Earlier today the Senate voted 78-17 in Executive Session to confirm the nomination of Ms. Sylvia Mathews Burwell to be the new Secretary of The Department of Health and Human Services (HHS). Ms. Burwell was most recently the head of President Obama’s Office of Management and Budget before being nominated for her new role. Ms. Burwell takes the helm of HSS from the former Secretary Kathleen Sebelius. A native of Hinton, West Virginia—a town of roughly 3,000, Ms. Burwell held the position of Deputy Chief of Staff working with Erskine Bowles in President Bill Clinton’s second administration. Ms. Burwell becomes the 22nd Secretary of HHS, an agency of over 70,000 federal employees across a number of important departments: the Food and Drug Administration (FDA); the National Institutes of Health (NIH); the Health Resources and Services Administration (HRSA); the Centers for Disease Control and Prevention (CDC); and the Administration on Aging among others. The largest portion of the agency’s near trillion dollar annual budget is dedicated to funding the Centers for Medicare and Medicaid Services (CMS) charged with running the Medicare and Medicaid programs nationwide.
The Administration made a major announcement at the end of last week: Secretary of the Department of Health and Human Services (HHS), Kathleen Sebelius, will be stepping down. Sebelius’ legacy will certainly be tied to the rocky implementation of the Affordable Care Act. After months of issues with the website, Sebelius’ announcement comes soon after a positive milestone with the enrollment period coming to an end and 7.5 million people signed up.
The President is nominating Office of Management and Budget (OMB) Director Sylvia Mathews Burwell to replace Sebelius. Burwell has significant experience, having held several positions in the Clinton administration. Burwell was unanimously confirmed by the Senate to head the OMB a year ago but it can only be assumed that the confirmation hearings this time around will be more contentious and may be more about the Affordable Care Act than Burwell herself.
According to Politico, “Burwell will undergo hearings in both the Finance Committee and the Health, Education, Labor and Pensions committee, though the confirmation vote will be held in Finance. A committee aide said the panel’s chairman, Sen. Ron Wyden (D-OR), plans to schedule a hearing soon after it receives Burwell’s nomination materials. A committee vote seems likely in early May. Her nomination will probably face a full floor confirmation vote in late May or early June, since the Senate isn’t likely to shuffle its immediate schedule for her confirmation. White House press secretary Jay Carney said Friday he is anticipating a “May transition” for Burwell to HHS.” http://www.politico.com/story/2014/04/sylvia-mathews-burwell-democrats-obamacare-affordable-care-act-105641.html#ixzz2yrbqCwv1
For more on Sebelius’ retirement from HHS and Burwell’s nomination see below:
Burwell Bio: http://www.whitehouse.gov/omb/organization_office
After weeks of scrutiny, accusations, and calls for resignations by Republicans, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius testified before the House Energy and Commerce Committee today to defend the Affordable Care Act (a.k.a. “Obamacare”) after a month of significant enrollment challenges. She faced questions on the cost and management decisions associated with the challenged healthcare.gov website, the enrollment portal for the federal health care exchanges. Ironically, the website was down and inaccessible as she gave her testimony.
Sebelius’ testimony follows an October 24, 2013 House Energy and Commerce Committee hearing where federal contractors hired by the Centers for Medicare & Medicaid Services (CMS) and HHS to manage the website and paper enrollment processes pointed the finger at HHS when asked who is responsible for the website’s flaws and challenges. Today, Sebelius did not point the finger at CMS or HHS staff, stating that she and CMS Administrator Marilyn Tavenner have been responsible for decisions to date. CMS Administrator Tavenner provided similar testimony before the House Ways and Means Committee yesterday.
Sebelius faced questions on costs expended to date, stating that approximately $118 million has been spent on the healthcare.gov website and about $56 million on additional IT to support it. She offered to get back to the Committee by mid-November 2013 with numbers concerning enrollment in the exchange marketplaces.
While both political parties expressed concern or outrage over the massive exchange website problems to date, Republicans largely defined the problems as an illustration of how flawed Obamacare is overall, while Democrats overwhelmingly characterized the problem as a short-term, fixable glitch.
Some Democratic lawmakers likened the problems to those faced during implementation of the Medicare Part D prescription drug benefit. However, several on the Committee also sought to distinguish the implementation challenges from those of past programs and mention other problems beyond the website, including data privacy. The federal data hub meant to link exchange applicant data to determine eligibility for subsidies has become a political target. Whether personal information is protected and for how long it is stored by the federal government is something of great question, which has resulted in varying answers from the Administration.
The Senate is planning similar hearings next week, with CMS Administrator Tavenner testifying before the Senate Health, Education, Labor, and Pension (HELP) Committee on Tuesday, November 5, 2013, and HHS Secretary Sebelius testifying before the Senate Finance Committee on Wednesday, November 6, 2013. Additional hearings and scrutiny over the next several months are anticipated in the lead-up to the January 1 enrollment date for the exchange marketplaces.
The first day of the federal government shutdown occurred on October 1, 2013, the same day as the start of the open enrollment period for the health insurance exchanges. This blog post focuses on some of the top issues impacting health care policy on this date.
HHS Operating Status
Despite the government shutdown, most Medicare fee-for-service reimbursement will continue as scheduled.
