‘Fiscal Cliff’ Bill Makes Changes to ACA, Patches Medicare Physician Reimbursement

The American Taxpayer Relief Act (the legislative response to the “fiscal cliff”), which the House and Senate passed on New Year’s Day and President Barack Obama signed late Wednesday, includes some changes to the Affordable Care Act (ACA) and Medicare physician reimbursements.

The bill permanently repeals the Community Living Assistance Services and Supports (CLASS) Act, a provision of the federal long-term care insurance program in ACA.

The bill also eliminates additional funding for Consumer Operated and Oriented Plans (CO-OPs), which were established under ACA to operate as nonprofit, member-driven health insurance issuers. The U.S. Department of Health and Human Services (HHS) had already distributed approximately $1.9 billion (of the $3.8 billion in authorized funding for the program) to the 24 plans that have already been created. The bill eliminates all unobligated CO-OP funds, but sets aside 10 percent of the unobligated funds to help with administrative costs for these 24 plans.

In addition, the bill delayed a 26.5 percent cut to Medicare physician reimbursements for another year, at a cost of $25.2 billion. The temporary “doc fix” is being paid for by a series of cuts to hospitals.