PPACA Impact and Opportunities : Health Care Lawyer & Attorney : Epstein Becker Green Law Firm : Insurance & Costs : Health Reform Musings Blog

By Gretchen Harders and Michelle Capezza

On May 8, 2013, the Employee Benefits Security Administration of the Department of Labor (the “DOL”) issued Technical Release 2013-02 (the “Release”) providing important guidance under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) with regard to the requirement that employers provide notices to their employees of the existence of the Health Insurance Marketplace, generally referred to previously as the Exchange. These employee notices must be provided to existing employees no later than October 1, 2013. This deadline is intended to correspond to the open enrollment period for the Marketplace commencing October 1, 2013 for coverage through the Marketplace beginning January 1, 2014. The Release includes temporary guidance and two model employee notices of the Marketplace upon which employers may rely. The Release further provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to include information of the health coverage options offered to individuals through the Marketplace for comparative purposes.

Employee Notice of the Marketplace. The Affordable Care Act amended the Fair Labor Standards Act (“FLSA”) to require employers to issue employees a notice of the health coverage options available under the Marketplace. The FLSA requirement was required to have been satisfied on or before March 1, 2013; however, given the regulatory delays in establishing and approving the Marketplace, the DOL extended the deadline. The guidance under this Release is temporary through the applicability date of October 1, 2013, but may be relied upon until future guidance and regulations are issued.

Which employers are required to comply with the notice requirements?

Whether or not required to “pay or play” under the Affordable Care Act, all employers subject to the FLSA must provide the employee notice. The FLSA generally applies to employers that employ one or more employees and are engaged in or produce goods for interstate commerce. The FLSA also covers, among other things, hospitals, schools, institutions of higher education and federal, state and local government agencies. To determine whether an employer is subject to the FLSA, the DOL provides an internet assistance tool at http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

Which employees must receive the notice?

Employers must provide the employee notice to each employee whether or not the employee has part-time or full-time status. It does not matter whether the employee is enrolled or eligible to enroll in a group health plan. A separate notice is not required to dependents or other individuals who may become eligible for coverage under the plan, but are not employees.

What information must the notice provide?

The employee notice must contain the following information:

• The existence of the Marketplace;
• The contact information and description of services offered on the Marketplace;
• A statement that the individual may be eligible for a premium tax credit if the employee purchases a qualified plan on the Marketplace; and
• A statement that if the employee purchases a qualified plan on the Marketplace, the employee may lose the employer contribution to any health benefit plan offered by the employer and all or a portion of employer contributions may be excluded from federal income.

What are the DOL model notice(s)?

The DOL has provided two model employee notices available on its website, one for employers who do not offer a health plan and one for employers who offer a health plan to some or all employees. The Release provides that employers may use the model notice(s) provided the notice(s) include the information described above.

The model employee notice for employers who do not offer health coverage includes the information described above, as well as an explanation of the impact of the availability of employer health coverage on the employee’s eligibility for subsidies on the Marketplace. The model employee notice does not require the employer to provide specific contact information for the Marketplace in the state where the employee resides, but rather refers the employee to the http://www.healthcare.gov website for contact information for the Marketplace in the employee’s area. This model employee notice requires the employer to provide contact information for the employer, including the employer’s EIN. This is the information an employee will need to include in an application for a premium subsidy on a Marketplace.

The model employee notice for employers who do offer health coverage generally includes the same information as the model employee notice for employers who do not offer health coverage. This model employee notice does, however, require the employer to provide contact information to obtain more information about the employer’s health care coverage. The disclosure requires the employer to state whether the health care coverage is offered to all employees and, if not to all employees, a description of those employees eligible for health care coverage. It also requires the employer to state whether it offers dependent coverage and which dependents are eligible. Finally, the employer is required to disclose whether the health care coverage offered meets the minimum value standard and that the cost of coverage is intended to be affordable. The Department of Treasury and Internal Revenue Service recently issued proposed guidance to assist employees in assessing whether the coverage offered provides minimum value. See our prior blog post New Proposed guidance for Determining Whether Employer-Sponsored Health Plan Provides Minimum Value.

