After an election that saw President Obama cruise to victory and Congressman Pete Stark lose his seat in Congress after 40 years, the Affordable Care Act (the “ACA”) will live on, though not without some changes. Focus also shifts to the states and Congress, which must address numerous health care-related issues when it returns for the lame duck session on November 13. The following are keys items to follow before the end of the year and when Congress reconvenes in January.
ACA Modifications
Hall Render attorney John Williams spent election night with senior aids to House Majority Leader Eric Cantor who reluctantly acknowledged that the ACA will remain the law of the land. However, look for changes to those parts of the law that are politically unpopular. These include higher than expected costs for community rating bands, the medical device tax and the Independent Payment Advisory Board that Republicans call the “death panel.”
Fiscal Cliff
Hall Render sources on Capitol Hill have indicated that Congress is likely to allow the Bush-era tax cuts to expire and the 2% across-the-board spending cuts to kick in under the budget sequester. President Obama and House Speaker John Boehner will then sit down and negotiate a “grand bargain” that includes tax increases and entitlement reform.
Provider Inflation Updates
For several years, CMS took an aggressive approach to provider inflation updates but appeared to back off as part of an election year strategy to calm the waters. Look for the agency to resume an aggressive posture next year with upcoding adjustments for hospitals, SNFs and home health agencies. Changes to inpatient psych and dialysis are also possible.
SGR Extension
Congress must fix the current Sustainable Growth Rate (“SGR”) formula before the end of the year to prevent a 30% cut in Medicare physician payments. A one-year “doc fix” would cost approximately $18 billion, but a short-term fix is more likely. In order to pay for the measure, Congress is considering cuts to E&M codes, rebasing the dialysis bundle and another one-year DSH cut extension. While discussion to date has focused on an SGR bill originating in the Ways and Means Committee, Hall Render has learned that House leadership is now leaning towards inclusion of the measure in a larger package that will be passed before the end of the year.
State Health Care Exchanges
States now face a November 16 deadline to decide whether to set up a health insurance exchange. Many governors were waiting to see if a Romney win would mean less pressure to move forward. Now they must create their own exchange or follow the federal government model as mandated by the ACA. Governors will also come under increasing pressure to expand their Medicaid programs.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@wp.hallrender.com or your regular Hall Render attorney.
