Category — Department of Health and Human Services

Section 4205 of the Patient Protection and Affordable Care Act of 2010 (PPACA) requires chain restaurants and vending machine operators with 20 or more locations or machines to provide calorie and other nutrition information to consumers.  Although FDA’s statutory deadline to publish the proposed rules was March 23, 2011 (within one year of PPACA’s enactment), the rules, entitled Food Labeling; Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments and Food Labeling; Calorie Labeling of Articles of Food in Vending Machines were published in the April 6, 2011 Federal Register and the public is invited to submit comments by July 5, 2011.

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule to implement the Medicare Shared Savings Program and Accountable Care Organization (ACO) provisions of the Patient Protection and Affordable Care Act (PPACA).  See Medicare Shared Savings Program: Accountable Care Organizations and Medicare Program, 76 Fed. Reg. 19,528 (proposed Apr. 7, 2011) (to be codified at 42 C.F.R. pt. 425).  This update provides an overview of how the proposed rule’s data sharing provisions implicate the Health Insurance Portability and Accountability Act (HIPAA) and its implementing regulations.  Comments on the rulemaking must be submitted to CMS by June 6, 2011. [Read more →]

Today, April 7, 2011, the Centers for Medicare & Medicaid Services (CMS) published the proposed rule on the Medicare Shared Savings Program/Accountable Care Organizations (ACOs).  In addition, CMS and the Office of Inspector General published the notice with comment period regarding waiver designs in connection with the Medicare Shared Savings Program.  Both documents are available in today’s Federal Register.

An analysis of the Medicare Shared Savings Program/ACO proposed rule can be found here and for more information on the ACO fraud and abuse waivers notice, please click here.

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS or the “Agency”), along with several other federal agencies, released a long-awaited proposed rule and other notices that would implement the Medicare Shared Savings Program and Accountable Care Organization (ACO) provisions of the Patient Protection and Affordable Care Act (PPACA). The proposed ACO regulations and policies are contained in four separate documents: (1) a CMS proposed rule establishing ACOs; (2) a Department of Health and Human Services Office of Inspector General/CMS notice with comment period proposing waivers for the Anti-Kickback Statute, the Physician Self-Referral Law (the “Stark Law”) and certain provisions of the Civil Monetary Penalties law; (3) a Federal Trade Commission/Department of Justice proposed statement of antitrust enforcement policy for ACOs; and (4) an Internal Revenue Service request for comments addressing guidance for tax-exempt organizations participating in the program. This health reform update gives a preliminary analysis of CMS’s proposed rule. The other three publications are reviewed in separate updates prepared by members of Akin Gump’s ACO team.

Although the CMS proposed rule has only been issued in draft form, publication in the Federal Register is expected on or around April 7, 2011. Comments on the rulemaking must be submitted to CMS within 60 days of publication.

Health industry stakeholders highly anticipated the release of this rule and early CMS estimates indicate that 1.5 to 4 million beneficiaries would be assigned to ACOs in the first three years of the program (as compared to 45 million beneficiaries who have traditional fee-for-service (FFS) Medicare coverage). This estimate reflects only those enrolled in the Medicare Shared Savings Program; additional individuals are anticipated to be enrolled in commercial and Medicaid ACOs. In press conferences and releases surrounding the announcement of the proposed rule, CMS appears confident that the ACO Shared Savings Program will incent providers to furnish coordinated and efficient care and ultimately lower costs throughout the health care delivery system. Summarized below are some noteworthy takeaways from the ACO proposed rule.

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On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule establishing accountable care organizations (ACOs) under the Medicare Shared Savings Program pursuant to provisions of the Patient Protection and Affordable Care Act (PPACA). CMS and the Department of Health and Human Services (HHS) Office of Inspector General (OIG) also jointly released a notice and solicitation of public comments (the Notice) regarding the waiver of certain federal fraud and abuse laws in connection with the Medicare Shared Savings Program.

Anticipating that the Medicare Shared Savings Program would potentially implicate fraud and abuse laws, Congress included a provision in the PPACA that grants the Secretary of HHS the authority to waive the application of certain fraud and abuse laws “as may be necessary” to implement the program. [1]   The fraud and abuse laws addressed by the proposed waivers are the Physician Self-Referral Law (the “Stark Law”),[2] the federal Anti-Kickback Statute,[3] and a provision of the Civil Monetary Penalties law (CMP Law), the so-called Gainsharing CMP, that prohibits a hospital from making a payment directly or indirectly to induce a physician to reduce or limit services to Medicare and Medicaid beneficiaries.[4] Industry stakeholders have expressed concerns that without such waivers the establishment and operation of ACOs would necessarily involve the creation of financial relationships between physicians and hospitals and other individuals and entities that would otherwise be restricted or prohibited by these laws.

