The Centers for Medicare and Medicaid (“CMS”) issued a proposed rule broadening the definitions of “representative” and “spouse” in its Medicare and Medicaid conditions of participation and conditions of coverage in response to United States v. Windsor, 570 U.S. 12 (2013) — the U.S. Supreme Court decision striking down Section 3 of the Defense of Marriage Act (DOMA), which banned federal benefits for same-sex spouses, as unconstitutional.
This proposed rule will apply to all hospitals, ambulatory surgical centers, hospices, long-term care facilities, and community mental health centers as a condition for participation in the Medicare and Medicaid programs. Under the proposed rule, institutions that participate in Medicare and Medicaid must respect same-sex spouses’ decisions to designate their spouse as a “representative” or “spouse” as long as the couple is legally married “under the law of the state, territory, or foreign jurisdiction where the marriage was entered into.” CMS followed other administrative agencies that have used the place of celebration as the test for a valid marriage. This “state of celebration rule” extends to same-sex couples who reside in or seek treatment in a state that does not legally recognize their marriage. Now all spouses, regardless of sexual orientation, will be able to participate in various aspects of their spouse’s health care, including visitation and decision-making.
As the proposed rule currently reads, there are no exemptions for small or religious-based institutions. However, this issue may not be as charged as it once was, as one catholic health-care network will be offering health care benefits to same-sex spouses and domestic partners as of January 2015, which leads to the inference catholic institutions may no longer desire to use sexual orientation as a basis to treat individuals differently. Although it is only one at this point, others may soon follow suit. Moreover, it may be difficult to challenge this broad rule, as the Secretary of Health and Human Services’ (the “Secretary”) authority stems from various provisions of the Social Security Act, which authorizes the Secretary to establish requirements necessary in the interest of the health and safety of patients and agencies are given high deference in the rule-making process.
This proposed rule is open for comment for 60 days.
With the end of the year in sight, Congress remains busy in the health policy arena. Partisan talking points are expected to fly on Tuesday, when Chairman Darrell Issa (R-CA) will chair one of his final hearings in the House Committee on Oversight and Government Reform focused on the Affordable Care Act. Economist Jonathan Gruber, who has been reported as saying the “stupidity of the American voter” aided the White House in passing the health reform law, is expected to appear before the Committee. Marilyn Tavenner, Administrator of the Centers for Medicare and Medicaid Services (CMS), is also expected to testify. Administrator Tavenner will likely be asked about Obamacare implementation issues, including the misreported Obamacare enrollment figures that came to light after the midterm elections.
Washington continues to focus on the global treatment of Ebola. This past week, the Centers for Disease Control and Prevention identified a preliminary list of hospitals that have the resources, capacity, and preparation to treat Ebola patients. President Barack Obama is pressing Congress to authorize $6.2 billion in emergency funding to fight the virus in the United States and abroad. The Senate Committee on Foreign Relations, Subcommittee on African Affairs will also hold a hearing to hear testimony on keys to success for the international response.
Some lawmakers and outside groups are requesting a delay of the ICD-10 coding system implementation, which was originally set for 2013. If this movement gains enough traction, applicable delay language may be attached to a spending bill or other significant legislation.
While a permanent sustainable growth rate (SGR) patch is not expected to be passed before the holidays, such legislation will likely be taken up in the first months of the 114th Congress, before the current patch expires on March 31, 2015.
This Week’s Hearings:
- Tuesday, December 9: The House Committee on Oversight and Government Reform will hold a hearing titled “Examining Obamacare Transparency Failures.” The House Committee on Energy and Commerce, Subcommittee on Health will hold a hearing titled “Setting Fiscal Priorities.”
- Wednesday, December 10: The House Committee on Energy and Commerce, Subcommittee on Health will hold a hearing titled “Examining FDA’s Role in the Regulation of Genetically Modified Food Ingredients.” The Senate Committee on Foreign Relations, Subcommittee on African Affairs will hold a hearing titled “The Ebola Epidemic: The Keys to Success for the International Response.”
Accountable Care Organizations (ACOs) Proposed Rule Released
On Monday, December 1, CMS released the “Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations” Proposed Rule. This proposed rule provides modifications to Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program. The proposed rule makes changes to the current program by: clarifying and establishing new definitions of terms; adding a procedure for ACOs to renew their participation agreements; adding, clarifying, and revising the beneficiary assignment algorithm; expanding the types of beneficiary-identifiable data that would be given to ACOs in reports under the program, as well as simplifying the opt-out process for claims data sharing; and adding or modifying policies to encourage increased participation in risk-based models. CMS is soliciting comments from ACOs and other stakeholders on the use of telehealth technologies for the coordination of care for assigned beneficiaries.
