2011 Key Implementation Actions

Major ACA 2011 implementation milestones, looking back:

Month Section Description
January 6001/ 1106
Prohibition on physician-owned hospitals: prohibits physician-owned hospitals that do not have a provider agreement prior to December 31, 2010, from participating in Medicare.
January 1001/ 10101

MLR rebate requirements effective: ACA’s medical loss ratio (MLR) requiring large group plans that spend less than 85% and small group and individual plans that spend less than 80% of premium revenue on clinical services and quality to pay rebates became effective. Plans will start paying rebates in 2012.

Note: December, the U.S. Department of Health and Human Services (HHS) published final regulations on MLR requirements.
January 9003
Changes to Health Savings Accounts, Flexible Spending Accounts, and Health Reimbursement Arrangements (HRAs): eliminated reimbursements for over-the counter medications from Health (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs) starting in 2011.
January 4103/ 4104
Prohibits cost-sharing on Medicare preventive services: ACA Section 4104 eliminated copayments for preventive service recommended with a grade of A or B by the U.S. Preventive Services Task Force starting in 2011. Section 4103 provided full Medicare coverage for an annual wellness visit and personalized prevention plan services which include a comprehensive health risk assessment starting in 2011.
March 3011
National strategy on health care quality: HHS released a report to Congress outlining initial plans to implement the National Quality Strategy. The report was due January 1, 2011. Initial implementation of the strategy started in 2011. The strategy has six priorities: (1) Making care safer by reducing harm caused in the delivery of care; (2) Ensuring that each person and family is engaged as partners in their care; (3)Promoting effective communication and coordination of care; (4) Promoting the most effective prevention and treatment practices for the leading causes of mortality, starting with cardiovascular disease; (5) Working with communities to promote wide use of best practices to enable healthy living; (6) Making quality care more affordable for individuals, families, employers, and governments by developing and spreading new health care delivery models.
April 9006
Repeal expanded 1099 reporting requirements: the President signed into law bipartisan legislation repealing Section 9006 which would have required businesses to send 1099 forms for all purchases of goods and services over $600 annually.
May 6301
Executive director appointed to PCORI: Joe Selby, M.D., M.P.H., was appointed the first executive director of PCORI. Selby is a family physician, clinical epidemiologist and health services researcher who joined from Kaiser Permanente, Northern California, as director of the Division of Research.
May 3001
Hospital value-based purchasing regulations: Center for Medicare & Medicaid Services (CMS) released final regulations on the hospital value-based (VBP) incentive program; incentive payments will be for hospital discharges starting October 1, 2012. Payments will be funded by reducing base operating diagnostic-related group (DRG) payments for each discharge by 1% in Fiscal Year (FY) 2013, increasing to 2% by FY 2017. For FY 2013 CMS adopted 13 measures from the Hospital Inpatient Quality Reporting (IQR) Program to capture clinical process of care (12 measures) and the patient experience (1 measure).
July 1311

Health insurance exchange regulations: HHS released proposed regulations on health insurance exchanges (HIX) which are entities intended to provide an organized health insurance marketplace for individuals and small employers to purchase affordable health insurance coverage. States must have HIXs operational by 2014; states that choose not to establish exchanges will have their exchanges operated by the federal government.

Note: August 12, 2011, 13 states and D.C. were awarded over $185 million dollars in Exchange Establishment grants. Three states, Indiana, Rhode Island and Washington, were awarded grants on May 23, 2011. February 16, HHS announced that Kansas, Maryland, New York, Oklahoma, Oregon, Wisconsin, and a multi-state consortium led by the University of Massachusetts Medical School will receive approximately $241 million total in Early Innovator grants
August 9008/ 1404
Annual fees for pharmaceutical manufacturers: the U.S. Internal Revenue Service (IRS) released temporary regulations which created annual fees payable starting in 2011 for certain manufacturers and importers of brand-name pharmaceuticals. November 4, 2011, the IRS issued guidance for the 2012 fee year. Fees are: 2011: $2.5 billion; 2012 and 2013: $2.8 billion; 2014 – 2016: $3 billion; 2017: $4 billion; 2018: $4.1 billion; 2019 and thereafter: $2.8 billion.
August 3021

Medicaid bundled payment initiative: the Center for Medicare and Medicaid Innovation (Innovation Center) started accepting applications for the Medicaid bundled payment initiative. The initiative allows providers to select from four models: (Models 1 – 3 involve a retrospective bundled payment arrangement) and Model 4 would pay providers prospectively. Final applications for Model 1 were due November 18, 2011 and for Models 2-4 are March 15, 2012.

Note: this program is separate from ACA Section 3023 which requires HHS to establish National Pilot Program on Payment Bundling by January 1, 2013 for Medicare providers.
October 8002
Halting CLASS implementation: HHS recommended halting implementation of the CLASS program—a voluntary self-funded public insurance program for long-term care services. HHS Secretary Kathleen Sebelius stated “I do not see a path to move forward with CLASS at this time” and that “the current market does not offer viable options for those unable to access private long-term care”. The recommendations align with a report from HHS’s Assistant Secretary for Planning and Evaluation (ASPE) which concluded that individuals would most likely not be able to recoup their paid premiums.
October 3022/ 3021

ACO regulations and initiatives: CMS released final regulations for the Medicare Shared Savings program which allows health care providers to share risk to improve outcomes, enhance patient experience and satisfaction, reduce costs, and reduce errors. The program includes 33 measures to capture: (1) patient and care giver experience, (2) care coordination and patient safety, (4) preventive health, and (5) at-risk populations.

CMS’s Innovation Center established two other Medicare Accountable Care Organization (ACO) initiatives: The Pioneer ACO model targeted towards large organizations with experience in shared savings programs and the Advanced Payment ACO Model which allows organizations participating in the Shared Savings Program to receive an advance on the shared savings they are expected to earn.

Note: December 19, CMS announced that 32 organizations will participate in the Pioneer ACO program targeted towards large organizations with experience in shared savings programs.
December 7001-7003

Pathway to approve biosimilars: ACA includes the Biologics Price Competition and Innovation Act of 2009 (BPCI Act) which creates an abbreviated FDA approval pathway for biosimilar products. December, FDA published and solicited recommendations for the user fee program for biosimilar biological products for FYs 2013 – 2017.

Recommendations included four fees: Biosimilar Product Development Fees (BPD), the marketing application fee, the establishment fee, and the product fee. Per the recommendations, under the program the FDA would be required to have available and allocate at least $20 million, adjusted for inflation, in non-user fee money for biosimilars review activities. The FDA is to revise the recommendations as needed send them to Congress by January 15, 2012.
December 1102
CMS halts payments for claims for Early Retiree Reinsurance Program: HHS announced that it will deny payments for claims for the Early Retiree Reinsurance Program (ERRP) incurred after December 31, 2011, based on the projected amount of remaining funding. CMS may announce approval of reimbursement request for claims occurred after December 31, 2011, if circumstances related to the availability of ERRP funding change.
December 1302 Essential health benefits bulletin: HHS issued an informational bulletin to provide guidance to states in defining “essential health benefits” (EHB) for evaluating health plan compliance with ACA. Per ACA Section 1302 all health insurance plans must provide coverage for “essential health benefits” in ten categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services (including oral and vision care). Noticeably, the bulletin was not a rule nor a typical guidance document; HHS is accepting public comments on the bulletin by January 31, 2012.