Weekly Health Policy Update: CBO Released Updated Economic Outlook, HHS Announced Final Stage 2 Meaningful Use Rule, and More Grant Awards were Issued
Weekly Health Care Wrap-Up.
In light of the Republican and Democratic National Conventions, MLA’s Weekly Wrap-Up will take a brief hiatus for the next two weeks. We look forward to returning on Friday, September 14. Enjoy the conventions!
Oversight Committee Asks IRS to Justify FFE Subsidies
Republicans on the House Oversight and Government Reform Committee sent aletter on Wednesday to the Internal Revenue Service (IRS) asking the agency to explain the basis for its plans to offer tax credits through the federally facilitated exchange (FFE), arguing the ACA only authorizes tax credits through a state-based exchange. Democrats have argued that a drafting error, not Congressional intent, led to the discrepancy in the statute. With a vast majority of states expected to fall under the FFE in 2014, expect the debate surrounding this issue to continue.
House Leaders Write CMS for Details on Exchange Rules
On Monday, two House Energy and Commerce Committee Republicans sent aletter to CMS Acting Administrator Marilyn Tavenner to follow up on their previous requests for clarification surrounding the Medicaid expansion and exchange planning. Representatives Fred Upton (MI) and Joe Pitts (PA) stress that “regulatory uncertainty” is hurting the states’ ability to make key decisions and with such a short time to implement the ACA changes, they “do not have the luxury of procrastination.” The letter also asks for full answers to the questions posed in a July 10 letter from the Republican Governors Public Policy Committee. Pressure on HHS to release additional guidance is likely to mount over the coming weeks as the November 16 deadline to submit state Blueprints and declaration letters approaches.
CBO Releases Updated Budget and Economic Outlook
The Congressional Budget Office (CBO) has published an updated reportfeaturing projections for federal deficits and the unemployment rate as well as the overall outlook for the budget and economy from 2012 to 2022. The CBO concludes, “The federal budget deficit for fiscal year 2012 will total $1.1 trillion, marking the fourth year in a row with a deficit of more than $1 trillion. That projection is down slightly from the $1.2 trillion deficit that CBO projected in March. At 7.3 percent of gross domestic product (GDP), this year’s deficit will be three-quarters as large as the deficit in 2009 when measured relative to the size of the economy. Federal debt held by the public will reach 73 percent of GDP by the end of this fiscal year—the highest level since 1950 and about twice the 36 percent of GDP that it measured at the end of 2007, before the financial crisis and recent recession.” This CBO report is the latest in a series of projections likely to underscore the need for serious fiscal reform, including tax and entitlement reform, in 2013.
CMS Announces 500 Primary Care Practices for CPC Program
CMS this week released the list of physician practices selected in seven markets across the country to participate in the Comprehensive Primary Care (CPC) multi-payer initiative. Selected practices will work with state and commercial payers as well as Medicare to better coordinate primary care services for patients. In exchange, participating providers will receive a monthly care management fee. Practices were selected through a competitive application process based on their use of health information technology, ability to demonstrate recognition of advanced primary care delivery by accreditation bodies, service to patients covered by participating payers, participation in practice transformation and improvement activities, and diversity of geography, practice size and ownership structure. Find more information and a list of participating practices here.
HHS Releases Final Rule for Stage 2 of EHR Incentive Program
On Thursday, the Department of Health and Human Services (HHS) released the final Stage 2 Meaningful Use rule, outlining the Stage 2 criteria that eligible professionals (EPs), eligible hospitals and critical access hospitals (CAHs) must meet in order to qualify for Medicare and/or Medicaid electronic health record (EHR) incentive payments. The final rule accepted several comments to the proposed rule, particularly around the level of patient engagement and quality reporting required to meet Stage 2 standards. A second new rule establishes the technical capabilities and related standards and implementation specifications that Certified EHR Technology will need to include.
Cohen Returns to CMS as Head of CCIIO
Late last week, CMS Acting Administrator Marilyn Tavenner announced that Gary Cohen will be returning to the Centers for Medicare and Medicaid Services (CMS) to become deputy administrator and director of the Center for Consumer Information and Insurance Oversight (CCIIO). He previously served as oversight director at CCIIO before taking the position of chief counsel at the California Health Benefit Exchange Board. Michael Hash, the current interim director, is resuming his position as director of the Office of Health Reform at the Department of Health and Human Services (HHS). Read more here.
From the States
For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.
HHS announced the next round of Level One and Level Two establishment grant awards this week. Awards were granted to eight states, adding Connecticut, Maryland, Nevada and Vermont to the list of states receiving Level Two grants. Previously, Rhode Island and Washington were the only states to reach Level Two status. California, Hawaii, Iowa and New York were also awarded Level One grants. Additional information can be found on HHS’s website.
A new issue brief from Health Affairs and the Robert Wood Johnson Foundation explores the debate over Graduate Medical Education (GME) funding and discusses various proposals to reform the program.
