New Simpson-Bowles Plan Released
On February 19, Alan Simpson and Erskine Bowles released a new framework for a deficit reduction plan hoping to split the difference between President Obama and House Republicans.
The plan is based on the parameters set by the President and House Speaker Boehner (R-OH) last December. It calls for $2.4 trillion in new savings over the next decade with about a quarter coming from health care savings and a quarter from tax reform. House Republicans want to cut it by $4 trillion, while the White House has set a $1.5 trillion goal.
The Bowles-Simpson plan would cut $600 billion from Medicare and Medicaid (the White House will only support $400 billion), $600 billion in new tax revenue from ending or curbing deductions and breaks (the House GOP has said all revenue is off the table) and $1.2 trillion in cuts to discretionary spending, along with cuts in cost-of-living increases for social security.
The new proposal is unlikely to be enacted as is. But as an alternative to automatic spending reductions known as the sequester, which are scheduled to occur March 1, the plan is likely to attract considerable attention. Last week, Republicans rejected Senate Democrats’ plan to replace the sequester with a package of spending cuts and take hikes, saying no additional tax revenue should be on the table.
With Congress not getting back from recess till February 25, that leaves four days before the sequester cuts start to kick in. Were sequestration to occur, health providers are facing a possible 2% reduction in Medicare payments. If no deal is reached by March 1, attention will turn to a March 27 deadline when the continuing resolution funding bill expires and a new measure would need to be negotiated to keep the government running.
Essential Health Benefits Rule
On February 20, HHS released a final rule pertaining to standards related to essential health benefits, actuarial value and accreditation of health plans. The rule, which will be published in the February 25 Federal Register, contains the administration’s final set of mandatory covered health benefits and provides guidance on benefits required by the Affordable Care Act (“ACA”).
The rule also finalizes a timeline for qualified health plans to be accredited in federally facilitated health insurance exchanges and amends regulations providing an application process for recognizing additional accrediting entities to certify qualified health plans. In addition, HHS released a report detailing how the rule applies to mental health and substance use disorder benefits and federal laws requiring that mental health benefits be provided at parity with other health benefits in the individual and small group markets.
HHS Awards State Innovation Model Awards to Several States
On February 21, CMS awarded 25 states close to $300 million to test proposals to improve health care delivery and payment for Medicare, Medicaid and Children’s Health Insurance Program beneficiaries. The states will use ACA funds to test multi-payer payment and service delivery models, including approaches already under way at CMS, as part of the State Innovations Models Initiative.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
