United States: Weekly Washington Healthcare Update - October 28, 2013

Last Updated: November 1 2013
Article by Stephanie A. Kennan and Brian J. Looser

1. Congress


Energy and Commerce Hearing with Healthcare.Gov Contractors

On Oct. 24, the House Energy and Commerce Committee held a hearing to examine the role of private contractors in the recent computer "glitches" that have plagued the rollout of the ACA's health insurance exchanges. Witnesses testified that, among other things, CMS made the call to turn off the anonymous shopping feature just two weeks before the launch. Republicans have suggested that the decision to require people to sign up for an account before being able to view insurance plans was political, made by HHS in order to mask the high cost of health plans. None of the contractors testifying suggested delaying the launch, despite worries they had about inadequate testing.


Cheryl Campbell
Senior Vice President
CGI Federal

Andrew Slavitt
Group Executive Vice President

Lynn Spellecy
Corporate Counsel
Equifax Workforce Solutions

John Lau
Program Director

For more information, please visit: energycommerce.house.gov

Bill Would Allow All U.S. Citizens to Enroll in Federal Employees Health Plan

On Oct. 24, House Oversight and Government Reform Committee Chairman Darrell Issa (CA-R) along with Reps. Mick Mulvaney (SC-R) and Lacy Clay (MO-D) introduced a bill that would allow all U.S. citizens the opportunity to enroll in the Federal Employees Health Benefits Program (FEHBP). "The Equal Access Act offers Americans access to the same health insurance plans long enjoyed by members of Congress and their families. This is a free market approach to health care with government playing the very limited role of helping small businesses and individuals come together to get a better price for healthcare," Rep. Issa said in a statement. Lawmakers say the advantages of the bill would include nationwide coverage with a high participation rate among physicians, affordable options fostering great competition to lower price and improve quality, the expansion of consumer choice given the 256 plans available in 2014 in the FEHBP, additional flexibility options for private-sector employers, and low administrative costs. On the other hand, critics of the bill say that FEHBP has many flaws including extremely high premiums, making it unrealistic for most Americans, and that many of the FEHBP's advantages exist within the Affordable Care Act. According to Office of Personnel Management charts, in 2014 the average premium costs for the FEHBP will be $183.07 for a family and $83.12 for an individual per two-week pay period.

Upcoming Ways and Means Hearing on the Status of ACA Implementation

House Committee on Ways and Means Chairman Dave Camp (R-MI) has scheduled a hearing to examine difficulties Americans are experiencing with the launch of the ACA. The Committee will hear testimony from Marilyn Tavenner, Administrator of the Centers for Medicare & Medicaid Services (CMS) at the U.S. Department of Health and Human Services (HHS). CMS is the federal agency that oversees the operation of the exchanges through the Center for Consumer Information and Insurance Oversight (CCIIO). The hearing will take place on Tuesday, Oct. 29, 2013, in 1100 Longworth House Office Building, beginning at 10 a.m.


Hon. Marilyn Tavenner
Centers for Medicare and Medicaid Services

For more information, or to view the hearing, please visit: waysandmeans.house.gov

Secretary Sebelius to Appear Before Energy and Commerce

The Committee on Energy and Commerce has scheduled a hearing on Wednesday, Oct. 30, 2013, at 9 a.m. in 2123 Rayburn House Office Building. The title of the hearing is "PPACA Implementation Failures: Answers from HHS." The hearing will focus on the recent enrollment issues that have hindered individuals' access to health insurance through ACA-created health exchanges.


Hon. Kathleen Sebelius
U.S. Department of Health and Human Services

For more information, or to view the hearing, please visit: energycommerce.house.gov


Upcoming HELP Committee Consideration of Children's Hospital GME

On Oct. 30, the Senate HELP Committee will meet for executive session in which Chairman Harkin (D-IA) intends to consider, among other bills, legislation to reauthorize the Children's Hospital Graduate Medical Education (GME) law, which authorizes payments to children's hospitals for operating training programs that provide graduate medical education. The session will take place at 10 a.m. in Room 430 of the Dirksen Senate Office Building. Other legislation to be considered includes the Older Americans Reauthorization Act and H.R 2094, School Access to Emergency Epinephrine Act.

