WellAware - Health Policy News Apr 11 2011

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WellAware

Health Policy News from M2

April 15, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.
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Federal

FY 2011 Funding Compromise Includes Cuts Related to Health Care Reform
The Administration and the Senate and House leadership reached a compromise on a FY 2011 Continuing Resolution last week to fund the government through the remainder of the fiscal year. The agreement averted the potential for a government shutdown.

Negotiators agreed to $38.5 billion in cuts. “When this agreement is signed into law, Congress will have taken the unprecedented step of passing the largest non-defense spending cut in the history of our nation – tens of billions larger than any other non-defense reduction, and the biggest overall reduction since World War II,” according to a statement released by the House Appropriations Committee leadership.

The CR includes billions in health spending cuts – for example, more than $1 billion for HIV/AIDS, viral hepatitis, sexually transmitted diseases and tuberculosis prevention, and about $600 million for community health centers. The bill also ends funding for two programs included in the health reform law: it eliminates funding for the free choice voucher provision, as well as the Consumer Operated and Oriented Plan, or CO-OP, provision. The CO-OP was established as a way to foster the creation of qualified not-for-profit health insurance issuers that would offer health plans in the individual and small group markets.

Under the CR, HHS will receive a total of $70.6 billion in FY 2011, which is approximately $5 billion more than proposed in earlier appropriations efforts. This new total is about $3.5 billion less than HHS received in the prior fiscal year.

“The bill rejects the elimination of the $750 million Prevention and Public Health Fund that was proposed” in an earlier appropriations bill, according to a summary released by the Senate Appropriations Committee. This mandatory funding was appropriated in the health reform law.

Link to article
Link to Continuing Resolution
Summary of FY2011 Appropriations


HHS Announces “Partnership for Patients” to Improve Care and Lower Costs
HHS Secretary Sebelius has announced a new national partnership that is intended to save 60,000 lives by stopping millions of preventable injuries and complications in patient care over the next three years.

The Partnership for Patients also “has the potential to save up to $35 billion in health care costs, including up to $10 billion for Medicare,” the agency says. Over the next ten years, the partnership could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings. To date, “more than 500 hospitals, as well as physicians and nurses groups, consumer groups, and employers have pledged their commitment to the new initiative.”

HHS will invest up to $1 billion, made available under the Affordable Care Act; $500 million of that funding has been made available through the Community-based Care Transitions Program. Up to $500 million more will be dedicated from the CMS Innovation Center to support new demonstrations related to reducing hospital-acquired conditions.

HHS says the partnership will target all forms of harm to patients but will start by asking hospitals to focus on nine types of medical errors and complications where the potential for dramatic reductions in harm rates has been demonstrated by pioneering hospitals and systems across the country. Examples include preventing adverse drug reactions, pressure ulcers, childbirth complications and surgical site infections.

Link to release




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State

Alaska House takes stand against health care reform
The Alaska House has approved a bill intended as a rebuke to federal health care reform efforts. In a largely party line vote, House members moved to make it the policy of the state of Alaska to oppose the insurance mandate in the Affordable Health Care and Patient Protection Act. The bill now goes to the Senate.

House Bill 1, sponsored by Rep. Carl Gatto, R-Palmer, is intended to respond to an encroachment on state rights by the federal government in health care reform. “It is the policy of the state of Alaska that a person has a right to accept or decline any mode of obtaining health care and services,” Gatto said, describing the bill.

While stating the bill would be difficult to enforce, he said there are already court rulings supporting his contention that the federal health care reform effort is unconstitutional in a court case involving Alaska.

Link to article


Iowa: Democratic Lawmakers Defend Health reform in Federal Appellate Court
Two Democratic members of the Iowa Senate are among more 150 lawmakers from 26 states who have filed an amicus brief in defense of last year’s federal health care reform, placing them in direct opposition to Gov. Terry Branstad who joined the suit against the law.

By signing an amicus brief filed in the U.S. Court of Appeals for the 11th Circuit, Sens. Jack Hatch of Des Moines and Joe Bolkcom of Iowa City say that they are “standing against the right-wing attorneys general and governors,” including Branstad, “who are playing politics with the health security of Iowa families by pressing a partisan lawsuit at odds with the framers’ vision of the Constitution.”

“There is no question that the framers of the Constitution would have viewed the health law as constitutional,” said Hatch, “and we have confidence that the courts will ultimately agree.”

Link to article


Massachusetts Marks Fifth Anniversary of Health Care Reform Law
Five years ago, then-Gov. of Massachusetts Mitt Romney signed what he called a bold health reform law. Romney, a Republican, teamed up with Democratic House and Senate leaders to avoid losing hundreds of millions of federal health care dollars. Romney thanked the business, health care and consumer group leaders who supported the law.

The push for near-universal coverage did not go as smoothly as planned. More residents than expected signed on to free or subsidized coverage. However, three years into the law, a report from the Massachusetts Taxpayers Foundation concluded that it was coming in under budget.

There is little solid research that shows residents are healthier or are living longer as a result of the law. However, 98 percent of the state’s residents now have health insurance. Five years after enacting reform, Massachusetts has the lowest uninsured rate in the country. That is the main accomplishment of the law, according to Harvard School of Public Health Associate Dean Nancy Turnbull.

Turning to costs, she said that at this point, “it’s very clear that without controlling health care costs, the law is not financially sustainable. And unless we find durable ways to control costs, we won’t be able to sustain the coverage extension. Whether there’s the commitment to do that remains to be seen.”

Link to article


Missouri Democrat AG Supports Lawsuit Against Health Care Reform
Missouri Attorney General Chris Koster, a Democrat, has entered a 35-page amicus brief in support of case brought by 26 states against the health care reform law. The move comes after months of silence on the issue from Koster, who switched parties in 2007 and who is up for re-election next year. The brief doesn't argue that the whole law should be repealed, just that the health care mandate should be struck down.

The attorney general's brief echoes previous legal opinions that mandating health care exceeds Congress' ability to regulate commerce between states. Koster says government either needs to "justify the provision on alternate constitutional grounds, or strike down the individual mandate."

Republicans have already criticized Koster's brief for not going far enough. Meanwhile, Koster sent a letter to leaders in the Missouri Legislature stating that the brief "is emphatically not based on any opposition to the expansion of health coverage for uninsured Americans," Koster wrote. "To the contrary, I favor the expansion of health coverage."

Link to article
Link to article


Oklahoma Returns $54 Million Innovator Grant
In February, HHS awarded $241 million to seven “Early Innovator” states “to design and implement the information technology (IT) infrastructure needed to operate Health Insurance Exchanges.” This week, one of the grantees, Oklahoma, decided to return their $54 million grant, saying the state would handle the creation of a “Health Insurance Private Enterprise Network” on their own.

Gov. Mary Fallin (R) chose to return the funds, despite supporting the state’s application for the grant previously, after the Oklahoma Senate refused to consider a bill passed by the House to authorize the creation of a health insurance exchange in the state. At a news conference at the Capitol, the Governor said, “We all support the repeal and the replacement of the federal health care bill. We do believe it is unconstitutional."

The grant is the largest Affordable Care Act funding received by a state to be returned.

Link to article
Link to Innovator Grant Awards


Vermont Health Plan Criticized by Allies in Single-Payer Movement
Vermont's proposed healthcare reform falls short of the single-payer overhaul it's being billed as, the advocacy group Physicians for a National Health Program said.

The doctors group said the bill passed by the Vermont House late last month falls "far short" of single-payer reform. The bill would create a public program open to all state residents by 2017 but would retain a role for private insurers.

"This would negate many of the administrative savings that could be attained by a true single-payer program," PNHP said in a statement, "and opens the way for the continuation of multi-tiered care." The group also criticized the bill for not addressing long-term care coverage and for not proposing a "concrete funding plan" for the public plan.

Link to article


Washington House Votes to Establish Exchange Under Health Reform
Washington state House members have approved a bill to establish a health benefit exchange by 2014 in compliance with federal health reform.

The measure now returns to the Senate for approval of amendments.

If the bill passes, Washington will be eligible to apply for federal grants to aid in the exchange's implementation. Lawmakers would determine the scope of the exchange next session.

Link to article




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Not in the News...Yet

Mostashari Next Head of Office of the National Coordinator for HIT
Farzad Mostashari, M.D. has been selected to lead the Office of the National Coordinator for Health Information Technology (ONCHIT). Mostashari started at ONCHIT in 2009 as the Deputy National Coordinator for Programs and Policy. He came to ONCHIT the New York City Department of Health and Mental Hygiene where he was Assistant Commissioner for the Primary Care Information Project.

Dr. Peter Basch, medical director for electronic health records and health IT policy at MedStar Health, Columbia, Md., and a volunteer adviser to ONC, said about the pick, "What we don't need now is someone to re-conceptualize health IT," he said. "We've got a good plan. What we need now is a closer."

Mostashari said under his lead ONCHIT would “double-down” on advancing three components of HIT policy: 1) Intensifying "boots on the ground" 2) Generating ways to learn about advancing HIT without having to centralize; and 3) Improving population health decision-making.

"We need to understand better what's happening in the industry and the market, and this will be a continued part of our agenda," he said. "And, we have to continue to watch out for the little guy. The market doesn't look out for the little guy – that will have to be the role of government."

Bottom line: Mostashari sees the current HIT tensions clearly: many stakeholders mean many policy objectives. In the meantime, the marketplace will move ahead with solutions for providers and patients.

Link to article
Link to article




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Releases of Note

Health Cost Drivers Include Rising Demand, Aging Population, Chronic Disease
A report from the American Hospital Association says “the demand for health care is rising due to advances in medicine, an aging population and a rising burden of chronic disease. At the same time, the costs to pro¬vide that care are increasing: new devices and drugs are adding to hospital expenses for each service; workforce shortages are driving up wage rates; and hospitals are making significant investments in clinical information technology, quality measure¬ment, care coordination and compliance with increasing regulatory and payer requirements.”

“Understanding these cost drivers is critical to developing strategies to contain costs,” AHA says.

While “hospital care remains the largest single category of health care spending,” hospital care “as a percent of total spending on health care services and supplies has actually declined from 43 percent in 1980 to 33 percent in 2009, AHA says, citing CMS data released in January 2011.

In addition, “growth in spending on hospital care has lagged behind growth in health insurance premiums, pharmaceuticals, and other services,” according to the report.

