4/26/12 issued the proposed rule "Medicaid Program; State Plan Home and Community-Based Services, 5-Year Period for Waivers, Provider Payment Reassignment, and Setting Requirements for Community First Choice." The proposed rule describes a Home and Community-Based Services state plan option, otherwise known as the "1915(i)" benefit, which was originally authorized in 2005 and then enhanced by ACA §2402. This benefit will make it easier for states to provide Medicaid coverage for home and community-based services because the new option permits States to offer home and community-based services without the use of a waiver. Under 1915(i), States can receive federal reimbursement for services that were previously only eligible for federal funding through a waiver or demonstration.

Comments are due July 2, 2012.

Read the proposed rule at:

http://www.gpo.gov/fdsys/pkg/FR-2012-05-03/pdf/2012-10385.pdf

Read the correction issued by CMS on 5/1/12 (which extended the comment date to July 2, 2012) at:

http://www.gpo.gov/fdsys/pkg/FR-2012-05-03/pdf/2012-10385.pdf

Read the fact sheet on the state plan home and community based services program proposed rule at: CMS

4/24/12 CMS issued an ACA-related proposed rule that will update Medicare payment policies and rates for inpatient stays to general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS) and long-term care hospitals (LTCHs) paid under the LTCH Prospective Payment System (PPS) in fiscal year 2013. According to CMS, the rule is part of the agency's policies to promote improvements in hospital care that lead to better patient outcomes while slowing long-term health care cost growth.

The rule also implements portions of the ACA's "Value-Based Purchasing" program (VBP Program) as well as the hospital readmissions reduction program. Starting in fiscal 2013, the VBP Program will adjust hospital payments based on the performances of hospitals on quality measures. The rule proposes that starting in fiscal 2015 the Medicare program will also add an efficiency measure to the payment calculation so hospital payments that year would vary according to both the quality and the efficiency of their services. A new outcome measure that rewards hospitals for avoiding certain kinds of life-threatening blood infections that can develop during inpatient hospital stays is also proposed. The rule also strengthens the inpatient quality reporting program with the addition of new measures and includes the methodology and payment adjustment factors for a Hospital Readmissions Reduction Program as required by the ACA. Additional information on the rule including details about the payment rate increases can be found in the rule.

Comments are due June 25, 2012.

Read the fact sheet at: CMS

Read the press release at: CMS

Read the proposed rule at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-09985.pdf 

(Note that the proposed rule will appear in the Federal Register on May 11, 2012 and can be found at www.federalregister.gov on that date.)

4/20/12 CCIIO issued sub-regulatory technical guidance regarding the Medical Loss Ratio (MLR) regulation under §10101 of the ACA. The bulletin, "CCIIO Technical Guidance (CCIIO 2012-002): Questions and Answers Regarding the Medical Loss Ratio Regulation," explains that the MLR provision requires health insurance issuers to submit an MLR report to the HHS Secretary and requires them to issue a rebate to enrollees if the issuer's MLR is less than the allowable MLR standard established under the ACA. The MLR rules establish the minimum dollar percentage that health insurance companies must spend of consumers' health insurance premiums on medical care, not on income, overhead or marketing. Beginning in 2011, the ACA requires insurance companies in the individual and small group markets to spend at least 80% of collected premium dollars on medical care and quality improvement activities; insurance companies in the large group market are required to spend at least 85%. Insurance companies that do not meet the MLR standard are required to provide a notice about their MLR as well as rebates to their consumers, making the first round of rebates this summer of 2012. 

The Bulletin provides MLR guidance in a question and answer format on the following topics: Applicability of the Medical Loss Ratio to Certain Types of Plans; Employer Groups of One; Counting Employees for Determining Market Size; Individual Association Policies; Offering Policyholders a "Premium Holiday;" Reinsurance and Reporting; Exchange User Fees; States With a Higher Medical Loss Ratio Standard; "Mini-Med" Experience - Application of the Adjustment, and Form of Rebate.

For example, the guidance clarifies that the MLR provision does not apply to self-funded, Medicaid managed care, or Medicare Advantage plans. The bulletin clarifies that the ACA only recognizes individual, small group, and large group coverage. The bulletin also says that state law provisions requiring a higher minimum MLR standard than the federal minimum will only be applied in calculating federal MLR rebates if the state law provision was adopted since the enactment of the ACA on March 23, 2010. According to CCIIO, examples of states that have taken "such affirmative action are Massachusetts, New Mexico and New York." The bulletin also explains that state and federal exchange fees are treated as regulatory fees for purposes of the MLR, and are thus subtracted from premium revenue before the MLR is calculated. 

Read the bulletin at:

http://cciio.cms.gov/resources/files/mlr-qna-04202012.pdf

Prior guidance can be viewed at www.healthcare.gov

News

4/26/12 The U.S. Government Accountability Office (GAO) released a report called "Estimates of Individuals with Pre-Existing Conditions Range from 36 Million to 122 Million." According to the GAO's findings, between 36 million and 112 million adults reported have a pre-existing condition that an insurer could have used to deny them coverage, representing between 20%- 66% of the adult population. Hypertension is the most commonly reported medical condition among adults that could result in a health insurer denying coverage, requiring higher-than-average premiums or restricting coverage. Mental health disorders and diabetes were the second and third most commonly reported conditions among adults.

The report was requested by Senate Majority Leader Harry Reid (D-NV), Senate Finance Committee Chair Max Baucus (D-MT), Senate Health Committee Chair Tom Harkin (D-IA) and Senator Jay Rockefeller (D-WV). The senators asked GAO to examine the ACA's provisions on pre-existing conditions and the effect on adults ages 19 to 64 years old. Beginning in 2014 health insurers in the individual market cannot deny coverage, increase premiums or restrict benefits due to a pre-existing condition.

