Government and Regulations

The question of whether health insurance equals healthcare access is complicated in the roughly two dozen states that have chosen not to expand Medicaid—an option granted by the U.S. Supreme Court in its June 2012 decision that upheld the law’s main tenets. Even with the federal government paying the full cost for the first three years (decreasing to 90% by 2020), some states have argued that the economic burden will be too great.

According to a recent analysis by the Kaiser Family Foundation, roughly five million uninsured adults may now fall into a “coverage gap” as a result. In essence, they will earn too much to be covered under the highly variable Medicaid caps established by individual states but too little to receive any federal tax credits to help pay for insurance in the exchanges. With limited options, the report suggests, they are likely to remain uninsured.

Safety net hospitals also may be squeezed between conflicting state and federal Medicaid priorities. During the initial Affordable Care Act (ACA) negotiations, hospitals agreed to $155 billion in cuts over 10 years, including sharp reductions in Disproportionate Share Hospital (DSH) payments, in anticipation of seeing a significant decrease in uninsured patients. Despite lower DSH payments, the hospitals expected to recoup the money through more Medicaid or private insurance reimbursements.

"The Medicaid expansion being optional throws a kink in all of that,” says Leighton Ku, PhD, MPH, director of the Center for Health Policy Research at George Washington University School of Public Health and Health Services in Washington, D.C.

The ongoing open enrollment in insurance exchanges will make up part of the total. But in states that are not expanding Medicaid, the number of newly insured patients may not compensate for the DSH reductions. Robert Berenson, MD, a senior fellow at the Washington, D.C.-based Urban Institute, a nonpartisan think tank focused on social and economic policy, says the resulting net loss could put some hospitals under additional financial strain.

"There will be pressure within the states from hospitals and from the business community to expand Medicaid because, otherwise, they’re bearing the burden of it,” he says.

Bryn Nelson is a freelance medical writer in Seattle.

The question of whether health insurance equals healthcare access is complicated in the roughly two dozen states that have chosen not to expand Medicaid—an option granted by the U.S. Supreme Court in its June 2012 decision that upheld the law’s main tenets. Even with the federal government paying the full cost for the first three years (decreasing to 90% by 2020), some states have argued that the economic burden will be too great.

According to a recent analysis by the Kaiser Family Foundation, roughly five million uninsured adults may now fall into a “coverage gap” as a result. In essence, they will earn too much to be covered under the highly variable Medicaid caps established by individual states but too little to receive any federal tax credits to help pay for insurance in the exchanges. With limited options, the report suggests, they are likely to remain uninsured.

Safety net hospitals also may be squeezed between conflicting state and federal Medicaid priorities. During the initial Affordable Care Act (ACA) negotiations, hospitals agreed to $155 billion in cuts over 10 years, including sharp reductions in Disproportionate Share Hospital (DSH) payments, in anticipation of seeing a significant decrease in uninsured patients. Despite lower DSH payments, the hospitals expected to recoup the money through more Medicaid or private insurance reimbursements.

"The Medicaid expansion being optional throws a kink in all of that,” says Leighton Ku, PhD, MPH, director of the Center for Health Policy Research at George Washington University School of Public Health and Health Services in Washington, D.C.

The ongoing open enrollment in insurance exchanges will make up part of the total. But in states that are not expanding Medicaid, the number of newly insured patients may not compensate for the DSH reductions. Robert Berenson, MD, a senior fellow at the Washington, D.C.-based Urban Institute, a nonpartisan think tank focused on social and economic policy, says the resulting net loss could put some hospitals under additional financial strain.

"There will be pressure within the states from hospitals and from the business community to expand Medicaid because, otherwise, they’re bearing the burden of it,” he says.

Bryn Nelson is a freelance medical writer in Seattle.

The question of whether health insurance equals healthcare access is complicated in the roughly two dozen states that have chosen not to expand Medicaid—an option granted by the U.S. Supreme Court in its June 2012 decision that upheld the law’s main tenets. Even with the federal government paying the full cost for the first three years (decreasing to 90% by 2020), some states have argued that the economic burden will be too great.

