Health Care Reform Implementation Update October 25, 2014

The Centers for Medicare and Medicaid Services (CMS) began sending reminders last week that open enrollment begins on November 15; CMS’s Marketplace CEO, Kevin Counihan, said that end-to-end testing of HealthCare.gov was encouraging but that the Department also has a variety of backup plans in case HealthCare.gov does not function properly during open enrollment. CMS announced the Accountable Care Organization (ACO) Investment Model, through which some ACOs can receive upfront shared savings, and released an interim final rule extending certain waivers for ACOs. The Department of Health and Human Services Office of Inspector General (HHS OIG) released a report this week regarding Medicare payments for outpatient services at critical access hospitals. And, the American Medical Association asked CMS to reevaluate its regulatory penalty structure towards providers.

AT THE AGENCIES

On October 15, CMS announced details on its Accountable Care Organization (ACO) Investment Model, which will be open to certain types of ACOs in the Medicare Shared Savings Program. Under the initiative, CMS will provide some ACOs with pre-paid shared savings to encourage ACOs in rural and underserved areas to join the program and encourage current ACOs to take on additional financial risk. The initiative can provide up to $114 million in upfront investments to up to 75 ACOs. In other ACO news, on October 16 the HHS Office of Inspector General (OIG) announced that it would extend until November 2, 2015 the waivers that it had established in 2011 regarding the federal anti-kickback statute, the physician self-referral (Stark) law and certain civil monetary penalty provisions. The HHS OIG is also requesting input on the waivers’ effectiveness and whether any changes should be made to them.

On October 15, one month before open enrollment begins, CMS kicked off its education campaign regarding the health insurance renewal process. Individuals who were already enrolled in exchange coverage last year began to receive notices on the renewal process last week. Additionally, when those who were previously enrolled return to Healthcare.gov, they will find that approximately 90 percent of the information in their application has been pre-populated. Notwithstanding efforts made by HHS to make reenrollment simple, if individuals who signed up last year take no action by December 15, HHS will automatically reenroll them in a plan the same or similar to the one they were in last year.

CMS released its annual agency enforcement report on October 16. It reported that its imposition of civil monetary penalties (CMPs) on Medicare Advantage organizations and prescription drug plans had increased by more than 300 percent between 2012 and 2013. In 2012, the agency had imposed CMPs on 10 occasions, while in 2013, there were 33 instances. Additionally, between 2012 and 2013, CMS imposed almost $8.4 million in civil monetary penalties.

On October 23, HHS announced the launch of the “Transforming Clinical Practice Initiative,” a program intended to improve health care quality while lowering costs. The program will provide grants to group practices, health care systems and provider associations to explore solutions for lowering costs and improving care to patients. The grants will total $840 million and will be disbursed through the CMS Innovation Center. The program will focus on the creation of a peer-to-peer system in which successful, innovative approaches to improving care and lowering cost would be shared with all providers nationwide.

The HHS OIG also released a report regarding Medicare beneficiary payments for outpatient services received at critical access hospitals (CAH). Currently, CAHs are reimbursed at 101 percent of their reasonable costs, while most other types of hospitals are paid under the Medicare outpatient prospective payment system. Beneficiaries that receive services at CAHs pay 20 percent of the hospitals’ charges, which tend to be higher than the CAH’s “reasonable costs.” The OIG found that in 2012, Medicare beneficiaries paid approximately $1.5 billion in co-insurance for CAH outpatient services, an amount that was nearly 50 percent of the cost of the services. The OIG recommended that CMS request from the Congress the authority to modify the methodology used to calculate CAH reimbursement.

THIRD PARTIES

On October 21, the American Medical Association (AMA) sent a letter to CMS requesting that the agency synchronize and simplify the requirements for avoiding regulatory penalties that providers face over the next 10 years. The letter claims that providers could see payments cut by more than 13 percent over that 10-year period. In the letter, the AMA highlights the Electronic Health Record program, the Physician Quality Reporting System and the Value-Based Modifier program as the three key Medicare programs that could affect provider payments and access to care.

To view our compilation of recent health care reform implementation news, click here.

To view and search our library of Health Care Reform Implementation Updates, visit our Affordable Care Act Databook

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