The Notice sets forth three proposed waivers and solicits comments on a number of related issues. To be eligible for waivers from the fraud and abuse laws, an ACO must enter into a formal agreement with CMS to participate in the Medicare Shared Savings Program and the ACO, ACO participants and ACO providers/suppliers would be required to comply with the various ACO requirements found in Section 1899 of the Social Security Act[5] (as promulgated by the PPACA) and the ACO implementing regulations, including the requirements regarding transparency, reporting and monitoring.

The requirements for the proposed waivers are set forth below—

Today, several federal agencies issued proposed rules or notices regarding Accountable Care Organizations (ACOs)— 

• CMS issued a proposed rule that establishes ACOs under the Medicare Shared Savings Program.
• HHS OIG and CMS jointly issued a notice with comment period addressing proposals for waivers for the anti-kickback statute, the physician self-referral law and certain provisions of the civil monetary penalty law, as related to the Shared Savings Program.  They also issued a solicitation for comments on additional waivers for program as well as for separate waiver authority for the Center for Medicare and Medicaid Innovation.
• FTC and DOJ jointly issued a proposed antitrust policy statement for ACOs participating in the Shared Savings Program.
• The IRS issued a request for comments addressing guidance for tax-exempt organizations participating in the Shared Savings Program through ACOs. 

On March 10, the Departments of Health and Human Services and the Treasury issued a proposed regulation implementing the Patient Protection and Affordable Care Act’s (PPACA) provision that allows states to seek waivers of the law’s requirements relating to state-based insurance exchanges, tax credits, the individual and employer mandate and essential health benefits. The proposed rule asks for public input on how states can apply for an “Innovation Waiver,” as well as how the Administration will monitor and evaluate such waivers. In order to apply for a waiver, states must ensure that the coverage will be at least as comprehensive and affordable as the coverage provided under PPACA and must cover the same number of residences as would have been covered under the law. Further, the state plan cannot increase the federal deficit. Currently, the PPACA allows Innovation Waivers to be implemented in 2017. However, President Obama has supported bi-partisan legislation that would allow states to apply for waivers by 2014. Innovation Waivers are provided for up to five years, with the option of renewal.

The Department of Health and Human Services (HHS) issued a proposed rule on February 9, 2011 that would extend the Patient Protection and Affordable Care Act’s (PPACA’s) consumer protections to students who obtain insurance through their college or university health plans.  These consumer protections include prohibitions on lifetime coverage limits, rescission of coverage because of unintentional mistakes on insurance applications, and pre-existing coverage exclusions for students under age 19.  Student health plans may impose annual dollar limits on essential benefits of no less than $100,000 for policy years beginning before September 23, 2012 but must comply with PPACA’s prohibition on annual dollar limits on essential benefits for policy years beginning after that date.  HHS requested comments on how PPACA provisions regarding choice of medical provider and medical loss ratios might apply to student health plans.

On January 31, 2011, federal Judge Roger Vinson of the Northern District of Florida issued his widely anticipated ruling in the litigation brought by the attorneys general or governors of 26 states, along with other plaintiffs, challenging the 2010 health care reform legislation.  Judge Vinson held unconstitutional the individual mandate provision.  That provision, section 1501 of the Patient Protection and Affordable Care Act, requires everyone (with limited exceptions) to purchase federally approved health insurance, or pay a monetary penalty, beginning in 2014.

Judge Vinson’s ruling brings to two the number of district courts that have held the individual mandate unconstitutional.  (Two other district courts have held the law constitutional).  Unlike Judge Henry E. Hudson of the U.S. District Court for the Eastern District of Virginia, however, whose decision invalidating the individual mandate was issued on December 13, 2010, Judge Vinson found that the individual mandate could not be severed from the Act’s remaining provisions and, thus, declared the entire health care reform law unconstitutional.  Judge Vinson reasoned that there are “simply too many moving parts in the Act and too many provisions dependent (directly and indirectly) on the individual mandate … for me to try and dissect out the proper from the improper, and the able-to-stand-alone from the unable-to-stand-alone.”[1]  To attempt such a task would be “tantamount to rewriting a statute in an attempt to salvage it;”[2] better to leave to “the watchmaker” the task of redesigning and reconstructing the “defectively designed watch.”[3]  Thus, although Judge Vinson upheld the Act’s expansions of the Medicaid program against constitutional challenge by the states, in the end his opinion holds that those provisions must fall—along with the entire Act—because, in the court’s view, they are not severable from the individual mandate. [Read more →]

The Department of Health and Human Services, the Department of Labor and the Internal Revenue Service issued a Request for Information (RFI) on December 28, 2010 on how group health plans and health insurance providers can deliver high-quality preventive care services cost-effectively under the Patient Protection and Affordable Care Act.  The agencies are interested particularly in suggestions on how welfare benefit plans can encourage use of the most beneficial preventive services and discourage use of the least beneficial services.  Public comments must be submitted before February 28, 2011.