Our own MLA Employee Benefits team has a new Employer Services Advisory out this week discussing “The Pay or Play Mandate for Large Employers,” outlining the options available to employers under the ACA. Read more here.
Georgetown University’s Center on Health Insurance Reforms has launched a new blog that will feature pieces on health insurance coverage, insurance markets and insurance reform with an emphasis on the effects of these reforms on those with chronic or pre-existing conditions.
Health Insurance Exchanges: State of the States update.
After weeks of suspense, the Department of Health and Human Services (HHS) announced $765 million in Level One and Level Two grant awards to eight states on Thursday. Also this week, there were numerous developments in the Midwest and we learned that a U.S. Territory is now examining whether to create a health insurance exchange. Let’s get started.
On Thursday morning, HHS announced that California, Hawaii, Iowa and New York were awarded additional Level One grants while, Connecticut, Maryland, Nevada and Vermont were awarded Level Two grants. The grant awards ranged from California’s sizeable $196 million award all the way down to Iowa’s $26.6 million award for additional IT work to coordinate the state’s various databases and integrate the state’s Medicaid eligibility solution. The four Level Two grant recipients join Rhode Island and Washington as the few states that have received Level Two grant funding. Additional details can be found on HHS’s website. The next round of Exchange Establishment grant applications is due on November 15, 2012, one day before state Blueprints and declaration letters are due to HHS.
Also during the fanfare, Lt. Governor Anthony G. Brown (D-MD) held a press conference to announce not only the state’s Level Two grant, but also the new name for Maryland’s Health Benefit Exchange. Renamed the “Maryland Health Connection” and sporting a new logo, the Connection already has a functionalwebsite. As many as 150,000 individuals are expected to use the Connection during its first year.
Moving west, California’s statehouse was busy last week examining legislation (SB 703) to create a Basic Health Plan to cover people with incomes between 133 and 200 percent of the federal poverty level. However, in the end, the Assembly Appropriations Committee did not advance the bill. If passed, the Basic Health Plan would have covered an estimated 900,000 Californians. But the Basic Health Plan issue could reemerge in the future. On August 16, Governor Jerry Brown (D) sent a letter to legislative leaders informing them that he intends to call a special legislative session in either December or January 2013 to focus on health reform implementation.
Focusing on a territory we rarely get to discuss (or visit), Governor John P. de Jongh Jr. (D) of the Virgin Islands announced this week that he hired two consulting firms to advise him on whether the Virgin Islands should create a Health Insurance Exchange. To perform an IT gap analysis, a $400,000 contract was awarded to NewWave Telecom and Technologies, while Value Advisory Group was awarded an $199,000 contract to analyze the impact of an exchange on the insurance market.
Meanwhile in the Midwest, there were signs that exchange implementation may be slowing in multiple states.
Governor Rick Synder’s (R-MI) administration announced that Michigan was no longer on track to create a state-based exchange by HHS’s deadline and will now pursue a Federal-State Partnership. According to spokeswoman Sara Wurfel, “the governor continues to believe that Michiganders would be much better served with our own state-controlled exchange rather than the feds making those decisions for us.”
In late July, Governor Daniels (R-IN) asked all of the state’s gubernatorial candidates for their views on whether to create a health insurance exchange or participate in the Medicaid expansion. This week, Republican gubernatorial candidate Mike Pence was the first candidate to respond. In his letter, Pence stated that he was against creating a health insurance exchange because there was “too much uncertainty” surrounding the issue.
Minnesota’s health insurance exchange planning is continuing to move forward, but Governor Mark Dayton (D) said in a letter to state legislative leaders that he will wait until after the November elections before making a final decision on the state’s health insurance exchange. This is an interesting move for the Governor since it was only in July 2012 when he submitted a letter to HHS stating that it was “Minnesota’s intention to continue the planning and development of a Minnesota Health Insurance Exchange.” The Governor also wrote at the time that “We are excited by this opportunity to design our own Exchange…” Despite the Governor’s intention to wait before deciding the final fate of Minnesota’s Health Insurance Exchange, the state continues its planning efforts. Last week it submitted a Level One grant application for an additional $42.5 million in funding.
Finally, according to the minutes of a meeting between the West Virginia Office of the Insurance Commissioner and the state’s health care providers, the state’s HIX IT system RFP is ready to be released. However, the state is now deciding if it will pursue a state-based exchange or a federal-state partnership. If the state moves toward a state-based exchange, a Financial Sustainability Plan produced in July suggests the state is leaning toward leasing the state’s HIX IT system as opposed to purchasing
Looking ahead, State of the States will be taking a brief hiatus over the next two weeks in light of the Republican and Democratic National Conventions. We’ll keep tracking exchange news in the meantime and will look forward to resuming on Friday, September 14. Have fun in Tampa and Charlotte!