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WellAware - Health Policy News Apr 11 2011

2011-04-26T13:17:00.002-04:00

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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

2011-04-11T12:00:00.003-04:00

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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

2011-04-11T10:59:00.002-04:00

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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

2011-03-28T11:06:00.003-04:00

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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

2011-03-21T14:38:00.003-04:00

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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

----------------------------------------------------
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

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

WellAware - Health Policy News Mar 7 2011

2011-03-14T13:22:00.002-04:00

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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.
-----------------------------------------------------------
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

WellAware - Health Policy News Feb 28 2011

2011-03-06T22:32:00.004-05:00

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WellAware

Health Policy News from M2

March 4, 2011

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

States May Apply for “Innovation Waivers” Beginning in 2014
President Obama has reiterated that States should have the “power and flexibility to innovate and find the health care solutions that work best for them” announcing his support this week for accelerating State Innovation Waivers and allowing states to apply for them starting in 2014.

Beginning in 2017, the Affordable Care Act allows states the flexibility to receive an Innovation Waiver. Waivers are designed to allow states to implement policies that differ from the new law so long as they:

•Provide coverage that is at least as comprehensive as the coverage offered through Exchanges – a new competitive, private health insurance marketplace.
•Make coverage at least as affordable as it would have been through the Exchanges.
•Provide coverage to at least as many residents as the Affordable Care Act would have provided.
•Do not increase the federal deficit.

State Innovation Waivers are provided for up to five years, with the option of renewal. If a state’s innovation fails to meet the criteria outlined above, the policies outlined in the Affordable Care Act would take effect. The White House says such alternative approaches could include allowing large employers to purchase coverage through state Exchanges or increasing the number of benefit levels to provide more choices for individuals and small businesses.

Under the bipartisan “Empowering States to Innovate Act” introduced by Senators Ron Wyden (D-OR), Scott Brown (R-MA), and Mary Landrieu (D-LA), State Innovation Waivers would be available three years earlier than under current law, so long as states meet certain criteria, including certifying that their proposals would cover at least as many of their residents as the policies in the Affordable Care Act would have covered.

Link to release

GOP Decries White House Waiver Offer, Saying States Still on Hook for Costs
Republican governors mostly decried the Obama administration’s suggestion that flexibility could be provided early via the existing State Innovation Waiver process, citing the lack of attention to states’ burdens to cover costs of reform.

Several GOP governors responded to the Administration’s announcement, saying it would not resolve states’ issues related to implementation of health reform. In Iowa, for example, a spokesman for Gov. Branstad said: “The change endorsed by President Obama today is a very minor step that does not provide the kind of flexibility Iowa needs.” He said the proposal doesn’t address the spending in the law or its Medicaid requirements. “The governor continues to believe this is an unaffordable, unsustainable and unconstitutional piece of legislation,” he said.

Oklahoma Gov. Mary Fallin said she was still concerned the law's mandates would hinder state solutions. And in South Carolina, Gov. Nikki Haley responded to the White House announcement by requesting that President Obama direct the Justice Department to seek expedited Supreme Court review of the 29 Republican governors’ lawsuits against the health reform law. “I told him that the states currently are in limbo,” Haley said. “His response was he would not expedite the process, and he would not stall it.”

Last month, 20 GOP governors suggested they would not set up health insurance exchanges if changes are not made.

Link to IA article
Link to OK article
Link to MS article

Governors Present Views on Reform during Committee Hearing
Mississippi Gov. Haley Barbour (R) slammed former Massachusetts Gov. Mitt Romney's (R) health care plan during a hearing of the House Energy and Commerce Committee this week. Calling the plan "RomneyCare," Barbour said the legislation might work for some states, but it wouldn't work for his. "Massachusetts has a state health insurance program that they're happy with," said Barbour." And that's their right."

"We don't want that. That's not good for us...We don't want community rating. We don't want extremely high mandatory standard benefits packages,” he said.

Romney, like Barbour a potential GOP presidential contender for 2012, has in recent months become the target of extensive criticism over the health care plan he passed while governor of Massachusetts.

At the hearing, Committee Chairman Fred Upton (R-MI) called the federal law's mandates "onerous and unsustainable."

"Nearly one year after the president signed the health care package into law, we are still finding more costly consequences," he said in a statement.

Rep. Henry Waxman (D-CA) argued that states enjoy "considerable flexibility in the management and design" of Medicaid, and described Republicans' proposed amendments to the reform package as "radical changes that will add to the number of uninsured."

The committee also released a report of state-by-state costs under health reform. Released by Upton and Sen. Orrin Hatch (R-UT), Ranking Member of the Senate Finance Committee, the report “estimates the health law will cost state taxpayers at least $118.04 billion through 2023--more than double the Congressional Budget Office’s (CBO) recent estimate of $60 billion through 2021."

Link to article
Link to report summary
Link to report

State Medicaid Block Grants Would Cost More than Current System
The Center on Budget and Policy Priorities says that it is a mistake for states to believe that proposals to convert Medicaid into a block grant or otherwise cap federal funding would make their Medicaid costs more predictable and stable over time. “In reality, a block grant is intended to provide predictability for the federal government by replacing the current financing system, under which the federal government pays a fixed share of a state’s Medicaid costs, with one in which the federal government would pay only a fixed dollar amount and leave the state responsible for all remaining costs,” the center says. “This is a radical change that would significantly shift both financial risks and costs to the states.”

For example, “if federal funding proved inadequate under a block grant or cap, states would have to contribute more of their own funds or else cut back Medicaid eligibility, benefits, and provider payments. That is an almost inevitable outcome, since federal policymakers who favor a block grant seek to use the conversion of Medicaid to a block grant to secure tens or hundreds of billions of dollars in savings for the federal government.”

“The only way for a block grant to produce those savings is for it to provide states with far less federal funding than they would receive under the current system,” the Center continues.

“Moreover, under a block grant, federal funding would cease to rise automatically in response to a recession or unanticipated costs resulting from epidemics or medical breakthroughs that improve health or save lives but increase costs.”

Link to report

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State

Despite Increases in State Health Department Spending, Delaware Governor’s Proposed Budget Would Include Cuts to General Assistance
Delaware Gov. Jack Markell's (D) budget calls for $975.2 million in taxpayer dollars to go to the state’s Department of Health and Social Services next year, a 9.4 percent increase from the current $891.6 million. However, that increase is intended to make up for federal stimulus money that is no longer available. The federal money had been used to address increasing Medicaid costs.

DHSS Secretary Rita Landgraf told the Joint Finance Committee that this is "the most difficult [department budget] to date in the Markell administration."

"The demand for services, especially in the area of benefits, continues to spike, with no leveling off in sight," Landgraf said. Putting the budget together was "a process of triaging." The department consumes 28 cents of every state tax dollar.

Despite the apparent increase, there are cuts in the proposed budget. Landgraf said that the most painful cut is the proposed elimination of general assistance, a $3 million state-funded program that provides $95 a month to low income people.

Link to article

New Hampshire State Retirees Seek to Retain Coverage of Health Costs
Retired state workers urged New Hampshire lawmakers not to charge more for medical benefits, saying the promise of health care kept them working for the state despite stagnant pay and personal danger. The retirees, many of them former state troopers, protested a proposal that would double the medical contribution for retired workers younger than 65 and institute a contribution for those 65 and older.

The proposal does not change the benefits retirees receive, but it caps payments from the state general fund at $30 million. Medical benefits for retirees now cost the state almost $80 million, including $40 million from the general fund.

Under the proposal, if the cost to the general fund exceeds $30 million, the commissioner of the Department of Administrative Services must, with legislative approval, change the benefits to reduce their cost.

Retired state workers younger than 65 now pay $65 a month for health care premiums. Gov. John Lynch (D) proposed increasing that to $100 a month in the next budget. The most recent version of the bill before the House Special Committee on Public Employee Pensions Reform would raise the monthly contribution to $135 for the retiree and another $135 for a spouse. That cost would represent about 15 percent of the $910 monthly cost of health care.

Retirees 65 or older do not pay a portion of the state insurance that covers expenses not addressed by Medicare. This bill would institute a $25 monthly fee, with another $25 for a spouse. Such a change would have older retirees paying 7 percent of the $353 monthly cost of the plan.

Link to article

Ohio Hospitals Willing to Trade Fees for Set Medicaid Rates
The Ohio Hospital Association (OHA) is proposing to extend a franchise fee on hospitals that the Ohio legislature adopted in 2009 to help control Medicaid spending, expected to reach $18 billion this year. Hospitals are willing to continue making the special payments to the state if the hospitals’ Medicaid reimbursement rates remain unchanged.

Rising Medicaid costs have contributed to a projected $8 billion budget deficit in Ohio, and Gov. John Kasich (R) has solicited ideas from across the state to help bridge the gap in his new budget to be released March 15. The current hospital fee is set to expire in September.

Continuing the franchise fee at a slightly higher rate, as the OHA proposes, would generate about $900 million, which the state could use to draw down about $1.2 billion in matching funds from the federal government. The proposal also calls for about $1 billion in savings from quality improvements and efficiency measures in administering the Medicaid program.

Link to article

Vermont Has Support of Obama Administration for Health Reform Changes
The Obama administration says it will support pending legislation critical to health reform in Vermont. Specifically, the President has endorsed a state bill to change a waiver date in the federal health reform law. The law now forbids any waivers from federal reform requirements until 2017, but Obama has agreed to support an earlier date -- 2014. “That's the year when many provisions of federal health reform take effect. That is so critical to our efforts," Vermont Gov. Peter Shumlin (D) said.

The President’s support of Vermont’s proposal is also part of a larger effort by the Administration to emphasize flexibility for states in implementing health reform; the White House has announced the acceleration for all states of the ability to secure “Innovation Waivers” (see first article above).

Shumlin has proposed moving Vermont to a single-payer health care system, with all Vermonters covered under by government-sponsored health insurance. The governor's bill is under review in the Vermont House Health Care Committee.

A federal waiver would allow Shumlin's proposed single-payer system to substitute for the health insurance exchange or marketplace that the state would have to create under the federal law. With a waiver for its alternative plan, the states wouldn't have to set up a system it intended to dismantle three years later.

Link to article

West Virginia May Not Address Retiree Costs During Current Session
West Virginia may not address the cost of retiree health benefits this legislative session. The Senate Finance Committee has rejected a bill that would have devoted $1 billion over 20 years toward those costs.

The state faces an estimated $8 billion funding shortfall from other post-employment benefits.

The measure proposed nearly tripling the cigarette tax for the necessary revenues. The committee had amended the bill so revenues would also fund other health care needs. Those included Medicaid coverage of children with autism.

The bill also proposed capping the subsidies that now help retirees pay their health premiums. Other provisions would have changed how county school boards pay toward the costs from their retirees.

Link to article

CMS Seeks State Proposals for Wellness Grants
CMS is inviting proposals from states to compete for grant awards for the legislatively-mandated Medicaid Incentives for Prevention of Chronic Diseases Program.

CMS says it is conducting a nationwide program to test and evaluate the effectiveness of providing financial and non-financial incentives to Medicaid beneficiaries of all ages who participate in prevention programs and demonstrate changes in health risk and outcomes, including the adoption of healthy behaviors.

The initiatives are to be "comprehensive, evidence-based, widely available, and easily accessible," the agency says. The programs “must use relevant evidence-based research and resources, including: the Guide to Community Preventive Services; the Guide to Clinical Preventive Services; and the National Registry of Evidence-based Programs.”

An application by a state for a grant must address at least one of the following prevention goals: tobacco cessation, controlling or reducing weight, lowering cholesterol, lowering blood pressure, and avoiding the onset of diabetes or improving the management of the condition.

State Notices of Intent are due to CMS by April 4, 2011, and Complete Grant Applications are due to CMS by May 2, 2011. Participating States must commit to operating their program for at least 3 years, conducting a state-level evaluation, and fulfilling reporting requirements specified by the legislation and CMS, including information technology system modification necessary to support the evaluation and reporting requirements.

Link to announcement

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Not in the News...Yet

Ventas Acquisition Reflects Demand for Senior Care
Ventas Inc.(NYSE: VTR) has agreed to acquire rival Nationwide Health Properties Inc. (NYSE: NHP) for $5.8 billion, the largest deal to date in a series of acquisitions by publicly traded health care real estate companies in recent months. Notably, this week saw two health care real estate investment trust (REIT deals), the other, Health Care REIT Inc.’s (NYSE: HCN) announcement to buy privately owned Genesis HealthCare for $2.4 billion also focuses on senior care real estate such as assisted living facilities.

Health care companies acquired $11.7 billion in medical-office and senior-living facilities in 2010.

The Ventas deal “increases the percentage of the company's private-pay assets to 70%. In private-pay facilities, patients pay for medical services without government assistance such as Medicare and Medicaid. As a result, the landlord doesn't face uncertainty over cash flow because of possible changes in government programs," explained Ventas Chief Executive Debra Cafaro in an interview with the Wall Street Journal.

However, most senior care in the U.S. is paid by public, not private payers.

In a seemingly unrelated report about states and Medicaid reform, Douglas Holtz-Eakin, former Director of the Congressional Budget Office, and President of the American Action Forum noted that when it comes to Medicaid, “Long-term care merits special emphasis.”

While the report anticipates a “dramatic expansion of the long-term care market,” the reason long term care bears special emphasis is because of the burden it causes for states.

“Medicaid has become the country’s largest payer of long-term care services, funding approximately 50 percent of all long-term care spending and nearly two-thirds of all nursing home residents…”

This should make the consolidation trend marked by both the Ventas and Health Care REIT deals a little more clear. As public pay continues to dominate the long term care market, the best place for bottom line growth will be through managing costs – not growing revenues.

Link to Ventas article
Link to Health Care REIT article
Link to report

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Releases of Note

Ambulatory EMR Sales Increase Again, Report Finds
One-third of physician practices and community health clinics are poised to replace their electronic medical record systems, according to the research firm KLAS. The replacement surge will mean new business for Allscripts, eClinicalWorks, Epic and NextGen.

Ambulatory EMR sales – both first-time and replacement – have risen again over the last year, and although options are more plentiful than ever, healthcare providers are leaning toward the known quantities, according to a new report by KLAS.

For the report, “Ambulatory EMR: Win Rates, Replacements and Provider Loyalty,” KLAS conducted nearly 400 provider interviews.

"Overall, 35 percent of all providers interviewed for this report are replacing their existing EMRs. This includes nearly a third of the smallest practices, as well as 43 percent of groups with 100-plus physicians," said report author Mark Wagner.

Healthcare professionals are turning to vendors they perceive as enduring and stable. Allscripts, eClinicalWorks, Epic and NextGen represent the best-known and most considered vendors in the study.

Link to release

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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 Feb 25 2011

2011-03-06T22:03:00.002-05:00

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WellAware

Health Policy News from M2

February 25, 2011

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

Third Federal Judge Upholds Constitutionality of Health Reform Law, For a Total of Three Rulings Upholding and Two Striking Down Reform Law
A federal judge in Washington, D.C. has upheld the health reform law as constitutional, bringing the tally of lower court rulings upholding the law to three, versus two that have ruled it unconstitutional.

The three judges who have upheld the law were all appointed by Democratic presidents; the two who ruled that it violates the Constitution were appointed by Republicans.

In this week’s ruling, U.S. District Court Judge Gladys Kessler, a Clinton appointee, upheld the constitutionality of the law's requirement that individuals maintain health coverage or pay a penalty.

Link to article
Link to opinion

Secretary Sebelius to Governors: States are in the Driver’s Seat
As governors arrive in Washington, D.C. for the National Governor’s Association (NGA) winter meeting, HHS Secretary Kathleen Sebelius sent a letter responding to requests from many for increased flexibility in implementing the Affordable Care Act and addressing rising Medicaid costs.

