POLICY BRIEFINGS


Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


THIS WEEK'S BRIEFING - APRIL 1, 2013


President Signs FY 2013 CR into Law


The President signed H.R. 933, the Consolidated and Continuing Appropriations Act for FY 2013, into law (Public Law 113-6). The White House continued to object to the points of sequestration included under the law, while House Speaker John Boehner (R-OH) opined that the House’s “tactic” to go forward with sequestration cuts will force the President to confront what he said is the nation’s long-term spending/entitlement problem. The Congressional Budget Office (CBO) estimated that the resulting $984 billion in FY 2013 spending, including the spending cuts of $85 billion induced by sequestration, will keep FY 2013 outlays within the $1.043 trillion cap mandated under the Budget Control Act (BCA). Thus, any further cuts are expected to be avoided under the BCA enforcement provisions, pending a final determination by the Office of Management and Budget (OMB). Of note, the BCA across-the-board spending reductions will remain in tact for FY 2014-2021.

The long-overdue FY 2014 budget from the White House is expected to be presented to the Congress next week. White House discussions with congressional Democrats over the inclusion of changes to entitlement programs, such as introducing a “chained” Consumer Price Index (CPI) for Social Security and other federal programs, would seem to collide with the FY 2014 budget resolution already adopted in the Senate. Senate resolution, S.Con.Res.8, would in essence void future BCA sequestration cuts through a combination of targeted spending reductions and revenue increases. In contrast, the House budget plan, H.Con.Res.25, would continue the BCA sequester in full force.

The Congressional Research Service released a report finding that the House’s Medicaid proposals, including turning the program into a state block-grant, would cut state Medicaid funding by $1.4 trillion over ten years and possibly lead to new reimbursement, benefit and eligibility restrictions. The vast differences in the two budget resolutions, including the House’s repeal of the PPACA and changes to Medicare/Medicaid, would seem to tee up another round of contentious negotiations over FY 2014 appropriations levels. The White House has given hints that the President may again be open to bipartisan discussions leading to a “grand bargain” that would have to be “balanced” with 10-year spending/entitlement reductions and revenue increases. However, when Congress returns next week, the next major hurdle will be for the House, Senate and President to agree on an increase in the federal debt limit which was tolled until May 18 under H.R. 325, the “No Budget, No Pay Act”.


Senator McConnell Asks House to Repeal PPACA Medical Device Tax


Following the bipartisan vote to include the non-binding Hatch amendment in the Senate Budget Resolution, which calls for the repeal of the PPACA’s medical device tax, Senate Majority Leader Mitch McConnell (R-KY) urged the House leadership to bring up and pass legislation to effect the proposed change.


HHS Criticizes Report Projecting Large Premium Increases under the PPACA


The Society of Actuaries issued a report finding that on-average health insurers in the individual market will experience claims increases of 32% by 2017 with increases ranging from 20% in Florida and 80% in Ohio. Claims increases of this magnitude will inevitably lead to premium increases of a comparable magnitude. The study did not look at the effect on net premium costs to individuals which would be reduced by any federal premium subsidies available under the PPACA. In criticizing the report, U.S. Department of Health and Human Services Secretary Kathleen Sebelius brought up the premium subsidy and other PPACA provisions that might mitigate such premium increases. However, she also said that some PPACA provisions could result in premium increases for some men and younger individuals while lowering the costs for older customers.


CMS Reaffirms Medicaid Rules Even if Private Coverage Offered


In a Frequently Asked Questions (FAQ) released by the Centers for Medicare and Medicaid Services (CMS), the agency said that premium assistance that state Medicaid programs may provide to expand private plan coverage has strings attached. If states use this mechanism, they must ensure that the coverage is “cost effective” and pay providers comparable reimbursements. If private coverage lacks federally guaranteed benefits and cost-sharing protections, state programs must provide “wrap-around” coverage to meet the minimum standards. If Medicaid beneficiaries are offered coverage under PPACA health insurance exchanges, CMS said they will consider a limited number of State Innovation Waivers under section 1115 which would: provide beneficiaries with a choice of at least two qualified health plans; make arrangements with qualified health plans to provide any necessary wrap around benefits and cost sharing; and end no later than December 31, 2016.



April 1, 2013: | Page 1 Page 2

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