Healthcare News From Capitol Hill And The Department Of Health And Human Services – August 22, 2011

HHS AWARDS GRANTS TO COMMUNITY HEALTH CENTERS

The Department of Health and Human Services (HHS) recently announced more than $28 million in grant funding geared toward the development and expansion of community health centers.

Community health centers are patient-directed and community-based organizations that provide healthcare to the underserved, including low-income, uninsured and homeless populations, in addition to those with limited English proficiency. The Patient Protection and Affordable Care Act (PPACA) made $11 billion available to community health centers over a five years for the construction, expansion and operation of the centers.

The grants will support full-service healthcare delivery sites providing comprehensive care, and will benefit 286,000 patients in underserved areas, according to HHS.

U.S. APPEALS COURT RULING DECLARES PPACA INDIVIDUAL MANDATE TO BE UNCONSTITUTIONAL

On August 12, the U.S. Court of Appeals for the Eleventh Circuit ruled 2-1 that the individual mandate included in the PPACA – that all individuals have health insurance – is unconstitutional.

The decision on appeal was a ruling from earlier this year by the U.S. District Court for the Northern District of Florida that the PPACA is invalid in its entirety, including the individual mandate. Though there have been similar challenges to the PPACA, the Northern District of Florida decision was the most far-reaching and was therefore the one that was appealed by the Obama Administration.

While striking down the individual mandate, the August 12 decision stopped short of ruling that the entire PPACA is unconstitutional. The Eleventh Circuit decision follows a Sixth Circuit decision in late June that upheld the individual mandate, setting up a circuit split.

Following the most recent ruling, President Obama and members of his Administration expressed confidence that the decision would not stand. Conversely, Republican leaders in Congress who opposed the PPACA hailed the decision by the Eleventh Circuit.

Now that appeals courts are split, the U.S. Supreme Court will need to make a final decision regarding the constitutionality of the individual mandate. Timing on upcoming Supreme Court action remains unclear.

CMS FINAL RULE WILL RESULT IN SKILLED NURSING FACILITY CUTS

The Alliance for Quality Nursing Home Care recently sponsored a report in response to the final skilled nursing facility (SNF) rule released by the Centers for Medicare and Medicaid Services (CMS) earlier this summer. The report – conducted by the healthcare consulting firm Avalere Health – determined that the 11.1 percent reimbursement rate reduction included in the final rule will cost the SNF industry $79 billion over the next decade.

CMS' final rule will reduce Medicare SNF reimbursements for Fiscal Year (FY) 2012 by $3.87 billion when compared to FY 2011 payments. The agency stated that its ruling intends to correct an inadvertent increase in payment levels and will align Medicare reimbursements more closely with costs.

In announcing the report, the Alliance's press release stated: "This new and latest reduction in payments to the U.S. SNF sector – America's second largest health facility employer – cumulates on $29.4 billion in payment cuts enacted to fund healthcare reform and a $16.8 billion Medicare payment reduction in 2010 regulation."

Alliance President Alan Rosenbloom stated: "By adding substantial changes in payment methodology for therapy services, CMS also crossed the line from over-correction into real Medicare cuts." Rosenbloom added that the upcoming cuts "...will contribute to destabilizing America's second largest health facility employer and the substantial economic activity facilities generate nationally and at the state level."

NEXT STEPS

As Congress' month-long August recess draws to a close, we continue to monitor healthcare news from HHS/CMS and other agencies. We will bring you timely updates as new developments occur.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.