While the letter provides specific examples of how the states have flexibility, such as the ability to choose which plans are sold in the exchanges, the overall message is: you are in the driver’s seat and we are paying the bills.

Arguing the law costs too much to implement may not be the Governors’ best approach.

The letter is explicit: “The law is clear that the federal government is responsible for all state expenses to establish state exchanges through 2014, including health information technology (IT) expenses related to eligibility and other exchange functions,” wrote Sebelius.

HHS put out additional funding announcements this week to help states implement the law.

Link to letter

HHS Will Provide $4B to Help Move Medicaid Beneficiaries Out of Institutions
HHS has announced that more than $4 billion is available from two programs in the health reform law to help move Medicaid beneficiaries out of institutions and into their own homes or other community settings.

HHS Secretary Sebelius said 13 states will receive a total of $45 million to continue the “Money Follows the Person,” or MFP, demonstration program, which was scheduled to expire this year but was extended for five years through health reform. The 13 states are Colorado, Florida, Idaho, Maine, Massachusetts, Minnesota, Mississippi, Nevada, New Mexico, Rhode Island, Tennessee, Vermont and West Virginia.

These states will join the 29 states and the District of Columbia, which are already participants in the program.

The goal of this program is to give states additional resources to make community living a first choice for Medicaid beneficiaries, while leaving nursing homes and institutions as a “fall-back” option. Under new rules from HHS, this option will allow states to receive a 6% increase in federal matching funds for providing community-based, attendant services and support to Medicaid beneficiaries starting in October.

Link to article
Link to HHS rules

$200M in New Grants Will Be Made Available to Address Premium Increases
HHS announced $200 million in available funds to help states make insurance premiums more transparent and “give States the power to stop unreasonable premium increases from taking effect.”

Of the total available, $149 million will be baseline grants to every state. An additional $50 million will be distributed to states with larger populations and more insurers, and to those states meeting certain performance incentives.

Link to release

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State

Wisconsin Budget Standoff: Could It Spread to Other States?
The emergency budget bill introduced several weeks ago by GOP Gov. Scott Walker in Wisconsin is designed to address the state’s $137 million shortfall. Walker says the bill will save the state about $30 million for the current fiscal year by requiring state employees to increase their pension and health insurance contributions. For example, the governor wants government workers to pay 5.8 percent of their salaries into their pensions, up from less than 1 percent now; his proposal would raise the amount they pay for their health insurance premiums from about 6 percent to 12.6 percent.

In response, throngs of protesters have gathered at the state capitol building, and Democrats in the state legislature have left the state to prevent a vote.

In part, the impasse reflects the fact that there is a lack of consensus about what constitutes employees’ “fair share” of health insurance costs. However, it is also about whether government workers will continue to have the ability to engage in collective bargaining. Some state employees – particularly police, fire fighters, and state troopers, who endorsed Walker’s gubernatorial campaign – are exempt from the proposal.

Many are asking whether the situation in Wisconsin could spread to other states.

In Texas, a right-to-work state, no public employee may legally go on strike, and only 5.4 percent of the total work force – private and public- is unionized.

However, when it comes to “fair share,” public employees in Texas are likely to take a hit by the end of the legislative session. Texas currently pays 100% of state workers’ health premiums, but both the House and Senate budgets would slash funding for Employees Retirement System of Texas by almost $600 million.

Link to article
Link to article

New Jersey Proposes Cutting $540M from Medicaid Funds
Calling the growth in New Jersey Medicaid spending "out of control", Republican Gov. Chris Christie said in his budget address that his proposal would cut $540 million from the program.

In the short term, Christie said, the state would save $240 million by transferring 121,000 low-income senior citizens and disabled people who now receive Medicaid into a managed care program, cutting state reimbursement to nursing homes, and rooting out fraud.

The remaining $300 million in savings would come from a "global waiver" the state plans to seek from the federal government to revamp the entire Medicaid program.

Link to article

Kansas HIT Plan for Medicaid is Months off Schedule
The Kansas Medicaid program's health information technology plan is months behind schedule; if it is not completed by August, as many as 2,800 physicians and 70 hospitals could experience delays in receiving millions of dollars in federal incentive payments.

The SMHP — or State Medicaid Health Information Technology Plan — is a federally mandated first step for states before they can begin Medicaid-based incentive payments to health providers that have implemented Electronic Health Records. The incentives are aligned with similar Medicare-based incentives for providers who adopt EHRs.

Officials with the Kansas Health Policy Authority say they had intended by November 2010 to have a contract in place with a vendor to design the plan. However, the agency has yet to finalize the contract.

"There's no earth-shattering reason, there were just a variety of things that happened that caused it to get delayed," said Diane Davidson, project director at the health policy authority."They were the result of a number of systematic personnel changes both at CMS, KHPA and the state of Kansas — and it's just natural when you're transitioning to a new governor and a new Legislature that these things get delayed. The old administration doesn't want to approve something without the new administration having something to say about it."

Link to article

Massachusetts Division of Insurance Approves All Requested Rate Increases
The Massachusetts Division of Insurance has accepted all the base rate increases submitted for approval by health insurers in the state, in contrast to the DOI’s actions last year.

The increases for plans serving small businesses and individuals range from 2.8 to 9.9 percent, according to the Division. In April 2010, some carriers sought increases as high as 34 percent. Gov. Deval Patrick (D) instructed the Division of Insurance to reject the particularly high rate increases. That tipped off negotiations between some of the health plans and the state, as well as some lawsuits.

Worcester-based Fallon Community Health Plan's request for an 8.4-percent increase to its small-group health insurance base rate was approved and will go into effect as of April 1. Last year, FCHP had requested a 25.2-percent increase.

The approved small-group health insurance base rates for other Massachusetts HMOs include Blue Cross Blue Shield HMO Blue at 9.2 percent and Blue Cross Blue Shield Massachusetts at 1.4 percent.

Link to article

Montana Senate Votes to Block Health Insurance Exchanges
Montana Senate Republicans passed a bill forbidding Montana to set up a health insurance exchange under the federal health reform law. Sen. Jason Priest (R), who sponsored the measure, said it is about the state asserting “local control” over how it would design a health insurance exchange.

Democrats, however, said it's not advisable for the state to halt all work on the exchange and return federal money funding the effort, as required by Priest's bill.

The Senate endorsed SB228 on a 28-21 vote, with all of the chamber's Republicans in favor. All Democrats voted against it, except one who was absent.

Link to article

Ohio Could Save $500M in Medicaid by Encouraging Greater Use of Home Care
Ohio could save $500 million in the next two-year budget by spending less on nursing homes and more on home-care services for those on Medicaid, according to advocates for seniors.

Responding to a call from Gov. John Kasich (R) for ideas to close a projected $8 billion budget shortfall, Ohio's 12 Area Agencies on Aging have launched an Internet-based campaign, Fair Care Ohio, to promote the less-expensive long-term care option.

"Ohio can save an estimated $500 million over the next two-year budget period by balancing its long-term care spending 50-50 between nursing homes and in-home care," said Larke Recchie, director of the Ohio Association of Area Agencies on Aging.

Currently, about 58 percent of Medicaid-eligible Ohioans older than 60 and receiving long-term care are in nursing homes, while 42 percent receive in-home and community-based services. Medicaid pays about $52,000 a year, on average, for a person in nursing-home care, compared with $19,000 for home care.

Link to article

Texas Medicaid Waiver Strategy May Be Employed by Other States, but is Unlikely to Receive Approval
Texas and other states struggling to balance their budgets are asking the federal government for permission to operate the Medicaid program as they see fit. Their approach — finding savings by curbing mandatory benefits or limiting eligibility among Medicaid populations — political pundits argue it is unlikely to be approved by the Obama administration, which is intent on expanding Medicaid, not shrinking it.

Several months ago, GOP Gov. Rick Perry led a group of legislators in calling for Texas to opt out of Medicaid all together. However, that would have meant the loss of significant federal matching funds. Texas Medicaid covers 3.6 million poor, disabled and elderly people, including children, and costs roughly $40 billion per biennium, of which the federal government pays 60 percent.

Texas is hardly the only state pursuing this course; governors across the country are preparing to flood the HHS with waiver requests. “The feds hold all the power and all the cards here,” said Gov. Mitch Daniels of Indiana, a Republican. “You can expect a whole lot more of this.”

Link to article

Utah Medicaid to Swap Community Service for Coverage
Utah lawmakers have approved a proposal to require a small number of Medicaid recipients to do community service in exchange for coverage as part of a pilot program. The Senate gave initial approval to House Bill 211 on a 22-5 vote.

Senate sponsor Curt Bramble, a Republican, says the bill would help people in the low-income health program give back to the community.

Under the bill, about 100 adults covered by Medicaid and capable of performing community service would participate in the pilot program. Democratic Sen. Luz Robles says the program creates additional burdens for people who are already struggling.

Link to article

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Not in the News...Yet

Medical Homes: Great in Theory, Difficult in Practice
Connecticut Gov. Dannel Malloy (D) wants to aggressively expand the use of patient-centered medical homes as part of an overhaul of state Medicaid programs, encouraging providers in Medicaid to become fully recognized patient-centered medical homes. So far, only four medical practices in the state have achieved it.

Recognized medical homes must meet a wide range of standards, set by the National Committee for Quality Assurance, including being accessible to patients outside office hours, using electronic medical records, prescribing electronically, following up on tests and procedures done at other facilities, and using data to track patients' hospitalizations and emergency room visits.

ProHealth Physicians, the largest primary care practice in Connecticut, is expected to begin a medical home demonstration project for state employees and Medicaid enrollees next month, and the project could expand to include other practices.

Connecticut, however, is dominated by small practices. Dr. Cliff O'Callahan, who submitted his practice’s application to be a fully recognized patient-centered medical home this week, told The Connecticut Mirror, "I don't know, for all these little practices, how they're going to do it," O'Callahan said of care coordination. "Except as part of a slightly larger network."

Being part of a larger network is key because the incentive payments don’t really add up unless you have a large number of patients. The Connecticut Medicaid pilot pays providers a $7.50 monthly per-patient care coordination fee. A practice would need to see 200 patients a month to make an extra $18,000 a year – probably not enough to cover the additional time burden of coordinating care.

What does it mean? A great idea in theory, patient-centered medical homes will work if incentive payments are raised, or if large practices or groups of practices adopt the model.

Link to article

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Releases of Note

44% of Hospitals Ready for Stage 1 Meaningful Use of HIT
Forty-four percent of hospital respondents fall within the "likely" or "most likely" categories for meeting Stage 1 of meaningful use of HIT, according to new HIMSS Analytics data. Respondents falling in the category of "most likely" had the capability to achieve 10 or more core measures and five or more menu measures.

Respondents in the category of "likely" had the capability to achieve five-nine core and five menu; or 10 or more core and three-four menu. All other hospitals fall in the category of "least likely," HIMSS says.

Based on the new HIMSS Analytics data, within the 44 percent of respondents falling in the "likely" or "most likely" category, 58 percent of those respondents indicated they expect to achieve all meaningful use core measures by May 2012, the end of the period covered by the survey.

Of the 999 hospitals that responded to the survey since May 2010, 25 percent already have the capability to meet 10 or more of the process core measures and at least five of the menu items.

HIMSS Analytics expects an increase in these percentages as the deadline approaches for full compliance of Stage 1 of meaningful use.

Link to article

CMS Should Align HIT Incentives, GAO Report Says
A new GAO report on electronic prescribing examines two CMS-administered programs—the Electronic Prescribing Program and the Electronic Health Records (EHR) Program—that provide incentive payments to eligible Medicare providers who adopt and use health information technology, and penalties for those who do not.

GAO recommends CMS take four actions, including: encourage physicians and other providers in the Electronic Prescribing Program to adopt certified technology, and expedite efforts to remove the overlap in reporting requirements for physicians who may be eligible for incentive payments or subject to penalties under both programs.

"Although GAO found similarities in the technology and reporting requirements for both programs, GAO also found that the requirements of the two programs are inconsistent in several areas,” the report says. “The EHR Program provides incentives from 2011 to 2016 and introduces penalties beginning in 2015, while the Electronic Prescribing Program provides incentives from 2009 to 2013 and provides for penalties from 2012 to 2014, when the program ends. Both the EHR and Electronic Prescribing Programs require providers to adopt and use technology that can perform similar electronic prescribing-related activities.”

“However, the EHR Program requires providers to adopt and use certified EHR systems that meet criteria established by HHS, which include electronic prescribing-related capabilities, while the Electronic Prescribing Program does not have a certification requirement,” according to GAO. “As a result, providers have no assurance that the systems they invest in will meet the Electronic Prescribing Program's requirements.”

Link to report

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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

WellAware - Health Policy News Feb 18 2011

2011-03-06T17:57:00.004-05:00

Click to view this in a separate browser

WellAware

Health Policy News from M2

February 18, 2011

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

Opponents of Health Reform Cite CBO Estimates Regarding Impact on Jobs
Congressional Budget Office Director Doug Elmendorf testified during a House Budget Committee hearing this week that the health reform law could lead to 800,000 fewer people working. His statement came in response to questions from GOP committee members about the numbers, which were pulled from a report compiled by the CBO last summer.

"[I]f the reduction in the labor used was workers working the average number of hours in the economy and earning the average wage...there would be a reduction of 800,000 workers," he told Rep. John Campbell (R-Calif.).

The report predicts that because people will have better coverage options through expanded Medicaid and insurance exchanges run by the state, many will choose not to work.

Link to article
Link to CBO August 2010 Report

President’s Proposed FY 2012 Budget Includes Doc Fix
President Obama's proposed budget for fiscal year 2012 would delay a significant reduction in Medicare reimbursement for physicians from January 1, 2012, until January 1, 2014, and freeze rates in the meantime.

The proposed budget for fiscal year 2012, which begins October 1, would finance this Medicare "doc fix" by, among other things, reducing Medicaid outlays for durable medical equipment; speeding new, lower-cost generic drugs to market; and capping Medicaid taxes that states impose on hospitals, nursing homes, and other providers as a way to increase their federal Medicaid funding. These measures would raise $62.2 billion, which would offset the $54.4 billion cost of the 2-year doc fix and result in an additional $7.8 billion in savings.

Last December, Congress passed a nearly $15 billion doc fix that delayed a 25% cut in Medicare rates from January 1, 2011, to January 1, 2012. The legislation froze rates at 2010 levels. If Congress enacts Obama's new 2-year fix, physicians will not receive a Medicare raise for three years running.

The pay cut once scheduled for January 1, 2011, had been mandated by the sustainable growth rate (SGR) formula that Medicare uses to set physician pay. Organized medicine has lobbied Congress for years to replace the SGR formula with one it considers more equitable for physicians. Congress has been overriding SGR-required pay cuts since 2003, causing them to balloon in size.

Link to article

President’s Proposed FY 2012 Budget and Health Reform
Of particular note in President Obama’s 2012 budget is almost $1 billion for “program management” related to the implementation of the Affordable Care Act. The budget also anticipates the hiring of more than 1,000 full time employees in 2012.

Funding for a public health emergency preparedness program run by the Centers for Disease Control and Prevention (CDC), on the other hand, was cut by about $72 million below fiscal 2010 levels in the budget proposal. Those funds are used to help state and city public health departments monitor for potential outbreaks and threats, hire and train staff to respond and other activities.

The discretionary budget request for the CDC remains only about $19 million below that of fiscal 2010. But that’s because the cuts are compensated by $752 million for the CDC from the Prevention and Public Health Fund (see WellAware February 11) that wasn’t meant to fill budget holes and which some worry isn’t secure.

