H.R. 3962 Summary
Insurance reforms. Prohibits insurance rating based on health status or pre-existing conditions, and limits age rating to 2:1. Prohibits annual or lifetime limits on medical spending. Grandfathers current individual policies.
Exchange. Creates a new marketplace called the national “Health Insurance Exchange”, with an option for states that agree to meet federal standards to run their own exchange.
Eligibility. People are eligible to enter the Exchange and purchase health insurance on their own as long as they are not enrolled in employer sponsored insurance, Medicare or Medicaid. The Exchange is also open to businesses, starting with small firms and growing over time.
Benefits. Outlines broad categories of covered services in the law, and creates a Health Benefits Advisory Commission, with physicians and other expert members, to help the Secretary of HHS define the essential benefit package.
Public health insurance option. The bill establishes a public health insurance option available within the Exchange to ensure choice, competition and accountability. Like other private plans, the public option must survive on its premiums.
New health insurance options. The legislation authorizes start-up loans to assist states with the creation of health insurance co-operatives as an additional option. It also permits states to enter into agreements to allow for the sale of health insurance across state lines when the state legislatures agree to such compacts.
Repealing the antitrust exemption for insurers. The bill promotes competition among health insurers and medical malpractice insurers by removing the antitrust exemption so that it no longer shields these insurers from liability for fixing prices, dividing up territories, or monopolizing their market.
Help for early retirees (temporary reinsurance program). Creates a $10 billion fund to finance a temporary reinsurance program to help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55-64.
Limitation on post-retirement reductions of retiree healthcare benefits. Prohibits employers from reducing retirees‘ health benefits after those retirees have retired, unless the reduction is also made to benefits for active participants.
Employers. Employers must either provide health insurance to their employees or make a contribution to help fund affordable health insurance. Employers that choose to offer coverage contribute at least 72.5 percent of premium for workers, 65 percent for families.
Small business protections. Small businesses with annual payrolls below $500,000 are exempt from requirements to offer or contribute to coverage, including the 8 percent payroll contribution for failure to provide health benefits to their workers. There is also a tax credit program to help low-wage small businesses offer coverage to their employees.
Small business tax credits. Small business tax credits are available for businesses with 10 or fewer employees and $20,000 or less in average wages. The credits phase-out if the employer has 25 or more employees or if average wages are $40,000 or more.
Individuals. Individuals are required to obtain health insurance coverage or pay a fee equal to lower of 2.5 percent of their adjusted income above the filing threshold or the average premium on the Exchange. Individuals and families below the income tax filing are exempt.
Government responsibility. It is the responsibility of the federal government to ensure that essential health coverage is affordable and available to all Americans by establishing consumer protections and insurance reforms, affordability credits and overseeing a fair marketplace for people to choose among options.
Affordability credits. Provides financial assistance for premiums and cost sharing for individuals and families with incomes up to 400 percent of the federal poverty level (FPL). Affordability credits are offered on a sliding scale such that premiums range from 1.5 percent of income at the lowest tier to 12 percent at 400 percent FPL.
Eligibility. Affordability credits are available to American citizens and legal residents whose employers do not offer coverage or whose share of employer-sponsored health insurance costs more than 12 percent of their family income.
Caps out-of-pocket spending and limits. Helps prevent medical bankruptcy by limiting out-of pocket costs to no more than $5,000 for individuals and $10,000 for families; these levels are indexed to inflation.
Medicaid and CHIP. Expands Medicaid coverage to everyone within income at or below 150 percent FPL ($33,100 per year for a family of 4) who is not eligible for Medicare. Eliminates assets tests for eligibility groups other than for long-term care. Requires States that now cover those above 150 percent FPL to maintain eligibility.
Revenue. The bill would impose a surcharge on taxpayers with adjusted gross income in excess of $1 million (married filing a joint return) and $500,000 (single) at a rate of 5.4 percent. The bill also clarifies that an employee’s share of premiums for employer-provided coverage offered through the Exchange may be paid on a pre-tax basis through a cafeteria plan.
Hospitals. Substantial delivery and payment system reforms, including productivity adjustments and reductions in market basket updates for most providers, per recommendations from MedPAC, OIG, GAO and others.
Skilled nursing facilities. Follows recommendations from MedPAC and others to encourage payment accuracy that more accurately reflects the costs of services provided.
Medicare DSH payments. Directs the Secretary of HHS to study Medicare DSH payments and report to Congress with recommendations on how best to ensure that DSH is properly targeted to adequately reflect the higher costs of care associated with treating low-income patients.
Graduate medical education. Provides incentives for the training of primary care physicians. Encourages medical residency training in non-hospital settings so that the future physicians of America will be able to provide coordinated care across the spectrum of provider settings.
Hospice moratorium. Extends a one year moratorium on regulatory changes that would phase out the budget neutrality adjustment factor for Hospice providers to ensure that hospices continue to receive the same reimbursement rate for wages for fiscal year 2010.
Reducing potentially preventable hospital readmissions. Changes payment incentives to hospitals and post-acute care providers to discourage preventable hospital readmissions.
Post-acute care bundling. Promotes bundled payments that encourage providers to coordinate a patient’s care across the entire spectrum, from the doctor’s office, to the hospital, through a rehabilitative or nursing facility stay, and back to home.
Center for Medicare & Medicaid Innovation. Establishes a Center for Medicare & Medicaid Innovation to empower CMS to pursue additional payment and delivery system reforms.
Healthcare-associated infections. Requires hospitals and ambulatory surgical centers to report public health information on healthcare-associated infections to the Centers for Disease Control and Prevention.
