Editor's Comment

Editor’s Comment: One Year and Counting

Posted on March 23, 2011

March 23, 2011, marks the one-year anniversary of the Affordable Care Act, and the Administration’s first year implementation effort spans the full scope of the law. Major areas of implementation encompass the full range of reforms under the Act: improving performance in the private insurance and employer-sponsored health plan markets; strengthening Medicare, Medicaid and CHIP; improving health care access and building a stronger health workforce; improving health care quality and accountability; increasing investments in public health; strengthening health care fraud and abuse controls; and reforming federal policies applicable to tax-exempt hospitals.

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Editor’s Comment: The Thomas More Decision- Finding the Constitutional in Health Reform

Posted on October 12, 2010

After a spring and summer of warm-up action in multiple courts, the first judicial verdict is in: health reform is constitutional. In Thomas More v Barak Hussein Obama (Case No. 10-CV 11156, E.D. Mich., October 7, 2010), Judge George Steeh quickly disposed of plaintiffs’ claims that the Affordable Care Act was unconstitutional.

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Editor’s Comment: GOP Promises to Repeal and Replace Affordable Care Act in “Pledge to America”

Posted on October 8, 2010

On September 23, 2010, Congressional Republicans released a document entitled “A Pledge to America” to help voters in November better understand their position on a broad set of policy issues. Featured in the document, is a pledge to repeal the Patient Protection and Affordable Care Act (ACA), and replace it with “common-sense solutions focused on lowering costs and protecting American jobs.”

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Editor’s Comment: ERISA Now and Forever

Posted on September 27, 2010

Enacted to secure the nation’s private pension system, the Employee Retirement Income Security Act (ERISA) has become a pillar of U.S. health policy because of the legal framework it establishes for employer-sponsored group health benefit plans. Even as it creates crucial protections for workers and their families, ERISA simultaneously diminishes the power of states to regulate employee health benefits. Furthermore, the law curtails the legal rights of patients who experience death or injury as a result of the negligence or misconduct of health benefit plan administrators. The Affordable Care Act preserves the ERISA framework, expanding the federal standards applicable to employee health benefit plans while preserving the law’s shielding effects against state regulation and health plan liability. A major unanswered question under the Act remains how the ERISA shield will affect the rights of patients whose employers purchase coverage through state Exchanges.

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Editor’s Comment: Six Months and Counting

Posted on September 23, 2010

The past six months have witnessed a remarkable implementation effort in the wake of passage of the Patient Protection and Affordable Care Act of 2010. As would be expected in the case of legislation of such size — and consistent with previous federal laws involving matters of complex health policy, such as the Medicare Modernization Act of 2003 and the Deficit Reduction Act of 2005 — the Affordable Care Act assigns the overall task of making health reform happen to federal agencies. In many cases, agency implementation activities are in response to direct Congressional instructions to interpret and implement the law through regulations and other policies. In many other situations, agency implementation efforts are in furtherance of their specialized expertise and overall responsibility to carry out the broad requirements of U.S. law.

A review of agency actions following enactment of health reform underscores the scope of the law and the range if issues addressed by the agencies since passage. The Act’s four major pillars — comprehensive market reforms, the establishment of state health insurance exchanges, the Medicaid expansions, and the employer and individual responsibility provisions — do not take effect until January 1, 2014. At the same time, however, major reforms addressing the accessibility, quality and affordability of health insurance coverage, health care quality, access, efficiency and information, the health care workforce, and public health and prevention already are in effect or are poised to take effect.

The following table sets forth the major provisions of the Act as well as key agency implementation actions to date.

