Tag Archives: health reform

Patient Protection and Affordable Care Act: Supreme Court decides individual mandate is constitutional

In a 5-4 decision today, the United States Supreme Court upheld the “individual mandate” provision of the Patient Protection and Affordable Care Act as a permissible exercise of the federal government’s power under the U.S. Constitution to levy taxes. This means the requirement that most Americans either have health insurance coverage or pay a penalty will become effective in 2014 (unless legislation enacted before 2014 changes or revokes that requirement). This also means that all provisions of the Affordable Care Act currently in effect remain in effect, and all provisions of the Affordable Care Act with future effective dates will become effective on the applicable dates (again, unless future legislation changes or revokes any of those provisions).

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HEALTH REFORM: U.S. Supreme Court’s Ruling on the Affordable Care Act: What Does It Mean?

By now, every American who pays any attention to the news is aware that the Supreme Court of the United States has upheld essentially all of the Obama administration’s Affordable Care Act (“ACA”). We have posted a copy of the lengthy opinion, concurrence, and dissent on our website. For now, we should be focusing on what the case of National Federation of Independent Business v. Sebelius actually will cause to occur.

For those who haven’t yet dissected the opinions, the Court’s controlling decision does two things. First, by a 5-4 majority led by the Chief Justice, the Court upheld the individual mandate, the single most controversial and essential provision of the ACA, not under the Commerce Clause, as its proponents primarily urged, but under the tax power—not as a requirement to buy health insurance, but as a tax if individuals don’t. The four “liberal” Justices, concurring, would have upheld the mandate under the Commerce Clause. The net of this is that the Chief Justice surprised many people by creating a majority to uphold the law, but he also stood as a bulwark against the expansion of the Commerce Clause to cover inactivity. In other words, you can’t be forced to eat broccoli, but you might be subject to a tax or fine if the consumption of broccoli is found by Congress to be an important national interest and you refuse to eat it.

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Is the Mandate Constitutional – US National Health Care Act – a Presentation by Stuart Gerson

Following Doug’s comments on the case for payment and delivery reform in the United States, Stuart Gerson was next to the podium to discuss whether the mandate is constitutional.

Stuart began by saying that it’s important to understand one thing – this discussion, besides the quality and efficiency issues, is about health insurance and not about healthcare itself. This is one of the real pitfalls of the US system – we provide healthcare to almost everyone, but it’s done through a series of cost-shifting and inefficiencies, and that’s what these programs are trying to address. 

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The Case for Payment and Delivery Reform in the US – A Presentation from Doug Hastings

Rumor has it that SCOTUS might announce their decision on the PPACA today, so there’s no more appropriate time to continue our discussion of health care reform! Today, I’m bringing you a recap of Doug Hasting’s presentation during the ILN’s 24th Annual Meeting in Washington, DC.

Doug said he would touch a little bit on the context that the health reform law provides or relates to in connection with the way that the healthcare delivery system in the US is evolving. He said that there are interesting interconnections there that lead into implications for how the Supreme Court ruling, whichever way it comes down, might affect that system. 

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HEALTH REFORM: 10 Things Providers Should Know About the Health Insurance Exchange Final Rule

On March 12, 2012, the U.S. Department of Health and Human Services (“HHS”) released its final rule (“Final Rule”) implementing the new Affordable Health Insurance Exchanges (“Exchanges”) authorized under the Patient Protection and Affordable Care Act (“PPACA”).[1] These Exchanges are intended to establish and operate a “one-stop marketplace” in each state for individuals and small employers to obtain health insurance. According to HHS, these Exchanges will offer Americans “competition, choice, and clout. Insurance companies will compete for business on a level playing field, driving down costs. Consumers will have a choice of health plans to fit their needs, and the Exchanges will give individuals and small businesses the same purchasing power as big businesses.”[2]

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HEALTH REFORM: No Change in the 10 Percent Federal Rate Review Threshold

