HHS RELEASES PROPOSED RULES TO IMPLEMENT PPACA REFORMS

On November 20, the U.S. Department of Health and Human Services (HHS) issued three proposed rules to implement core provisions of the Patient Protection and Affordable Care Act (PPACA). All of the proposed rules were published in the Federal Register on November 26.

The first proposed rule prohibits health insurance companies from discriminating against individuals who have a pre-existing or chronic condition in plan years starting on or after January 1, 2014. Under the rule, insurers will be permitted to determine premiums only based on age, tobacco use, family size, and geography, and may not refuse coverage or charge higher premiums to any U.S. citizen because of a pre-existing condition or based on gender. Public comments on the rule will be accepted through December 26. HHS issued a fact sheet regarding the rule.

The second proposed rule outlines policies and standards for coverage of essential health benefits (“EHB”), and proposes a timeline for qualified health plans to be accredited in “federally facilitated” health insurance exchanges (i.e., exchanges that are not operated entirely by a state). EHB must include items and services within 10 general categories: ambulatory services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. The rule allows states significant flexibility in determining how EHBs are defined. Public comments on the rule will be accepted through December 26. HHS issued a fact sheet about the rule.

The third proposed rule provides incentives for wellness programs in group health plans for plan years starting on or after January 1, 2014. Issued in conjunction with the Treasury and Labor Departments, the rule increases the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan from 20% to 30% of the cost of coverage, and increases the maximum permissible reward for wellness programs designed to prevent or reduce tobacco use to to 50% of the cost of coverage. Public comments on the rule will be accepted by the Department of Labor through January 25, 2013. HHS issued a fact sheet regarding the rule.

NUMBER OF MEDICARE ACOS EXPECTED TO DOUBLE

On November 13, at a conference in Washington sponsored by the National Business Coalition on Health, Richard Gilfillan, the head of the Center for Medicare and Medicaid Innovation, predicted that the number of accountable care organizations (“ACOs”) contracted with Medicare might double when the third round of contracts is announced in January. At present, 153 ACOs have contracted with Medicare to provide coordinated care to Medicare beneficiaries under the Medicare Shared Savings Program, established under PPACA. Many other ACO-like organizations have been formed, often in conjunction with health insurance companies, to coordinate care to non-Medicare patient populations. A further discussion of ACOs may be found here.