Oct 26, 2015

Washington Healthcare Update

This Week: The House sets date to elect a new Speaker... No path forward on debt ceiling yet... More co-ops collapse.

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Elections for Speaker of the House and Potential Changes at Ways and Means Committee

Rep. Paul Ryan (R-WI) announced Tuesday (Oct. 20) that he will run for the House Speaker position if the major House Republican coalitions endorse him. He gave those coalitions until the end of the week to decide. Speaker Boehner announced that the internal Republican election for Speaker will be Oct. 28, and the floor election (the full House of Representatives) will be Oct. 29.

If Rep. Paul Ryan, who is currently the Chairman of the House Ways and Means Committee, becomes Speaker, a vacancy occurs at Ways and Means. This committee is responsible for legislation concerning tax, trade, Medicare and Social Security. Rep. Jim Brady (R-TX), who currently chairs the committee’s subcommittee on health, is next in line to be Chair of the full committee. However, Rep. Pat Tiberi (R-OH) has made clear that if the Chairmanship is open, he too will run. Tiberi is fourth in seniority on the panel and current chair of the trade subcommittee. He would have to jump over Reps. Sam Johnson (R-TX), Brady and Devin Nunes (R-CA). Johnson is not expected to throw his name in for the slot. Nunes already serves as chairman of the House Intelligence Committee. Brady previously ran against Ryan for the chairmanship before withdrawing from the race.

In addition, to a change in Chairmanship, should Ryan become Speaker, another Republican would have to be named to serve on the committee.

House Energy and Commerce Health Subcommittee Holds Hearing to Examine Medicare Part D Medication Therapy Management Program

The House Energy and Commerce Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), held a hearing on Oct. 21 entitled “Examining the Medicare Part D Medication Therapy Management Program.” Subcommittee members discussed opportunities to strengthen medication therapy management for seniors in Medicare Part D. The program’s original intention was to help people adhere to their prescriptions more diligently, thus optimizing therapeutic outcomes and reducing the need for additional care. The Centers for Medicare and Medicaid Services (CMS) announced a new program designed to strengthen it. Subcommittee members reviewed possible plans to improve the Medication Therapy Management Program (MTM) so that the people covered will benefit and experience more positive outcomes.

Witness List

Panel I

Tim Gronniger
Director of Delivery System Reform
Centers for Medicare and Medicaid Services

Panel II

Lawrence Kocot
Principal and National Leader
Center for Healthcare Regulatory Insight

Mark Merritt
President and CEO
Pharmaceutical Care Management Association

Jesse McCullough
Field Clinical Services
Rite Aid Corporation

Richard Thomas Benson
Associate Director of Stroke
MedStar Washington Hospital Center

A background memo can be found here.

For more information or to watch the hearing, please visit

House Energy and Commerce Health Subcommittee Holds Hearing to Review the Accuracy of Medicaid and Exchange Eligibility Determinations

The House Energy and Commerce Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), held a hearing on Oct. 23 entitled “Reviewing the Accuracy of Medicaid and Exchange Eligibility Determinations.” Recent reports from the Department of Health and Human Services’ Office of Inspector General (OIG) and the Government Accountability Office (GAO) raised concerns about the accuracy of the eligibility verification systems related to and state exchanges. Subcommittee members heard from two witnesses from the GAO about the agency’s assessment of Medicaid and exchange eligibility controls and coordination:

  • Carolyn Yocom presented findings from two new GAO reports. One report assesses federal and state policies and procedures to minimize duplicative coverage for Medicaid and exchange premium subsidies. The second report examines federal efforts to ensure the accuracy of Medicaid eligibility determinations and the federal matching rate for state Medicaid expenditures.
  • Seto Bagdoyan presented preliminary results of undercover testing of federal and state exchanges’ application, enrollment and eligibility verification controls, including opportunities for potential enrollment fraud, during ACA’s second open enrollment period.