For example, AHA notes that Baylor Regional Medical Center in Plano, TX implemented an evidence-based intervention created by the Institute for Healthcare Improvement to eliminate ventilator-associated pneumonia (VAP). The institution reports no cases of VAP and direct cost savings of $150,000 per patient, totaling more than $3 million in savings from March 2007 through April 2009.

Link to report




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M2 Health Care Consulting | Denver | Washington, DC | www.m2hcc.com

WellAware - Health Policy News Apr 4 2011

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WellAware

Health Policy News from M2

April 8, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.
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Federal

Rep. Ryan Budget Proposal Attempts to Change the Conversation
The GOP budget proposal for 2012, introduced by Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, includes a number of cuts to entitlement programs. Overall, the budget would privatize Medicare for future retirees, cut spending on Medicaid and other domestic programs, and offer sharply lower tax rates to corporations and the wealthy.

Ryan said the plan would create jobs, promote growth, and rebuild an economy ravaged by recession and “relentless government spending, taxing and borrowing.”

According to one blogger, “under the Ryan plan, Medicare as we know it would be abolished.” The plan calls for the payment of subsidies to allow Medicare patients to buy private health insurance. The amount of the subsidy would differ depending on income. The eligibility age for Medicare would also increase from 65 to 67. That change would take place in increments from 2022 until 2033.

Under the Ryan plan, seniors would shop for health insurance from private insurance companies. The Ryan plan calls for this “shopping” to be done at health insurance exchanges which would be set up by each state.

State based health insurance exchanges are a key provision of the Affordable Care Act which Ryan is proposing to repeal in its entirety.

Reacting to the proposed GOP budget, Alaska Gov. Sean Parnell (R) said that House Republicans have “proposed a bold, serious, fiscally responsible federal budget for 2012 that cuts $6 trillion in federal spending over the next 10 years and puts America on a path to balance the budget and begin paying down the national debt.”

“By giving states more freedom and flexibility, we can employ cost-saving measures and tailor solutions for the benefit of our unique populations,” Gov. Parnell said.

Congressional Democrats attacked the plan as an extreme attempt to balance the budget on the backs of the most vulnerable Americans. House Minority Leader Nancy Pelosi (Calif.) blasted it on Twitter as “a path to poverty for America’s seniors & children and a road to riches for big oil.”

In an analysis of the budget plan issued Tuesday, the non¬partisan Congressional Budget Office said that “most beneficiaries who receive premium support payments would pay more for their health care than if they participated in traditional Medicare,” with 65-year-olds covering an average of twice as much of their total health-care costs.

***See reactions from the states below.

Link to blog
Link to Gov. Parnell’s reaction
Link to article




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State

Governors React to Ryan Proposal
Democrats are describing Budget Chairman Paul Ryan’s (R-Wis.) proposal to overhaul Medicare as a voucher program, but Ryan is rejecting the label.

Ryan and conservatives are dubbing the plan “premium support,” in which Medicare makes a payment to a private insurance plan chosen by seniors. The amount of Medicare support would be means tested. But Democrats suggest Ryan’s 2012 budget is a rehashing of his proposal to provide a voucher to seniors to purchase insurance on their own.

Voucher has become somewhat of a dirty word in the Medicare arena. When Ryan first pitched vouchers in 2009, the proposal received a chilly reception from his party and polling showed little support for it. Fifty-one percent oppose a Medicare voucher plan, while 35 percent support it, according to a 2010 Associated Press-GfK poll.

Democratic Governors also expressed dismay at the proposal to turn Medicaid into a block grant.

In a letter to congressional leaders, New York Gov. Andrew Cuomo (D) expressed his opposition to the proposal. “Such a drastic overhaul of the Medicaid program is neither necessary nor desirable,” he wrote.

Separately, four prominent Republican governors expressed their support for Ryan’s efforts. Govs. Rick Perry (TX), Bob McDonnell (VA), Haley Barbour (MS) and Chris Christie (NJ) said that “on behalf of Republican governors, we applaud the bold FY 2012 budget proposal.”

“Medicaid reform is welcome and the Republican Governors overwhelmingly support the creation of a Medicaid block grant program,” they stated. “This well established approach will give states the freedom to innovate, share best practices, and create cost-effective ways to deliver quality health care to our most vulnerable populations.”

Link to blog
Link to Cuomo letter
Republican reaction


Florida Medicaid Managed Care Pilot Shows No Clear Evidence of Cost Savings
In the two counties in which Florida Medicaid has moved to a managed care pilot program, “there is no clear evidence” that the program is saving money, according to an analysis prepare by Georgetown University’s Health Policy Institute for the Jessie Ball DuPont Fund.

In addition, if any money is being saved, “it is not clear whether it is through efficiencies or at the expense of needed care,” the analysis says.

The “opt-out” provision gives beneficiaries the choice of enrolling in employer-sponsored insurance if it is available to them but requires families to pay all applicable coinsurance and cost sharing. “According to the latest data submitted by the state, there are currently 21 persons enrolled in the “opt-out” program – less than .01 percent of current pilot participants. As a result, per capita administrative costs likely will continue to be extremely high and the program most likely is not cost-effective,” the authors state.

Link to analysis


Idaho Blocks Implementation of Federal Health Reform
Idaho’s Senate has voted to block the federal health reform law in the state. The measure now goes to Gov. C.L. Otter (R) after the 24-11 Senate vote.

A previous nullification effort to block the federal law failed in the Senate after Idaho's attorney general advised lawmakers it would violate the U.S. and Idaho constitutions. Proponents say changes remedy that - while still making certain Idaho isn't tied to the federal reform effort.

Link to article


Illinois State Employees Lose Two HMO Options; New Contracts Save $$
Over 100,000 state employees in central Illinois will have to change their health insurance coverage next month after the state said it is dropping two popular HMOs. The Health Alliance and Humana insurance programs will no longer be part of the state's health program after June 30. 115,000 state employees, their dependents and retirees are affected.

The Department of Healthcare and Family Services, which administers state worker health plans, said the health insurance contracts were put out for bid, and the new contracts will save the state $102 million in the next budget year. Over the next 10 years, the state expects to save $1 billion on employee health costs.

Link to article


Massachusetts Governor Pushing for Bill Addressing Health Care Costs
Gov. Deval Patrick (D) cautioned against debating his health reform proposal “to death” and said he would like the legislature to consider his bill this summer after completing work on the fiscal 2012 budget. But a top House lawmaker questioned the governor’s claim that there is a “broad-based consensus” on how to rein in costs.

The call for action comes as Massachusetts approaches the five-year anniversary of health care reform that served to expand coverage to over 98 percent of residents, but deferred significant changes to address cost drivers. Patrick is also gearing up for his role as a surrogate in President Barack Obama’s re-election campaign when he will likely be called upon to defend the state’s health reform efforts on which national reform was modeled.

Patrick said changing the payment model for health care by shifting away from fee-for-service will alter behaviors among medical professionals, reduced unnecessary tests and improve the quality of care. “I am a private marketeer, not a market fundamentalist. I don’t think the market always gets it right and I don’t think the market has gotten it right in this case,” Patrick said, banging his fist on the podium.

Majority Leader Ronald Mariano (D), however, said he worried that Massachusetts risked a repeat of the 1990s when the state embraced HMOs and limited-networks plans only to have them challenged by the so-called patients’ bill of rights. “I disagree there’s a broad-based consensus that this bill is going to cut costs for anybody,” Mariano said.

Health and Human Services Secretary JudyAnn Bigby said per capita spending on health insurance is projected to increase in Massachusetts to $18,000 a year per person, up from $10,000 today, threatening small businesses and family budgets.

Link to article


Minnesota HMOs Will Return Extra Profits from Public Contracts
Four large nonprofit health plans will return some profits from public health care contracts to the state under a yearlong deal announced by Gov. Mark Dayton (D).

Blue Cross Blue Shield of Minnesota, HealthPartners, Medica and UCare — the biggest of the health plans that contract to cover more than 500,000 subsidized patients — agreed to limit their 2011 profits from state business to 1 percent. Any earnings above that will come back to the state next year, flowing into the general fund and a special fund tied to the MinnesotaCare health plan for the working poor.

The profit cap is the latest development in the governor's push to curb HMO earnings from public contracts. It comes a day after the state Human Services Department launched a website displaying financial details about health plans.

Human Services Commissioner Lucinda Jesson said she and Dayton decided last week to focus instead on the current year's contracts, after health plans reported 3.8 percent profits on 2010 state-managed care contracts, up from 2.6 percent in 2009.

Representatives for the health plans said the state's projected $5 billion deficit in the next two years factored into the deal with Dayton. "We believe this one-time contract amendment is appropriate given the state's current financial situation," said HealthPartners spokeswoman Amy von Walter.

Link to article


West Virginia Becomes Second State to Pass Exchange Legislation
West Virginia Gov. Earl Ray Tomblin (D) has signed legislation to authorize the creation of an insurance exchange. The state follows California, which became the first to authorize its exchange in September.

The West Virginia legislation sets up the exchange within the insurance commissioner's office, and will cover the small-business market and the individual market in the exchange.

Link to bill




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Not in the News...Yet

Consortium Joins Health Plan EMRs in Data Sharing Effort
Five leading health systems – the Mayo Clinic, Geisinger, Kaiser Permanente, Intermountain Healthcare, and Group Health Cooperative – have announced a new initiative to securely exchange electronic health data, with the first data exchange planned in the next year. The consortium will utilize standards-based health information technology to share data about patients electronically.

These health organizations are largely closed medical systems, and will likely play a large role in the Accountable Care Organization effort under health reform. An ACO must have a high-level electronic medical records system in order to be effective and to qualify for enhanced Medicare payments.

The goal of the consortium is to demonstrate better and safer care with better data availability. If a patient from one system gets sick far from home and must receive health care in another system — or if any system sends patients to another — doctors and nurses at each of the consortium systems will be able to easily and quickly access invaluable information about the patient's medications, allergies, and health conditions, allowing them to provide the right kind of treatment at the right time and avoid unintended consequences like adverse medication interactions.

"This collaborative effort exists because we all have reached the same important conclusion about linking and sharing patient-specific data," said George Halvorson, chairman and chief executive officer of Kaiser Permanente. "Our…belief is that when doctors have real-time data about patients, care is better and more effective."

Link to press release
Link to article




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Releases of Note

Kaiser "Center for Total Health" to be “Interactive Learning Destination”
Kaiser Permanente has opened the Center for Total Health, an “interactive learning destination” for “innovators, leaders, influencers, thinkers and believers in wellness to talk about health,” the company says.

