HHS Releases Final Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges – On August 14, 2012, the Department of Health and Human Services (HHS) Center for Consumer Information and Insurance Oversight (CCIIO) released a final Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges (the "Blueprint"). The Patient Protection and Affordable Care Act establishes Affordable Insurance Exchanges ("Exchanges"), which are state-based marketplaces that will provide individuals and small businesses with access to health insurance coverage beginning January 1, 2014. The Exchanges are meant to increase competition within the health insurance market — individuals and small employers can compare and purchase private health insurance options through the Exchanges, which should incentivize insurance companies to compete for business by, for example, keeping down costs.
CCIIO’s recently released Blueprint provides guidance to states about the application and declaration process involved with selecting an Exchange. Under the Affordable Care Act, states have choices in determining what type of Exchange will best suit the needs of its citizens, including choosing to operate as a State-based Exchange or a Federally-facilitated Exchange. Within a Federally-facilitated Exchange, a state may also opt for a State Partnership Exchange, in which a state may operate certain Exchange activities related to plan management and/or consumer assistance.
HHS must approve or conditionally approve State-based Exchanges or State Partnership Exchanges prior to January 1, 2013. Additionally, HHS must make a determination regarding whether a state will operate reinsurance and/or risk adjustment programs or instead opt for Federal government services for these activities. To begin the approval process for a State-based Exchange, a State Partnership Exchange, or reinsurance and risk adjustment programs, a state must submit information, or its own “blueprint,” that details how the state will meet all of the required aspects of the Exchange option it has chosen. States seeking to operate a State-based Exchange or electing to participate in a State Partnership Exchange must submit a complete Exchange blueprint to HHS by November 16, 2012 (for plan years beginning in 2014). HHS will begin plans to implement a fully federally facilitated Exchange in those states that do not submit the required documentation for state-run exchanges by the November 16 deadline. One notable difference in the final Blueprint released by HHS from an earlier draft version is that states must describe how they will implement an in-person assistance program, which will provide in-person assistance to consumers prior to the start of the Exchange program in 2014.
The Blueprint is available here.
Reporter, Christina A. Gonzalez, Houston, +1 713 276 7340, cagonzalez@kslaw.com.
GAO Report Investigates Estimates of PPACA's Effects on Employer-Sponsored Insurance – A new Government Accountability Office (GAO) report has reviewed several studies predicting modest changes in the number of individuals who will continue to receive employer-based health insurance as coverage provisions of the Affordable Care Act take effect. GAO reviewed five separate studies whose estimates ranged from an increase of 2.7 percent to a decrease of 2.5 percent of individuals receiving employer-based coverage. These studies—carried out by CMS, the RAND Corporation, the Robert Wood Johnson Foundation, the Congressional Budget Office, and the Lewin Group—used statistical modeling to predict the near-term effects of the Affordable Care Act, and generally refrained from predicting coverage levels beyond two years.
By contrast, 16 of 19 employer surveys, including surveys by PricewaterhouseCoopers and McKinsey & Co., found that employers estimate dropping coverage for some employees in the near term. The employer surveys varied, however, in estimates of how many employers would drop coverage—the studies found that the changes ranged from as little as two percent to as many as 20 percent of employers. Several of these surveys found that smaller employers were more likely than larger employers to drop coverage; while other surveys found that employers of all sizes that planned to keep coverage were nonetheless considering changes to employee benefit plans that would shift a larger share of plan costs to employees.
The GAO report is available here.
Reporter, Christopher Kenny, Washington, D.C., +1 202 626 9253, ckenny@kslaw.com.
HHS Awards States Funds to Fight Infectious Disease – On August 16, 2012, HHS announced in a press release that it has awarded nearly $49 million to health departments in all 50 states, and certain cities, regions and territories to support the prevention, monitoring and response to infectious diseases. The funding is authorized in part by the Affordable Care Act, and is part of the Centers for Disease Control and Prevention’s Epidemiology and Laboratory Capacity for Infectious Disease Cooperative Agreement (ELC). The ELC program, which began in 1995, provides support for infectious disease infrastructure in all 50 states, six local health departments (the District of Columbia, New York City, Los Angeles County, Chicago, Philadelphia and Houston), Puerto Rico and the Republic of Palau.
The awarded money will be used by health departments to hire and train new staff; develop and implement prevention strategies; invest in more efficient IT systems, including the use of electronic health records; and purchase laboratory equipment and supplies. According to the press release, these awards represent the third year of such funding under the Affordable Care Act. Of the $48.8 million in awards, says HHS, $45.4 million comes from the Affordable Care Act’s Prevention and Public Health Fund, and is broken down as follows:
- $35.3 million for epidemiology-related capacity;
- $9.3 million for healthcare-associated infections; and
- $0.8 million for immunization.
States, cities, regions and territories will receive an additional $3.4 million in annual appropriations.
Click here to read the HHS press release.
Reporter, Greg Sicilian, Atlanta, +1 404 572 2810, gsicilian@kslaw.com.
U.S. Representative Calls for Federal Investigation of Hospital Auditors – U.S. Representative Dan Boren (D-OK) is calling for a federal investigation of CMS Recovery Audit Contractors (RACs) that audit hospitals' Medicare billing. The Recovery Audit Program, authorized by the Tax Relief and Health Care Act of 2006, was established as an effort to reduce unnecessary and improper Medicare costs. To implement the program, CMS divided the United States into four regions and an auditing firm was selected to carry out hospital Medicare cost recovery audits in each region. According to an August 15, 2012 news release from his office, Rep. Boren asserts that rural providers are particularly disadvantaged by the RAC process since such hospitals often have limited resources in responding to the review and appeals process. Boren also says that certain RACs, such as Connolly, Inc. (the exclusive RAC for “Region C”), “are causing significant survival choices for rural hospitals by impacting operational cash flow, cash reserves, and any other publicly approved support in the form of city or county taxes.”
Click here to read Rep. Boren’s news release.
Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.
Healthcare Roundtable on Recent Medicaid Developments Resulting from the Implementation of and the Supreme Court's Ruling on PPACA, Enforcement Actions, and Other Medicaid Reforms – On Friday, August 24, 2012 at 1:00 - 2:30 P.M. Eastern Time, King & Spalding will host an Atlanta-based Roundtable focused on recent Medicaid developments.
The Roundtable will include the following topics:
- Status of PPACA Medicaid Expansion After Supreme Court’s Decision
- Medicaid Contractor Developments Including MIC Reports and Medicaid RAC Initiative
- Implementation of Health Reform Programs Affecting Medicaid
- Medicaid Supplemental Payment and 1115 Waiver Developments
- Medicaid Enforcement Update
You can register to attend in person or by Webinar by visiting http://www.kslaw.com/HealthcareRoundtable. If you are attending in person, lunch will be provided between 12:00 p.m. and 1:00 p.m. if you would like to arrive early for that.
This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.
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