According to a recent analysis by the Kaiser Family Foundation, roughly five million uninsured adults may now fall into a “coverage gap” as a result. In essence, they will earn too much to be covered under the highly variable Medicaid caps established by individual states but too little to receive any federal tax credits to help pay for insurance in the exchanges. With limited options, the report suggests, they are likely to remain uninsured.

Safety net hospitals also may be squeezed between conflicting state and federal Medicaid priorities. During the initial Affordable Care Act (ACA) negotiations, hospitals agreed to $155 billion in cuts over 10 years, including sharp reductions in Disproportionate Share Hospital (DSH) payments, in anticipation of seeing a significant decrease in uninsured patients. Despite lower DSH payments, the hospitals expected to recoup the money through more Medicaid or private insurance reimbursements.

"The Medicaid expansion being optional throws a kink in all of that,” says Leighton Ku, PhD, MPH, director of the Center for Health Policy Research at George Washington University School of Public Health and Health Services in Washington, D.C.

The ongoing open enrollment in insurance exchanges will make up part of the total. But in states that are not expanding Medicaid, the number of newly insured patients may not compensate for the DSH reductions. Robert Berenson, MD, a senior fellow at the Washington, D.C.-based Urban Institute, a nonpartisan think tank focused on social and economic policy, says the resulting net loss could put some hospitals under additional financial strain.

"There will be pressure within the states from hospitals and from the business community to expand Medicaid because, otherwise, they’re bearing the burden of it,” he says.

Bryn Nelson is a freelance medical writer in Seattle.

Click here to listen to more of our interview with Dr. Hilger

Click here to listen to more of our interview with Dr. Hilger

Click here to listen to more of our interview with Dr. Hilger

As many hospitalists are probably acutely aware, the Centers for Medicare & Medicaid Services (CMS) is putting a new rule into effect that will greatly impact how inpatient admission decisions are made. The rule, known as the “two-midnight rule,” states that if the admitting practitioner admits a Medicare beneficiary as an inpatient with the reasonable expectation that the beneficiary will require care that “crosses two midnights” and this decision is justified in the medical record, Medicare Part A payment is “generally appropriate.”

While there are multiple caveats, exceptions, and details, this rule can be simply articulated: If the admitting physician feels a patient will be in the hospital for a period longer than two midnights and the medical record supports this determination, the patient is an inpatient. Stays expected to be shorter than two midnights should be under observation status.

This new policy is an attempt to respond both to hospital calls for more guidance about when a beneficiary is appropriately treated as an inpatient—and paid by Medicare—and concerns about increasingly long hospital stays under observation status. Most hospitalists wrestle with status determination issues on a daily basis.

SHM is aware of the struggle and has been advocating on behalf of hospitalists to help shape observation status and the two-midnight rule. When the rule was first proposed, SHM voiced serious concerns about its utility and how it was unlikely to solve the overall confusion surrounding inpatient status determinations. Nevertheless, CMS finalized the rule as an attempt to begin addressing the problem.

Faced with an increasingly loud chorus of providers and hospitals concerned about the implementation of the new policy, CMS agreed to delay full enforcement from the original date of Oct. 1, 2013, until March 31, 2014.

During the delayed enforcement period, hospitals will be expected to begin implementing the two-midnight rule, and auditors will be giving hospitals non-punitive feedback on their application of the policy. To accomplish this, CMS is instructing Medicare Administrative Contractors (MACs) to review a sample of 10 to 25 inpatient hospital claims spanning less than two midnights after admission for each hospital. This probe sample will be used to assist hospitals with implementing the new requirements correctly. To give an additional level of comfort during this adjustment period, CMS has announced that it will not conduct post-payment patient status reviews for claims with dates of admission Oct. 1, 2013, through March 31, 2014.

Unfortunately, beyond the vague guidance CMS has offered thus far, there is no foolproof guide to establishing new hospital admissions policies that comply with the rule. As a result, there likely will be wide variation among hospitals.

To assist in sorting out the confusion, SHM will be hosting a webinar this month with case studies from several hospitals. The focus will be on the internal processes each hospital is using to implement the rule and how they were developed. Sharing and learning from national implementation experiences is a valuable way for hospitalists to gain new perspectives and to bring those experiences to their home institutions when considering their own roles in meeting the new admissions criteria head on.

