HCR-Update: State Strategies; Claims Appeals Rules

Thanks to our partners at UBA, we have more information surrounding Health Care Reform.  Read below to learn the latest.

HHS and Treasury Propose Rules for States to Adopt Innovative Strategies to Meet the Goals of PPACA; Comments Accepted

The Departments of Health and Human Services (HHS) and Treasury have proposed new rules outlining the steps states may pursue in order to receive a state innovation waiver under the Patient Protection and Affordable Care Act (PPACA). The Act gives states the flexibility to receive a state innovation waiver (beginning in 2017 -- some elected officials would like to see this date changed to 2014) so they may pursue their own innovative strategies to ensure their residents have access to high-quality, affordable health insurance. The proposed regulation describes the content of the waiver application and how such proposals may be disclosed to the public, monitored and evaluated.

State innovation waivers are designed to allow states to implement policies that differ from those in PPACA so long as they:

• Provide coverage that is at least as comprehensive as the coverage offered through health insurance exchanges -- new competitive, private health insurance marketplaces
• Make coverage at least as affordable as it would have been through the exchanges
•  Provide coverage to at least as many residents as otherwise would have been covered under PPACA
• Do not increase the federal deficit

States could use a variety of strategies to innovate through a waiver, provided they meet the above requirements. For example, they could develop a new system for providing tax credits, which links small business tax credits to the tax credits for moderate-income families. Or they could change the benefit levels or add new benefit levels for health plans offered in the exchanges, providing consumers and employers even more choices.

• The proposed rule says that an application must include the following:
• The provisions of the law that the state seeks to waive
• An explanation of how the proposed waiver will meet the goals related to coverage expansion affordability, comprehensiveness of coverage and costs
• A budget plan that does not increase the federal deficit, with supporting information
• Actuarial certifications and economic analysis to support the state's estimates that the proposed waiver will comply with the comprehensive coverage requirement, the affordability requirement and the scope of coverage requirement; and
• Analyses of the waiver's potential impact on provisions that are not waived, access to health care services when residents leave the state, and deterring waste, fraud and abuse
• Under the proposed rule, states with waivers submit quarterly and annual reports. They track measures in the four key areas: affordability, comprehensiveness of coverage, the number of people covered and impact on the federal deficit.

A summary of the proposed rules is available at http://www.healthcare.gov/news/factsheets/stateinnovation03102011a.html.

EBSA Provides Additional Grace Period for Health Care Reform's Claims Appeals Regulations
The Department of Labor's Employee Benefit Security Administration has extended and modified an enforcement grace period for some of the new standards required under the Patient Protection and Affordable Act (ACA) for health care internal claims and appeals and external reviews until plan years beginning on or after Jan. 1, 2012. Technical Release 2011-1 is intended to give group health plans more time to change plan or policy procedures and to modify computer systems in order to comply with the new interim final claims regulations issued on July 23, 2010, and Aug. 23, 2010, to implement Public Health Service Act (PHSA) Sec. 2719. The Department of Health and Human Services, the Internal Revenue Service, and EBSA jointly issued these 2010 regulations, and they intend to issue amendments to these rules soon.

Specifically, this Technical Release 2011-01 extends the enforcement grace period until plan years beginning on or after Jan. 1, 2012 with respect to the following:

• A plan or issuer must notify a claimant of a benefit determination (whether adverse or not) with respect to a claim involving urgent care as soon as possible, taking into account the medical exigencies, but not later than 24 hours after the receipt of the claim by the plan or issuer
• Notices must be provided in a culturally and linguistically appropriate manner, as required by the statute, and as set forth in the 2010 interim final regulations)
• If a plan or issuer fails to strictly adhere to all the requirements of the 2010 interim final regulations, the claimant is deemed to have exhausted the plan's or issuer's internal claims and appeals process, regardless of whether the plan or issuer asserts that it has substantially complied, and the claimant may initiate any available external review process or remedies available under ERISA or under state law

During the grace period, the Department of Labor and the IRS will not take any enforcement action against a group health plan, and HHS will not take any enforcement action against a self-funded non-federal governmental health plan, with respect to these provisions. Similarly, HHS is encouraging states to provide similar grace periods with respect to insurers, and HHS will not cite a state for failing to substantially enforce PHS Act section 2719(a) in these situations.

Will Congress Repeal Health Care Reform?

Attempts to Repeal the Health Care Reform Law
In January, the House passed repeal legislation by a vote of 245 to 189, with three Democrats crossing the aisle to vote with their Republican colleagues. The Senate also voted on repeal in February. However, that attempt was defeated, with Senators voting along party lines. Sixty votes were required for repeal; the measure failed 47 to 51.

It is possible that further attempts to repeal the health care reform law will be introduced in Congress.

Potential Health Care Reform Changes
Because full repeal of the health care reform law will be difficult, Republicans have indicated that they will use other strategies to prevent the law from being fully implemented in its current form. These strategies include replacing, rather than repealing, parts of the law, or repealing the law “piece by piece,” using approaches like blocking funding or regulations.

Provisions of the law that may be revised or repealed include:

• The requirement for businesses to report payments in excess of $600 on a Form 1099;
• The employer responsibility provisions, which provide that employers can face penalties for not providing a certain level of health coverage to employees.
• The individual responsibility requirement, which imposes penalties on individuals who do not obtain coverage;
• The Cadillac Plan tax on high-cost, employer-sponsored health plans;
• The tax on manufacturers of medical devices; and
• Cuts to Medicare.

Republicans have also suggested changes to the planned health insurance exchanges, which will take effect in 2014, to give states more power in designing the exchanges. However, members of the GOP have also said that they may want to keep some of the law’s provisions that are popular with consumers. Some experts have warned that keeping some parts of the law while repealing others may not be practical.

Democrats are standing behind the health care package and some exit polls show that the public is split on whether health care reform should be repealed. However, party leaders, such as President Obama and Senate Majority Leader Harry Reid (D-Nevada) have indicated a willingness to revise some portions of the law, especially if changes will bring faster and more effective reform to the health care system.

What’s Next?

Despite the various attempts to repeal the law, and potential future changes, the health care reform law as we know it is the law. Employers and health plan sponsors should make sure they are implementing the requirements as they become effective. If any changes are made to parts of the law that have already taken effect, there will likely be time for employers and plan sponsors to put changes into place.