The model employee notice includes optional information that an employer may provide to the employee based on the Marketplace Employer Coverage Tool to better understand their coverage choices, including whether the employee is eligible in the next three months for employer coverage, whether the employer offers a health plan that meets the minimum value standard, the premium for employee-only coverage under the lowest-cost plan that meets the minimum value standard if the employee received the maximum discount for any tobacco cessation program, and what changes the employer will make for the next plan year. Although this information is optional, it may be to an employer’s benefit to demonstrate, where appropriate, that its plan is providing minimum value and is affordable.

When must the employee notice be provided and what are the acceptable delivery methods?

Current employees before October 1, 2013 must be provided with the notice no later than October 1, 2013. Beginning October 1, 2013, the employer must provide each new employee the notice at the time of hire, which will be considered timely provided in 2014 if provided within 14 days of the employee’s start date.

The employee notice must be provided free of charge in writing in a manner calculated to be understood by the average employee. The employee notice may be provided by first class mail or electronically if in accordance with the DOL’s electronic disclosure safe harbor.

COBRA Model Notice. Under COBRA, an individual who was covered by a group health plan the day before a qualifying event occurred may be eligible to elect COBRA continuation coverage. These qualified beneficiaries must be provided with an election notice within 14 day after the plan administrator receives notice of a qualifying event. The COBRA election notice is required to include specific information.

The DOL updated its model COBRA election notice to provide information about the Marketplace for the purposes of informing qualified beneficiaries that they may also be eligible for a premium tax credit to pay for coverage offered through the Marketplace. It also includes clarification on the limit on pre-existing conditions exclusions beginning in 2014. Such information is not specifically required under the Affordable Care Act and should have no impact on whether an employer is subject to the employer responsibility penalties if in fact a former employee obtains coverage on the Marketplace.

The Release provides that the use of the model COBRA election notice completed appropriately will be considered good faith compliance with the COBRA election requirements. The model COBRA election notice does not provide a specific deadline or compliance date. Employers may wish to review their existing COBRA election notices for changes relating to the Affordable Care Act.

Employers have long been waiting for specific guidance from the DOL on the employee notice requirements. Now that it is here, compliance should be addressed well before the October 1, 2013 deadline.

Our colleagues at Epstein Becker Green have issued a client alert: "Federally Facilitated Exchanges Are Almost Ready," by Linda V. Tiano.

Following is an excerpt:

On March 1, 2013, the Center for Consumer Information and Insurance Oversight ("CCIIO") and the Centers for Medicare & Medicaid Services ("CMS") released lengthy and detailed draft guidance regarding the federally facilitated exchanges ("FFEs") that will operate in the 26 states that have chosen not to establish their own exchange or partner with CMS. Although the guidance was issued in draft form, CCIIO and CMS allowed only two weeks for the public to submit comments and, as described in this alert, CMS intends to start accepting issuer applications to the FFEs on April 1, 2013. As such, it seems unlikely that the guidance will be materially revised.

Read the full alert here.

Our Epstein Becker Green colleagues Jane L. Kuesel, Jackie Selby, and Linda V. Tiano have released a client alert titled "New York Issues 'Invitation to Participate in the New York Health Benefit Exchange,' Clarifying Application Process and State Requirements."

The alert describes a number of the more significant requirements by New York on applicants that want to become eligible for certification as a Qualified Health Plan and to participate in the New York Exchange, as well as applicable time frames and processes.

Following is an excerpt:

The New York Department of Health’s Office of the New York Health Benefit Exchange issued the long-awaited “Invitation to Participate in the New York Health Benefit Exchange” (the “Invitation”) on January 31, 2013. The Invitation clarifies and summarizes the requirements for applicants to be qualified as eligible for certification as a qualified health plan, which permits them to be offered on the New York Health Benefit Exchange. Some of the more interesting and helpful features of the Invitation are summarized below. The full Invitation can be found online, along with a number of related attachments.

