In an October 4 letter to Kathleen Sebelius, the Secretary of the Department of Health and Human Services (HHS), the leaders of the House Energy and Commerce Committee renewed their request that HHS respond promptly to all outstanding questions from states regarding implementation of the Patient Protection and Affordable Care Act (PPACA). Reps. Fred Upton (R-MI) and Joe Pitts (R-PA), the Chairman of the Committee and Chair of its health subcommittee, respectively, had sent a similar letter to the Centers for Medicare & Medicaid Services (CMS) on August 20.

The new letter requested that HHS respond by no later than October 15. The letter said that “In the months since the Supreme Court’s ruling that PPACA’s mandatory expansion of Medicaid was unconstitutional, governors and legislatures have been left to navigate alone the regulatory maze created by the absence of guidance from your Department. Questions from States have been answered with vague and often dismissive responses, creating regulatory uncertainty that has crippled the ability of states and health providers to plan for the future.”

In July, the Republican Governors Association and the National Association of Medicaid Directors sent separate letters to HHS with more than 50 specific questions regarding PPACA’s mandated state healthcare exchanges and expansion of the Medicaid program. HHS and CMS have answered some, but not all, of the questions, and officials have stated that further guidance will be released before the exchanges and Medicaid expansion go into effect in January 2014.


On September 27, HHS announced $224 million in new grants to five states and the District of Columbia to fund development of state insurance exchanges as required by PPACA. The largest grant was a multi-year $72.9 million “Level Two Exchange Establishment Grant” to DC, while the five state grants were one-year “Level One” grants. Level One grants are issued to states to begin building exchanges, while Level Two grants are issued to states that are further along in the process.

The new grant recipients, in addition to DC, are Arkansas, Colorado, Kentucky, Massachusetts and Minnesota. All but Arkansas have notified HHS that they intend to operate their own state exchanges; Arkansas is partnering with HHS to offer its residents coverage under the government’s “federally facilitated exchange.” The Massachusetts grant of $41.7 million will help the state update its existing health insurance exchange to bring it in line with PPACA requirements.

On September 28, House Energy and Commerce Committee Chairman Fred Upton and Senate Judiciary Committee member Chuck Grassley (R-IA) wrote a letter to HHS Secretary Sebelius expressing concern that HHS has “failed to provide substantive guidance” to states on how to use the over $1 billion in grants to date for exchange planning and establishment. The congressmen stated that PPACA itself is “virtually silent on how the funds are to be used and grants HHS unrestricted access to taxpayer dollars to fund these grants.” The letter further noted that the State of California spent $900,000 to hire a public relations firm to promote its exchange, and requested an HHS response to its concerns by October 5.


On October 3, New York Governor Andrew Cuomo vetoed a bill that would have amended the state’s anti-kickback law for health providers to align it with the federal “Stark Law.” Gov. Cuomo said that the bill would have weakened the state’s rules that prohibit referrals between practitioners who have financial relationships.

State Assemblyman Richard N. Gottfried (D) and State Senator Kemp Hannon (R) sponsored the bill, which stated, “Some arrangements or referrals are permissible under the federal Stark Law but not under the New York statute. This can create difficulties for health care providers.” The legislation would have eliminated differences between the state and federal laws unless the state Department of Health and Public Health and Health Planning Council specifically determined that the changes would “pose a substantial risk of payor or patient abuse.”

In vetoing the bill, Gov. Cuomo wrote, “I see no reason to upset New York’s rules for determining the propriety of practitioner referrals.”