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Weekly Health Policy Update: HHS Releases FAQs on Medicaid Expansion & Exchanges

Weekly Health Care Wrap-Up

HHS Releases FAQs on Exchanges, Medicaid

On Monday, the Department of Health and Human Services (HHS) released a series of FAQs designed to answer some of the outstanding questions surrounding the Medicaid expansion and exchanges under the Affordable Care Act (ACA). Of note, the document announced that states will need to expand Medicaid to 133 percent of the federal poverty level (FPL) to be eligible for the enhanced federal match — partial expansions will not be eligible for the extra federal funding. The document also reiterates the December 14 deadline for state-based exchange Blueprints and the February 15 deadline for partnership exchanges. According to the information provided, states will not be charged for use of the federal data hub and HHS anticipates reimbursing states pursuing partnership activities in support of the FFE. A complete recap of this week’s exchange activities can be found in our State of the States publication.

Senate Ds Claim Committee Slots

We received a glimpse into the 113th Congress this week, when Democrats announced several key committee assignments.  The Senate Finance Committee, which lost four members this election cycle, will add Democratic Senators Sherrod Brown (OH) and Michael Bennet (CO). The Senate HELP committee will add Democrats Tammy Baldwin (WI), Christopher Murphy (CT) and Elizabeth Warren (MA).  Meanwhile, Senator Parry Murray (WA) will be at the helm of the Senate Budget Committee in 2013, replacing retiring Senator Kent Conrad (ND). The Republican assignments have yet to be announced.

Around Town

A new study from the Government Accountability Office (GAO) finds that the Medicaid Integrity Group has hired more than one company to perform its audits, with both contractors reviewing similar areas without coordination or communication.  GAO recommends that CMS remove duplicate contractors and use comprehensive reviews to better target their audits.  Read the entire reporthere.

The Commonwealth Fund released an issue brief this week examining the trends in private employer-based health insurance premiums and deductibles from 2003 to 2011.  The brief found that premiums have increased 62 percent and deductibles have more than doubled.

The American Hospital Association is out with a study finding that Medicare patients, while living longer, are growing sicker and therefore using more services.  The rise in obesity and chronic conditions has been staggering in Medicare population, with obesity rates doubling since 1987 and diabetes rates increasing from 18 percent in 2002 to 27 in 2010.  Due to medical breakthroughs and expanded use of health care services, life expectancy has risen despite the sicker population, which has vast cost implications for the Medicare program.

A new analysis from the Kaiser Family Foundation provides a detailed look at the difference in the availability of health coverage at small and large employers, as well as the variations in plan costs and cost-sharing requirements.

Health Insurance Exchanges: State of the States update

Today is the final day for states to declare their intent to develop a state-based exchange and submit their Blueprint to HHS. Already, one state that had previously signaled an interest in a state-based exchange, Iowa, has reversed course. But more on that later. As we await additional announcements from governors and HHS on which states will move forward with building a state-based exchange, let’s review a week packed with exchange developments.

Exchange officials in Colorado, Connecticut, Massachusetts, Maryland, Oregon and Washington were able to breath a collective sigh of relief this week because on Monday, HHS conditionally approved their Blueprint applications. HHS also revealed during a press call that, including the six states that received conditional approval, HHS has received Blueprint applications from 14 states total. According to Director Cohen, the reason those six states were approved first was because they were the “earliest ones to make their application available to HHS.” Then on Friday, HHS announced that the District of Columbia, Kentucky and New York also received conditional approval to operate exchanges.

Also on Monday, CCIIO released a “Frequently Asked Questions on Exchanges, Market Reforms and Medicaid,” which included information on the Medicaid expansion and exchanges, with some anticipated details surrounding the FFE. The FAQ states that there will be no charge for states to access the federal “Data Hub.” The FAQ also says that after Exchange Grant opportunities expire in 2014, HHS anticipates offering continued funding under a different source for state activities performed on behalf of the FFE.

