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Tag Archive | "Affordable Care Act"

U.S. Supreme Court – Day Two of Oral Arguments on the Affordable Care Act

Today’s Supreme Court oral arguments centered on the Patient Protection and Affordable Care Act’s (ACA) “individual mandate” (also known as the “minimal coverage provision”), the requirement, beginning in 2014, for all Americans to either obtain health insurance or pay a penalty.  The question is whether Congress can use its authority under the Commerce Clause of the Constitution to regulate interstate commerce in order to enact such a requirement.

Solicitor General Donald B. Verrilli began by describing a U.S. health care system in which 40 million people are uninsured and the costs of their uncompensated care drive up health insurance costs for those who are insured.  He explained that Congress used its authority under the Commerce Clause to enact two key reforms to the insurance market, “guaranteed issue” and “community rating” (a position that none of the parties disputes), but that these reforms could not exist without Congress also creating a minimal coverage provision, thereby assuring that individuals would have insurance in advance of any actual need for health care services.  He argued that there is no temporal limit to the Commerce Clause, that everyone subject to the regulation is or will eventually be in the health care market and they are just being regulated in advance.

Chief Justice Roberts and Justices Scalia and Breyer at once began to question whether Congress could create commerce where previously none existed in order to regulate it. General Verrilli responded that, rather than creating commerce, Congress actually was regulating existing economic activity – people’s participation in the health care market, where health insurance is a means of paying for health care. Justice Scalia insisted that the provision regulates health insurance, not health care.  Chief Justice Roberts expressed his concerns that if the Court accepted the principle that everyone was in the insurance market, he didn’t see why Congress’ power would be limited to only the method of payment

Justice Kennedy stated that this issue goes beyond what the Court’s cases have allowed and, because of that, the government has a heavy burden to show that the individual mandate is authorized under the Constitution.  He posed the question whether Congress could have chosen alternative means, for example, using its taxing authority to create a national health service. General Verrilli responded that Congress had chosen a tool that was reasonably adapted to the problem it confronted.  Justice Scalia and General Verrilli then engaged in a lengthy exchange in which Justice Scalia noted that while the provision might have been reasonable, it was not proper because the federal government’s powers are not unlimited.

While Justices Kagan, Ginsburg and Sotomayor repeatedly noted that requiring individuals to purchase insurance made sense because it diversifies the risk and eventually everyone will need health care, Justice Alito pointed out that healthy young adults would be forced to purchase health insurance that would result in them subsidizing services that would be received by everyone else. Justice Scalia said that young adults would purchase health insurance when they think they have a risk of incurring high medical costs, just as others do. Chief Justice Roberts noted that the minimum coverage provisions would require people to purchase insurance for services that they might never need, like pediatric or maternity services.

General Verrilli was asked to explain how the penalty for failure to obtain insurance was a “tax” and stated that because it is to be administered by the Internal Revenue Service, it is characterized as a tax.  When Justice Ginsburg pointed out that the previous day General Verrilli had argued that the penalty was not a tax, he replied that Congress clearly used its taxing authority to create the penalty provision. Justice Ginsburg held firm to her previously stated position that because the penalty would not generate revenue, but rather was designed to affect the purchase of health insurance, it is not a tax.

Paul D. Clement, the appellate attorney arguing for the respondents, stated that while the Commerce Clause gives Congress the power to regulate commerce, it does not give Congress the greater power to compel people to enter into commerce, to actually create commerce.  He explained that it is consistent with 220 years of the Court’s jurisprudence that regulating the point of sale (the purchase of health care services) is regulating commerce, but that Congress cannot force individuals to enter into commerce in the first place by requiring them to purchase health insurance.  He noted that Congress could have chosen an alternative mechanism, for example, tax credits for those who purchased insurance.  He also argued that the penalty is not a tax because it was neither labeled a tax in the ACA nor was it structured as a tax.

Michael A. Carvin, the appellate attorney arguing on behalf of an additional set of respondents, stated that Congress does not have the authority to promote commerce, only to regulate it once it exists.  In response to Justice Ginsburg’s comment that the only  way to assure that people could afford health care once they became sick was to have health insurance prior to the onset of an illness, he noted that the Commerce Clause does not give Congress the power “to regulate things that are statistically connected to things that negatively affect commerce.”  He also commented that Congress not only had compelled people to enter the insurance market, it also had prohibited anyone over age thirty from purchasing only catastrophic health insurance because the “subsidies” they provided were needed by others in the insurance pool.