For more information about the webinar and to register, visit www.hospitalmedicine.org today.

Josh Boswell is SHM’s senior manager of government relations.

As many hospitalists are probably acutely aware, the Centers for Medicare & Medicaid Services (CMS) is putting a new rule into effect that will greatly impact how inpatient admission decisions are made. The rule, known as the “two-midnight rule,” states that if the admitting practitioner admits a Medicare beneficiary as an inpatient with the reasonable expectation that the beneficiary will require care that “crosses two midnights” and this decision is justified in the medical record, Medicare Part A payment is “generally appropriate.”

While there are multiple caveats, exceptions, and details, this rule can be simply articulated: If the admitting physician feels a patient will be in the hospital for a period longer than two midnights and the medical record supports this determination, the patient is an inpatient. Stays expected to be shorter than two midnights should be under observation status.

This new policy is an attempt to respond both to hospital calls for more guidance about when a beneficiary is appropriately treated as an inpatient—and paid by Medicare—and concerns about increasingly long hospital stays under observation status. Most hospitalists wrestle with status determination issues on a daily basis.

SHM is aware of the struggle and has been advocating on behalf of hospitalists to help shape observation status and the two-midnight rule. When the rule was first proposed, SHM voiced serious concerns about its utility and how it was unlikely to solve the overall confusion surrounding inpatient status determinations. Nevertheless, CMS finalized the rule as an attempt to begin addressing the problem.

Faced with an increasingly loud chorus of providers and hospitals concerned about the implementation of the new policy, CMS agreed to delay full enforcement from the original date of Oct. 1, 2013, until March 31, 2014.

During the delayed enforcement period, hospitals will be expected to begin implementing the two-midnight rule, and auditors will be giving hospitals non-punitive feedback on their application of the policy. To accomplish this, CMS is instructing Medicare Administrative Contractors (MACs) to review a sample of 10 to 25 inpatient hospital claims spanning less than two midnights after admission for each hospital. This probe sample will be used to assist hospitals with implementing the new requirements correctly. To give an additional level of comfort during this adjustment period, CMS has announced that it will not conduct post-payment patient status reviews for claims with dates of admission Oct. 1, 2013, through March 31, 2014.

Unfortunately, beyond the vague guidance CMS has offered thus far, there is no foolproof guide to establishing new hospital admissions policies that comply with the rule. As a result, there likely will be wide variation among hospitals.

To assist in sorting out the confusion, SHM will be hosting a webinar this month with case studies from several hospitals. The focus will be on the internal processes each hospital is using to implement the rule and how they were developed. Sharing and learning from national implementation experiences is a valuable way for hospitalists to gain new perspectives and to bring those experiences to their home institutions when considering their own roles in meeting the new admissions criteria head on.

For more information about the webinar and to register, visit www.hospitalmedicine.org today.

Josh Boswell is SHM’s senior manager of government relations.

As many hospitalists are probably acutely aware, the Centers for Medicare & Medicaid Services (CMS) is putting a new rule into effect that will greatly impact how inpatient admission decisions are made. The rule, known as the “two-midnight rule,” states that if the admitting practitioner admits a Medicare beneficiary as an inpatient with the reasonable expectation that the beneficiary will require care that “crosses two midnights” and this decision is justified in the medical record, Medicare Part A payment is “generally appropriate.”

While there are multiple caveats, exceptions, and details, this rule can be simply articulated: If the admitting physician feels a patient will be in the hospital for a period longer than two midnights and the medical record supports this determination, the patient is an inpatient. Stays expected to be shorter than two midnights should be under observation status.

This new policy is an attempt to respond both to hospital calls for more guidance about when a beneficiary is appropriately treated as an inpatient—and paid by Medicare—and concerns about increasingly long hospital stays under observation status. Most hospitalists wrestle with status determination issues on a daily basis.