On Capitol Hill yesterday, the House Energy and Commerce Health Subcommittee held a hearing on the implementation of exchanges and the Medicaid expansion. During the hearing, CCIIO Director Gary Cohen fielded a few tough questions from lawmakers and denied allegations from Representative Michael Burgess (R-TX) that HHS intentionally delayed the release of regulations before the November elections for political reasons. He also reiterated his view that states and the federal government will be ready to run exchanges in 10 months. Director Cohen was joined by CMS Deputy Administrator/Director Cindy Mann, who is in charge of Medicaid at CMS, and officials from the states of Arkansas, Louisiana, Maryland and Pennsylvania.  Full video of the hearing and witness testimony can be found on the subcommittee website.

Moving to the states, two states decided against creating state-based exchanges this week. On Monday, Governor Bill Haslam (R) of Tennessee decided that his state would not create a state-based exchange. In a statement, Haslam did not express opposition to the idea of an exchange, but he said he was concerned over how much independence Tennessee would have to run its exchange. “What our administration has been working to understand is whether we’d have the flexibility for it to be a true state-based exchanged, how the data exchange would work, and if it would work.” He also expressed concerns that exchange rules from the federal government had been developed haphazardly. “What has concerned me more and more is that they seem to be making this up as they go.”

In Pennsylvania, Governor Tom Corbett (R) sent a letter to HHS Secretary Sebelius stating that Pennsylvania would not develop a state-based exchange due to regulatory uncertainty. In his letter, he wrote “With regulations still to be finalized and with more forthcoming, too many unknowns remain for us to plan accordingly.”

Moving in a different direction, Governor C.L. “Butch” Otter announced on Tuesday that Idaho would pursue a state-based exchange, subject to legislative approval. In a statement released to the press, Governor Otter presented the stark choice faced by the state. “Our options have come down to this: Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt.” His decision to pursue a state-based exchange comes after a working group appointed by the governor to examine the exchange issue recommended that Idaho create a state-based exchange, despite warnings from KPMG that the state had a slim chance of meeting HHS deadlines. It is not clear how HHS will react to Idaho’s announcement. While the state has signaled an intention to create a state-based exchange, the state’s lack of planning and actions by the legislature could alter the state’s course.

Also this week, on Thursday, Governor Susana Martinez (R) sent a Declaration Letter to Secretary Sebelius announcing that New Mexico will create a state-based health insurance exchange. In her letter, Governor Martinez wrote that the Office of Health Care Reform will coordinate developing New Mexico’s state-based exchange with the New Mexico Health Insurance Alliance, a quasi-governmental non-profit agency created in 1994 by the legislature to increase access to health insurance. One major hurdle for the exchange is that lawmakers and the governor have been unable to pass health insurance exchange legislation.

Staying in the west, Governor Gary Herbert (R) of Utah sent President Obama aletter this week asking him to let the state keep its current exchange, Avenue H. While Governor Herbert said he would expand the exchange to serve individuals, he wrote in his letter that, “we never intended for our exchange to administer Medicaid, enforce the individual mandate, or distribute federal tax credits.” If Utah’s exchange were allowed to operate without adhering to those portions of the ACA, Governor Herbert suggests that it could be a game changer for other governors still on the fence. In his letter, Governor Herbert writes “I am confident that if you make this change, several other states will join Utah and request certification for ‘state based exchanges’ based on our model.” Today, (Friday), Secretary Sebelius wrote back to Governor Herbert with an upbeat letter that could present an opportunity for Utah’s exchange to be certified in its current form. While we haven’t seen the full letter, according to an excerpt from an AP article, Secretary Sebelius wrote, “We look forward to working with you toward certifying the Utah exchange, ensuring that consumers and small businesses have access to affordable, high-quality coverage.”

Also this week, on Wednesday, Rhode Island submitted its Blueprint to operate a state-based exchange. Rhode Island has been diligently planning to operate a state-based exchange and should be publicly announcing its selection of an IT vendor for the backbone of its health insurance exchange in the near future.