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Senators Offer Health Amendments To Trade Agreements

The Senate Finance Committee is marking up a number of trade agreements at 3pm this afternoon. The following health-related amendments have been filed to the United States-Korea Free Trade Agreement:

Rockefeller #2 – GAO study of health coverage tax credit

Hatch #19 – To ensure health care premiums are reduced by $2,500 for American families

Hatch #20 – To ensure greater health care choices for American families

Hatch #21 – To repeal the job-killing employer mandate

Hatch #22 – To repeal the job-killing medical device tax to ensure continued access to life-saving medical technologies to Americans

Hatch #23 – To restore the longstanding partnership between the States and the federal government in managing the Medicaid program (Saves $2.1 billion over 10 years, which shall be allocated to a deficit reduction trust fund.)

Hatch #24 – To ensure that taxpayer dollars are effectively used in demonstration programs implemented by the Centers for Medicare and Medicaid Services (CMS)

Hatch #25 – To close the loophole that sends taxpayer dollars to fund operational costs for abortions

Hatch #26 -To repeal the burdensome restrictions on taxpayers’ purchase of over- the counter medications

Grassley #1 – Sunsetting the Independent Payment Advisory Board (CBO informally suggested to Senator Grassley’s office that this amendment is budget neutral, having no impact within the 10 year budget window)

Kyl #4 -TAA/health care/tax- related reform

Kyl #5 -TAA/health care/tax- related reform

Kyl #6 – TAA/health care/tax- related reform

Kyl #7 – TAA/health care/tax- related reform

Kyl #8 -TAA/health care/tax- related reform

Kyl #9 -TAA/health care/tax- related reform

Crapo #1 – Ambulatory Surgical Center Update

Crapo #2 – Equalizing Radio Surgery Reimbursment (CBO scored language at a 300 million savings over 10 years)

Crapo #3 – Accountable Care Organizations Regulatory Repeal (Cost neutral)

Crapo #4 – Ensuring Access to Ambulatory Surgery Centers Same Day Services

Crapo #5 – Medicare Advantage Payment Rate Update

Roberts #4 -To prevent seniors requiring in home health care from being forced out of their homes and into institutional care

Roberts #5 -To ensure continued access to care for those of the most vulnerable populations and to enusre equitable treatment of all hospitals

Roberts #6 -To ensure valuable stakeholder comment on regulations implementing the Patient Protection and Affordable Care Act

Roberts #7 -To ensure the integrity of the Medicare program and avoid undue burden on rural home health and hospice providers

Roberts #8 -To ensure access to over-the-counter medications

Enzi #4 -An amendment to eliminate Medicaid and insurance subsidy eligiblity for early retirees

Enzi #5 -Making helath care more affordable for consumers and reducing burdens on physicians and pharmacists

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Capital Thinking Podcast

This week will begin with the Medicare Advisory and Payment Commission (MedPAC), which advises Congress on Medicare payment policy, releasing its annual March report to Congress.  MedPAC is required to review and make recommendations on payment policies for specific provider groups, such as home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, and outpatient dialysis services, among others.  The House Ways and Means Health Subcommittee will hold a hearing on Tuesday and will hear from MedPAC’s Chairman, Glenn Hackbarth.  Additionally, the Senate Finance Committee will hold a hearing in which HHS Secretary Sebelius will testify on lessons learned from health reform during its first year of implementation.

Secretary Sebelius outraged Republican lawmakers last week for writing that the House-passed FY 2011 spending bill, H.R.1, would prohibit the Centers for Medicare and Medicaid Services to use funds to administer payments based on any rate calculated on the basis of the provisions in the Affordable Care Act.  Additionally, she stated that if the bill became law CMS would not have the legal authority to pay Medicare Advantage plans, claims for wellness visits (a new requirement under the health reform law) would not occur, and anti-fraud programs would be halted.  House Ways and Means Chairman Dave Camp and Senate Finance Committee Ranking Member Orrin Hatched called her claims baseless and referred to her letter as a senior scare tactic.

Last week, the Department of Health and Human Services held a press conference call to discuss efforts to support state flexibility in implementing the Affordable Care Act.  HHS and Treasury released a Proposed Rule detailing a process for approval of “State Innovation Waivers” under the Affordable Care Act.  Starting in 2017, States that meet specified standards for providing comprehensive and affordable coverage without increasing the federal budget deficit may be exempted from major requirements of the law.  State flexibility has been a major topic of discussion after several Governors testified on Capitol Hill about their concerns about a lack of flexibility under Medicaid.  Sens. Ron Wyden and Scott Brown introduced a bill, that President Obama has publicly supported, that allows stated to apply for waivers to set up their own health care exchanges, rather than implement the exchange model authorized in the health reform law.

The Congressional Budget Office (CBO) released the latest version of its report on spending and revenue options.  It includes a range of potential targets to offset new spending or reduce the deficit, although most are likely to provoke significant political and/or stakeholder opposition.  Among the health-related provisions of potential interest are proposals to block grant Medicaid long-term care payments; reduce GME funding for teaching hospitals; eliminate the Medicare critical access hospital and sole community hospital programs; impose limits on medical malpractice liability awards; and reduce Medicare payment rates in “high-spending” areas of the country.

