Federal News
General News
Federal News:
The Institute of Medicine, under the direction of HHS, has released a report outlining the “essential health benefits" (EHB) that must be included in some health plans offered by state-based insurance exchanges as required by § 1302 of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). The EHB represents a minimum level of benefits that must be included in some health plans;it does not restrict health insurers from offering plans with more benefits.
PPACA requires that an EHB include at least 10 general categories of medically necessary health services and benefits, including ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; chronic disease management services; and pediatric services, including oral and vision care.
The EHB, as described by the IOM, “are intended to cover health care needs, to promote services that are medically effective, and to be affordable to purchasers." The IOM proposed that HHS put in place a framework for EHB that would: (1) consider the population’s health needs as a whole; (2) encourage better care by ensuring good science is used to inform practice decisions; (3) emphasize the judicious use of resources; and (4) carefully use economic tools to improve value and performance.
State Flexibility. The IOM report noted that current state health insurance mandates “should not automatically be included in the EHB package but reviewed in the same way as other potential benefits." The IOM added, however, that state-specific variations in the EHB will help encourage innovation at the state level, as long as the variations are consistent with the PPACA requirements for EHB packages.
The IOM also recommended that HHS update the EHB package annually, keeping it based on credible evidence of effectiveness, but also considering both the cost of the EHB package and limiting medical inflation. “Without serious attention to rising health care costs across all sectors, the EHB will become unaffordable over time," the IOM report noted.
The full report is available here: http://www.iom.edu/Reports/2011/Essential-Health-Benefits-Balancing-Coverage-and-Cost.aspx
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The Center for Consumer Information and Insurance Oversight (CCIIO) of the Centers for Medicare and Medicaid Services (CMS) on October 6 published a list of frequently asked questions and answers (FAQ) pertaining to the Consumer Operated and Oriented Plan (CO-OP) program, adding to a another FAQ published on September 7.
CO-OPs are qualified nonprofit health insurance issuers that are promoted by the Patient Protection and Affordable Care Act (ACA). The ACA provides that the Department of Health and Human Services must award and begin the distribution of 6 billion dollars appropriated to fund grants and loans allocated for the CO-OP program by July 1, 2013. The CO-Ops will offer qualified health plans in the individual and small group markets and have available tax exempt status. A qualified health plan offered under the program for the health cooperatives or as a multi-state health plan are subject to federal and state laws that also apply to private health insurers.
Among the topics the FAQs cover is clarification that after receiving Letters of Intent (LOI) to apply for CO-OP loans, CMS does not anticipate to publicly post the names or locations of organizations filing such LOIs. However, LOI applicants should remember that all materials submitted to CMS are subject to the Freedom of Information of Act (FOIA) and any FOIA request will be examined against exceptions such as trade secrets outlined in the Department’s FOIA regulation. The CMS has stated that applicants may access the Department’s FOIA guidelines at http://www.hhs.gov/foia/45cfr5.html.
Whether or not approval will be available for start-up loan modifications necessary to satisfy the capital requirements associated with unexpected rapid growth or high enrollment, the CMS states that applicants should estimate their funding needs as accurately as possible in the business plan submitted as a part of the application, and should not assume that loan modifications will be available to provide additional funding.
CMS also has stated that an organization may not partner with an existing health insurance issuer to develop a CO-OP, since, under the ACA, if an organization is a health insurance issuer that existed on July 16, 2009, a related entity, or any predecessor of either, that organization is not eligible for loans under the CO-OP program and cannot become a CO-OP. Also, a third party administrator (TPA) may not develop a CO-OP unless the TPA was also a licensed health insurance issuer on July 16, 2009.
Whether or not an existing nonprofit entity has to form a separate entity to apply for funds and become a CO-OP, the CMS reiterated that, first, as a statutory requirement under the ACA, a health insurance issuer that was in existence on July 16, 2009 can not sponsor a CO-OP. Under the proposed rule, the applicant must be the entity that will eventually become a CO-OP. Unless the sponsor wants to become a CO-OP, it should form a separate entity.