On October 1, 2013, the Medicare Administrative Contractors (MACs) indicated they would “continue to perform all functions related to Medicare fee-for-service claims processing and payment.” However, according to the HHS contingency plan, health care fraud and abuse efforts will cease during the government shutdown. In addition, CMS will be curtailing the number of recertification and initial surveys for Medicare and Medicaid providers.
Despite the HHS furlough, October 1st marked the first day of open enrollment for the health insurance exchanges. Initially individuals were reporting that many of the individual state-based health insurance exchange sites were not working properly and the healthcare.gov website and toll-free number were experiencing problems or longer than average wait times. However, as of yesterday afternoon, HHS informed reporters that more than 2.8 million individuals had visited the healthcare.gov website since it launched earlier that morning, the call centers received more than 81,000 calls, and there were more than 61,000 live chat requests. HHS did not announce how many individuals had successfully enrolled in a health insurance plan offered through the exchange on this first day.
Medicare and Medicaid Provider Policies
In addition to the establishment of the new health insurance exchanges, the ACA also mandated certain Medicare and Medicaid cuts to begin on October 1, 2013, including:
- Medicare readmissions reductions: Under the Hospital Readmissions Reduction Program (HARP) hospitals are assessed a penalty for patients with certain conditions who return to the hospital within 30 days of discharge. When the program began on October 1, 2012, hospitals were assessed a maximum penalty of one percent of total revenue. As of October 1, 2013, the penalty increases to two percent of total revenue. CMS data suggests that more than 2,200 hospitals will have their Medicare payments reduced under this program. (More information on the program is available here.)
- Medicaid Disproportionate Share Hospital (DSH) payments: The Medicaid program provides additional payments—DSH payments—to hospitals that see a higher than average share of low-income beneficiaries. The ACA reduced the overall level of Medicaid DSH payments beginning October 1, 2013 when cumulatively states will receive a $500 million cut in DSH payments.
Under the ACA, states who choose to do so may expand their Medicaid programs to cover uninsured individuals up to 133 percent of the federal poverty level (2013 federal poverty level figures are available here). More than half the states have chosen to expand their Medicaid programs, as seen in this map. Expanded Medicaid coverage begins in most states on January 1, 2014.
Today the Department of Health and Human Services (HHS) released the final rules implementing the Affordable Care Act (ACA) provisions on workplace wellness. The ACA created incentives for employers to offer workplace wellness programs and support healthier workplaces. These new rules apply to group health plans beginning on or after January 1, 2014.
Drinker Biddle’s Government Relations and Health Care panel will host a three part webinar on the implications of the Health Insurance Portability and Accountability Act (HIPAA) Omnibus Final Rule. Click here to register for any or all of the upcoming webinars.
Part I: Business Associate Agreements, March 14, 2013, 11:30 a.m. – 12:30 p.m. CT / 12:30 p.m. – 1:30 p.m ET
Part II: Research, Marketing & Sales, April 9, 2013, 11:30 a.m. – 12:30 p.m. CT / 12:30 p.m. – 1:30 p.m. ET
Part III: Breach Notification, April 16, 2013, 11:30 a.m. – 12:30 p.m. CT / 12:30 p.m. – 1:30 p.m. ET
Today, HHS released its final rule outlining the essential health benefits insurers must provide for health plans operating in the health insurance exchanges. A copy of the final rule is available here.
Why are these rules important? Under the Affordable Care Act (ACA), beginning in 2014 every state will have a health insurance exchange – a marketplace in which individuals and employers will be able to purchase comprehensive health insurance. Plans participating in the exchanges must provide certain benefit (“essential health benefits”) within 10 specific categories: prescription drugs; ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; rehabilitative and habilitative services; laboratory services; preventive and wellness services; and pediatric services, including dental and vision care. The final rules issued today provide additional guidance on standards related to these essential health benefits.
For more information, check out these links:
The press release is live here: http://www.hhs.gov/news/press/2013pres/02/20130220a.html
The rule is live here: http://www.ofr.gov/(X(1)S(vp32o25ckyhpvspfpzx3owe4))/OFRUpload/OFRData/2013-04084_PI.pdf
The ASPE Issue Brief is live here: http://aspe.hhs.gov/health/reports/2013/mental/rb_mental.cfm
The EHB fact sheet is live here: http://cciio.cms.gov/resources/factsheets/ehb-2-20-2013.html
And the Tri-Dept FAQs are live here: http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs12.html
- The definition of protected health information has been amended so as to exclude information on a person who has been deceased for more than 50 years.
- The rule expands the definition of “business associate” to include additional entities and clarifies that business associates are directly liable under HIPAA.
- Covered entities will have to modify their Notice of Privacy Practices.
- Patients are provided additional rights under the final rule. Marketing standards are strengthened.
Today, the Department of Health and Human Services released an omnibus rule making changes to the Health Insurance Portability and Accountability Act (“HIPAA”) regulations related to privacy and security. The new final rule expands requirements beyond covered entities (health care providers, health plans, and entities that process health insurance claims) to business associates of covered entities in order to provide additional protections. These changes represent some of the most significant changes to the rule since it was first implemented fifteen years ago.
This mega rule also seeks to finalize privacy and security regulations related to the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) as well as implement certain provisions of the Genetic Information Nondiscrimination Act of 2008 (“GINA”).
The final rule is effective on March 26, 2013; covered entities and business associates must comply with the rules by September 23, 2013. Drinker Biddle & Reath is in the process of reviewing the 563-page final rule and will be releasing alerts and updates over the next few days. A copy of the rule can be found here.