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Comparative Effectivness Methodology Committee Members Announced

On Monday, January 21, Gene Dodaro, Comptroller General of the United States with the U.S. Government Accountability Office (GAO), announced the appointment of 15 members to the Methodology Committee of the Patient-Centered Outcomes Research Institute (PCORI).  The Affordable Care Act established the PCORI as a public-private partnership to support comparative effectiveness research (CER).  The PCORI is authorized to identify research priorities and establish a research project agenda to assist patients, health care providers, and policy makers in making informed health care decisions based on clinical evidence on the most efficient and effective way to prevent, diagnose, treat and/or monitor diseases.  Additionally, the institute will adopt research priorities and submit annual reports to the President, Congress, and the public on its findings.

The Methodology Committee will develop and improve the science and methods of comparative clinical research by developing methodological standards.  In addition to the expert members appointed today, the Director of the Agency for Healthcare Research and Quality (AHRQ) and the Director of the National Institutes of Health (NIH), or their designees, are also required to serve on the committee.  The GAO announced the appointment of 19 members to the Board of Governors of PCORI in September 2010.

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Capital Thinking Podcast

Last week, the House voted on the “Repealing the Job-Killing Health Care Law Act” (H.R. 2). The final vote on the bill was 245-189, with three Democrats – Reps. Dan Boren (OK), Mike McIntyre (NC), and Mike Ross (AR) – voting with the Republicans in favor of repeal. At this time, the Senate has no plans to take up consideration of the bill, which would be unlikely to pass and would almost certainly face a Presidential veto if it were to move successfully.

The House also took up and also passed H.Res. 9, instructing House Committees to recommend measures to replace the reform law. Specifically, the Resolution directs Committees to “proposing changes to existing law” that address many of their chief concerns with the health law including: provisions that spur economic growth and create jobs; lower health premiums; preserve patients’ ability to keep their health plan; provide people with pre-existing conditions access to coverage; reform medical malpractice; increase the number of insured; protect the doctor-patient relationship; provide States with more Medicaid flexibility; expand personal responsibility; prohibit taxpayer funding of abortions; eliminate waste; and do not accelerate the insolvency of entitlement programs. Along with the Resolution, the House adopted an amendment instructing lawmakers to permanently fix the Medicare physician payment formula.

The Committees will turn their attention this week to oversight hearings. The Ways and Means Committee will convene a hearing on Wednesday examining the economic and regulatory burdens resulting from the enactment and implementation of Affordable Care Act. Specifically, the Committee will consider the law’s impact on jobs stemming from the new taxes and new federal regulatory requirements and the impact of the employer mandate on job creation. The Senate Health, Education, Labor and Pensions Committee will hold a hearing on Thursday to discuss the impact of health care reform on consumers. Last week, the House Energy and Commerce Committee announced an investigation into the Office of Consumer Information and Insurance Oversight waiver process that House Republicans believe shield some entities from parts of the health care reform law. These activities foretell House Republicans’ clear focus on oversight of the Affordable Care Act during the 112th Congress.

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Capital Thinking Podcast

Last week, as the Senate remained in session to finish up some last-minute business before the August recess, Majority Leader Harry Reid and Washington Senator Patty Murray led an effort to pass a $26.1 billion state-aid package. The measure, in the form of a substitute amendment to the Federal Aviation Administration reauthorization bill, provides $16.1 billion to state governments to put towards their Medicaid expenses. It accomplishes this by extending the increases in the Federal Medical Assistance Percentages (FMAP) for a total of six months, a provision that originated in the stimulus bill.

Republican Senators Susan Collins and Olympia Snowe provided crucial votes for the majority, enabling them to suspend debate and ultimately win passage on the amended bill. The Congressional Budget Office scored the bill as being deficit-neutral over the ten year window in part to a number of revenue-raising provisions including cuts in the food stamp program and international tax credits, as well as recessions to a wide variety of other programs. Although many of these cuts drew criticism, the bill is being praised by many states that are desperately in need of the Medicaid funds.

In wake of the Senate’s passage of the bill, House Democratic leadership announced that it would be calling members back into session this week in order to consider the legislation. House Majority Leader Steny Hoyer announced that the House will meet in pro forma session today and again at 10 a.m. on Tuesday to “vote on the bill and send it to the president for his signature.” Although many members may be reluctant to vote for another spending measure in such proximity to the upcoming elections, the fact that both of the major provisions in the bill have already been passed through the House on two separate occasions bodes well for its chances this time around.