SHM is aware of the struggle and has been advocating on behalf of hospitalists to help shape observation status and the two-midnight rule. When the rule was first proposed, SHM voiced serious concerns about its utility and how it was unlikely to solve the overall confusion surrounding inpatient status determinations. Nevertheless, CMS finalized the rule as an attempt to begin addressing the problem.

Faced with an increasingly loud chorus of providers and hospitals concerned about the implementation of the new policy, CMS agreed to delay full enforcement from the original date of Oct. 1, 2013, until March 31, 2014.

During the delayed enforcement period, hospitals will be expected to begin implementing the two-midnight rule, and auditors will be giving hospitals non-punitive feedback on their application of the policy. To accomplish this, CMS is instructing Medicare Administrative Contractors (MACs) to review a sample of 10 to 25 inpatient hospital claims spanning less than two midnights after admission for each hospital. This probe sample will be used to assist hospitals with implementing the new requirements correctly. To give an additional level of comfort during this adjustment period, CMS has announced that it will not conduct post-payment patient status reviews for claims with dates of admission Oct. 1, 2013, through March 31, 2014.

Unfortunately, beyond the vague guidance CMS has offered thus far, there is no foolproof guide to establishing new hospital admissions policies that comply with the rule. As a result, there likely will be wide variation among hospitals.

To assist in sorting out the confusion, SHM will be hosting a webinar this month with case studies from several hospitals. The focus will be on the internal processes each hospital is using to implement the rule and how they were developed. Sharing and learning from national implementation experiences is a valuable way for hospitalists to gain new perspectives and to bring those experiences to their home institutions when considering their own roles in meeting the new admissions criteria head on.

For more information about the webinar and to register, visit www.hospitalmedicine.org today.

Josh Boswell is SHM’s senior manager of government relations.

Initial Efforts

1965

• President Lyndon B. Johnson signs the Social Security Act, which authorizes both Medicare and Medicaid; the law is widely labeled the biggest healthcare reform of the past century.

1993

• President Bill Clinton attempts to craft universal healthcare legislation that includes both individual and employer mandates. He appoints his wife, Hillary Rodham Clinton, as chair of the White House Task Force on Health Reform. The President’s Health Security Act ultimately fails in Congress.

1997

• State Children’s Health Insurance Program (S-CHIP) authorized by Congress, covering low-income children in families above Medicaid eligibility levels.

2006

• Massachusetts (followed by Vermont in 2011) passes legislation that expands healthcare coverage to nearly all state residents; the Massachusetts law is later deemed a template for the Patient Protection and Affordable Care Act of 2010.

The Patient Protection and Affordable Care Act (ACA)

March 23, 2010

• President Obama signs the ACA into law. Among the law’s early provisions: Medicare beneficiaries who reach the Part D drug coverage gap begin receiving $250 rebates, and the IRS begins allowing tax credits to small employers that offer health insurance to their employees.

July 1, 2010

• Federal government begins enrolling patients with pre-existing conditions in a temporary Pre-Existing Condition Insurance Plan (PCIP).

• Healthcare.gov website debuts.

• IRS begins assessing 10% tax on indoor tanning.

Sep. 23, 2010

• Patient-Centered Outcomes Research Institute (PCORI) launches with 21-member board of directors.

• For new insurance plans or those renewed on or after this date, parents are allowed to keep adult children on their health policies until they turn 26 (many private plans voluntarily offered this option earlier).

• HHS bans insurers from imposing lifetime coverage limits and from denying health coverage to children with pre-existing conditions or excluding specific conditions from coverage.

• HHS requires new and renewing health plans to eliminate cost sharing for certain preventive services recommended by U.S. Preventive Services Task Force.

Sep. 30, 2010

• U.S. Comptroller General appoints 15 members to National Health Care Workforce Commission (commission does not secure funding).

December 30, 2010

• Medicare debuts first phase of Physician Compare website.

Jan. 1, 2011

• CMS begins closing Medicare Part D drug coverage gap.

• Medicare begins paying 10% bonus for primary care services (funded through 2015).

• Center for Medicare and Medicaid Innovation debuts, with a focus on testing new payment and care delivery systems.

March 23, 2011

• HHS begins providing grants to individual states to help set up health insurance exchanges.

