Weekend Update

Congress returns to Washington this week. The legislature needs to resolve or at least kick down the road the Homeland Security funding issue this week.

Right after the FEHBlog hit publish on Friday's TGIF post, the Department of Health and Human Services let loose two huge regulations -- the proposed Medicare Advantage and Medicare Part D funding rule for 2016 and the final ACA notice of benefit and payment parameters also for 2016. The links are to the HHS Fact Sheets.

Here's a link to the Hill's article on the Medicare Advantage rule.  "The new rate proposal announced Friday would decrease payments “modestly” by about 0.95 percent, said Sean Cavanaugh, deputy administrator and director of the Center for Medicare and Medicaid Services (CMS)." This reduction is bound to be controversial as Medicare Advantage is a popular program but the ACA is driving these reductions.

A hat tip to Tim Jost at the Health Affairs  blog, who has already written detailed reports on OPM's final multi-state plan rule and the 2016 benefits and payments parameter notice.  This parameters notice continues to tighten the leash on the qualified health plans operating in the exchanges which includes OPM's multi-state plan options. The most relevant portion of the notice for FEHB plans is its discussion of the transitional reinsurance contribution.

Here is the relevant preamble (p. 84) discussion of the transitional reinsurance contribution rate (self insured and self administered plans are exempt from this fee for 2015 and 2016)

Although we stated in the 2015 Payment Notice (79 FR 13776) that, for operationalreasons, HHS would not permit contributing entities to elect to make the entire benefit year’s reinsurance contribution by January 15, 2015, 2016, or 2017, as applicable, we have resolved those operational barriers, and now offer contributing entities the option to pay: (1) the entire 2014, 2015 or 2016 benefit year contribution in one payment no later than January 15, 2015, 2016, or 2017, as applicable (or, if such date is not a business day, the next applicable business day), reflecting the entire uniform contribution rate applicable to each benefit year (that is, $63 per covered life for 2014, $44 per covered life for 2015, and $27 per covered life for 2016); or (2) in two separate payments for the 2014, 2015, or 2016 benefit years, with the first remittance due by January 15, 2015, 2016, and 2017, as applicable (or, if such date is not a business day, the next applicable business day) reflecting the first payment of the bifurcated contribution (that is, $52.50 per covered life for 2014, $33.00 per covered life for 2015, and $21.60 per covered life for 2016); and the second remittance due by November 15, 2015, 2016, or 2017, as applicable (or, if such date is not a business day, the next applicable business day) reflecting the second payment of the bifurcated contribution (that is, $10.50 reinsurance fee per covered life for 2014,$11.00 per covered life for 2015, and $5.40 per covered life for 2016).

By operation of the ACA, the fee will sunset for 2017 for all types of plans.

Finally, the FEHBlog nearly intrigued by this Modern Healthcare article reporting that

As hospitals increasingly lose patients to medical care delivered in clinics and home settings, hospital operators are escalating their efforts to shrink capacity. Hospitals are operating with fewer beds or closing outright, in some cases to make way for new ambulatory-care centers.