The departments of Health and Human Services (HHS), Labor and the Treasury issued interim final regulations on July 14, 2010 requiring health plans beginning on or after September 23, 2010 to cover certain recommended preventive services.  Under the new regulations, such health plans may not charge patients copayments, coinsurance or deductibles for these services when they are delivered by a network provider.  Covered preventive services include—

• evidence-based items or services with an A or B rating in the U.S. Preventive Services Task Force recommendations with respect to the individual involved
• immunizations for routine use in children, adolescents and adults with a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved
• evidence-informed preventive care and screenings for infants, children and adolescents that are included in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA)
• Evidence-informed preventive care and screening for women included in the comprehensive guidelines supported by HRSA (not otherwise addressed by the recommendations of the Task Force). HHS expects to issue these guidelines by August 2011.

Click here for a complete list of recommendations and guidelines that are required to be covered under the new regulations.  Click here to view the new regulations.

A major theme in the Patient Protection and Affordable Care Act (PPACA) of 2010 (Pub. L. No. 111-148)[1] is combating fraud and abuse in the health care industry.  One key provision in PPACA is destined to have a significant impact on the False Claims Act (FCA),[2] which has long been a highly effective tool used by the government to prosecute suspected health care fraud.  Specifically, the massive new health care reform law includes a wholesale rewrite of the public disclosure provision of the statute—a provision that is often invoked by FCA defendants seeking to dismiss qui tam relators.  Although the amendment is not as radical as some legislative proposals introduced in Congress over the past two years, it significantly narrows the circumstances in which defendants can obtain dismissal of qui tam actions that are based on public disclosures.

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On July 2, 2010, CMS issued for display its Proposed Rule entitled “Medicare Program; Proposed Changes to the Hospital Outpatient Prospective Payment System and CY 2011 Payment Rates.”  This Proposed Rule, which is expected to be published in the Federal Register on August 3, 2010, would implement key provisions of the health reform legislation that waive Medicare beneficiary cost-sharing for preventive services, reduce the 2011 hospital fee schedule update payment by 0.25 percentage points, and revise certain physician self-referral and graduate medical education program policies as well as proposing updates to payments and policies for certain outpatient department services.  Comments will be accepted by CMS through August 31st, with the Final Rule expected out on November 1st.  The policies contained in the rules are applicable for services furnished on or after January 1, 2011.

The rule can be found at http://www.ofr.gov/OFRUpload/OFRData/2010-16448_PI.pdf

The Centers for Medicare & Medicaid Services (CMS) will delay its requirement that Medicare contractors automatically reject claims for health services, durable medical equipment, prosthetics, orthotics, and supplies, and certain other items and services based on orders or certifications from physicians and other eligible professionals who are not enrolled in the Medicare Provider Enrollment, Chain and Ownership System (PECOS).  The Patient Protection and Affordable Care Act  permits only Medicare-enrolled providers to certify or order such items and services under Medicare Part B.  CMS issued an Interim Final Rule in May 2010 that would have allowed Medicare contractors to automatically reject, starting on July 6, 2010, claims based on orders from providers not enrolled in PECOS.  Due to providers’ reports of problems with enrollment, however, CMS will delay the automatic rejection procedures.  Other provisions of the regulations will go into effect on July 6, 2010.  Providers should not see any change in the processing of submitted claims until the automatic rejection procedures are operational.

Click here for the CMS Press Release.

The U.S. Department of Health and Human Services (HHS) has opened enrollment in the new Pre-existing Condition Insurance Plan (PCIP) that offers coverage for individuals who have been uninsured for at least six months, have been unable to get health coverage because of a health condition, and are U.S. citizens or legal residents.  Twenty-one states have elected to have HHS administer their PCIP and 29 states and the District of Columbia will run their own programs.  Starting July 1, 2010, the PCIP will be open to applicants in the 21 states where HHS is operating the program.  Other states will begin enrollment by the end of the summer.  The PCIP will end in 2014, when insurers will no longer be able to discriminate against adults with pre-existing conditions. Five billion dollars are available under the Patient Protection and Affordable Care Act to support the PCIP in every state, with no state matching requirement.  The Act establishes general eligibility for the PCIP, but states can determine the costs, benefits, and rules for determining pre-existing conditions for their programs.   

Additional information is available through the new HHS health care website.

The National Prevention, Health Promotion and Public Health Council, a new entity established by the Patient Protection and Affordable Care Act within the Department of Health and Humans Services, issued its first annual status report (http://www.hhs.gov/news/reports/nationalprevention2010report.pdf) on July 1, 2010.  The Council is tasked with coordinating prevention activities across federal agencies and establishing a National Prevention and Health Promotion Strategy.  The report outlines some of the key areas that will be addressed in the National Strategy, including the current five leading causes of death (heart disease, cancer, stroke, chronic lower respiratory disease and unintentional injury) as well as substance abuse, domestic violence and behavioral and mental health.  The strategy intends to incorporate a community health approach to prevention activities and will coordinate activities in both the public and private sectors.  In developing the National Strategy, the Council will also hear input from an Advisory Group comprised of 25 non-federal members appointed by the President.  The Council is only one of several new prevention priorities included in the Patient Protection and Affordable Care Act along with Medicare coverage for annual wellness visits and eliminating cost sharing for recommended preventive services, which hope to place a new focus on prevention and wellness within the health care system.

The Government Accountability Office (GAO) has appointed 15 members to the Advisory Board for the Consumer Operated and Oriented Plan (CO-OP) Program.  The CO-OP Program, established by the Secretary of Health and Human Services, will make grants and loans to create nonprofit, member-run health insurers serving the individual and small-group markets.  All grants and loans must be awarded by July 1, 2013.  More information about the appointees and the Advisory Board are available at http://www.gao.gov/hcac/co_op.html.

A state insurance decision out of Massachusetts is potentially very informative for how implementation of healthcare reform initiatives will play out.   Strong nationwide debate is underway regarding the authorization to regulate health plan rates and medical loss ratios pursuant to the Patient Protection and Affordable Care Act.  Small group insurance rate regulation has played a significant role in that debate and gave rise to the controversy addressed in the June 24 decision by the appeals board in the Massachusetts Division of Insurance.  The appeals board focused on provider market power as a driver of increasing costs and found the health plan’s efforts to contain provider costs and utilization reasonable, along the road to deciding that the plan’s proposed small group rate increases were not unreasonable.  As healthcare reform moves forward, similar issues may well arise in other states or in reviews undertaken by federal regulators and the Massachusetts decision could prove to be an important precedent.

Please click here to see the decision.

On June 25, 2010, CMS issued for display its Proposed Rule entitled “Medicare Program: Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011.”  This Proposed Rule, which is expected to be published in the Federal Register on July 13, 2010, would implement key provisions of the health reform legislation that expand preventive services for Medicare beneficiaries, improve payments for primary care services, and promote access to health care services in rural areas.  These rules are applicable for services furnished on or after January 1, 2011. Stay tuned for our posting when the official Proposed Rule is published, which will include additional information on the comment period.

The departments of the Treasury, Labor and Health and Human Services have released an Interim Final Rule that implements health care reform provisions that intend to provide consumer protections against certain insurance policies.  The regulation, nicknamed the ‘Patient’s Bill of Rights’, implements reforms that restrict the use of annual limits and prohibit insurers from rescinding coverage, imposing lifetime limits and excluding children due to pre-existing conditions.  The regulation also protects the right for individuals to choose their primary care doctor and removes barriers to emergency services.  

Link to the Interim Final Rule:  http://www.federalregister.gov/OFRUpload/OFRData/2010-15278_PI.pdf