Who Was Denied Health Reform Waivers?

There has been a spike in the number of companies receiving waivers from having to comply for now with the new health reform law.

But a very important question is this: Did the Obama administration deny any company requests for waivers? Which companies were denied? Would those denials show political favoritism?

A top Republican Senator is now demanding answers, because he says many small businesses in his state were not able to obtain waivers from the new health reform law.

Health and Human Services did not return calls for comment.

The Dept. of Health and Human Services has given a grand total of 733 waivers for the annual benefit limits established under the Patient Protection and Accountability Act (PPACA).

That number is more than triple the 222 waivers that were previously announced in December 2010 -- and that 222 figure was already double the amount given in early November, and more than seven times the number given in October.

U.S. Sen. Orrin Hatch (R-Utah), ranking Member of the Senate Finance Committee, sent a latter this week  to Donald Berwick, Administrator of the Centers for Medicare and Medicaid Services [CMS], the agency that oversees implementation of the new health reform law.

The Senator is demanding detailed information about the soaring increase in waivers the Administration has granted to companies like Jack in the Box, AMF Bowling Worldwide as well as labor unions from the burdensome mandates in the new health law. The Finance Committee has jurisdiction over CMS.

We told you about this controversy last December, see the Dec. 8, 2010 EMac’s Bottom Line, “More Unions and Companies Win Health-Reform Exemptions,” http://www.foxbusiness.com/markets/2010/12/08/unions-companies-win-health-reform-exemptions/#) and "State of the Union: Addressing Health Reform" (http://www.foxbusiness.com/markets/2011/01/25/state-union-health-reform/#).

The waivers raised a slew of questions, including whether it was fair that other businesses and entities must follow the health-reform rules while their competitors who got waivers do not. Also, health reform did not spell out who should get these waivers -- government officials are making these decisions.

Most of the waivers had to do with mini-med plans, low-quality plans which cover part-time and low-wage workers. The waiver craze started last year, when McDonald’s (NYSE:MCD) threatened to drop its mini-med plans, covering 30,000 workers, if it did not receive an exemption.

Here is the letter Sen. Hatch sent to CMS:

Donald W. Berwick, MDAdministratorCenters for Medicare and Medicaid ServicesU.S. Department of Health and Human Services200 Independence Avenue, SWWashington, DC 20201

Dear Administrator Berwick:

As the Ranking Member of the Senate Committee on Finance (Committee), it is my responsibility to conduct oversight of the Department of Health Human Services (HHS), including the Centers for Medicare & Medicaid Services (CMS), and the federal healthcare programs. In this role, I am writing to express my concern about the waiver process being utilized by the Center for Consumer Information and Insurance Oversight (CCIIO) which was recently transferred from HHS to CMS.

In particular, I was surprised by the announcement made by HHS on January 26, 2011, that a total of 733 waivers have been granted from the annual benefit limits established under the Patient Protection and Accountability Act (PPACA). This is a more than 200% increase from the 222 waivers that were previously announced in December 2010 and about which my colleagues, Congressman Fred Upton and Congressman Cliff Stearns of the House Energy & Commerce Committee, have already requested information.

The majority of these waivers were to large entities such as private employers, labor unions, health insurers and states ostensibly to ensure that the workers employed by those entities continue to receive coverage. This waiver process obviously stands in stark contrast to the Administration’s claims about the value of PPACA in reducing costs and making health care more affordable.

My home state of Utah has numerous small businesses and I have heard from many of them asking why they were not able to get waivers like the 700 plus entities who were able to receive them. Many of these businesses had not even heard there was a waiver process. They are concerned that these requirements under the new law are substantially increasing their overall costs and for which having the option of a waiver could mean the difference between their staying financially viable or being forced to close their doors.

The lack of transparency which has surrounded the waiver process has been disappointing. In light of the recent transfer of CCIIO from HHS to CMS, I am calling on you to help bring more transparency and accountability to the waiver process. It is apparent that more oversight is necessary and I feel that this is especially important now that a new Director, Steve Larsen, will be taking over as the head of CCIIO.

To that end, please provide my office with the following information:

1) A complete list of all entities from this new expanded group of waiver requests (excluding the 222 original waivers and ancillary documents already requested by the House Energy & Commerce Committee) that have:a. Requested a waiver or exemption from complying with any part of PPACA;b. Obtained a waiver or exemption from complying with any part of PPACA; and/orc. Been denied a waiver or exemption from complying with any part of PPACA.2) Any documents relating to the granting or denial of waivers or exemptions related to the entities covered in (1) above. This includes e-mails, letters, faxes or other communications between individuals at CCIIO and waiver applicants.3) A detailed explanation of the processes currently in place governing the waiver approval process and the manner in which those have been overseen up until the transfer of CCIIO to CMS. Please include all internal policies and procedures and other guidance documents utilized by CCIIO staff in making waiver determinations.4) All documents related to the process by which CCIIO will ensure that the waivers do not continue for longer than the one year period approved under the waiver.5) A detailed explanation of what information is available publicly regarding that waiver approval process, where it is available and how it has been communicated to those entities eligible for waivers. This includes any and all documents explaining what efforts have been made to communicate the waiver process to all impacted entities, including small businesses. Please include copies of all outreach and educational materials, transcripts of public calls or speeches, and links to publicly available resources developed for the public related to the waiver process.6) What processes CMS will be implementing to ensure CCIIO is following the appropriate protocols for waiver approval.7) What actions CMS will take if it appears that those protocols are not being followed.

Thank you for your immediate attention to this important matter. I would appreciate your response by no later than February 28, 2011.

Sincerely,Orrin G. HatchRanking Member, Senate Finance Committee