On April 12, 2012, the Centers for Medicare & Medicaid Services (“CMS”) released a final rule with comment period (“Final Rules”) implementing changes to the Medicare Advantage program and Medicare’s prescription drug benefit program, referred to as Medicare Parts C and D, respectively. Part C and D plan sponsors and other participants should carefully review the changes, particularly those related to increased transparency and exclusion from Parts C and D. The Final Rules are the latest effort by CMS to improve accountability, transparency, and effectiveness of the Medicare program. 

Included among these regulations are changes to the law under the Affordable Care Act (“ACA”). The Final Rules codify Medicare’s Coverage Gap Discount program, a program enacted in January 2011 through the ACA to eliminate the prescription drug coverage “donut hole.” They also implement section 6005 of the ACA, which requires Medicare Part D sponsors and other entities with pharmacy benefit managers to report certain information and also provides that such reports will remain confidential. Penalties will be imposed for failure to comply with the reporting requirements.

The Final Rules make several additional changes to Medicare Parts C and D including:

1. CMS’ adoption of the authority to exclude any plan sponsors who fail to achieve at least a 3-star rating for three consecutive years on CMS’ performance quality rating; 
2. Changing the Part D appeals process to allow prescribers to request a reconsideration on an enrollee’s behalf without first obtaining an appointed representative form;
3. Allowing dual eligible special needs plans that meet integration and performance standards to expand their supplemental benefit offerings to include benefits such as nonskilled nursing services, personal care services, or other long term care services where CMS finds that the benefit will improve integration of care for the dual eligible population;
4. Permitting Medicare Advantage plans to limit durable medical equipment to ‘‘preferred’’ brands and manufacturers so long as beneficiary access protections are in place including access to all preferred brands, a transition period during plan changes that allow enrollees to retain durable medical equipment, providing medical necessity exceptions to plan limitations and appeal rights for brand or manufacturer based denials, and full disclosure of plan limitations on durable medical equipment;
5. Application of a lower, pro-rated cost sharing when prescriptions are dispensed with less than a month’s supply where appropriate; and,
6. Requiring Part D sponsors to include an active and valid prescriber National Provider Identifier on prescription drug event records submitted to CMS.

Read CMS’ announcement on the changes here. 

On February 9, 2012, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury jointly issued final regulations pursuant to the Affordable Care Act regarding plain-language health insurance plan descriptions. Health insurers will soon be required to present health plan benefits and coverage information in a clear, consistent and comparable manner.                

Starting on September 23, 2012, health insurers and group health plans will be required to provide two significant tools to help consumers navigate the health insurance market.  First, a Summary of Benefits Coverage (“SBC”) will outline key features of a plan, such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions.  The SBC will also include a standardized plan comparison chart, showing common procedures and the corresponding plan coverage.  The second tool, a Uniform Glossary, will explain terms commonly used in health insurance coverage, such as “deductible” and “co-payment”. Insurers must provide the SBC and Uniform Glossary at certain times during the enrollment process, such as when consumers are shopping for coverage, when coverage is renewed, when certain changes occur and upon request.  The Uniform Glossary will also be publicly accessible on government websites, granting consumers easier access to insurance information.   

To view the final rule, visit: http://ofr.gov/OFRUpload/OFRData/2012-03228_PI.pdf.

On January 13, 2012 CMS issued Transmittal 153, implementing section 3108 of the Affordable Care Act which now allows physician assistants to perform level of care certifications and recertifications in skilled nursing facilities.  The physician assistant may perform the certification or recertification if the physician assistant collaborates with the physician but does not have a direct or indirect employment relationship with the facility.  The new transmittal will be implemented on February 13, 2012 and the changes will be effective with items and services furnished on or after January 1, 2011. 

Read CMS’ full transmittal here. 

On December 20, 2011 the Supreme Court of the United States set the date to hear challenges to the health care reform law.  On March 26 – 28 the Court will hear five-and-a-half hours of oral argument on the several challenges to the Affordable Care Act that are currently pending before the Court.  The first day is reserved for oral argument on the federal anti-injunction act’s effect on commerce clause challenges to the Affordable Care Act, and on the second day the Court will hear the long-anticipated argument on the constitutionality of the Affordable Care Act’s individual mandate.  The final day is reserved for argument on the severability of the individual mandate and the constitutionality of the Medicaid expansion created through the Affordable Care Act.

The Centers for Medicare & Medicaid Services (CMS) issued its final rule today establishing the Affordable Care Act’s (ACA’s) Consumer Operated and Oriented Plan (CO-OP) program.  The CO-OP program was established to provide financial support, in the form of loans, for the creation of non-profit, private, consumer-governed health insurance companies that will be qualified to offer insurance plans through the ACA’s health insurance exchange markets.  As CMS described in the final rule, the goal of the CO-OP plans is to increase the number of plans that are focused on integrated care and plan accountability, as well as to increase competition and promote efficiencies, premium reductions, and improve enrollee services and benefits.  This final rule establishes a two-year time frame for CO-OP plans to transition to member-elected boards, clarifies that certain existing insurers are ineligible for funding, and sets forth the instances in which CO-OP plans may receive state or local government funding.  The final rule likewise describes the CO-OP’s obligation to remain compliant with state and federal standards for insurers.