July 1, 2011

• CMS stops paying for Medicaid services related to specific hospital-acquired infections.

Oct. 1, 2011

• Fifteen-member Independent Payment Advisory Board is formally established (but no members are nominated). The IPAB is charged with issuing legislative recommendations to lower Medicare spending growth, but only if projected costs exceed a certain threshold.

Jan. 1, 2012

• CMS launches Medicaid bundled-payment demonstration and Accountable Care Organization (ACO) incentive program.

• CMS reduces Medicare Advantage rebates but offers bonuses to high-quality plans.

Aug. 1, 2012

• HHS requires most new and renewing health plans to eliminate cost sharing for women’s preventive health services, including contraception.

Oct. 1, 2012

• CMS begins its Value-Based Purchasing (VBP) Program in Medicare, starting with a 1% withholding in FY2013.

• CMS begins reducing Medicare payments based on excess hospital readmissions, starting with a 1% penalty in FY2013.

Jan. 1, 2013

• CMS starts five-year bundled payment pilot program for Medicare, covering 10 conditions.

• CMS increases Medicaid payments for primary care services to 100% of Medicare’s rate (funded for two years).

• IRS increases Medicare tax rate to 2.35% on individuals earning more than $200,000 and on married couples earning more than $250,000; also imposes 3.8% tax on unearned income among high-income taxpayers.

• IRS begins assessing excise tax of 2.3% on sale of taxable medical devices.

Jan. 2, 2013

• Sequestration results in across-the-board cuts of 2% in Medicare reimbursements.

July 1, 2013

• DHS officially launches Consumer Operated and Oriented Plan (CO-OP) to encourage growth of nonprofit health insurers (roughly $2 billion in loans given to co-ops in 23 states by end of 2012).

Oct. 1, 2013

• Open enrollment begins for state- and federal government-run health insurance exchanges and expanded Medicaid; the rollout is marred by multiple computer glitches.

• CMS lowers Medicare Disproportionate Share Hospital (DSH) payments by 75%, starting in FY2014 but plans to supplement these payments based on each hospital’s share of uncompensated care.

• CMS lowers Medicaid DSH payments by $22 billion over 10 years, beginning with $500 million reduction in FY2014.

Jan. 1, 2014

• Coverage begins through health insurance exchanges. Individuals and families with incomes between 100% and 400% of the federal poverty level can receive subsidies to help pay for premiums.

• Voluntary Medicaid expansions expected to take place in roughly half of all states, for individuals up to 138% of the federal poverty level.

• Insurers banned from imposing annual limits on coverage, from restricting coverage due to pre-existing conditions, and from basing premiums on gender.

• Insurers required to cover 10 “essential health benefits,” including medication and maternity care.

March 31, 2014

• Open enrollment closes for health insurance exchanges; under the “individual mandate,” people who qualify but don’t buy insurance by this date will be penalized up to 1% of income (penalty increases in subsequent years).

Oct. 1, 2014

• CMS imposes 1% reduction in payments to hospitals with excess hospital-acquired conditions (FY2015).

• CMS imposes penalties on hospitals that haven’t met electronic health record (EHR) meaningful use requirements.

Jan. 1, 2015

• Employer Shared Responsibility Payment, or the “employer mandate,” begins (delayed from Jan. 1, 2014). With a few exceptions, employers with more than 50 employees must offer coverage or pay a fine.

• CMS begins imposing fines based on doctors who didn’t meet Physician Quality Reporting System requirements during 2013, with an initial 1.5% penalty that rises to 2% in 2016.

Jan. 1, 2018

• High-cost, or so-called “Cadillac,” insurance plans—those with premiums over $10,200 for individuals or $27,500 for family coverage—will be assessed an excise tax.

Sources: Healthcare.gov, Commonwealth Fund, Kaiser Family Foundation, American Medical Association, Greater New York Hospital Association.

Initial Efforts

1965

• President Lyndon B. Johnson signs the Social Security Act, which authorizes both Medicare and Medicaid; the law is widely labeled the biggest healthcare reform of the past century.