On the topic of Partnership exchanges, after meeting with various members of the state legislature, Governor Mike Beebe (D) of Arkansas announced that he is no longer planning to pursue a state-based exchange. After HHS pushed back the November 16 deadline for states to declare a state-based exchange and submit their Blueprint, Governor Beebe decided to see if legislators were interested in creating a state-based exchange. Instead, Arkansas will revert to pursuing a Federal-State Partnership exchange, an option the state has been planning for since late 2011.

Iowa submitted a letter to HHS Secretary Kathleen Sebelius today (Friday) declaring that Iowa will pursue a Federal-State Partnership exchange. While the state had been examining the possibility of moving forward with a state-based exchange, according to Governor Terry Branstad’s (R) letter, the “cost of building and maintaining a state-financed and based exchange, estimated at $15.9 million annually” was too high for the state. Currently, five states including Arkansas, Delaware, Illinois, Iowa and North Carolina are known to be moving forward with a Partnership exchange while a few others are still evaluating the option.

And finally, the Hawaii Health Connector awarded a $53 million, four year contract to CGI technologies to develop and support the Connector’s IT system last Friday. CGI currently has extensive IT contracts with the federal government to develop the technology infrastructure for the FFE and a contract to develop the IT backbone for Colorado’s health benefit exchange.

Weekly Health Policy Update: HHS Releases FAQs on Medicaid Expansion & Exchanges

Donations and Gifts Related to Official and Unofficial Inaugural Events

With 2012 coming to a rapid close and the 57th Presidential Inauguration quickly approaching, it is a good time to briefly highlight the rules governing donations and gifts related to official and unofficial inaugural events.

In a Switch from Four Years Ago, Certain Corporate Donations Will Be Accepted for Official Inaugural Events

Official inaugural activities are sponsored by the Presidential Inaugural Committee (“PIC”). Back in 2009, then President-Elect Obama announced that it would “abide by an unprecedented set of limitations on fundraising for his inauguration.” As a result, the 2009 PIC announced that it would not accept contributions from corporations, political action committees, federally-registered lobbyists, non-U.S. citizens or registered foreign agents.

Four years later, after the most expensive presidential campaign in American history, these limitations remain in place for the 2013 inaugural, with one notable exception. The 2013 PIC is soliciting corporate donations of up to $1,000,000, so long as the contributing corporation is not organized under the laws of a foreign country and does not have its place of business in a foreign country.

Apart from a ban on donations from foreign nationals, federal campaign finance law and regulations do not restrict donations to the PIC. Despite this fact, the PIC itself is still required to file a FEC Form 13 report no later than 90 days after the Inauguration that discloses the full names and addresses of each person or entity that donates $200 or more in the aggregate to the committee. See 11 CFR 104.21.

Lobbying Disclosure Act (“LDA”) Requirements

In addition to the aforementioned restrictions and reporting requirements, the LDA requires lobbyists and their employers to report contributions over $200 to the PIC on their semi-annual “Lobbying Contribution Report,” or LD-203. Likewise, the LDA provision mandating the reporting of disbursements to “pay the cost of an event to honor or recognize a covered legislative branch official or covered executive branch official” may apply to unofficial inaugural events or Congressional swearing events in  certain instances if a registered lobbying entity is the primary organizer of the event.

Congressional and Executive Branch Gift Restrictions

It is also important to note that local, state and federal gift and entertainment restrictions  apply to the provision of both official and unofficial inaugural event tickets to Members of Congress and  staff, and other federal, state and local officials and employees.

Members of Congress and staff may attend certain events allowed under Congressional gift rules including meals or gala events that qualify as “widely attended events” as long as the invitation comes from the event organizer. Typical receptions may also be attended where  only “nominal food and drink not a part of a meal” is served. See recent House Ethics Committee guidance.

Executive branch employees may also accept invitations to what the Office of Government Ethics calls “widely attended gatherings” (“WAGS”). Political appointees of the Obama Administration, however, must abide by stricter rules set forth by President Obama’s Executive Order 13490 that restricts appointee  attendance at WAGS and conferences that are sponsored by corporations or business trade associations.

