News from OMHA Appellants Forum: Statistical Sampling Coming, Backlog Growing

Yesterday the HHS Office of Medicare Hearings and Appeals (OMHA) held a forum for appellants affected by its decision, which I blogged about last month, to hold off on assigning incoming appeals to ALJs while they work to clear a large backlog.  I was able to go, and enjoyed every minute.  This issue has received its share of attention in the news (Washington Post here, National Review online here), as well as controversy (see here and here), but I have not yet seen an article discussing some of the policy developments that came out of yesterday’s forum.  So I am going to play journalist for a minute, rather than academic, and share yesterday’s developments.  There were a lot of them: Read More

Medicare Stops Hearing Provider Appeals in Hopes of Clearing Backlog

When Medicare refuses to cover a treatment (such as inpatient hospitalization) or device (like diabetes testing supplies), the statute gives the disappointed beneficiary the right to appeal.  Furthermore, there are mechanisms by which the provider–which may be a hospital, doctor, durable medical equipment manufacturer, etc.–that recommended the treatment (and often stands to profit if it is covered) can appeal on the beneficiary’s behalf (or on their own if the claim is assigned).

The statute sets deadlines for decisions on appeal, but in recent years a flood of new cases has led to a growing backlog and long delays.  (The backlog is caused in large part by the Recovery Audit Contractor program, through which Medicare has been revisiting and revising coverage determinations from the past several years.   That is a subject for another day.)

On Christmas Eve, the office in the Department of Health and Human Services responsible for hearing appeals (that is, the Office of Medicare Hearings and Appeals), adopted a controversial mitigation measure: They’ve stopped hearing new appeals, while they work to clear the backlog.  Which will take at least two years.  (See recent coverage here.)

Yes, the law says that Medicare must hear appeals, so yes, this temporary measure is technically inconsistent with the law (which is not to say it is illegal, more below on that).  But in my view it is actually a good idea, and consistent with what I think is the best ultimate solution to the “backlog” problem.  Here’s why:

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Mandatory Settlement Conference in Evolving End-of-Life Dispute

Over the holidays, a dispute about whether to withdraw life-sustaining treatment between the family of Jahi McMath, a young girl pronounced brain dead by doctors after routine tonsil surgery, and her hospital reached state and federal court and began to receive national attention.  (See coverage on CNN here, Fox News here, ABC News here, NY Times here.)

Just a quick flag and comment on the latest development: that a federal magistrate judge, Donna Ryu, has ordered the hospital and family into court tomorrow morning for settlement talks.  Meanwhile, suits are pending simultaneously in state court and before a federal judge.  While the parties have already engaged in extensive discussions, sometimes a judge can lead parties to agreement where one seemed impossible.  I’m still reviewing the case but will follow up if I have anything to add to the news coverage that comes out in the coming days.

Meanwhile, for further scholarly reading on this subject generally, see Glenn Cohen’s 2004 paper in the Harvard Negotiation Law Review.

Individual Mandate Not Postponed for Anyone, Yet

Yesterday the CMS issued a document, Options Available for Consumers with Cancelled Policies, that describes four options available to people who received notice that their healthcare plans were cancelled.  (I blogged about the cancellations here.)

The first three options aren’t newsworthy: you can buy a new plan from your insurer, buy a plan through the marketplace, or shop outside the marketplace.  The fourth option is newsworthy, because the CMS has for the first time announced that people whose plans were cancelled may qualify for a hardship exemption allowing them to enroll in (cheaper) catastrophic coverage.

Not surprisingly the announcement is receiving lots of attention.  Seth Chandler has a roundup of some of the early news coverage.  Since he posted, Nicholas Bagley blogged here and Jonathan Adler noted the change here.

I am still digesting this interesting news, but have one contribution to the discussion so far.  Many people are saying that those in cancelled plans are now “exempt” from the individual mandate, that having a plan cancelled is now itself a “hardship.”  That is not quite right in a way that obscures an important aspect of this announcement.  The CMS has not exempted anyone with a cancelled plan yet.  Read More

Could the Patient Protection and Affordable Care Act Have a Legitimacy Problem?

Public skepticism about the Patient Protection and Affordable Care Act could in a sense turn out to be self-fulfilling.  The success of the Exchanges will depend in large part on how many people enroll in them, that is, how many people comply with the individual mandate and sign up for insurance rather than take the tax penalty.  That is why we are starting to talk more and more about how many people will wind up enrolling; it’s important.  (For further reading in that vein, see Seth Chandler’s interesting post at his blog doubting that enrollment will reach projections, and John McDonough’s cautious predictions based on experience with the Massachusetts health insurance mandate.)

Many have based their projections on the Massachusetts experience, which is an interesting comparison for several reasons, for me none more than this one: the Massachusetts mandate was relatively uncontroversial.  One survey showed 64% approval for the law in general and 52% approval for the mandate.

It goes without saying, but the PPACA has not enjoyed that kind of popular support, for a variety of reasons.  According to a recent poll, the law enjoys only 40% approval in general and only 34% approval for the individual mandate.