1993

• President Bill Clinton attempts to craft universal healthcare legislation that includes both individual and employer mandates. He appoints his wife, Hillary Rodham Clinton, as chair of the White House Task Force on Health Reform. The President’s Health Security Act ultimately fails in Congress.

1997

• State Children’s Health Insurance Program (S-CHIP) authorized by Congress, covering low-income children in families above Medicaid eligibility levels.

2006

• Massachusetts (followed by Vermont in 2011) passes legislation that expands healthcare coverage to nearly all state residents; the Massachusetts law is later deemed a template for the Patient Protection and Affordable Care Act of 2010.

The Patient Protection and Affordable Care Act (ACA)

March 23, 2010

• President Obama signs the ACA into law. Among the law’s early provisions: Medicare beneficiaries who reach the Part D drug coverage gap begin receiving $250 rebates, and the IRS begins allowing tax credits to small employers that offer health insurance to their employees.

July 1, 2010

• Federal government begins enrolling patients with pre-existing conditions in a temporary Pre-Existing Condition Insurance Plan (PCIP).

• Healthcare.gov website debuts.

• IRS begins assessing 10% tax on indoor tanning.

Sep. 23, 2010

• Patient-Centered Outcomes Research Institute (PCORI) launches with 21-member board of directors.

• For new insurance plans or those renewed on or after this date, parents are allowed to keep adult children on their health policies until they turn 26 (many private plans voluntarily offered this option earlier).

• HHS bans insurers from imposing lifetime coverage limits and from denying health coverage to children with pre-existing conditions or excluding specific conditions from coverage.

• HHS requires new and renewing health plans to eliminate cost sharing for certain preventive services recommended by U.S. Preventive Services Task Force.

Sep. 30, 2010

• U.S. Comptroller General appoints 15 members to National Health Care Workforce Commission (commission does not secure funding).

December 30, 2010

• Medicare debuts first phase of Physician Compare website.

Jan. 1, 2011

• CMS begins closing Medicare Part D drug coverage gap.

• Medicare begins paying 10% bonus for primary care services (funded through 2015).

• Center for Medicare and Medicaid Innovation debuts, with a focus on testing new payment and care delivery systems.

March 23, 2011

• HHS begins providing grants to individual states to help set up health insurance exchanges.

July 1, 2011

• CMS stops paying for Medicaid services related to specific hospital-acquired infections.

Oct. 1, 2011

• Fifteen-member Independent Payment Advisory Board is formally established (but no members are nominated). The IPAB is charged with issuing legislative recommendations to lower Medicare spending growth, but only if projected costs exceed a certain threshold.

Jan. 1, 2012

• CMS launches Medicaid bundled-payment demonstration and Accountable Care Organization (ACO) incentive program.

• CMS reduces Medicare Advantage rebates but offers bonuses to high-quality plans.

Aug. 1, 2012

• HHS requires most new and renewing health plans to eliminate cost sharing for women’s preventive health services, including contraception.

Oct. 1, 2012

• CMS begins its Value-Based Purchasing (VBP) Program in Medicare, starting with a 1% withholding in FY2013.

• CMS begins reducing Medicare payments based on excess hospital readmissions, starting with a 1% penalty in FY2013.

Jan. 1, 2013

• CMS starts five-year bundled payment pilot program for Medicare, covering 10 conditions.

• CMS increases Medicaid payments for primary care services to 100% of Medicare’s rate (funded for two years).

• IRS increases Medicare tax rate to 2.35% on individuals earning more than $200,000 and on married couples earning more than $250,000; also imposes 3.8% tax on unearned income among high-income taxpayers.

• IRS begins assessing excise tax of 2.3% on sale of taxable medical devices.

Jan. 2, 2013

• Sequestration results in across-the-board cuts of 2% in Medicare reimbursements.

July 1, 2013

• DHS officially launches Consumer Operated and Oriented Plan (CO-OP) to encourage growth of nonprofit health insurers (roughly $2 billion in loans given to co-ops in 23 states by end of 2012).

Oct. 1, 2013

• Open enrollment begins for state- and federal government-run health insurance exchanges and expanded Medicaid; the rollout is marred by multiple computer glitches.

