Two recent developments under Wisconsin law eliminate disparities with federal law and may simplify health plan administration for Wisconsin employers. First, the Wisconsin insurance law requirement that dependent child coverage be offered to the adult children of covered employees has been amended to conform to the federal adult child coverage requirement. Second, Senate Bill 203, which recently passed both houses of the Wisconsin Legislature and is awaiting Governor Scott Walker’s signature, would amend Wisconsin tax law to conform the state income tax exclusion for coverage provided to an employee’s adult child to the federal income tax exclusion.
von Briesen Health Law Blog
October 26, 2011
October 24, 2011
Healthcare “Apology Bill” Passes Assembly
The “Apology Bill,” AB 147, has passed the Wisconsin Assembly. The bill provides that a statement or conduct of a health care provider or a provider’s agent or employee that expresses apology, benevolence, compassion, condolence, fault, liability, remorse, responsibility, or sympathy to a patient or patient’s relative or representative is not admissible into evidence or subject to discovery as evidence of liability or as an admission against interest in any civil action or administrative hearing regarding the health care provider.
Assembly Democrats had offered an amendment which would have provided that apologies or other expressions of compassion or condolence by health care providers would not be admissible. However, a provider’s statements of fault, liability, or responsibility would remain as admissible. Specifically, the amendment states, “A statement, gesture, or the conduct of a health care provider or a health care provider’s employee or agent, that expresses apology, benevolence, compassion, condolence, remorse, or sympathy to a patient or to his or her relative or representative is not admissible into evidence or subject to discovery in any civil action or administrative hearing regarding the health care provider as evidence of liability or as an admission against interest.” This amendment was tabled.
The Assembly Bill is now in the Senate. The companion bill, SB 103, was passed out of the Senate Committee on Judiciary, Utilities, Commerce, and Government Operations on a vote of 3-2. It has not yet been scheduled for a floor vote. A similar amendment–limiting the scope of excluded statements–was offered in the Senate.
The Health Law team at von Briesen will continue to monitor and report on the progress of Assembly Bill 147 and Senate Bill 103.
IRS Announces Retirement Plan Limitations for 2012 Tax Year – Most Limits Increased
The Internal Revenue Service (“IRS”) has announced the cost of living adjustments for the 2012 tax year, which affect various dollar limitations for retirement plans. The IRS increased many of these limitations for the first time since 2009. Some limitations remain unchanged. The following chart highlights many of the noteworthy limitations for the 2012 tax year.
October 21, 2011
Wisconsin Assembly Bill Implements Affordable Care Act Provisions
On Tuesday, the Wisconsin Assembly passed 2011 Assembly Bill 210, implementing provisions of the Affordable Care Act (ACA) that have gone—or soon will go—into effect. The bill includes the following ACA provisions dealing with health insurance plans:
- Rate reporting requirements;
- Internal grievance procedures and external review procedures;
- Medical loss ratio reporting;
- Standards for lifetime and annual limits;
- Prohibition on rescissions;
- Prohibition on pre-existing condition exclusions for minors;
- Coverage of preventative health services;
- Extension of dependent coverage to age 26; and
- Choice of health care provider.
The bill does not provide for implementation or establishment of a health benefit exchange in Wisconsin.
The bill grandfathers health plans that were in effect when the ACA was enacted. This delays the timeline for when these plans must begin to comply with some of the specified provisions of the ACA provisions until such time that the health plans are renewed. The bill requires grandfathered health plans to comply with the ACA provisions for non-grandfathered plans relating to reporting requirements ensuring the quality of care and requirements for coverage of dependent students on a medically necessary leave of absence, coverage of emergency services, and others.
Assembly Bill 210 provides the Commissioner of Insurance the authority to promulgate emergency rules to adopt certain ACA provisions.
According to the amended bill, if the ACA is found unconstitutional or unenforceable in Wisconsin, whether in its entirety or in part, then insurers and self-insured governmental health plans are exempt from the specified or affected corresponding provision(s). Further, any rules or requirements established by the commissioner with respect to such provision(s) would be void and unenforceable.
Assembly Bill 210 was introduced in July and was referred to the Assembly Committee on Insurance. The bill passed the Assembly 57 to 39 and was referred to the Senate Committee on Insurance and Housing. The Health Law team at von Briesen will monitor the progress of Assembly Bill 210, including the bill’s progress in the Senate.