Read the full alert here.

by Brandon C. Ge

In the months leading up to Election Day 2012, the pace of health reform implementation slowed considerably as the Obama administration held off on releasing regulations to avoid pre-election controversy. With the 2012 elections now in the books, health reform has scored two major victories: the re-election of President Barack Obama and the preservation of a Democratic majority in the Senate. Although the Affordable Care Act (ACA) is now safe from repeal, implementation still faces hurdles, such as state resistance, the fiscal cliff, and pending lawsuits challenging ACA’s contraception mandate.

Nonetheless, the administration has stormed ahead in recent weeks, issuing a torrent of regulations that will help determine operation of many key ACA provisions. These rules cover a bevy of health reform pieces, including:

• Health insurance market reforms;
• Employer wellness programs;
• Essential health benefits and actuarial values;
• Benefit and payment parameters; and
• The Multi-State Plan Program.

Health Insurance Market Reforms

On November 20, the U.S. Department of Health and Human Services (HHS) proposed a rule that implements several ACA provisions aimed at protecting consumers from discrimination and other abuses when purchasing health insurance. The rule generally prohibits health insurance issuers from denying coverage to individuals with pre-existing conditions. Moreover, insurers would only be allowed to vary premiums based on age, tobacco use, family size, and geography. The proposed rule also requires health insurance issuers to have a single statewide risk pool for each of their individual and small employer markets unless the state merges the individual and small group pools. In addition, the rule provides for enrollment in catastrophic plans and amends the rate review program.

Employer Wellness Programs

HHS, in conjunction with the Labor and Treasury departments, also proposed rules implementing and expanding employer wellness programs. The rules would apply to both grandfathered and non-grandfathered group health plans and would be effective for plan years starting on or after January 1, 2014. The proposed rules continue to support workplace wellness programs, including participatory wellness programs, which are generally available regardless of an individual’s health status. The rules also amend standards for non-discriminatory health-contingent wellness programs, which usually require individuals to meet a health-related standard to obtain a reward.

Essential Health Benefits and Actuarial Values

In addition, HHS proposed a rule on November 20 outlining standards related to coverage of essential health benefits and determination of actuarial value. The rule implements ACA’s requirement that health plans offered in the individual and small group markets, both inside and outside of health insurance exchanges, offer essential health benefits, a core package of items and services in at least ten categories:

• Ambulatory patient services;
• Emergency services;
• Hospitalization;
• Maternity and newborn care;
• Mental health and substance use disorder services;
• Prescription drugs;
• Rehabilitative and habilitative services and devices;
• Laboratory services;
• Preventive and wellness services and chronic disease management; and
• Pediatric services.

The proposed rule also provides that starting in 2014, non-grandfathered health plans in the individual and small group markets must meet certain actuarial values, which are calculated as the percentage of total average costs for covered benefits that a plan will cover. Actuarial values correspond with certain metal levels: 60 percent for bronze plans, 70 percent for silver plans, 80 percent for gold plans, and 90 percent for platinum plans. HHS would allow a de minimis variation of 2 percent from these values.

Benefit and Payment Parameters

On November 30, HHS released a proposed rule addressing several issues, including parameters for the three new premium stabilization programs—the permanent risk adjustment program and the transitional reinsurance and risk corridor programs. These programs aim to more evenly spread financial risk by providing payments to health insurance issuers that cover higher-risk populations. The proposed rule expands on the framework outlined in the final rule on health insurance premium stabilization programs, with much of the regulatory text devoted to technical descriptions of calculation methodologies for these programs.

