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Government Relations Update – November 26, 2013

Pennsylvania Issues


H.B. 1603: Administration of Anesthesia. The Pennsylvania Department of Health (DOH) currently requires physician supervision during the administration of anesthesia. On July 1, 2013, Representative Jim Christiana (R-Beaver) introduced legislation requiring that certified registered nurse anesthetists be supervised by a physician when administering anesthesia in a hospital setting. The legislation would incorporate the DOH regulations into the Pennsylvania Medical Practice Act. The Pennsylvania Medical Society supports the bill asserting that it is essential to patient safety. The Hospital & Healthsystem Association of Pennsylvania, the Pennsylvania State Nurses Association and the Pennsylvania Association of Nurse Anesthetists oppose the legislation arguing that it is unnecessary because it is already required by the DOH. On November 20, 2013, the House approved the bill by a vote of 131 to 67. Every Lehigh Valley legislator voted in favor of the legislation, except for Representatives McNeill (D-Lehigh, Northampton) and Samuelson (D-Northampton). The bill has been sent to the Senate for consideration.

New Jersey Issues


A-3409: Prohibiting Medicaid Managed Care Organizations from Reducing Provider Reimbursement. On October 18, 2012, Assemblyman Gary Schaer (D-Passaic) introduced legislation requiring Medicaid insurers seeking to reduce provider reimbursements to obtain approval from the New Jersey Commissioner of Human Services. As a condition to approving the reduction, the legislation would require that: (1) the insurer has already taken all other actions to lower costs; (2) the proposed reduction would not adversely impact the delivery of health care; and (3) the Commissioner hold a public hearing on the proposed rate reduction. The New Jersey Hospital Association (NJHA) assisted in drafting the bill and supports its passage. On November 18, 2013, the Assembly Appropriations Committee unanimously approved the bill, and it will now proceed to the full Assembly for consideration.


New Jersey Economic Impact Report: On November 18, 2013, the NJHA released the 2013 New Jersey Hospital Economic Impact Report. According to the report, New Jersey hospitals contributed $20.4 billion to the state economy in 2012 by employing over 144,000 individuals, paying $8 billion in salaries and causing the payment of nearly $450 million in state income taxes by hospital employees. The report also contained hospital specific data to illustrate the economic contribution of each hospital to its local community. The NJHA has encouraged its members to share this information with their communities.

Federal Issues


H.R. 3350: The Keep Your Health Plan Act. As of January 1, 2014, all health insurance plans offered to individuals or through the small-group market to employers with 50 or fewer employees are required to provide coverage for an Essential Health Benefits (EHB) package. While those plans in existence on March 23, 2010 are exempted, an estimated seven million individuals currently have plans that fail to meet the EHB requirement.

On October 28, 2013, Congressman Fred Upton (R-6-MI) introduced legislation that would allow policies without an EHB package to be issued for one additional year. On November 15, 2013, the House passed the bill by a vote of 261 to 157, with 39 Democrats supporting the measure, and it has been sent to the Senate for consideration. Congressmen Dent (R-15-PA), Fitzpatrick (R-8-PA) and Lance (R-7-NJ) served as co-sponsors of the bill. Congressman Cartwright (D-17-PA) voted against the bill. President Obama immediately stated that he would veto the bill. However, on November 14, 2013, the President announced that he adopted an administrative policy permitting current plans without EHB packages to be retained for one additional year.


Final Mental Health Parity Rule: The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requires group health insurance plans to provide parity between mental health or substance disorder benefits and other physical health benefits. It also requires that co-payments, deductibles and visit limits be consistent for mental health treatments and physical health services. On November 15, 2013, the Departments of Health and Human Services (HHS), Labor and the Treasury published a final rule implementing various provisions of the Act. The final rule: (1) ensures that parity applies to intermediate levels of care received in residential treatment or intensive outpatient settings; (2) clarifies transparency provisions for health plans; (3) mandates parity for all plan standards, including geographic limits, facility type limits and network adequacy; and (4) strikes a provision that would have allowed insurers to apply discriminatory limits on mental health and substance abuse disorder treatment if there was a “clinically recognized standard of care that permitted a difference.” The final rule applies to plan years beginning on or after July 1, 2014.

Hospital Observation Status: As previously reported, the final 2014 federal fiscal year Medicare inpatient prospective payment system rule established new criteria for determining the appropriateness of inpatient admissions. In general, the Centers for Medicare & Medicaid Services (CMS) will presume that surgical procedures, diagnostic tests and other treatments are appropriate for Medicare Part A inpatient hospital payment when the physician admits a patient based on the expectation that the patient will require a stay of at least two midnights. On September 5, 2013, CMS released guidance on admission order and certification requirements in connection with the new “two-midnight” benchmark. The guidance addresses standards for physician certification of hospital services, such as content, timing, authorization and the medical record elements that meet the initial inpatient certification requirements. CMS also provided guidance on practitioner orders, including content, qualifications of ordering/admitting practitioner, verbal orders, “knowledge of the patient,” and timing and specificity of the order. On November 4, 2013, CMS announced that it delayed enforcement of the policy until March 31, 2014 and that it will not permit recovery audit contractors to review compliance with the policy during the delay. On November 8, 2013, the American Hospital Association and the American Medical Association sent a letter to CMS asserting that the rule was fundamentally flawed and requesting that enforcement be delayed until October 1, 2014.

Health Insurance Marketplace Enrollment Numbers: On November 13, 2013, HHS issued its first report on ACA Health Insurance Marketplace/Exchange enrollment statistics. According to the report, 106,185 individuals have selected health plans during the first 33 days of the open enrollment period. The majority of the individuals who have selected a plan – almost 75% – have gone through a state-based marketplace, with fewer than 27,000 individuals selecting a plan through the federally-facilitated marketplace. State numbers vary significantly, with 35,364 individuals in California selecting a plan through the state-run marketplace, compared to only 42 North Dakota residents selecting a plan through the federal marketplace.