Carolyn Yocom
Health Care
Government Accountability Office

Seto Bagdoyan
Audit Services
Forensic and Investigative Service
Government Accountability Office

A background memo can be found here.

For more information or to watch the hearing, please visit

CBO Reports That House Reconciliation Legislation (H.R. 3762) Would Reduce the Deficit by $130 Billion

On Oct. 20, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released a cost estimate for the bill that repeals major parts of Obamacare and defunds Planned Parenthood for one year. H.R. 3762 would lower the deficit by about $130 billion over the 2016-2025 period. Excluding macroeconomic effects, the bill would cut the deficit by $79 billion. The biggest sources of the budgetary effects come from repealing provisions of the Affordable Care Act (ACA) and repealing the federal excise taxes on the sale of medical devices and employer-provided health coverage with higher premiums.

Repeal of the individual and employer mandates results in net budgetary savings to the federal government of $147.1 billion over 10 years. However, the report also states that repealing the individual mandate would also result in higher health insurance premiums in the non-group market after 2016. Repeal of the medical device tax would reduce revenues and thus increase federal deficits by about $23.9 billion over 10 years.

Repeal of the excise tax on high-premium insurance plans (the Cadillac tax) would increase federal deficits over 10years by $109.3 billion decrease in revenues, partially offset by $18.2 billion decreases in spending.

In addition, the report estimates that fewer people would enroll in employment-based coverage, in the non-group market and in Medicaid and the Children’s Health Insurance Program (CHIP).

The House passed the Reconciliation legislation on Oct. 23, 240 to 189.

The CBO cost estimate report can be found here.

Bipartisan Group Asks CMS to Finalize Guidelines Concerning Part D and Pharmacy Price Concessions

A bipartisan group of House members is asking CMS to finalize guidelines released last year on pharmacy price concessions to increase transparency in the Medicare Part D program. Without this information, beneficiaries choosing a plan for 2016 now may be relying on inaccurate data on the Medicare Plan Finder website.

The letter signed by 11 members was led by Reps. Austin Scott (R-GA) and Dave Loebsack (D-IA) and said some Part D plans manipulate how and when to report certain price concessions they received from pharmacies, as well as incentive payments made to pharmacies related to drugs dispensed to Medicare beneficiaries. The 2014 guidance would standardize the process. In addition, the guidance would help ensure Part D plans consistently report direct and indirect remuneration fees paid by pharmacies.

The letter was supported by the National Community Pharmacists Association. Last year, in testimony before the House Energy and Commerce Health Subcommittee, the Medicare Rights Center advocated standardizing reporting by drug plans on negotiated prices because it would benefit the Medicare program and also improve the accuracy of premium and cost amounts in the Medicare Plan finder.

Debt Ceiling Legislation Stalled

The House GOP leaders ditched their plans to bring a vote to the floor on a proposal to raise the debt ceiling while imposing new limits on the executive branch’s powers. Republican leadership found that the proposal would fall short of the 218 votes needed if it were brought to a vote. It was not expected to pass the Senate. There is no apparent plan ready, and the debt ceiling has to be raised by Nov. 3.


Sen. Ben Sasse Asks for an Explanation of Co-op Closures

Sen. Ben Sasse (R-NE) announced he will block the approval of any Health and Human Services (HHS) nominees until the department explains the reasons behind the collapse of eight co-ops formed under the Affordable Care Act (ACA). Currently there are three HHS nominees pending in the Senate. They are: Karen DeSalvo, nominated for HHS Assistant Secretary for Health; Andy Slavitt, nominated for Administrator for the Centers for Medicare and Medicaid Services (CMS); and Robert Califf, nominated for Food and Drug Administration Commissioner. Twenty-three co-ops were started under the ACA. In a letter to HHS, Sasse explains, “Taxpayers have spent a total of $2.4 billion on loans for co-ops and hundreds of thousands of Americans have enrolled in these health plans. It is imperative that we understand the cause of these failures and that the Centers for Medicare and Medicaid Services (CMS) be working to protect taxpayers from wasted spending and consumers from unstable health plans.”

