Stakeholders Gear Up For Debate On ACA Changes, SGR, Medicare Reform In Coming Weeks

Posted: September 3, 2013

Will lawmakers' urgent focus on Syria when they return next week temporarily dampen the political debate surrounding health reform? Politics aside, the ACA's Oct. 1 open enrollment is quickly approaching and healthcare stakeholders are preparing for stepped-up debate in the coming weeks on potential health law tweaks, physician payment reform and Medicare overhaul options. The administration and lawmakers over the August recess have been pressed by all sides to change the reform law's 30-hour work week, and unions are urging the White House to let beneficiaries enrolled in multi-employer plans obtain exchange subsidies. All of this will play out against the backdrop of a quickly expiring federal budget and approaching debt ceiling debate, in which physician payment reform and Medicare overhaul options are tightly embroiled.

On the health insurance exchange front, IHP's Health Exchange Alert reports that it's a huge week for insurers seeking to participate in the federally facilitated and partnership exchanges. CMS will inform issuers of their certification status next Monday (Sept. 9) and on Wednesday (Sept. 4) will hold a webinar on the contract signing process, which will now take place in mid-September. President Bill Clinton plans to give an ACA speech from his library in Little Rock, and HHS officials have joined or plan to join congressional Democrats in town hall events in their districts (for more details, see Health Exchange Alert).

Chamber Hopeful ACA Full-Time Definition Will Be Fixed In 2013

A key official with the U.S. Chamber of Commerce tells Inside Health Policy that Congress could change by the end of this year the Affordable Care Act's 30-hour week definition of a full-time employee, a provision that has been criticized by both businesses and unions. Lawmakers could stick the fix, which would change the definition of “full-time” to 40 hours per week, into the upcoming continuing resolution, Chamber Senior Vice President Randy Johnson says, but others say Congress is still too gun-shy about opening up the ACA and any tweaks for now -- even those that carry bipartisan support -- are unlikely.

AFL-CIO President Richard Trumka, among union officials who met with the White House last week, has also voiced support for changing the law's 30-hour full-time employee definition.

Possible White House Shift On Taft-Hartley And Mystery Rule

Unions may be gaining traction within the administration on another ACA tweak. Sources tell Inside Health Policy that the Obama administration is working on a regulation to address unions' concerns that workers enrolled in multi-employer or “Taft-Hartley” aren't eligible for ACA exchange subsidies. As union officials met with the White House last Tuesday (Aug. 27) to discuss their ACA concerns, a proposed Department of Labor rule that appeared to address Taft Hartley requirements vanished from the Office of Management & Budget website. The rule was posted the previous Saturday (Aug. 24) on OMB's list of rules under review and then disappeared from OMB's website three days later. Since when does the White House post rules on its OMB review list on a Saturday, or remove a rule three days after posting? Department of Labor officials declined IHP's request for an explanation of the mystery rule.

Administration Tweaks Also Expected On Preferred Pharmacy Networks

Industry experts tell IHP a CMS proposed Part D rule, expected within the next few weeks, could address the agency's concerns that some preferred pharmacy networks cost Medicare more than other pharmacies. But agency officials declined to comment on the possible forthcoming rule, saying the agency is still reviewing regulatory options.

The expected Part D rule comes as lawmakers increasingly are urging CMS to hike oversight of the networks to keep Medicare spending under control.

CMS, in its April 2014 call letter announcing Medicare Part D rates, revealed that the agency had begun to scrutinize Part D drug costs within preferred pharmacy networks. Then, in an analysis released in July, CMS said that while preferred networks on average lead to lower prices for drugs, in about a third of cases drug prices were unexpectedly higher within the preferred pharmacy networks than in other pharmacies. CMS also told a bipartisan group of lawmakers in a June 4 letter, obtained by IHP, that the agency was eying regulatory options to address the issue.

CMS Offers States Flexibility On Medicaid ACOs

CMS says it won't pursue a “one-size-fits-all” approach when it comes to Medicaid shared savings programs. In a guidance released Friday (Aug. 30), the agency says cost-savings alone is not enough for CMS to partner with states on the Medicaid initiatives. The shared savings programs must improve quality and health outcomes, according to the guidance.

The guidance doesn't prescribe a preferred model, and says CMS in the initial stages of such programs will support efforts that don't put providers at risk if they fail to reach shared savings targets, but provide incentives if they do.

The guidance is the third in a series that lays out what states need to consider when designing and implementing Medicaid Integrated Care Models and shared savings programs, and the latest guidance focuses on potential program designs.

House GOP Probes Navigator Grant Recipients

House Energy and Commerce Republicans on Thursday (Aug. 29) launched a probe into the administration's use of “navigators” to enroll people in health insurance plans. The lawmakers sent letters to groups that collectively were awarded $67 million in HHS navigator grants, asking them detailed questions about how they will spend the funds, what training will be required of volunteers and staff, and how the navigators will be monitored. The GOP probe was quickly blasted by the administration, House Democrats and consumer advocates. E&C Ranking Democrat Henry Waxman (CA) called the inquiry “groundless” and said “there is no legitimate predicate for these letters and no evidence of any malfeasance from any of the organizations.”

