HHS encourages states to apply for Affordable Care Act waivers to keep marketplace stable

HHS encourages states to apply for Affordable Care Act waivers to keep marketplace stable

On the Hill

The American Health Care Act (AHCA) would eliminate an Affordable Care Act (ACA) requirement that Medicaid covers basic mental health and addiction programs in expansion states. The roll back in Medicaid expansion would drop the mandate for which 1.3 million people receive treatment for mental health and substance abuse disorders. The drop in requirement would likely affect states that are burdened with the epicenters of the opiate epidemic, such as Ohio, Kentucky and West Virginia. A total of 31 states and the District of Colombia expanded Medicaid under the ACA and fall under the mandate currently. The full House is expected to vote on AHCA on March 23, 2017.

The U.S. Senate confirmed Seema Verma as CMS Administrator in a 55 to 43 vote. Verma will be tasked with overseeing the vast system of Medicare and Medicaid programs which provide services for nearly 130 million people. The agency is expected to experience numerous reforms, especially if Republicans are successful in their attempt to repeal the ACA. She will also oversee major changes to Medicare payment policy under the Medicare Access and CHIP Reauthorization Act (MACRA), the bipartisan provider payment law that passed in 2015. 

At the agencies

The Department of Health and Human Services (HHS) has released a letter of recommendations to states to “help foster healthcare innovation” and stabilize the marketplace. In the letter to governors, HHS encouraged states to apply for ACA waivers which would allow them to change parts of the law while still meeting its requirements. The so-called Section 1332 waivers would grant states exceptions from the section of the ACA which is due to go into effect early this year. Secretary Tom Price, in the letter, suggested federal officials are open to wavier proposals that set up high-risk pools or state-operated reinsurance programs intended to improve market stability. Hawaii is the only state to have secured approval for a Section 1332 waiver prior to the letter. Alaska is awaiting approval for its waiver proposal.

Secretary Price and the new Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma have sent out a joint letter to states affirming their intention to work with governors on Medicaid issues and their intent to use policy waivers to shape Medicaid programs. The letter criticizes Medicaid expansion as “a clear departure from the core, historical mission” of the program and encourages states to revamp the program with a focus on the most vulnerable populations. The document signals that under the new leadership at HHS and CMS states will receive greater flexibility and illustrates a different approach when dealing with Medicaid expansion populations.    

CMS has announced it is extending its deadline for the 2016 Physicians Quality Reporting System (PQRS) Electronic Health Record (EHR) submission. Individual Eligible Professionals (EPs), PQRS group practices, qualified clinical data registries and qualified EHR data submission vendors now have until March 31, 2017, to submit 2016 EHR data via the Quality Reporting Document Architecture. Additionally, the deadline for EPs to electronically report Clinical Quality Measures (eCQMs) for the Medicare EHR Incentive program was also pushed to March 31.   

According to a CMS report released on March 15, 2017, sign-ups for ACA exchanges showed a first year-to-year decline during the 2017 open enrollment season, falling behind estimates for the three month period. The Obama Administration had estimated 13.8 million individuals would sign up through exchanges but the exchanges had only 12.2 million enrollees from Nov. 1, 2016 to Jan. 31, 2017. The total was a drop off from the 12.7 million who had signed up in the close of the year earlier open enrollment period. An estimated third of the 12.2 million are new enrollees.

The Congressional Budget Office (CBO) has released its report on the House Republican ACA repeal bill, the American Health Care Act (AHCA). Among a number of data points, the new bill would reduce the number of insured Americans by 24 million within ten years and would see a decline in employer offered insurance. The report did show a savings of $673 billion dollars sourced primarily from the repealed Obamacare subsidies, but also predicts the bill will cut $880 billion from Medicaid over the next ten years.

In the courts

Advocate Health Care and NorthShore University Health System have ceased their proposed merger after an Illinois federal judge issued a preliminary injunction blocking the hospitals from finalizing their merger. Unsealed court documents showed the Federal Trade Commission (FTC) was successful in proving their relevant geographic market analysis was not arbitrary and that a merger could form a monopoly. Following the decision, the two hospitals informed their employees that they would not seek an appeal and would stop merger efforts. Last year, the same judge had ruled in the favor of the hospitals, ruling that FTC had omitted significant regional competitors in its analysis of the geographic market. The Seventh Circuit Court had overruled the ruling, sending it back to the district court.

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

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