One of the co-ops that failed also did business in Nebraska. There are 420,000 people enrolled in co-ops that must find new coverage in the next enrollment period beginning Nov. 1.

The Senate HELP Committee Schedules Hearing on Mental Health

The Senate Health, Education, Labor and Pensions Committee (HELP) scheduled a hearing entitled “Mental Health and Substance Use Disorders in America: Priorities, Challenges, and Opportunities.” The hearing is set to take place Oct. 29 at 10 a.m. The witness list includes Substance Abuse and Mental Health Services Administration (SAMHSA) Administrator Kana Enomoto, Health Resources and Services Administration (HRSA) Acting Administrator Jim Macrae and outgoing National Institute of Mental Health (NIMH) Director Thomas Insel. Legislation is not expected to be written until early next year.

2. Administration

HHS Awards $22.9 Million in Mental Health Planning Grants

On Oct. 19, the U.S. Department of Health and Human Services (HHS) announced that the Substance Abuse and Mental Health Services Administration (SAMHSA), together with the Centers for Medicare and Medicaid Services (CMS) and the Assistant Secretary of Planning and Evaluation (ASPE), awarded $22.9 million in planning grants to support 24 states in their efforts to improve the behavioral health of their citizens.

“The planning grants will help states strengthen payment for behavioral health services for Medicaid and CHIP beneficiaries, and will help individuals with mental and substance use disorders obtain the health care they need to maintain their health and well-being,” said Vikki Wachino, deputy administrator of CMS, and director, Center for Medicaid and CHIP Services. This money will be used by the states to develop applications to participate in a two-year demonstration program — just eight of those 24 states will be selected for this program, which will begin January 2017. Under the demonstration program, the eight selected states will provide behavioral health services to eligible beneficiaries and be paid using an approved prospective payment system.

In addition to supporting the application process, the grants will aim toward supporting states to certify community behavioral health clinics, solicit input from stakeholders and establish prospective payment systems for demonstration reimbursable services.

HHS Awards $2.2 Billion in Ryan White HIV/AIDS Grants

On Oct. 22 HHS Secretary Sylvia Mathews Burwell announced more than $2.2 billion in Ryan White HIV/AIDS Program grants were awarded in fiscal 2015. This funding supports a coordinated and comprehensive system of care to ensure that more than half a million people living with and affected by HIV in the United States continue to have access to critical HIV health care, support services and essential medications. More than $600 million went to 53 metropolitan areas for core medical and support services for people living with the disease and approximately $1.3 billion in grants to states and territories for medical and support services. Other funding went toward the education and training of health care professionals; community organizations that provide family-centered care for women, infants and young children; and programs targeted at minorities.

For more information about the recipients of the funding click here.

CMS Answers Questions on the Impact of the PACE Act on State Small Group Expansion

In response to questions from state regulators and health insurance experts, the Centers for Medicare and Medicaid Services (CMS) released an FAQ entitled “Frequently Asked Questions on the Impact of PACE Act on State Small Group Expansion.” The Protecting Affordable Coverage for Employees Act (PACE Act) makes the ACA’s small-group expansion optional — it defines a small employer as one who employed an average of 1-50 employees on business days during the preceding calendar year, but gives states the option to extend this definition to include employers with up to 100 employees. If a state chooses expansion, it is requested to inform CMS by Oct. 30.

In the FAQ, CMS clarified what constitutes a state election to change the definition of a small employer, whether carriers have the ability to change their rate filings for 2016, and more.

CMS Adds FAQ on Public Health Reporting

On Oct. 6, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. To support provider participation in 2015, CMS has also released FAQ #12985 in response to inquiries about the public health reporting objective in 2015.

In the FAQ, CMS clarifies that alternate exclusions to the measures in the public health reporting objective are available for providers in 2015 based on the changes to the public health reporting objective. Providers for whom the alternate exclusion is applicable will be presented with that option in the attestation system.

