Affordable Care Act (ACA)

Medicare/Medicaid Reform and ACA Repeal on the Horizon, MACRA Moves Forward for Now

The new administration’s agenda for health care may have come into clearer focus with President-Elect Donald Trump’s nomination of House Representative Tom Price, MD, a Republican from Georgia, as Secretary of Health and Human Services (HHS) and Seema Verma, MPH, as CMS Administrator. The American Medical Association (AMA) released a statement of strong support for Congressman Price, encouraging a swift confirmation vote. “Dr. Price,” the AMA said, “has been a leader in the development of health policies to advance patient choice and market-based solutions as well as reduce excessive regulatory burdens that diminish time devoted to patient care and increase costs.”

Continue Reading President-Elect Trump Names Rep. Tom Price, MD (R-GA) as HHS Secretary, Seema Verma, Health Care Consultant, as CMS Administrator

Physicians subject to the Rule must meet notice and posting obligations by October 16, 2016.

The federal Department of Health and Human Services (HHS), through its Office for Civil Rights (OCR), has published its final Rule implementing Section 1557 of the Affordable Care Act (ACA), 42 U.S.C. 18116, prohibiting discrimination in health care programs and activities. The new Rule, like Section 1557, specifically focuses its prohibitions and requirements on four already existing federal nondiscrimination laws: 1) Title VI of the Civil Rights Act of 1964, prohibiting discrimination based on race, color and national origin; 2) the Age Discrimination Act of 1975; 3) Section 504 of the Rehabilitation Act of 1973; and, 4) the sex discrimination provisions of Title IX of the Education Amendments of 1972 (extended by Section 1557 to health care). Section 1557 is in addition to rights and remedies available under these four laws. While the nondiscrimination prohibitions of Section 1557 have been in effect since passage of the ACA in March of 2010, this final Rule advises health care consumers of their Section 1557 rights and informs affected health care programs and activities of their Section 1557 obligations.

Continue Reading Hhs’ Final Nondiscrimination Rule Impacts Most Physicians

US Supreme Court Upholds ACA Tax Credits for All Qualified Individuals Purchasing Health Insurance Through a Marketplace Exchanges

In King v. Burwell, the Court’s 6-justice majority concludes that denying ACA tax credits to individuals on federally-facilitated State exchanges is contrary to what Congress intended.

King v. Burwell, U.S. Supreme Court No. 14-114, decided June 25, 2015.

In another major challenge to the Patient Protection and Affordable Care Act (“ACA”), the federal health reform law, the U.S. Supreme Court, on a 6-3 vote, upheld the Internal Revenue Service’s regulation extending federal tax credit support provided under the ACA to all qualified individuals enrolled in a marketplace Exchange regardless of whether the State elected to operate its own Exchange or exercised its option to have the federal government do so.

The Court’s decision rests on its interpretation of the law’s language rather than on constitutional grounds. Chief Justice Roberts, writing for the majority, said the challenged language is ambiguous; however, reading that language within the context of the ACA’s overall statutory framework compels an interpretation extending availability of the law’s tax credits to all qualified individuals purchasing coverage through an Exchange whether state-operated or federally-facilitated. The limited reading furthered by the petitioners “would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress intended the Act to avoid.”

The limited reading furthered by the petitioners “would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress intended the Act to avoid.”

The petitioners in King v. Burwell specifically pointed to ACA language making tax credits available to low and moderate income individuals purchasing health insurance coverage through an “Exchange established by the State.” The government argued in response that each State is required by the ACA “to establish” a marketplace Exchange and may do so, as allowed by the ACA, by either operating its own Exchange or defaulting to operation by the federal government. Facts before the Court showed that in 2014, 16 states operated their own Exchanges while 34 were federally facilitated. Of the 7.3 million individuals who purchased health insurance coverage through an Exchange, 5.4 million did so through federally-facilitated Exchanges and approximately 87% of those individuals were eligible for tax credits.

Petitioners’ arguments about the plain meaning of the challenged language are strong, the Court said, when viewed in isolation, but other language in the law, as highlighted by the Court, supports tax credit availability to qualified individuals purchasing insurance coverage on an Exchange regardless of operational source. Its task is to establish meaning within context. “A fair reading of legislation demands a fair understanding of the legislative plan.”

