WellAware - Health Policy News from M2 Jan 14 2011

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WellAware

Health Policy News from M2

January 14, 2011

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

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Federal

CBO Predicts Health Reform Repeal Would Increase Costs; Jan. 12 Vote Put on Hold in Wake of Rep. Giffords’ Shooting; Vote Now Set for Week of Jan. 17
In a letter to House Speaker Boehner, the Congressional Budget Office says that if legislation (HR 2) is enacted to repeal health reform, the federal deficit would increase by about $230 billion over the next decade and leave 32 million more Americans uninsured.

The “Repealing the Job-Killing Health Care Law Act” was the first priority for the newly elected House GOP majority; a vote had been set for January 12. However, after the January 8 shooting that critically wounded Rep. Gabrielle Giffords (D-AZ) and killed six others, those plans were put on hold.

Now, House Republican leadership has rescheduled the repeal vote for the week of January 17, with some saying the vote could take place on January 19.

Link to article
Link to article
Link to CBO letter


Essential Health Benefits Sessions Begin at IOM
The Institute of Medicine’s (IOM) Committee on the Determination of Essential Health Benefits (EHB) convened its first in a series of meetings of stakeholders to discuss the development of a framework and a process for determining the scope of the ten categories of care outlined in Section 1302 of the Affordable Care Act. Invited speakers included state and federal government officials, academics, physicians, representatives from the insurance industry, and patient advocates. Some highlights of the discussion included:

•The legislative intent of Section 1302 was debated. In particular, the presenters and committee members struggled with definition of a “typical health plan” and “affordability.”
•The insurance industry representatives asked for the recommendations to “preserve insurers’ abilities to use utilization tools”, such as medical necessity and coverage determinations based on scientific evidence.
•State and federal government officials urged the committee to “be conservative” and advised them to “include provisions for phasing some things in” or making determinations on a “case by case basis.”
•Utah State Rep. James Dunnigan (R) stated a case for allowing the states to define their own EHB in the interest of “preserving state flexibility in state benefit design”.
•Patient advocacy groups stated fears that the EHB will become “the ceiling and not the floor” for health benefits for those purchasing insurance through the exchanges.

There seemed to be some consensus that a less detailed definition of EHB would provide more flexibility and would be more malleable to change driven by innovation and evidence and would keep premiums affordable.

Of particular interest when considering likely next steps were the comments of Dr. Virginia Calega, the Vice President of Medical Management and Policy for Highmark Blue Cross and Blue Shield. She asked the IOM Committee not to base its recommendations on existing mandates saying: “Essential health benefits should be evaluated on a de novo basis that includes a review of authoritative scientific evidence – rather than the frequency or design of state benefit mandates.”

Link to sessions


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State

States Unprepared for Medicaid Expansions, 33 Governors Tell HHS
In a letter to HHS Secretary Sebelius, 33 Republican governors and governors-elect warn that state governments are not prepared for the current costs of Medicaid, and federal requirements to expand the program will create "a perfect storm" in state budgets.

"Every governor, Republican and Democrat, will face unprecedented budget challenges in the coming months," according to the letter, and federal health agencies’ efforts "to regulate state operations impose greater uncertainty on our budgets for oncoming years."

The letter admonishes: “The effect of the federal requirements is unconscionable; the federal requirements force Governors to cut other critical state programs, such as education, in order to fund a ‘one-size-fits-all’ approach to Medicaid.”

As a whole, states forecast a gap of at least $113 billion for the fiscal year that starts for most in July. The letter includes “fast facts” from the signing states about the cost estimates to implement ACA.

Link to article
Link to letter


Health Reform Will Hold Long-Term Benefits for MD, Gov.’s Commission Says
The Maryland Health Care Reform Coordinating Council (HCRCC), appointed by Governor Martin O’Malley (D), released its final report on health reform implementation in the state. The report details 16 long-and short-term recommendations on how health reform can be most effectively implemented in Maryland.

The first of the 16 recommendations is to “establish the basic structure and governance” of the state’s health insurance exchange (HIE). The HCRCC recommends that Maryland establish the structure of a single health benefit exchange, to handle both small-employers and individuals, during the 2011 legislative session.

In a July 2010 interim report, the HCRCC found that Maryland’s reform implementation could result in estimated savings of over $800 million over the next ten years. Though enthusiastic about the potential savings the final report recognizes that, “the investment of some limited resources will be needed to leverage and take full advantage of all the opportunities presented by health care reform”.