Advocacy Group Consumers’ CHECKBOOK Sues HHS and Receives Marketplace Public Use Files

On Oct. 15, the U.S. Department of Health and Human Services (HHS) provided Consumer’s CHECKBOOK with the 2016 plan benefit details for federally facilitated marketplace products — known as the marketplace public use files. This occurred per a court order after Consumers’ CHECKBOOK sued HHS under the Freedom of Information Act (FOIA). The files are crucial to stakeholders because they provide benefits and rate information that is necessary for their cost calculations. The files were released to the general public Oct. 23.

The court order can be found here

Federally Facilitated Marketplaces (FFMs) Are Investigating an Error Preventing Customers From Enrolling

The Centers for Medicare and Medicaid Services (CMS) published a slideshow Aug. 17 announcing that federally facilitated marketplace states (FFMs) are investigating a validation error in the system, blocking people from enrolling in coverage. This has been an ongoing problem since May. According to the slideshow, in most cases the consumers were trying to update their application, but couldn’t continue to enrollment. If affected, people need to contact the FFM call center to open a Health Insurance Casework System (HICS) to the issuer with their updated information. “The HICS case will note that the consumer experienced the 500.300588 error and will instruct the issuer to update the issuer’s system; it will also note whether the consumer is entitled to a retroactive effective date based on the date that the consumer attempted to update his or her application and enroll.”

The CMS slideshow can be found here.

Reaction to CMS Report on 115 Waivers

Last week, the Centers for Medicare and Medicaid Services (CMS) released a legislatively required report concerning Medicaid 115(a) waivers. However, two House members and the Government Accountability Office (GAO) raised concerns about the report. The GAO said the criteria CMS used to approve a 115 waiver application are not specific enough as described in the report. Rep. Gus Bilirakis (R-FL) raised concerns about whether a state was coerced into taking action when it may not have wanted to do so. House Energy and Commerce Subcommittee on Health Chairman Joe Pitts (R-PA) raised concerns about the report’s description of the approval process and whether the agency was approving waivers that replicated other federal programs. It is likely that the CMS approval process will continue to be scrutinized by Congress and the GAO.

CMS Expands Prior Authorization for Repetitive Scheduled Non-Emergent Ambulance Transports

On Oct. 23, CMS published a notice announcing an expansion of the three-year Medicare Prior Authorization Model for Repetitive Scheduled Non-Emergent Ambulance Transport in accordance with Section 515(a) of the Medicare Access and CHIP Reauthorization Act of 2015. This expansion will begin on Jan. 1, 2016, in Maryland, Delaware, the District of Columbia, North Carolina, Virginia and West Virginia.

FDA’s Final “Deeming Rule” on Tobacco Products Now Being Reviewed by the OMB

The Tobacco Control Act provides FDA authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco and any other tobacco products that the Agency by regulation deems to be subject to the law

The FDA rule that will give the agency authority to regulate e-cigarettes and other various tobacco products originally outside its purview is now being reviewed by the White House. The proposed rule was published Apr. 25, 2014. On Oct. 20, the Office of Management and Budget received the final deeming rule for review. The rule was created by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) and its regulations would not take effect until two years after they are finalized — per the timeline in the proposed rule.

There are three major areas covered in the proposed rule: 1) setting the minimum legal age of sale at 18; 2) restrictions on vending machine sales; and 3) specifications for warning labels. It would also require that new tobacco products go through FDA’s pre-market review process. FDA announced its intention to regulate e-cigarettes four years ago and has faced criticism for slow progress.

FDA Nominee’s Ties to Industry Called into Question

The AIDS Healthcare Foundation called on the Obama administration to withdraw Robert Califf’s nomination due to his relationship with Faculty Connections, a firm that seeks to find academic researchers who can help influence providers and others. Through that company he worked with Amgen, AstraZeneca, Daichi Sankyo, Merck, Novartis and Sanofi over the last year. The Chairman of the Senate Health, Education, Labor and Pensions Committee (HELP) has said he expects to hold a confirmation hearing before Thanksgiving.