The center demonstrates what Kaiser Permanente and others are doing to advance health and care delivery in the US. “A major part of Kaiser Permanente’s commitment to total health is sharing best practices and facilitating discussions that will improve the health of our nation,” said company President and COO Bernard Tyson.

The center features interactive displays intended to inspire dialogue about improving health and wellness.

“The center will be the first place that leaders and the general public can go to see the real-world convergence of health, health care technology and innovation,” said Philip Fasano, chief information officer and executive vice president of Kaiser Permanente.

Link to release




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M2 Health Care Consulting | Denver | Washington, DC | www.m2hcc.com

WellAware - Health Policy News Mar 28 2011

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WellAware

Health Policy News from M2

April 1, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.
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Federal

Accountable Care Organization Proposed Rule Released
The long awaited “Medicare Shared Savings Program: Accountable Care Organizations” proposed rule was released this week by the Centers for Medicare and Medicaid Services (CMS). Additionally, the Federal Trade Commission (FTC) and Antitrust Division of the Department of Justice published a proposed enforcement policy applicable to health care collaborations such as Accountable Care Organizations (ACOs).

A new initiative of the Affordable Care Act, the shared savings program would permit physicians, hospitals and other health care providers to collaborate in a specially formed network such as an ACO to coordinate patient care, assume risk for providing care, and share any savings generated when quality care results in lower costs to Medicare.

One of the accompanying CMS fact sheets says, “By focusing on the needs of patients and linking payment rewards to outcomes, this delivery system reform, as part of the Affordable Care Act, will help improve the health of individuals and communities while lowering the cost of the system – up to an estimated $960 million over three years in Medicare savings.

Comments on the proposed rule are due by June 6, 2011. The final rule is expected before the end of the year.

M2 is preparing detailed analyses on the rule and what it means. Contact us for more information.

Link to proposed rule
Link to FTC Policy Statement


NAIC Halts Push for a Decision on Agent Commissions in MLR Calculation
The National Association of Insurance Commissioners (NAIC) has stopped pushing for support of a bill that opponents say would raise health insurance premiums for consumers. A key committee voted in Austin at an NAIC meeting instead to examine in depth the bill sought by insurance brokers and health insurance companies.

Consumer Watchdog, which had criticized NAIC for its apparent support of the legislation, applauded the move. Though virtually identical legislation was recently introduced by Reps. Mike Rogers of Michigan (R) and John Barrow (D) of Alabama, it faces a tougher fight without the NAIC endorsement.

The bill, entitled the "Access to Professional Insurance Advisors Act of 2011," would change the federal health reform law to let insurance companies exclude broker commissions from their administrative costs when calculating how much they spend on actual health care. Current law requires insurance companies to pay consumer rebates if they spend less than 80% to 85% of premium dollars on health care – also referred to as the medical loss ratio (MLR).

Florida Insurance Commissioner Kevin McCarty, the chief champion of the brokers' legislation, acknowledged growing opposition on March 27 and stopped urging a vote of all 50 state commissioners. McCarty is separately trying to get his state's insurance companies exempted from existing federal cost-control regulation.

Notably, Aetna (NYSE: AET) supports NAIC's efforts to remove agent commissions, but goes further, recommending other changes. "Aetna endorses the Draft Legislation and agrees that broker compensation should be removed from MLR calculations," according to the company’s comments. The bill also “offers NAIC an opportune foundation for addressing key additional MLR shortcomings – most notably the treatment of fraud prevention, ICD-10, utilization management, the large group market, and rebate administration."

Aetna also recommends increased state flexibility when it comes to the MLR provision. "Specifically, Aetna agrees with the Task Force that the small group and individual markets would be well served by the Task Force’s proposal to widen application of Secretarial discretion to adjust the ACA’s MLR percentages to the small group market. We concur that the current ACA provision should apply such authority not only to the fragile individual markets, but also to the vulnerable small group segment as well."

In terms of state reactions, Ohio, for example, supports the bill but urges consumer protections be a part of the legislation. Ohio says it “strongly supports efforts to accommodate agent and broker commissions in the medical loss ratio calculations contained in the PPACA. However, the Ohio Department of Insurance does have some concerns surrounding the proposed legislation that exempts ‘licensed independent insurance producer remuneration’ from the MLR requirements. Though we generally agree that this approach is acceptable, there needs to be more specific consumer protections in place before carving out agent commissions altogether."

Link to article
Link to Aetna comment
Link to OH comment


GAO Identifies Ways to Encourage, Rather Than Require, Health Insurance
In a new report, the Government Accountability Office describes alternatives to the individual mandate included in the health reform law. “Because of the possibility that legislative or judicial action could result in a change to, or elimination of, the mandate,” GAO was asked to “identify potential alternatives to encourage, rather than require individuals to obtain private health insurance coverage.”

For the report, GAO interviewed “multiple experts on the range of approaches Congress could consider to encourage voluntary enrollment in private health insurance coverage,” GAO says.

The primary alternatives are noted below, generally in the order of frequency with which they were proposed by the experts:

•Modify open enrollment periods and impose late enrollment penalties.
•Expand employers’ roles in autoenrolling and facilitating employees’ health insurance enrollment.
•Conduct a public education and outreach campaign.
•Provide broad access to personalized assistance for health coverage enrollment.
•Impose a tax to pay for uncompensated care.
•Allow greater variation in premium rates based on enrollee age.
•Condition the receipt of certain government services upon proof of health insurance coverage.
•Use health insurance agents and brokers differently.
•Require or encourage credit rating agencies to use health insurance status as a factor in determining credit ratings.

Link to report


Health Reform Law’s Early Retiree Program a Boon to Dow-Listed Companies
A year after President Obama signed health reform into law HHS says the business community is one of the biggest beneficiaries of a separate provision of the overhaul, which provides billions of dollars in assistance to employers that maintain medical coverage for early retirees. Hundreds of U.S. companies -- including some that took write-downs last year that critics cited as proof of the new law's burden on business -- are participating in the program, which has paid out $530 million in the first seven months and is authorized to spend as much as $5 billion through 2014.

But while companies were quick to criticize the overhaul, which eliminated a double subsidy they had enjoyed on certain drug expenses, the companies are not saying much about the tailwind they are experiencing due to another aspect of the law.

The program, known as the Early Retiree Reinsurance Program (ERRP), was designed to encourage health-plan sponsors -- companies, labor unions, nonprofits and state and local governments -- to continue to provide coverage to employees who retire before they qualify for Medicare. Without coverage from their former plans, experts say these people often cannot get insurance on their own because of their age and pre-existing conditions. Under the ERRP program, taxpayers now pay 80 percent of the outlays associated with higher-cost early retirees, those who cost their former employers between $15,000 and $90,000 a year in insurance premiums and other healthcare-related outlays.

The official list of companies participating in the program includes half the members of the Dow Jones industrial average. Among the corporate beneficiaries: AT&T (NYSE: T), Caterpillar Inc. (NYSE: CAT), and Deere & Co (NYSE: DE) -- three companies that were part of the very public write-down wave that followed Obama's signing of the law last year and the elimination of the double subsidy regarding retiree drug benefits.

That loophole, created in 2003 with the Medicare Modernization Act, allowed companies to receive a 28 percent subsidy from taxpayers to help cover the cost of prescription drugs for retirees -- without counting the money as income. And when they spent the money, the companies were allowed to turn around and get a deduction for it on their taxes -- even though the money was a gift from taxpayers.

The Obama administration saw that as a double subsidy and eliminated it. So starting in 2013, U.S. companies will only be able to enjoy the subsidy once, by not having it count as income.

Link to article


For 20 States, 2012 Medicaid Match Rates Will Be Lower Than Rates of 2008
In a new report, the Council on State Governments (CSG) analyzes the value of the Medicaid matching rate to states before, during and after Recovery Act funding; the American Reinvestment and Recovery Act provided all states with enhanced matching rates for their Medicaid programs in recognition of the fiscal issues states faced in the recession.

On average, states gained $1.07 additional match for each state dollar spent under the Recovery Act enhanced rates, as the average federal return on a state dollar rose from $1.61 in 2008 to $2.68 in late 2010. The additional match for states ranged from 56 cents in Alaska to $2.39 in Mississippi.

States will lose any additional federal stimulus match June 30, 2011, and revert back to the pre-recession calculation of Medicaid matching rates. For 20 states, the Medicaid match rate in the 2012 fiscal year will be lower than the pre-recession rate in the 2008 fiscal year, ranging from 52 cents less per state dollar expended in North Dakota to 2 cents in Rhode Island.

However, the rate will increase for 17 states, ranging from 57 cents more per state dollar expended in Michigan to 4 cents in Idaho, and remain the same for 13 states and the District of Columbia.

Link to report
Link to related article
Link to related article
Link to related article




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State

Illinois Will Not Request Waiver for Medical Loss Ratio Requirements
Illinois Insurance Department Director Michael McRaith said the state will not request a federal waiver to of the medical loss ratio (MLR) requirement under health reform.

"There is some disruption and definitely some discomfort among insurers, but consumers are definitely better protected than they were a year ago," McRaith said. The MLR provision requires insurers to spend at least 80 cents of every premium dollar on providing medical care, or provide rebates to policyholders starting in 2012.

Other states, including Georgia, have recently filed requests for waivers from the MLR provision.

Up to 20 percent of individual policyholders could get partial rebates on the premiums they pay, McRaith predicted, and up to 25 percent of small group policyholders could receive rebates.

Note: McRaith has been selected as the first director of the newly created Federal Insurance Office (FIO) in the Obama administration and will leave his post as Illinois Insurance Department Director in June.

Link to article


Maryland's Approach to Hospital Costs: Set Prices
The new federal health law has resulted in hospital mergers as the industry prepares for major changes in financing and delivery of care. Some concerns have arisen that the resulting behemoths will have too much price-setting power. In Maryland, however, monopoly pricing won’t be a problem because the state sets the prices.

For more than 30 years, Maryland has regulated the rates hospitals can charge, while all 49 other states have relied on market mechanisms to keep prices in check. For the most part, it has worked. The urban hospitals that serve large numbers of uninsured Maryland patients are financially strong, instead of nearly bankrupt like most inner-city hospitals. And everyone — private insurers, the uninsured, and those on Medicaid and Medicare—is charged the same amount.

Maryland has the lowest price in the country for average hospital cases — a little more than $13,000, compared to a national average of $32,500. The cost of health insurance in Maryland is second lowest in the nation as a percentage of median income.

