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Health Care - In Search of Best Practices

January 2016

Contributors: A. Xavier Baker, Kevin B. Kroeker, Barbara H. Ryland, and Jodi G. Daniel.

The U.S. Supreme Court’s 2015 decision in King v. Burwell was a watershed moment for the Affordable Care Act (ACA).

In its third major interpretation of the ACA, the Court didn’t just uphold federal health care subsidies; it also signaled that the Obama administration’s health care reform program “is not going anywhere,” says Crowell & Moring partner Xavier Baker. But that doesn’t mean smooth sailing ahead for the ACA—especially for the insurance marketplaces.

Although the Court upheld the availability of premiums subsidies in the federal marketplaces, funding shortfalls in the temporary risk corridor program and higher-than-expected losses for health insurers’ marketplace business means continuing uncertainty for one of the ACA’s signature programs. “The federal government has affirmed numerous times that it will make good on its risk corridor obligations,” Baker says, “but whether insurers can afford to wait for the payments and whether they’ll decide the marketplaces are too expensive and exit that business remain open questions.” At the same time, federal regulators have a renewed mandate to establish new rules and regulations that they say will make the system run better.

The Centers for Medicare and Medicaid Services (CMS) is expected to finalize proposed rules governing state Medicaid managed-care programs. Crowell & Moring partner Kevin Kroeker says the new rules were overdue, given the shift by the states from fee-for-service Medicaid to managed-care plans.

While the new rules would cap insurer profits, Kroeker says many Medicaid managed-care plans are operating on razor-thin margins and some states already impose profit limits. And, he points out, new actuarial soundness requirements could actually represent a “silver lining” for those plans because such requirements call for rates that allow plans to recover “all reasonable, appropriate, and attainable” costs.

The new rules also call for states to create network adequacy requirements to bolster beneficiaries’ access to care, with time and distance standards for certain types of doctors, which could be a challenge in rural areas and more broadly in states where Medicaid reimbursement levels are particularly low.

Insurers will likely struggle with CMS’s new provider directory rules, which require them to provide up-to-date doctor lists for their Medicare Advantage and policies, says Crowell & Moring senior counsel Barbara Ryland. “There are major logistical hurdles,” she says. For example, CMS requires that provider directories include information on which languages are spoken at each provider’s office—and continuously update that information in real time. “It’s a struggle in that it’s a hard-and-fast rule without a lot of give,” she says. “The hope is that over time, we’ll see some best practices emerge, and CMS might take a more realistic approach.”

Kevin Kroeker, Barbara Ryland, Xavier Baker, and Jodi Daniel.


This year federal regulators will propose rules that will govern the use of electronic health records (EHR) under Medicare and Medicaid programs well into the future, says Crowell & Moring partner Jodi Daniel, who served in the Department of Health and Human Services for 15 years, including 10 years as a director in the Office of the National Coordinator for Health Information Technology.

In 2015, she notes, CMS published final rules for Stage 3 of the Medicare and Medicaid EHR Incentive Programs, which sets “meaningful use” objectives and measures for doctors and hospitals beginning in 2018. While this is anticipated to be the last stage of Meaningful Use, CMS asked for comments and published a request for information on the connection between the EHR Incentive Programs and the new Merit Based Incentive Payment System (MIPS) that will go into effect in 2019. CMS will likely propose new rules in 2016 to address Meaningful Use of EHRs and MIPS, identify required EHR technology, and define alternative payment models. The Office of the National Coordinator for Health IT (ONC) will continually update its recommended and required EHR standards, affecting the technology doctors and hospitals use.

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Regulatory Forecast]

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Jodi G. Daniel
Partner & CHS Managing Director – Washington, D.C.
Phone: +1.202.624.2908

Barbara H. Ryland
Senior Counsel – Washington, D.C.
Phone: +1.202.624.2970