3. State Activities

Colorado Co-op Fights Closure But Drops Lawsuit

Colorado HealthOP filed a lawsuit in state court seeking a temporary restraining order preventing the Colorado Division of Insurance from kicking the co-op off the state’s exchange. However, after a hearing on Oct. 19, the co-op dropped its lawsuit. Colorado HealthOP had argued in the legal complaint that it was poised to turn a profit next year, despite missing out on nearly $9 million in anticipated risk corridor payments from the feds.

South Carolina Co-op Becomes Ninth Co-op to Close

Consumers’ Choice Health Insurance Company, a co-op created with Affordable Care Act (ACA) funding, will close at the end of the year. The co-op has about 40 percent of South Carolina’s exchange enrollment. This means about 67,000 customers will need to shop for new plans when the open enrollment period begins on Nov. 1. Under the ACA, 23 startup insurers were provided $2.4 billion in low-interest loans. Just 14 remain in business.

Florida: Cigna Announces Its Withdrawal From the Florida State Exchange

Cigna announced it will leave the Florida state exchange two weeks before the 2016 enrollment period begins. Cigna spokesman Joseph Mondy explained that the insurer’s departure is due to “an exponential increase in fraudulent and abusive care delivery practices in 2015 in Florida.” As a result, an estimated 30,000 people enrolled in Cigna plans in Florida will have to find new coverage for next year. Those receiving coverage from Cigna through Medicare or a group plan through an employer or union will not be affected by this change.

Minnesota: Resident Sues the State Over Its Decision to Drop UCare

A resident of Minnesota, filing under an anonymous name, is suing the state over its decision to drop health insurer UCare from public health care programs. The insurer was dropped after a competitive bid process, and that means 370,000 customers will need to pick new plans for next year. UCare had filed its own lawsuit, but subsequently dropped it. The resident who is suing argues that the state must offer a free choice of plans to Medical Assistance enrollees, and that the state is required to provide people with an option to keep their current providers.

New York: Four Urgent Care Centers Will Disclose More Information on the Insurance Plans They Accept

Four urgent care centers in New York signed agreements to disclose more information concerning the insurance plans they accept. The centers are 181st Street Urgent Care in Manhattan; Brookdale Urgent Care (affiliated with Brookdale Hospital); New York Doctor’s Urgent Care (two locations in Manhattan); and Cure Urgent Care (three locations in Manhattan and Long Island). These centers will list the health plans they contract with as in-network providers and also explain to consumers the consequences of using an out-of-network provider.

These agreements are part of the first enforcement action brought under New York’s new “surprise medical bill” law. The new law aims to protect consumers who get surprised by larger bills than expected and see providers on them who are not part of their insurance plan networks. Even though consumers may not notice, their visits to these urgent care clinics can result in these out-of-network bills.

Arizona: Comment Period Opens for Proposed Changes in Arizona’s Medicaid Expansion Population

The required comment period for changes Arizona is seeking to make for its Medicaid expansion population started on Oct. 15. These changes include a new 2 percent premium paying up to 3 percent in copays, eliminating non-emergency medical transportation, a five-year maximum lifetime coverage limit and a work requirement. Comments will be accepted through Nov. 16.

Texas: Comment Period Opens for Texas’s Waiver Extension Request

On Oct. 15, the Centers for Medicare and Medicaid Services (CMS) opened up the federal comment period for Texas’s waiver extension request. The five-year extension request for the Texas Healthcare Transformation and Quality Improvement Program asks for $35 billion in uncompensated care funding for Texas hospitals. This comment window will be accepted through Nov. 16.

