CMS Finalizes Rules on Reinsurance, Risk Corridors, and Risk Adjustments

The Centers for Medicare and Medicaid Services (CMS) issued final rules on March 23 on reinsurance, risk corridors, and risk adjustments to mitigate potential financial risks to health insurance plans under health care reform and to alleviate insurers’ needs to build large risk premiums into their rates. The rules are based on section 1341 of the Affordable Care Act (ACA) which requires each state to establish a reinsurance program to help stabilize premiums in the individual health insurance market for the first three years of Exchange operations (2014-2016); section 1342 of the ACA which requires CMS to implement a risk corridor program in the individual health insurance market and the small group health insurance market over the same three year period; and section 1343 of the ACA which requires states to create risk adjustment programs in the individual and small group markets over a longer period, offering adjustments to health insurance issuers that disproportionately serve high cost populations such as individuals with chronic conditions. If a state elects not to set up a section 1341 or a section 1343 program, CMS will do so for that state.


CMS Finalizes Medicaid/CHIP Eligibility Rules

The Centers for Medicare and Medicaid Services (CMS) issued final rules on March 23 on provisions of the Affordable Care Act (ACA) on determining eligibility under Medicaid and the Children’s Health Insurance Program (CHIP). The final rules are effective January 1, 2014 but have been issued in advance to give states time to complete planning and implementation of eligibility policy, operations, and systems changes. Proposed rules were published last August 17.


ACA Subjected to Historic 3-Days of Oral Arguments Before U.S. Supreme Court

On March 26 through 28, 2012, the Affordable Care Act (ACA), the Obama Administration's attempt to extend health care insurance coverage to millions of additional individuals, underwent an unprecedented three days of oral argument before the U.S. Supreme Court. On day one, the Court dealt with the question of whether the cases being appealed were ripe for judicial decision-making, since the provisions of the law dealing with the mandate to purchase insurance and the extensions of the Medicaid program are not scheduled to come into effect until 2014. Impressions from the Justices' questions during oral argument suggest that the Court will be inclined to address the issues during the current term because of the significance of the issues and the extreme public interest in bringing them to fruition.

CMS to Test Medicaid Emergency Psychiatric Demonstration

On Tuesday, March 13, the Centers for Medicare & Medicaid Services (CMS) announced a demonstration project that will test whether paying private psychiatric hospitals to provide emergency psychiatric treatment to Medicaid patients will enable the beneficiaries to get more timely and appropriate care. Currently, federal Medicaid law does not allow payment to private psychiatric hospitals because of historical concerns that states would warehouse those patients in large facilities. CMS will provide up to $75 million under the demonstration program, funded by the Affordable Care Act, to the following 11 states: Alabama, California, Connecticut, Illinois, Maine, Maryland, Missouri, North Carolina, Rhode Island, Washington, West Virginia, and the District of Columbia.


HHS Finalizes Rules on Health Insurance Exchanges

The U.S. Department of Health and Human Services (HHS) issued on March 12 a draft copy of final rules on state health insurance exchanges under the Affordable Care Act (ACA). The final rules are scheduled to be published officially in the Federal Register on March 27, to be effective 60 days later. HHS may consider additional comments for up to 45 days after publication on nine “interim final” provisions within the rules. [More]

OSERS Proposes to Increase Data Collection Requirements for IDEA Part B Funding

On March 6, 2012 the U.S. Department of Education (ED), Office of Special Education and Rehabilitative Services (OSERS) published, in the Federal Register, a proposal to increase the data reporting requirements that state education agencies must meet to receive funding under Part B of the Individuals with Disabilities Education Act (IDEA). Under IDEA’s requirement for maintenance of state financial support (MFS), also called maintenance of effort (MOE), a state may not reduce the amount of state financial support for special education and related services below the amount of the state’s support for the preceding year. [More]

Obama’s FY 2013 Budget for Human Services

The Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies held a hearing this week with U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius to discuss the President’s budget recommendations for her agency in FY 2013. The President’s 2013 Budget for HHS includes a reduction in discretionary funding for ongoing activities and extensive legislative proposals saving. [More]

Oregon Enacts Care Coordination Legislation

Governor John Kitzhaber signed legislation (S.B. 1580) on March 2 authorizing additional steps to implement regional coordinated care organizations (CCOs) throughout Oregon for 600,000 Medicaid recipients under the Oregon Health Plan. The new legislation builds on a state health care transformation law (H.B. 3650) enacted in July 2011. Oregon seeks to promote the use of preventive services and better care management, especially with respect to individuals with high cost, chronic conditions that account for up to 80 percent of Medicaid expenditures. Oregon seeks to achieve savings mainly through reductions in avoidable emergency room visits and inpatient admissions to hospitals for these high-risk, vulnerable persons. The State initiated appropriate steps following the July 2011 law to develop CCO participation criteria; global budgeting methodologies for CCOs; outcomes, quality, and efficiency metrics to evaluate CCO performance; and Medicare-Medicaid integration initiatives for dually entitled recipients served through the CCOs. S.B. 1580 now enables Oregon to move forward with an application process for emerging CCOs across the State and to obtain federal approval to permit more flexible use of state Medicaid funds. [More]

OMB Proposes to Streamline Requirements

The Executive Office of the President, Office of Management and Budget (OMB), outlined proposed reform ideas pertaining to OMB circulars on grants to state, local, and tribal governments, in a Federal Register notice on February 28. The issuance follows Executive Orders signed by President Obama on eliminating OMB requirements that are outmoded, ineffective, or excessively burdensome; strengthening program integrity; and simplifying financial requirements under a wide range of grant programs. The reform ideas pertain to audit requirements (OMB Circular A-50 and A-133), cost finding and cost allocation principles (A-21, A-87, and A-122), and administrative requirements (A-89, A-102, and A-110). Reform ideas on cost finding and cost allocation include consolidating all cost principles into a single OMB issuance (with limited variations by type of entity), considering alternatives to time and effort reporting for salaries and wages, and adopting flat rates instead of negotiated rates for indirect costs. OMB is requesting input from state governments and others on its reform ideas, additional reform ideas, and on relevant questions, such as whether the reform ideas would actually reduce compliance burdens, by March 29. OMB expects to use such public input to begin promulgating more specific proposed revisions to OMB circulars later this year. [More]

New Data Highlight Inequities in K-12 Education

On March 6, 2012 the U.S. Department of Education (ED), Office of Civil Rights (OCR) released the results of a first-of-its kind Civil Rights Data Collection (CRDC) that reveals serious educational inequities in the nation’s K-12 schools. In a press release, ED acknowledged that the CRDC reflects that African-American and Hispanic students, compared to their white peers, receive harsher discipline, have less access to rigorous high school curricula, and are taught by lower-paid and less experienced teachers. Based on school district self-reported data for the 2009-10 school year, the CRDC exposes inequities with regard to student preparedness, grade retention, seclusion and restraints, discipline, and teacher-equity. More than 72,000 schools serving 85% of the nation’s students participated in the CRDC. [More]