Already, ten of the state’s 46 hospitals have volunteered for a program in which the state sets a flat, three-year budget based on current spending levels, and hospitals have the opportunity to use cost-cutting procedures to improve their bottom lines and reap higher profits.

Robert Murray, head of Maryland’s health services cost review commission, admits that Maryland's “macro” regulation is not perfect. But he says it has put the state in an ideal position to provide incentives for the kind of highly coordinated and efficient care the federal health law is now calling for.

Link to article


Massachusetts Connector Needs Repairs, Report Says
Since health reform was enacted in Massachusetts in 2006, the state is “still facing the same core issue” of increasing costs, according to a new report by the Pioneer Institute. The Commonwealth Health Insurance Connector Authority (Connector), the exchange entity responsible for implementing the health reform law, was designed to assist both individuals and businesses in acquiring affordable, high-quality health care coverage.

The Connector operates both the state-subsidized insurance program called “Commonwealth Care” and the unsubsidized insurance program called “Commonwealth Choice.”

“The Connector has been successful in providing free or near-free care to 158, 973 of the under 65 population in Massachusetts, which has helped to reduce the uninsured rate to the lowest in the country. It has been less successful at enrolling non-subsidized individuals and businesses,” the report says.

The Connector “required employers to meet the same requirements that were in place in the market outside the Connector, that is, to pay at least 50% towards the premium and meet employer participation rules. This requirement overlooked the fact that these barriers were identified before the reform as reasons some smaller employers couldn’t offer health insurance," the report says.

Link to report


Nevada Awards Medicaid/Health Reform Contract to HP
HP Enterprise Services (NYSE: HPQ) has entered a five-year, $176 million services agreement with the Nevada Division of Health Care Financing and Policy “to strengthen Medicaid operations and help position the state for healthcare reform,” the company says.

HP will become Nevada’s Medicaid fiscal agent and will upgrade and manage the state’s Medicaid Management Information System. HP also will help the agency enhance service delivery to Medicaid clients and improve staff productivity.

HP is the nation’s largest provider of Medicaid and Medicare process management services.

“We look to HP for a smooth transition to more effectively administer benefits to our residents and provide excellent policy guidance to help us prepare for and manage challenges such as healthcare reform,” said Charles Duarte, Medicaid Administrator, Nevada.

Link to release


Vermont House Passes Universal Health Care Measure
The Vermont House has voted 92-49 on March 24 to approve a bill that could set the state on the road to creating a universal coverage system. “There was universal agreement on the House floor that the current system will bankrupt us. We have a problem. We need to solve it,” House Speaker Shap Smith, (D-Morristown), said in explaining the need for the bill.

Democratic Gov. Peter Shumlin made health reform a priority for his first term. The bill now goes to the Democrat-controlled Senate, where the bill is expected to pass.

Two days after the House vote, hundreds rallied for a single payer health system inside Vermont's Statehouse. Medical students and Vermont lawmakers packed the conference room, saying the single payer system will better serve patients. Physicians are also supporting the bill, saying it will save money by providing more timely treatment.

Link to article
Link to article




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Not in the News...Yet

MLR Provision Could Significantly Affect Individual Insurance Market
A study published in the American Journal of Managed Care finds that the introduction of medical loss ratio (MLR) regulation as part of the health reform law “has the potential to significantly affect the functioning of the individual market for health insurance.”

"In 2009, using a [health reform]-adjusted MLR definition, we estimated that 29% of insurer-state observations in the individual market would have MLRs below the 80% minimum, corresponding to 32% of total enrollment,” according to the article.

“Nine states would have at least one-half of their health insurers below the threshold. If insurers below the MLR threshold exit the market, major coverage disruption could occur for those in poor health; we estimated the range to be between 104,624 and 158,736 member years.”

Link to article




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Releases of Note

ONC Five-Year Strategic Plan: Electronic Health Data Will Transform Health Care
Electronic data will revolutionize health care, a new five-year strategic plan from the Office of the National Coordinator for Health Information Technology says. The plan was released for public comment on March 25.

Clinical information captured from electronic health records in machine-readable format can be used to rapidly speed-up the creation and diffusion of medical knowledge, the plan says, creating what ONC calls a "learning health system.”

"Through a learning health system, the right information will be available to support a given decision, whether it is about the efficacy of a treatment or medication for an individual patient, predicting a national pandemic, or deciding whether to proceed with the research and development for a potential new treatment," the plan states.

"However, these technologies – including electronic health records (EHRs), telehealth devices, remote monitoring technologies, and mobile health applications – are remarkably underutilized today,” the plan says. “In 2010, only 25 percent of physician offices and 15 percent of acute care hospitals take advantage of EHRs. Even fewer use remote monitoring and telehealth technologies."

The plan envisions ONC working with a few federal agencies to create a federated model for data exchange, and later expanding participation to other public- and private-sector organizations.

Among the initial agency efforts that could form the basis of the learning system are the Food and Drug Administration's Sentinel Initiative, which will track and monitor all FDA-regulated products; the Center for Disease Control's health surveillance network; and an HHS database that will use insurance claims as a basis for medical research.

ONC is accepting public comments on the plan through April 22, 2011.

Link to article
Link to HHS release




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M2 Health Care Consulting | Denver | Washington, DC | www.m2hcc.com

WellAware - Health Policy News Mar 21 2011

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WellAware

Health Policy News from M2

March 25, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.
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Happy Birthday, ACA!

This is a collection of quotes and reports at the one year anniversary of the passage of the Patient Protection and Affordable Care Act that may serve as a helpful reference.

On the costs:

“…ObamaCare will be far more expensive than advertised. To wit, CBO says the entitlement's health insurance subsidies will cost $1.13 trillion between 2012 and 2021, not $1.04 trillion, the prior estimate. This 8.6% jump is the result of revised assumptions, the so-called technical factors in CBO's budget model. The bill's total cost now stands at $1.445 trillion, according to another recent CBO estimate.”

WSJ, March 23, 2011


“Gifts of bogus statistics for the health-care law’s birthday,” in Fact Checker

Washington Post, March 21, 2011



On health care stocks:

“That’s right, it’s the one-year anniversary of the of big health care overhaul bill. So, we figured we’d have a look at how the past year has treated the health care sector of the stock market.

The unsurprising answer: Not good. Over the last 12 months, the health care sector is the worst-performing sector of the 10 that make up the S&P, down 1.6%. The S&P itself is up 10%.”

WSJ, March 23, 2011



From those who support the law:

"...AARP strongly opposes efforts to repeal the Affordable Care Act."

AARP Bulletin, March 2011


“In addition, the ACA will improve the distribution of the nation’s health resources in underserved communities through increased funding for Community Health Centers, which have demonstrated the ability to provide high-quality care to low-income and minority communities, and several health professions programs that provide incentives for providers to work in underserved communities."

“All of these provisions will help improve the current state of health care for people of color, who are disproportionately uninsured and underinsured, and who face greater barriers to receiving high-quality care, even when they do have health insurance…”

The Joint Center for Political and Economic Studies, March 25, 2011



From those who oppose the law:

“This week marks the one-year anniversary of the Patient Protection and Affordable Care Act — ObamaCare. Unlike the remedy we were promised, Obamacare has done nothing to improve the quality of health care in our country, and has already done significant damage to the economy.”

Red State blog, March 23, 2011


“So while some may be wishing ObamaCare a happy first anniversary, those who are paying attention are wishing it good riddance. Unless common sense returns to our nation’s capitol, ObamaCare is repealed and overall spending is brought under control, seniors will inevitably find their drugs and care are rationed.”

Fox News, March 22, 2011



From the states:

Connecticut
"On health-reform anniversary, Dems celebrate while GOP pledges repeal"

CT Mirror, March 23, 2011


Georgia
Governor says: "New health care law costing state, employees millions"

The Atlanta Journal-Constitution, March 23, 2011


Iowa
“…expedited review is a bad idea for two reasons. First is the court's reputation and legitimacy as an apolitical branch of government. Second, this is essentially a policy debate, not a judicial debate…”

Des Moines Register, March 22, 2011


Missouri
“No doubt more wrinkles will have to be ironed out through legislation. Nobody ever said medical insurance and health care were uncomplicated subjects, and nobody ever said the new law was perfect.

The Affordable Care Act remains, however, the building block of a fairer, more humane and more efficient system. May it survive and prosper.”

McClatchy, March 22, 2011


Pennsylvania
“Health care debate roils Harrisburg”

Pittsburgh Tribune-Review, March 24, 2011


Texas
“It has been one year since President Obama signed the Patient Protection and Affordable Care Act into law, and Texas is at a policy crossroads: We can choose to lead with responsible public policy or become supporting actors in a national political sideshow. The reality is that the success of health reform now depends on the states.”

Houston Chronicle, March 22, 2001



From the think tanks:

WEBCHAT: “On the first anniversary of the health care law, Brookings expert Kavita Patel reviewed the steps taken thus far toward implementation and answered your questions about the prospects for more action on Capitol Hill.”

The Brookings Institution, March 23, 2011


FACT SHEET: “Obamacare One Year Later: Why America Needs Full Repeal Now”
PODCAST: “Dr. Robert Moffit on the One-Year Anniversary of Obamacare”

Heritage Foundation, March 22, 2011


“Obamacare is Unconstitutional”

Cato Institute, March/April 2011


“This issue brief is a response to recent false attacks conservatives have made against the law. As we will demonstrate, the Affordable Care Act will create jobs, lower health care costs for families, help small businesses provide health insurance to their employees while maintaining the private sector’s key role in health insurance, and ensure we provide quality health care to all Americans at a lower cost to them and American taxpayers.”

Center for American Progress, March 21, 2011




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M2 Health Care Consulting | Denver | Washington, DC | www.m2hcc.com
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M2 Health Care Consulting
1600 Clarendon Blvd.
Arlington, VA 22209
US

WellAware - Health Policy News Mar 14 2011

Click to view this in a separate browser

WellAware

Health Policy News from M2

March 18, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.
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Federal

Sen. Rockefeller: Brokers’ Fees Should Be Included in MLR Calculations
In a letter to the National Association of Insurance Commissioners (NAIC), Senator John D. Rockefeller (D-WV) has expressed concern that insurance brokers could succeed in persuading regulators and lawmakers to change the health reform law so that their commissions would not be included in the calculation of health insurer administrative expenses.

