A key recommendation for medical coverage standards under the Obama administration's healthcare overhaul may be issued later than a September deadline, the organization preparing the report says.

The influential Institute of Medicine, an independent agency based in Washington, was given the task of recommending how to determine the basic health benefits for millions of Americans who will qualify for coverage sold through state-run insurance exchanges beginning in 2014.

Their findings will inform a final decision by the Department of Health and Human Services, expected by the end of the year. HHS has been subject to intense lobbying over which health services should be mandated by the government.

IOM spokeswoman Christine Stencel said the institute was still working to release its report by the end of September, but that the issue date could slip into October.

A further delay into November would be unlikely, but Stencel could not rule one out due to uncertainty about the peer review process.

"The committee has stated its target to issue a report by the end of September. But there is a chance that the report could slip a little later," Stencel said.

An 18-member IOM committee charged last year with developing recommendations for HHS recently signed off on their report, she said. The document is now being reviewed by a number of experts who will advise IOM before a final report can be sent to the department.

Stencel also said IOM will not produce specific benefits standards for the exchanges. Instead, the group is working toward recommendations on criteria and methods that would allow HHS to determine and update the essential health benefits package.

HHS had no immediate comment on how a delay of the IOM report might impact its release of regulations, the most anticipated piece of information still awaited by states, health providers and insurers under the Affordable Care Act, the centerpiece of President Barack Obama's domestic policy.

IMPACT OF DEFICIT CUTTING

The IOM report will emerge as a deficit-cutting congressional committee deliberates over how to find $1.2 trillion in savings from the federal budget in the next 10 years. The so-called super committee has a deadline in late November.

Analysts say the panel's six Republicans and six Democrats could consider saving billions of dollars by delaying implementation of the health insurance exchange.

Any delay in essential benefits regulations from HHS would chip away at the time left for states to develop health insurance exchanges.

States are facing a deadline of Jan. 1, 2013, to submit detailed plans for how their exchanges will work, or the HHS will do the work for them to ensure the exchanges are up and running by 2014.

"It's hard to (begin planning) ... until you see what's going to be required," Justine Handelman, vice president of legislative and regulatory policy for the Blue Cross and Blue Shield Association, told Reuters earlier on Wednesday.

"Plans really need to know what's in all of these rules, because when you think about the timeline to develop these products, price them, there's a lot of uncertainty."

The Affordable Care Act is designed to extend healthcare coverage to an estimated 32 million Americans who are now uninsured.

About half that number would be covered by an expansion of Medicaid, the healthcare program for the poor that is funded jointly by federal and state governments. Medicaid would be extended to cover people with wages of up to 133 percent of the federal poverty rate.

The remainder, low-income people earning wages between 133 percent and 400 percent of the poverty rate, would purchase private insurance through the state exchanges.

(Editing by Michele Gershberg and Andre Grenon)

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