Feds reject proposals by Alaska and Wisconsin

No Change in the 10 Percent Federal Rate Review Threshold

The Patient Protection and Affordable Care Act required that the U.S. Department of Health and Human Services (“HHS”) establish a process for reviewing unreasonable increases in health insurance premiums in the individual and small group markets. The Rate Increase Disclosure and Review Final Rule[1] established a 10 percent national review threshold for proposed premium increases to individual and small group insurance products for the first year of the federal rate review program, September 1, 2011, through August 31, 2012. For subsequent years, the regulations require that the Centers for Medicare & Medicaid Services (“CMS”) establish state-specific thresholds; however, if no state-specific threshold is established, the 10 percent national threshold will remain in effect. The Secretary of HHS must issue a notice by June 1 of each year announcing the state-specific thresholds that will apply in the following year’s rate review program (e.g., starting September 1, 2012, for the second year).[2]

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HEALTH REFORM: RAC Roundup: Preparing for the Prepayment Review Demonstration Project

As part of continued efforts to expand the Medicare Recovery Audit Contractor (“RAC“) program, in November 2011 the Centers for Medicare & Medicaid Services (“CMS“) announced the implementation of a demonstration project that would allow RACs to conduct prepayment reviews on certain types of Medicare claims. This demonstration project is intended to lower error rates by preventing improper payments rather than identifying improper payments after they have been made.[1] Originally slated to begin in January 2012, the demonstration project is expected to begin in the summer of 2012.

The introduction of the demonstration project reflects an ongoing dilemma—balancing the importance of Medicare program integrity initiatives against the effect that prepayment review has on Medicare providers. Providers should consider that this demonstration project will not simply be a one-year trial; instead, it will evolve to become the new model for RAC reviews. As such, providers should take the necessary steps to assess, analyze, and, as needed, make investments to improve internal auditing and monitoring policies, procedures, and processes.

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HEALTH REFORM: Patient-Centered Outcomes Research Institute Begins Process to Fund Clinical Effectiveness Research Grants

On May 22, 2012, the Patient-Centered Outcomes Research Institute (“PCORI”),[1] a private nonprofit entity established by the Patient Protection and Affordable Care Act of 2010, announced that it will be seeking applications to fund an initial $96 million in grants for innovative research projects in clinical effectiveness research.[2] These grants will be awarded in four areas recently identified in PCORI’s National Priorities Research Agenda:[3]

  • Assessment of Prevention, Diagnosis, and Treatment Options – This area includes comparisons related to the effectiveness and safety of alternative health care services in order to determine which alternatives work best for people with a particular health problem.[4]
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HEALTH REFORM: Alternative Provider Reimbursement Models – How Are They Treated Under MLR Rules?




In a recent health reform alert, “New Rules Issued on Medical Loss Ratio Requirements,”[1] we described the rules issued by the Centers for Medicare & Medicaid Services (“CMS”) and the U.S. Department of Health and Human Services regarding the calculation of the Medical Loss Ratio (“MLR”) pursuant to the Patient Protection and Affordable Care Act (45 C.F.R. Part 158). Such rules require individual and group health plans (other than self-funded health plans) to spend a minimum percentage of premium towards medical expense or “medical loss” (or else provide rebates to enrollees). Other expenses are generally considered “administrative” and not counted toward such minimum. For purposes of this alert, “medical expense” (or “medical loss”) is defined primarily as “incurred claims” and certain quality improvement activities (“QIAs”).

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HEALTH REFORM: New York Health Benefit Exchange Established by Executive Order

On April 12, 2012, Governor Andrew Cuomo issued Executive Order No. 42, titled “Establishing the New York Health Benefit Exchange” (“Order”). The purpose of the Order is to require the State of New York and its administrative agencies to take the steps necessary to establish an American Health Benefit Exchange and Small Business Health Options Program in New York (together, the “Health Benefit Exchange”). The Governor’s action was taken in response to the mandate contained in Section 1311 of the Patient Protection and Affordable Care Act (P.L. 111-148) (“ACA”).

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