Under the law’s rules governing an insurance company’s minimum medical loss ratio, insurers must spend at least 85 cents out of every dollar they collect in premiums on the health care of their customers. While acknowledging the important role brokers play in helping people buy insurance policies on their own, the regulators included the cost of commissions in their calculation of administrative expenses.

The brokers and others, including some state regulators, are now actively lobbying to exclude commissions. “I cannot support a proposal that would allow agents, brokers, and health insurance companies to retain the estimated $1 billion in benefits that American consumers will receive next year thanks to the health care reform law,” the letter to Susan E. Voss, NAIC president, says.

Although NAIC discussed and resolved the issue last year, the letter states, the NAIC Executive Committee “has apparently reopened the issue of whether agent and broker commissions should be exempted from the minimum” MLR requirements.

As Rockefeller notes in his letter, some of the health insurers have already signaled they plan to cut commissions as a way of lowering their expenses to meet the new rules. Some brokers have also discussed moving toward more of a fee-based system of being paid, where the person or company buying coverage would pay a fee for the broker’s services.

Like the insurers, he argues brokers may make less profit on each transaction, but there should be many more transactions.

The National Association of Health Underwriters, which represents the brokers, is arguing forcefully that its members’ livelihood is at stake. The new rules are “currently having a devastating financial impact on the country’s approximately half-million licensed professional health insurance agents and brokers,” the association’s chief executive said in a letter to HHS Secretary Sebelius in January.

Link to article
Link to letter


Multiple Congressional Hearings Examine HCR as Anniversary Approaches
Several hearings took place this week, including one in the House and two in the Senate, examining the first year of health care reform.

The hearings included the following:

•On March 15, the House Oversight and Government Reform/Health Care Subcommittee held a hearing entitled “Obamacare: Why The Need For Waivers?"
•On March 16, the Senate Finance Committee held a hearing on "Health Reform: Lessons Learned During the First Year." HHS Secretary Kathleen Sebelius is scheduled to testify.
•On March 17, the Senate Health, Education, Labor and Pensions Committee examined "Health Insurance Exchanges and Ongoing State Implementation of the Affordable Care Act."

The March 15 House subcommittee hearing focused on the waivers that have been granted by HHS over the past year for some companies.

“Through an amorphous process shrouded in ambiguity and understood by few, the Administration has exempted over 1,000 companies from certain requirements – and at the same time has neglected to afford others the same accommodation,” subcommittee chairman Trey Gowdy said in his opening statement.

The waivers relate to mini-med plans; many such plans would violate federal rules mandated by the health care law that set a minimum annual dollar limit on essential benefits that health care plans must provide in 2011, 2012, and 2013.

“What is the legal authority by which the Secretary can grant waivers?” Gowdy asked. “Where in the health care law does it specifically grant the Secretary the authority to waive compliance with the law?”

At the Senate Finance Committee hearing on March 16, Chairman Max Baucus (D-MT) focused on the law’s impact on Medicare. He said the health reform law “extended the life of the program by twelve years,” until “at least 2029,” and the law changed Medicare from a program that paid only when people became sick, to one that is a “true health care system.”

In addition, Baucus said, “health reform increases payments to hospitals for providing higher quality care, the law gives hospitals incentives to prevent avoidable illnesses, and the law improves quality by increasing the number of primary care physicians.”

“Because of the changes in the Affordable Care Act, Medicare is stronger than ever,” Baucus stated. “But now we face new challenges. We face those who want to roll back these benefits and weaken Medicare.

Witnesses at the Finance Committee hearing included HHS Secretary Sebelius and Douglas Holtz-Eakin, President of the American Action Forum.

Link to hearing document
Link to testimony
Link to committee hearing


MedPAC Report Recommends Increase in Payments for Physician Services
The Medicare Payment Advisory Commission released its March 2011 report to Congress, featuring the Commission’s recommendations for 2012 rate adjustments in fee-for-service (FFS) Medicare.

For 2012, the Commission recommends a 1 percent increase in payments for physician services “to ensure beneficiaries have continued access to these services. In contrast, the Commission recommended no update to payments for home health care services, as the number of home health agencies has increased to an all-time high and Medicare’s payments have exceeded their costs by nearly 18 percent—the 10th consecutive year they have been in this range.”

The Commission also recommends an update of 1 percent for both the inpatient and outpatient prospective payment systems for 2012.

In terms of overall Medicare spending, the report says that "Medicare’s spending growth has resulted in Medicare consuming a significant share, 18 percent, of all income tax revenue (in addition to Medicare’s dedicated payroll tax revenues, premiums, and cost sharing)."

“Further complicating Medicare’s long-term outlook is a large non-Medicare federal fiscal burden. Total debt held by the public is expected to near 70 percent of GDP within the next decade, a level not seen since World War II.”

Link to release
Link to report


MACPAC Releases Its First Report to Congress
In its first report to Congress, the Medicaid and CHIP Payment and Access Commission (MACPAC) aims to “contribute to a better understanding of the Medicaid and CHIP programs, their roles in the U.S. health care system, and the key policy and data issues to be addressed,” according to MACPAC. “This first report also sets out an analytic framework that serves as the foundation for the Commission’s future work with respect to access and payment.”

The Commission is a non-partisan, federal, analytic support agency and resource for the Congress on Medicaid and CHIP. MACPAC is the first federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, and making recommendations to the Congress and the Secretary of the Department of Health and Human Services on a wide range of issues affecting these programs. The Commission conducts independent policy analysis and health services research on key Medicaid and CHIP topics, including but not limited to:

•Payment policies
•Issues related to access to care
•Eligibility
•Quality of care
•Interactions between Medicaid and Medicare; and
•Data development to support policy analysis and program accountability.

The report also includes a “compilation of Medicaid and CHIP program information, including state-specific information about program enrollment, spending, eligibility levels, Medicaid benefits covered, and the federal medical assistance percentage (FMAP). This section of the Report, called MACStats, will be a standing supplement in all Commission reports to the Congress," the commission says.

Link to MACPAC
Link to report


AHRQ Opens Series of Medication Adherence Questions for Public Input
The Agency for Healthcare Research and Quality (AHRQ) has opened a series of questions on medication adherence for public comment. The questions will remain open for comment through April 8.

The questions include:

•Among patients with chronic or acute diseases with self-administered medication prescribed by a provider, what is the comparative effectiveness of interventions directed at patients or providers versus usual care or other interventions in improving medication adherence?
•For the subset of patients with improvements in medication adherence, what is the comparative effectiveness of medication adherence interventions versus usual care or other interventions in improving other outcomes (i.e., biomarkers, clinical outcomes [mortality and morbidity], quality of life, patient satisfaction, health care utilization [and associated costs], and quality of care)?
•What adverse medication effects are associated with interventions to improve medication adherence?

“As medication adherence has become more recognized as an important health care-quality issue, treatment guidelines often include recommendations for providers to consider adherence. Currently, available guidelines and recommendations that address issues related to medication adherence are predominantly disease specific,” the agency says. “Furthermore, adherence is not the focus of these guidelines but rather is one among several issues discussed in the area of disease treatment and management.”

This evidence review will be part of a collection of reports produced by the Agency for Healthcare Research and Quality for the “Closing the Quality Gap: Revisiting the State of the Science” series. These reports will critically assess the evidence regarding quality improvement for selected settings, interventions, and clinical conditions aimed at closing the “quality gap” in health care.

Link to announcement


PCORI Public Session Attendance Low, Stakeholder Session Yields Higher
The Patient Centered Research Institute (PCORI) board and methodology committee met March 7 in St. Louis to present their first work products to each other and the public. The board is seeking input from all stakeholders to inform the direction of the Institute and the research it will fund.

The public session was marked by low attendance; on day one, while a half hour was slotted for public comment, only half that time was needed. Day two elicited only one comment. However, the first stakeholder forum, was well-attended; with about 80 researchers, clinicians, patient advocates, patient representatives, social workers, public health workers, payers, and business leaders in the St. Louis region participating.

In a report presented at the meeting, the PCORI Program Development Committee said its current objectives include:

•Conduct and environmental scan
•Develop the “Tier 1” planning grant process
•Establish the PCORI national priorities
•Develop the “durable core research agenda for patient-centered outcomes research”
•Identify and fund capacity-building research that will fill gaps in research methodology

Link to PCORI objective
Link to PCORI objective
Link to article




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State

Arizona Governor Decides Not to Move Forward With Deep Cuts in Medicaid
Despite federal approval to do otherwise, Gov. Jan Brewer (R) has issued a new plan to eliminate fewer people from the state's Medicaid rolls by freezing enrollment, requiring patients who remain to pay more for their care and reducing the amount paid to health-care providers.

Under the 12-part, $500 million proposal, the state would cut about 120,000 people from the Arizona Health Care Cost Containment System, the state's Medicaid program, instead of the 280,000 Brewer originally proposed as a move to help close the state's budget shortfall.

Brewer proposed other significant changes, from mandatory copayments to benefit limits that would save the state millions of additional dollars.

HHS Secretary Sebelius said last month that Arizona could eliminate 250,000 people from the rolls without losing matching federal funds. Sebelius said Brewer could simply choose not to reauthorize that portion of AHCCCS, approved by voters in 2000, because it went beyond Medicaid requirements. However, since then, Brewer has said she hoped to mitigate the cuts.

The new proposal proposes some changes that have previously been rejected by the federal government. The plan includes provisions to:

•Cut reimbursement rates for hospitals, doctors and other health-care providers by 5 percent, effective October 1, saving $95 million. Providers already are bracing for a 10 percent cut to take effect April 1. This would be an additional cut.
•Impose new limits on benefits to save $40 million, including a 25-day limit on adult hospital stays and an unspecified limit on office visits for parents and childless adults.
•Charge mandatory copayments for parents and children, and institute no-show fees for missed appointments - all currently prohibited under federal rules. AHCCCS patients currently have copayments for office visits and emergency-room care, but providers cannot refuse to provide service if patients don't pay. Mandatory copays for childless adults were imposed last year following a protracted federal court battle.

"Nothing about this plan is pain-free," Brewer said in a statement. "But it strikes a balance by creating a Medicaid program that is more fiscally responsible while keeping its core promises to the Arizonans who depend on it."

Link to article


Alabama Governor, One of Only Two Physician-Governors, Favors HSAs
Alabama Gov. Robert Bentley (R) is one of two current governors who is also a physician. Bentley was a dermatologist before he got into politics; Oregon’s John Kitzhaber was an emergency room physician. The two governors agree on one thing: The federal health care law reforms the way we pay for health care, but doesn't fix the problems with the way we deliver it.