The proposed rule also addresses several other issues:

• It provides more guidance on how the advance premium tax credit and cost-sharing reduction payment programs will operate.
• The rule proposes a monthly federal exchange user fee. Under the proposed rule, this fee would be 3.5 percent of monthly premiums, but HHS may adjust this rate to align with rates charged by state-based exchanges.
• It elucidates standards for the administration of Small Business Health Options Program (SHOP) exchanges.
• Lastly, the proposed rule amends regulations regarding medical loss ratio calculation.

The Multi-State Plan Program

Also on November 30, the Office of Personnel Management (OPM) released a proposed rule describing establishment of ACA’s Multi-State Plan Program (MSPP), which aims to promote competition in the insurance marketplace and give consumers more high-quality, affordable insurance choices. Under the program, OPM will contract with at least two health insurers to offer multi-state plans (MSPs), which are to be available on exchanges in all states and the District of Columbia by the fourth year of the issuer’s participation in the MSPP. MSPP issuers must offer at least two MSPs—one gold-level and one silver-level—in each exchange. In addition to requirements for MSPP issuers and MSPs, the proposed rule also describes standards for coordination between OPM, HHS, and states to approve rates, standards for rating, medical loss ratios, and MSPP issuers’ participation in the premium stabilization programs.

A Shift in Scope

These recent regulations evidence a shift in the scope of ACA implementation—the administration appears to be moving away from the big-picture issues and towards more of the operational specifics that have yet to be ironed out. Stakeholders should stay abreast of these developments as implementation marches on.

EBG counsels clients on ACA implementation requirements and will continue to track developments in the area. For more information, contact the author at bge@ebglaw.com.

In addition to the work that states are doing (or purposefully not doing) to implement State Health Insurance Exchanges for operation in 2014, states have also been given the task of choosing a benchmark plan for purposes of defining the essential health benefits (“EHB”), a minimum package of benefits that must be offered by all insurance policies sold in the small group and individual markets beginning in 2014. 

Section 1302(b) of the Affordable Care Act directs the Secretary of Health and Human Services (the “Secretary”) to define the EHB. The scope of the EHB must equal the scope of benefits provided under a typical employer plan. Further, 10 broad categories of services must be covered in the EHB package.

Rather than setting a national standard for the EHB, in December 2011, the Centers for Medicare & Medicaid Services (“CMS”) issued a bulletin providing guidance to the states on CMS’s proposed regulatory approach for defining the EHB. Specifically, CMS is largely leaving the decision to the states to choose from one of 10 benchmark plans in the following four categories:

• The largest plan by enrollment in any of the three largest small group insurance products in the State’s small group market;
• Any of the largest three State employee health plans by enrollment;
• Any of the largest three federal employee health plans by enrollment; and
• The largest insured commercial non-Medicaid HMO operating in the state.

Many states have been actively assessing these benchmark options, given that the definition of what is included in the EHB will have a broad reaching impact in each state. In addition to the non-grandfathered plans in the individual and small group markets both inside and outside of the State Health Insurance Exchange, the EHB package also must be offered by Medicaid benchmark and benchmark-equivalent plans for newly-eligible Medicaid recipients, and Basic Health Programs (which are offered by states to people who are ineligible for Medicaid and who have incomes at or below 200 percent of poverty as an alternative to receiving premium credits to purchase coverage through an exchange).  Self-insured group health plans, health insurance coverage offered in the large group market, and grandfathered health plans are not required to cover the EHB.

States were encouraged to select a benchmark plan by the end of the third quarter of 2012. As of October 10, 2012, 24 states and the District of Columbia have made their selections, 12 states have issued letters to the Secretary stating that they are awaiting further federal guidance before making a decision, and the remaining 14 states are at various stages across the decision-making spectrum (from having done the analysis and will likely make a decision imminently to having done no discernible work towards making a decision at all). If a state does not select a benchmark plan, the largest small group plan by enrollment in the state will become the default benchmark plan. 