2. Administration

2014 Medicare Pay Rules Likely Delayed Due to Government Shutdown

On Oct. 23, CMS announced that four 2014 Medicare rules will be delayed, possibly until Nov. 27 as a result of the recent government shutdown. The rules will be effective on Jan. 1, 2014. The four rules that will be delayed are: (1) Revisions to Payment Policies under the Physicians Fee Schedule and other Revisions to Part B for CY 2014 Final Rule With Comment Period (CMS-1600-FC); (2) CY 2014 Home Health Prospective Payment System Final Rule (CMS-1450-F); (3) CY 2014 Changes to the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (CMS-1601-FC); and (4) Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (CMS-1526-F).

Final Rule Would Implement Exchange Risk-Adjustment, Reinsurance Provisions

HHS has released a final rule to implement provisions of ACA, outlining financial integrity and oversight standards with respect to Affordable Insurance Exchanges, qualified health plan (QHP) issuers in federally facilitated exchanges (FFEs), and states with regard to the operation of risk adjustment and reinsurance programs. It also establishes additional standards for special enrollment periods, survey vendors that may conduct enrollee satisfaction surveys on behalf of QHP issuers, and issuer participation in an FFE, and makes certain amendments to definitions and standards related to the market reform rules. These standards, which include financial integrity provisions and protections against fraud and abuse, are consistent with Title I of the Affordable Care Act. This final rule also amends and adopts as final,,certain interim provisions set forth in the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule, published in the Federal Register on March 11, 2013, related to risk corridors and cost-sharing reduction reconciliation.


Mental Health Parity Final Rule Under Review

OMB is reviewing a final rule on the Mental Health Parity and Addiction Equity Act of 2008, which would finally implement regulations released nearly four years ago. The law requires insurers to offer mental health benefits that are comparable to the benefits offered to cover physical health services. However, mental health advocates have been looking for some additional details in the final regulations, such as requiring that all plans adhere to objective standards for covering mental health services and provide a full continuum of care.

3. State Activities

Ohio Gov. Subverts Legislature to Expand Medicaid, Challenges Pending

Despite opposition among fellow Republicans in the state legislature, Ohio Governor Kasich has seemingly found a way to achieve an expansion of his state's Medicaid program for which he has been fighting. He used authority given to the state's Controlling Board, a seven-member panel comprising select state lawmakers, which voted 5-2 to accept $2.5 billion in Medicaid matching funds from the federal government to provide expanded coverage for an estimated 275,000 Ohio residents. Republican opponents in the state legislature have already signaled that they intend to file suit, arguing that the board overstepped its authority.

4. Regulations Open for Comment

Basic Health Plan Proposed Rule

On Sept. 20, CMS issued a proposed rule to guide the introduction of Basic Health Plans, as required by Section 1331 of the Affordable Care Act. The Basic Health Program provides states the flexibility to establish a health benefits coverage program for low-income individuals who would otherwise be eligible to purchase coverage through the state's Affordable Insurance Exchange (Exchange, also called a Health Insurance Marketplace). The Basic Health Program would complement and coordinate with enrollment in a Qualified Health Plan (QHP) through the Exchange, as well as with enrollment in Medicaid and the Children's Health Insurance Program (CHIP). This proposed rule sets forth a framework for Basic Health Program eligibility and enrollment, benefits, delivery of health care services, transfer of funds to participating states and federal oversight. Additionally, this rule would amend other rules issued by the Secretary of the Department of Health and Human Services (Secretary) in order to clarify the applicability of those rules to the Basic Health Program. Comments are due by Nov. 25, 2013.

CMS Proposed Rule for Federally Qualified Health Center Payments

On Sept. 18, CMS released a proposed rule that establishes a new Prospective Payment System (PPS) and increases Medicare reimbursement payments for federally qualified health centers (FQHC). In the rule, Medicare payments would increase 30 percent for FQHC services provided to beneficiaries in medically underserved areas. Under the PPS, Medicare would pay the FQHCs a single encounter-based rate per beneficiary per day for all services provided. The proposed rate would be calculated based on an average cost per encounter, which is estimated to be $155.90, adjusted for geographic variation, with additional consideration given to new Medicare beneficiaries.