However, Kitzhaber, a Democrat, supports the federal health care overhaul passed last year, and is looking to find ways to channel federal dollars toward coordinating care at the local level. Bentley, a Republican, objects to what he calls a “federal takeover” of health care.

As a state senator in 2009, Bentley authored a constitutional amendment designed to block the law’s implementation in Alabama. He says health care costs have gone up and quality has gone down as the federal government and insurance companies have taken a larger role in health care. His prescription is to return health care to patients and doctors.

Bentley’s plan emphasizes individual health savings accounts, which he says will lower costs by letting patients decide how they want to spend their health care dollars. He wants to give state tax breaks to businesses that purchase insurance for their employees and state-based incentives to attract more insurance carriers. He’s also proposing greater use of electronic medical records and state scholarships for primary care physicians willing to repay their loans by serving Alabama’s rural communities.

Separately, the Governor’s recently-appointed Statewide Health Coordinating Council has approved the state's formal health plan in a unanimous vote at its first meeting.

The vote was largely procedural; the board is required to approve the document every three years and all changes approved in the vote had already been approved individually by the previous council. The deadline for approving the document was May 4.

The state health plan sets limits on the number of hospital beds that can be made available in certain specialties and otherwise guides regulators in governing health care in the state.

Link to article
Link to article


Colorado House Leader Sponsors Legislation to Opt Out of Federal Health Reform, But Will Seek to Establish State Insurance Exchange
House Majority Leader Amy Stephens (R) is co-sponsoring legislation that would allow Colorado to join other states in opting out of the health reform law.

However, she is also a co-sponsor of legislation that would enact one of the key tenets of health reform: the requirement that states set up health insurance exchanges. "I think you have to explore the exchange issue on its own," Stephens said. "I've always been intrigued by the exchange idea and how it might help small business."

Stephens has agreed to be the House sponsor for a Senate bill that would set up the insurance exchanges in Colorado. The bill expected to be introduced soon.

Initially, the exchanges would be open only to individuals and to businesses with fewer than 100 employees. The idea is that individuals and businesses could band together to get better prices and health care options the way big companies now negotiate for health insurance.

Boyd said she and Stephens had each been eyeing legislation to set up the exchanges and decided it made sense to talk about combining their bills and seeking a compromise.

Link to article


Georgia Applies for Waiver From Medical Loss Ratio Requirements
Georgia Insurance Commissioner Ralph Hudgens plans to request a waiver from the federally imposed Medical Loss Ratio (MLR) standard for 2011, 2012 and 2013 in the health reform law. In his letter of transmittal to HHS Secretary Sebelius, Hudgens says the purpose of Georgia’s request for an MLR waiver is three-fold.

“First, we should do no harm to Georgians with health issues who are currently insured in the individual market. For these individuals it is imperative that their current insurer remain in the Georgia individual health market,” he said.

“Second, the phase-in period will give insurers time to adjust business models to compete in the proposed federal system should it be deemed constitutional. Third, the wavier will help preserve consumer access to agents or brokers who explain and facilitate the purchase of individual health policies.” Hudgens added: “It appears to me that the current law is engineered to eliminate the agent from the marketplace by reducing the commissions that can be paid on the sale of a health insurance policy. I believe that agents are vital in assisting Georgians in making sound health insurance choices.”

He said that “unless the MLR waiver is granted, it is my opinion that Georgia’s individual health market will become less competitive.”

Link to article


Nebraska Behavioral Health Providers: Budget Cuts Would Reduce Access
If proposed cuts to provider rates go forward, Medicaid service providers are warning Nebraska legislators the consequences may include reduced access to behavioral health services and higher use of more expensive services, such as hospital emergency rooms, crisis centers and jails.

Part of the issue is that some behavioral health providers have already closed because of child welfare reform, said Topher Hansen, executive director of CenterPointe treatment services, who spoke at a news conference.

Five percent cuts were proposed by the state Department of Health and Human Services and recommended in Gov. Dave Heineman's (R) proposed 2011-13 budget. Those cuts would not extend to primary care, child care, child welfare or juvenile services, or to services for people with developmental disabilities.

The Legislature's preliminary budget proposes 4 percent cuts for behavioral health, Medicaid, Children's Health Insurance Program and aging services providers.

Between 2003, when Nebraska ranked 48th among states for behavioral health per capita spending, through last year, providers have received at least a small increase each year. Still, Nebraska ranks in the bottom one-fourth for spending on behavioral health.

Link to article


New Jersey Gov. Christie Will Not Negotiate Health Costs With Unions
Representatives for Gov. Chris Christie (R) have told the state’s largest union that the administration’s plan to increase health care costs for public employees was not negotiable, union leaders said today.

The governor’s office first took the issue of health care costs off the table when negotiations over a new contract got underway. But union officials said they were determined to have a voice in changes to their benefits.

"It represents a pretty fundamental attack on a long-established right to bargain over health care," said Bob Masters, political director for the Communication Workers of America, which represents that state’s public employees. "We are going to insist that our legal right to bargain over health care be honored by this governor as it has been by every governor."

Instead, a spokesman for Christie said the governor will stick to his plan to have state employees to pay 30 percent of their health care premiums by requiring it through having the legislature enact a law. Union members currently pay 1.5 percent of their salary for health care coverage.

"We and the Senate president are pursuing that area in the same way through legislation," a spokesman said.

Separately, New Jersey school insurance premiums are helping a private employer pay its retirees $500 a month for lifetime health care — even as public teachers confront layoffs and increasing pressure to reduce salaries and benefits.

The "post-employment benefit plan" for former employees of the New Jersey School Boards Association Insurance Group cost nearly $29,000 in fiscal 2009. That figure is projected to reach $504,991 over the lifetimes of the beneficiaries, internal documents show.

Link to article
Link to article


Ohio Proposes $8 Billion in Cuts, Including Some Changes to Medicaid
Gov. John Kasich (R) has proposed a $55.5 billion, two-year, general fund budget that he says closes an $8 billion shortfall through cuts, government restructuring and other measures but without tax hikes.

Medicaid consumes 30 percent of all state government spending and threatens to crowd out other priorities. Gov. Kasich’s budget includes some Medicaid growth; the state’s total Medicaid spending would grow 5.5 percent in fiscal 2012 to $18.8 billion.

But a Medicaid spokesman claims the budget overall would achieve $1.44 billion in savings and cuts to Medicaid’s current trend lines.

The budget would:

•Create significant new growth opportunities for CareSource, Ohio’s largest Medicaid managed care provider
•Restructure payments for hospital and nursing home care to Medicaid enrollees
•Rebalance long-term care by shifting more care away from nursing homes and into home and community-based settings.

The governor's priorities echoed those of GOP newcomers in Wisconsin, Michigan, Florida and elsewhere, who aim to close huge budget deficits by selling state assets, reducing health-care spending, cutting local aid and forcing or negotiating concessions from public workers.

Link to article
Link to article


State By State ARRA Spending: States Have Obligated 66% of Funding Overall
As of March 4, states as a whole have obligated 66% of their American Reinvestment and Recovery Act funding, according to an analysis by IDEA Money Watch, a project of The Advocacy Institute.

IDEA Money Watch is tracking the use of federal funds that are being provided to local school districts in support of special education services (IDEA) through the ARRA.

Washington, DC has obligated 90%, while Nebraska has obligated 45% of its funding, according to the analysis.

Link to analysis




----------------------------------------------------
Not in the News...Yet

Budget Widget Demonstrates Cutting Ohio Spending is Harder Than It Looks
An Ohio web site has posted an interactive chart to demonstrate the difficulties in making budget decisions to close the state’s $8 billion two-year budget deficit. For each “idea,” the pros and cons are noted, as well as the cost savings to the state. Under Medicaid, the first idea is to “establish a zero-growth spending freeze on the state's Medicaid program. (“Caution: This idea and the next overlap,” the site says.)

“Why it's a good idea: Takes a stab at containing Medicaid program growth, which has been averaging 9 percent annually in recent years.” On the other hand, “Why it's a bad idea: May not be feasible, and health care providers may drop out of the state's Medicaid program.” Estimated savings are $570 million.

The second Medicaid idea is “reduce Medicaid per member, per month costs by 3 percent from fiscal 2011 levels. “Why it's a good idea: It would be a major step in filling the state's budget hole and makes a bold statement to Ohio's nursing homes and health industry.” On the other hand, “Why it's a bad idea: It could spark a crisis for Medicaid patients if providers stop seeing Medicaid patients to protest their rates being cut.” Estimated savings are $825 million.

A third idea related to Medicaid is to “eliminate all optional Medicaid services such as dental, vision, prescriptions for adults, podiatry, hospice, physical therapy and occupational therapy. “Why it's a good idea: It doesn't affect what are considered core Medicaid services.” However, “Why it's a bad idea: The "optional" tag is in name only. People need things like glasses, medications and physical therapy to be productive members of society.” Estimated savings are $500 million.

Link to article




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Releases of Note

IOM Report 24 Objectives in Healthy People 2020 Warrant Priority Attention, Including Reducing Coronary Heart Disease Deaths
HHS’ Healthy People 2020 report identifies 42 topics and nearly 600 objectives. In addition, an Institute of Medicine report singles out 12 indicators as immediate, major health concerns that should be monitored and 24 objectives that warrant priority attention in the plan's implementation.

The 12 recommended indicators include measures of access to care and quality of health care services, healthy behaviors, injury, physical and social environments, chronic disease, mental health, responsible sexual behavior, substance abuse, tobacco use, and healthy births.

The 24 objectives include:

•Reduce coronary heart disease deaths.
•Reduce the proportion of people with hypertension.
•Reduce the proportion of people who experience major depressive episodes.
•Reduce low birth weight and very low birth weight.
•Reduce the proportion of obese children and adolescents.
•Reduce tobacco use by adults.

Link to press release
Link to report brief
Link to report




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M2 Health Care Consulting | Denver | Washington, DC | www.m2hcc.com
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M2 Health Care Consulting
1600 Clarendon Blvd.
Arlington, VA 22209
US

WellAware - Health Policy News Mar 7 2011

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WellAware

Health Policy News from M2

March 11, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.
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Federal

House Oversight Committee Becomes Second to Investigate Mini-Med Waivers
The House Committee on Oversight and Government Reform is investigating waivers the Obama administration has awarded to more than 1,000 organizations for a provision of the healthcare reform law. Specifically, the committee is asking why some organizations have been denied requests for waivers for the new annual limit on coverage requirements.

