Welcome to the Weintraub Resources section. Here, you can find our Blogs, Videos, and Podcasts, in which Weintraub attorneys regularly provide insights and updates on legal developments. You can also find upcoming Weintraub Events, as well as firm and client News.

Brace For The Transition — Enrollment Tips; CMS Changes California Mac Award Contract From Palmetto GBA To Noridian

The Centers for Medicare & Medicaid Services (“CMS”) recently announced that it awarded Noridian Administrative Services the contract for administration of Medicare Part A and Part B fee-for-service claims for California, Nevada, Hawaii and the American territories of American Samoa, Guam and the Northern Mariana Islands. Noridian will also take over additional Medicare operational functions, including provider enrollment functions. According to CMS, the workload transfer is to be complete by early 2013. However, if Palmetto GBA protests the bid award, this could significantly delay implementation.

SCOTUS Hands Employers Huge Health Care Obligations

Yesterday, the Supreme Court of the United States ruled that the Patient Protection and Affordable Care Act of 2010 as amended by the Health Care and Education Reconciliation Act of 2010 is constitutional. The decision came down in the cases entitled, National Federation of Independent Business et al. v. Sebelius, No. 11-393 (June 28, 2012), Department of Health and Human Services et al. v. Florida et al., No. 11-398, and Florida et al. v. Department of Health and Human Services et al., No. 11-400). There, the 5 to 4 majority decided that the law is constitutional as an exercise of Congress’ power to tax, despite the congressional record stating it is not a tax. In California, where statutes that say “penalty” are later determined by courts to be “wages” these types of word games come as no surprise.

The overall effect of the Court’s decision: all existing provisions of the Act, such as the coverage of adult children up to age 26 and the prohibitions on lifetime benefit limits, remain in effect. More importantly, the penalties on larger employers for failing to provide minimum essential coverage and availability of coverage through government-sponsored exchanges will become effective as scheduled, on January 1, 2014.

So Now What?: Employers’ Obligations

Employer sponsored group health plans must now ensure compliance with Act’s regulations regarding the summary of benefits and coverage. An employer’s next open enrollment (if after September 21, 2012) will require distribution of summaries of benefits and coverage during upcoming open enrollments. Employers are required to provide employees with an HHS approved “easy to understand” summary of benefits and coverage explanation (SBC) prior to enrollment, re-enrollment upon request, or upon a mid-year material modification. The SBC requirement applies to insured and self-funded group health plans, regardless of grandfathered status, and health insurance issuers offering group or individual health insurance coverage. Employers will also have to prepare to issue Form W-2s for 2012 that include the cost of group health coverage. Finally, those Employers that are negotiating collective bargaining agreements will need to consider the effects of the health care reform requirements, assuming that it will be fully implemented.

In addition to the above, below are some other key provisions of the Act that affect employers:

• “Play or Pay”: Every employer with 50 or more full-time employees will have to either (a) provide at least a specified minimum level of health coverage that its employees can afford or (b) pay a penalty beginning in 2014.
No discrimination for highly compensated employees. Group health plans may not discriminate in favor of highly compensated individuals regarding coverage and benefits.
Flexible Spending Account. Beginning next year, the law limits the maximum health care flexible spending account amount to $2,500.
Benefit Limitations. Employer group health plans will be prohibited from having lifetime or annual limits on benefit amounts. The plans will also no longer permit waiting periods in excess of 90 days or any differential treatment for pre-existing condition.
Tax Treatment. Eliminated are the Code’s tax-free reimbursements for over-the-counter medicines.
Retiree Drug Costs. Beginning in 2013, the employer tax deduction for retiree prescription drug benefit costs for employers receiving a related subsidy is eliminated.
Automatic Enrollment. Beginning in 2014, employers with more than 200 full-time employees will be required to automatically enroll new full-time employees in group health plans.

And last but not least, Employers must report the annual cost of health coverage on each employee’s W-2 to the government for research purposes. It is likely the government will later look at taxing individuals or employers for the benefit they were forced to receive.

The Individual Mandate (err Tax)

In addition to imposing requirements and restrictions on employers and employer-sponsored group health plans, the law requires individuals to purchase health coverage or pay a penalty (the “individual mandate”). In addition, the Act increases the Federal Income Contributions Act (“FICA”) tax on individuals with compensation in excess of $200,000 by 62 percent.

