California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Health Care Stakeholders Speak Out Against New Fiscal Cliff Agreement

On Thursday, the National Alliance of State Health CO-OPs criticized a provision in the fiscal cliff deal signed Thursday by President Obama that prohibits HHS from distributing remaining loan money for consumer oriented and operated plans, The Hill's "Healthwatch" reports.

Under the ACA, HHS was to distribute $3.8 billion in loans to establish CO-OPs. The plans are designed to compete with the law's health insurance exchanges and test new methods of delivering health care.

NASHCO President John Morrison in a statement called the cuts a win for "big health insurance companies [that] have fought the new CO-OPs because they represent a real opportunity to lower health insurance premiums."

He added, "The cut to the CO-OP program was not about federal spending ... it was about the health insurance giants attempting to eliminate competition at the expense of millions of Americans who will pay higher premiums due to lack of competition" (Viebeck, "Healthwatch," The Hill, 1/3).

Hospital Group Denounces Changes to Medicare Overpayment Recovery

In related news, the American Hospital Association is speaking out against a provision in the fiscal cliff deal that extends by two years the statute of limitations on nonfraudulent Medicare overpayments, Modern Healthcare reports.

Section 638 of the compromise legislation allows Medicare officials to collect overpayments from up to five years prior, an increase from three years. In May 2012, HHS' Office of Inspector General found that the three-year limit prevented CMS from collecting as much as $332 million in overpayments. According to a summary of the bill, the two-year increase will allow CMS to collect an estimated $500 million in hospital and provider overpayments.

Rick Pollack -- AHA executive vice president of advocacy and public policy -- said the change in law was unnecessary. He also noted that the "process was not the most transparent." He added, "A lot of legislators might not even have known what they were voting on" (Carlson, Modern Healthcare, 1/3).

Health Care Advocates Warn Against Cuts

Meanwhile, advocates for hospitals and nursing homes are warning that they cannot sustain further cuts in a deal to replace the sequester and raise the debt ceiling in two months, The Hill's "Healthwatch" reports. Thursday's fiscal cliff deal delays across-the-board cuts until March, and safety-net providers are concerned that a new deal to delay the sequester could include cuts to their payments.

Bruce Siegel, head of the National Association of Public Hospitals and Health Systems, said, "Hospitals that care for large numbers of Medicaid and other low-income patients already have contributed significantly to federal health care savings." Siegel noted that "more federal spending cuts only will harm access to care and shift costs to state and local governments and taxpayers."

Mark Parkinson, president of the nursing home advocacy group American Health Care Association, also cautioned lawmakers against reducing their funding to ease the federal deficit. "As Congress prepares for legislation to raise the debt ceiling, we stand ready to work with lawmakers to continue acknowledging cuts are something we cannot absorb in 2013" (Viebeck, "Healthwatch," The Hill, 1/3). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.