Secretary Sebelius Testifies on ACA Implementation

After weeks of scrutiny, accusations, and calls for resignations by Republicans, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius testified before the House Energy and Commerce Committee today to defend the Affordable Care Act (a.k.a. “Obamacare”) after a month of significant enrollment challenges.  She faced questions on the cost and management decisions associated with the challenged website, the enrollment portal for the federal health care exchanges.  Ironically, the website was down and inaccessible as she gave her testimony.

Sebelius’ testimony follows an October 24, 2013 House Energy and Commerce Committee hearing where federal contractors hired by the Centers for Medicare & Medicaid Services (CMS) and HHS to manage the website and paper enrollment processes pointed the finger at HHS when asked who is responsible for the website’s flaws and challenges.  Today, Sebelius did not point the finger at CMS or HHS staff, stating that she and CMS Administrator Marilyn Tavenner have been responsible for decisions to date.  CMS Administrator Tavenner provided similar testimony before the House Ways and Means Committee yesterday.

Sebelius faced questions on costs expended to date, stating that approximately $118 million has been spent on the website and about $56 million on additional IT to support it.  She offered to get back to the Committee by mid-November 2013 with numbers concerning enrollment in the exchange marketplaces.

While both political parties expressed concern or outrage over the massive exchange website problems to date, Republicans largely defined the problems as an illustration of how flawed Obamacare is overall, while Democrats overwhelmingly characterized the problem as a short-term, fixable glitch.

Some Democratic lawmakers likened the problems to those faced during implementation of the Medicare Part D prescription drug benefit.  However, several on the Committee also sought to distinguish the implementation challenges from those of past programs and mention other problems beyond the website, including data privacy.  The federal data hub meant to link exchange applicant data to determine eligibility for subsidies has become a political target.  Whether personal information is protected and for how long it is stored by the federal government is something of great question, which has resulted in varying answers from the Administration.

The Senate is planning similar hearings next week, with CMS Administrator Tavenner testifying before the Senate Health, Education, Labor, and Pension (HELP) Committee on Tuesday, November 5, 2013, and HHS Secretary Sebelius testifying before the Senate Finance Committee on Wednesday, November 6, 2013.  Additional hearings and scrutiny over the next several months are anticipated in the lead-up to the January 1 enrollment date for the exchange marketplaces.

Dewonkify – Medicare Part A

Medicare is a federal program that provides health insurance coverage for people who are age 65 or older.  Individuals younger than 65 may qualify if they have certain disabilities or have End-Stage Renal Disease (ESRD).  Medicare is comprised of four parts — Parts A, B, C, and D.  Over the next few weeks, Capitol Health Record will dewonkify each of the four parts.

Definition:  Medicare Part A pays primarily for inpatient hospital stays, care in skilled nursing facilities, home health care, and hospice care.

Used in a Sentence: “Republicans have suggested a push to reduce the deficit with entitlement cuts, such as means testing for Medicare and a possible merger of Medicare parts A and B for hospitals and doctor services.” From “GOP Senators Ready Entitlement, Tax Proposals for Budget Conference” by Alan K. Ota, published in CQ (subscription required).We also have a program called the Seal of Recognition that may be worth your time and consideration.  You could submit your materials supporting the Trigen SureShot and our nursing team would evaluate the content to make sure it is consistent with the AORN Recommended Practices.  If approved, you would receive the AORN Seal of Recognition logo to use on your documents for one year (can be renewed annually).

History:  Medicare Part A began in 1965 and was enacted at the same time as Part B and Medicaid.  At the time, older Americans who did not have health care coverage through their employers, had to either purchase health insurance on their own (which could be expensive) or rely on their families to help pay for their medical care.  More information on the history of the Medicare program can be found here.

