Federal Judge in Florida Strikes Down the Health Reform Law

On January 31, 2011, a United States District Court in Florida held that the individual mandate provision in the Patient Protection and Affordable Care Act (“Act”) is an unconstitutional exercise of Congress’ power under the Commerce Clause of the United States Constitution. The court also held that “[b]ecause the individual mandate is unconstitutional and not severable, the entire Act must be declared void.” The court reasoned that “[i]f [Congress] has the power to compel an otherwise passive individual into a commercial transaction with a third party merely by asserting—as was done in the Act—that compelling the actual transaction is itself ‘commercial and economic in nature, and substantially affects interstate commerce’ . . . it is not hyperbolizing to suggest that Congress could do almost anything it wanted.” In concluding its decision, the court emphasized that the ruling only addressed a constitutional issue and that it was not about whether the Act was good or bad legislation.

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New Round of Grants to Help States Establish Exchanges

On January 20, 2011, the Department of Health and Human Services (HHS) announced an additional grant funding opportunity for states to establish their health insurance exchanges. Two types of grants will be available: Level One and Level Two. Level One grants will provide states with funding for up to one year, and subsequent to the first year, states may apply for a second year of Level One funding. Level Two grants, which provide states with funding through December 31, 2014, are available for those states that are further along in the implementation of their exchanges. For states to receive funding at either level, they must submit plans to HHS outlining how they intend to implement the exchanges along with anticipated expenditures. HHS did not disclose the amount of funding available for the grants, but it noted that funding will vary based on state need. For additional information regarding the grants, please see the Health Insurance Exchange Establishment Grants Fact Sheet.

OIG Solicits Proposals for New Anti-Kickback Safe Harbors and Special Fraud Alerts

On December 28, 2010, the Office of the Inspector General published a notice of intent to develop regulations in the Federal Register soliciting recommendations for modifications to the safe harbors under the anti-kickback statute and suggestions for new safe harbors and OIG Special Fraud Alerts. The solicitation was published in accordance with Section 205 of the Health Insurance Portability and Accountability Act of 1996, which requires HHS to publish this formal solicitation annually. The notice lists the criteria that HHS will consider in reviewing the proposals submitted and recommends that proposals be accompanied by supporting data and/or justifications.

To read the notice published in the Federal Register, please go to: http://www.gpo.gov/fdsys/pkg/FR-2010-12-28/pdf/2010-32705.pdf.

CMS Transmittal Released on Waiving Copayments and Deductibles for Preventative Services Provided at Rural Health Clinics

On December 21, 2010, CMS released Transmittal 2122 providing instructions for waiving coinsurance and deductibles for certain preventative services provided in Rural Health Clinics, as provided for in Section 4104 of the Affordable Care Act. Qualifying preventative services are those recommended by the United States Preventive Services Task Force with a grade of A or B. The transmittal is effective for services provided on or after January 1, 2011.

To read Transmittal 2122, please go to: http://www2.cms.gov/transmittals/downloads/R2122CP.pdf.

CMS Will Acquire New Tools to Prevent Fraud

On December 16, 2010, at the regional health care fraud prevention summit in Boston, Massachusetts, HHS Secretary Sebelius and Attorney General Eric Holder announced that CMS will issue a solicitation for new analytic tools to prevent fraud in Medicare, Medicaid and CHIP. In its press release on the subject, HHS stated that the tools will “integrate many of the Agency’s pilot programs into the National Fraud Prevention Program and complement the work of the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT).” The tools will be designed to prevent fraudulent payments before they occur, including through predictive modeling and identification of real-time trends by tracking billing patterns and other information.

To read the full press release, please go to: http://www.hhs.gov/news/press/2010pres/12/20101216a.html.