Squire Patton Boggs attorneys recently published an article that discussed three anti-fraud elements of the Affordable Care Act (ACA) regarding maintaining financial integrity of the health insurance exchanges. Looking at those provisions, some may erroneously conclude that the ACA dramatically increased the damages that may be imposed for false claims made in connection with the exchanges. The article analyzes the three anti-fraud elements and concludes that only two made it into law: (1) the FCA is explicitly applicable to the exchanges; and (2) the conditions of eligibility for an insurer are material to the company’s entitlement to payments. The effort to impose treble-treble damages failed to make it into law, even though it was included in the legislation that passed.
It’s another record haul for the United States Department of Justice! In FY 2014, the DOJ ensured the collection of more than $ 24 billion from civil and criminal actions. The False Claims Act yielded a substantial portion of that total by having its own record setting recovery of $ 5.69 billion.
Healthcare fraud recoveries under the False Claims Act amounted to $ 2.3 billion, which makes this the fifth consecutive year in which such recoveries totaled more than $2 billion. The DOJ considers this “steady, significant and continuing success” attributable to the administration’s high priority fighting health care fraud.
Attorney General Holder, warning that these stiff penalties for white-collar misconduct will continue, said: “The False Claims Act was enacted both to protect vital taxpayer dollars and deter those who would misuse public funds. The department will continue to enforce the law aggressively to ensure the integrity of government programs designed to keep us safer, healthier and economically more prosperous.”
Whistleblowers continued to account for most false claims actions, and they netted a neat $435 million as a result of their complaints. This is certain to encourage the growing trend for more such complaints to be filed, especially by disgruntled employees.
“Be prepared” — that’s the take away. A robust compliance program is far cheaper to implement and execute than dealing with a fraud allegation that will cost large sums to investigate and defend. If you have any question about the adequacy of your compliance program, now is the time to examine and update it, if necessary. Your organization does not want to be part of next year’s record-breaking statistics.
In a recent blog post, we urged providers to ready themselves for publication of the 340B mega rule. The Health Resources and Services Administration (HRSA), however, has halted publication of that rule indefinitely. HRSA made this decision a month after the Pharmaceutical Research and Manufacturers of America (PhRMA) launched a new lawsuit challenging HRSA’s latest “interpretive rule” concerning treatment of orphan drugs. HRSA published its “interpretive rule” after PhRMA won a lawsuit that voided HRSA’s previous substantive 340B rule making on the issue.
HRSA will likely wait until 2015 before it issues proposed guidance for notice and comment that will address key policy issues regarding the integrity of the 340B program. HRSA is also planning to issue proposed rules pertaining to civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution.
With the midterm elections now over, the attention of the health policy community has shifted to the Affordable Care Act’s open enrollment period, which began on November 15. Due to last year’s bungled rollout, as well as recently disclosed statements made by economist and White House consultant Jonathan Gruber, a renewed focus on the effectiveness of the Affordable Care Act is sure to dominate conversations in Washington in the coming weeks.
On Capitol Hill, lawmakers continue to probe the government’s response to Ebola and other public health threats. Hearings on this topic are planned in the House Committee on Foreign Affairs, the House Committee on Energy and Commerce, and the Senate Committee on Homeland Security and Governmental Affairs. On Wednesday, November 19, the Senate Committee on Health, Education, Labor, and Pensions will meet in executive session to consider, among other agenda items, S. 2917, Adding Ebola to the FDA Priority Review Voucher Program Act, and H.R. 669, Sudden Unexpected Death Data Enhancement and Awareness Act.
This Week’s Hearings:
- Tuesday, November 18: The House Committee on Foreign Affairs, Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations will hold a hearing titled “Fighting Ebola: A Ground-Level View.” The House Committee on Energy and Commerce, Subcommittee on Oversight and Investigations will hold a hearing titled “Update on the U.S. Public Health Response to the Ebola Outbreak.”
- Wednesday, November 19: The House Committee on Energy and Commerce, Subcommittee on Health will hold a hearing titled “Examining Medical Product Development in the Wake of the Ebola Epidemic.” The Senate Committee on Homeland Security and Governmental Affairs will hold a hearing titled “Preparedness and Response to Public Health Threats: How Ready Are We?” The Senate Committee on Veterans’ Affairs will hold a hearing titled “Mental Health and Suicide Among Veterans.” The Senate Committee on Indian Affairs will hold an oversight hearing titled “Protecting Our Children’s Mental Health: Preventing and Addressing Childhood Trauma in Indian Country.”
- Thursday, November 20: The Senate Committee on Health, Education, Labor, and Pensions, Subcommittee on Primary Health and Aging will hold a hearing titled “Why Are Some Generic Drugs Skyrocketing in Price?”