Three States Sue Over the Affordable Care Act

On Oct. 22, Texas, Kansas and Louisiana filed suit against the Administration over the Affordable Care Act’s (ACA) fee on health insurers. The ACA imposes a fee on health insurers, which the states argue is essentially a fee passed on to them and is an unconstitutional federal coercion of states because if they do not pay the fee, they lose federal Medicaid funds. At the heart of the case is a CMS rule requiring states to pay the fee as part of what they pay their Medicaid managed care organizations. The states disagree with that rule.

The suit relies on a previous 2012 Supreme Court rule on the Affordable Care Act, which said that the federal government could not coerce states to expand Medicaid.

4. Regulations Open for Comment

Centers for Medicare and Medicaid Services (CMS) Issues Proposed Rule to Begin Data Collection for New Fee Schedule for Medicare Clinical Diagnostic Laboratory Tests

CMS released a proposed rule Sept. 25 that initiates the agency’s next step in implementing the Protecting Access to Medicare Act of 2014 (PAMA), a bill that requires clinical laboratories to report on private insurance payment amounts and volumes for lab tests. Under the proposed rule, certain laboratories would be required to report private payor rate and volume data if they receive at least $50,000 in Medicare revenues from laboratory services and more than 50 percent of their Medicare revenues from laboratory and physician services. Laboratories would collect private payor data from July 1, 2015, through Dec. 31, 2015, and report it to CMS by March 31, 2016. CMS will post the new Medicare rates by Nov. 1, 2016; these rates will be effective on Jan. 1, 2017. Tests that meet the criteria for being considered new advanced diagnostic laboratory tests (ADLTs) will be paid at actual list charge for a minimum of three quarters. ADLTs are tests offered under Medicare Part B and are furnished by only one laboratory and that either include a unique algorithm and are at a minimum an analysis of RNA or DNA, or are cleared or approved by the U.S. Food and Drug Administration (FDA). Under PAMA, the Medicare payment amount for any test cannot be reduced by more than 10 percent compared to the prior year’s amount during the first three years of implementation (2017-2019) and cannot be reduced by more than 15 percent in the following three years (2020-2022).

Medicare’s current fee schedule for lab tests was first adopted in 1984 and has remained relatively unchanged except to establish payments for new tests or implement across-the-board statutory payment updates. Medicare pays approximately $8 billion a year for clinical diagnostic laboratory tests. The new system will be updated every three years for clinical diagnostic laboratory tests (CDLTs) and every year for ADLTs to reflect market rates paid by private payors. One hot-button issue in the proposed rule is the definition of “applicable laboratory.” PAMA defined an applicable laboratory as one that receives a majority of its Medicare revenues under the MCLFS or the Medicare Physician Fee Schedule (MPFS). In a fact sheet summarizing the proposed rule, CMS said it does not expect any hospital laboratory to meet the definition of “applicable laboratory” and that more than 50 percent of independent laboratories and more than 90 percent of physician offices would likely be excluded based on the $50,000 threshold. The proposed rule was published in the Federal Register on Oct. 2. CMS will solicit comments until Nov. 24, 2015.

The Centers for Medicare and Medicaid Services (CMS) Offers Request for Information (RFI) to Solicit Answers to Physician Pay Formula Questions

On Sept. 28, CMS released an RFI to seek public comment related to new provisions in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA): Merit-based Incentive Payment System (MIPS), Alternative Payment Models (APMs) and a physician-focused payment model (PFPMs). Rather than offering much insight on how it plans to implement the physician pay formula (SGR), the “request for information” asks about 150 questions. In April 2015, Congress voted to repeal and substitute the SGR with a reimbursement system that aims to pay providers contingent on the value of care they provide.