Read the GAO report at: http://www.gao.gov/assets/590/589618.pdf

4/26/12 HHS/CMS announced the first round of participating practices in the Independence at Home Demonstration authorized under §3024 of the ACA. Under the demonstration, the CMS Innovation Center will work with medical practices to test a payment incentive and service delivery system that utilizes physician and nurse practitioner directed home-based primary care teams aimed at improving health outcomes and reducing expenditures for chronically ill Medicare beneficiaries. The Demonstration greatly expands the scope of in-home services Medicare beneficiaries receive and provides patients with a complete range of primary care services. The Demonstration will reward health care providers that provide high quality care while reducing costs and test whether or not delivering primary care services in the home can improve the quality of care and health outcomes for patients living with chronic illnesses while also reducing their costs.

The demonstration is scheduled to begin on June 1, 2012, and conclude May 31, 2015. CMS selected 16 practices to participate in the Demonstration including Boston Medical Center. Read the complete list at: http://innovation.cms.gov/initiatives/independence-at-home/

Applications are due May 4, 2012 for those applicants who submitted a Letter of Intent to apply as a consortium.

Read an updated fact sheet at:

http://innovation.cms.gov/Files/fact-sheet/IAHfactsheet.pdf

4/26/12 The Kaiser Family Foundation issued a report called "Insurer Rebates under the Medical Loss Ratio: 2012 Estimates" which estimates that millions of consumers and small businesses will receive an estimated $1.3 billion in rebates from their health plans this summer under the Medical Loss Ratio (MLR) Rule, §10101 of the ACA which establishes the minimum dollar percentage that health insurance companies must spend of consumers' health insurance premiums on medical care, not on profit, overhead or marketing. Beginning in 2011, the ACA rules require insurance companies in the individual and small group markets to spend at least 80% of collected premium dollars on medical care and quality improvement activities; insurance companies in the large group market are required to spend at least 85%. Insurance companies that do not meet the MLR standard are required to provide a notice about their MLR as well as rebates to their consumers (the first of which will be distributed this summer).

The rebates include $541 million in the large employer market, $377 million in the small business market, and $426 million for individuals buying insurance on their own. Rebates in the group market will generally be provided to employers, and in some cases be passed on to employees as well. Rebates are expected to go to almost one-third (31%) of consumers in the individual market. Among employers, about one-quarter (28%) of the small group market and 19% of the large group market is projected to receive rebates. The share of consumers in the individual insurance market expected to receive rebates ranges from near zero in several states to as high as 86% in Oklahoma and 92% in Texas. According to the report, the figures are based on the latest estimates insurers provided state regulators, so the actual rebate amounts may differ.

More than a dozen states have applied for waivers to phase-in the MLR requirements for insurers. The ACA allows the Secretary to adjust the MLR standard for a state if it is determined that meeting the 80% MLR standard may destabilize the individual insurance market. In order to qualify for this adjustment, a state must demonstrate that requiring insurers in its individual market to meet the 80% MLR has a likelihood of destabilizing the individual market and result in fewer choices for consumers. HHS has approved waivers from Maine, New Hampshire, Nevada, Kentucky, Georgia, Iowa and North Carolina. For more information on states and the MLR requirements visit the Center for Consumer Information and Insurance Oversight (CCIIO) website at: http://cciio.cms.gov/programs/marketreforms/mlr/index.html  

Read the The Kaiser Family Foundationreport at:

http://www.kff.org/healthreform/upload/8305.pdf

A Commonwealth Fund report in early April 2012 estimated that if the MLR rules under the ACA had been in effect in 2010, consumers nationwide would have received an estimated $2 billion in rebates from health insurers.

Read the report at: Commonwealthfund

4/25/12 The Board of Governors of the Patient-Centered Outcomes Research Institute, known as PCORI and created under §6301 of the ACA, voted to amend PCORI's draft Research Agenda in response to 15 major themes that emerged from hundreds of public comments PCORI received on its proposal released earlier this year. The board did not recommend any changes to the National Priorities for Research, saying the public comments did not identify significant gaps in the five proposed priorities. PCORI plans to incorporate the revisions and vote on the final Research Agenda and National Priorities for Research next month.

During a public teleconference/webinar where the Board discussed the National Priorities for Research and Research Agenda, the board also approved $30 million in funding over two years for 50 pilot projects. Selected projects include those designed to develop a range of tools aimed at improving patient-centered care and decision-making; creating new patient-centered care measures; and improving the delivery of patient-centered counseling and care in various health care settings. PCORI will commit approximately $120 million of research funding by the end of the year through broad funding announcements that will be based on its initial Research Agenda, in addition to the $30 million awarded for pilot projects.

Created under §6301 of the ACA, PCORI is an independent nonprofit tasked with conducting patient-centered outcomes research and the Institute is asking the public to help define that term. PCORI was created to conduct research to provide information about the best available evidence to help patients and their health care providers make more informed decisions. PCORI will update its definition based on public feedback from individuals and organizations and use the research agenda to guide future funding announcements for comparative effectiveness research.

Read the materials from the teleconference/webinar including the agenda, presentations and recommendations at:

http://www.pcori.org/meetings-events/event/special-board-of-governors-teleconferencewebinar/

Read the major themes in public comments about the Research Agenda and PCORI's response at: 

http://www.pcori.org/assets/Major-Comment-Themes-and-PCORI-Response.pdf