October 20, 2011
CMS Releases Final ACO Rule
The Centers for Medicare & Medicaid Services (CMS) today issued its final rule for Accountable Care Organizations (ACOs). In today’s announcement, CMS Administrator Don Berwick noted that more than 1,300 comments were received on the proposed rule. The final rule incorporates a number of these suggestions, including:
- Increasing incentives and streamlining the Shared Savings Program;
- Extending the benefits of the new program to a broader range of beneficiaries;
- Making the one-sided model truly one-sided;
- Expanding participation to Rural Health clinics, Federally Qualified Health Centers, and organizations where specialists provide primary care; and
- Providing a flexible starting date in 2012
In conjunction with the release of CMS’ final rule on ACOs, the Office of Inspector General released an interim final regulation on waivers of fraud and abuse provisions; the Internal Revenue Service issued a fact sheet on tax exempt organizations participating in the Shared Savings Program; and the Department of Justice (DOJ) and the Federal Trade Commission (FTC) today issued a final version of a joint policy statement on antitrust enforcement. The FTC and DOJ final policy statement:
- Preserves an antitrust “safety zone” for certain ACOs;
- Provides examples of conduct that, under certain circumstances, may raise competitive concerns;
- Provides expanded coverage – the policy statement no longer applies only to collaborations formed after March 23, 2010; and
- Shifts antitrust review from mandatory to voluntary review.
The Health Law team at von Briesen will be posting additional information on the ACO final rule and its accompanying guidance.
October 14, 2011
HHS Halts Implementation of the CLASS Program
The U.S. Department of Health and Human Services (HHS) announced plans today to halt implementation of the Community Living Assistance Services and Supports (CLASS) Act. The CLASS Act is a voluntary, federally administered long-term care insurance program introduced in the Affordable Care Act (ACA). The program would have provided benefits to purchase long-term services and supports. Details regarding implementation and enrollment were to be announced by October 1, 2011.
Secretary Sebelius sent a letter to congressional leaders today noting no “viable path forward for CLASS implementation at this time.” The ACA conditioned implementation of the CLASS program on certification that the program would be actuarially sound and financially solvent for 75 years. However, HHS actuaries and the Congressional Budget Office could not find a way to meet these contingencies
Secretary Sebelius emphasized the continued need for affordable long-term care services and the lack of viable options in the current market.
October 10, 2011
Wisconsin Supreme Court Hears Argument in Hospital Case
On Friday, October 7th, the Wisconsin Supreme Court heard arguments in a Gister v. American Family Mutual Insurance Company, 2009AP2795. The case examines whether a charitable hospital that is required by law to provide emergency medical services to all persons, including the uninsured, may enforce a hospital lien pursuant to Wis. Stat. § 779.80 on a Medicaid recipient’s personal injury settlement as an alternative to billing Medicaid.
The circuit court had ruled that the hospital could do so. The decision was reversed in the Court of Appeals, which relied on Dorr v. Sacred Heart Hospital, 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 1999). Dorr held that when the contract between an HMO and hospital contains a hold harmless provision, the hospital may not file a hospital lien against an HMO’s patient’s property because the HMO patient is not indebted to the hospital for the medical services provided. Likewise, a Medicaid patient is not indebted to the hospital for the medical services provided, and therefore the lien provision is not available to the hospital in the present case.
On appeal, Saint Joseph’s of Sheboygan argues that the Court of Appeals decision contravenes Congress’s intent that Medicaid should be the payer of last resort. The hospital contends that it is well-settled that hospitals may bill either Medicaid or file a lien on proceeds that may be paid by third party tortfeasors and that a debt does exist for which Medicaid benefits are not authorized because the settlement proceeds are available to pay for medical costs. Plaintiffs contend that neither federal or state law permit the filing of a hospital lien in these circumstances and that the Court of Appeals reliance on the Dorr decision is correct.
The Health Law team at von Briesen will monitor the progress of the case, including the Wisconsin Supreme Court’s decision, which is anticipated by spring.
October 7, 2011
DHS Creates Office of Inspector General
The Wisconsin Department of Health Services announced that it is creating an Office of the Inspector General. The office will be tasked with identifying fraud and overpayments in the Department’s programs, with include Medicaid, FoodShare, and the Women Infants and Children program.