Of the 17 states (including DC) that chose small group plans as their benchmark, at least 10 of those states chose the largest small group plan by enrollment (the federal default benchmark). Three states have chosen a state employee health plan and four states have chosen the largest commercial non-Medicaid HMO plan. One state, Nebraska, has chosen a high deductible health savings plan, which the Governor characterizes as “the Nebraska Essential Health Benefits Plan” that provides “the absolute minimal coverage”.  At this time, no states have opted for a federal employee health plan. This is likely because states are required to defray the costs of state-mandated benefits that are in excess of the EHB, if they are not already included in the benchmark plan selected by the state. Since most small group plans are required to comply with state mandates to cover certain benefits (examples include coverage of certain immunizations, contraception, and treatment for autism), but federal employee health plans are not, it makes sense that states would choose state plans over federal plans to reduce their financial burden. However, allowing states to avoid paying for state-mandated benefits by choosing a benchmark plan that already includes them is intended to be a “two-year transitional policy” and will be revisited by CMS in 2016.

Despite good forward progress on selecting EHB benchmark plans, there are many questions that remain. For example: 

• When will CMS issue regulations providing states with the guidance they have requested? 
• Will CMS accept the benchmark plans that states have proposed, or will they make changes to them? 
• In what ways will individual insurers change particular benefits offered in the EHB benchmark plan but still remain “substantially equal” to the benchmark? 
• How will supplemental coverage for categories of services not included in the benchmark plan (such as habilitative services, mental health and substance abuse services, and pediatric oral and vision care) be integrated and priced by insurers? 
• How will dental benefit plans, which may be offered as a standalone benefit, be incorporated into an individual’s overall coverage? 
• After the first two years, will states have more flexibility to offer innovative plan designs to cover the EHB, instead of relying on the plan designs currently in place?

EBG counsels health plans and providers on the evolution of the definition of the EHB, and will continue to track developments in this area. For more information, contact the author at lyeung@ebglaw.com.

This autumn, health insurance exchange ("Exchange") implementation issues can be characterized as either meeting impending deadlines or waiting on necessary federal guidance. We will shortly experience a cascade of developments on federal Exchange guidance and state implementation through the remainder of 2012. 

State Options

Exchanges are intended to operate a "one-stop marketplace" in each state for individuals and small employers to obtain health insurance. The Exchanges also have the responsibility of setting standards for participating qualified health plans (“QHPs”). States are given the option of establishing their own State-Based Exchange; coordinating with the U.S. Department of Health and Human Services (“HHS”) to establish a Partnership Exchange; or declining to establish any exchange, in which case HHS will establish and run a federally-facilitated exchange (“FFE”) in the state.

Fast Approaching Deadlines

States have until November 16, 2012 to submit a complete proposal to operate a State-Based Exchange in plan year 2014. A state proposal will be approved by HHS no later than January 1, 2013. HHS may issue a conditional approval at that time if it appears that a state has made significant progress towards implementation and its Exchange is likely to be operational in 2014.

Operating in the 2014 plan year requires being ready for open enrollment in October 2013 and plan contracting with network providers before then. This means a very busy 2013 preparing for the inaugural exchange plan year. 

The pressures may be greatest on plans, providers, and state regulators in those 25 states that have not yet decided whether to establish a State-Based Exchange.  As noted in a recent report on Exchange implementation by PricewaterhouseCoopers Health Research Institute, “the pace of state exchange planning . . . poses challenges for insurance companies that are evaluating which markets to enter or exit.”

Still Awaiting Guidance

States, in turn, face difficulty in evaluating Exchange options before the November 16 deadline because promised information from the federal government is still forthcoming. This difficulty has been articulated by

• September 12, 2012 testimony by Pennsylvania Insurance Commissioner Michael Consedine before the House of Representatives Ways and Means Committee
• A September 24, 2012 letter from Sen. Orrin Hatch, ranking member of the Senate Finance Committee, and
• A September 27, 2012 letter from Gov. Bob McDonnell, Chair of the Republican Governors Association. 