Overall, the President’s FY 2012 budget is a reflection of guidance which asked all agencies to submit a discretionary budget that was at least 5 percent lower than in 2011.

Link to Budget Guidance
Link to FY 2012 Budget Document
Link to article

FDA Loosens Rules on Certain Medical Device Data Systems
The FDA has loosened regulations on “medical device data systems,” – also called mHealth, for mobile health - making them exempt from premarket review by the agency. However, FDA is also carefully limiting the definition of what the systems are.

Under the rule, published February 15, medical data device systems (MDDS) are “off-the-shelf or custom hardware or software products used alone or in combination that display unaltered medical device data, or transfer, store or convert medical device data for future use, in accordance with a preset specification,” according to FDA. Examples include devices that collect and store data from a glucose meter for future use or that transfer lab results for future use at a nursing station.

FDA emphasizes that a system that does anything else not described in the rule is not an MDDS. Notably, an MDDS does not modify, interpret, or add value to the data or the display of the data, and it does not add to or modify the intended uses or clinical functions that are already contained within the medical devices and that provide data to or receive data through the MDDS.

Link to article

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State

HHS to Provide $241 Million to Health Exchange “Early Innovator” States
HHS awarded $241 million in “Early Innovator” grants to help six states plus a consortium of the five states design and implement the IT infrastructure needed to create state health insurance exchanges.

States receiving grants are Kansas, Maryland, New York, Oklahoma, Oregon, Wisconsin and a consortium of New England states. The New England consortium will be led by the University of Massachusetts Medical School – the only medical school in the country to win an award - and aims to include individuals and small businesses in Connecticut, Maine, Massachusetts, Rhode Island, and Vermont.

The grants range from $6 million to $54 million and present a variety of potential solutions to providing the IT infrastructure necessary to run a state health insurance exchange.

Most states will use the funds to expand existing frameworks already in place, including those used for the administration of state Medicaid programs. Most aim to integrate with health departments and agencies to lower administrative costs while also providing consumers with easy access to health insurance information.

Technology sharing should help other states establish their exchanges quickly using the models and building blocks created by the Early Innovator states.

Link to release

Arizona Does Not Need Waiver to Cut 250,000 Enrollees, HHS Secretary Says
Arizona officials who spent nearly a year criticizing the federal government for not allowing the state to cut its Medicaid rolls got some surprising news: permission from HHS isn’t necessary for the state to drop 250,000 people from the Arizona Health Care Cost Containment System.

In a letter to Gov. Jan Brewer (R), HHS Secretary Sebelius said Arizona could simply choose to not renew the agreement under which the federal government provides matching funds for 250,000 childless adults in AHCCCS. The end of the agreement would effectively allow Arizona to drop those patients from AHCCCS on September 30, when the agreement expires.

In her letter, Sebelius said the cuts would not violate the maintenance-of-effort provision in the Patient Protection and Affordable Care Act, the landmark health care law passed by Congress in 2010, which prohibits states from reducing Medicaid eligibility.

But because Arizona is operating under a waiver that began when voters approved Proposition 204 in 2000, the state does not need a waiver to drop most of those people from AHCCCS. The ballot measure expanded AHCCCS coverage to include all childless adults who make up to 100 percent of the federal poverty level.

Brewer called the letter “an encouraging development” for the state as it seeks flexibility from the Affordable Care Act. “Secretary Sebelius’ letter clearly indicates that Arizona may take the steps it requires to manage its Medicaid program and balance its budget without violating MOE requirements,” Brewer said. It was not clear why state officials did not realize earlier that a waiver was unnecessary, nor why HHS did not inform the state sooner that the waiver was unnecessary. Brewer submitted her waiver request to HHS on January 25, but she and lawmakers had sought to cut AHCCCS for nearly a year.

Link to article
Link to letter from Gov. Brewer to Sebelius
Link to letter from Sebelius to Gov. Brewer

Kentucky, New Hampshire, Nevada Request Adjustments of the MLR Standard
Kentucky is seeking a waiver from HHS of the medical loss ratio (MLR) standard because of a “failed” experiment in the early nineties that “completely destabilized” the state’s individual market and ended with 43 health insurance companies exiting the market. The state proposes maintaining the existing 65 percent MLR in 2011, then increasing it 5 percent per year to reach the required 80 percent floor by 2014.

New Hampshire has submitted an MLR waiver request in part because “the size of New Hampshire’s market makes the market relatively unattractive to insurance carriers,” and the state’s individual market is currently dominated by one player. The current MLR is approximately 60 percent.

In addition, Nevada has requested an adjustment to the MLR standard to 72%. In its request, the Nevada Division of Insurance says that “this one-year adjustment will allow our carriers, agents and brokers time to adjust their pricing and operations to comply with the new standard. Carriers licensed in NV have demonstrated their intent to comply with the MLR.”

The health reform law allows the HHS Secretary to adjust the MLR for a state; the state must demonstrate that requiring insurers in its individual market to meet the 80 percent MLR has a likelihood of destabilizing the individual market and could result in fewer choices for consumers. HHS invites public comment on the requests.

Link to KY request
Link to HHS notice on NH
Link to NH MLR Adjustment Request
Link to HHS notice on NV
Link to NV MLR Adjustment Request

Wisconsin Insurance Commissioner Ends Federal Grant Under Health Reform
Wisconsin's insurance commissioner has terminated a $637,114 grant issued through the federal health reform law, part of $86 million awarded to the state, some of which also could be in question.

Ted Nickel, the Commissioner of Insurance appointed by GOP Gov. Scott Walker, has ended a Consumer Assistance Grant announced in October to help people enroll in health coverage and file complaints under the new law. Nickel said the program is "largely duplicative and unnecessary….We believe that saving taxpayers, whether they are federal or state taxpayers, from unnecessary spending is in everyone's best interest."

Attorney General J.B. Van Hollen said that in Wisconsin, "the federal health care law is dead — unless and until it is revived by an appellate court."

Van Hollen was responding to a federal court judge's ruling in Florida that the law is unconstitutional because it requires most Americans to buy insurance or face penalties.

Link to article

Texas Medicaid Cuts
As Texas budget writers attempt to make cuts to Medicaid, state Health and Human Services Commission officials are warning that certain cuts could cost the state more in the long run. For example, if kidney dialysis treatment is cut, Medicaid patients with renal disease would show up at hospitals, said Charles Bell, deputy executive commissioner for health services at the Health and Human Services Commission. “Without the dialysis, that individual would actually go into an emergency situation,” Bell, a doctor, told a Senate Finance Committee panel studying Medicaid.

Texas GOP leaders have proposed cuts of 29 percent to Medicaid, a much larger reduction than most programs would see, as lawmakers try to write a balanced budget without raising taxes or exhausting their rainy-day money.

The program’s costs grew rapidly in the current two-year cycle because Congress temporarily enhanced federal matching money to help recession-ravaged states cope with swelling rolls. But now, GOP leaders say, cuts must be made. “It’s absolutely unsustainable,” said Sen. Jane Nelson (R) who heads the panel. “Medicaid costs are projected to double every 10 years.”

While the proposed Senate budget, like the House’s, would cut the program to just over $17.5 billion a year, from $25 billion, leaders have put placeholders into the budget to achieve much of the savings. While a huge share of the cuts will come out of care providers’ fees, there are figures pulled out of the air for new efficiencies, savings generated by new outcomes-based payment models and cuts to the adult recipients’ optional services. Details are to come later.

Nelson said her panel has three weeks to craft recommendations, including on how to reduce spending of state taxes on the optional services — or at least those not provided in long-term care settings — by 10 percent, or $45 million over the next two years.

Link to article
Link to article

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Not in the News...Yet

Study: Hospital Budgets Will Expand over Next Five Years, With Increases in Areas Such as IT, Facilities and Medical Devices
Hospital executives are planning for budget increases during the next five years and are prioritizing strategic initiatives that had previously been on hold due to economic constraints. In addition, health reform is causing hospital management to re-evaluate how they select and purchase medical devices and other services, according to a new survey.

Nearly 60 percent of 196 surveyed hospital executives expected budget increases in 2011, the survey from L.E.K. Consulting finds. During the next five years, 70 percent of respondents predicted larger budgets and are planning to increase purchasing in multiple areas, including IT (58 percent), facilities (38 percent), large medical devices (37 percent), small medical devices (21 percent) and disposables (28 percent), according to the Boston-based consulting firm’s survey.

Supplier negotiations will be central to controlling costs, which has hospitals increasingly turning to group purchasing organizations (GPOs) to help negotiate the best rates possible. More than half of respondents expect to use GPOs more by 2015.

Which product area is almost as hot as IT? Anything that cuts medical errors. “Most of the executives surveyed are willing to pay a 10 to 15 percent premium on average for disposables that demonstrate an ability to reduce medical errors and infection rates.”

Link to article

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Releases of Note

Voters Ready to “Make Tough Choices” on Budget Cuts
A poll this week finds “70% of likely U.S. voters think voters are more willing to make the hard choices needed to reduce federal spending than elected politicians are.” A separate Rasmussen poll also found 55 percent of voters think President Obama’s proposed budget doesn’t cut enough spending from the national pocketbook.

Despite the fact that Republicans have taken over the House in Congress, the poll found, “voters still expect government spending, taxes and the deficit to go up over the next two years.”

Link to hard choices poll
Link to Obama budget poll

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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

WellAware - Health Policy News Feb 11 2011

2011-02-24T23:13:00.002-05:00

Click to view this in a separate browser

WellAware

Health Policy News from M2

February 11, 2011

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

HHS Announces Prevention Fund Allocation under HCR
The Public Health Fund established under the health reform law will expand on four critical priorities in the current fiscal year, HHS says on its healthcare.gov website. These priorities are:

•Community Prevention ($298 million); this initiative “supports prevention activities that we know will work to reduce health care costs and promote health and wellness,” HHS says. This area includes Community and State Prevention ($222 million), Tobacco Prevention ($60 million), and Obesity Prevention and Fitness ($16 million).
•Clinical Prevention ($182 million), including Access to Critical Wellness and Preventive Health Services ($112 million) and Behavioral Health Screening and Integration with Primary Health ($70 million).
•Public Health Infrastructure and Training ($137 million), including public Health Infrastructure ($40 million), Public Health Workforce ($45 million) and Public Health Capacity ($52 million).
•Research and Tracking ($133 million), including Health Care Surveillance and Planning ($84 million) and Prevention Research ($49 million).

Link to announcement

HHS Will Host Series of Virtual Meetings with State Medicaid Directors on Promising Medicaid Cost-Saving Initiatives
Given the urgency in many states of reigning in Medicaid costs, HHS Secretary Sebelius reminds governors in a recent letter that states have “substantial flexibility to design benefits, service delivery systems, and payment strategies, without a waiver.” In 2008, “roughly 40 percent of Medicaid benefits spending – $100 billion – was spent on optional benefits for all enrollees, with nearly 60 percent of this spending for long-term care services,” the letter says.

The health reform law gives states the flexibility to reduce eligibility for non-disabled, non-pregnant adults with incomes above 133 percent of the Federal poverty line ($14,500 for an individual) if the State has a budget deficit, although prior to June 30, this would mean the loss of the enhanced FMAP under the Recovery Act. “I continue to review what authority, if any, I have to waive the maintenance of effort under current law,” Sebelius says.

Some of the key areas of potential cost savings for states include:

•Modifying Benefits
•Managing Care for High-Cost Enrollees More Effectively
•Purchasing Drugs More Efficiently
•Assuring Program Integrity

HHS is also focused on how to help States provide better care and lower costs for dual eligibles. The agency will further host a series of “virtual” meetings with State health policy advisors and Medicaid directors. In these sessions, HHS will share information about promising Medicaid cost-saving initiatives underway in one or more States that the agency is prepared to support and approve in other States on a fast-track basis.

Link to Sebelius letter

Kindred/RehabCare Group Deal Spurred by Reimbursement Rates and HCR
Kindred Healthcare will acquire RehabCare Group for close to $900 million in cash and stock, in the latest industry merger driven by cost-cutting by both government and private health insurers.

Kindred currently runs or services nearly 700 hospitals, nursing and rehabilitation clinics; RehabCare owns and operates 34 facilities while also managing rehab services in more than 1,250 locations. The deal will create the largest "post-acute" health company in the country, with more than $6 billion in revenue and operations in 46 states. Executives of the two companies said that their deal was driven, in part, by declining health care reimbursement rates, but also by some of the bigger changes related to health care reform.

The two companies estimate they will save $40 million in costs over the first two years, with the transaction immediately accretive to Kindred shares—excluding one-time deal costs.

Link to article

FDA Announces Changes Designed to Accelerate Medical Device Reviews
FDA has announced changes in its review of device product applications; specifically, the agency is seeking to speed up its reviews of promising medical devices and boost research for new technologies in hopes of getting novel products to market faster. The initiative targets "devices that are true pioneering technologies and that have the potential to revolutionize patient care or health care delivery," FDA said.

The proposed changes "will help accelerate the development of and patient access to innovative medical devices, which often fulfill unmet public health needs," according to Jeffrey Shuren, head of FDA's Center for Devices and Radiological Health.

Shuren told reporters, however, that the agency could only handle about one or two such expedited reviews a year and that funding the initiative would be an issue as Congress looks to renew device industry user fees that expire in 2012.

Since Hamburg took office in mid-2009, the agency has made sweeping changes to its device unit, including how it reviews and classifies devices. Last month, FDA officials announced steps to help streamline its device review but sidestepped several outstanding issues.

Link to article

Obama Admin. Announces Initiation of Two State Pilots under “Direct Project”
Under a pilot program announced by HHS’ Office of the National Coordinator for Health IT (ONC), providers and public health agencies in Minnesota and Rhode Island have begun exchanging health information using specifications developed by the Direct Project.

The Direct Project is an ‘open government’ initiative that calls on cooperative efforts by organizations in the health care and information technology sectors, ONC says. Other Direct Project pilot programs will also be launched soon in New York, Connecticut, Tennessee, Texas, Oklahoma and California to “demonstrate the effectiveness of the streamlined Direct Project approach, which supports information exchange for core elements of patient care and public health reporting.”

The project is on track to give U.S. health care providers early access to an easy-to-use, internet-based tool that can replace mail and fax transmissions of patient data with secure and efficient electronic health information exchange.

“This is an important milestone in our journey to achieve secure health information exchange, and it means that health care providers large and small will have an early option for electronic exchange of information supporting their most basic and frequently-needed uses,” said Dr. David Blumenthal, National Coordinator for Health Information Technology. “Other efforts are also going forward at full-throttle to build a comprehensive structure of health information exchange. But by bringing together health care and IT companies, including competitors, to rapidly produce a system that supports basic clinical delivery and public health needs, we will be able to more quickly start building electronic information exchange into our health care system.”

Pilot testing of information exchange based on Direct Project specifications is being carried out on schedule this year, aiming toward formal adoption of the standards and wide availability for providers by 2012.

Aneesh Chopra, White House Chief Technology Officer, noted that "instead of depending on a traditional top-down approach, stakeholders worked together to develop an open, standardized platform that dramatically lowers costs and barriers to secure health information exchange."

Link to announcement

National Coordinator for Health IT David Blumenthal Stepping Down This Spring
The day after announcing the start of pilots under the Direct Project (see above), National Coordinator for Health IT David Blumenthal announced he will leave the Administration in the spring and return to teaching at Harvard. Blumenthal, who has held the position since March 2009, led an ambitious effort to push doctors and hospitals to adopt electronic systems. His office developed many of the rules for health providers to qualify for $27 billion in incentive payments to automate their records. Blumenthal's efforts have been lauded in the health IT industry. "He's helped bring the industry back to life when it seemed to be failing, and he gave the industry a jolt of energy it lacked," said Betty Otter-Nickerson, president of Tampa-based Sage Health, an IT company.