Financing:  Medicare Part A is financed through a payroll tax paid by employers and employees.  Part A currently pays out more in claims than it collects in revenue and is projected to become insolvent by the year 2026.  In 2012, total expenditures (costs) for the Medicare program were $574.2 billion and total income was $536.9 billion.  Each year the independent Medicare Trustees releases a report projecting the solvency of the program.  Information on the most recent Trustees’ report is available here.

Enrollment:  Currently 50.7 million Americans are enrolled in Medicare Part A.

Eligibility:  In order to be eligible for Medicare Part A, you (or your spouse) must have worked at least 10 years (40 quarters) in Medicare-covered employment.  Some individuals under age 65 may be eligible for Medicare Part A if they are entitled to Social Security (or railroad retirement) disability benefits for at least the previous 25 months or qualify for ESRD benefits.  More information on eligibility requirements can be found here.

Out-of-Pocket Costs:  Beneficiaries enrolled in Part A pay a deductible when they are admitted to the hospital.  The amount of the deductible varies from year to year and is calculated to be $1,216 in 2014.  This deductible covers beneficiaries’ costs for the first 60 days of care within a benefit period.  Beneficiaries pay additional fees for hospitalizations longer than 60 days (for more information, see here).

Premiums:  About 99 percent of individuals who have Part A do not pay a premium.  However, some individuals may be able to enroll in Part A and pay a monthly premium:  individuals (and spouses) with fewer than 30 quarters (7.5 years) of Medicare-covered employment pay a premium of $426 and individuals (and spouses) with between 30 and 39 quarters of Medicare-covered employment pay $234.  (More information is available here.)

CMS Clarifies Health Insurance Exchange Enrollment Deadline

On October 28, 2013, the Centers for Medicare & Medicaid Services (CMS) released guidance clarifying that individuals have until March 31, 2014 to enroll in the health insurance exchanges.  (More information on the health insurance exchanges is available here.)  

What’s the issue? 

The Administration has previously announced the open enrollment period for the new health insurance exchanges would run from October 1, 2013 through Mach 31, 2014.

The Affordable Care Act (ACA) also imposes an individual mandate requirement, which provides that beginning January 1, 2014, individuals must have health insurance coverage or face a penalty.  This penalty is assessed on the individual’s federal income tax return for the following year.  (More information on this requirement is available here.)  In establishing the individual mandate requirement, the Internal Revenue Service (IRS) determined the penalty would not apply to individuals who have a gap in health insurance coverage for less than three months.

So, what’s the problem?

The problem comes from fact that there is a lag between when an individual signs up for health insurance coverage and when the coverage begins.  Under the rules, if an individual selects a plan and pays his/her premiums between the 1st and the 15th of a given month, his/her coverage begins on the first day of the following month.  However, if the individual selects a plan between the 16th and the end of a given month, his/her coverage will not begin until the first day of the second following month.  Below are some examples to illustrate the issue.

Example 1:

Betty does not have any health insurance coverage and decides to sign up for coverage in the health insurance exchange operating in her state.  She signs up for health coverage and pays her premiums on February 10, 2014.  Her health insurance coverage will begin on March 1, 2014.

Because she experienced a gap in coverage of less than three months, she will not be assessed an individual mandate penalty.

Example 2:

Bobby does not have any health insurance coverage and decides to sign up for coverage in the health insurance exchange operating in his state.  He waits until March 20, 2014 (still within the open enrollment period) to sign up for coverage and pay his premiums.  His coverage will begin on May 1, 2014 (the second following month).

However, because he experienced a gap in health insurance coverage of more than three months, prior to the CMS guidance, he would be assessed an individual mandate penalty.

What does the CMS guidance do?

The CMS guidance clarifies that an individual mandate penalty would not be assessed against anyone who signs up for coverage and pays his/her premiums before the end of the open enrollment period.  So, Bobby in Example 2 would not be assessed an individual mandate penalty even though he was without health insurance coverage for more than three months.

CMS will be issuing additional guidance next year to provide additional information to people as they prepare and file their 2014 federal income tax return (which is due to the Internal Revenue Service (IRS) by April 15, 2015).

