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HHS releases 3 health care regulations, CBO updates SGR, CMS releases EHB State Medicaid Director letter and Benchmark guide

Posted on November 20, 2012 | No Comments

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Today, the U.S. Department of Health and Human Services (HHS) released the essential health benefits proposed rule, the health insurance market rule (which includes standards for premium rates and guaranteed availability and renewability), and a notice of proposed rulemaking (NPRM) on the wellness program.

Also out today is the Congressional Budget Office’s (CBO’s) update to the sustainable growth rate (SGR) formula, pertaining to the Centers for Medicare & Medicaid Services’s (CMS’s) physician payment rule released earlier this month.

CMS’s Center for Medicaid and CHIP Services released a letter to the State Medicaid directors today, which concerns essential health benefits in the Medicaid program.

Finally, CMS released a guide for reviewing proposed State essential health benefits benchmark plans.

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The Congressional Budget Office (CBO) recently updated their cost estimate for the Affordable Care Act (ACA). The new estimate states that the ACA will cost $1.383 trillion over the next ten years, which is $104 billion less than the February estimate. The CBO states that the readjustment can be attributed to administrative changes, changes in the law, judicial decisions, new data (such as projected healthcare expenditures for both the private and public sectors), and changes in modeling.
The Congressional Budget Office (CBO) score of HR 4015 found that repealing the Affordable Care Act's (ACA) individual mandate would save the government $169.5 billion over the next 10 years. Doing so would also result in 13 million fewer individuals having insurance by 2018, and those with insurance would pay more for their coverage. Lifting the individual mandate is the current pay-for for the House bill to reform the Sustainable Growth Rate (SGR). The savings from removing the mandate would arise from the decreased issuance of health insurance subsidies, or premium tax credits.
The Bipartisan Policy Center (BPC) recently released a new national health care cost-containment strategy. Funded in part by the Robert Wood Johnson Foundation, A Bipartisan Rx for Patient-Centered Care and System-Wide Cost Containment, proposes strategies that would save $560 billion in health care expenditures over the next 10 years. BPC's main source for cost-containment is the alteration of the Sustainable Growth Rate (SGR) formula, which accounts for nearly $300 billion of the proposed savings. Other cost-containment measures prescribed included the expansion of Medicare networks, a concept very similar to Accountable Care Organizations, and instituting the competitive bidding practice among Medicare Advantage plans.
The Congressional Research Service (CRS) released a memorandum stating that the Centers for Medicare and Medicaid Services (CMS) may assume that Congress will amend the sustainable growth rate (SGR) in order to prevent doctors from taking massive cuts in their Medicare reimbursements. CMS claimed that they did not possess the legal authority to make that assumption, and therefore cited the SGR as a reason to propose a 2.3% cut to Medicare Advantage (MA). As a result, legislators are hoping that CMS will use this authority to reduce their proposed cuts to MA rates in light of the savings from the pending "doc fix" on SGR. UPDATE: In response to the findings from CRS, CMS released a report stating they will assume a "doc fix" from Congress and therefore increase MA payments by 3.3% for next year.
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