• CMS lowers Medicare Disproportionate Share Hospital (DSH) payments by 75%, starting in FY2014 but plans to supplement these payments based on each hospital’s share of uncompensated care.

• CMS lowers Medicaid DSH payments by $22 billion over 10 years, beginning with $500 million reduction in FY2014.

Jan. 1, 2014

• Coverage begins through health insurance exchanges. Individuals and families with incomes between 100% and 400% of the federal poverty level can receive subsidies to help pay for premiums.

• Voluntary Medicaid expansions expected to take place in roughly half of all states, for individuals up to 138% of the federal poverty level.

• Insurers banned from imposing annual limits on coverage, from restricting coverage due to pre-existing conditions, and from basing premiums on gender.

• Insurers required to cover 10 “essential health benefits,” including medication and maternity care.

March 31, 2014

• Open enrollment closes for health insurance exchanges; under the “individual mandate,” people who qualify but don’t buy insurance by this date will be penalized up to 1% of income (penalty increases in subsequent years).

Oct. 1, 2014

• CMS imposes 1% reduction in payments to hospitals with excess hospital-acquired conditions (FY2015).

• CMS imposes penalties on hospitals that haven’t met electronic health record (EHR) meaningful use requirements.

Jan. 1, 2015

• Employer Shared Responsibility Payment, or the “employer mandate,” begins (delayed from Jan. 1, 2014). With a few exceptions, employers with more than 50 employees must offer coverage or pay a fine.

• CMS begins imposing fines based on doctors who didn’t meet Physician Quality Reporting System requirements during 2013, with an initial 1.5% penalty that rises to 2% in 2016.

Jan. 1, 2018

• High-cost, or so-called “Cadillac,” insurance plans—those with premiums over $10,200 for individuals or $27,500 for family coverage—will be assessed an excise tax.

Sources: Healthcare.gov, Commonwealth Fund, Kaiser Family Foundation, American Medical Association, Greater New York Hospital Association.

Initial Efforts

1965

• President Lyndon B. Johnson signs the Social Security Act, which authorizes both Medicare and Medicaid; the law is widely labeled the biggest healthcare reform of the past century.

1993

• President Bill Clinton attempts to craft universal healthcare legislation that includes both individual and employer mandates. He appoints his wife, Hillary Rodham Clinton, as chair of the White House Task Force on Health Reform. The President’s Health Security Act ultimately fails in Congress.

1997

• State Children’s Health Insurance Program (S-CHIP) authorized by Congress, covering low-income children in families above Medicaid eligibility levels.

2006

• Massachusetts (followed by Vermont in 2011) passes legislation that expands healthcare coverage to nearly all state residents; the Massachusetts law is later deemed a template for the Patient Protection and Affordable Care Act of 2010.

The Patient Protection and Affordable Care Act (ACA)

March 23, 2010

• President Obama signs the ACA into law. Among the law’s early provisions: Medicare beneficiaries who reach the Part D drug coverage gap begin receiving $250 rebates, and the IRS begins allowing tax credits to small employers that offer health insurance to their employees.

July 1, 2010

• Federal government begins enrolling patients with pre-existing conditions in a temporary Pre-Existing Condition Insurance Plan (PCIP).

• Healthcare.gov website debuts.

• IRS begins assessing 10% tax on indoor tanning.

Sep. 23, 2010

• Patient-Centered Outcomes Research Institute (PCORI) launches with 21-member board of directors.

• For new insurance plans or those renewed on or after this date, parents are allowed to keep adult children on their health policies until they turn 26 (many private plans voluntarily offered this option earlier).

• HHS bans insurers from imposing lifetime coverage limits and from denying health coverage to children with pre-existing conditions or excluding specific conditions from coverage.

• HHS requires new and renewing health plans to eliminate cost sharing for certain preventive services recommended by U.S. Preventive Services Task Force.

Sep. 30, 2010

• U.S. Comptroller General appoints 15 members to National Health Care Workforce Commission (commission does not secure funding).

December 30, 2010

• Medicare debuts first phase of Physician Compare website.

Jan. 1, 2011

• CMS begins closing Medicare Part D drug coverage gap.