A final regulation addressing many Exchange implementation issues was released in March of this year, brief guidance on FFEs was released in May, and a template “Blueprint” was released in August to aide states in submitting proposals to HHS for state-run exchanges. Yet-to-be released information includes the following:

• Expanded guidance on FFEs, including detailing state responsibilities, costs, and any management reimbursement
• FFE guidance clarifying how many FFEs will be established and what flexibility they will have to meet unique state needs
• Proposed and final regulations defining required essential health benefits for QHPs
• Final standards for Multi-State Plans
• Quality standards for Exchanges
• Details on the conditional approval process for State-Based Exchanges

Stay Tuned

Reasons for the delay in guidance may vary, but it is unlikely that we will see significant state exchange announcements or further HHS guidance until after the November 6 election. After that point, stay tuned to this blog as the pace of Exchange implementation accelerates into 2013. 

In addition to tracking these and other PPACA regulatory developments, EBG counsels plans and providers on the arrangements necessary to participate in Exchanges. For more information, contact the author at phall@ebglaw.com. 

by Lynn Shapiro Snyder and Shawn M. Gilman

Speculation abounds with respect to the decision that states will make on the issue of whether to expand Medicaid coverage under the Affordable Care Act, now that the Supreme Court of the United States has made the option to abstain a meaningful one. This health reform alert highlights some key factors that may influence a state's decision on whether to implement such an expansion.

Read the full alert here

Danielle Steele, a Summer Associate (not admitted to the practice of law) in Epstein Becker Green's Washington, DC, office, contributed significantly to the preparation of this alert.

This health reform alert is a revised version of an article published in the Aug. 22, 2012, issue of the Health Insurance Report, a publication of Bloomberg BNA, and is being reprinted here with permission.

by Lynn Shapiro Snyder and Philo D. Hall

On March 12, 2012, the U.S. Department of Health and Human Services (“HHS”) released its final rule (“Final Rule”) implementing the new Affordable Health Insurance Exchanges (“Exchanges”) authorized under the Patient Protection and Affordable Care Act. These Exchanges are intended to establish and operate a “one-stop marketplace” in each state for individuals and small employers to obtain health insurance. While states, health issuers, and related vendors pour over all the details of the Final Rule, we thought it would be helpful to highlight 10 issues related to these Exchanges that would be of particular interest to health care providers. A significant portion of providers’ patient populations may be obtaining their health benefits coverage through one of these Exchanges.

Read the full alert here

Back in 1996, the Federal Trade Commission and Department of Justice, in providing antitrust guidance for multi-provider networks, considered financial integration and clinical integration as separate pathways for such networks to avoid per se violations of the antitrust laws and, instead, to be treated under the rule of reason, allowing for an assessment of their procompetitive vs. anticompetitive effects. With 65 organizations now participating in Medicare shared savings initiatives, including the 27 Medicare Shared Savings Program participants announced on April 10 (there are 32 Pioneer Accountable Care Organizations and 6 Physician Group Practice Transition Demonstration organizations), we can see, 16 years later, how clinical and financial integration in fact go hand in hand.  Under these various accountable care arrangements, multi-providers entities contracting with the Centers for Medicare and Medicaid Services as ACOs are required to demonstrate both quality (i.e., delivery reform featuring clinical integration) and cost efficiency (i.e., payment reform featuring financial integration).

Click Here to Read the Full Blog Post on the Health Affairs Blog

by Stuart M. Gerson

The three days of arguments about the constitutionality of the Patient Protection and Affordable Care Act are complete. The Justices of the Supreme Court of the United States have conducted their post-argument conference and are now turning their attention to the drafting and the discussions that will lead to a majority opinion and, likely, several dissents and concurrences. The Court's decision should be issued before the end of June. Health care companies and employers, like the rest of the population, await the ultimate decision. However, there are several matters that can be identified in the short run.

