CONSISTENTLY DELIVERS

Sep 21, 2012

Weekly Washington Healthcare Update

This Week:

1. Congress

House of Representatives

Senate

  • N/A

2. Administration

Health and Human Services (HHS)

3. State Activities

4. Regulations Open for Comment

5. Reports

General Accountability Office (GAO)

Congressional Budget Office (CBO)

Agency for Healthcare Research and Quality (AHRQ)

Center for American Progress

American Academy of Family Physicians (AAFP)

Robert Wood Johnson Foundation and the Trust for America's Health

Medicaid and CHIP Payment Access Commission (MACPAC)

Bipartisan Policy Committee (BPC)


1. Congress

House of Representatives

Energy and Commerce Reports Health Insurance Broker, Medicare Secondary Payer Bills

The Energy and Commerce Committee considered both legislation with broad support as well as a more controversial bill that rekindled debate tied to the ACA. The latter bill, H.R. 1206, the Access to Professional Health Insurance Advisors Act of 2011, would exclude commissions paid to independent insurance brokers and agents from the calculation of the Medical Loss Ratio (MLR). Republicans claim the MLR, enacted as part of the ACA, is costing jobs in the insurance industry. While Democrats largely support the MLR provision as a consumer protection mechanism, Rep. Barrow (D-GA), a co-sponsor of a bill, was the only Democrat on the panel who voted to advance the bill for full House consideration. The committee approved the bill on a 26-14 vote. The other bill reported, H.R.1063, the Strengthening Medicare and Repaying Taxpayers (SMART) Act, would create efficiencies in the Medicare Secondary Payer program to speed up the process of returning money to the Medicare Trust Fund while reducing costly legal barriers for both large and small employers. The markup can be viewed online.
 

Ways and Means Health Subcommittee Examines Medicare Advantage Program

House Ways and Means Health Subcommittee Chairman Herger (R-CA) will hold a hearing on Friday to explore the current status of the MA program, including Special Needs Plans (SNPs) and Medicare Cost Plans. In noticing the hearing, Chairman Herger stated:

"More than one in four Medicare beneficiaries have chosen to receive their Medicare benefits through a private Medicare plan. Since 2003, enrollment in the Medicare Advantage program has tripled, which is a clear indication that many beneficiaries enjoy the additional benefits that are often provided by these private health plans. Unfortunately, the Democrats' health law slashed payments to the Medicare Advantage program by more than $300 billion over the next 10 years to fund ObamaCare. These cuts will significantly alter the program and jeopardize seniors' access to the health plans they rely on. Understanding the successful structure of the current MA program, and the challenges the program will face because of the Democrats' health law, is key to ensuring Medicare meets the needs of seniors now and into the future."

Witness List:

James Cosgrove
Director, Health Care, U.S. Government Accountability Office

James Capretta
Fellow, Ethics and Public Policy Center

Karen Ignagni
President and Chief Executive Officer, America's Health Insurance Plans

Tim Schwab, M.D.
Chief Medical Officer, SCAN Health Plan

John Tallent
Chief Executive Officer, Medical Associates Clinic & Health Plans

Marsha Gold
Senior Fellow, Mathematica Policy Research

A summary of the hearing will be available in next week's Weekly Washington Health Care Newsletter.

Senate

N/A

2. Administration

HHS

Medicare Advantage (MA) Plan Enrollment, Premiums Increase

On Wednesday, HHS Secretary Kathleen Sebelius announced that enrollment in the MA program is projected to increase by 11 percent in the next year. In addition, the average MA premium in 2013 is projected to increase by $1.47 from last year, coming to $32.59. However, if beneficiaries choose lower-cost plans at the same rate in 2013 as they did in 2012, the average premium is expected to increase by $0.57. Additionally, the number of plan choices will increase by 7 percent in 2013, resulting in 99.6 percent of Medicare beneficiaries having access to a plan. While the Administration cited the statistics as undermining Republican accusations that the ACA would significantly reduce MA enrollment, Senate Finance Committee Republicans pointed out that only 4 percent of the savings the ACA is supposed to derive from the MA program have taken effect, and that the GAO has questioned the legality of an $8 billion program to boost payments to MA plans that win high quality marks from CMS.

3. State Activities

Oklahoma Updates Health Insurance Exchange Lawsuit

Continuing an approach that has become a headline criticism of the ACA, Oklahoma Attorney General Scott Pruitt this week filed suit against the IRS over a controversial ruling the agency made in May declaring that health insurance subsidies would be available to all individuals purchasing insurance through exchanges, whether the exchange is operated by the state or the federal government. Citing text of the law, Pruitt and other ACA opponents believe that an exchange run by the federal government is not authorized to convey the tax subsidies, or "affordability credits"  to individuals purchasing insurance. Moreover, the suit contends that the employer mandate penalty, which is triggered when an employee receives a subsidy through the exchange, is not valid in states where the health insurance exchange is run by the feds.

New York's Medicaid Reforms

With the nation's most costly Medicaid program, New York is hoping changes recently implemented to cap expenses will generate substantial savings for both the state and the federal government. Currently, the state roughly splits the $54 billion per year cost of the program, but under a provision included as part of the state budget signed into law last year, a cap of almost $16 billion has been placed on what the state can spend on Medicaid. Since the cap on state spending also translates into reduced federal spending on the program, NY state officials have asked that $10 billion of the expected five-year, $17 billion federal savings be given back to the state in order to modernize hospitals and clinics serving the poor and to expand primary and preventive care. The state's plan is available online.