However, some of his decisions have been criticized by hospitals and doctors who say they complicated efforts to qualify for the incentive checks.

In an internal staff memo Blumenthal said: "We are already seeing results that indicate that the national shift to (electronic health records) and (health information technology)-assisted care is finally underway." He noted the proportion of primary care physicians who had adopted a basic electronic health record increased from 19.6 percent in 2008 to 29.6 percent in 2010.

Link to article

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State

GOP governors Ask Sebelius for Changes to HCR Implementation Rules
Twenty-one Republican governors have sent a letter asking HHS Sec. Sebelius to make six critical adjustments to the rules concerning state-run healthcare exchanges under health reform, or risk having the federal government assume full responsibility. The group continues to prefer the health reform law be overturned entirely, but is taking the simultaneous approach of seeking changes to the rules.

“We wish states had been given more opportunity to provide input when the PPACA was being drafted,” the letter says. “We believe in its current form the law will force our health care system down a path sure to lead to higher costs and the disruption or discontinuation of millions of Americans’ insurance plans.” Among the requested changes are granting states authority to choose benefits that meet the needs of their citizens, waiving provisions that discriminate against consumer-driven health plans, such as health savings accounts, and commissioning an independent assessment of how many people will be “offloaded” into the exchanges by employers.

Indiana Governor Mitch Daniels (R) said in a same-day op-ed: “If there’s to be a train wreck, we governors would rather be spectators than conductors. But if the federal government is willing to reroute the train to a different, more productive track, we are here to help.”

The system advocated by the governors is “a very different system than the one the legislation intends,” Daniels writes. “Health care would be much more affordable, minus all the mandates, and plus the consumer consciousness that comes with health savings accounts and their kin. Customer choice would be dramatically enhanced by the state's ability to allow more insurers to participate and offer consumer-driven plans. Through greater flexibility in the management of Medicaid, the state might be able to reduce substantially the hidden tax increase that forced expansion of the program will impose.” “Most fundamentally, the system we are proposing requires Washington to abandon most of the command-and control aspects of the law as written,” according to the op-ed.

Link to letter
Link to op-ed
Link to article

Arkansas Insurance Commissioner Urges Lawmakers to Grant His Agency as Much Authority as Possible Over Health Insurance Exchanges; Miss. House Approves Bill to Enact Exchange
In a briefing to the Arkansas House Public Health Committee, state Insurance Commissioner Jay Bradford urged lawmakers to give his agency as much authority as possible regarding health insurance exchanges under health reform.

"I'm not going to editorialize or become a part of the legislation because I don't have a vote up there [in Washington]," Bradford told committee members. Bradford is a former insurance executive and former legislator who once chaired the Senate and House Public Health Committees during his tenure.

Arkansas has received three federal grants - two each for $1 million and a third for $200,000 - according to Bradford.

One of the million dollar grants is to create a health insurance exchange for private insurance companies to expand coverage in the state. When it is operational, the exchange is expected to be "self-sufficient," he said, adding that he didn't think it would be a "high overhead" operation.

Separately, the Mississippi House has passed a bill to enact a health insurance exchange in the state. A similar bill is pending in the Mississippi Senate. Republican Governor Haley Barbour, who has filed a lawsuit questioning the constitutionality of the federal health care law, supports the exchanges and is requesting $1.5 million to put one in place.

Link to article
Link to article

Connecticut Plans Significant Medicaid Changes over the Next Year
Connecticut Governor Dannel Malloy’s (D) administration plans to drop the for-profit managed care organizations from running the state’s Medicaid program and also beef up a transition that takes seniors out of nursing homes and provides services to help them live in their own communities.

Office of Policy and Management Secretary Ben Barnes and Lt. Gov. Nancy Wyman (D) announced the changes for almost 600,000 Medicaid recipients, which they expect to be in place by January 2012.

The majority of the low-income clients, 391,000, are in the state’s HUSKY A health care program for children and their parents, but the state also covers some 165,000 seniors and young adults, the aged, blind, and disabled, slightly higher income children in HUSKY B, and patients in the Charter Oak Health Care Plan.

The state is projected to pay $3.96 billion for Medicaid services this year, one of its most costly commitments out of a $19.01 billion budget. Ellen Andrews, of the Connecticut Health Policy Organization, said its studies projected a savings of $40 million for switching HUSKY clients alone to the new model, but that adding the elderly, disabled and blind population could double that.

The savings will be announced as part of the biennial budget Malloy will release February 16.

Link to article

Illinois Community Colleges May Create Insurance Pool to Save Money
Community colleges in Illinois are considering banding together to create a cooperative insurance pool with the goal of saving money on health insurance for thousands of employees. Nine schools in the Chicago suburbs and two others have expressed interest in joining a newly fashioned Illinois Community College Health Insurance Pool.

A co-op plan could be in place by July 1. A co-op with more customers could fetch a better bargain with insurers than if colleges purchased plans individually, Area College officials said. Savings could be realized through lower fixed prices as well as shared services, said Scott Baldwin, vice president of insurance broker Gallagher Benefits Services Inc. of Itasca, which is organizing the insurance pool.

Link to article

Minnesota Showed “Biobusiness” Job Growth of 20% from 2002-2007; State Should Become Leader in Pharmaceuticals and Agricultural Biotech, BioBusiness Alliance of MN Says
Minnesota should build on its success in medical devices to become a leader in areas such as pharmaceuticals and agricultural biotechnology, according to a report by the BioBusiness Alliance of Minnesota.

Minnesota showed 20 percent growth in biobusiness jobs from 2002 to 2007, compared with a 3 percent decline from 1997 to 2002, the last time the alliance measured the sector. That growth continued in 2008 and 2009, the group said, and was driven largely by big gains in areas where the state has been weak.

"This didn't happen by chance," said Dale Wahlstrom, the alliance's CEO. "The involved stakeholders across the state decided to change course as a result of the negative trends identified in [the previous] report." He pointed to efforts by the University of Minnesota and the Mayo Clinic to commercialize their research and technologies, as well as increased dialogue between industry, academia and government.

Link to article

NM Regulators Would Be Permitted to Consider Insurance Executive Salary Levels in Reviewing Premium Rate Hike Requests, Under State Bill
Health insurers seeking to hike premiums would have to open their financial books to the state of New Mexico under a bill that was approved by the Senate Public Affairs Committee. The proposal also would give the Public Regulation Commission veto power over disputed rate increases.

In April 2010, the then-insurance superintendent agreed to let Blue Cross Blue Shield New Mexico raise monthly rates on 40,000 New Mexicans by more than 20 percent. The newly passed legislation would change how the state reviews health insurers' requests to raise monthly premium costs.

Under the bill, the New Mexico superintendent of insurance would be able to consider factors that currently can't be weighed, including a company's surplus and the salaries of its executives, to decide whether to grant the insurer's request.

Link to article

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Not in the News...Yet

EMRs Will Be Key on Genetic Markers for Drug-Related Adverse Events
A research initiative has been launched to identify genetic markers that may help predict risk associated with a range of serious drug-related adverse events; the effort will be collaboration between the International Serious Adverse Events Consortium (iSAEC) and the HMO Research Network (HMORN). EMRs will play a key role.

Through the collaboration, the iSAEC will use the HMORN's centralized clinical data warehouses, across nine HMOs, to build research cohorts associated with the genetics of three drug-induced SAEs: hepatoxicity, serious skin rashes and extreme weight gain in users of atypical antipsychotic medications.

The nine HMORN members participating in the collaboration are: HealthPartners Research Foundation; Kaiser Permanente Georgia; Kaiser Permanente Hawaii; Marshfield Clinic Research Foundation; Group Health Collaborative and Geisinger Center for Health Studies; Henry Ford Health Care; Kaiser Permanente Southern California; Harvard Pilgrim Health Plan; and Kaiser Permanente Colorado. Each member will use detailed clinical profiles to search for potential subjects to enroll in the research projects using their electronic medical record (EMR) databases. This second phase of the collaboration is expected to take 20 months.

"Our efforts to date on drug induced immunologic SAEs have mainly leveraged traditional academic networks, recruiting research subjects across a limited number of hospitals," said Arthur L. Holden, chairman of the iSAEC. "By working with these nine leading HMOs, all of which have sophisticated EMRs and outstanding clinical research capabilities, we hope to open up a new, more scalable research channel to enroll subjects into this vital research.”

Link to article

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Releases of Note

Most Commercial Insurance Markets in US Lack Competition, AMA Says
Most commercial health insurance markets in the United States are dominated by one or two health insurers, according to the American Medical Association. The 2010 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets found that 99 percent of health insurance markets in the U.S. are “highly concentrated,” based on the 1997 U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines.

“This indicates a significant absence of competition among insurers. In 48 percent of metropolitan statistical areas, at least one insurer had a market share of 50 percent or more,” AMA says.

“The market power of health insurers places physicians and patients at a significant disadvantage,” said AMA President Cecil B. Wilson, M.D. “When insurers dominate a market, people pay higher health insurance premiums than they should, and physicians are pressured to accept unfair contract terms and corporate policies, which undermines the physician role as patient advocate.”

Physicians are the least concentrated segment of the health care sector, with 78 percent of office-based physicians working in practices with nine physicians or less. Most of those are in either solo practices or practices of two to four physicians.

“To help restore a competitive balance to health insurance markets, the AMA urges the federal and state agencies to prohibit harmful insurance company mergers and adopt policies that would level the playing field between small physician practices and large insurers

Link to release

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

WellAware - Health Policy News Feb 4 2011

2011-02-24T12:12:00.002-05:00

Click to view this in a separate browser

WellAware

Health Policy News from M2

February 4, 2011

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

------------------------------------------------------
Federal

Judge Vinson Rules Entire Health Reform Law Unconstitutional
Judge Roger Vinson of Federal District Court in Pensacola, FL, has become the second judge to rule that the federal health reform law is unconstitutional. However, unlike the Virginia judge who issued a ruling in December, Vinson concluded that the insurance requirement was so “inextricably bound” to other provisions of the Affordable Care Act that the unconstitutionality of the provision required the invalidation of the entire law.

“The act, like a defectively designed watch, needs to be redesigned and reconstructed by the watchmaker,” Judge Vinson wrote.

The judge did not immediately enjoin the law pending appeals, a process that could last two years. But he wrote that the federal government should adhere to his declaratory judgment as the functional equivalent of an injunction.

That left confusion about how the ruling might be interpreted in the 26 states that are parties to the legal challenge. David B. Rivkin Jr., a lawyer for the states, said the ruling relieved the plaintiff states of any obligation to comply with the health law. “With regard to all parties to this lawsuit, the statute is dead,” he said.

However, the White House asserted that the opinion should not deter the continuing implementation of the law.

Mississippi Judge Throws Out Health Reform Challenge
On Thursday, a federal judge in Mississippi threw out a lawsuit that challenged the constitutionality of the health reform law.

The decision comes just a few days after a Florida judge ruled the whole law unconstitutional, in a case brought forward by 26 states.

The Mississippi judge found that the plaintiffs lacked the standing to sue, but offered them 30 days to amend their petition. The 10 individuals that brought the case forward argued that the law’s requirement to buy insurance violated their rights.

What does it mean?

Now that there are five conflicting rulings on the law, the issue is expected to eventually go to the Supreme Court.

Fundamentally, the individual mandate and lowering premiums go hand-in hand. (see Not in the News Yet story below). If people wait until they are sick to buy insurance, prices will stay high.

“Healthcare Economist” blogger Jason Shafrin provides an illustrative example of the importance of getting everybody paying into the health system.

Shafrin provides a theoretical example showing that with the individual mandate, average premium for all enrollees would be $5,250. In contrast, he says that the average premium for all enrollees, if only the sick are insured, the premium would be $10,000.

Link to decision
Link to article
Link to article
Link to blog

HHS Has Granted Waivers from Financial Requirements to 733 Employers and Union-Affiliated Insurers (“Mini-Med” Plans)
Hundreds of employers have received federal waivers from a new requirement under health reform. Government data shows 733 applicants, mainly employers and union-affiliated insurers but also some states, received an exemption from a requirement that puts their plans on the hook for up to $750,000 in eligible medical bills for each covered worker this year. Most of those plans now have reimbursement limits that are a fraction of that amount. The exemptions cover approximately 2.2 million people.

The provision at issue targets plans that provide less than comprehensive coverage, called "mini-med" health plans. These lower-cost plans offer limited benefits but are popular with workers for providing access to doctor's visits, medications and often some protection for larger bills.

Companies warned HHS Secretary Sebelius that they would have to drop this coverage because it doesn't meet the health law's mandate that they provide much more expensive benefit plans.

Link to article
Link to article

63% of Employers Are “Likely” or “Highly Likely” To Pass Health Reform Costs On To Employees
More than 40% of employers said that they are likely, and another 23% said that they are “highly” likely, to pass along any direct or indirect health reform-related cost increases to employees, according to research from the Employee Benefit Research Institute (EBRI) and the Society for Human Resource Management (SHRM).

Two surveys found that few (10%) are unlikely or “highly” unlikely (2%) to pass along cost increases related to health reform, while 23% were unsure whether cost increases would be passed along to workers.

The studies noted that while the majority of employers are likely to pass along cost increases onto workers, only 30% of employers said that they were likely to pass along any cost decreases that were directly or indirectly related to the law. And, while 23% were “highly” likely to pass along these cost increases, only 10% were “highly” likely to pass along similar cost decreases.

Link to survey results

Health Care-Related IPOs Dominate Market
Of the 11 IPOs expected in the U.S. the week of January 31, seven are health-care-related, and several early-stage companies are trying to raise money although they don’t yet have any product approvals. “The best of the bunch are Epocrates Inc., which makes a mobile-device application for doctors, and Tornier N.V., which sells orthopedic products such as joint replacements and bone fixation devices,” according to the Wall Street Journal.

Epocrates is hoping the third time is charm. The firm filed an IPO in 2008 and again in 2010, but withdrew both. This week’s offering was successful and raised more than anticipated.

Epocrates says almost half of U.S. physicians use its app, “which helps them look up drug data on Apple, BlackBerry and Android devices, phones and tablets. Epocrates makes money through deals with pharma companies that send “clinical alerts” through its platform.” An electronic health record platform for small physician practices is in the works.

Link to article
Link to article

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State

Aetna Leaving Colorado Individual Market
Aetna has filed documents with the Colorado Insurance Division stating it is pulling out of the individual market in Colorado because it doesn't think it can remain competitive in the market. "Aetna Life Insurance Company has determined it can no longer meet the needs of its consumers while remaining competitive in the Colorado individual health market," Mary V. Anderson, a counsel to Aetna, writes in a December 21, 2010 letter to the Colorado Insurance Division.

Under Colorado law, the move prohibits Aetna from re-entering the state's individual health market for the next five years. This means they will not be able to sell individual policies in 2014, when the market is expected to expand significantly with health reform's mandated purchase of health insurance.

Link to article

Iowa Insurance Commissioner to Trim Wellmark’s Proposed Rate Increase
Iowa's insurance commissioner plans to trim a premium-increase proposal from Wellmark Blue Cross and Blue Shield, the state's main health insurer. The company sought to raise individual policyholders' rates an average of 11 percent, after raising them 18 percent last spring.

Commissioner Susan Voss, who listened to or read the comments of hundreds of outraged customers, said Wellmark could raise the rates an average of 8.5 percent, starting in April. Wellmark provides coverage to three-quarters of Iowans who buy their own health insurance. The increase in the base rate will affect about 46,000 people.

Voss said she based her decision partly on the opinions of two actuaries, who determined the request for an 11 percent increase was excessive.