HHS has granted 1,040 one-year exemptions for groups that would not be able to meet the new annual coverage floor of $750,000 in 2011. In January, HHS said the department denied about 50 waiver requests.

The waivers are applicable only to the law’s annual limits provision. Republicans say that the exemptions are either proof of the reform’s flaws or gifts to Democratic allies. The administration has repeatedly rejected both claims, pointing out that the law gives the HHS secretary the ability to offer waivers and that a large chunk of business groups have received them.

“The current lack of transparency lends credence to the perception that bureaucrats are picking winners and losers in a politicized environment where the winners are favored constituencies of the administration,” the Oversight committee said in a letter to HHS.

About 2.6 million people are covered by the waivers, representing less than two percent of privately insured individuals, according to HHS.

Link to article


AHA Says New Study Shows Hospital Prices Closely Linked to Cost of Care
The American Hospital Association (AHA) has sent the Department of Justice's Antitrust Division and the Federal Trade Commission a study showing the “close and consistent relationship between hospital prices and the cost of providing care.”

"This extensive research casts serious doubt on claims of market power based simply on differences in prices," the AHA said in a letter accompanying the study. "In this regard, it is entirely in agreement with recent work by the Federal Trade Commission's Bureau of Economics concluding that different price levels in hospital markets are 'neither necessary, nor sufficient, to demonstrate the exercise of market power.”

In other key findings, AHA says that “over the last decade, increased expenditures on labor explain a substantial proportion of overall costs to hospitals.” In addition, “up to 72% of the differences in hospital prices for non-Medicare services can be explained by how sick patients are and costs of care.”

The study is the second undertaken by economists with Compass Lexecon on behalf of the AHA. The earlier study found a “lack of credible support for several popular publications making exaggerated claims of provider market power,” according to the association.

Link to article
Link to letter
Link to report


Repeal of 1099 Tax Reporting Provision under Health Reform Still in Question
The House has passed legislation that would roll back a tax reporting provision in the health reform law that would apply to many small businesses. The Senate passed similar legislation in February by a wide margin as part of an unrelated bill, but the chambers are not in agreement over how to offset the estimated $20 billion cost of the provision's repeal.

The 1099 tax reporting provision, approved to help raise funding for the reform bill's coverage expansions, would require many small businesses to file forms with the Internal Revenue Service for every vendor on which they spend $600 or more in a year. Because many physician practices would be subject to the requirement as well, the American Medical Association and other physician organizations have come out in opposition to the provision and in favor of bipartisan legislation to overturn the language.

The Senate version would give the White House the ability to redirect money already appropriated by Congress for certain budget items that the administration no longer deems necessary. The House version would require the recipients of federal insurance subsidies under the health system reform law to pay back more of those subsidies if it were determined that the recipients received higher income for the year than projected.

The White House indicated that Obama does not support the House funding mechanism for the 1099 repeal, although the president stopped short of threatening to repeal the House version.

If it is not rescinded, the tax reporting provision will take effect for purchases starting on January 1, 2012.

Link to article

NAIC Draft Bill to Exclude Brokers from MLR Calculation
The National Association of Insurance Commissioners is soliciting public comment on a bill that would amend the health reform law to mandate the exemption of broker commissions from the medical loss ratio (MLR) calculation. Consumer representatives to NAIC expect the organization will vote at its spring meeting in Austin later this month to send the bill to Congress.

The bill would exclude "remuneration" paid to "independent insurance producers" from the MLR calculations.

Lobbyists for the insurers and brokers have been trying to persuade Congressional Democrats to join Republicans in co-sponsoring the NAIC-recommended legislation when it arrives in Washington.

In the Senate, Ben Nelson, a Democrat from Nebraska, has indicated he will help lead an effort to change the law. Nelson is a former insurance company executive who previously served as Nebraska’s insurance commissioner.

Link to article
Link to article
Link to draft bill


Medical Home Guidelines Drafts by Medical Societies Exclude Nurses
Four primary care medical societies yesterday released guidelines for accrediting patient-centered medical homes that would bar nurse practitioners (NPs) from being in charge of them.

The American Academy of Family Physicians, the American College of Physicians, the American Academy of Pediatrics, and the American Osteopathic Association released a joint set of guidelines for programs that accredit or otherwise recognize medical homes. The societies stated that they want to ensure that these programs are standardized and stay focused on core principles, which include comprehensive, coordinated, and continuous care; accessibility; and patient engagement.

The medical home — a long-term healing relationship between a patient and a team of primary care clinicians — is viewed by many as a model for delivering care and getting paid for it, too. For a practice to qualify for third-party payments as a medical home, an organization has to designate it as such. Therefore, physicians have a lot at stake in the criteria that these groups use to distinguish medical homes from ordinary practices.

Groups that currently accredit or recognize practices as medical homes are the National Committee for Quality Assurance, the Accreditation Association for Ambulatory Health Care, and URAC, formerly known as the Utilization Review Accreditation Commission. A fourth group, the Joint Commission plans to unveil such a program later this year.

The new guidelines urge these groups to incorporate a set of medical home principles adopted by the four primary care societies in 2007. One of these principles, that physicians should lead the medical home team of clinicians, is a point of controversy within healthcare because NPs also aspire to direct such teams.

The Accreditation Association for Ambulatory Health Care agrees with the primary care medical societies. It specifies that an accredited medical home is physician-directed.

In contrast, the National Committee for Quality Assurance announced last fall that it would recognize nurse-led practices as medical homes in states that license NPs as independent practitioners. By defining medical homes as "clinician-led," URAC also leaves the door open to nurses being in charge, said NP Jan Towers, PhD, director of health policy for the American Academy of Nurse Practitioners.

Dr. Towers says the concept of the patient-centered medical home and its emphasis on and comprehensive care encompass what nurses do routinely. "All of this is basic nursing," Dr. Towers said.

Link to guidelines
Link to article


FDA Considers Approaches to Regulating Genetic Tests for Consumers
The FDA conducted a two-day hearing to weigh the risks and benefits of the increasingly popular direct-to-consumer genetic tests. Manufacturers contend the tests can help predict a person's risk of disease or how someone might respond to a given medication.

A panel of FDA advisers will look only at those genetic tests sold directly to consumers without the involvement of medical professionals. The kits enable people to have their genetic material analyzed to identify variations that might be related to inherited disorders, such as cystic fibrosis, breast cancer and even Alzheimer's disease.

This relatively new category of tests sprang up as a result of the Human Genome Project, begun in 1990, which boosted understanding of human health, disease and genetics, the FDA explained in a background summary. Because the field is so new, little is known about the accuracy of home genetic tests or the implications of test results, particularly if a health care professional isn't involved to help consumers interpret the results. Currently, only home tests that make medical claims are regulated by the agency. Before drafting regulations for the direct-to-consumer tests, the FDA has asked its advisers and test manufacturers for input in a variety of areas, including the reliability of the tests; the possibilities for misuse; the likelihood and consequences of misunderstood results; and how a lack of counseling might affect people who receive disturbing results.

Because people might make medical decisions based on the test results, the FDA will likely set standards to minimize the chance of misuse or misinterpretation of test results, similar to standards governing prescription-only genetic tests or home tests such as pregnancy tests.

Other considerations will include how to categorize the different types of home genetic tests. Three possibilities, the FDA said, include: tests that screen for carriers of a heritable disorder; tests that predict risk for a disorder such as ovarian cancer in people with no symptoms; and tests claiming to predict how someone will respond to a particular drug or medical treatment

Link to article
Link to article



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State

State Reform Flexibility to be Improved via New ‘1332’ Waivers
HHS and the Department of Treasury will officially announce a proposed rule Monday, March 14, to allow states to implement certain provisions of the Affordable Care Act with innovative approaches as early as 2014.

If a state seeks a 1332 waiver, the state’s plan must provide health insurance coverage that:

•Is at least as comprehensive as the coverage that would have been provided under the Affordable Care Act.
•Is at least as affordable as the coverage and cost sharing protections under the Affordable Care Act.
•Covers at least as many residents as would have otherwise been covered under the Affordable Care Act.
•Will not increase the Federal deficit.

In a teleconference this week, HHS discussed various ways states might innovate when it comes to health reform. Although HHS did not provide specifics, conceptually, states could create plans that would change benefit levels in the health plans offered via the exchanges, they could link different classifications of tax subsidy, they could even waive the individual mandate, say some policy experts.

Link to press release
Link to fact sheet
Link to proposed rule


Maine Receives First State MLR Waiver
Maine health insurers are getting a temporary waiver from the health reform law's requirement that they spend at least 80 percent of premiums on care. Maine is the first state to receive a waiver; three other states — New Hampshire, Nevada and Kentucky — have pending waiver applications.

The law requires plans in the individual market to meet an 80 percent medical loss ratio threshold or offer rebates to enrollees for the difference. The Maine Bureau of Insurance in December asked to retain its existing 65 percent ratio, arguing that a higher ratio would disrupt its market.

HHS agreed with those arguments in a letter to Superintendent of Insurance Mila Kofman, a supporter of the law. The waiver is valid for three years, but the last year is conditional on getting 2012 data that shows a continued need for the waiver.

The decision is "rooted in the particular circumstances of the Maine insurance market," the letter says. Specifically, HHS points out that three insurers make up the bulk of Maine's individual insurance market: Anthem Blue Cross Blue Shield of Maine (49 percent), MEGA Life and Health Insurance Company (37 percent) and HPHC Insurance Company (13 percent). MEGA had told Maine during preliminary discussions that it "would probably need to withdraw from this market if the minimum loss ratio requirement were increased."

“After a careful examination of the application and consideration of the criteria set forth in the statute and implementing regulation, we agree” that the 80 percent MLR standard in Maine “has a reasonable likelihood of destabilizing the Maine individual health insurance market,” the letter says. “We have determined that an adjustment of the MLR to 65 percent is warranted under the particular circumstances.”

Link to article
HHS letter to ME


Arkansas Senate Rejects Health Reform, But Approves Obesity Surgery Pilot
Two bills addressing health costs saw different fates this week in Arkansas. A Senate committee has rejected a bill that would require state agencies to report on the cost of implementing the federal health reform law. The bill would also prohibit agencies from implementing the law unless a specific state law allowed it.

