Healthcare Reform Update

As the struggle over the details of the Affordable Care Act persists, changes continue to be made. The following are the most recent updates as of this writing:

Appeals of insurance denials. The original delay of health insurance denial appeals rules has once again been put off, from July 2011 to January 2012. The rules now on hold include:

• a reduction in the amount of time an insurance company is allowed to review a denial of coverage in urgent cases, from no more than 72 hours to 24 hours;
• a requirement that insurers provide information about the denial and how to appeal in appropriate language for nonEnglish speaking beneficiaries; and
• a requirement that insurers must provide consumers with specific details that would include diagnostic codes used by doctors, hospitals and insurance companies and what treatment isn’t covered and why

The reason for the extended grace period, according to the announcement posted on the Labor Department’s website, is because the government intends to modify the rules “in the near future.” However, what those changes might be has not been disclosed.

Medicaid incentive grants. A federal grant program authorized in the health overhaul law provides states with $100 million to reward Medicaid recipients who make an effort to quit smoking or keep their weight, blood pressure or cholesterol levels in check. The goals of the program are to place more emphasis on the role of preventive health in targeting the underlying causes of chronic disease, as well as to reduce Medicaid costs associated with chronic illnesses, which accounts for more than 75 percent of the $2.5 trillion the U.S. spends on healthcare, according to data from the Department of Health and Human Services.

States have some flexibility about how to design their incentive programs. However, there are federal guidelines. Medicaid enrollees who demonstrate a commitment to improving their health will be eligible to receive financial rewards such as coupons or gift certificates. For instance, those who are overweight or trying to quit smoking might be offered weight-management classes or tobacco-cessation counseling. And, the rewards would be on a tiered basis, from “attempts at participation,” to “actual behavior change” and “achievement of health goals.”

Bills limit reform funding. Five bills have been approved by the House Energy and Commerce’s Health Subcommittee that aim to limit the Department of Health and Human Services (HHS) secretary’s spending authority under the health reform law, as well as subject some of the statute’s mandatory spending to the annual appropriations process. The bills change a provision that gives the HHS secretary an unlimited amount of funds for state-based exchange grants by canceling unlimited direct appropriation and rescinding any unobligated funds. They also repeal the section of the law that creates a prevention and public health fund and gives the HHS secretary full authority to administer that funding, which totals $17.75 billion from fiscal year 2012 to 2021.

Repeal of 1099 tax reporting provision. President Obama has signed HR4, a bill that repeals a provision that required business and real estate owners to file a 1099 form with the Internal Revenue Service for every vendor to whom they paid more than $600 in a year. The $22 billion cost of the 1099 legislation was offset by requiring some people, if their income level increases during the year, to pay back a portion of the subsidies they receive to join health insurance exchanges.

Temporary healthcare reform waivers exceed 1,000. As of March, the number of healthcare reform waivers granted by the Obama administration was 1,040. These waivers grant a one-year exemption from a new coverage requirement to organizationsthat cannot meet newannual coverage limits in 2011. According to the HHS, the waivers have typically been granted to socalled “mini-med” plans that offer limited annual coverage — as low as $2,000 — that would fall short of meeting the new annual coverage floor of $750,000 in 2011.

The waivers are meant as a stopgap measure until new state-run insurance exchanges open in 2014, when annual dollar limits will be abolished. Approximately 2.6 million people are covered by the waivers, which represents less than 2 percent of privately insured individuals, according to HHS.