Donations and Gifts Related to Official and Unofficial Inaugural Events

Weekly Health Policy Update: IRS Released New Rule and Regulations

Each week, our Health Policy team recaps recent health care developments in two reports, Weekly Health Care Wrap-Up and Health Insurance Exchanges: State of the States.

Weekly Health Care Wrap-Up is our weekly look at regulatory developments affecting health care at the federal and state level. Last week, the IRS released the final rule for the medical device industry tax and the final regulations for fees on health insurance policies and self-insured plans to fund the Patient-Centered Outcomes Research Institute Trust Fund.

Health Insurance Exchanges: State of the States update is our weekly State of the States report on Health Insurance Exchange developments. After many, many weeks of announcements by governors, letters from exchange stakeholders and countless pages of federal regulations, this was a slow week for exchange developments.

Weekly Health Policy Update: IRS Released New Rule and Regulations

Weekly Health Policy Update: HHS Releases New Round of Proposed ACA Rules

Weekly Health Care Wrap-Up

HHS Releases Next Round of ACA Rules

Today (Friday), the Department of Health and Human Services (HHS) released its next round of proposed rules related to the Affordable Care Act (ACA). The latest release provides further detail and parameters related to the “3Rs,” cost sharing reductions, user fees for the FFE, premium tax credits, the FFE SHOP and the MLR. In addition, the Office of Personnel Management (OPM) released its proposed rule on multi-state plans. Additional analysis will be provided in next week’s wrap up. Today’s release follows proposed rules last week related to Essential Health Benefits, market reforms and employer wellness incentives.

DC Fixated on Fiscal Cliff

Discussions continued this week surrounding potential strategies to avert the so-called Fiscal Cliff, which includes a host of expiring tax provisions, sequestration and the Medicare “doc fix,” among other programs. Not surprisingly, the debate continues to focus on identifying the right mix of revenue increases and spending cuts, with both sides drawing battle lines around tax hikes and entitlement reforms. The back and forth is expected to drag on for several weeks, likely butting up against the Christmas holiday. Stay tuned.

CMS Seeks Public Comments Regarding Health Plan Quality Management

In preparation for the quality rating requirements for qualified health plans (QHPs) under the ACA, the Centers for Medicare and Medicaid Services (CMS) released a Request for Information regarding quality metrics for exchanges. HHS hopes to hear from stakeholders regarding existing quality measures and rating systems, strategies and requirements for quality improvement, purchasing strategies to promote care redesign and patient safety, as well as effective methodologies to measure health plan value. Comments are due by December 27, 2012. Quality metrics are slated to be reported and displayed for QHPs beginning in 2016. Read more here.

Murphy Poised to Take Over E&C Oversight Subcommittee

House Committee on Energy and Commerce Chairman Fred Upton (R-MI) has selected Representative Tim Murphy (R-PA) to replace outgoing Oversight Subcommittee Chairman Cliff Stearns (R-FL) who lost his primary earlier this year.  Murphy is a psychologist and member of the GOP Doctors Caucus.

OIG Assesses HHS Oversight over EHR Incentive Program

The HHS Office of the Inspector General (OIG) released an assessment this week of CMS’s oversight of the Medicare electronic health record (EHR) incentive program. The report finds, “CMS faces obstacles to overseeing the Medicare EHR incentive program that leave the program vulnerable to paying incentives to professionals and hospitals that do not fully meet the meaningful use requirements. Currently, CMS has not implemented strong prepayment safeguards, and its ability to safeguard incentive payments postpayment is also limited.” Republican lawmakers have recently raised doubts over the EHR incentive program, calling for the suspension of the program amidst concerns over interoperability and utilization.

From the States

A complete roundup of this week’s action in the states is available through ourState of the States: Health Insurance Exchanges publication here.

Alabama. The Alabama Medicaid Advisory Commission, charged with considering ways to revamp the state’s Medicaid program, is reportedly looking at managed care models. The news comes on the heels of comments by Public Health Director, Dr. Don Williamson, that the state needs to find $30 million in additional state funding to keep its Medicaid program at current levels in 2014. More information is available here and here.

