States Required to Submit Request for Enhanced Medicaid FMAP
Last week, Health and Human Services Secretary Kathleen Sebelius sent a letter to all of America's governors telling them that if they want to continue receiving the enhanced Medicaid funds that Congress recently approved they have to ask for the money. Members of Congress interrupted their August recess to approve an extension of enhanced Medicaid Federal Medical Assistance Percentage (FMAP) funds, through June 2011. Sebellius sent all governors a letter informing them that they have until September 24 to ask for the funds.

Both Republicans and Democrats alike urged Congress to approve the extension of the enhanced match, but some governors initially signed a letter with 40 state executives requesting Medicaid assistance and later changed their position. In her August 16 communication, Sebelius said the new federal funding can stave off the deep cuts to Medicaid that many had feared and sustain jobs in hospitals, health centers and communities across the country and she urged the governors to act.  The Centers for Medicare & Medicaid Services issued a letter template that governors may use to request the six month extension of Medicaid's temporary enhanced Federal Medical Assistance Percentage.

HHS Announces State Grants for Health Insurance Consumer Assistance
States may now apply for federal grants to help consumers file health insurance complaints or appeals and enroll in health coverage. Funded by the Patient Protection and Affordable Care Act, Consumer Assistance Program grants are available to states to establish a health insurance consumer assistance or ombudsman program through the insurance department, attorney general, independent consumer assistance agency, or contract or partnership with one or more non-profit organizations. To apply, states also must explain how the program will demonstrate independence, assist people with all types of coverage, collect data about any problems and questions, and provide assistance in a culturally appropriate manner. Starting in 2014, the programs also must help resolve problems with premium credits for health insurance exchange coverage. Applications are due September 10.

Obama Appoints Berwick to CMS
During the current congressional recess, President Barack Obama appointed Donald Berwick, MD, current president and CEO of the Institute for Healthcare Improvement, to fill the role of the Centers for Medicare & Medicaid Services (CMS) administrator. Berwick has dedicated his career to engaging hospitals, doctors, nurses and other healthcare providers to improve patient care. A physician and innovator in healthcare quality, his knowledge of the healthcare system makes him the right choice. Berwick served as an independent member of the American Hospital Association (AHA) Board of Trustees from 1996 to 1999. AHA President and CEO Rich Umbdenstock said that given the importance of health reform to millions of Americans, tapping a respected leader for CMS is of the utmost importance. The Obama Administration made the initial nomination in late March.

President Signs MD Payment Fix, Senate “Jobs” Stalemate Continues
The House last week approved legislation (H.R. 3962) to delay for six months a 21% Medicare pay cut for physicians by providing a 2.2% increase in the Medicare physician fee schedule through November. Signed into law by President Obama, H.R. 3962 will reduce hospital payments by about $4 billion by prohibiting hospitals from retrospectively billing to unbundle payments for outpatient therapeutic services provided prior to date of enactment of the legislation if they were performed within 72 hours of a hospital admission and were unrelated to that admission.

The bill does not extend a temporary increase in Medicaid's Federal Medical Assistance Percentage (FMAP), nor does it extend COBRA subsidies to laid-off workers, as proposed in earlier versions of "Jobs" legislation. The 2009 economic stimulus bill included $87 billion in Medicaid funding to help states weather the recession. The funding expires at the end of 2010. The initial proposal would have increased Medicaid’s FMAP by 6.2% over six months. That proposal has run aground in the Senate, where Republicans objected to the cost. The impasse prompted Democratic leaders to scale back the extra Medicaid funding from $24 billion to $15 billion. It was killed last Thursday along with the rest of the bill, when a procedural motion failed. Currently, 22 states and the District of Columbia have passed budgets presuming that the additional six months of funding is forthcoming.

Senate “Tax Extender”  Bill Continues to Raise Concerns
Senate Democrats continue to look for 60 votes necessary to pass the "tax extenders" bill this week, which also includes language to prevent scheduled cuts to doctors' Medicare pay and more Medicaid funding for states. The $115 billion package has raised concerns among both Democrats and Republicans that it will raise the deficit while the American Hospital Association (AHA) and other national hospital groups have expressed concerns over the bill's payment reduction to hospitals. The Senate began debate on its version of the legislation by offering a substitute amendment that makes several changes from the legislation passed earlier in the House. The Senate bill adds a six-month extension, through June 30, 2011, of the federal Medicaid matching rate (FMAP) increases enacted under the American Recovery and Reinvestment Act of 2009. Like the version of the bill approved by the House, the amendment includes provisions that would delay a 21% Medicare payment cut for physicians that took effect June 1 and reduce Medicare payments to hospitals by about $4 billion. According to AHA, both versions of the bill give physicians a 2.2% rate increase for the rest of this year and an additional 1% increase in 2011, and change Medicare's "72 Hour Rule" to prevent hospitals from submitting separate Medicare reimbursement claims for inpatient and outpatient therapeutic care provided within three days of a hospital admission.

Jobs Bill Trimmed of COBRA and Medicaid
Last week, Democratic leaders caved in to the demands of fiscal conservatives by cutting nearly $50 billion out of the Jobs bill by shortening the physician fix to 19 months from three-and-a-half years and shaving a month off of unemployment benefits and COBRA health subsidies. The following day, House Democratic leaders agreed to cut even more out of the bill. The latest round of cuts would eliminate $31 billion to pay for health-related benefits for the unemployed and federal aid to cash-strapped states to maintain Medicaid services. The trimmed bill will be voted on in two pieces; the first will include unemployment insurance and tax extenders, and the second a 19-month Medicare physician payment fix. The House would then send the combined package over to the Senate.