"These health centers serve some of our most vulnerable populations," HRSA Administrator Mary Wakefield said in a Sept. 18 statement. "We are excited about our collaboration with CMS to create a payment system that enables these vital health centers to keep doing such important work." CMS estimates that during the first five years of implementation, the annual Medicare spending for the FQHCs would be $33 million in 2014, increasing to at least $200 million every year afterward until 2018. Comments on the proposed rule are due on Nov. 18, 2013.

IRS Proposed Rule -- ACA Employer Information Reporting Mandates

On Sept. 5, the IRS issued proposed regulations providing guidance to employers that are subject to the information reporting requirements under Section 6056 of the Internal Revenue Code (Code), enacted by the Affordable Care Act. Section 6056 requires those employers to report to the IRS information about their compliance with the employer shared responsibility provisions of Section 4980H of the Code and about the health care coverage they have offered employees. Section 6056 also requires those employers to furnish related statements to employees so that employees may use the statements to help determine whether, for each month of the calendar year, they can claim on their tax returns a premium tax credit under Section 36B of the Code (premium tax credit). In addition, that information will be used to administer and ensure compliance with the eligibility requirements for the employer shared responsibility provisions and the premium tax credit. The proposed regulations affect applicable large employers (generally meaning employers with 50 or more full-time employees, including full-time equivalent employees, in the prior year), employees and other individuals.

IRS will accept comments on specific aspects of the proposed rule, such as whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility, and how the quality, utility and clarity of the information to be collected may be enhanced. A public hearing will be held at 10 a.m. on Nov. 18.

IRS Proposed Rule -- Reporting On ACA Minimum Essential Coverage

On Sept. 5, the IRS issued proposed regulations providing guidance to providers of minimum essential health coverage that are subject to the information reporting requirements of Section 6055 of the Internal Revenue Code (Code), enacted by the Affordable Care Act. Health insurance issuers, certain employers and others that provide minimum essential coverage to individuals must report to the IRS information about the type and period of coverage and furnish related statements to covered individuals. These proposed regulations affect health insurance issuers, employers, governments and other persons that provide minimum essential coverage to individuals. Under the proposed rules, health insurance issuers are not required to submit Section 6055 information returns on minimum essential coverage they provide in the individual market through the ACA health insurance exchanges, or marketplaces; however, sponsors of self-insured group health plans are required to report minimum essential coverage under the proposed rule. In addition, self-insured group health plans or arrangements covering employees of related corporations are treated as sponsored by more than one employer and each employer must report for its employees.

IRS will accept comments on specific aspects of the proposed rule, such as whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, whether the information will have practical utility, and how the quality, utility and clarity of the information to be collected may be enhanced. A public hearing will be held at 10 a.m. on Nov. 19.

IRS Proposed Rule -- ACA Small Business Tax Credit

The IRS has issued proposed rules on the ACA's small-business tax credit, available only to certain businesses with 25 or fewer full-time employees purchasing health coverage through a SHOP exchange. Under the proposed rule, for taxable years beginning during or after 2014, the maximum credit for an eligible small employer other than a tax-exempt eligible small employer is 50 percent of the eligible small employer's premium payments made on behalf of its employees under a qualifying arrangement for QHPs offered through a SHOP exchange. For a tax-exempt eligible small employer for those years, the maximum credit is 35 percent. The employer's tax credit is subject to several adjustments and limitations as set forth in this preamble.

In addition, all employees (determined under the common law standard) who perform services for the employer during the taxable year are taken into account in determining FTEs and average annual wages, including those who are not performing services in the employer's trade or business. An employee's hours of service for a year include hours for which the employee is paid, or entitled to payment, for the performance of duties for the employer during the employer's taxable year. Hours of service also include hours for which the employee is paid for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. Hours of service do not include the hours of seasonal employees who work for 120 or fewer days during the taxable year, nor do they include hours worked for a year in excess of 2,080 for a single employee.

Comments are due Nov. 21, 2013.