Read the full text of the rule here. 

The Department of Health and Human Services (HHS) recently cited as “excessive” a 12% insurance rate increase proposed by Everest Insurance under a Pennsylvania insurance plan.   HHS’ finding that the rate increase was excessive was the first such move under the Affordable Care Act, which gives HHS the authority to review insurance rate increases over 10% and cite them as excessive.  Although the Affordable Care Act does not give HHS the authority to sanction insurers attempting to push through excessive rate increases, the hope is that publicizing the excessive rate increases will increase transparency and accountability.   

Read HHS’ full news release here. 

In a highly anticipated decision, on November 14, 2011 the United States Supreme Court granted certiorari in three cases on the constitutionality of the Affordable Care Act (“ACA”): National Federation of Independent Business v. Kathleen Sebelius, Secretary of HHS, et al.; Florida, et al. v. Department of Health and Human Services; and Department of Health & Human Services et al. v. Florida, et al.  The Court’s review will address four fundamental questions: (1) whether the ACA’s individual mandate is constitutional, (2) whether the individual mandate may be severed from the ACA if it is unconstitutional, (3) whether the claim brought by the opponents to the mandate is barred by another federal statute, and (4) whether the ACA’s expansion to Medicaid coverage was valid.  The Court has granted a total of four and a half hours of oral argument for the three issues, which is highly unusual.  This decision will be monumental for the future of the ACA, and will be closely followed by Duane Morris attorneys. 

View the United States Supreme Court’s order here. 

On November 8, 2011, in the latest scrimmage regarding the Affordable Care Act’s (ACA’s) individual mandate, the D.C. Circuit Court of Appeals upheld the mandate’s constitutionality.  The Court found that Congress could create “national solutions to national problems, no matter how local–or seemingly passive–their individual origins,” and that the individual mandate was therefore constitutional because it was within Congress’ authority. 

On November 10, 2011, the United States Supreme Court will hold a private conference to decide whether to hear the challenges to the ACA.     

Read the entire decision here. 

Yesterday afternoon the Centers for Medicare & Medicaid Services (CMS) released the long anticipated final Accountable Care Organization (ACO) regulations, after considering the nearly 1200 comments submitted in response to the earlier proposed regulations.  ACOs, created under the Affordable Care Act, are a model of health care that focuses on collaboration between providers across a continuum of care including different health care settings.  The new regulations set forth the specifics for the program including payment mechanisms through which providers will be compensated for care provided through the integrated ACO model, as well as performance requirements for participating providers.  The first ACOs will start operating in 2012.  

Over the next few weeks, Duane Morris attorneys will be reviewing the final regulations and providing additional guidance to providers about the effect of the regulations. 

Read the full set of regulations here.

On August 1, 2011, the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS) released a Final Rule updating the prospective payment rates for inpatient rehabilitation facilities (IRFs). The rule also establishes a program that reduces the annual increase factor by 2 percent for failure to report quality data to HHS starting in 2014. The Final Rule implements section 3004 of the Affordable Care Act and will become effective on October 1, 2011.

The Final Rule affecting IRFs was published in the Federal Register on August 5, 2011 and can be found here: http://www.gpo.gov/fdsys/pkg/FR-2011-08-05/pdf/2011-19516.pdf.

In addition, on August 1, 2011, CMS and HHS released a Final Rule that updates payment rates for skilled nursing facilities (SNF). Among other things, the rule also recalibrates the case-mix indexes, discusses a non-therapy ancillary component being developed by CMS, and reduces the market basket percentage.

The Final Rule affecting SNFs will become effective on October 1, 2011 and was published in the Federal Register on August 8, 2011. To read the text of the Final Rule, please go to http://www.gpo.gov/fdsys/pkg/FR-2011-08-08/pdf/2011-19544.pdf.

On March 18, 2011, the U.S. Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS) issued this regulation, implementing section 6111 of the Affordable Care Act. Section 6111 gives CMS authority to impose and collect civil monetary penalties (CMPs) against nursing homes. The penalties are reserved for nursing homes that fail to comply with federal participation requirements outlined in section 6111. Although penalties for noncompliance existed before the Affordable Care Act was promulgated, this regulation revises and expands CMS's authority to impose and collect CMPs. The final rule is effective January 1, 2012.

For additional information about this new regulation, please visit the Office of the Federal Register website.

Issued by the U.S. Department of Health and Human Services (HHS)on February 18, 2011, this regulation implements section 6113 of the Patient Protection and Affordable Care Act (PPACA). The interim final rule amends existing legislation by introducing new notice requirements associated with long-term care (LTC) facility and skilled nursing facility (SNF) closures. Its purpose is twofold: to protect resident health and safety, and to facilitate a “smooth transition” in the event of a facility’s closure.

New requirements under this regulation include:

• who the administrator of a facility must notify about a closure;
• what minimum content is required in the written notice of closure, such as a detailed closure plan outlining how the facility will transfer residents; and
• when an administrator must provide written notification, which depends on whether the secretary of HHS terminates the facility’s participation in the Medicare or Medicaid program, or whether the facility is closing for another reason.

The regulation also extends liability to facility administrators. For example, an administrator may be subject to a civil monetary penalty of up to $100,000 if he or she fails to comply with its requirements. This regulation is effective on March 23, 2011.