Kaiser Study Estimates Health Reform Medicaid Enrollees
A study released last week by the Kaiser Commission on Medicaid and the Uninsured estimates the state-by-state distribution of new Medicaid enrollees under health reform and the associated reduction in uninsured adults.  The study suggests states are likely to reap health benefits for relatively little cost and may even end up in the black. Provisions of the healthcare reform law, which begin in 2014, will expand the program's eligibility to adults with incomes of less than 133 percent of the federal poverty level. According to the report the law is expected to add 15.9 million people to the Medicaid ranks by 2019 at a cost of $465 billion, though only $21 billion would come from states.

First Lady Releases Plan To Reverse Childhood Obesity
Last week, Michelle Obama unveiled a plan to reverse the epidemic of childhood obesity and called for help from families, schools and businesses as well as government. Ms. Obama released a task force report titled Solving the Problem of Childhood Obesity Within a Generation. The goal, she said, is to ensure that our children can have the healthy lives and the bright futures that they deserve.  The report emphasizes the importance of improved nutrition and physical activity. President Obama's task force suggests insurance coverage for problems faced by obese children, encouraging pediatricians to calculate children's body-mass index and providing information to parents about how to help their children achieve a healthy weight. 

Health Care Worker Receives Prison Sentence for HIPAA Violation
A former UCLA Healthcare System employee was sentenced last week to four months in federal prison for violating the federal privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA), the U.S. Attorney's Office for the Central District of California reports. Huping Zhou, 47, of Los Angeles pleaded guilty in January to four misdemeanor counts of violating HIPAA by illegally reading private and confidential medical records, mostly for celebrities and other high-profile patients, after being terminated from his job at UCLA School of Medicine for unrelated performance reasons. He is the first person to receive a prison sentence for HIPAA privacy violations. According to the American Hospital Association, the UCLA Healthcare System, UCLA School of Medicine and UCLA Medical Group fully cooperated in the investigation.

Short-Term Jobs Legislation Signed into Law
Last week, President Obama signed into law H.R. 4851. The legislation will ensure that physicians who practice in hospital-owned outpatient centers qualify for health information technology incentives under the American Recovery and Reinvestment Act. The bill also delays a 21% Medicare payment cut for physicians until May 31 and extends COBRA coverage for recently unemployed workers through May. Additional legislation is pending in a House-Senate conference that would further delay the physician payment cut until September 30 and extend COBRA relief until December 31, as well as extend Federal Medical Assistance Percentage relief.

President Signs Healthcare Reconciliation Bill
Last week, President Obama signed the Reconciliation Act of 2010 (H.R. 4872), healthcare reform legislation approved by Congress. The bill makes changes to the Senate healthcare reform bill (H.R. 3590) signed by the president March 23. The U.S. House of Representatives voted 220-207 to approve technical changes to the "sidecar" health reform bill, sending it to the president for his signature. The bill, which cleared the Senate earlier in the day, makes changes to the new health reform legislation that were sought by the House and President Obama. Together, H.R. 3590 and H.R. 4872 extend health coverage to 32 million people, 95% of legal residents and 92% of all U.S. residents.

Historic Healthcare Bill Passes House
The U.S. House of Representatives voted Sunday to pass Congress' landmark healthcare reform package. The House first voted 219-212 to pass the Senate-passed reform bill, the Patient Protection and Affordable Care Act (H.R. 3590). It then voted 220-211 to approve the Reconciliation Act of 2010 (H.R. 4872), a package of changes to H.R. 3590. Together, the bills would extend health coverage to 32 million people, 95% of legal residents and 92% of all U.S. residents. The Congressional Budget Office estimates that the legislation will cost $940 billion over 10 years. The president signed the Patient Protection and Affordable Care Act into law on Tuesday. The Senate is expected to vote on H.R. 4872 this week.

Congress Delays Physician Payment Cut
Last week, the president signed legislation delaying a 21% Medicare payment cut for physicians. Among other provisions, the Temporary Extension Act (H.R. 4691) extends through March the American Recovery and Reinvestment Act’s COBRA continuation coverage and premium assistance for recently unemployed workers.

President Open to Republican Health Reform Proposals
President Obama recently told congressional leaders he is exploring as part of a final health reform package at least four policy priorities identified by Republicans at the bipartisan meeting on health reform. In a letter, the president said he is open to proposals to provide an additional $50 million in grants for medical liability demonstrations, ways to increase doctor reimbursement if Medicaid is expanded, allowing high-deductible health plans to participate in the health insurance exchange, and using medical professionals to conduct random undercover investigations of healthcare providers that receive reimbursements from Medicare, Medicaid and other federal programs.

Commission Reports Record Increase in Medicaid Enrollment
Nearly 3.3 million more people enrolled in state Medicaid programs between June 2008 and June 2009, according to a new analysis by the Kaiser Commission on Medicaid and the Uninsured. Enrollment during the one-year period rose by 7.5% to 46.9 million U.S. residents. Every state experienced an increase and 32 states saw enrollment grow at least twice as fast as the year before, according to the analysis. State Medicaid programs have been able to help millions of Americans who have nowhere else to turn in a recession, but states face significant fiscal pressures as increases in enrollment push up costs at a time when state budgets are already severely constrained.

White House Calls for Compromise at Health Summit
President Barack Obama asked that both Republicans and Democrats find common ground on health reform. The President's Health Summit, scheduled for Thursday, could prove a pivotal moment in the year-long effort to overhaul the healthcare system. While both Democrats and Republicans agree broadly that the healthcare system is broken, they have found little consensus on more detailed questions, such as how best to provide insurance to people who don't have access to affordable coverage through an employer. President Obama's compromise plan is expected to provide subsidies to people who can't afford coverage, incentives for businesses to offer insurance and expanded Medicaid coverage for the poor.