The results of this year’s mid-term election, while historic, also raise considerable uncertainty regarding future legislative action. What legislative initiatives can we expect to see from the Republican controlled Congress? Will President Obama and Congress work together or will Republican control of both houses result in continued gridlock? What will happen to the ACA?
To help answer these questions, the Squire Patton Boggs public policy team has prepared an extensive analysis of the election and what may be expected. This analysis covers topics ranging from appropriations and budgets to transportation and infrastructure, and includes an extensive discussion of healthcare policy. The analysis may be found here.
This Week’s Hearings:
- Wednesday, November 12: The Senate Committee on Appropriations will hold a hearing titled “The U.S. Government Response to the Ebola Outbreak.”
- Thursday, November 13: The House Committee on Foreign Affairs will hold a hearing titled “Combating Ebola in West Africa: The International Response.” The House Committee on Veterans’ Affairs will hold a hearing titled “Assessing the Implementation of the Veterans Access, Choice, and Accountability Act of 2014.”
IRS Issues Guidance on Group Health Plans
On Tuesday, November 4, the Internal Revenue Service (IRS) issued guidance regarding group health plans that fail to cover in-patient hospitalization services. Following reports that some group plans that do not include hospital coverage are being marketed to employers as meeting minimal requirements, the guidance states that the Administration will issue regulations requiring employer plans to cover adequate hospital and physician services in order to meet minimum standards.
The Affordable Care Act has once again made its way onto the Supreme Court’s calendar. On Friday, the Justices voted to accept King v. Burwell for hearing this term. The issue this time is whether tax subsidies may be given to individuals who purchase insurance through the federal exchange, rather than an insurance exchange run by one of the states. The Urban Institute has estimated that 7.3 million people are expected to receive subsidies as a result of enrolling through a federally-facilitated exchange. This question has spill-over effects for the employer mandate, which triggers penalties for an employer when an employee purchases insurance through an exchange and receives a subsidy. Argument has not yet been scheduled but will likely occur after the first week of March, with a decision likely to come at the end of the term in June or July, as observed by SCOTUSblog.
Since only 14 states are operating their own exchanges, the federal government is involved in some manner in the exchanges in the other 36 states. So far, individuals meeting certain income levels who buy their insurance on either a state exchange or a federally-administered exchange have been receiving tax subsidies, pursuant to the IRS’ interpretation set out at 26 C.F.R. §1.36B-2(a)(1). The plaintiffs in King v. Burwell, though, argue that the statute only provides subsidies for people who purchase insurance from “an Exchange established by the State,” (26 U.S.C. §36B(c)(2)(A)(i)) so subsidies aren’t allowed for individuals who purchase on a federally-administered exchange.
The Courts of Appeals for the Fourth Circuit and the D.C. Circuit have weighed in so far. On July 22, a panel of the Fourth Circuit held that subsidies were available for participants in federal exchanges. On the same day, a panel of the D.C. Circuit held in Halbig v. Burwell that the opposite – that subsidies are only allowed for people buying insurance on state-run exchanges. On September 4, though, the judges of the D.C. Circuit vacated the decision in Halbig v. Burwell and voted to hear the case en banc, meaning all the judges, not just the three that originally heard the case, would hear arguments and vote on the decision.
It is an unusual move that the Court would accept the issue onto its docket while the D.C. Circuit’s en banc proceedings are still pending and no circuit split exists, as noted by commentators here and here. It may mean that the Court is interested in providing a swift decision to settle the issue that effects so many Americans.
The Court has already issued two ACA decisions, National Federation of Independent Business v. Sebelius (holding the individual mandate to be constitutional and the Medicaid expansion voluntary) and Burwell v. Hobby Lobby Stores, Inc. (holding that the law could not require private companies to provide contraception over religious objections).
Happy Halloween! In addition to costumes and candy, October 31 saw the release of the 2015 Work Plan by the Office of Inspector General for Health and Human Services. Always a lengthy document, the Work Plan can indicate areas that providers and suppliers want to monitor closely, as they are areas receiving attention from the government. In addition to continuing many of the existing areas of focus, this year adds several new categories, including:
- Hospital electronic health record system contingency plans required by HIPAA;
- Review of hospital wage data used to calculate Medicare payments;
- Adverse events in post-acute care in long-term-care hospitals (an area previously reviewed for inpatient rehab facilities);
- Independent clinical laboratory billing requirements; and
- Medicaid MCO payments for services after a beneficiary’s death or for ineligible beneficiaries.
The Work Plan also emphasizes the large recoveries made by the OIG in 2014, as well as the number of Medicare exclusions, criminal convictions, and civil recoveries for healthcare fraud in 2014, consistent with the Department of Justice’s recent emphasis on prosecuting companies and individuals for fraud as we reported previously.