The SGR legislation creates a payment system that encourages physicians to participate in alternative value-based pay models. Beginning in 2026, the physician reimbursement rate will rise 0.75 percent annually for providers who utilize alternative pay models. Alternatively, physicians who do not enroll in alternative pay models will see only a 0.25 percent pay raise each year. For providers who receive a substantial part of their revenue from alternative pay models, they will get an additional 5 percent bonus from 2019 to 2024, in combination with the shared savings bonuses or fees they might collect for participating in those models. Worth noting, providers do not have to participate in alternative pay models to get value-based care bonuses. The Doc Fix law also consolidates Medicare’s three existing quality programs into the MIPS, which begins in 2019. Sans this overarching payment structure, the Doc Fix law leaves much of this new pay system to CMS’s discretion; CMS now requests provider feedback on the most efficient way to accomplish the savings and enhanced care goals of the new law. Public comments for the RFI are due on Nov. 2, 2015.

Department of Health and Human Services (HHS) Proposes Updates to “the Common Rule”

HHS and 15 other agencies released a notice of proposed rulemaking Sept. 2 for the Common Rule, the existing regulatory framework to transparency and oversight for scientific research involving human subjects. The proposed changes are to address the substantial changes that have occurred within scientific research. Current regulations have been in place since 1991 and are followed by 18 federal agencies. Proposed updates to the rule include:

  • Strengthened informed consent provisions
  • Requirements for administrative or IRB review that would align better with the risks of the proposed research
  • New data security and information protection standards
  • Requirements for written consent for use of an individual’s biological samples, for example, blood or urine, for research with the option to consent to their future use for unspecified studies
  • Requirement, in most cases, to use a single institutional review board for multisite research studies
  • Application of rule to clinical trials, regardless of funding source, if they are conducted in a U.S. institution that receives funding from a Common Rule agency for research involving human participants.

In July 2011, HHS issued an Advance Notice of Proposed Rulemaking to seek the public’s input on updating the Common Rule. The proposed rule issued reflects input and requests comments for HHS to consider as it drafts the final rule. HHS will take public comment on the proposed rule until Dec. 7.

For a press release detailing changes to the rule visit

Department of Health and Human Services (HHS) Releases Proposed Rule on Health Equity

On Sept. 3, HHS issued a proposed rule, Nondiscrimination in Health Programs and Activities, to advance health equity and reduce disparities in health care. The proposed rule establishes that the prohibition on sex discrimination includes discrimination based on gender identity. It also includes requirements for effective communication for individuals with disabilities and enhanced language assistance for people with limited English proficiency. The proposed rule applies to Health Insurance Marketplaces, any health program that HHS itself administers, and any health program or activity any part of which receives funding from HHS, such as hospitals that accept Medicare patients or doctors who treat Medicaid patients. Finally, the proposed rule extends these nondiscrimination protections to individuals enrolled in plans offered by issuers participating in the Health Insurance Marketplaces and explicitly bars any marketing practices or benefit designs that discriminate on the basis of race, color, national origin, sex, age or disability. Section 1557 of the Affordable Care Act (ACA) extended civil rights protections banning sex discrimination to health programs and activities. Previously, civil rights laws enforced by HHS’s Office for Civil Rights (OCR) barred discrimination based only on race, color, national origin, disability or age. The rule will be published in the Federal Register on Sept. 8, and is open for public comment through Nov. 6, 2015.

For more information, including a fact sheet and Frequently Asked Questions, visit

Internal Revenue Service (IRS) Proposed Rule Mandates Employer Health Plans Offer Hospital and Physician Services

The IRS released a proposed rule Aug. 31 that would require employer health plans to offer substantial coverage for inpatient hospital services and physician services. The Affordable Care Act requires employer health plans to be at least 60 percent of the minimum value standard. News reports uncovered the fact that employer plans could do so without providing hospital or physician coverage.

The preamble of the proposal points out that while large group plans are not required to cover the ACA’s Essential Health Benefit, a plan that does not cover hospital and physician services “does not meet a universally accepted minimum standards of value expected from and inherent in any arrangement that can reasonably be called a health plan and that is intended to provide the primary health coverage for employees.”