Link to article

Medicaid Cuts Continue across U.S. – OH, SC, TN, TX
In Ohio, if no changes are made, Medicaid will cost state taxpayers an additional $1.6 billion next year. This would be a 49 percent jump in the state's share of costs, pushing to $4.9 billion the cost to the state for the next fiscal year.

Most of the increase to Ohio is due to the loss of federal stimulus money. The federal government has been covering a higher share of Medicaid costs to help states during the recession, but that help ends June 30. In addition, state officials are projecting an increase in enrollment and utilization of services, both of which also will drive up costs.

Gov. John Kasich (R) must deliver his state budget plan for the next two years on March 15.

The administration also will evaluate the rates paid to hospitals, nursing homes, doctors and other care providers, which could bring more immediate savings than efforts such as preventive care.

Kasich is among 33 Republican governors who have asked the Obama administration to let states cut Medicaid enrollment without losing federal aid. Under the health reform law, states that restrict eligibility in their programs lose federal support, which generally covers about 60 percent of costs.

The state Medicaid director in South Carolina has told lawmakers he needs $228 million in the next several months or the state will have to cut hundreds of thousands of patients from the Medicaid rolls.

Tony Keck's testimony before House and Senate budget writers sets the stage for a major clash over how the state will pay its bills. The decision about whether to allow the Department of Health and Human Services to operate with a deficit will be made next week by the Budget and Control Board, which is chaired by Gov. Nikki Haley (R). Some state lawmakers, mainly Senate President Pro Tem Glenn McConnell, R-Charleston, have insisted the agency make do with the funding the legislature allocated and not come back for more.

In addition, to prepare for another deficit within the Health and Human Services Department next budget year, lawmakers are considering allowing the agency to cut the rates it pays doctors, hospitals and nursing homes that treat Medicaid patients. The agency's budget shortfall for the upcoming fiscal year that begins July 1 could reach nearly $500 million.

Tennessee officials are preparing to cut $300 million in Medicaid spending by limiting doctor and hospital visits. Republican Gov. Bill Haslam has warned of an estimated to be a $1 billion budget gap in Tennessee.

TennCare, the state's Medicaid program, proposes to reduce state spending by $103 million, mostly with a cap of eight doctor and hospital visits a year for poor patients enrolled in the expanded program. The state cuts would erase $203 million more in federal matching funds.

In Texas, the head of the state’s health and human services agency is expected to tell state senators that the Medicaid program needs an additional $6 billion in funding.

He plans to tell state senators that Medicaid estimates they’ve been looking at are off by several billion dollars. They’ve been working with a base budget that does not take into account the cost of adding 250,000 people who are expected to join the rolls of Medicaid.

The additions to the Medicaid program come from typical growth in the number of eligible people and are not the result of federal health care reform. The higher price tag is due to medical costs rising through inflation, more people using the program and more services being provided, said a spokeswoman for the state's Health and Human Services Commission.

Link to article
Link to article
Link to article
Link to article

Montana Supporters Move Forward With Health Insurance Exchange Rhode Island Also Moves Ahead With Its Exchange
The day after a federal judge declared the national health reform law unconstitutional, Montana businesses and consumer groups came to the state capital to support a bill laying the groundwork for a key element of the law: a state-based health insurance exchange.

Supporters of House Bill 124 said that even though courts could void the federal law, Montana should start working on the health insurance exchange, both to help consumers and to pre-empt the federal government from creating the exchange instead.

HB124, prepared by Democratic state auditor Monica Lindeen, who regulates insurance in the state, could face an uphill battle in the Republican-controlled legislature, where many members have vowed to do all they can to delay or block implementation of the federal health reform law.

Rhode Island has also taken its first step toward creating an insurance exchange. Senate President M. Teresa Paiva Weed, a Newport Democrat, filed legislation to establish the exchange. The legislation positions Rhode Island to be named an “early innovator” under the federal health-care law and thus win additional federal money to develop the exchange.

Link to article
Link to article

Wisconsin Creates Office of Free Market Health Care to Oppose Health Reform
Republican Gov. Scott Walker has created a new office to fight federal health care reform, a bold move that may put Wisconsin in the forefront of states where newly elected Republican governors are challenging President Barack Obama's signature legislation.

Walker said he created the Office of Free Market Health Care with an executive order to simultaneously create a health care exchange in Wisconsin, as required under the federal health care reform bill, while also exploring "all opportunities and alternative approaches" that would free Wisconsin from establishing that exchange. Failure by states to establish an exchange would mean the federal government would step in to set one up. By law, each state must have one in place by 2014.

By simultaneously creating an exchange and looking for ways to get out of one entirely, however, Walker is preventing the federal government from having any role in how the state's exchange works.

Former Gov. Jim Doyle (D) had been a champion of Obama's efforts and gained national prominence for finding ways to insure roughly 98 percent of the state's population.

Link to article

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Not in the News...Yet

Concept of the Week: Adverse Selection
Adverse selection occurs in health insurance when a plan enrolls more unhealthy than healthy individuals. The Affordable Care Act’s provisions requiring insurers to cover those with pre-existing conditions and to stop the practice of rescission encourages less healthy people to seek coverage – increasing the likelihood of adverse selection.

The individual mandate in the Affordable Care Act is a mechanism to reduce the likelihood of adverse selection. Getting more healthy people to buy coverage lowers costs for everyone. The concept is simple: an insurer needs more people paying premiums than filing claims for the system to work.

This week two reports were released warning about the importance of preventing adverse selection as ACA is implemented.

First, the National Academy of Social Insurance (NASI) in a toolkit for states creating health exchanges warned about several ways the operations of Exchanges in the states could increase adverse selection. For example, an Exchange that requires higher certification standards for plans offered inside the Exchange versus outside the Exchange will cause qualified health plans in the Exchange to be more expensive. This would, in turn, lead to adverse selection because “healthy people…more interested in lower premiums and less interested in the additional standards…” would purchase plans outside the Exchange – driving costs up inside the Exchange.

Second, a report from the Center for Retirement Research at Boston College about the implementation of the voluntary, long term care insurance program Community Living Assistance Services and Supports, or CLASS, similarly warned about the importance of controlling for adverse selection.

The report asserts “broad participation” is key and “the success and solvency of CLASS will depend primarily on the extent of participation from American workers, especially the young and healthy. For broad participation, employers must decide to offer the plan and individuals automatically enrolled must not opt out.”

Adverse selection is at the core of the arguments about whether to have an individual mandate. As this drama continues to unfold, adverse selection will continue to be at the heart of whether any of these health care market system changes will work.

Link to NASI report
Link to CLASS brief

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Releases of Note

AdvaMed Says Device Recalls In Europe, U.S. Occur At Similar Rates
Medical device recalls in Europe and the U.S. occur at about the same rate, even though the approval process in the U.S. takes significantly longer, according to a report released by the Advanced Medical Technology Association (AdvaMed).

The report examines the rate of safety recalls for medical devices in Europe from 2005-2009 and compares them with the level of similar recalls in the U.S. The study focused on those products recalled because of significant health risks and found an average recall rate in Europe of 21 per year, compared to the tens of thousands of devices on the market. This is almost identical to the rate of equivalent recalls in the U.S.

“The results of this study suggest little difference between absolute number of serious recalls between the U.S. and EU regulatory systems,” the report says. “The distribution of the serious recalls is similar across therapeutic areas and reasons for recall, suggesting that differences between the two systems do not ultimately affect performance.”

“The FDA should focus on resolving key performance issues to provide patients timely access to life-saving and life-changing medical technology and improve American competitiveness,” Stephen Ubl, AdvaMed President and CEO said. The AdvaMed-sponsored report was prepared by Boston Consulting Group.

Link to release
Link to report

Study Finds Gap between Supposed Benefits of EHRs and Empirically Demonstrated Benefits; EHRs May Also Introduce New Risks, Including Over-Reliance on Clinical Decision Support
“There is a large gap between the postulated and empirically demonstrated benefits of eHealth technologies,” according to a meta-analysis released by PLOS Medicine (the UK’s Public Library of Science). In addition, there is a “lack of robust research on the risks of implementing these technologies, and their cost-effectiveness has yet to be demonstrated, despite being frequently promoted by policymakers and `techno-enthusiasts’ as if this was a given.”

Therefore, “it is vital that future eHealth technologies are evaluated against a comprehensive set of measures, ideally throughout all stages of the technology's life cycle,” according to the authors.

The researchers divided eHealth technologies into three main categories: “(1) storing, managing, and transmission of data; (2) clinical decision support; and (3) facilitating care from a distance.”

“The researchers found that despite the wide support for eHealth technologies and the frequently made claims by policy makers when constructing business cases to raise funds for large-scale eHealth projects, there is as yet relatively little empirical evidence to substantiate many of the claims made about eHealth technologies.”

“For example, the researchers only found limited evidence that some of the many presumed benefits could be realized; importantly, they also found some evidence that introducing these new technologies may on occasions also generate new risks such as prescribers becoming over-reliant on clinical decision support for e-prescribing, or overestimate its functionality, resulting in decreased practitioner performance.”

Link to report

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

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Arlington, VA 22209
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WellAware - Health Policy News Jan 28 2011

2011-02-24T11:43:00.002-05:00

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WellAware

Health Policy News from M2

January 28, 2011

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

------------------------------------------------
Federal

Obama Signals Willingness to Correct “Flaws” in HCR Law
In his State of the Union address January 25, President Obama said that while he opposes repeal of health reform, he is open to considering improvements. He specifically called out the 1099 provision, stating: “we can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses."

Members of Congress enthusiastically applauded the statement. Obama was referring to a bill that Sen. Baucus (D-Mont.) and Senate Majority Leader Reid (D-Nev.) introduced January 25 that would repeal an unpopular provision in the healthcare reform law that requires employers to fill out a 1099 tax form every time they spend $600 on goods and services.

Obama also said he would look for ways to reduce health care costs in programs such as Medicare and Medicaid, and he would work to spur innovation (see related story in Not in the News Yet)

President Obama's State of the Union address echoed the call for austerity that many governors have already voiced in their own state-level speeches to legislatures, and left little doubt that states should not look to Washington for fiscal help.

Link to article

Kaiser Poll Finds Mixed Views on Replacing or Defunding Health Reform
While the public is still divided on health reform, opposition to the new law increased in January as the GOP began efforts to repeal it, according to a new survey by the Kaiser Family Foundation and the Harvard School of Public Health.

The survey, conducted just prior to the House repeal vote, also showed that “there is no groundswell of public support for overturning the law, that many individual components of the legislation remain popular across the political spectrum and that a majority of Americans oppose the idea of lawmakers using the appropriations process to defund or slow down implementation of the law,” Kaiser says.

While most respondents say they prefer spending cuts over new taxes as the key means of reducing the deficit, “there is little public consensus about where to achieve meaningful savings” and a majority opposes any spending reductions in two of the largest entitlement programs - Medicare and Social Security.

Link to report

US Physicians Fear Health Reform Could Worsen Care for Patients
Almost two-thirds of US doctors are concerned that health reform could lower quality of care, by flooding physician offices and lowering their income, according to a new Thomson Reuters survey.

The survey of over 2,900 doctors found many predict the legislation will force them to work harder for less money. "When asked about the quality of healthcare in the U.S. over the next five years, 65 percent of the doctors believed it would deteriorate with only 18 percent predicting it would improve," Thomson Reuters said.

Link to article

GAO Names AHA-Backed Candidates to PCORI Methodology Committee
The Government Accountability Office has appointed 15 people to the Methodology Committee for the Patient-Centered Outcomes Research Institute (PCORI), established by the health reform law to conduct comparative clinical effectiveness research.

The committee will help PCORI develop and update methodological standards and guidance for the research. AHA nominated two of the committee members: Mark Helfand, M.D., staff physician at Portland VA Medical Center and professor of medicine/medical informatics and clinical epidemiology at Oregon Health & Science University; and Brian Mittman, director of the VA Center for Implementation Practice and Research Support at the Department of Veterans Affairs Greater Los Angeles Healthcare System.

Notably, Naomi Aronson, PhD, Executive Director, Blue Cross and Blue Shield Association Technology Evaluation Center, was also named to the Committee. Of the 15 designees, Mittman and Aronson seem to represent the real-world application of comparative effectiveness research. No patient advocates were named to the Committee, nor were representatives for most health care industries. Additionally, no representatives from the Centers for Medicare and Medicaid Services (CMS) or the Food and Drug Administration (FDA) will serve on the Committee.

In addition to the 15 members named January 21, the directors of the Agency for Healthcare Research and Quality and National Institutes of Health (or their designees) will serve on the committee.

Link to release

NIH To Create New Center for Translational Medicine
The National Institutes of Health (NIH) is creating the National Center for Advancing Translational Sciences (NCATS) in an attempt to spur translational medicine – moving promising preclinical research into the clinical development stage.

Francis Collins, Ph.D., NIH director, expects to have the center up and running by October 1.

The center is the result of a review conducted by the NIH Scientific Management Review Board (SMRB) at the request of Collins. The SMRB concluded that a successful translational medicine program could not be created through incremental changes that augment and expand an existing body within the agency but instead would be achieved best through a new center systematically engineered to accelerate translation.

The formation of NCATS largely dismantles the National Center for Research Resources (NCRR), which on January 16 said most of its programs would be spread across four NIH institutes.

NCATS will adopt NCRR’s Clinical and Translational Science Awards program as well as select projects from the National Human Genome Research Institute, the National Center for Research Resources, and the director’s common fund. For example, the new Cures Acceleration Network, which was authorized by the Affordable Care Act, would also be part of NCATS. These programs are together valued at over $700 million, according to The New York Times.

"The final budget for the proposed center is unknown at the present time," the NIH notes. "For the most part, the budget and staff for each relocated program will remain with that program. Thus, the overall budget for NCATS will be the sum of the imported programs—an amount much smaller than the several billion dollars currently being spent on translational research by existing institutes and centers."

Link to article
Link to article

Government Will Cover Greater Costs for RECs to Help Providers Adopt HIT
The federal government will provide more funding across four years for regional extension centers (RECs) that have been established to help health care providers adopt health IT, according to an announcement posted on January 25 in the Federal Register.

RECs are designed to help health care providers demonstrate meaningful use of electronic health records to qualify for Medicare and Medicaid incentive payments.

RECs have received federal grants under the stimulus package to cover 90% of their costs for two years, and then were expected to receive a 10% federal share in the next two years. However, the Office of the National Coordinator for Health IT said that it would continue the 90/10 cost-sharing plan over four years due to current economic conditions.

Link to article

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State

State Budget Pressures Will Further Affect Medicaid Spending in 2011; Cuts to Physician and Hospital Payments Among Likely Areas for State Cuts
Facing dire budget situations, states in 2011 are likely to make cuts to their Medicaid programs in two areas: lowered payments to doctors and hospitals, and cuts to the types of services they cover. In the first area – cuts to payments for doctors and hospitals - states have substantially cut back on reimbursement rates already over the past two years. Any further cuts may mean that in some states, health care providers will stop seeing Medicaid patients.

In the area of cutting the types of services they cover, South Carolina, for example, plans to stop providing hospice care for the terminally ill. Massachusetts will stop paying for dentures. North Carolina has stopped covering surgery for the clinically obese.

Nationally, Medicaid accounts for nearly 22% of state spending, according to data from the National Association of State Budget Officers. Illinois and Missouri spend the highest percentages on Medicaid, at 32.8% and 32.5%, respectively. Wyoming Medicaid spending comes in lowest at 7.3%, and Texas spends 7.5%.

The squeeze on Medicaid budgets comes at a time when some types of cuts, such as changes in eligibility, cannot be made, given the terms of federal health reform law.