Secretary Dennis Smith has named Alan White to head the office. Mr. White has headed the Bureau of Program Integrity within the Division of Health Care Access and Accountability for more than a decade. His bureau has been responsible for developing and implementing prior authorization guidelines, performing audits of service providers, and developing quality control measures and standards for Medicaid. The new office expands the scope of his responsibilities and will include oversight of other Department programs, including FoodShare and WIC.
Additional positions will be added to the Office of Inspector General. The positions were created in the current biennial budget.
October 4, 2011
Supreme Court Opens Term with California Medicaid Rate Cuts Case
The Supreme Court opened its 2011-2012 term yesterday with oral arguments in the healthcare case Toby Douglas, Director, California Department of Health Care Services v. Independent Living Center of Southern California, Inc., et al. The Supreme Court consolidated and granted certiorari in three cases to address whether the Constitution’s Supremacy Clause gives Medicaid providers and beneficiaries a cause of action to challenge a state law reducing Medicaid reimbursement rates.
The suit was filed in response to California’s proposed Medicaid rate cuts of up to 10%. Providers and beneficiaries challenged the cuts, arguing that the cuts violated federal law. Federal law requires states that accept Medicaid funding to adopt a plan to assure that Medicaid rates are “sufficient to enlist enough providers” so that Medicaid beneficiaries can access care to the same extent as “the general population in the geographic area.” The Ninth Circuit Court of Appeals held that the rate cuts violated federal law and threatened access to “much-needed medical care.” The Ninth Circuit found that private parties could sue under the Supremacy Clause, which makes federal law “the supreme law of the land.” California appealed the case to the Supreme Court, which heard oral arguments yesterday.
The Health Law team at von Briesen will monitor the progress of the case, including the Supreme Court’s decision, which is anticipated by spring.
October 3, 2011
DHS Proposes Cuts to Wisconsin Medicaid Program
The Wisconsin Department of Health Services (DHS) announced Friday a set of proposed changes to the Wisconsin Medicaid program as part of DHS’ efforts to identify and implement savings measures in the program. In a letter to co-chairs of the Joint Committee on Finance, DHS Secretary Smith outlined a number of proposals aimed at cutting Medicaid spending by $554.4 million in all funds needed to balance the program. These proposed cuts are required under the 2011-2013 biennial budget (Act 32 § 49.45(2m)(f)).
DHS’ proposed changes focus on review and reform of service delivery models, payment, benefits, and eligibility, including:
- Elimination of the 2% intensity increase in hospital inpatient payments, leaving hospital base funding at FY 2011 levels. (Projected Savings: $7.2 million GPR).
- Modification and reduction of provider reimbursement for services to dual eligibles such that providers will receive the same reimbursement for services provided to dual eligibles and non-dual eligibles. (Projected Savings: $6 million GPR).
- Implementation of the Enhanced Ambulatory Patient Grouping System (EAPGs) for outpatient claims reimbursement similar to inpatient DRG payments. (Projected Savings: $1.6 million GPR).
- Development of a per diem rate for end stage renal disease services not to exceed 80% of Medicare payments. (Projected Savings: $1.3-1.5 million GPR).
- Adjustment of rate paid to physicians for services typically provided in an office setting when those services are instead provided in a hospital setting, including adjustment based on lower overhead costs in a hospital setting. (Projected Savings: $1.5 million GPR).
- Increased focus on fraud and Medicaid integrity with the addition of 10 FTE contract auditors and implementation of extrapolation policies when fraud is identified (Projected Savings: $14.9 million GPR); payment review for Medicaid Managed care fee-for-service payments to identify inappropriate payments (Projected Savings: $2 million GPR); and contracts with Recovery Audit Contractors (RACs) to reduce improper payments (Projected Savings: $3 million GPR).
- Submission of a proposed Demonstration Project to waive the Maintenance of Effort Waiver requirements established under the Affordable Care Act. (Projected Savings: $54.4 million GPR).
The DHS letter also includes reform proposals regarding: HMO and hospital pay for performance, asset test enhancement, divestment policy reforms, third party liability, medical homes for specific populations, conversion of 1915(i) Home and Community Based Waiver to 1937 Benchmark Alternative Benefits Plan, and the Family Care enrollment cap.
The full list of DHS Medicaid proposals is available here, and the Secretary’s statement on the Medicaid program is available here. Read the joint statement by Joint Committee on Finance Co-Chairs here. Comments on these proposals may be submitted to DHS’ new Medicaid reform website.