Finally, the CMS stated that a CO-OP can be founded by a consumer-run nonprofit self-insured multiple employer welfare arrangement (MEWA) that does not have an insurance license, but that is currently licensed in its domiciliary state as a nonprofit, self-funded MEWA, because entities not licensed as issuers on July 16, 2009, may apply.
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The Department of Health and Human Services (HHS) has issued guidance regarding how plan sponsors participating in the Early Retiree Reinsurance Program (ERRP) would submit a request for appeal of an adverse reimbursement determination, and how the appeals process works.
Definition of adverse reimbursement determination. An adverse reimbursement determination is a determination constituting a complete or partial denial of a reimbursement request. This includes a determination regarding whether a given individual whom the sponsor has submitted to the Centers for Medicare and Medicaid Services (CMS) as an early retiree in advance of a reimbursement request satisfies the substantive criteria for being an early retiree for the entire time period claimed by the sponsor or whether a claim submitted in advance of a reimbursement request is for a “health benefit,” as defined by the ERRP statute, regulation, and other ERRP guidance.
Appealable determinations are ones that CMS makes based on the plan sponsor’s submissions to CMS. A plan sponsor may not appeal a reimbursement determination on the ground that:
- it neglected to include a given item or service in its reimbursement request;
- it misstated data with respect to a given item or service; or
- CMS could not process an Early Retiree List, Summary Claim Data, a Claim List, or a reimbursement request due to the fact that it was not submitted in the correct manner or format.
The ERRP statute and regulations do not permit plan sponsors to appeal CMS determinations to deny an ERRP application, to refuse to accept an application for processing, or to terminate approval of an application. The denial of an application, the refusal to accept an application, or the termination of an application approval are related to whether a plan sponsor may participate in the program, not a determination about reimbursement for participating plan sponsors.
Request for appeal. The ERRP regulations state that a sponsor has 15 calendar days from the date of receipt of an adverse reimbursement determination to submit an appeal. The 15-calendar day period does not begin to run until the sponsor receives the relevant email that notifies the plan sponsor about the adverse reimbursement determination. That email will describe the 15 calendar-day time limit for submitting an appeal.
Documentation to submit. A request for appeal must specify the findings or conclusions with which the plan sponsor disagrees and the reason(s) for the disagreement(s). In submitting a request for appeal, a plan sponsor should include all information and data necessary for the HHS Departmental Appeals Board to evaluate the request and CMS to respond to the appeal, including
- a copy of the email notifying the plan sponsor about the adverse reimbursement determination,
- the amount of reimbursement at issue,
- the application ID number,
- plan year,
- information about the items and services at issue including dates of service, and
- information about the individuals to whom the items or services were provided.
Since the Appeals Board is independent of CMS, the plan sponsor should not assume that the Appeals Board would have information that the plan sponsor submitted to CMS, such as the plan sponsor’s Claim List.
The plan sponsor also may submit supporting documentation not previously submitted to CMS. The plan sponsor should not submit any documentation that is related to individuals, items or services not previously included in the Early Retiree List or Claim List, to the extent the adverse reimbursement determination being appealed is directly related to the response files sent with respect to those lists.
How and where to submit documentation. If a plan sponsor wishes to submit its request for appeal and/or supporting documentation electronically, the plan sponsor should call the Appeals Board at (202) 565-0208 as soon as possible before the applicable deadline to ascertain whether the Board is able to accept the submission electronically and to obtain any instructions for submission. Any electronic submissions must be made using the DAB web portal.
Requests for appeal and supporting documentation must be mailed to the Department of Health and Human Services Departmental Appeals Board, MS 6127 Appellate Division 330 Independence Ave., S.W. Cohen Building - Room G-644 Washington, D.C. 20201.
For more information, visit http://www.errp.gov.
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Although the 340B program allows certain providers within the U.S. health care safety net to stretch federal resources to reach more eligible patients and provide more comprehensive services, and covered entities report using it for these purposes, the Health Resources and Services Administration’s (HRSA’s) current approach to oversight does not ensure 340B program integrity and raises concerns that may be exacerbated by changes within the program, according to a Government Accountability Office (GAO) report.