Read the full alert here

Kara Maciel, Member of the Epstein Becker Green Labor and Employment, Litigation, and Health Care and Life Sciences Practices, was recently interviewed by Employment Law360 concerning employer wellness programs. 

According to the article, businesses are turning to wellness programs to curb health care expenses, but programs that aren't carefully crafted can open employers up to costly privacy and discrimination litigation, attorneys say.  Wellness programs can lead to big savings for employers by targeting behaviors that can cause conditions that drive up their health care expenditures. But programs that give employers too much  information about their employees can leave employers vulnerable to claims that they have violated the  Health Insurance Portability and Accountability Act, the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, and state privacy and nondiscrimination laws, experts say. 

“Employers really can open themselves up to a litigation minefield if they do not properly craft their programs in a legally compliant way, with a particular focus on discrimination and privacy issues,” said Maciel. 

Click here to download the Employment Law360 article in its entirety (PDF).

by Lynn Shapiro Snyder and Lesley R. Yeung

On December 16, 2011, the Center for Consumer Information and Insurance Oversight ("CCIIO") within the Centers for Medicare & Medicaid Services ("CMS") released a "bulletin" to provide information and solicit comments on the regulatory approach that the Department of Health and Human Services plans to propose to define essential health benefits ("EHB") under section 1302 of the Affordable Care Act. The "bulletin" provides information to stakeholders (i.e., consumers, states, employers, and health insurance issuers) about what benefits are likely to be required under the EHB package. CCIIO is proposing to give states a significant role in defining the EHB package by allowing them to select from one of four benchmark health plan types that will serve as the standard for the health plans offered through the new state exchanges starting in 2014. Public comments may be submitted to CMS by January 31, 2012. Comments should be sent to EssentialHealthBenefits@cms.hhs.gov. Stakeholders interested in the EHB package definition process should consider submitting comments and actively engaging in public dialogue with HHS on the process now.

Read the full alert here

Expansion of the DMEPOS Competitive Bidding Program; Legislative Inquiry Related to Fraud and Abuse Enforcement Actions; and Automated Pre-Enrollment Provider Screening

by George B. Breen, Amy F. Lerman, Emily E. Bajcsi, Deepa B. Selvam

In order to be prepared for upcoming changes and to respond to new initiatives, providers and suppliers participating in Medicare must be aware of recent Congressional activity that would hold the federal government accountable for its intended enforcement efforts designed to curb health care fraud, waste, and abuse, as well as an effort by the Centers for Medicare & Medicaid Services (“CMS”) to implement automated pre-enrollment provider and supplier screening in January 2012. One example of the pressures that providers and suppliers face in this enhanced regulatory and enforcement climate is the upcoming expansion of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (“DMEPOS”) Competitive Bidding Program, which is targeted to launch in July 2013 and for which the Round 2 bidding timeline was announced on November 30, 2011.

Read the full alert here

by Lynn Shapiro Snyder and Lesley R. Yeung

The Early Retiree Reinsurance Program (“ERRP”) was created by the Patient Protection and Affordable Care Act to provide financial assistance to employers, unions, and state and local governments to help them maintain health insurance coverage for early retirees age 55 and older. A report published by the Department of Health and Human Services on March 2, 2011, states that almost 5,500 plan sponsors have been approved to participate in the ERRP and that $535 million in ERRP reimbursement payments have been made to date. It is important for plan sponsors and third-party administrators to understand that the health benefit claims that qualify for ERRP reimbursement are only those for medical services that would be covered by the Medicare program. Compliance is essential for those participating in the ERRP, especially when Medicare rules are relevant to this federal program.