Health Care on the Hill: Week of October 28, 2013

Tuesday, October 29, 2013

10:00 a.m.
Status of the Affordable Care Act Implementation
House Ways and Means Committee Hearing
1100 Longworth House Office Building
* CMS Administrator Marilyn Tavenner is scheduled to testify.

Wednesday, October 30, 2013

9:00 a.m.
PPACA Implementation Failures: Answers from HHS
House Energy and Commerce Committee Hearing
2125 Rayburn House Office Building
* HHS Secretary Kathleen Sebelius is scheduled to testify.

10:00 a.m.
Children’s Hospital GME Support Reauthorization Act of 2013, CHIMP Act Amendments of 2013, H.R. 2094, Older Americans Act Reauthorization Act of 2013, and Nominations
Senate Health, Education, Labor, and Pensions Committee Markup
430 Dirksen Senate Office Building

November 6th Webinar: Top Ten Ways Hospitals and Health Systems Can Survive in the Current Federal Health Care Policy Environment

Health care providers are facing the most dynamic and uncertain regulatory, legislative and fiscal environment in more than a generation. Increasingly, hospitals and health systems need to develop and maintain comprehensive government relations programs that address their site-specific or system-specific concerns. Federal government relations efforts are an integral component to health care providers’ business planning and strategic operations.

Join Ilisa Halpern Paul, Managing Government Realtions Director, Drinker Biddle’s Lobbying and Advocacy Team, and Meghan Woltman, Vice President, Government & Community Relations at Advocate Health Care, on November 6, 2013 for a complimentary webinar that will review the ten best practices with respect to federal health policy and government relations. The webinar will help guide providers in evaluating existing efforts and will provide recommendations for the most effective federal government relations program to navigate the ever-changing federal policy environment. For more information or to register, see here.

Government Shutdown Now Over – But What About Sequestration?

The government may be back up and running and funded under a short-term continuing resolution (CR), but the battle is far from over as Congress heads toward new deadlines to address budgetary matters.  There has been some confusion about what the current budget agreement means in terms of sequestration’s annual cuts to discretionary and mandatory programs instituted in 2012.  The law signed by the President to address the short-term continuing resolution and temporarily raise the debt ceiling does not provide federal agencies flexibility to administer new sequestration cuts at this time.  With the government spending levels remaining at FY 2013 levels for the duration of the CR, a new round of sequester cuts are not set to kick in until January 2014.

The law established a short-term budget conference committee, with a set deadline of Dec. 13, 2013 to outline recommended spending levels and program cuts.  Of note is that the committee deadline is set in advance of when the second year of the sequester will begin.  The deadline provides a window of opportunity for the new budget conferees to address how the sequester cuts are applied in FY 2014.   The conferees may contemplate making other adjustments to entitlement programs (Medicare and Medicaid) to address health care spending issues that will be negotiated during their deliberations.  In addition, Medicare payments to physicians are set to be cut by approximately 25 percent if Congress does not address the cut by December 31, 2013 and offset the cut with a payfor that would likely include cuts to other health care entities. Any of these negotiations and decisions, if ultimately accepted by Congress, could impact the size of the Medicare sequester cuts in January FY 2014.

Health Care on the Hill: Week of October 21, 2013

This week the House is in session but the Senate is in recess.

Also of note, President Obama will be delivering remarks at 11:25 a.m. today on the rollout of, the federal health insurance exchange website.

Thursday, October 24, 2013

9:00 a.m.
“PPACA Implementation Failures: Didn’t Know or Didn’t Disclose?”
House Energy and Commerce Committee Hearing
2123 Rayburn House Office Building

Shutdown Day 16 Recap

Last night the House and Senate passed, and the President signed, legislation to both fund the government and raise the federal debt limit – the shutdown has ended.