Major Agency Implementation Actions Under the Affordable Care Act

Title and Issue	Agency Action
Title I. Quality Affordable Health Care for All Americans
Immediate Improvements in Health Care Coverage for All Americans (§1001)	Implementation of provisions aimed at improving coverage either immediately or within six months of date of enactment: extending dependent coverage to children to age 26; prohibiting rescissions (retroactive cancellation of coverage) in the absence of fraud; prohibiting lifetime coverage limits; barring annual benefit limits to no less than $750,000 as of September 23, 2010 and rising to no less than $2 million before being fully phased out January 1, 2014; prohibiting the use of pre-existing condition exclusions for children under age 19; assuring patients the right to choose their participating primary care provider, including pediatricians; assuring patients direct access to obstetrical and gynecological services; coverage of emergency services without prior authorization and with in-network cost-sharing protections; for plan years that begin on or after September 23, 2010, coverage of evidence-based preventive items and services with an A and B rating currently recommended by the United States Preventive Services Task Force, immunizations recommended by the Advisory Committee on Immunization Practice, and pediatric and women’s health services recommended by the Health Resources and Services Administration. In the case of new recommendations not in place as of September 23, 2010, coverage must begin for plan years that begin within a year of the date on which the recommendation is issued; and establishing minimum federal standards for internal appeals involving claims for benefits as well as external review of claims denials by health plans and insurers. Medical loss ratio standards governing insurer expenditures on health benefits under development through joint activities between HHS and NAIC, including approval by NAIC of the MLR reporting form.
Immediate Actions to Preserve and Expand Coverage (§§1101-1105)	Pre-existing condition plan regulations governing comprehensive coverage and subsidized premiums issued, covering individuals who have lost insurance coverage and who have pre-existing conditions. (July 30, 2010) Establishment of insurance pricing reporting requirements as well as a federal and state rate review process to curb unreasonable price increases; $46 million in premium oversight grants awarded to states. (August 18, 2010) Early Retiree Insurance Program implemented, making available $5 billion in temporary assistance to support preservation of early retiree benefits; approximately 2,000 employers and unions approved as of August 31. Premium rate review process moved into implementation phase through state grants and the development of comprehensive information aimed at measuring unreasonable rate increases. Healthcare.gov launched in both English and Spanish to assist consumers find affordable coverage and care; site includes insurance finder tools. (June 30, 2010)
Preserving the Right to Maintain Existing Coverage (Grandfathered Health Plans) (§1253)	Standards established to measure whether health plans qualify for grandfathered status. Standards are designed to protect continuously existing plans while assuring disclosure of grandfathered status, and preventing abuse of grandfathering status in order to avoid compliance with key patient protections such as preventive benefit coverage, appeals rights and restrictions on annual coverage limits. (June 17, 2010)
Consumer Choices and Insurance Competition Through Health Benefit Exchanges (§§1301-1321)	State planning grants totaling $51 million awarded to begin the Exchange developmental process. Standard-setting process initiated through a Request for Comments on the development of implementation policy. (August 3, 2010)
Small Business Tax Credit (§1421)	Small business tax credits for firms of fewer than 25 full-time employees and average annual wages of under $50,000 made available through implementing IRS guidance. (May 18, 2010)
Title II. Role of Public Programs
Improvements in Public Programs including Medicaid and Title V (§§2301-2406)	CMS implements state option to expand Medicaid to all low income adults prior to effective date of coverage mandate. (May, 2010) State Medicaid Directors Letter explaining new state options under the home and community based services reforms issued, including elimination of “institutional” level of care need and expanded services for persons with mental illness and substance abuse needs. (August 6, 2010) Medicaid family planning coverage option guidance issued. (July, 2010) $2.25 billion in Money Follows the Person grants awarded. (July, 2010) $88 million awarded in maternal and child health home visiting grants; separate program also established for tribal home visiting programs.
Improving Medicare for Patients and Providers; Medicare Part D Improvements (§§3101-3114; 3301-3315)	$250.00 prescription drug coverage gap rebate checks issued to program beneficiaries in several rounds of mailings beginning July, 2010. Discount drug rebate agreement for Medicare Part D prescription drugs implemented. (July 2010) CMS proposes new preventive health coverage standards for Medicare beneficiaries, including annualized wellness visit and personal prevention plan as well as expanded preventive procedures with no cost sharing. (June 28, 2010)
Title III. Improving the Quality and Efficiency of Health Care
Patient Centered Outcomes Research (§6301)	$14.2 million awarded by HHS to develop and test interventions based on patient-centered outcomes research among racial and ethnic minority populations. (September 15, 2010)
Improving Payment Accuracy (§§3131-3143)	Medicare home health payment reduction of 4.75% for FY 2011 implemented. Hospital Outpatient PPS payment rule proposed. (July 6, 2010)