The director of the state’s Department of Human Services told the committee that the bill could have “very serious” effects on Medicaid in Arkansas. The Committee on Public Health, Welfare and Labor voted 4-4 on a motion to recommend Senate Bill 709 by Sen. Missy Irvin (R). The motion was not adopted, as it needed five favorable votes.

Separately, under a bill endorsed by a Senate panel, insurance coverage for surgeries to treat people who are morbidly obese would be available to state employees and public school teachers.

Senate Bill 66 would create a four-year pilot program to not only offer life-saving procedure, but also to determine the economic impact that offering the surgeries would have on insurance plans. The Senate Insurance and Commerce Committee sent the measure to the full Senate for consideration. The bill has already passed the state House.

The bill’s sponsor said the surgery would benefit the health of those who receive it, but after the surgery their need for medications would drop considerably, which he said would help reduce insurance costs. Coverage under the bill would include bariatric surgery, gastric bypass surgery and lap-band surgery.

Link to article
Link to article


Florida Could Opt Out of HCR under Measure Approved by State Senate
The Florida Senate has approved a proposed constitutional amendment allowing the state to opt out of the federal health reform law. The measure is the top priority of the chamber’s President. The Senate approved the measure, (SJR 2) by a 29-10 vote, with just one Democrat voting in favor. The House has not yet voted on the measure.

The proposed amendment would require 60 percent approval from the voters to pass.

The amendment, which would go before the voters next year, bans the federal government from forcing Floridians from having to purchase health care coverage, the “individual mandate” that is the subject of several federal court cases, including one in Florida.

Lawmakers attempted to put a similar measure on the ballot last year, but the Florida Supreme Court struck it down, saying it was confusing to voters. The measure’s sponsor tweaked the language to try to meet the court’s muster this time around.

The Senate Democratic leader argued that the federal law already allows states to opt out if they come up with another way to make sure its citizens are insured.

Link to article


Kentucky Governor Will Call State Lawmakers Back to Work on Medicaid
Though the legislative session has ended, Kentucky Gov. Steve Beshear (D) plans to call lawmakers back to Frankfort on March 14 to deal with the state's Medicaid budget shortfall. The governor blamed Senate President David Williams (R) for this week's impasse.

Beshear said at a news conference that by adjourning the regular session without acting on the Medicaid bill, Williams was “signaling his intention to leave Frankfort once again without finishing the job that the people of Kentucky not only elected him to do but also has paid him to do.” He said Williams, who hopes to be the Republican candidate for governor against Beshear in November, had made a “careless and cavalier decision to abandon his duty” that “carries grave consequences for people all across Kentucky.” On the Senate floor, Williams described Beshear's comments as a “vitriolic and personal attack.”

He said an immediate special session before both chambers agree on a solution to the Medicaid funding problem is sure to be unnecessarily long and costly. Beshear and the House want to deal with the problem through efficiencies within the Medicaid budget, while the Senate wants budget cuts in other areas of state government.

Beshear said he is obliged to call a special session almost immediately because the failure to deal with a shortfall in this year's Medicaid budget would require the state to slash fees for hospitals, doctors, nursing homes and others. The cuts to providers will begin on April 1, according to Beshear.

Link to article


Illinois HCR Plan: 1 Million Uninsured May Be Able to Buy Insurance by 2014
About 1 million uninsured Illinois residents may be able to purchase health insurance by 2014, according to a recent report released by the Illinois Health Care Reform Implementation Council.

The council, formed in July 2010 by Gov. Pat Quinn (D-Illin.), was set up to evaluate ways to bring Illinois in line with the health reform law. About 1.7 million Illinois residents were uninsured in 2009, according to the Kaiser Family Foundation.

Chief among the recommendations in the report is the creation of an online health insurance exchange. The Council agreed that an independent board of directors should run the exchange, but it would also be subject to Freedom of Information Act and Open Meetings laws.

"The consensus from the participants was that a quasi-state agency was an appropriate way forward for the state of Illinois," said Director of the Illinois Department of Insurance Michael McRaith.

Medicaid also will be offered under the exchange, since the new health care law will offer the state-federal health insurance for the poor and disabled to low-income single adults for the first time.

Estimates indicate 500,000 to 800,000 people will enroll in Medicaid after the new regulations are in place in 2014.

Link to article


Georgia Takes Step toward Creating Insurance Exchange under Health Reform
A Georgia House subcommittee has unanimously approved a bill (HB 476) that would create the Georgia Health Exchange Authority, which would run a state-based insurance exchange.

The exchange would serve as a host for private companies who want to sell insurance and who are willing to follow guidelines drawn up by both the state and the federal government. The exchange would also determine whether someone qualifies for Medicaid.

Small business owners could go to a separate exchange to shop for a plan to cover their employees. Along with presenting choices for coverage, an online interface would let consumers know whether they qualify for a federal tax credit to help pay for their insurance.

The exchange would open for business in 2014, the year that most Americans will be required by law to have health coverage.

Georgia is moving forward with plans for a state-run exchange while it is also vigorously contesting the constitutionality of the health reform law. State legislators know that if the law stands and Georgia doesn't set up its own health insurance exchange, then the federal government would design and run Georgia's marketplace.

Link to article


West Virginia Moves Forward on Exchange
The West Virginia House Judiciary Committee has approved a bill to establish a state-run insurance exchange under health reform. The panel approved the legislation on a party-line 16-8 vote, and it now goes to the House Finance Committee.

The bill, already approved by the state Senate, would adopt a key provision of the federal health care law. An exchange aims to allow individuals and small businesses to pool their buying power. Private insurers would offer coverage plans within this marketplace.

Committee Republicans oppose the exchange and the reform law. Among other concerns, they question the cost to taxpayers.

Link to article


Medical Home Concept Growing in New York
The medical home movement is growing in New York, where six major health insurance plans have paid a combined $1.5 million in extra reimbursements to doctors in 11 practices who achieved the medical-home goal.

The health plans are Aetna (NYSE: AET), CDPHP, Hudson Health Plan, MVP Health Care, UnitedHealthcare (NYSE: UNH) and Empire BlueCross BlueShield, a subsidiary of WellPoint, Inc., (NYSE: WLP), and represent some 65 percent of the commercial insurance market in the Hudson Valley and 43 percent of Medicaid managed care.

The plans paid the $1.5 million to 236 primary-care physicians that met "patient-centered medical home" standards and were recognized by the National Committee for Quality Assurance. That averages to $6,356 per doctor.

"The success of this project means we've reached a critical mass for the medical home in the Hudson Valley," said Susan Stuard, executive director of Taconic Health Information Network and Community, or THINC, a nonprofit that works on the extension of the medical-home idea and electronic health information systems.

Stuard said the medical home model's key ideas are to smooth work-flow practices; create easier access to care; use of electronic health communication and records; more care coordination among a patient's various providers; and a focus on preventive care.

Stuard said the underlying financial impact is that better care and coordination lead to saving money by avoiding costlier treatments that delay often necessitates.

Link to article
Link to announcement


Health Care Compact Moving Forward in 11 States
A growing number of states are uniting around the Health Care Compact, which would give states both the primary responsibility for health care regulation and full control over federal taxes spent on health care within their borders.

The Health Care Compact is a “governance reform, not a health-care-policy reform,” Compact representatives write in a recent article. “It would change who decides health care policy, not who or what is covered. The Health Care Compact is needed because no centrally planned, top-down reform can fix health care throughout the United States. Instead, each state should craft its health-care policies to fit its specific needs. Some states may choose a single-payer system, while others may opt for a health-savings-account system with subsidies for seniors and low-income residents. Under the Health Care Compact, each state decides which plan is best for its citizens.”

Citizens and state legislators in more than eleven states are working to get the Health Care Compact passed by their legislatures, and the compact is being actively discussed in at least 25 other states.

The interstate compacts are voluntary agreements between two or more states. When consented to by Congress, they have the force of federal law. “Authority for compacts was established in the Constitution (Article I, Section 10), and more than 200 such agreements have been developed,” the article says.

The Health Care Compact does not conflict with the efforts by state attorneys general, state legislators and members of congress to repeal or modify the health care bill, according to the Compact web site.

Link to article
Link to Health Care Compact



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Not in the News...Yet

State Care Delivery Innovations
Care delivery innovations in 15 organizations across the U.S., funded in part by The Commonwealth Fund, have been profiled as part of an innovation series.

The 15 profiles include: the impact of process improvement techniques to promote patient-centered care at UPMC, a nonprofit health system in Pennsylvania; the impact of a team approach to home care visits in Massachusetts; the results of a Colorado health center that instituted group visits for prenatal care and offered same-day appointments; the impact of an initiative providing training and support to help 49 pediatric practices improve asthma care for children; and evaluation of a computerized data tool that provides multidisciplinary teams with real-time information on elderly patients' health risks and allows the teams to customize their treatment plans.

Other delivery innovations occurred in California, Indiana, Maine, Wisconsin, and Vermont.

The innovative approaches fall into one of several broad categories: economic incentives for providers, increased decision making powers for providers, improved access to population health data and enhanced coordination of care.

Much of the innovation is focused on prevention, public health and primary care interventions. Paying for prevention and treatment early in the progression of disease saved money and improved outcomes.

Link to announcement



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Releases of Note

HIT Review Shows Mostly Positive Results
Ninety-two percent of recent articles on health information technology “reached conclusions that were positive overall,” according to an article in the March issue of Health Affairs.

The article’s lead author is Melinda Beeuwkes, director of the Office of Economic Analysis, Evaluation, and Modeling in the HHS Office of the National Coordinator for Health Information Technology, and other authors include David Blumenthal, national coordinator for health information technology.

The authors reviewed the recent literature on health information technology to determine its effect on outcomes, including quality, efficiency, and provider satisfaction. They searched the online journal database MEDLINE for the period July 2007 up to February 2010. After applying a framework for inclusion, 154 studies that met the criteria, 100 of which were conducted in the US.

Positive articles and outcomes were ones in which health information technology was associated with improvement in one or more aspects of care, with no aspects worse off.

“We also found that the benefits of the technology are beginning to emerge in smaller practices and organizations, as well as in large organizations that were early adopters,” the article says. “However, dissatisfaction with electronic health records among some providers remains a problem and a barrier to achieving the potential of health information technology. These realities highlight the need for studies that document the challenging aspects of implementing health information technology more specifically and how these challenges might be addressed.”

Link to article



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M2 Health Care Consulting | Denver | Washington, DC | www.m2hcc.com
-----------------------------------------------------------
M2 Health Care Consulting
1600 Clarendon Blvd.
Arlington, VA 22209
US