ACA, to exclude employees who have health coverage under TRICARE or the Veterans Administration.
Both bills are awaiting Senate consideration.
On December 31, 2014, the IRS published final regulations providing guidance on the community health needs assessment and financial assistance policy requirements for charitable hospitals under the ACA. The regulations address the entities that must meet these requirements, related reporting obligations, and the consequences for failing to satisfy these ACA requirements. The regulations apply to taxable years beginning one year after December 29, 2014.
Administration Issues Proposed Rules on ACA Summary of Benefits and Coverage, Excepted Benefits/Wraparound Coverage
On December 30, 2014, the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA), and the Centers for Medicare & Medicaid Services (CMS) published a proposed rule that would revise Affordable Care Act (ACA) summary of benefits and coverage (SBC) and uniform glossary requirements for group health plans and health insurance coverage. The changes, which would modify a February 14, 2012 rulemaking, are intended to help plans and individuals better understand their health coverage options and compare plans. For instance, the proposed rule would add another coverage example to the SBC to illustrate costs for consumers, streamline the SBC, and revise the uniform glossary that helps consumers understand insurance terms. If finalized, the new requirements would be implemented for plan years beginning on or after September 1, 2015. Comments on the proposed changes are due by March 2, 2015. The Departments also issued revised draft SBC template, instructions, and supplemental materials.
Separately, the agencies published a proposed rule on December 23, 2014 that would amend the definition of excepted benefits to allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to individuals who are purchasing individual health insurance in the private market, including through the ACA Health Insurance Marketplace. The rule proposes the following pilot programs for wraparound coverage: a pilot allowing wraparound benefits only for Multi-State Plans in the Marketplace, and a pilot allowing wraparound benefits for part-time workers or retirees who enroll in an individual market plan. There are several significant conditions and limitations to this type of coverage. This type of wraparound coverage could be offered as excepted benefits to coverage that is first offered no later than December 31, 2017 and that ends on the later of: (1) the date that is three years after the date wraparound coverage is first offered; or (2) the date on which the last collective bargaining agreement relating to the plan terminates after the date wraparound coverage is first offered. Comments will be accepted until January 22, 2015.
On December 16, 2014, President Obama signed a $1.1 trillion spending bill that funds most government agencies through the end of the fiscal year on September 30, 2015 (funding for the Department of Homeland Security is funded through February 27, 2015). With regard to HHS funding, the bill, among other things: holds CMS funding at FY 2014 levels; provides no new funding for Affordable Care Act implementation and blocks the use of CMS program management funds to support risk corridor payments; provides emergency funding to address the Ebola crisis; increases National Institutes of Health funding by $150 million over FY 2014 levels; provides funds to FDA to investigate counterfeit drugs within the United States and internationally; and reduces funding for the Independent Payment Advisory Board (IPAB) by $10 million. The explanatory statement also includes a number of health policy provisions. For instance, the report: expresses concerns about a CMS proposal to eliminate critical access hospital status for certain rural facilities; requests CMS to report on the impact of competitive bidding on treatment patterns of enteral nutrition patients residing in LTC facilities; directs CMS to review billing rules regarding implantable pain pump drugs; requests that CMS develop proposals to encourage short-cycle dispensing of outpatient prescription drugs in LTC facilities; directs CMS to educate providers on how to reduce Medicare claims errors, develop procedures to reduce the Office of Medicare Hearings and Appeals (OMHA) appeals backlog, and improve the appeals and audit processes; requests that CMS reconsider changes to payment for surgical procedures included in the annual Medicare physician fee schedule rule; and directs HRSA to work with covered entities under the 340B drug program “to better understand the way these entities support direct patient benefits from 340B discounted sales.”
CMS has issued a proposed rule that would establish ACA Marketplace health plan payment parameters and essential benefit standards for 2016. Specifically, the wide-ranging proposed rule addresses, among other things: the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters; user fees for federally-facilitated exchanges; standards for qualified health plans, including network adequacy and quality improvement; the Small Business Health Options Program; guaranteed availability and renewability, rate review; the medical loss ratio program; and minimum essential health benefits (including new policies and procedures for enrollee requests for prescription drugs not included on a plan’s formulary). CMS will accept comments on the proposed rule until December 22, 2014.
Recent Congressional health policy hearings have addressed the following issues:
- The Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing on generic drug pricing;
- The House Oversight and Government Reform Committee focused on its concerns associated with transparency in passage and implementation of the Affordable Care Act in a hearing featuring CMS Administrator Marilyn Tavenner and Massachusetts Institute of Technology Professor Dr. Jonathan Gruber (); and
- The House Energy and Commerce Committee addressed fiscal challenges and opportunities for savings within the federal health care budget, and the future of the Children’s Health Insurance Program.
Looking ahead to 2015, House Energy and Commerce Committee Chairman Fred Upton has indicated that his panel will hold a hearing on preparation for ICD-10 implementation.
On October 23, 2014, CMS published the proposed methodology for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS proposes to use the same methodology in 2016 as was established in the final 2015 payment notice, with updated values. Comments will be accepted through November 24, 2014.