IOM study of the appropriateness of Medicare payment rates based on geography. Within one year of enactment, the Institute of Medicine is required to report to CMS on the validity of the geographic adjusters that apply to Medicare physician and hospital payments and include any recommendations for improvements.
Productivity adjustments. Expands productivity adjustments to Medicare providers who receive CPI updates in addition to those that receive market basket updates. These providers are: ambulatory surgical centers, ambulances, clinical laboratories, and durable medical equipment not competitively bid.
Accountable Care Organization program. Establishes a new program that allows providers to share in Medicare savings they help create through care coordination and quality improvement initiatives. Ensures that doctors can join with hospitals and others when forming these organizations.
Telehealth. Expands Medicare’s telehealth benefit to beneficiaries who are receiving care at freestanding dialysis centers.
Quality measures. Creates a timely process to allow for a multi-stakeholder group to provide the Secretary with input into the selection of quality measures and provides for consultation by the Secretary of a consensus-based entity in the use of quality measures.
Cost sharing for preventive services. Eliminates deductibles and co-payments for all preventive services covered by the Medicare program.
Improved access to vaccines. Makes it easier for Medicare beneficiaries to get access to needed vaccinations by covering all vaccines under Part B of the program rather than Part D.
Extend Qualified Individuals (QI) program. Extends the QI program two years to help low-income beneficiaries pay their Part B premiums.
Extends months of coverage of immunosuppressive drugs for kidney transplant patients. Lifts the current 36-month limitation on Medicare coverage of immunosuppressive drugs for kidney transplant patients who would otherwise lose this coverage on or after January 1, 2012.
Durable medical equipment in Medicare. Provides protections for beneficiaries receiving oxygen therapy in the event an oxygen supplier goes out of business. Exempts certain pharmacies from the surety bond requirement and the need to be accredited to sell diabetic testing supplies and certain other items.
Payment for imaging services. Instructs CMS to pay more accurately for imaging services in Medicare. Excludes lowtech imaging devices (such as ultrasound, mammograms, EKGs, and x-rays) from the adjustment in payment.
Medicare drug benefit. Eliminates Part D donut hole over time and provides 50 percent discount in donut hole for Part D enrollees. Restores manufacturer rebate for Part D drugs used by dual eligibles, as well as low-income subsidy eligibles after 2015.
Medicare low-income subsidy. Increases eligibility limits by raising assets test and clarifying what counts toward the asset test. Eliminates cost-sharing for certain non-institutionalized dual eligibles.
Encourage accurate dispensing of drugs. Requires that Part D and MA-PD plans develop methods to reduce waste of drugs in the long-term care setting.
Increase use of generics. Increases generic drug utilization by eliminating current requirements that prevent Part D and MA-PD plans from creating incentives for seniors to use lower-cost generic drugs.
Follow-on biologics. Creates an FDA licensure pathway for “biosimilar” generic biological products, allowing these products to come to market and compete with brand name biologics. The biosimilar product must have no clinically meaningful differences in safety, purity or potency from the reference product, and may not be licensed until at least 12 years after the date that the brand-name product was licensed.
Physician Payment Sunshine. Requires manufacturers or distributors to electronically report to the HHS OIG any payments or other transfers of value above a $5 de minimis made to a “covered recipient. Requires hospitals, manufacturers and group purchasing organizations to report the nature of ownership arrangements by physicians.
REDUCIING WASTE,, FRAUD,, AND ABUSE Increases funding by $100 million annually for the Healthcare Fraud and Abuse Control Fund to fight Medicare and Medicaid fraud; improves provider and payment screening to prevent fraud and abuse before it occurs; creates enhanced oversight for Medicare and Medicaid programs at risk of fraud and abuse; creates new penalties for providers and suppliers that defraud federal health care programs; partners with the private sector to reduce waste and abuse by requiring that all Medicare and Medicaid providers establish compliance programs to reduce waste, fraud, and abuse.
PREVENTIION & WELLNESS Creates a grant program to help small and mid-sized employers begin or strengthen workplace wellness programs. These grants will assist in improving the health of our nation’s workforce and will reduce employer health care costs.
Coverage for HIV-positive individuals. Allows State Medicaid programs to cover low-income individuals who are HIV positive through December 31, 2013, after which coverage will be available through the Health Insurance Exchange or, for those with incomes at or below 133 percent of poverty, Medicaid.
Increasing prescription drug rebates. Increases the minimum percentage rebate on brand-name drugs to 23.1 percent of average manufacturer price; extends rebates to new formulations of brand-name drugs; and extends rebate requirement to drugs prescribed by Medicaid managed care organizations.
Reductions in Medicaid DSH payments. Directs the Secretary of HHS to reduce Medicaid DSH payments to States by a total of $10 billion using a methodology that imposes the largest reductions on states with the lowest percentages of uninsured individuals or the least effective targeting of funds on DSH hospitals.
Prohibitions on Medicaid and CHIP payment for undocumented Immigrants. Provides that the Medicaid title does not change current prohibitions against Federal Medicaid or CHIP payments for persons not lawfully present in the U.S.
Primary care residencies in community health centers. Establishes a new grant program to support the development and operation of primary care residency programs in community-based settings such as community health centers.
School-Based health clinics. Establishes a new grants program to support school-based health clinics that provide health services to children and adolescents.
IHS reauthorization. A new division is added to provide for the reauthorization of the Indian Health Care Improvement Act (IHCIA). IHCIA provides the main legal authority for the provision of health care to American Indians and Alaskan Natives.
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