Under the proposed rule, an employer group health plan must, to meet the minimum value standard (MSV) and avoid a penalty, meet or exceed an actuarial value standard of at least 60 percent coverage including substantial coverage for doctor and hospital services. The proposed rule provides a transition period for employers that have previously offered non-compliant coverage prior to Nov. 4, 2014. The proposal aligns IRS and Department of Health and Human Services (HHS) policies. The ACA compels employers who do not meet the affordability and MSV thresholds to pay a penalty of $3,000 for each worker that receives a tax credit. The IRS proposed rule, published in the Federal Register Sept. 1, also says that any employee offered a non-compliant plan would not be prevented from receiving premium tax credits. IRS is taking comments on the proposed rule until Nov. 2, 2015.

Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats

FDA issued a final rule June 16 that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in processed foods, are not “generally recognized as safe” or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. Comments on the final rule are due by June 18, 2018.

More information on FDA’s decision can be found in the agency’s press release.

CMS Releases Proposed Rule on Basic Health Program; Federal Funding Methodology for Program Years 2017 and 2018

On Oct. 22, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule related to federal funding methodology for the Basic Health Plan. The document provides the methodology and data sources necessary to determine federal payment amounts made in program years 2017 and 2018 to states that elect to establish a Basic Health Program under the Affordable Care Act to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Marketplaces. The Affordable Care Act provides states with an option to establish a Basic Health Program (BHP). Federal funding will be available for BHP based on the amount of premium tax credits (PTC) and cost-sharing reductions that BHP enrollees would have received had they been enrolled in qualified health plans (QHPs) through Marketplaces. These funds are paid to the states through trust funds dedicated to BHP, and the states then administer the payments to standard health plans within BHP. The proposed rule is open for comment. Comments must be received by 5 p.m. on Nov. 23, 2015.

5. Reports

Researchers Publish a Paper Describing the Benefits of Kidney Donor Compensation

In a newly published paper, a team of researchers propose that the government should compensate kidney donors to increase the supply of transplant kidneys and address the current shortage. They report that this shortage results in 5,000 to 10,000 premature deaths every year, and an additional 100,000 more people suffer from dialysis due to the shortage. The authors of the report show that the benefits of this practice would far outweigh the costs. Opponents of compensation for donors believe it will exploit the poor, but these researchers actually argue that poor people in particular would enjoy the greatest benefit — African Americans in particular because of their over-representation on the waiting list. The report proposes that a compensation of $45,000 to living donors and $10,000 to the estates of deceased donors would be more than sufficient to end the shortage and also end the waiting list within five years. The authors of the paper come from Stanford; the University of California, San Francisco; and the University of Michigan.

GAO Report: VA Primary Care: Improved Oversight Needed to Better Ensure Timely Access and Efficient Delivery of Care

On Oct. 22, the Government Accountability Office released a report concerning primary care panel sizes within the Veterans Administration’s Health System. The GAO found that the Department of Veterans Affairs’ (VA) data on primary care panel sizes — that is, the number of patients VA providers and support staff are assigned as part of their patient portfolio — are unreliable across VA’s 150 medical facilities and cannot be used to monitor facilities’ management of primary care. As part of its review, GAO found missing values and other inaccuracies in VA’s data. Officials from VA’s Primary Care Operations Office confirmed that facilities sometimes record and self-report these data inaccurately or in a manner that does not follow VA’s policy. The GAO obtained updated data from six of seven selected facilities, corrected these data for inaccuracies, and then calculated the actual panel sizes for the six facilities. GAO found that for these six facilities the actual panel size varied from 23 percent below to 11 percent above the modeled panel size, which is the number of patients for whom a provider and support staff can reasonably deliver primary care as projected by VA. Such wide variation raises questions about whether veterans are receiving access to timely care and the appropriateness of the size of provider workload at these facilities.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Charlyn Iovino, Vice President
Caroline Perrin, Research Assistant

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering state and federal government relations, national/multistate strategies, infrastructure and economic development, strategic communications and grassroots issue management services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and in 2010 was ranked in the Top 20 of The National Law Journal's "The Influence 50," an annual report of the top public affairs firms in Washington, D.C.

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