Missouri. Governor Jay Nixon embraced the expansion of Medicaid under the Affordable Care Act this week. Despite Nixon’s support, efforts to expand the program are likely to meet resistance in the legislature.

Health Insurance Exchanges: State of the States update

This week contained just a little bit of everything for exchange watchers. There was an exchange announcement from a governor, more action by state legislatures and a release of proposed rules by CMS. As always, let’s start at the federal level.

The proposed rule released this morning by CMS contained information on risk adjustment, reinsurance, and risk corridors programs; cost-sharing reductions; user fees for a Federally-facilitated Exchange and the Federally-facilitated Small Business Health Option Program, among other topics. Of immediate interest, CMS is proposing to fund Federally-facilitated Exchanges by levying a fee on health plans sold on the FFE. CMS proposes limiting the monthly user fee rate to “3.5 percent of the monthly premium charged by the issuer for a particular policy under the plan” for 2014.  OPM today also released the proposed rule associated with multi-state plans.

This week, Governor Jan Brewer (R) sent a letter to CCIIO stating that Arizona will not create a state-based health insurance exchange because of lingering concerns caused by the failure of CMS and CCIIO to “timely issue detailed regulations, written guidance and inform states when required federal services will be made available.” Governor Brewer concluded her letter stating, “Arizona will work collaboratively with HHS on any issues regarding a Federally-facilitated Exchange.”

Concern over unanswered questions surrounding exchanges also caused health insurance exchange legislation to be voted down this week in Michigan. On Thursday, the House Health Policy committee voted 9 to 5, with two abstentions, to reject legislation to create a non-profit entity to run a state-based exchange (SB 693). According to House Speaker Jase Bolger (R), one of the reasons the bill was defeated was the uncertainty surrounding the exchange issue. In a statement released by his office, Bolger said, “After due diligence, however, it is clear that there were too many unanswered questions for the committee to feel comfortable with a state-run exchange.” The defeat of SB 693 comes after Speaker Bolger publicly supported the creation of a state-based health insurance exchange. Also of note, Michigan still lacks authorization to spend the $9.8 million Level One Establishment grant it received in November 2011. Language to use the grant had been included in a Senate supplemental appropriations bill, but was removed from the bill on Wednesday pending the outcome of the House committee vote.

In New Mexico, the Health and Human Services Committee endorsed draft legislation to authorize the creation of the New Mexico health insurance exchange as a non-profit entity. The move to enact legislation comes after Mark Reynolds, Assistant Attorney General for the State of New Mexico, wrote a letter on November 15 to the Department of Human Services saying “We believe that legislation creating a New Mexico exchange is necessary.” Previously, Governor Susana Martinez’s administration (R) had been considering using the New Mexico Health Insurance Alliance to create an exchange without legislative approval. Currently the Health Insurance Alliance is reviewing responses to anRFP to hire a contractor to develop the HIX IT system. In an email, Senator Dede Feldman (D), chair of the committee, wrote that the draft bill “is just a starting point and will doubtless be revised during the upcoming session.” She also stated that the draft legislation reviewed by the committee was “quite different” from the health insurance exchange implementation bill Governor Martinez vetoed in 2011.

Also, as states continue to choose their exchange options after the election, the transfer of power could create a few disruptions. On November 15, the outgoing Governor of North Carolina, Bev Perdue (D), stated that North Carolina would pursue a federal-state partnership exchange. However, Governor-elect Pat McCrory (R) will have a say over North Carolina’s ultimate exchange plans. McCrory has not stated a final view on the exchange issue. According to a spokeswoman from the Department of Insurance, North Carolina has submitted a grant request for $74 million to use for health plan management, technology upgrades and consumer assistance staff. In comparison, New Hampshire, which was previously stalled in its health insurance exchange planning, might reengage under new leadership. Governor-elect Maggie Hassan (D) wants to discuss the exchange issue before making a decision.  But with the House switching over to Democratic control, there may be opportunities for exchange legislation to gain traction.

