On February 10, 2014, the U.S. Department of the Treasury and the Internal Revenue Service issued final regulations implementing the Affordable Care Act’s employer shared responsibility provisions. Significantly, under the new rule, employers with 50 to 99 employees will be given until 2016 to comply with the Affordable Care Act’s insurance mandate. The regulations also provide a phase-in process for larger employers. To avoid penalties for failing to provide health coverage, companies with 100 or more employers will have to offer coverage to 70 percent of their employees in 2015 and 95 percent in 2016 and beyond.

The regulations will be published in the February 12, 2014 Federal Register. Please look for our in depth analysis of this new rule in the coming weeks.

House and Senate Committees Announce Legislation to End the "Doc Fix"

On February 6, 2014, three congressional committees announced a bipartisan bill that would overhaul Medicare’s sustainable growth rate (SGR) formula. The SGR formula provides for an annual cut in physician payments, which is typically suspended each year by Congress (often referred to as the “doc fix”). The legislation, known as the SGR Repeal and Medicare Provider Payment Modernization Act, would replace the current Medicare reimbursement system with a model that would attempt to align physician payments medical outcomes. The payment model would be phased in over the next five years (2014 – 2018), with a 0.5 percent increase in payments each year. The 2018 rate would remain in place through 2023. In addition, beginning in 2018, physicians would be able to participate in a new Merit-Based Incentive Payment System (MIPS), which would include bonuses based on how well a physician meets certain quality measures.

The current “doc fix” is scheduled to end on March 31, 2014. If Congress does not approve legislation to replace to SGR, physician payments will be cut by approximately 24 percent.

OIG Releases 2014 Work Plan

On January 31, 2014, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) released its annual Work Plan. The Plan outlines OIG’s primary objectives, initiatives, and anticipated activities for the upcoming year. The following are some examples of the new programs highlighted in this year’s Plan:

  • new inpatient admission criteria;
  • billing for power mobility devices;
  • pharmaceutical compounding; and
  • hospice services in assisted living facilities.