Download the full alert (PDF)    Read the full alert online

by George B. Breen, Carrie Valiant, Emily E. Bajcsi, Anjali N.C. Downs, and Amy F. Lerman

On February 2, 2011, the Centers for Medicare and Medicaid Services ("CMS") published new rules ("Final Rule") authorized by the Affordable Care Act ("ACA") creating a vigorous screening process for new and existing Medicare, Medicaid and the Children's Health Insurance Program ("CHIP") providers and suppliers; giving CMS authority to temporarily stop enrollment of new providers and suppliers; expanding the ability of CMS and States to temporarily suspend payments to providers and suppliers; establishing requirements for States to terminate providers from the Medicaid and CHIP programs; and adding several other enrollment-related provisions. Generally, the new rules are effective March 25, 2011.

Publication of the Final Rule follows the recent announcement that the federal government recovered more than $4 billion in FY 2010 from health care fraud prosecutions and settlements – the largest annual amount ever recovered in health care fraud cases. Significantly, the 2010 recoveries from civil health care matters brought under the False Claims Act were more than $2.5 billion, reportedly the largest in the history of the Department of Justice ("DOJ"). These results, and the Final Rule, are further evidence of the increased focus the government will place on enforcement efforts in 2011 and beyond.

Download the full alert (PDF)          Visit EpsteinBeckerGreen online

by Shawn Gilman and Frank C. Morris, Jr.

A little-noticed provision of the Patient Protection and Affordable Care Act (PPACA) will significantly impact both health care manufacturers and providers.  The provision amends the Rehabilitation Act of 1973 to require regulations by March 23, 2012, mandating that all medical diagnostic equipment and health care provider locations be able to accommodate the needs of individuals with disabilities.  This requirement would mean a redesign of both diagnostic equipment and locations for patient interactions to assure that individuals with disabilities who could not utilize currently available diagnostic equipment or provider locations will, in the future, have access to the care and services available to individuals without disabilities.  They must be able to have access to—and independently be able to enter, use, and exit—the equipment to the maximum extent possible.  This is significant because of the often high cost of diagnostic equipment and space requirements at provider locations.

Download the full alert (PDF)          Read the full alert online

Now that we have sweeping new health care legislation, the Patient Protection and Affordable Care Act ("the Act"), let's look at the rollout of the accountable care provisions--i.e., those changes to the payment and delivery system that hold the most long-term promise of improving quality and cost-efficiency. They are discussed in my most recent article: "The Timeline for Accountable Care: The Rollout of the Payment and Delivery Reform Provisions in the Patient Protection and Affordable Care Act and the Implications for Accountable Care Organizations," published last week in the BNA's Health Law Reporter.  Click here to read the full article (PDF).

In my most recent article in the series I have been writing for the BNA's Health Law Reporter on payment and delivery system reform, accountable care organizations and bundled payments, I comment on where things are now that federal reform has stalled. The article, titled "Payment and Delivery System Reform: It's Only a Matter of Time," argues that changes in payment and delivery are on the horizon regardless of the pace of federal reform and that providers (and payers as well) should continue their efforts toward accountable care to meet the cost and quality challenges that are no less daunting today than they were a month ago. Please click here to view. I hope you find it of interest.

Thursday's White House Forum on Health Reform brought together people who have a stake in our health care system with people who have the ability to change it. Prior to his inauguration, President Obama called on Americans to hold community discussions about health care. More than 9,000 Americans signed up to host discussions in all 50 states and more than 30,000 Americans attended these discussions. These community groups submitted reports to the White House that detailed their concerns about the health care system and their suggestions for reform. At the Forum, several of these community participants joined health care experts to participate in the Forum discussions.

Did these community representatives have any meaningful impact on Thursday’s discussion? Let’s hope so – engaging members of our nation’s communities adds a necessary human element to these debates as they begin to take shape and hopefully will demonstrate to those who can effect change that every ordinary person must be involved in this important national discussion. The President expressed his desire see change by the end of this year. We should harness the energy generated by yesterday's discussions to promote actions that result in health reform efforts and engage all Americans - all "stakeholders" - in these efforts.