Link to article

NGA Names Wisconsin, Oregon Governors to Lead HHS Committee
Wisconsin Gov. Scott Walker (R) was named Chair of the National Governors Association’s committee on Health and Human Services on January 21. Oregon Gov. John Kitzhaber (D) was named Vice Chair. The committee’s purview includes health care and Medicaid issues.

Walker favors repealing health reform, and Wisconsin has joined the multi-state lawsuit against the health reform law.

Link to article

Mississippi Insurance Exchange Would Cover Approximately 500,000 Uninsured
About 500,000 Mississippians without health insurance may soon have access to a web portal to shop for insurance and determine whether they are eligible for Medicaid under the new federal health care law. But state lawmakers are first required to reach agreement on operational issues. All states must have an insurance exchange up and running by January 1, 2014.

At least three pending bills in the Mississippi legislature would determine how the exchange would be run and who would run it, but many issues remain.

The Insurance Department would prefer a nonprofit board operate the exchange made up of 16 members, 11 of whom would have voting rights. The voting members would include insurance companies, a consumer advocate, insurance agents, small-business owners, a health care provider, a hospital representative, and an actuary.

House Medicaid Vice Chairman Robert Johnson, (D), said a state agency or a hybrid of state agencies running the exchange would provide better customer service and safeguards against politics affecting the process.

Link to article

Vermont Should Enact Single Payer System, Harvard Team Recommends
A group of Harvard researchers is recommending that Vermont adopt a single payer system of health coverage, saying it would save the state $500 million in the first year. William Hsiao, Harvard School of Public Health presented a set of recommendations to the legislature and Gov. Shumlin (D) the week of January 17.

In an interview with the Burlington Free Press, Hsiao said that some of the savings would come from administrative simplification. “When you have a single payer, then there won't be any sales, marketing or underwriting expenses. And there won't be any commission paid for insurance or brokerage fees,” he said. “That is a really big chunk. It is close to $200 million.”

Another source of savings would be the fact that all claims would come into one data bank, allowing the creation of physician profiles to detect over-use and fraud, he said.

Link to article

Pennsylvania Seeks Federal Funding For Those with Pre-Existing Conditions
Pennsylvania Gov. Tom Corbett (R) is seeking more federal money to help cover some people who have pre-existing medical conditions and who are scheduled to lose their state-subsided health insurance soon.

The Corbett administration wrote to HHS Secretary Sebelius on January 24 seeking more money and looser eligibility rules for PA Fair Care. State officials say more than 40,000 people in the AdultBasic program are expected to lose their state-subsidized insurance when money runs out February 28.

The Corbett administration is trying to help AdultBasic enrollees get coverage through other, albeit more expensive, options. PA Fair Care is for those who can’t obtain health insurance because of pre-existing conditions; it requires an applicant to be without health insurance for six months before enrolling.

Link to article

Texas Nursing Home Operators Concerned About Cuts of 34%
The Texas House of Representatives' budget proposal for fiscal year 2012-2013 includes cuts to Medicare providers of 34%, three times higher than nursing home advocates expected.

Nursing home operators, who say nursing facilities are already losing money at Medicaid's current reimbursement rate, worry that the cut currently under consideration would put non-profit nursing homes out of business. Medicaid provider rates were cut by 1% in September and an additional 2% cut will occur in February.

The Texas Association of Homes and Services for the Aging says the current Medicaid reimbursement rate for nursing homes is less than $125 per day. The proposed cut would lower it to $80.

Link to article

States Continue to Struggle with How or Whether to Move Forward in HCR
West Virginia lawmakers are weighing the state's options in terms of health reform, as state officials continue ongoing efforts to implement the law and Congress debates repealing it.

The Governor's Office of Health Enhancement and Lifestyle Planning continues to engage in implementation efforts, including setting up insurance exchanges, despite the GOP-led House vote to repeal the law and pending state lawsuits challenging its key provisions.

On the other hand, in South Dakota, state lawmakers have introduced two bills that target federal health reform.

One bill would declare unconstitutional any federal law that "interferes with the right of any person" to choose their own coverage or decline to purchase health insurance. The bill says such federal laws violate the rights of the states.

The other measure would make it a felony for any federal or state agent to enforce the health care bills passed by Congress. State Attorney General Marty Jackley has already joined a legal challenge to the new law. Gov. Dennis Daugaard (R) also opposes the federal law.

In Idaho, the attorney general has concluded that efforts to reject federal health care reform through the 18th-century doctrine of nullification are unconstitutional.

Some Idaho Republicans are pushing this idea, something Thomas Jefferson espoused in 1799 to argue that states could reject federal laws they found to violate the U.S. Constitution.

But a Democratic legislator asked the AG's office for its opinion on the theory. In a four-page letter, Assistant Chief Deputy Attorney General Brian Kane writes that the Constitution doesn't allow states to "pick and choose" which federal laws to follow.

Republican Sen. Monty Pearce says the bill will go ahead, as planned, in the House State Affairs Committee.

Link to WV article
Link to SD article
Link to ID article

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Not in the News...Yet

Has Big Pharma Become Big Biotech? Big Pharma Leads in Innovation, As Venture Capital Investment in Biotech Grows 3% in 2010
Once-innovative companies in the biotech sphere have come to resemble big pharma, with the attendant focus on lifecycle management and fighting patent expirations, “Seeking Alpha” blogger Jason Chew says. At the same time, big pharma has accumulated as much in the way of biotechnology capabilities as any biotech. “What is left to differentiate Big Pharma from Big Biotech?” he asks. “In general, Big Pharma is bigger, with higher revenue and a larger market cap. They are also more diversified; some have diagnostics, animal care units, and generics. Also, growth rates are still higher for the large biotechs. Still, it appears the differences are disappearing fast.”

“Big Pharma is resurgent just as Big Biotech is losing steam,” Chew contends. “With a web of collaborators ranging from university labs to small biotechs to fellow pharmas,” big pharma companies are focused on innovation.

Meanwhile, venture capital backing of biotech companies has recovered from its 2009 low. In 2010, biotech venture capital investing grew 3% in terms of total dollars and 8% in terms of total deals, according to a MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters.

This represents a significant comeback from 2009, in which biotech investing plummeted 19% during the economic crisis.

The industry dropped to second place overall behind software, with $3.7 billion going into 460 deals. In the fourth quarter, biotech investing declined 24 percent in dollars and fell 15 percent in the number of deals from the third quarter with $685 million going into 94 rounds. That's a large drop from Q4 2009, when investing grew 10 percent over the previous quarter. Life Sciences and Networking and Equipment industries were the only two industries not to post double-digit growth numbers in 2010.

These numbers come on the heels of a recent report showing that disease-focused charities are stepping up to “restart the engine” of drug development; these charities are becoming the new financiers of early-stage drug development, during an uncertain healthcare environment and a healthcare market that has performed poorly.

Government investment in technology, including health care, was also featured in President Obama’s state of the union address January 25. Obama said he would soon send a budget to Congress that would spur innovation -- and create jobs -- through investments in technology development and research, including biomedical research.

Link to article
Link to article
Link to article

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Releases of Note

AHA Supports Linking Pay to Wellness? AHA Calls on Hospitals to Implement Successful Wellness Practices for Employees
In its report “A Call to Action: Creating a Culture of Health,” the American Hospital Association identifies emerging, successful practices in hospital employee health and wellness. The report calls on hospitals and their employees to be “leaders in creating a culture of health.” AHA includes seven specific recommendations for hospitals:

•Serve as a role model of health for the community.
•Create a culture of healthy living.
•Provide a variety of program offerings.
•Provide positive and negative incentives.
•Track participation and outcomes.
•Measure for ROI.
•Focus on sustainability

Each recommendation contains details or examples for implementation. For example, under “Serve as a role model of health for the community, AHA offers the following:

•Use wellness programs as pilots to export to the whole community as part of a population-based approach to health care
•Offer health and wellness program benefits to all dependents of employees
•Work with local employers to build an integrated, regional approach to health and wellness
•Provide free wellness programs at local community centers.
The report touches briefly on the potential of linking pay to employee wellness. The most serious challenges to program effectiveness include “motivating employees over extended time periods,” and “financial restrictions or limitations.”

Link to report

Report: Payers Should Support ACOs with Investments in HIT
“Substantial financial and time investments are required to accomplish changes in care delivery, even among groups of providers affiliated with one another for many years,” according to a new qualitative research study of seven provider organizations from the Center for Studying Health System Change, as reported by the National Institute for Health Care Reform.

A common challenge for health care organizations’ efforts to improve care is implementing changes with minimal disruption to patients and productivity, the institute says.

To achieve improvements in care delivery, the seven provider organizations “tapped existing financial reserves or external grant funding.”

The providers also sought strong physician and organizational leadership and encouraged transparency and flexibility when making changes. “As payers develop guidelines to contract with ACOs, they will need to support providers’ capability to develop and sustain improvements in care delivery, such as new health information technology and data reporting systems,” the institute finds.

Link to report

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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

WellAware - Health Policy News Jan 21 2011

2011-02-08T10:11:00.002-05:00

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WellAware

Health Policy News from M2

January 21, 2011
WellAware is a weekly update on actionable health policy news for the business and investing community.

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Federal

House Votes to Repeal Health Reform, Begins Setting Agenda for Replacement
After the House voted on January 19 to repeal the health reform law, Senate Majority Leader Reid confirmed expectations that the measure is “unlikely” to be brought to a vote in the Senate. However, following the vote, House Republicans began laying out their agenda for replacing parts of the health law.

The Energy and Commerce Committee announced plans to probe implementation of the reform law by HHS. For example, Committee Republicans asked HHS to provide detailed information on groups requesting and receiving exemptions to any of the reform law requirements.

Link to article

House Democrats, GOP Square Off on Health Reform Costs
While both Republicans and Democrats are focused on the financial impact of the health reform law, there is little agreement beyond that: Republicans say the law will add $701 billion to the deficit in its first 10 years, while Democrats say repealing it will add $230 billion to the deficit.

The bill the House passed this week was called “job-killing” in part based on a Congressional Budget Office (CBO) report that said labor would be reduced by half a percent, translating into 650,000 jobs, say Republicans.

Link to article
Link to CBO letter on repeal bill

HHS Finds Up To 50% of Americans May Have Pre-Existing Conditions
According to an analysis by the U.S. Department of Health and Human Services (HHS), between 50 and 129 million non-elderly Americans (19-50%) have some type of pre-existing health condition. Up to one in five non-elderly Americans with a pre-existing condition – 25 million individuals – is uninsured. Under health reform, starting in 2014, these individuals “cannot be denied coverage, be charged significantly higher premiums, be subjected to an extended waiting period, or have their benefits curtailed by insurance companies,” HHS says.

As many as 82 million Americans with employer-based coverage have a pre-existing condition, ranging from life-threatening illnesses such as cancer to chronic conditions such as diabetes, asthma, or heart disease.

Link to HHS analysis

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State

Arizona Calls Special Session on Medicaid Waiver
State lawmakers held a special one-day session on January 20 to give Gov. Jan Brewer (R) permission to seek a waiver from federal health care regulations. Brewer wants to eliminate 280,000 people from the Arizona Health Care Cost Containment System, effective October 1. According to her office, on an annualized basis, that would save the state about $1 billion a year.

Arizona now provides free care for everyone below the federal poverty level, about $18,300 a year for a family of three. That is more generous than is required by Medicaid which picks up about two-thirds of the cost. Brewer wants to reduce eligibility to be close to the federal minimum.

Link to article

Michigan Gov. Snyder Pledges to Focus on Improvement of Health Care Delivery
Michigan Gov. Rick Snyder (R) has pledged to improve the delivery of health care in the state. The state's new GOP governor promised government initiatives to increase access to health care, incentivize preventive medicine and encourage medical students to eschew lucrative specialties in favor of general medicine.

Snyder pledged to "build a system that encourages all of us" to have an annual physical, lose weight and quit smoking. The statement follows the House vote to repeal health reform, which Republicans in the Michigan delegation supported.

Link to article

California Asks Insurers to Postpone Rate Increases
California Insurance Commissioner Dave Jones, who took office just last week, said on January 18 that he asked Anthem Blue Cross, PacifiCare and Aetna to hold off for 60 days on raising rates. The announcement came after Jones requested that San Francisco’s Blue Shield of California delay increases of as much as 59 percent on some individual policies.

Link to article

Colorado Moving Ahead With Digitizing Medicaid Enrollees’ Health Data
Despite persistent concerns about security risks, Colorado plans to move ahead with a major effort to digitize the health records of Medicaid enrollees. In coming weeks, patients in Colorado will receive letters saying their health care provider is about to join an "information exchange." More than 800 Colorado providers have signed agreements with the state agency sponsoring the exchanges.

Colorado's exchanges will use an "opt out" feature rather than the "opt in" method favored by some privacy advocates. Offices will notify patients, but will assume they will join the exchange unless they sign an opt-out waiver. To satisfy patients, health providers will have to design systems openly and disclose security problems, officials said.

Link to article

Minnesota Could Still Receive $1M Federal Grant for Insurance Exchange
HHS Secretary Sebelius says Minnesota may still receive a $1 million health care grant that former Gov. Tim Pawlenty passed up last fall. Last September, Pawlenty ordered state agencies to stop applying for discretionary federal health care reform grants. That included a planning grant for Minnesota to set up a health insurance exchange, in which consumers can compare and buy insurance plans.

Sebelius is working with the new governor to extend the deadline so as to allow Minnesota to apply for the grant.

Link to article

Physician Shortage Worsens in New York
According to a new report by the Health Association of New York State, access to care in communities across New York is “threatened by growing physician shortages.” HANYS’ members reported a “dramatic increase in the number of departing physicians and severe difficulty in recruiting replacements in 2009. As a result, both emergency and routine services are becoming less available in many of New York’s communities.”

The HANYS’ 2010 Physician Advocacy Survey finds that 1,000 new physicians are needed in the state. A total of 111 member hospitals responded to the survey, for a statewide response rate of 63%.

Most significantly, the report indicates “nearly one-third of all physicians are directly employed by a medical facility or corporation,” according to the American Medical Association, “but others believe this number is much higher, perhaps approaching 50%”.

Link to report

Six States Join Multi-State Legal Challenge Against Health Law
In the Florida-led multi-state lawsuit against the federal health reform law, more than half of states -- a total of 26 – have signed on to the suit. Iowa, Kansas, Maine, Ohio, Wisconsin and Wyoming are asking a Florida judge for the right to join the lawsuit, which was also brought by the National Federation of Independent Business.

Florida U.S. District Judge Roger Vinson is expected to rule later this month as to whether he will grant summary judgment without a trial.

Link to article

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Not in the News...Yet

Disease-Focused Charities Finance Early-Stage Drug Development
Where do drugs come from? Disease-focused charities are stepping up to “restart the engine” of drug development. In the midst of an uncertain healthcare environment and a poor performing healthcare market, these charities are becoming the new financiers of early-stage drug development.

Such groups include the Juvenile Diabetes Research Foundation (JDRF), Multiple Myeloma Research Foundation (MMRF), the Cystic Fibrosis Foundation and the National Multiple Sclerosis Society, CHDI Foundation, Michael J Fox Foundation for Parkinson's Research and The Leukemia & Lymphoma Society. They are now directly investing in or partnering with companies to speed up the development and distribution of new treatments.

Link to article

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Releases of Note

Survey: More Hospitals and Physicians Interested in Federal EHR Incentives
David Blumenthal, MD, the National Coordinator for Health Information Technology, says a new survey by the National Center for Health Statistics shows a reversal of the low interest in EHR adoption in previous years. Blumenthal said four fifths of US hospitals and 41 percent of office based physicians intend to take advantage of federal incentive payments for adoption and meaningful use of certified EHR technology.

