As summer rolls to a close, the agencies continue to make announcements and roll out additional regulations. The Department of Health and Human Services (HHS) introduced the new CEO of, awarded grants to 147 health centers across the country, and released new rules regarding nonprofit religious organizations and the Affordable Care Act (ACA) contraception mandate. The Centers for Medicare and Medicaid Services (CMS) issued a final rule that will enable consumers in the federal exchange to automatically re-enroll in coverage for 2015, made announcements regarding ICD-10 testing and responding to reports on their budget and recovery audit contractors. In Pennsylvania, Governor Tom Corbett announced that CMS approved a modified version of Pennsylvania’s alternative Medicaid expansion plan, Healthy PA. Finally, the U.S. Court of Appeals for the District of Columbia decided to rehear the Halbig v. Burwell case.


On August 27, the Congressional Budget Office (CBO) released a budget report that updated its April forecast for federal government spending for Medicare. According to the report, Medicare spending over the next 10 years will be $62 billion less than the CBO had predicted in April. According to CBO, an improved economic outlook overall is the main factor in the updated forecast. Federal spending on health care programs is still expected to grow from 4.9 percent of GDP in 2015 to 5.9 percent by 2024.

On August 26, Congressman Elijah Cummings (D-Md.), the lead Democrat on the House Oversight Committee, wrote a letter to CMS Administrator Marilyn Tavenner regarding the rating system used for nursing home facilities. In his letter, Congressman Cummings expressed concern that nursing homes are “gaming” the rating system through which CMS relies heavily on self-reporting by the nursing homes themselves. Congressman Cummings is requesting that CMS prepare a briefing on the agency’s nursing home rating system and ensure oversight of the program.


On August 29, CMS finalized its rule on electronic health records (EHR), which had been proposed in May. The rule gives providers more time and flexibility to meet goals defined by the 2009 HITECH Act. Under the rule, physicians and hospitals can continue to utilize EHR systems that were certified under the 2011 program and still receive meaningful use incentive payments in the 2014 reporting period. Providers will not be required to use 2014-certified EHR software until 2015. The final rule extends this “stage 2” of the EHR program through 2016 and begins “stage 3” in 2017.

On August 29, CMS announced that it would offer an administrative agreement mechanism to acute care and critical access hospitals that agree to withdraw pending appeals regarding short-term inpatient hospital claims with admission dates prior to October 1, 2013. The agreement is being offered in order to alleviate the number of appeals currently in the Medicare system. Under the agreement, CMS would make partial payments equal to 68 percent of the “net allowable amount” that was under appeal. Hospitals have until October 31, 2014 to decide if they wish to participate in the settlement, and CMS said that payments will be made within 60 days of when an agreement is reached.

On September 2, CMS finalized its proposed rule regarding re-enrollment in ACA plans for 2015. Under the final rule, individuals who already have coverage in the federal exchange will receive notices that will explain the auto-enrollment process, how individuals can learn if they qualify for additional premium assistance, and how they can shop for other plans available through the federal exchange. If these individuals take no action, they will be automatically re-enrolled in the same coverage they had for 2014 and with the same level of subsidy.

A report released by the HHS Office of the Inspector General (OIG) found that one-third of CMS’s contracts were over budget as of February of 2014 and that many of its largest contracts were over budget. The OIG did not include any recommendations in the report, but noted that it will continue to examine the agency’s contracting in future reports.

On August 25, HHS named Kevin Counihan as the new CEO of the federal ACA exchange website,, and director of the agency’s Center for Consumer Information and Insurance Oversight (CCIIO). Counihan is known for his management of Connecticut’s successful state-run exchange, Access Health CT, and prior to that was the architect of the Massachusetts state exchange that served as a model for the ACA.

On August 26, the Department of Health and Human Services (HHS) awarded $35.7 million to 147 health centers across the country. These grants will assist health centers in improving their patient-centered medical homes model through construction improvements and facility renovations. The awards will support 21 new constructions and 126 renovation projects in 44 states, the District of Columbia and Puerto Rico.

CMS announced that they have scheduled ICD-10 testing dates in advance of the ICD-10 coding compliance deadline of October 1, 2015. The testing weeks will take place November 17-21, March 2-6, and June 1-5.

On August 22, the Obama administration issued an interim final rule that makes it easier for religious nonprofits to be exempt from providing contraceptive coverage to their employees. The new rule would require nonprofits to notify HHS directly of their objection to providing contraception coverage as opposed to the previous process in which religious nonprofits were required to inform their insurance providers of their objection to such coverage. After HHS is notified of the objection, the agency and the Department of Labor, along with third party administrators, will ensure that contraception coverage is made available to the religious nonprofit’s employees. The response from religious nonprofits has been largely negative, with many claiming that the rule does not go far enough in addressing their concerns.


On September 4, the U.S. Court of Appeals for the District of Columbia has decided to rehear theHalbig v. Burwell case, which questions the legality of the federal government providing premium subsidies for individuals receiving health coverage through the federal exchange. In July, a three-judge panel of the court had ruled in this case that the premium subsidies could only be provided in state-run exchanges. Oral arguments for the rehearing of Halbig v. Burwell are scheduled for December.

On August 26, the Center for Medicare Advocacy filed a class action lawsuit against HHS in a Connecticut federal court claiming that the agency routinely violates the 90-day statutory limit for resolving Medicare claims appeals. According to the Center for Medicare Advocacy, the current wait time for administrative law judges to decide on these appeals is 489 days.

In a widely expected move, the state of Oregon sued Oracle America and five of its executives, alleging that they lied, breached contracts, and engaged in racketeering activity regarding the state’s exchange website, Cover Oregon. Oracle sued the state last month.


On August 28, Governor Tom Corbett announced that a modified version of Pennsylvania’s alternative Medicaid expansion plan, Healthy PA, was approved by CMS after months of negotiations. As many as 600,000 new enrollees could be eligible for federal subsidies to purchase private insurance in Pennsylvania as opposed to the traditional outright expansion of Medicaid in the state. The approved plan also includes components that encourage employment and require some cost sharing.

In a letter to CMS, Congressman Darrell Issa (R-Calif.), chairman of the House Oversight Committee, requested that the agency recover improper Medicaid payments made to the state of New York. According to the letter, Issa and other congressional members are concerned that decision-makers, some of whom are former health care lobbyists, in New York are misusing the $8 billion that the state is supposed to be using to restructure its Medicaid program. Although the letter does note that CMS has already refused to pay $1.26 billion in improper overpayments to New York, Chairman Issa urges CMS to recover as many improper Medicaid payments made to New York state as possible.