Maryland is optimistic about the potential of reform in the state. Despite the budget crunch, the report insists, health reform implementation holds long-term benefits.

Link to report


Illinois BCBS Changes its Mind on Prior Authorization for Mental Health Services
Blue Cross and Blue Shield of Illinois has dropped a plan to require enrollees to obtain prior approval to access a broad range of outpatient mental health services. Health care providers and the Illinois insurance director had criticized the plan to require prior authorization.

The state's largest health insurance company started requiring preauthorization for patients under its preferred provider organization, or PPO, plans in recent weeks.

Illinois Blue Cross has 6.7 million health plan members. The company would not disclose how many of its health plan members use outpatient behavioral health plan services but said the policy was limited to its PPO plans, which are the most popular choice sold by the company.

This decision came three days before the shooting of Rep. Giffords (D-AZ) on January 8, after which President Obama said: "Already we've seen a national conversation commence, not only about the motivations behind these killings, but about everything from the merits of gun safety laws to the adequacy of our mental health systems."

Link to article


Federal Government Sues New York City for Medicaid Payments
In a lawsuit filed January 11, the United States attorney’s office in Manhattan accuses New York City of overbilling Medicaid by “at least tens of millions of dollars” by improperly approving 24-hour home care for thousands of patients.

The lawsuit, which follows a whistle-blower’s complaint, also says the city ignored rules requiring recommendations from doctors, nurses and social workers before patients could be enrolled in the home care program, or sometimes rejected doctors’ findings that the services were not needed. The lawsuit did not say exactly how much overbilling the federal government believed had occurred, but it asked the court to award it triple damages.

“It goes without saying that ultimate medical decisions about patient care should be made by doctors and nurses, not government bureaucrats, and they should be based first and foremost on the best interests of the patient,” Preet Bharara, the United States attorney in Manhattan, said in a statement. “The allegations here are serious and unfortunately reflect a systemic failure to responsibly administer the Medicaid program.”

Connie A. Ress, a spokeswoman for the city’s Human Resources Administration, declined to comment except to say that the agency was reviewing the complaint.

Link to article


Louisiana Must Repay Nearly $240 Million in Medicaid Overpayments
Louisiana will have to repay $239.5 million in Medicaid overpayments received for care of the uninsured, under a federal ruling. The state Department of Health and Hospitals lost its appeal of a finding by federal CMS.

The dispute involved reimbursements for health care delivered at LSU’s charity hospitals between 1996 and 2007. The decision comes as DHH is making a new round of cuts in the $6.6 billion Medicaid budget. More cuts are expected in the budget year that begins July 1.

The state government is struggling to balance spending with what is expected to be about $1.6 billion less in revenues next fiscal year. The health agency had been putting money aside in the event the appeal did not go the state’s way, state DHH Secretary Bruce Greenstein said.

“We are definitely disappointed that the appeal board decided this way,” Greenstein said Wednesday. “If it had not, we would have been able to use this (money) to close the budget hole.”

DHH has $90 million in the current year’s budget to cover the first installments of the repayment plan, Greenstein said. Additional money has been included in budget proposals for the next state fiscal year. “We are in discussions with the federal government right now on a repayment plan,” Greenstein said. “The goal is to stretch it out.”

Link to article


At Least Four States to Join Existing Multi-State Lawsuit against Federal HCR
Attorneys general in at least four additional states have announced they will follow 20 others in filing lawsuits aimed at overturning the administration’s new health care law. As expected, the newly elected Republican AG in HHS Secretary Sebelius's home state of Kansas said he will request to join the multi-state lawsuit against reform. "Whatever the merits or demerits of health care reform, the ends cannot justify an unconstitutional means," AG Derek Schmidt said.

Maine made a similar announcement, and Wisconsin’s newly elected Gov. J.B. Van Hollen also said he would file a case. In addition, Republicans in Montana have introduced a bill requiring the state attorney general to join the multi-state lawsuit against reform. The lawsuit "has bipartisan appeal here in Montana because the bill is unpopular," state Sen. Jason Priest, who introduced the bill, tells Pulse. Montana Gov. Brian Schweitzer is a Democrat and could veto the legislation after its expected passage through the Republican-controlled state houses.

Separately, Oklahoma’s AG-elect Scott Pruitt said the state would file its own lawsuit seeking to overturn federal health care reform.