HRSA oversees the 340B Drug Pricing Program through which participating drug manufacturers give certain entities within the health care safety net, known as covered entities, access to discounted prices on outpatient drugs. The law requires drug manufacturers to give 340B discounts to entities covered under the law to have their drugs covered by Medicaid.
GAO found that all of the covered entities interviewed reported that the 340B program allowed them to support their missions by maintaining services and lowering medication costs for patients, which is consistent with the purpose of the program, including the up-front savings they realized on the cost of drugs and regardless of the amount of revenue generated through the program. GAO concluded, however, that HRSA’s oversight of the 340B program does not adequately provide reasonable assurance that covered entities and drug manufacturers are in compliance with program requirements.
GAO also found that HRSA primarily relies on participant self-policing to ensure program compliance, but its guidance on program requirements often lacks the necessary level of specificity to provide clear direction. This makes the participants’ ability to self-police difficult and raises concerns that the guidance may be interpreted in ways inconsistent with the agency’s intent, according to GAO.
The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) included several program integrity provisions for the 340B program (see § 7101, as amended by the Health Care and Education Reconciliation Act of 2010 (P. L. 111- 152, § 2302), and PPACA § 7102(b)).
PPACA requires HRSA to (1) recertify eligibility for all covered entity types on an annual basis, which would help ensure entities that lose eligibility for the program do not remain enrolled; (2) develop a formal dispute resolution process, including procedures for covered entities to obtain information from manufacturers, and maintain a centralized list of 340B prices; (3) institute monetary penalties for covered entities and manufacturers, which gives program participants more incentive to comply with program requirements; and conduct more direct oversight of manufacturers, including conducting selective audits to ensure that they are charging covered entities the correct 340B price.
GAO recommended four actions to HRSA to strengthen oversight: (1) conduct selective audits of 340B covered entities to deter potential diversion; (2) finalize new, more specific guidance on the definition of a 340B patient; (3) further specify its 340B nondiscrimination guidance for cases in which distribution of drugs is restricted and require reviews of manufacturers’ plans to restrict distribution of drugs at 340B prices; and (4) issue guidance to further specify the criteria that hospitals that are not publicly owned or operated must meet to be eligible for the 340B program.
GAO Report, GAO-11-836, September 23, 2011
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General News:
Nearly 30% of employers are interested or very interested in exploring Accountable Care Organizations (ACOs) as a way to continue offering employer-sponsored benefits, while reducing costs and improving quality of care, according to recent research from consultants Aon Hewitt and Polakoff Boland. An ACO is the organizational mechanism adopted by the Centers for Medicare and Medicaid Services (CMS) to implement the Shared Savings Program established by the Patient Protection and Affordable Care Act. Aon Hewitt noted that ACOs also have come to represent a broader value-based approach of delivering care, where providers assume more financial risk, along with the opportunity of more financial reward for delivering better care at a lower cost.
While 28% of employers are interested or very interested in exploring ACOs, 37% are somewhat interested, 24% are unsure, and 11% are not at all interested. Quality of care delivered is the top ranked factor by 82% of employers in evaluating the use of ACOs, according to the survey. This was followed by the ability to manage the total cost of care (81%), patient outcomes (66%), and plan/provider pricing transparency (47%).
In addition, the survey found that 87% of employers believe having a primary care physician in the ACO would be a critical or important positive influence on employee acceptance of the model. Nearly 80% said awareness or reputation of the sponsoring organization is critical or important in influencing employees in a positive manner and 71% of organizations said having different ACO networks or models to choose from would be a critical or important positive influence on workers. Conversely, 74% of employers indicated that limiting patients to only ACO network providers for care and services would be a significant negative influence on employees, and 66% said the same related to the limited track record of ACOs.
When asked to what extent each group should share in the ACO’s cost management risk, employers cited medical groups the most (23%), followed by hospitals (22%), health plans (21%), employers (18%), and employees (15%).
The survey contains responses from 674 employers that provide health care coverage to more than 5 million individuals. For more information, visit http://www.aon.com.
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