WellAware - Health Policy News Mar 14 2011

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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




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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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