The Court noted that Congress based the ACA on three major reforms:

1) guaranteed issue and community rating requirements; 2) mandated individual insurance coverage at the risk of tax penalty; and 3) tax credits for individuals with household incomes between 100%-400% of federal poverty. Denying tax credits, a fundamental aspect of the ACA’s reform strategy, to individuals in federally-facilitated Exchange states would lead to substantially different operations and outcomes under this law in some states than in others, an implausible reading of what Congress intended. The Court referenced a study predicting that denying tax credits in federally-facilitated Exchange states would result in premium increases of 47% and enrollment decreases of 70% while another study predicted premium increases of 35% and enrollment decreases of 69%; collateral impacts also would result in insurance markets outside an Exchange. “[Tax] credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”

The Court’s ruling is important to Iowa.

Iowa’s Exchange is federally-facilitated. Technically, Iowa operates a partnership Exchange, relying upon the participant enrollment technology of the federal government while retaining plan management and consumer assistance functions through the Iowa Insurance Division. Of the 45,000 Iowans on Iowa’s marketplace exchange in 2015, more than 33,000 were eligible for tax credit support.

Update – Insurance Commissioner requests CoOportunity liquidation – district court to decide in late February

Concluding that insufficient funds currently exist to meet its obligations to pay medical claims, Iowa Insurance Commissioner, Nick Gerhart, filed a petition in Polk County District Court on January 29, 2015, concluding that further efforts toward rehabilitation of CoOportunity would be futile and asking for court-ordered liquidation of this non-nonprofit insurer. The Commissioner’s petition cites several factors affecting CoOportunity’s asset position, including congressional action placing an estimated $81 million in risk funding CoOportunity was slated to receive at risk; CMS’s decision in December to not advance additional 2014 funds to CoOportunity; and the unavailability of 2015 federal loan funds until late in 2015. The petition concludes that “further transaction of business by CoOportunity would be financially hazardous to policyholders, creditors, and the public.”

A hearing on liquidation is expected to occur in late February, with court-ordered liquidation expected to take effect as of February 28. Upon liquidation, the Insurance Division will take possession of CoOportunity’s assets and will administer those assets under court supervision. State guaranty funds in Iowa and Nebraska will be utilized to meet payment obligations for claims submitted by CoOportunity insureds up to limits set in law.

Commissioner Gerhart continues to advise Iowans with CoOportunity coverage to find other coverage. “Individuals and employer groups are strongly encouraged to find coverage with another insurance company and then cancel their policy with CoOportunity Health as soon as possible.” The Commissioner particularly advises individuals who purchased CoOportunity coverage through Iowa’s marketplace exchange and who are receiving advance premium tax credits and cost sharing reductions to find alternative coverage through the marketplace exchange by March 1, with open enrollment ending on February 15; while there will be a special enrollment period from March 1-April 29, 2015, to avoid having a gap in financial assistance, those individuals must meet March 1 coverage requirements. Individuals are encouraged to call the marketplace center at 1-800-706-7893 or work with an agent, broker, navigator, or consumer assistance counselor.

The Insurance Division has several informational postings, including CoOportunity alerts for persons insured by CoOportunity and for providers, on its website at The Division also has posted the following frequently asked questions (FAQs) and guidance documents.

  • FAQs for individuals.
  • FAQs for small groups.
  • Guidance on tax credits for certain small employers that cannot offer a qualified health plan (QHP) through the Small Business Health Options Program (SHOP) Exchange because  the employer’s principal business address is in a county in Iowa in which a QHP through the SHOP Exchange is not available for all or part of 2015.

CoOportunity Health

In what came as a surprise to many, Iowa’s Insurance Commissioner, Nick Gerhart, filed a petition in Polk County District Court on December 23, seeking court authorization under state insurance laws to assume management authority over CoOportunity Health, Inc., toward the end of rehabilitating the company’s substantially declining financial stability. The district court granted the order on that same day, transferring the company’s assets to the commissioner for administration and control. CoOportunity’s board of directors elected not to oppose the petition. The Nebraska Insurance Commissioner has suspended CoOportunity’s authority to do business in that state in light of the Iowa action.