Link to release

Medication Errors Spike Among Minnesota Hospitals
Serious medication errors rose sharply in Minnesota hospitals last year, despite the fact that many hospital pharmacies have converted to sophisticated new electronic dispensing systems.

Minnesota's annual report on adverse events -- a public accounting of preventable errors by hospitals -- shows 13 serious medication errors in the year ended last October 6. By comparison, only 14 medication errors were reported in the previous three years combined.

Link to article

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M2 Health Care Consulting
1600 Clarendon Blvd.
Arlington, VA 22209
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WellAware - Health Policy News from M2 Jan 14 2011

2011-01-18T12:06:00.004-05:00

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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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For more information on how M2 can help your business understand health policy, please contact us at 202-684-6859 or info@m2hcc.com.

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

Why Health Reform is Nothing like the Chilean Mine Rescue Effort

2010-10-15T14:27:00.001-04:00

As the world watches the rescue of 33 miners trapped underground for more than two months in Chile, I couldn’t help but think of how different the effort has been from the passage and implementation of health reform in the U.S.

Leadership, then cooperation
The President of Chile, Sebastian Pinera, has made the rescue a top priority. No doubt, numerous case studies will be written in the coming years highlighting both his successes and failures as he dealt with the crisis. But as it looks right now, President Pinera got in front of the issue immediately and he did something we rarely see in politics today: he led! He made a decision to save the miners, which made planning a much easier task because everyone understood what they were trying to accomplish. The list of cooperative efforts is truly staggering - between other countries, public and private entities and different types of experts. The cooperation flowed from the strong leadership, it didn’t magically appear on its own. President Barack Obama’s strategy for health reform was not to direct the effort, but to delegate to Congress. Cooperation was not forthcoming, as we all know.

Putting practical considerations before expert opinions
NASA and the Chilean Navy worked together to create the rescue capsule. Why them? Because they had the practical experience necessary to do something that’s never been done before. Practical experience trumped expert opinions. When I say expert I mean an authority, not just someone with specialized knowledge. Does NASA or the Chilean Navy know more about mines than local engineers? Not a chance. However, they do know what it takes to build specialized containers that move through difficult terrain that can also hold humans safely. Practically speaking, the effort needed drills and drill bits, drilling rigs and steel pipe and vital signs monitors. President Pinera needed to know how to rescue the miners, not how he should rescue them. Health reform on the other hand, has been built by policy experts, not by patients certainly, and not by families and friends who help patients navigate the system.

Effective use of public relations
Live video and sound feeds, both below and above ground. The prominent placement of the Chilean flag in front of the flywheel apparatus that cameras all over the world are focused on. When the cameras pan, you also see the friends and family of the miners and rescue workers, the logos of companies who helped, and the flags of countries who donated supplies and technical expertise. The message is loud and clear. We are Chile. We are taking care of our own. We take pride in leading a truly cooperative effort. The Obama administration has said repeatedly they have a communication problem when it comes to health reform. Their communication approach matches their health reform policy: we gave a little bit to everyone. No one loses, but no one wins.

Utmost focus on the goal
Bringing the miners above ground, alive, and as healthy mentally and physically as possible, has been the utmost goal over the past 69 days. Seems simple really, but Chile could have focused on who was responsible for getting the miners trapped in the first place, or on who should pay, or on which agency should be permitted to perform which part of the rescue effort, but they didn’t. They focused on the goal. In the U.S., health reform changes who is responsible and who is allowed to do what. Maybe if the policy had the utmost goal of helping patients instead, the entire U.S., and maybe the world, would be cheering as they are for the Chilean rescue effort.

Federal Government Promotes Universal EHR Adoption

2010-07-15T14:09:00.011-04:00

This week, the President announced a government push to computerize all of America’s medical records within the next five years. The measure is expected to cut rising U.S. health care costs and improve patient care.

To promote electronic health records (EHR), the federal government intends to help lower the one of the biggest barriers to adoption by providers—cost. Beginning in 2011, as part of the American Reinvestment and Recovery Act (ARRA), providers are eligible to receive federal funds to establish electronic systems. Federal incentive payments for doctors and hospitals to buy EHR systems could reach tens of billions over 10 years; however, the federal government also anticipates significant savings.

On July 13, HHS announced two regulations providers must meet to qualify for incentive payments from ARRA. The regulations define “meaningful use” requirements and identify technical capacities required by certified EHR technology. Providers must meet meaningful use requirements to qualify for incentive payments from ARRA. Federal officials tried to address provider complaints that the initial draft of the rule asked them to do too much, too fast. Under the rules, eligible professionals may receive as much as $44,000 under Medicare and $63,750 under Medicaid. If providers do not comply with the new rule by 2015, they may face cuts in Medicare payments.

Previously awarded ARRA grant funding has laid the foundation for EHR adoption. One such grant gives states funding to operate Regional Extension Centers (RECs). The primary purpose of RECs is to assist providers in achieving meaningful use of EHR. With federal funding available to jumpstart the use of EHR systems, RECs will play a pivotal role in establishing and elevating use of EHR within the states.

Federal funding, HHS guidance, and the establishment of RECs play an important role in the adoption of EHR among providers. States should also lay a policy foundation that reinforces the federal drive toward universal adoption of EHR.

Expanded Medicaid Coverage and the Cost of Health Reform; State-By-State

2010-07-12T13:49:00.002-04:00

The Patient Protection and Affordable Care Act (ACA) will expand Medicaid to millions of adults under the age of 65 that are below 133% of the Federal Poverty Level (FPL). The impact of ACA will vary significantly by state since each state has different Medicaid eligibility levels and the numbers of uninsured. While the Congressional Budget Office (CBO) has provided estimates on the national impacts of health reform, it has stopped short of providing state-by-state estimates.

A recent analysis performed by the Urban Institute for the Kaiser Commission on Medicaid and the Uninsured aims to fill this gap. The report illustrates the number of new Medicaid enrollees and costs for all 50 states, as well as the impact on the uninsured.

In general, the analysis found:
• Medicaid expansions will significantly increase coverage and reduce the number of uninsured
• The federal government will pay a very high share of new Medicaid costs in all states
• Increases in state spending are small compared to increases in coverage and federal revenues and relative to what states would have spent if reform had not been enacted

While the impact of reform varies by state, generally states with low coverage levels and high uninsured rates will see the largest increases in coverage and federal funding.

To read the report, visit: http://www.kff.org/healthreform/8076.cfm

Health Plan Benefits and Costs - Draft outlines

2010-07-09T10:40:00.000-04:00

The National Association of Insurance Commissioners (NAIC) is working hard on all sorts of draft regulations for the Patient Protection and Affordable Care Act, including creating the form health plans will have to use to communicate with consumers about benefits and costs of insurance plans. Today, Politico published four draft versions of what the simple information templates might look like. Regulations are due March 2011, and insurers must use the new forms starting in March 2012.

Kudos Politico for the advance!

"25 Benefits Questions"

Plan Cost and Coverage front

Plan Cost and Coverage back

From Oregon

Jobs Bill Fails; States Face Increased Financial Burden

2010-06-28T12:44:00.008-04:00

Last Thursday, the Senate failed to pass the most recent version of the “jobs” bill. The bill included a provision to extend the enhanced Federal Medicaid Assistance Percentage (FMAP) matching rate.

Enhanced FMAP, which originated from the American Reinvestment and Recovery Act (ARRA), provides additional federal funding to support state Medicaid programs. The additional funding was provided in order to offset the decline in state revenues resulting from the recession. The recently failed legislation would have extended FMAP for additional six months; FMAP is scheduled to expire on December 31, 2010.

Without federal support, states face an increased financial burden that many are ill equipped to handle. The majority of states continue to suffer from reduced revenues and increased demand for social services due to the recession. Now, many are likely to make considerable spending cuts in order to increase their proportion of Medicaid funding. States would have received nearly $15 billion in federal funding had the bill passed.

The table below shows the estimated benefits that states would have received under a six-month extension of federal assistance in the failed jobs bill:

How will struggling states compensate for the lost funding while maintaining access to care for their Medicaid patients?

Temporary EHR Certification - Rule Out Today

2010-06-18T15:24:00.002-04:00

Today, the Office of the National Coordinator for Health Information Technology (ONC) released a rule establishing a temporary electronic health records certification program.

The certification program provides organizations a way to test and certify their electronic health record technology (EHR). Use of certified EHR technology is a core requirement for providers looking to become “meaningful users” of EHR and, thus, eligible for payments under Medicare and Medicaid EHR incentive programs established by the HITECH Act.

All organizations can apply for EHR certification, and to get certification, everyone will have to apply. The rule does not grant “grandfather” status to existing EHRs that are certified by the Certification Commission for Health Information Technology (CCHIT).

To read the regulation, visit: Temporary Certification Program Final Rule

New Rules on Grandfathered Plans - How Many Are Left Standing?

2010-06-17T10:42:00.006-04:00

This week, the Departments of Health and Human Services, Labor and Treasury released much awaited regulations relating to “grandfathered” health plans. Grandfathered health plans are those existing as of March 23, 2010; they are exempt from some of the mandates imposed on insurance plans under the Patient Protection and Affordable Care Act.

The newly issued regulations outline how changes to covered benefits, cost-sharing requirements, or other plan features would influence grandfathered status. There has been considerable speculation as to the number of plans that will be forced to relinquish grandfathered status as a result of the regulations. The charts below provide insight on this issue:

Read the regulations here: Interim Final Regulations on Grandfathered Plans

Latest M2HCC White Paper Highlights Disparities in Care for Women with Chronic Pain Conditions

2010-05-19T15:41:00.003-04:00

A white paper released this week by M2 Health Care Consulting and a collaboration of stakeholders illuminates the many barriers and issues faced by women with chronic pain conditions as they navigate the health care system. The report, “Chronic Pain in Women: Neglect, Dismissal and Discrimination” also offers policy makers recommendations to improve policy on women’s pain and care.

As many as 50 million American women live with one of more chronic pain conditions; most, receive little help from the health care system. Not only do women’s pain conditions exact a heavy personal toll on millions of women, they also produce a staggering financial burden. The report, which focuses on six chronic pain conditions: chronic fatigue syndrome, fibromyalgia, interstitial cystitis, temporomandibular joint (TMJ) disorders, and vulvodynia, estimates the financial burden of these conditions could add as much as $80 billion annually in health care costs to the system.

Evidence shows there are considerable disparities within the health care system as it pertains to women’s chronic pain conditions. Discrepancies include lack of research, evidence-based treatments, and education of medical professionals on women's pain conditions, among others as compared to other conditions.

To address these disparities, the report outlines recommendations for change in the health care system. The paper provides a detailed set of policy solutions designed to improve care and lower costs for the millions of American women in pain. One question is left unanswered--when will reform come for these women? Equity demands no less.

"Chronic Pain in Women: Neglect, Dismissal and Discrimination" can be found at: http://m2hcc.com/HealthCareOurFaultBook.aspx#WhitePapers

States Show Mixed Feelings for High-Risk Pool Program

2010-05-03T16:08:00.001-04:00

Friday April 30 was the deadline for states to tell the Department of Health and Human Services (HHS) whether they will choose to administer new high-risk insurance pools in their state. The high-risk pool program was created under the Patient Protection and Affordable Care Act (PPACA); more than 30 states already operate high-risk pools.

States have several options under the new law, they can: 1) establish a new high-risk pool, if the state does not presently have one, 2) operate a new HHS-funded pool alongside a current one, or 3) build on existing state programs that were designed to cover high-risk patients. States can also choose to do nothing, in which case, HHS would run a federal high-risk pool program in that state.

As of Monday May 3, 28 states have announced their participation in the program. An additional 18 states have said they would not set up their own pools. Several of these states’ governors expressed opposition to health reform legislation, as well. Others have expressed concern that—despite $5 billion provided by the federal government to run the pools—the cost of participation may be too high to afford. Among those declining a part the program are the following: Georgia, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, Tennessee, and Wyoming. HHS will step-in to run pools in their state.

Four states—Utah, Oregon, Arizona and West Virginia—have not yet declared their participation. Both Oregon and Utah have sought additional information before making their decision.

The pools are intended as a short-term solution to provide insurance for people with pre-existing conditions that have been turned down for coverage by insurers. The state programs will be in place until 2014; thereafter, health insurance companies can no longer deny coverage to people with pre-existing conditions or poor health.

Funds will be allocated based on each state's population and costs. To receive funding, the new state pools will have to meet certain requirements: Eligible patients must be U.S. citizens or legal residents and have been uninsured for at least six months; the coverage offered must have an out-of-pocket limit no greater than $5,950 for an individual; and, of course, there can be no preexisting condition exclusions.

The majority of states that responded chose to participate in the high-risk pool program, but several have yet to respond for a variety of reasons. How does state participation in the first steps of the reform process predict the road ahead?

First Test of State’s Implementation of PPACA: High Risk Pools - Part 1

2010-04-22T11:44:00.001-04:00

The new health reform law, the Patient Protection and Affordable Care Act (PPACA) requires the creation of a temporary national high-risk pool to provide coverage to Americans who have been unable to obtain health insurance due to pre-existing conditions. The new national pool will provide coverage to the uninsured until further provisions in the law extending coverage to individuals with pre-existing conditions are implemented in 2014. PPACA directs HHS to create the new high-risk pool by July of 2010.

Participation in the new high-risk program is optional and Secretary Sebelius has outlined states’ options for participating in the program. States may either:

1. Operate a new high risk pool alongside a current state high risk pool;
2. Establish a new high risk pool (in a state that does not currently have a high risk pool);
3. Build upon other existing coverage programs designed to cover high risk individuals;
4. Contract with a current HIPAA-designated insurance carrier of last resort or other carrier, to provide subsidized coverage for the eligible population; or
5. Do nothing, in which case HHS would carry out a coverage program in the state.

Currently, 35 states have high-risk insurance programs (see map below for details). Typically, these pools extend “coverage of last resort” to the uninsurable, HIPPA specified federally-eligible individuals, and individuals eligible for the Health Coverage Tax Credit. In 2008, the total national enrollment in state high-risk pools was 200,358, which is about 2 percent of the individual market enrollment but is 25 percent of the adverse underwriting rate.[1]

Broadly speaking, the new high-risk pool will operate under the following guidelines:

U.S. citizens and legal immigrants with a pre-existing medical condition who have been uninsured for at least six months will be eligible to enroll and receive subsidized premiums.
Premiums will be established for a standard population.
Maximum cost-sharing will be limited to the current law HSA limit.
The law appropriates $5 billion to finance the program.
The new pools are to be administered directly by a state or nonprofit entity under contract. States may not reduce their current high risk pool efforts.

In January, Kaiser Family Foundation issued a brief on the “Issues for Structuring Interim High-Risk Pools”. The paper examines issues concerning premiums vs. covered benefits in the national pool, subsidies for low income individuals, cost sharing, and consumer protections.

The brief also expresses concern over the immediacy of the implementation of the national program. States have been urged to be “shovel ready”. It may be more difficult for states that do not already have an existing high-risk program to adopt these changes and Kaiser outlines alternative options for coverage expansion to the uninsured. More to come in Part 2.

For more information, see NCSL report on coverage of high-risk individuals. http://www.ncsl.org/default.aspx?tabid=14509 And Kaiser brief on interim high-risk pools http://www.kff.org/healthreform/8040.cfm.

[1] National Conference of State Legislatures. Coverage of High-risk Individuals: State & Federal High Risk Pools. 20April2010. http://www.ncsl.org/Default.aspx?TabId=14329.

Medical Loss Ratio (MLR): Who wins, who loses, who needs to change?

2010-04-15T16:10:00.003-04:00

According to a report released by the Senate Commerce Committee today, most insurers spend less revenue from health insurance premiums on medical care for their consumers than will be required under new provisions in the Patient Protection and Affordable Care Act (PPACA).