The deal contained a continuing resolution (CR) to fund the government through January 15, 2014 and a debt limit extension to February 7, 2014. The bill also contained language requiring verification of income for those eligible for the Affordable Care Act’s subsidies.

Another provision in the CR/debt ceiling legislation is a bicameral, bipartisan budget conference. This conference is to meet to discuss discretionary spending levels for fiscal year (FY) 2014 and develop a report, due December 13, 2013. The conference committee is chaired by Senate Budget Committee Chair Patty Murray (D-WA) and House Budget Committee Chair Paul Ryan (R-WI). House conferees include Representatives Diane Black (R-TN), Assistant Democratic Leader James Clyburn (D-SC), Tom Cole (R-OK), Appropriations Committee Ranking Member Nita Lowey (D-NY), Tom Price (R-GA), and Budget Committee Ranking Member Chris Van Hollen (D-MD). All Senate Budget Committee members were named as conferees.

The Senate passed the bill with a vote of 81-18 and the House then followed with a vote of 285-144. The bill passed the House with 87 Republicans and 198 Democrats.

Following the vote, the Senate adjourned until Monday, October 28th. The House is scheduled to be in session today, but no schedule has been announced.

While the deal is good news – federal employees can go back to work and will get paid, federal programs can continue, and national parks and monuments are reopened – with the short-term CR, we could be facing this all again in 90 days.

Shutdown Day 15 Recap

After progress on Monday between Senate Democrats and Republicans in crafting a deal to end the shutdown and raising the debt ceiling, Senate leadership paused negotiations following an announcement from House Republicans that they would put forth their own plan.

The initial House plan unveiled on Tuesday included a continuing resolution through January 15, 2014 and a debt ceiling increase through February 7, 2014. The House legislation also included a two year delay of the Affordable Care Act’s (ACA’s) medical device tax, income verification for ACA subsidies, and cancellation of ACA subsidies for Members of Congress and the President’s Cabinet. After negotiations, the medical device tax was removed and the continuing resolution would run only through December 15th. The House was scheduled to vote on this proposal Tuesday night, but the vote was cancelled.

After the House plan failed to go anywhere, Reid and McConnell restarted Senate negotiations. It was reported last night that a Senate deal was practically done and that the major sticking point remaining was crafting the budget conference provision so that it cannot be subject to a point of order.

All the back and forth and attempted proposals have cut the timeline for a deal before the projected deadline for hitting the debt ceiling very short.

Medicare Open Enrollment Starts Today

There has been much focus recently on open enrollment for the health insurance exchanges. In addition to the exchange open enrollment period, today, October 15, 2013, marks the beginning of Medicare’s annual enrollment period, which lasts until December 7, 2013.  Approximately 49 million Americans are enrolled in Medicare.

What does the enrollment period mean for Medicare beneficiaries?

Each year during Medicare’s annual enrollment period, current Medicare beneficiaries are allowed to make changes to their Medicare plan choices.  Beneficiaries who are enrolled in a Medicare prescription drug plan (otherwise known as Medicare Part D) can review their plan choices and determine whether they want to stick with their current plan, or switch to a new plan.  Beneficiaries who are enrolled in a Medicare Advantage plan (an MA plan, or Medicare Part C) can review their plan choices and decide if they want to keep their current plan or switch to a new plan.

What happens if a beneficiary does nothing during the annual enrollment period?

If a beneficiary is satisfied with his/her current Medicare coverage, he/she does not need to do anything.  So, if you are happy with your current Part D plan and want to keep the same plan next year, you do not need to do anything during the annual enrollment period.  Plan premiums may change; beneficiaries should have been notified by their current plans of any changes for next year.

If a beneficiary has Medicare, should they enroll in plans in the health insurance exchanges?

No.  If you have Medicare you are considered covered and do not need to obtain health insurance coverage through the exchanges.  For more information visit

For more information on Medicare coverage options, please visit or call 1-800-MEDICARE.