Congress Passes Legislation Delaying 25 Percent Medicare Physician Reimbursement Cut for One Year

On December 15, 2010, President Obama signed the Medicare and Medicaid Extenders Act of 2010 into law. This legislation implements a one-year delay to a significant reduction in reimbursement—a 25 percent pay cut—for physicians treating Medicare beneficiaries. Current Medicare payment rates will now remain in effect through December 31, 2011. In addition, the Act extends other Medicare and Medicaid payment provisions that were set to expire, such as the Medicare work geographic adjustment floor, Transitional Medical Assistance, and the qualifying individual program. Among other things, the Act also repeals the delay of RUG-IV and provides for the continued inclusion of orphan drugs as covered drugs for children’s hospitals under 340B.

The full text of the Act is available at http://www.gpo.gov/fdsys/pkg/BILLS-111hr4994enr/pdf/BILLS-111hr4994enr.pdf.

OIG Submits Semiannual Report to Congress Reporting Savings and Expected Recoveries of $25.9 Billion

On December 15, 2010, the OIG submitted its semiannual report to Congress pursuant to the Inspector General Act of 1978. The report summarizes the OIG’s audit, investigation, and evaluation activities from April 1, 2010 through September 30, 2010 and for the 2010 fiscal year in total. Highlighted accomplishments for FY 2010 include savings and expected recoveries of $25.9 billion and the exclusion of 3,340 individuals and organizations from participation in Federal health care programs. The report summarizes the OIG’s Medicaid and Medicare reviews, its legal and investigative activities, its public health (CDC, FDA, HRSA, HIS, NIH) and human services (AoA, ACF) reviews, and other department wide issues.

To read the OIG’s press release, please go to: http://oig.hhs.gov/publications/docs/press/2010/sar2010press.pdf. To read the full report, please go to: http://oig.hhs.gov/publications/sar/2010/fall2010_semiannual.pdf.

HHS Releases “Strategic Framework on Multiple Chronic Conditions”

On December 14, 2010, the U.S Department of Health and Human Services (“HHS”) released its “Strategic Framework on Multiple Chronic Conditions” (the “Framework”). HHS describes the Framework as an “innovative private-public sector collaboration to coordinate responses to a growing challenge.” It was developed by a departmental workgroup with most of HHS’ operating divisions participating. HHS has identified four goals of the Framework, including (1) improving the health of individuals with multiple chronic conditions through system changes; (2) increasing the use of self-care management; (3) providing more information and better tools to help health professionals caring for individuals with multiple chronic conditions; and (4) facilitating research on interventions and systems that will benefit those with multiple chronic conditions. Going forward, HHS will coordinate the Framework and will solicit input from agencies within HHS and stakeholders from the private sector.

To learn more about the Framework, please go to: http://www.hhs.gov/ash/initiatives/mcc/.

New Medicare Primary Care Incentive Payment Program

On December 3, 2010, the Centers for Medicare and Medicare Services (CMS) announced its implementation of a primary care incentive payment program, which is scheduled to take effect in 2011. Under the Patient Protection and Affordable Care Act (PPACA), Medicare is authorized to offer this incentive to primary care practitioners for the services they provide under Part B, beginning January 1, 2011, and until January 1, 2016. According to section 5501(a) of the PPACA, Medicare will pay primary care practitioners “on a monthly or quarterly basis an amount equal to 10 percent of the payment amount” for such primary care services under Part B. This program is one example of the numerous incentives for primary care practitioners that will continue to be implemented under the authority of the PPACA.

For more information regarding this announcement, please go to: http://www.cms.gov/MLNMattersArticles/downloads/MM7115.pdf and http://www.cms.gov/transmittals/downloads/R2081CP.pdf.

New Legislation Delays Medicare Physician Reimbursement Cut for an Additional Month

On November 30, 2010, President Barack Obama signed into law the Physician Payment and Therapy Relief Act of 2010. This legislation implements a one-month delay to a significant reduction in reimbursement—a 23-percent pay cut—for physicians treating Medicare beneficiaries. The legislation also provides a 2.2-percent reimbursement increase for physicians. The reimbursement reduction will go into effect, beginning on December 31, 2010. Both the Obama administration and Congress hope to use this delay to develop a long-term solution.

For more information regarding the Physician Payment and Therapy Relief Act of 2010, please go to: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR05712:@@@D&summ2=m&.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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