Under the new requirement, insurers may need to adjust their spending to meet new requirements for medical loss ratios (MLRs). The law specifies that large group plans must spend 85 percent of premiums (or 85 cents of each premium dollar) on actual medical care as opposed to administrative and other expenses; individual and small group plans must spend 80 percent or premiums (or 80 cents of each premium dollar) on care.

The report has been in the works since August 2009, when the Senate Commerce Committee began investigating how commercial insurance companies spend the money paid in health care premiums by American consumers.

Analysis of 2008 and 2009 industry MLRs found the largest for-profit insurers spent a lower percentage of their customers’ premium dollars on patient care than other health insurers. The analysis also found that in the individual and small group markets, health insurers spent a significantly smaller portion of each premium dollar on medical care than they did in the large group market (see tables below).

Insurance companies and industry analysts have begun to recognize the impact PPACA will have on their bottom-line and, as a result, some companies have begun to look at their accounting practices.

At least one company, WellPoint, has “reclassified” more than half a billion dollars of administrative expenses as medical expenses, according to the report. The change in accounting practices have produced MLRs for many WellPoint subsidiaries that already exceed the minimum MLRs required by PPACA (see tables below).

While individual insurers currently decide what categories to include in the MLR, PPACA requires that all companies classify medical costs the same way beginning in 2011. What will be included under the MLR formula is in the process of being developed by the Department of Health and Human Services and the National Association of Insurance Commissioners (NAIC). The devil will be in the details.

For the full-text of the report, visit: http://commerce.senate.gov/public/?a=Files.Serve&File_id=d20644bc-6ed2-4d5a-8062-138025b998ef

Multi-State Coalition Calls for Changes to Meaningful Use Criteria

2010-04-13T11:04:00.001-04:00

A coalition comprised of 13 state health information exchanges (HIEs) has issued a letter to the Centers for Medicare and Medicaid Services (CMS) calling for changes to recently issued meaningful use criteria. The Coalition was established to facilitate dialogue among state health IT leaders and coordinate comments and feedback to CMS.

In the letter, the state HIE coalition called for federal officials to consider those providers already participating in a qualified HIE network as meeting meaningful use criteria. Making this change, the coalition argues, will foster participation in existing HIE networks. The adjustment in criteria would allow providers to take advantage of HIE services already being developed such as electronic prescribing and electronic health records.

The coalition also recommended applying state-specific meaningful use objectives that providers and hospitals would need to meet to receive full incentive payments under Medicaid.

Members of the state HIE coalition include: California, Colorado, Delaware, Maine, Maryland, Michigan, Missouri, Nebraska, New York, Rhode Island, Tennessee, Texas and Vermont.

The letter follows on the tails of a recent Health Affairs article that reports that less than 20 percent of physicians have basic electronic health record systems. The report advocated that assistance from health information exchange entities, among other interventions, could encourage provider involvement in nation-wide HIT efforts.

For more information on the 13 state coalition visit: http://www.healthdatamanagement.com/news/hie-meaningful-use-comment-states-40085-1.html

In the 50 States, 50 Different Fiscal Scenarios Under Health Reform

2010-04-08T12:03:00.007-04:00

Across the country, state lawmakers and health care leaders alike are hurriedly attempting to iron out the details of health reform. Foremost on their minds is what reform means for their health systems, citizens—and for many—their already overburdened budgets.

One thing that is clear, right now, is that the law will play out in 50 different ways. One major example is Medicaid. Health reform expands already established Medicaid programs within each state. States will be required to set their Medicaid eligibility level at 133% of the federal poverty level (FPL) for everyone, including childless adults and parents.

For some states, the expansion means a doubling of Medicaid rolls, especially for those states with eligibility levels below the new threshold. These states will see the entire expansion paid for by the federal government from 2014 to 2016, although that aid will taper off to a 10 percent share by 2020.

States that have had Medicaid programs that were previously accepting childless adults or already allowed participation at or above 133% FPL, called “expansion states”, will see the entire expansion paid for by the federal government from 2014 to 2016, will receive a smaller amount of federal funding.

According to the Congressional Budget Office (CBO), augmentation of state Medicaid programs to cover newly eligible enrollees will cost the states $20 billion while it will cost the federal government hundreds of billions. Still, some states insist the CBO is mistaken.

Some elected officials are calling health reform “an unfunded mandate", contending that the law will stress already delicate state fiscal affairs.

Much of criticism of the reform as an unfunded mandate originates from those states that are likely to see the largest expansion of their Medicaid programs. The most striking estimates come from Texas and Arizona, who will see an increase in their Medicaid population by 88.6% and 53.79%, respectively, if every currently uninsured person below 133% FPL enrolls. According to Texas and Arizona, the augmentation of their Medicaid population comes with a remarkably high price tag. Texas estimates expansion will cost them $27 billion; Arizona estimates it will cost them upwards of $12 billion. Nevada, Florida, Michigan, South Carolina, Illinois, and Utah have estimated their Medicaid expansion costs to reach in the hundreds of millions (See stats below).

Reactions among lawmakers to the numbers are mixed. Some insist the estimates are inflated, while others stand by the estimates. It may be too soon to tell.

For more information see http://www.stateline.org/live/details/story?contentId=475804

NEWLY ELIGIBLE FOR MEDICAID

By 2014, Medicaid will be available to anyone whose income is less than 133 percent of the poverty level, increasing rolls nationwide by 52.40 percent. Below is the expected increase for each state if every currently uninsured person below 133 percent of poverty enrolled.

Nevada	106.77%
Texas	88.60%
Florida	87.75%
Georgia	77.95%
Colorado	77.31%
New Jersey	71.55%
Virginia	70.40%
Oregon	69.86%
New Mexico	66.73%
Idaho	65.87%
Louisiana	62.01%
South Carolina	61.47%
Utah	60.96%
North Carolina	58.75%
Alaska	57.58%
Nebraska	57.10%
Maryland	56.46%
Wyoming	55.28%
California	54.54%
Kansas	54.48%
Arizona	53.79%
North Dakota	52.59%
Oklahoma	52.56%
United States	52.40%
Mississippi	52.38%
Montana	51.80%
South Dakota	51.26%
Kentucky	51.15%
Illinois	50.87%
New Hampshire	48.86%
Arkansas	48.67%
Ohio	47.78%
Missouri	46.67%
Tennessee	45.08%
Alabama	44.15%
Indiana	43.95%
West Virginia	42.80%
Michigan	41.24%
Delaware	38.97%
Washington	37.66%
Iowa	37.16%
Connecticut	34.60%
Pennsylvania	33.89%
Rhode Island	33.62%
Wisconsin	31.85%
Minnesota	31.34%
New York	30.72%
Hawaii	27.79%
District of Columbia	21.73%
Vermont	18.04%
Maine	17.74%
Massachusetts	12.73%

Source:The Henry J. Kaiser Family Foundation's State Health Facts.org

Some States Win, Some Lose as a Result of Healthcare Reform

2010-03-29T12:37:00.004-04:00

Last week, several states breathed a sigh of relief when the fixes to the Patient Protection and Affordable Care Act (PPACA) were passed. The comparatively short “fix-it” bill that followed the 2,000-plus page health reform bill meant significant savings for states that had already expanded their Medicaid programs to cover childless adults. Since these “expansion” states are already paying for a provision mandated by PPACA, the fixes specify that the federal government will take on much of the financial burden that these states are already bearing. Prior to the fixes, PPACA left these states holding the debt for their forward-thinking Medicaid improvements.

States that cover childless adults do receive some reimbursement from the federal government. Now, the federal reimbursement to those states is set to increase. States have not yet expanded Medicaid to cover childless adults will receive 100 percent federal reimbursement in the beginning, but over time will have to begin to cover the costs of Medicaid expansion.

There are clear winners and losers following the passage of the fixes bill. Though the Medicaid expenses of some states will grow in the long-run, those states that pioneered with early expansion of Medicaid to cover childless adults will see their expenses decline.

In total, 22 states will pay less as a result of the fixes, while 28 states will have to contribute more. The chart below provides a schematic of the winners and losers of the changes.

2010-03-26T17:32:00.001-04:00

Update: States Debate Whether to Sue

The choice of whether or not to sue over federal reform has become a swelling partisan issue. This has forced some states to grapple with opposing interests between state governors and their own attorneys general, in states where they belong to separate parties.

Fourteen states have now brought forth lawsuits; all except one has a Republican attorney general. These states contend that the newly passed health care reform law is a violation of the 10th Amendment of the constitution.

Some states refuse to join the lawsuit, insisting that whether or not they join, the lawsuit will be considered in federal court.

To read more about this topic, visit: http://www.stateline.org/live/details/story?contentId=472539

States Sue Feds Over Health Reform Mandates

2010-03-25T12:14:00.002-04:00

Just seven minutes after President Obama signed the health care reform bill into law Tuesday, Attorneys general from 13 states filed suit against the federal government over the constitutionality of the bill.

Florida Attorney General Bill McCollum, who lead the suit, was joined by Attorneys General from: South Carolina, Nebraska, Texas, Michigan, Utah, Pennsylvania, Alabama, South Dakota, Idaho, Washington, Colorado and Louisiana.

According the lawsuit, the Constitution does not authorize the United States to mandate that citizens have qualifying health care coverage. The lawsuit contends that the bill violates the Commerce Clause of the 10th Amendment by mandating that individuals purchase health insurance and by requiring states to operate insurance exchanges.

Legal experts have been quoted saying there is little chance of the lawsuit succeeding, citing the Supremacy Clause of the Constitution under which federal laws trump state laws.

Though some states are considering separate lawsuits, more may join the aforementioned 13 states.

Meanwhile, other states are finding other ways to preempt the overhaul, including passing legislation to prevent an insurance mandate. See our blog post “Health Reform Revival Coming Up? Some States Want No Part of It...” from February 19, 2010.

Changes to Medicaid in the House Reconciliation Bill

2010-03-19T16:49:00.000-04:00

In hopes of passing sweeping health care reform this weekend, House Democrats have made several changes to the Senate-passed health care bill in order to expand support for the bill. Among them, several changes have been made to Medicaid provisions. The House reconciliation bill:

• Provides full federal funding to all states for newly eligible Medicaid recipients for three years.

• Gives additional funding to states like Vermont and Maine that have already moved to cover childless adults, which isn't currently required under the Medicaid program.

• Lowers the reduction in federal Medicaid Disproportionate Share Hospital payments.
DSH will be reduced by $4 billon over a ten year period, beginning in 2014.

• Increases Medicaid payments to primary care physicians (internists, family physicians, and pediatricians). Medicaid payments starting in 2013 and 2014 would reflect Medicare rates, which run around 20% higher than Medicaid.

• Removes a specification known as the "Cornhusker kickback". The provision would have exempted Nebraska from paying any cost of a Medicaid expansion included in the bill.

Strength in Numbers: Health Care Leaders Comment on Meaningful Use

2010-03-19T12:07:00.000-04:00

When the HITECH Act was passed as part of the American Reinvestment and Recovery Act last year, doctors, hospitals, and health care organizations waited in anticipation for the announcement of the “meaningful use” requirements. Now that the meaningful use requirements have been published, anticipation has faded to anxiety and the Department of Health and Human Services (HHS) committee that published the rules has gone back to the drawing board.

In response, health care leaders from 56 organizations have filed a joint public comment suggesting program priorities to the HHS. The Markle Foundation, the Center for American Progress, and the Engelberg Center for Health Care Reform at Brookings coordinated the collaborative comments on the meaningful use requisites. Among their recommendations, the groups urged HHS to make a set of health improvement goals including improving medication management, reducing readmissions to hospitals, patient safety, and disparity reduction.

The letter also emphasized that the health IT program should:
· Encourage the participation of providers by prioritizing the requirements necessary to receive incentive payments,
· Make certain that providers report only summary statistics to HHS avoiding identifiable patient information,
· Provide the practice information in return to analyze their own practices, and
· Enhance the ability for patients to obtain electronic copies of their health information.

For full comments, please visit: http://www.markle.org/downloadable_assts/20100315_ehrincent_cms0033p.pdf

ARRA: Keeping Medicaid Afloat Despite Inclement Economic Conditions

2010-03-11T14:54:00.007-05:00

The enhanced Medicaid match provided under the American Recovery and Reinvestment Act (ARRA) gave support to state Medicaid programs in the face of budget shortfalls and growing enrollment. The match is set to expire on December 31, 2010, cut off inconveniently in the middle of most states’ fiscal year.

However, it appears the tide of funding may rise again. On March 1st, Senator Baucus of Montana introduced a substitute amendment of H.R. 4213—The Tax Extenders Act of 2009, creating a second "Jobs" bill entitled the American Workers, State, and Business Relief Act of 2010. The bill would extend funding for a period of six additional months, providing an additional $21 billion in enhanced Medicaid matching funds.

Yesterday, the senate passed the bill by a vote of 62-36 and it will now move to the house for consideration.

Passage of the bill is necessary to keep many states’ Medicaid programs from enduring additional funding cuts come January 1, 2011. In 19 states, the governors have already included the extension of the Medicaid enhanced matching rate in their recommended budgets (see map).

Alas, flailing economic conditions and budget shortfalls will not end on June 1, 2010, but the funding will. Will state Medicaid programs have the bearings to stay on course?

Surprise (not!) States Raise Taxes to Meet Shortfalls

2010-03-10T15:05:00.000-05:00

33 states raised taxes in 2008 and 2009 in order to address a nationwide shortfall of $87 billion according to the Center on Budget and Policy Priorities. California raised taxes on people in every tax bracket - the only state to do so. For the full report see CBPP - State Tax Changes March 2009

Obama Health Summit Watch: Think About Medicaid

2010-02-25T10:04:00.000-05:00

The President's health reform proposal largely follows the Senate passed bill. Whether he gets all of what he wants or just some of it, Medicaid will be an obvious place to build in order to increase coverage, but with a relatively low price tag.

When watching the televised Summit, and in analysis afterwards, think about this. 10 states spend more than 25% of their state budgets on Medicaid. Funds will have to flow from the Feds to the states - as outlined in the Administration's FY2010 budget proposal to help lighten this burden. Still, how much will be enough?

Health Reform Revival Coming Up? Some States Want No Part of It...

2010-02-19T17:49:00.000-05:00

In response to federal health reform efforts that would require individuals to purchase health insurance, participate in a public option or health exchange and various other approaches considered to be forcing DC on the states, The American Legislative Exchange Council wrote a model bill called the Freedom of Choice in Health Care Act that “protects the rights of patients to pay directly for medical services, and it prohibits penalties levied on patients for declining participation in a particular health plan”.

The Freedom of Choice in Health Care Act, has been, or will be introduced in 31 states.

Lawmakers in 4 states have publicly announced their intentions to file the legislation. A citizen-led initiative has also been announced in Colorado. Legislation is anticipated from these five states in 2010.

Arizona’s HCR 2014, a revised version of the ALEC model, will be put on the ballot in 2010.

For more information, see American Legislative Executive Council, ALEC’s Freedom of Choice in Health Care Act, How Your State Can Protect Patient Rights. Available at: http://www.alec.org/AM/Template.cfm?Section=ALEC_s_Freedom_of_Choice_in_Health_Care_Act

Graphic of the Week - February 12, 2010

2010-02-12T16:20:00.001-05:00

According to the Pew Center on the States, State of the States 2010, one of two states with no budget deficit in 2009 - North Dakota - received the most stimulus funds per capita (>$1,000). Two states that were in particularly bad shape, Florida and Nevada received the lowest amounts per head (<$400). in 2009, about 20% of the total state stimulus amount available to the states was paid out - $52.9 billion,