The GOP letter asks the navigators to brief committee staff by Sept. 13. GOP lawmakers at the state and federal levels have raised concerns that the enrollment assisters may be ill-equipped to handle individuals' personal identifiable information. The E&C Republicans also single out Enroll America, asking for any documents and communications between that group and HHS, CMS, CCIIO and any other entity concerning targeting or soliciting individuals for insurance enrollment under the health law.

Groups that received navigator funding include Ascension Health – a member of Enroll America's board – Planned Parenthood, and many other hospitals and health systems.

House Republicans Push Beneficiary Cost-Sharing Proposals

The Republicans on the House Ways & Means and Energy & Commerce Committees are making it increasingly clear they want a Medicare reform plan to include beneficiary cost-sharing proposals. The two panels floated a joint paper last week signaling they intend to establish a uniform deductible for Medicare hospital (Part A) and medical (Part B) insurance, simplify coinsurance for spending above that deductible and cap out-of-pocket spending. The move came after W&M GOP sought comment on a draft bill that included cost-sharing proposals, which the Republicans culled from the administration's broader budget proposals.

Beneficiary groups promptly criticized the move, while congressional Democrats and administration officials said the proposals were meant to be part of a broader deal and can't be taken up on their own. W&M is under the gun to come up with offsets to pay for a Medicare physician payment reform bill moving through the chamber, so expect the cost-sharing proposals to get close attention in coming weeks.

CBO May Score SGR Bill At $170B To $200B

Case in point. The Congressional Budget Office's unpublished preliminary score of the House Energy & Commerce Committee's Medicare physician-pay bill ranges from $170 billion to $200 billion, several sources say, and if Medicare payment “extenders” are included, which is expected, the price would likely increase by tens of billions of dollars. This expected score – tens of billions of dollars higher than CBO's $138 billion estimate for a physician pay freeze – complicates efforts to move a robust physician payment reform bill through Congress.

It's not clear why the range is so wide, but some say it might be due in part to changes to the section on alternative pay models that E&C made between the subcommittee and full-committee markup. The bill also increases physicians' base pay by 0.5 percent during each of the five years of the transition to the new outcomes-based payment model, instead of simply freezing current pay rates.

Some sources expect the House Ways & Means and Senate Finance committees to press for more aggressive payment policies to reduce the bill's cost. The Energy & Commerce bill had the full support of both parties, but sources say finding offsets, such as beneficiary cost-sharing, will test that bipartisanship so it's important to keep the cost as low as possible.

Home Health Firms On Defense As W&M, CMS Seek Cuts

Home health stakeholders are on the defense as W&M seeks to cut back Medicare spending by re-instating home health co-pays. Home care and hospice lobby groups also are asking CMS to thoroughly analyze the home health sector and ease the 14 percent rebasing cuts that are scheduled to phase in over the next four years before finalizing the 2014 home health payment rule. But Congress' Medicare payment advisers say even the health law's maximum rebasing cuts -- which CMS proposed -- are too small.

New CMS Twist On Duals; NY Pushes Integrated Appeals

A new study with a surprising conclusion may also add a new twist in congressional and administration efforts to target dually eligible beneficiaries as part of efforts to decrease Medicare costs. Medicaid is subsidizing Medicare for the care of elderly duals who receive long-term care, an article published in CMS' Medicare & Medicaid Research Review states, which is the opposite of what previous analyses found. The study finds seniors receiving long-term care in the community cost the health care system more than those in nursing homes and urges policymakers to delve deeper into the issue as they attempt to reduce duals' health care costs.

“[A]nalyses have suggested cost shifting from Medicaid to Medicare for care of Medicare-Medicaid enrollees, we note the opposite effect,” the study states. “Our findings suggest that nursing homes may be subsidizing Medicare by reducing hospital use and lowering medical expenditures.”

The results have policy implications. Efforts to control costs in duals should recognize the importance of targeting long-term care users and should improve coordination of medical care and long-term care services, the authors say. Researchers should look into why seniors who are duals and receive care in the community cost the system more.

“If nursing homes are cross-subsidizing Medicare, a combined capitation rate may address this by allowing the managed care entity to decide how to address this subsidy,” the article states. “Policy planners and managed care programs, including Accountable Care Organizations, should examine the role of nursing homes in lowering medical costs,” the article adds.

In other duals news, New York and CMS will move forward with an integrated appeals system for Medicare and Medicaid as part of its duals demo, and beneficiary advocates say the state's proposal shows promise.

DME Competitive Bidding Back In Spotlight

Durable equipment competitive bidding is back in the news, this time with an OIG review. The HHS Office of Inspector General plans to review the controversial durable medical equipment competitive bidding program in Tennessee, Maryland, Michigan and Ohio after lawmakers requested the agency see if CMS had awarded contracts to suppliers who were unlicensed in those states in order to hit a set price for DME.

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Personnel News

The Generic Pharmaceutical Association has hired Heidi Wilson, who formerly served as a legislative assistant for U.S. Rep. Connie Mack (R-FL) for healthcare and other issues. Wilson will join GPhA's government affairs team as director, federal government affairs. Most recently, Wilson worked as director, government relations for Universal American Corp.

-- Donna Haseley (This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

Health Insider -- September 3, 2013