Finally, switching to Exchange policy, on Thursday, the Connecticut Health Insurance Exchange Board voted unanimously to follow a staff recommendation and not have the Exchange negotiate on price with insurers offering products on the Exchange. Exchange staff were against negotiating rates with insurance carriers because they believe the Connecticut Exchange will have a market share of less than 5 percent initially. They also pointed out that the Connecticut Insurance Department still has to “approve all forms and rates” before a plan can be offered on the Exchange.

Weekly Health Policy Update: HHS Releases New Round of Proposed ACA Rules

States Lead the Charge on Pressuring Donor Disclosure by Politically-Active, Non-Profit Organizations

In our initial Political Law and Campaign Finance Update posting before Thanksgiving, we introduced the readers of the Politics, Law and Policy Blog to several campaign finance reform “roadmaps” being proposed for consideration at the federal level in 2013.  The call for substantive changes in the rules governing the interplay of money and politics is growing increasingly loud at the state level as well, however.  In fact, in many ways, state legislators and regulators are well ahead of their federal brethren in terms of implementation and enforcement in the campaign finance context.

This is particularly the case in respect to the enforcement of campaign finance disclosure obligations by non-profit groups that engage in political advocacy activities at the state and local level.  While the FEC and IRS struggle in their efforts to promote greater non-profit transparency at the federal level, an increasing number of state agencies have been taking concerted and aggressive action in this area.  For example, in recent weeks specific efforts have been undertaken in California, Idaho, Montana and Maine to turn up the pressure on 501c(4)s and other non-profit groups to reveal their financial backers and spending activities.

A leading jurisdiction in the battle over non-profit transparency has been California, where the California Fair Political Practices Commission (CFPPC) has been vigorously pursuing regulatory and legal action against organizations that attempt to skirt disclosure obligations.  A prime example of this uptick in enforcement can be seen in the CFPPC’s recent decision to file suit against an Arizona-based non-profit group, Americans for Responsible Leadership (ARL), in order to force disclosure of its donors.  Following a settlement agreement whereby ARL agreed to divulge its direct (rather than primary source) contributors, the California Attorney General’s Office has also joined the CFPPC in calling for “further investigation” into the compliance obligations of non-profit political entities.

Similar enforcement pushes have also been seen in Idaho, Montana and Maine over the past few weeks.  In Idaho, the Secretary of State’s Office recently filed suit against 501c(4) group Education Voters of Idaho (EVI), which funded more than $200,000 in advertisements concerning state ballot measures during the 2012 election cycle, to compel disclosure of its donors.  This effort proved successful, as an Idaho state judge subsequently issued an order requiring the public release of EVI’s financial contributors.

In Montana, the state’s Commissioner of Political Practices recently determined that the non-profit group American Tradition Partnership (ATP) qualified as a political committee under state law and should therefore be subject to donor disclosure requirements.  Despite ATP’s efforts to fight this determination, a Montana state judge recently ordered the release of various ATP financial records, which publicly revealed substantive data regarding the entity’s political activities and financial backers.

In Maine, a similar story is unfolding, as the State Ethics Commission is investigating the National Organization for Marriage (NOM) and seeking to compel its compliance with donor reporting requirements.  While the disclosure fight between ethics officials and NOM rages on in state and federal court, the state has increased its scrutiny of NOM on other fronts by fining the non-profit for filing its latest campaign finance disclosure statement a mere 14 hours after the submission deadline.

Examples such as these are just the opening volley in what will undoubtedly be an intense legal and regulatory battle over campaign finance reform and enforcement in the non-profit context moving forward.  Heading into 2013, the Political Law and Campaign Finance Update will be here to keep readers of this blog up to date on key reform proposals and policy developments affecting the world of campaign finance in Washington and beyond.  Stay tuned for our next update.

States Lead the Charge on Pressuring Donor Disclosure by Politically-Active, Non-Profit Organizations