In theory the law is the law, so the fact that the Massachusetts mandate was more popular than is the PPACA’s individual mandate should not affect compliance.  Rather, that should be determined by the difference between the monetary penalty for non-compliance and the cost of a complying health plan.  (Under the PPACA in year one, the penalty is $95 or 1% of your taxable income, whichever is higher; under the Massachusetts law in year one, it was $219.  So the PPACA’s penalty is higher for those making more than $21,900 in taxable income.  I haven’t compared the premiums of complying plans in Massachusetts year one to the premiums of plans on the Exchanges.)

But there is research that suggests that the controversy surrounding the law could matter for compliance.   Read More

A Little Choice About PPACA Risk Corridors That Could Have Big Consequences

The Patient Protection and Affordable Care Act has made even the most technical questions of healthcare coverage regulation newsworthy. Policy questions that would be noticed only by experts and interested parties in the regulation of Medicare or Medicaid, even with billions of dollars in taxpayer or beneficiary money at stake (think DSH and the transition to MS-DRGs), are front-page news when they have a connection to the PPACA.  The best example may be the recent attention to the PPACA’s risk corridors, which was the subject of an op-ed by Senator Rubio last week that led to a lot of discussion in the press.  (For background on the risk corridors, as well as their cousins, the risk adjustment program and transitional reinsurance, see the helpful efforts of Seth Chandler, Mark Hall (also here), and Timothy Jost.)

In that spirit, I noticed in my research a tiny regulatory policy choice made by the HHS about the risk corridors that may wind up making news one of these days, in a lawsuit or otherwise.  It has to do with the way the risk corridor payments are calculated, and could have an impact on the extent of taxpayer liability for risk corridor payments.  Read More

More thoughts on the legality of the like it/keep it fix.

Yesterday, President Obama held a lengthy press conference in which he took responsibility for recent problems in the implementation of the Patient Protection and Affordable Care Act and announced that the Administration would allow health insurers to re-establish certain canceled plans for 2014 even if they do not comply with the PPACA.  Specifically, he said “we’re going to extend [the principle behind the grandfather clause] both to people whose plans have changed since the law took effect and to people who bought plans since the law took effect.”

Jonathan Adler at Volokh, co-blogger Chris Robertson here at Bill of Health, Nicholas Bagley at The Incidental Economist, and Seth Chandler at ACA Death Spiral, have all offered thoughts on the legality of the President’s decision to grandfather administratively plans that were being canceled for non-compliance with certain PPACA requirements.  House Speaker John Boehner, for his part, said of the move: “I’m highly skeptical they can do this administratively.  I just don’t see within the law their ability to do it.”

I’ve a few thoughts of my own to add on the prospects for a successful lawsuit challenging the fix: Read More

Why the Administration Will Think Twice Before Delaying the Individual Mandate

It has been widely reported that people are having trouble buying healthcare through the online exchanges due to technical difficulties, a situation President Obama addressed from the Rose Garden on Monday, saying “no one is madder than me” and encouraging people to try to sign up by telephone rather than online.  Ezra Klein calls the rollout, so far, a “failure” but says the real question is how long it takes for the exchanges to get running smoothly.

Klein is right about that: it would seem unfair to impose a tax on someone for failing to obtain insurance if they tried but were unable to do so due to problems with the government-run website.  Yet that is what the well-known individual mandate codified at 26 U.S.C. § 5000A(b)(1) says: a taxpayer who goes a month (or more) without health insurance after the effective date must pay a tax penalty.  There is no exception for taxpayers who tried and failed to get health insurance through the exchanges.  Or is there?

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Another Wrinkle in Exchange Rollout? Private Sites Attempting to Lure Shoppers Looking for Exchanges

Yesterday saw two reports—perhaps the first of many—discussing the emergence of an additional wrinkle in the rollout of the health exchanges: private websites attempting to lure shoppers away from the government exchanges with websites that look and sound like the real thing.

According to an article posted by WMUR New Hampshire, the state insurance commissioner has issued a cease-and-desist letter to the owner of one website,, that is allegedly trying to take advantage of shoppers hoping to acquire insurance through the real exchange.  New Hampshire’s not the only state dealing with this sort of issue.

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Introducing Contributor Matthew Lawrence

We are pleased to welcome Matthew J.B. Lawrence, who recently joined the Petrie-Flom Center as the 2013-2015 Academic Fellow.

Lawrence earned a J.D. magna cum laude from New York University School of Law in 2009, where he was Managing Editor of the N.Y.U. Law Review and was awarded the Paul D. Kaufman Memorial Prize for writing the most outstanding Law Review note.  After law school he clerked for the Honorable Douglas H. Ginsburg of the United States Court of Appeals for the District of Columbia Circuit, and then became a Trial Attorney at the Federal Programs Branch of the United States Department of Justice.  There he served as attorney of record for the United States defending various federal agency actions against statutory and constitutional challenges in district and appellate court, including numerous high-stakes Medicare cases.  His methodological focus is the operation and design of decision-making processes in light of the actual and theoretically expected behavior of participants at every level, from first mover to final arbiter.  His past work has applied this focus to medical malpractice and civil procedure, and his current work applies this focus to the federally-mandated procedures that govern disputes between insured and insurer about coverage for doctor-recommended care.

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