Link to article
Link to article
Link to article


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Not in the News...Yet

J.P. Morgan Annual Healthcare Conference
The 29th Annual J.P. Morgan Healthcare Conference was held this week in San Francisco, and as usual, provided a font of insights about trends in the industry. In our opinion, three sessions were of particular note when it comes to what will happen next in health care reform. The key catch-phrase? Evidence-based decision support.

1) MedcoHealth Solutions Inc. (NYSE: MHS)
Medco spent a significant portion of their presentation explaining that comparative effectiveness (CE) will become "bigger and bigger over time" and part of the way that would happen was through a radical increase in the number and breadth of phase 4 trials. Simply put, more data from “real-life” patient use will enable improved safety monitoring, especially as health information technology becomes more widespread.

Medco can already use its immense database of prescriptions to see how a patient is performing against national evidence based protocols, but they noted, 33% of physicians are not practicing to current evidence based protocols. “It’s not their fault, they just can't keep up,” said CEO, David Snow.

The plan? Pharmacies are “already wired,” so Medco can easily push the information out to providers as they become connected to health information exchanges.

2) Aetna Inc. (NYSE: AET)
Most of us think of Aetna as a health insurance company, and much of the news this week from Aetna’s conference appearance was about their comments on health care reform and how they may change their payment of broker’s commissions. We were more keyed into Joseph Zubretsky, Senior Executive VP and CFO’s comments about their acquisition late last year of Medicity.

"If we own the connectivity...think about the power to use information to create additional value..." Zubretsky said. Aetna’s strategy is to use health information exchanges as a “mechanism to distribute content.”

What content? Clinical decision support tools for health providers.

3) Molina Healthcare Inc. (NYSE: MOH)
Molina is the only health care firm that operates primary care clinics, a risk-based health plan and serves as a Medicaid IT vendor. This combination gives the firm a unique ability to see across the health care spectrum from delivery to management of services. The headline news out of the conference on Molina was they are well-positioned to pick up a number of new lives in the health care exchanges.

Dr. Mario Molina, the CEO of Molina, did say the firm anticipates growth opportunities because of reform and that the expectation in many states is that Medicaid health plans will participate in the Exchanges so people can move freely back and forth between Medicaid and non-Medicaid plans as their eligibility fluctuates.

Long-term, looking at opportunities to set up new IT systems for states, Molina anticipates its role as a Medicaid fiscal agent is a chance for them to bring some of their care management abilities” to bear and help states better control costs.


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Releases of Note

Practicing Evidence Based Medicine Harder than it Looks
The Archives of Internal Medicine published a study indicating, "More than half of the current recommendations of the Infectious Diseases Society of America are based on level III evidence only." Level III evidence means it is based on expert opinion only, not on randomized clinical trials.

The study by Lee and Vielemeyer begs the question, what does it mean to call something evidence-based? They warned, “Physicians should remain cautious when using current guidelines as the sole source guiding patient care decisions.”

Link to abstract


DC Still #1 Inbound, NJ Takes Over as #1 Outbound State
This year’s United Van Lines study of state-by-state migration patterns shows the District of Columbia (DC) is once again the #1 destination of families moving house interstate. DC has been the #1 destination for the last three years.

On the other end of the spectrum is New Jersey; they had the greatest outflow of families in 2010.

Regionally, the Great Lakes states had the “highest out-bound traffic levels in the nation,” with Michigan leading the way.

United Van Lines is the nation’s largest household goods mover and has been conducting the study since 1977.

Link to release


U.S. Base Salary Increases for Healthcare Employees in 2011
U.S. healthcare employees will likely receive an average base salary increase of 2.6 percent in 2011, according to a survey by the Hay Group. That’s up from base salary increases of 2.3 percent reported in 2010 and slightly below increases of 2.8 percent reported across all industries for 2011.

“The healthcare industry did not see salary budgets fall until 2009, while other industries felt the effects of the recession much sooner, lowering salary budgets as early as 2007,” said Ron Seifert, vice president and executive compensation practice leader for Hay Group’s healthcare practice. “So, while healthcare is still 0.2 percent behind other industries, it seems to be rebounding at a faster pace after taking a deeper dip in a much shorter timeframe.”

Eighteen percent of respondents across all industries reported that they will maintain a salary freeze across all levels in 2011 to reduce compensation costs, while only four percent of respondents in healthcare reported an across-the-board freeze on salaries.

Hay Group’s forecast is based on data from more than 486 U.S. organizations in November 2010 in the general industry survey, and 90 hospitals and health systems of varying size, structures and locations participating in the healthcare salary survey. Typical respondents to the survey include compensation professionals in the Human Resources departments.

Link to release


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