Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


Election To Shape Budget Deal and Regulation on Health Issues

Tuesday's presidential election appears to be a dead heat with just a few states set to determine the outcome and the lame-duck congressional agenda on avoiding the "fiscal cliff" and raising the federal debt ceiling.  While a re-elected President Obama has indicated his interest in pursuing a "grand bargain" to ameliorate the effect of sequestration and reduce future federal deficits, a newly elected President Romney would likely try to persuade Congress to make a short-term deal and push off long-term decisions in order to allow the Romney administration to structure its own comprehensive tax and spending plan.  If campaign promises are pursued, the Romney plan would seek to restructure Medicare (allowing younger taxpayers to choose private health plans in the future), provide states with block-grant funding for Medicaid and scale-back the main components of the PPACA (including the individual mandate and $ 716 billion in Medicare cuts).

Regardless of the presidential outcome, the Obama Administration will likely rush to issue regulations that OMB has bottled up for political reasons.  The Administration has also delayed issuing the upcoming regulatory agenda on key health issues as well as details on the effect of sequestration on federal health programs.  The lack of key PPACA regulations have hampered the ability of states to properly structure their health insurance exchanges, of health insurers to finalize their benefit plans and of employers to make coverage decisions for next year and for the critical 2014 year when the PPACA mandates become effective.  If Obama is reelected, The House Oversight and Government Reform Committee is readying a “resolution of disapproval” which would strip the IRS of its regulatory decision to provide federal subsidies for individuals who obtain health insurance under the default federally administered health exchange (or even all such subsidies).  The committee’s chairman, Rep. Darrell Issa, has threatened the IRS with a subpoena for documents related to the IRS decisions after the agency cited “confidentiality interests” as the reason for not complying with an earlier request for information.  If Mitt Romney prevails, the House will likely defer action on this and other health matters until next year and attempt to use the budget reconciliation process to halt the implementation of various PPACA provisions.

HHS to Unveil Two Nationwide PPACA Health Plans

OPM has been silent on health related regulatory matters, but raised the veil briefly to say that OPM will negotiate with insurers to establish two new nationwide health insurance plans (one a non-profit) that will be offered in both state-run health insurance exchanges and the federal default exchange.  If the Administration limits the offerings available under the federal exchange to the two nationwide plans, this move would greatly simplify the operation of the federal exchange.  It remains unclear whether the plans would have to abide by state insurance law as well as the rules under the PPACA.

CMS Releases Final Payment Rules

Last week CMS released the 2013 Medicare Physician Fee Schedule (MPFS) final rule which will take effect next year.  Comments are due within 60 days.  The rule includes a cut of nearly 27% that is scheduled for more than a million physicians under the SGR (unless Congress mitigates the cut legislatively).  The rule also addresses other changes to the physician fee schedule (RVU, PE, geographic cost indices, etc.), quality provisions (PQRS, e-prescribing, EHR and the VBPM), and payments for Part B drugs, etc.  The rule also implements provisions of the PPACA by establishing face-to-face encounters as a condition of payment for certain durable medical equipment (DME) items.  In addition, it implements statutory changes regarding the termination of non-random prepayment review. 

CMS also released the 2013 Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems (OPPS/ASC) final rule that includes provisions related to QIOs.  Under the rule, OPPS payments will increase by about 1.8% and ASC payments will increase by about 0.6%. 

Under a final CMS rule for home health agencies, payments are estimated to decrease by about $10 million or .01%.  The rule contains provisions to ensure quality and establishes a new hospice quality reporting program. 

A final CMS rule for Medicare reimbursements to end-stage renal disease treatment facilities will increase payments by 2.3% in 2013 to about $8.4 billion.  The rule also includes reporting on clinical measures and expands the scope of the ESRD Quality Incentive Program (QIP) reporting requirement to cover a broader range of patients who receive dialysis care. 

Codifying a provision of the Middle Class Tax Relief and Job Creation Act, the rule reduces to 65% certain bad debt payments for several Medicare provider groups as an intended revenue source for a future Medicare doc fix.  A final CMS Medicaid payment rule provides for increased payments in only 2013-14 for primary care services delivered by a physician in family medicine, general internal medicine or pediatric medicine as well as for related sub specialists.  The rule allows states to either lock-in rates at the level of the Medicare physician fee schedule in effect at the beginning of 2013 and 2014 or modify the rates in alignment with all updates by Medicare.  In addition to value-based payments, family physicians would likely see increases of about 7% while other physicians providing family care services would see their rates increase by about 3-5%.

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