After the final vote on the Medicaid bill, the Senate was also able to achieve passage of Senator Blanche Lincoln’s bill to reauthorize federal children’s nutrition programs, as well as a prescription drug disposal bill. Senators are scheduled to return to Washington on September 13, and will begin consideration of competing amendments to a small business bill soon thereafter. The amendments, offered by Senators Mike Johanns and Bill Nelson, would adjust IRS vendor-purchase tax reporting requirements included in the health care overhaul law. In addition, the Johanns amendment would eliminate a preventive care trust fund and decrease the requirements for mandatory health coverage beginning in 2014.

Last week also saw the release of the annual Medicare and Social Security Trustees Report, which depicted an overly optimistic view of the future of Medicare, although the validity of that report has been questioned given that the authors were all members of the current administration.

State challenges to the health care reform law also received a boost last week as a federal court rejected the administration’s request to dismiss the Virginia lawsuit questioning the law’s constitutionality. Additionally, voters in Missouri overwhelmingly supported a measure to repeal the individual mandate created in the reform law, becoming the first state to overturn a central element of the law. This could be the first in a string of such actions taken by individual states in the coming months, as there continues to be growing anxiety over the implementation of state-based insurance exchanges.

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Capital Thinking Update

Diane Rowland, Chair of the Medicaid and CHIP Payment and Access Commission (MACPAC), announced that Lu Zawistowich was named the Commission’s Executive Director and that the first public MACPAC meeting will be convened in September. The Commission was authorized in the Children’s Health Insurance Program Reauthorization of 2009 (P.L. 111-3). Congress appropriated funding for MACPAC in the Affordable Care Act.  MACPAC will advise Congress on Medicaid, CHIP, and health insurance exchange policies.

Dr. Zawistowich most recently served as the Acting Deputy Director of the Office of Consumer Information and Insurance Oversight at the Department of Health and Human Services. She previously worked at the Centers for Medicare and Medicaid Services as well as at the Maryland State Department of Health and Mental Hygiene.

On July 21, Democratic Rep. Lynn Woolsey introduced H.R. 5808 to amend the Affordable Care Act (ACA) to include a public plan option. The Congressional Budget Office CBO issued a letter to House Ways and Means Health Subcommittee Chairman Pete Stark noting that the bill would reduce the budget deficit by $53 billion over 10 years. The letter also states that the cost of insurance under a public plan option would be 5-7 percent lower on average.

Including a public plan option in health care reform legislation was a controversial issue that did not ultimately have traction in the Senate’s Patient Protection and Affordable Care Act. The House-passed health care reform bill included a public plan option.  The rates under the Affordable Health Care for America Act would be negotiated and could not be less than Medicare rates, but not higher than the average rates of other health benefit plans. Rep. Woolsey’s legislation would set reimbursement rates under the public plan option as equal to Medicare plus 5 percent. Although the legislation has 128 co-sponsors, the House is unlikely to move the bill during this session of Congress.

The National Association of Insurance Commissioners convened last week to develop a recommendation to HHS regarding the definition of medical loss ratio, which would serve determine the types of insurance spending that should count as medical spending. NAIC was charged with this role in the Affordable Care Act, which requires large group health insurance plans to spend 85 percent of premium dollars on clinical services and activities related to quality of care. The NAIC hopes to present a recommendation to HHS by mid to late August; although, its work could continue into September. Secretary Kathleen Sebelius must certify the Commissioners work. NAIC has also been tasked with developing standard insurance benefits and enrollment forms and regulations for the state-based exchanges.

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Capital Thinking Radio Show

Capital Thinking Radio Show July 1, 2010

If you missed the Capital Thinking Radio Show with Kevin O’Neilllast week, listen to the podcast on demand. 

Join us as we examine the hurdles of turning the new health care bill into a reality with advocacy leaders John Jonas and Julie Black.

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Congress Passes Short-Term SGR Fix

Last night, the House passed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” which will increase Medicare reimbursement to physicians by 2.2 percent through November 30, 2010. President Obama signed the legislation into law on June 25.

Amy Hall, Director of the Office of Legislation at the Centers for Medicare and Medicaid Services (CMS) issued a notice to Hill staff explaining that Medicare physician “claims containing June 2010 dates of services which have been paid at the negative update rates will be reprocessed as soon as possible.” The notification indicated that contractors have been instructed to stop processing claims with the 21 percent cut and to hold claims for services provided in June until the 2.2 percent update is loaded into the claims processing systems.

Congress is likely to reconvene after the November elections for a lame duck session. The short-term SGR fix along with a number of Medicare extenders that were included in the Affordable Care Act (ACA) will expire before the end of the year. In addition to addressing the Medicare physician reimbursement rate, Congress will likely extend:

  • the floor on geographic adjustments to the work portion of the Medicare physician fee schedule;
  • the process of allowing exceptions to limitations on medically necessary therapy;
  • the policy that directly reimburses qualified rural hospitals for specified laboratory services;
  • bonus Medicare payments to ambulance services provided in rural and other areas; and
  • the physician fee schedule mental health add-on to increase the payment for psychiatric services.

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