Update on ACA Repeal Efforts

On May 4, the House of Representatives passed the American Health Care Act (AHCA) (H.R. 1628) by a vote of 217 – 213, with all Democrats and 20 Republicans voting against the measure. The passage of the legislation comes over two months after it was originally introduced for consideration by the House and underwent several revisions before finally being passed.

The original legislation, which was introduced on March 7, included sweeping provisions that would fundamentally change large portions of the law created by the Affordable Care Act (ACA). Some of the major provisions in the AHCA include the repeal of the ACA’s employer and individual mandates, replacing the ACA’s tax credits and cost sharing reductions with refundable tax credits that vary by age rather than income, repealing the ACA’s various taxes, and eliminating the ACA’s Medicaid expansion provision. In addition, the legislation would create a Medicaid per-capita-cap funding approach, which is a set amount of funding per enrollee based on category, and would allow states the option to implement a block grant system for certain populations, which would be a set amount of total funding allocated to a state to cover these individuals. The legislation also provides $10 billion in safety-net funding over five years for Medicaid non-expansion states and originally provided $100 billion over 10 years for a Patient and State Stability Fund (PSSF) that states could use to stabilize insurance markets, provide payments to providers, and subsidize high-risk pools for patients with high-cost conditions. A score of the legislation by the Congressional Budget Office (CBO) indicated that 24 million Americans would lose healthcare coverage under the bill and that it would provide $880 billion less to the states than under current law over a ten-year period due mostly to changes to the Medicaid program.

After the bill was pulled from the House floor on March 24 due to a lack of votes, a variety of changes were made over the past six weeks to revive the legislation and bring it to the floor for an ultimately successful vote last week. One amendment, from Reps. Gary Palmer (R-Ala.) and David Schweikert (R-Ariz.), would appropriate $15 billion for a federal invisible risk sharing program to provide a subsidy to insurers for high-cost patients outside of high-risk pools. A second amendment, introduced by Rep. Tom MacArthur (R-N.J.) and meant to court moderate Republicans, would allow a state to apply for three different types of waivers to define its own age rating band, define its own essential health benefits, and permit its insurers to engage in health status underwriting. The final amendment, introduced by Reps. Fred Upton (R-Mich.) and Rep. Billy Long (R-Mo.) to assuage concerns that the bill would adversely affect those with preexisting conditions, would provide an additional $8 billion to support individuals who would experience a monthly premium rate increase as a result of the MacArthur health status underwriting waiver.

The Senate will now move to consider the legislation this summer. Some of its leaders have indicated that the Senate will craft its own ACA repeal and replace legislation, and an informal working group of 13 senators has been established to work on the legislation. The Republican bloc in the Senate can afford to lose only two senators to maintain the majority needed to pass its own healthcare bill under reconciliation. However, several of the provisions in the House bill have already been flagged as potentially violating “the Byrd rule,” a mechanism that requires a 60-vote threshold, rather than simple majority, on provisions that do not have a significant budgetary impact.

Click here to read Holland & Knight's memo discussing the provisions of the House-passed bill as well as issues regarding its future movement through Congress. It also includes a link to a previous memo on the AHCA that was released in March.

Inpatient Prospective Payment System Rule Update

In April, CMS released the FY 2018 Inpatient Hospital Proposed Rule. The proposed rule contains small adjustments to the inpatient payment systems. Notably, CMS is proposing a one year regulatory moratorium on the payment policy threshold for patient admissions in long-term care hospitals while the agency continues to evaluate long-term care hospital policies. CMS is also proposing to reduce clinical quality measure (CQM) reporting requirements for hospitals that have implemented electronic health records (EHRs).

The Proposed Rule also implements provisions of MACRA and the 21st Century Cures Act—including the SES provisions in the Hospital Readmissions Reduction Program. Click here to see the document.

Comments are due June 13, 2017.


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