Iowa insurance laws permit insurance division rehabilitation efforts when an insurer no longer evidences sufficient financial strength to meet its ongoing financial obligations to policyholders. The commissioner’s petition noted that CoOportunity at this time is solvent, but its current lack of needed additional revenues places it in a “financially hazardous” condition. The goal of the commissioner is rehabilitation but if not feasible, the company’s assets will be liquidated. Purchase by another insurer is a possibility.

In its first year of operations, CoOportunity–a non-profit insurer domiciled in Iowa and operating both in Iowa and Nebraska under both states’ laws and rules of the newly established federal health insurance CO-OP (Consumer Operated and Oriented Plan) program, had experienced early program success by enrolling an unanticipated 120,000 Iowans and Nebraskans through individual and small group policies. At the same time, however, the company experienced high unanticipated losses, leading to a drop in assets from $121.5 million to $17 million at the time of the petition’s filing. A $45.7 million net loss experienced by the company in the first 10 months of 2014 operations equated, the commissioner said, to “a 66% loss to remaining surpluses.” From November through December 12, the company’s assets continued to decline, dropping from $47.1 million to $17.2 million, a level and operational trend that threatened the ability of the company to meet its future health claim obligations to its policyholders.

Immediate sources of needed monies could not be identified. The federal Centers for Medicare & Medicaid Services (CMS), which provided start-up loan funding for CO-OPs, recently informed CoOportunity that it would not receive additional loans in this last round of funding. CoOportunity has received $130.6 million in solvency loan funds and $15.4 million in operational loan funds from CMS, including loan funds of $32.7 million awarded to the company at the end of September. The company is slated to receive an additional $125.6 million from other CMS program sources, but not until the second half of 2015 and $60 million of that amount is currently threatened by potential congressional budget action.

The Insurance Division cites “extremely high health care utilization” as a major factor affecting CoOportunity’s deteriorating asset position.

The Insurance Division, in frequently asked questions (FAQs) posted on its website (, helps policyholders to understand what this step toward regulatory rehabilitation means to them. To have continued coverage, policyholders must pay their premiums. Claims may continue to be submitted through CoOportunity as usual. The Division “will control the company and ensure that claims are paid according to contract provisions.” Even if rehabilitation is not successful and the company is liquidated, state insurance laws protect policyholders and their claims up to $500,000 per insured person.

The FAQs further clarify that coverage with CoOportunity during rehabilitation “should not impact your provider’s standing with CoOportunity.” The Division, however, notes that providers currently in the CoOportunity network may opt to leave that network and advises policyholders to contact their providers to make sure they remain in network.

The Division further advises: “Most policyholders may find it in their best interests to find other coverage before the end of open enrollment” which closes February 15, 2015. The Nebraska Insurance Department has similarly advised policyholders in that state.

CMS announced in November the formation of a new Office of Enterprise Data Analytics (OEDA) and named Niall Brennan as the OEDA’s chief data officer. The OEDA’s overarching goal is to harness CMS’ vast data resources for internal and external use as CMS continues to move away from volume-based to value-based care.

Brennan, who has served in various data analytic roles with CMS, will oversee the OEDA’s collection and dissemination of information in several areas of CMS activity, including the ACA’s marketplace exchanges and Medicare’s Shared Savings and quality incentive programs. CMS’ Principal Deputy Administrator, Andy Slavitt, said this new office “signals to the industry that there is no turning back from the health care data agenda.”

Brick Gentry’s Managing Partner, Paul Drey, presented the Hospitals’ and Physicians’ Perspective on the federal Affordable Care Act (ACA), as part of the Health Care Track of the Iowa State Bar Association‘s Annual  Meeting.

The federal Affordable Care Act presents a number of challenges and opportunities for hospitals and physicians in the evolving healthcare industry. This presentation introduced a number of the key changes under the Affordable Care Act which have critical business and legal implications for providers, including payment and delivery reforms, federal incentive programs, and the new insurance marketplaces. By recognizing the unique perspectives of hospitals and physicians on these issues, healthcare counsel can help their clients better understand how to add value to their services while achieving regulatory compliance.