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Health Care Provisions in the Fiscal Cliff Deal

From the National Business Coalition on Health: Both the Senate and House have now passed a bill to avert the fiscal cliff, and the bill has been signed by the President. The bill deals mostly with the tax implications of the cliff, and not much with the scheduled automatic spending cuts to domestic programs - the "sequestration" - so there will be more to come from Congress.

But the personal income tax provisions, although dominating the news, were not the only provisions included in the legislation. Here are some of the highlights of the health care-related provisions included in the bill:

Consumer Operated and Oriented Plans (CO-OPs). This provision will rescind all unobligated CO-OP funds under section 1332(g) of the Affordable Care Act. This provision also creates a contingency fund of 10 percent of the current unobligated funds to be used to further assist currently approved co-ops that have already been created. The provision does not take away any obligated CO-OP funds. NOTE: Tennessee's CO-OP has already been approved and we assume the funds have been obligated for it and will not, therefore, be impacted by this provision. MBGH will confirm and update members on the funding status.

Medicare Physician Payment Update. This provision fixes the Sustainable Growth Rate (SGR) through the end of 2013. Medicare physician payment rates are scheduled to be reduced by 26.5 percent on Dec. 31, 2012. This provision would avoid that reduction and extend current Medicare payment rates through Dec. 31, 2013.

Work Geographic Adjustment. Under current law, the Medicare fee schedule is adjusted geographically for three factors to reflect differences in the cost of resources needed to produce physician services: physician work, practice expense, and medical malpractice insurance. This provision extends the existing 1.0 floor on the “physician work” index through Dec. 31, 2013.

Rebase Medicaid Disproportionate Share Hospital (DSH) payments to extend the changes from the Affordable Care Act (ACA) for an additional year. This proposal rebases DSH allotments to maintain the level of changes achieved in the ACA, and determines future allotments off of the rebased level using current law methodology.

Repeal of CLASS Program. The provision repeals the Community Living Assistance Services and Supports (CLASS) program established by the Affordable Care Act.

Commission on Long Term Care. The provision establishes the Commission on Long Term Care to develop a plan for the establishment, implementation, and financing of a high quality system that ensures the availability of long-term services and supports for individuals.

Coding Intensity Adjustment. Under current law, Medicare Advantage plans receive risk-adjustment payments that are further adjustment to reflect differences in coding practices between Medicare fee-for-service and Medicare Advantage. This provision increases this coding intensity adjustment.

MBGH is closely monitoring these fiscal cliff discussions through the National Business Coalition on Health and will provide more information as it becomes available.

Posted by Cristie Travis at 8:44 AM

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