Mark McClellan and Hall Render Discuss the Future of Health Care Reform
On Thursday, former CMS Director Mark McClellan met with Hall Render attorneys for a discussion on the future of health care reform in the United States. Mr. McClellan, who also served as Commissioner of the Food and Drug Administration under President George W. Bush, noted that a Romney Administration wouldn’t necessarily spell the end of the Affordable Care Act. According to Mr. McClellan, provisions of the law, such as guaranteed issue and community rating, are popular with the public and have been supported by Gov. Romney in the past. In addition, several states have already put the infrastructure in place that is necessary to create insurance exchanges, and Mr. McClellan believes those states will continue to implement many of the law provisions, regardless of which party wins the White House in November. He also noted that the next Congress will have to address deficit reduction and tax reform legislation that will certainly squeeze Medicare and Medicaid spending even further than today. Mr. McClellan is currently the Director of the Engelberg Center for Health Care Reform, Senior Fellow in Economic Studies and Leonard D. Schaeffer Director’s Chair in Health Policy Studies at the Brookings Institution in Washington, D.C. He is widely considered to be one of the top choices for Secretary of Health and Human Services in a Romney Administration.
Sequestration Looms
The Office of Management and Budget (“OMB”) released a report on September 14 detailing potential cuts to the health care sector under the implementation of sequestration. The report was statutorily required under the Sequestration Transparency Act, which Congress passed in August.
Should sequestration take effect on January 2, 2013, Medicare and the SGR are facing approximately $11 billion in cuts. Other health-related programs that face cuts include: $78 million for fighting fraud and abuse, $76 million to the prevention and public health fund and $66 million in grants to states to help create health insurance exchanges.
In an effort to show the potential impact of the sequestration, the American Hospital Association, American Medical Association and American Nurses Association released a report analyzing the impact the sequestration could have on health care-related jobs. According to this report, up to three-quarters of a million jobs could be lost by 2021.
More People Expected to Pay Health Care Penalty
The Congressional Budget Office (“CBO”) announced Wednesday that approximately 2 million additional people will be subject to the health care penalty since their last report in April 2010. According to the CBO, about 6 million people will pay a penalty beginning in 2016. Roughly $7 billion is expected to be collected during 2016. CBO attributes the increase to legislation passed since 2010, the rise in unemployment and the Supreme Court ruling that states can opt out of Medicaid expansion.
Stopgap Agreement Gets Closer in Senate
In an effort to avoid a potential government shutdown before the election in November, the Senate is working to a continuing resolution before they depart for recess this week. The House passed H.J.Res.117 last week by a vote of 329-91, which will continue to fund the government for six more months beginning October 1.
The continuing resolution will be voted on before the Senate leaves for recess and is expected to pass.
CMS to Release Report on the FPS
According to a letter sent to the Senate Finance Committee, CMS will release a report by September 30, 2012 detailing the results of the Fraud Prevention System (“FPS”). In the letter, acting CMS Administrator Marilyn Tavenner states, “This report will include the results of the FPS in the first year, including a detailed breakout of any dollar amounts that have been saved as a direct result of the FPS.”
Tavenner’s letter was prompted by an inquiry July 31 from Sen. Orrin Hatch (R-UT), ranking member on the Senate Finance Committee, and committee member Tom Coburn (R-OK) that sought information on the success level of the FPS program. In their letter to CMS, Hatch and Coburn asked for detailed information on the anti-fraud program, including the amount of money recovered so far, as well as how the agency targets claims for further review.
House Energy and Commerce Committee Mark-Up
The House Energy and Commerce Committee held a two-day mark-up this week on H.R. 1206 (Access to Professional Health Insurance Advisors Act of 2011) and H.R. 1063 (Strengthening Medicare and Repaying Taxpayers Act of 2012). The Committee passed an amendment for H.R. 1206 that would amend the calculation on the medical loss ratios (“MLRs”) established. Under the new calculation, payments to licensed independent insurance agents, or brokers, from a health insurer’s administrative costs would be excluded when calculating the MLR.
The Committee also advanced H.R. 1063. This legislation would modify the Medicare Secondary Payer program to speed up the settlement process.
Health-Related Bills Introduced this Week
S. 3562: Sen. Bernie Sanders (D-VT) introduced a comprehensive bill that would reauthorize the Older Americans Act. The Older Americans Act formally expired September 30, 2011, although most programs have continued through appropriations funding. The Act (PL89-73) established the Administration on Aging and authorizes a variety of health and social programs for seniors. The Sanders bill incorporates language from other bills introduced by various Senate Democrats, including requirements for states to have a Home Care Consumer Bill of Rights addressing safety and access to information. The legislation is unlikely to pass this Congress given the lack of Republican supporters.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