Putting the Decision in Context

Employers should keep in mind that while the Supreme Court’s decisions are the final word on the specific constitutional challenges, they may not be the last word on what part or parts of the Act gets enacted. Lawmakers in the U.S. House of Representatives have vowed to repeal and replace the health care reform law. In addition, this issue is expected to be one of the bigger issues during this year’s presidential campaign.

More immediately however, Employers can expect the cost of maintaining a health plan will likely go up. Employers will need to examine the portion of the employee cost that you are paying currently in light of employees’ pay to determine whether you will be in compliance with the play or pay mandate. Employers will also have to be prepared for the many questions Employees will have about how the Act impacts their healthcare plans. For help in addressing the impact of these new provisions, please contact any of the employment lawyers at Weintraub Genshlea Chediak Tobin & Tobin who are always available to answer questions and assist employers in all of their employment law needs.

Fundamentals of Provider Enrollment 2012

American Health Lawyers Association, Institute on Medicare and Medicaid Payment Issues Conference, Fundamentals of Provider Enrollment.

When: March 28–30, 2012

Where: Baltimore, Maryland.

Medicare-Enrolled Providers And Suppliers To Revalidate By 2015

The Centers for Medicare & Medicaid Services (“CMS”) has begun the process of revalidating most Medicare provider and supplier enrollments, which must be completed by 2015. This effort began making waves in the provider and supplier community when letters sent last fall from the Medicare Administrative Contractors (“MACs”) gave recipients 60 days to respond with a complete Medicare revalidation application. The consequences of failure to comply with a MAC request to revalidate include deactivation of a provider or supplier’s enrollment, which means that the Medicare revenue stream ceases.

CMS Finalizes 2012 Skilled Nursing Facility Payment Changes

The Centers for Medicare & Medicaid Services (CMS) finalized changes for Medicare skilled nursing facility (SNF) payments for calendar year (CY) 2012. The final rule will be published in the August 8, 2011, Federal Register. CMS finalized an 11.1% decrease to SNF Medicare payments, reflecting the net effects of a downward recalibration of case-mix indexes, a market basket increase and a multi-factor productivity adjustment to the SNF prospective payment system (PPS) rates. In addition, CMS revised several SNF payment policies effective October 1, 2011.

CMS Proposes 2012 Home Health Agency Payment Changes

The Centers for Medicare & Medicaid Services (CMS) proposed changes for Medicare home health agency (HHA) payments for calendar year (CY) 2012. The proposed rule, which was published in the July 12, 2011, Federal Register, results in a net 3.35% decrease to HHA Medicare payments after taking into account the effects of both market basket and wage index updates and reductions in the home health prospective payment system (PPS) rates.

CMS Proposes HOPDAnd ASC Payment Policy And Rate Updates For 2012

On July 1, 2011, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule with policy and payment changes for Hospital Outpatient Departments (HOPDs) and Ambulatory Surgical Centers (ASCs). The proposed rule would affect Medicare payments commencing in calendar year (CY) 2012. The proposed rule will be published in the July 18, 2011, Federal Register.

CMS Issues Proposed 2012 Physician Fee Schedule

On July 1, 2011, the Centers for Medicare & Medicaid Services (CMS) issued proposed payment rate and policy changes for the Medicare physician fee schedule that would go into effect for calendar year (CY) 2012. The proposed rule will be published in the July 19, 2011, Federal Register. Highlights of the proposed changes are discussed below. Note that the proposed rule does not address CMS’ projected reduction of 29.5% to the conversion factor for CY 2012 that is based on the application of the sustainable growth rate (SGR). The reason is that this reduction can only be averted through a change in law. The President’s budget submission for fiscal year (FY) 2012 would extend current payment rates through Dec. 31, 2013.

Government Payor File Updates More Important Than Ever To Keep Revenue Streams Alive

Few surgery centers can remain economically viable without at least some level of government payor reimbursement. So imagine a scenario where the ASC’s Medicare or Medicaid receivables come to a screeching halt without warning; the enrollment has been deactivated. This does happen; sorting out why and how to fix it can take many months.