5. Reports


Spinal Devices Supplied by Physician-Owned Distributors: Overview of Prevalence and Use

In a report released on Oct. 24 by the Department of Health and Human Services Office of Inspector General (OIG), titled "Spinal Devices Supplied by Physician-Owned Distributors: Overview of Prevalence and Use," OIG officials found that approximately 20 percent of all spinal fusion surgeries in FY 2011 used devices supplied by physician-owned distributorships (PODs). The report also discovered that between FY 2004 and FY 2012, hospitals that began using POD devises had a 21 percent increase in spinal fusion surgery, compared with a 9 percent increase in spinal fusion surgeries for hospitals overall. "Taken together, these factors may increase the cost of spinal surgery to Medicare over time," the report said. Moreover, the report provides data on the average cost of six spinal devices, and found that none of them were cheaper when provided by a POD, a differentiation that could eventually raise a hospital's Medicare reimbursement through higher device costs.


Medicare Supplemental Coverage: Medigap and Other Factors Are Associated with Higher Estimated Health Care Expenditures

According to a recent GAO report, total health care expenditures were higher for beneficiaries with Medigap or employer-sponsored coverage than for beneficiaries with traditional fee-for-service (FFS) Medicare only. The findings, based on CMS's 2010 Medicare Current Beneficiary Survey (MCBS), also noted that those who were enrolled in Medicare's Part D prescription drug program had higher average health care expenditures than those without Part D. Although some research has found similar patterns of higher health care expenditures for those with supplemental coverage, other studies have found that certain characteristics, such as health status and age, may influence the decision to purchase supplemental coverage, which could provide a partial explanation of the differences in expenditures. Furthermore, some studies suggest that increasing cost sharing for those with supplemental coverage could decrease the utilization of (and associated health care expenditures for) certain types of health care, such as physician visits, but increase the utilization of (and expenditures for) other types of health care, such as inpatient hospitalizations.

Health Records: Numbers and Characteristics of Providers Awarded Medicare Incentive Payments for 2011--2012

The GAO provides information on certain providers, including hospitals and professionals, that were awarded Medicare electronic health records (EHR) technology incentive payments for 2011 and 2012. The incentive payments are given to hospitals and professionals that demonstrate meaningful use of certified EHR technology and meet other program requirements under the Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009. The GAO found that hospitals and health care professionals, such as physicians, were awarded a total of approximately $6.3 billion in Medicare EHR incentive payments for 2012, which is more than twice the $2.3 billion awarded in 2011. In 2012, 2,291 hospitals were awarded payments, which constitute 48 percent of eligible hospitals. This compares to only 777 hospitals or 16 percent of those eligible that were awarded payments in 2011. In 2012, 183,712 professionals were awarded payments, which represents 31 percent of eligible professionals and an increase compared to 2011, when 58,331 professionals, or 10 percent of those eligible, were awarded incentive payments. Of note, general practice physicians were 1.5 times more likely than specialty practice physicians to have been awarded an incentive payment for 2012. The GAO did not provide any recommendations to HHS.


Raising the Age of Eligibility for Medicare to 67: An Updated Estimate of the Budgetary Effects

In the course of preparing its forthcoming report on options for reducing the budget deficit, the Congressional Budget Office (CBO) updated its analysis of an option to raise the eligibility age for Medicare from 65 to 67. The option that CBO analyzed would raise the age of eligibility for Medicare by two months every year, beginning with people who were born in 1951 (who will turn 65 in 2016), until the eligibility age reached 67 for people born in 1962 (who will turn 67 in 2029). According to estimates by CBO and the staff of the Joint Committee on Taxation, implementing this option would reduce federal budget deficits by $19 billion between 2016 and 2023. That figure represents the net effect of a $23 billion decrease in outlays and a $4 billion decrease in revenues over that period. The decrease in outlays includes a reduction in federal spending for Medicare as well as a slight reduction in outlays for Social Security retirement benefits. This updated estimate of the savings to Medicare from this option is much lower than its earlier estimates for proposals to raise Medicare's eligibility age. For example, in a report published in January 2012, CBO estimated that such a policy change would produce budgetary savings of $113 billion over 10 years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.