• Medicare begins paying 10% bonus for primary care services (funded through 2015).

• Center for Medicare and Medicaid Innovation debuts, with a focus on testing new payment and care delivery systems.

March 23, 2011

• HHS begins providing grants to individual states to help set up health insurance exchanges.

July 1, 2011

• CMS stops paying for Medicaid services related to specific hospital-acquired infections.

Oct. 1, 2011

• Fifteen-member Independent Payment Advisory Board is formally established (but no members are nominated). The IPAB is charged with issuing legislative recommendations to lower Medicare spending growth, but only if projected costs exceed a certain threshold.

Jan. 1, 2012

• CMS launches Medicaid bundled-payment demonstration and Accountable Care Organization (ACO) incentive program.

• CMS reduces Medicare Advantage rebates but offers bonuses to high-quality plans.

Aug. 1, 2012

• HHS requires most new and renewing health plans to eliminate cost sharing for women’s preventive health services, including contraception.

Oct. 1, 2012

• CMS begins its Value-Based Purchasing (VBP) Program in Medicare, starting with a 1% withholding in FY2013.

• CMS begins reducing Medicare payments based on excess hospital readmissions, starting with a 1% penalty in FY2013.

Jan. 1, 2013

• CMS starts five-year bundled payment pilot program for Medicare, covering 10 conditions.

• CMS increases Medicaid payments for primary care services to 100% of Medicare’s rate (funded for two years).

• IRS increases Medicare tax rate to 2.35% on individuals earning more than $200,000 and on married couples earning more than $250,000; also imposes 3.8% tax on unearned income among high-income taxpayers.

• IRS begins assessing excise tax of 2.3% on sale of taxable medical devices.

Jan. 2, 2013

• Sequestration results in across-the-board cuts of 2% in Medicare reimbursements.

July 1, 2013

• DHS officially launches Consumer Operated and Oriented Plan (CO-OP) to encourage growth of nonprofit health insurers (roughly $2 billion in loans given to co-ops in 23 states by end of 2012).

Oct. 1, 2013

• Open enrollment begins for state- and federal government-run health insurance exchanges and expanded Medicaid; the rollout is marred by multiple computer glitches.

• CMS lowers Medicare Disproportionate Share Hospital (DSH) payments by 75%, starting in FY2014 but plans to supplement these payments based on each hospital’s share of uncompensated care.

• CMS lowers Medicaid DSH payments by $22 billion over 10 years, beginning with $500 million reduction in FY2014.

Jan. 1, 2014

• Coverage begins through health insurance exchanges. Individuals and families with incomes between 100% and 400% of the federal poverty level can receive subsidies to help pay for premiums.

• Voluntary Medicaid expansions expected to take place in roughly half of all states, for individuals up to 138% of the federal poverty level.

• Insurers banned from imposing annual limits on coverage, from restricting coverage due to pre-existing conditions, and from basing premiums on gender.

• Insurers required to cover 10 “essential health benefits,” including medication and maternity care.

March 31, 2014

• Open enrollment closes for health insurance exchanges; under the “individual mandate,” people who qualify but don’t buy insurance by this date will be penalized up to 1% of income (penalty increases in subsequent years).

Oct. 1, 2014

• CMS imposes 1% reduction in payments to hospitals with excess hospital-acquired conditions (FY2015).

• CMS imposes penalties on hospitals that haven’t met electronic health record (EHR) meaningful use requirements.

Jan. 1, 2015

• Employer Shared Responsibility Payment, or the “employer mandate,” begins (delayed from Jan. 1, 2014). With a few exceptions, employers with more than 50 employees must offer coverage or pay a fine.

• CMS begins imposing fines based on doctors who didn’t meet Physician Quality Reporting System requirements during 2013, with an initial 1.5% penalty that rises to 2% in 2016.

Jan. 1, 2018

• High-cost, or so-called “Cadillac,” insurance plans—those with premiums over $10,200 for individuals or $27,500 for family coverage—will be assessed an excise tax.

Sources: Healthcare.gov, Commonwealth Fund, Kaiser Family Foundation, American Medical Association, Greater New York Hospital Association.