Health Care Reform Implementation Update September 15, 2014

Congress is back in session, and work on a Continuing Resolution is underway. The Affordable Care Act (ACA) is back center stage with House Republicans attaching a medical device tax repeal provision to a jobs package set for a floor vote this week and the House Ways and Means Committee holding a hearing to discuss the status of the ACA’s implementation with CMS Deputy Administrator Andy Slavitt and IRS Commissioner John Koskinen. On the adminsitrative front, the Department of Health and Human Services (HHS) responded to an unfavorable Government Accountability Office (GAO) report regarding the Arkansas Medicaid waiver plan, and the Centers for Medicare and Medicaid Services (CMS) made announcements regarding the Star Ratings Program for Medicare Advantage and prescription drug plans and dialysis centers, and released another rule regarding electronic health records.


On September 10, CMS Deputy Administrator Andy Slavitt and IRS Commissioner John Koskinen testified at a House Ways and Means Hearing regarding the upcoming enrollment period for ACA exchanges. Slavitt testified that CMS is focused on improving the consumer experience overall and will streamline the enrollment process for new and reenrolling customers. Slavitt did not promise a mistake-free ACA marketplace, and warned that there would “always be ongoing challenges.” IRS Commissioner Koskinen focused his testimony on premium tax credit and the individual mandate and was questioned by members on the process for ensuring that taxpayer income information is correct so that they receive the subsidy amount for which they are eligible. The commissioner testified that the IRS plans to update its website to provide clarification to taxpayers on how they can update their income data if needed.

On September 9, the House passed a bill that would delay enforcement through 2014 of a CMS rule that requires physician supervision of certain therapeutic services at Critical Access Hospitals. Congresswoman Lynn Jenkins (R-Kan.) is the sponsor of the bill and claims that the rule, which CMS began enforcing in January, places an undue burden on hospitals and providers in rural areas by requiring physician supervision of services such as drawing blood. The Senate has passed similar legislation, but it is unclear whether the Senate will take up the House bill version for a vote.

The Medicare Payment Advisory Commission (MedPAC) met for the first time since April to discuss Medicare payment policy, service provision based on clinical evidence, Accountable Care Organizations, Medicare Advantage, hospital short stat policy issues and the impact of home health payment rebasing on beneficiary access to and quality of care.


On September 8, the Government Accountability Office (GAO) released a report criticizing HHS for not ensuring that Arkansas’ Medicaid waiver plan was budget neutral. According to the report, Arkansas will be spending $778 million more than a normal Medicaid expansion would have cost in the state. GAO also highlighted that HHS did not require Arkansas to provide any data to justify its funding levels. In response to the report, HHS claimed that its analysis was based on other states’ experiences and that GAO’s $778 number is inaccurate because it used only a small subset of available data to estimate cost levels. 

CMS announced that it was creating two new special enrollment periods (SEPs) for those individuals who were asked to submit documentation regarding immigration-related issues by September 5. The individuals who were required to clear up their immigration status with were supposed to be dropped from enrollment at the end of September if they did not resolve the issues; however the Obama administration is providing leeway for those who could not get the documents in on time. The first SEP is for individuals who can attest that they attempted to submit the necessary documents by the September 5 deadline and who have been verified as eligible for coverage through the exchanges. The second SEP is for individuals who cannot make such an attestation but who do submit the necessary documentation within 60 days.

On September 8, CMS announced that it would delay by one year terminations of Medicare Advantage and prescription drug plans with continual low star ratings. Under the Star Ratings Program, the agency was to terminate plans that received less than three out of five stars in the ratings program for three consecutive years. CMS said that it was delaying the terminations because of concerns that the program disadvantages plans that serve disproportionately high numbers of low-income beneficiaries. 

CMS announced that it would delay a Star Ratings Program for dialysis facilities by three months, until January 2015.  CMS said that the delay would be used to educate the public about the program, and not be used to modify program metrics, which disappointed dialysis providers and patient groups, who argue that the agency, which announced the program in July of 2014, should have gone through notice and comment rulemaking procedures before introducing this program.

HHS’s Office of the National Coordinator for Health Information Technology released a final rule on September 10 that modifies the 2014 certification requirements that electronic health record (EHR) systems must meet to qualify for Medicare and Medicaid meaningful use programs. The Office decided not to adopt a new version of EHR certification and not to implement a new procedure to certify EHR technology outside of the meaningful use program.

On September 8, HHS awarded $60 million in grants to navigators to assist with enrollment in federally facilitated and state partnership exchanges before and during the 2015 open enrollment period. A total of 90 organizations, including charities, universities and nonprofits, tribal, and religious groups, received the grants.

On September 8, HHS Secretary Sylvia Matthews Burwell made a speech on the ACA and committed to improving the open-enrollment process for 2015 and stressed her belief in effective management, transparency and working across party lines. She also said that she intends to respond to Congressional information requests within 30 days.


On September 9, New York state settled with GHI, a subsidiary of EmblemHealth Inc. and New York’s largest health insurer, regarding the company’s inadequate disclosure of out-of-network benefits to its customers. New York state Attorney General Schneiderman announced that GHI will have to establish a $3.5 million dollar fund to reimburse GHI customers who were affected, improve its disclosure of benefits to its customers, and pay $300,000 in fines to the Attorney General’s Office.

On September 8, Governor Terry McAuliffe (D-Va.) unveiled a plan for partial Medicaid expansion in Virginia. The plan would extend coverage to 25,000 Virginia citizens, but falls far short of the governor’s original plan to fully expand Medicaid in the state. The Virginia General Assembly will resume debate on Medicaid expansion and the governor’s new plan during the third week of September.


On September 5, the Federation of State Medical Boards released a final model “compact” that would facilitate physician licensure and practice in more than one state. The compact outlines a process for licensing physicians to practice in more than one state.

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