Health Care Quality Improvement (§3001)	Hospital Compare quality tool launched at CMS website www.healthreform.gov.
Health Care Delivery System Research (§3501)	Expanded multi-payer advanced primary care practice demonstration program launched by CMS to improve, on a statewide basis, the quality of primary health care across payers. (June 3, 2010)
Title IV. Prevention of Chronic Disease and Improving Public Health
National Prevention, Health Promotion, and Public Health Council (§4001)	National Prevention, Health Promotion, and Public Health Council Established.
Prevention and Public Health Trust Fund (§4002)	$15.4 million from Prevention and Public Health Trust Fund ($16.8 million in all) awarded to support 27 Public Health Training Centers. (September 15, 2010). $31 million from the Prevention and Public Health Fund awarded by HHS to reduce obesity and smoking, increase physical activity, and improve nutrition. The funds supplement an initial $491.8 million investment.
Spending for Federally Qualified Health Centers (§5601)	Health Center New Access Point Grants ($250 million) issued. (August 9, 2010)
Food Labeling (§4205)	FDA implements food labeling requirements through a request for comment. (July 7, 2010)
Pregnancy Assistance (§§10211-10214)	Implementation of 10-year pregnancy assistance grant program launched. (July 2, 2010)
National Prevention and Public Health Council (§4001)	National Prevention and Public Health Council issues first report to Congress. (July 30, 2010)
Prevention and Public Health Investments (§4002)	$250 million in community grants for community investments in prevention and public health made available for projects related to community clinical care, public health infrastructure, research and tracking, and public health training. (June 18, 2010)
Title V. Health Care Workforce
Increasing the Supply of the Health Care Workforce (§§5201-5210)	$250 million awarded for expansion of primary care workforce for primary care residencies, physician assistant and nurse practitioner training, nurse-led clinics, and state workforce planning. (June 16, 2010)
Title VI. Transparency and Program Integrity
Targeting Enforcement: Civil Money Penalties (§6111)	Regulations proposed establishing new nursing home civil money penalties policy aimed at improving quality and efficiency. (July 12, 2010)
Fraud Prevention	National fraud prevention effort in connection with donut hole rebate checks launched. (June, 2010)
Title VII. Improving Access to Innovative Medical Therapies
More Affordable Medicines for Children and Medically Underserved Communities (§§7101-7103)	Expanded 340B drug discount program launched by Health Resources and Services Administration. (July, 2010) Regulations proposed by HRSA for a dispute resolution process that can be used by safety net providers who suspect they have been overcharged for 340B drugs and by manufacturers who think safety net providers are in violation of the program prohibition on duplicate discounts or rebates, or the prohibition on resale of drugs purchased through the program. (September 20, 2010) Regulations proposed by HRSA setting standards for civil monetary penalties for manufacturers that “knowingly and intentionally overcharge” a 340B provider. (September 20, 2010)
Title VIII. CLASS Act
	N/A
Title IX. Revenue Provisions
Requirements for Charitable Hospitals (§9007)	Regulatory development process initiated through a Request for Comments issued by the IRS and aimed at developing standards to ensure compliance by nonprofit hospitals with new federal community benefit obligations in the areas of community public health needs assessment and provision of discounted care to the uninsured. (May 27, 2010)
Limits on Health Flexible Spending Arrangements under Cafeteria Plans (§9005)	IRS guidance issued to implement revised standards governing coverage of over-the-counter drugs in flexible spending plans. (August 2010)
Qualifying Therapeutic Discovery Project Program (§9023)	IRS issues policy standards for tax credits for qualifying therapeutic discovery projects, with available credits of up to $5 million per firm and $1 billion overall. (May 2010)
Tax benefits for providers working in medically underserved areas (§10908)	IRS issues policy expanding tax benefits for health care professionals practicing in underserved communities. (June 16, 2010)
Indoor tanning tax (§9017)	IRS guidelines on new tax policy issued. (June 2010)

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Editor’s Comment: Un-Stacking the Deck Against Patients Insured through ERISA Health Plans

Posted on August 30, 2010

The Affordable Care Act is a complete game changer. Under its terms, as implemented by the US Labor Department, when a patient appeals a claims denial to an external reviewer, the review now is to be completely independent and binding on the plan. If the plan should refuse to go along with the decision, the patient can go to court and seek an order enforcing the decision against the plan.

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Editor’s Comment: Medical Loss Ratio and Rebates in Private Health Insurance

Posted on August 25, 2010

A key issue for insurers, businesses and consumers in health reform is working its way through the regulatory process. Beginning January 1, 2011, insurers will be required to spend a minimum percentage of insurance premiums on medical expenses, as opposed to administrative and marketing costs or profits. Insurers that fail to meet these minimum percentages, called medical loss ratios, will be required to rebate the difference in premiums. Group policies will be required to spend 85 percent on medical expenses and individual policies must spend 80 percent on medical expenses.

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