4. Regulations Open for Comment

HHS Releases Electronic Funds Transfer (EFT) Rule

HHS released an interim final rule with comment period offering guidance on the operation of electronic health care transactions under HIPAA. The rule implements portions of Sec. 1104 of the Affordable Care Act (ACA), and it is expected to save $9 billion over the next 10 years "by reducing inefficient manual administrative processes for physician practices, hospitals, and health plans,"  HHS said. Comments on the rule, are due Oct. 9.

FDA Proposes Unique Device Identifier (UDI) Rule

The FDA will accept comments on the proposed rule to implement a Unique Device Identifier system for medical devices distributed in the United States. Comments on the proposed rule will be accepted either electronically or written until Nov. 7, 2012.

5. Reports

General Accountability Office (GAO)

Medicaid: States' Use of Managed Care

This week, GAO released a report reviewing the national landscape of Medicaid managed care following a request from Sen. Rockefeller (D-W.Va.) and Rep. Waxman (D-Calif.), the top Democrat on the House Energy and Commerce Committee. However, Medicaid Health Plans of America says that the Medicaid managed care market has "changed significantly"  since data was gathered for the GAO report. "Many more states have started or expanded managed care programs using [managed care organizations], or have immediate plans to do so, including Louisiana, Kentucky, New Hampshire, Florida, South Carolina, Georgia, Illinois,"  said MHPA President and CEO Thomas Johnson in a statement. Those states include some of the fiercest ACA opponents, who have pledged not to take the law's Medicaid expansion. But if they decide to reverse course, Johnson says his industry is ready to step in and "help [states] reduce their costs and provide high quality care."  

CMS Should Improve Information Available about Dual-Eligible Plans' Performance

About 9 million of Medicare's more than 48 million beneficiaries are also eligible for Medicaid because they meet income and other criteria. These dual-eligible beneficiaries have greater health care challenges than other Medicare beneficiaries, increasing their need for care coordination across the two programs. Moreover, about 9 percent of the dual-eligible population is enrolled in 322 Medicare dual-eligible special needs plans (D-SNP), a type of Medicare Advantage (MA) plan. All dual-eligible beneficiaries are low income, but those in D-SNPs tended to have somewhat different demographic characteristics relative to those dual-eligible beneficiaries in other MA plans. For the report, GAO analyzed the characteristics of dual-eligible beneficiaries in D-SNPs and other MA plans, reviewed differences in specialized services between D-SNPs and other MA plans, and reviewed how D-SNPs work with state Medicaid agencies to enhance benefit integration and care coordination. In its findings, GAO recommended, among other things, that in order to increase D-SNPs' accountability and ensure that CMS has the information it needs, CMS should require D-SNPs to state explicitly the extent of services they expect to provide and to collect and report to CMS standard performance and outcome measures to be outlined in their models of care. To read the full report, please visit the GAO website.

VA Budget Justifications Need Better Labeling, More Detail

The Department of Veterans Affairs (VA) operates one of the largest health care delivery systems in the nation through which the Veterans Health Administration (VHA) provides a range of health care services for eligible veterans, such as primary care, inpatient and outpatient surgery, and nursing home care. Historically, VHA received medical care funds primarily through a single appropriations account. But in 2004, Congress established a new three appropriations account structure: Medical Services, Medical Support and Compliance, and Medical Facilities. However, VHA formulates its Congressional Budget Justification (CBJ) based on the single appropriations account, in part, because the systems to formulate the request were in place prior to 2004. This has led to inconsistent labeling and varying levels of detail among the three appropriations accounts throughout the justification. In its report, GAO recommended that VA label health care services more consistently so it is clear what services are being referred to across appropriations accounts. GAO also recommended that VA further consult with congressional decision makers when determining what detailed information related to appropriations accounts should be presented -- and how -- in its CBJ. To read the full report, please visit the GAO website.

Congressional Budget Office (CBO)

More Will Face ACA Penalty for Lacking Insurance

On Wednesday, CBO issued a report finding that approximately 6 million Americans will likely face the tax penalty for not complying with the individual mandate to possess health insurance under the ACA. . This figure is about 2 million more than had previously been estimated. As a result, CBO now estimates the tax will generate roughly $7 billion in revenue in 2016 and average about $8 billion per year over the 2017-- 2022 period, or about $3 billion more annually than previously expected.

Agency for Healthcare Research and Quality (AHRQ)

Rx Medication Adherence and Health Care Costs

Late last week, the Agency for Healthcare Research and Quality (AHRQ) released a report evaluating ways of addressing poor medication adherence, which adds $100 billion to $289 billion a year in direct costs to the U.S health care system. AHRQ said about 20 to 30 percent of prescriptions are never filled, half of medications for chronic diseases are not taken properly, and there are tools to boost patient self-management and achieve significant savings.

Center for American Progress

ACA Cost Reduction Measures Showing Results

On Tuesday, the Center for American Progress reported that efforts by doctors, insurers and hospitals to eliminate inefficiencies in the delivery of health care services, largely as a result of pressure applied by the ACA, have begun to yield positive results. "Instead of basing payment solely on the volume and price of the items and services provided to patients, these alternative methods of payment create incentives to encourage preventive care and better care coordination, especially for patients with chronic illnesses,"  according to the report. "Although many of these efforts are in beginning stages, early experiences of health care providers piloting these alternatives to fee-for-service are promising."  

American Academy of Family Physicians (AAFP)

Docs, Nurses and the Provider Shortage

Despite growing concerns over a worsening physician shortage, expected to reach 90,000 in the next 10 years, the American Academy of Family Physicians (AAFP) released a report this week that warns that addressing the shortage through increased responsibilities for nurse practitioners would be ill-advised, noting that a shortage of nurses is also occurring. Though the report cites the importance of expanding medical home treatment models in modernizing America's health care system, AAFP discounts the idea that nurse practitioners practice medicine independently to treat patients.

Robert Wood Johnson Foundation and the Trust for America's Health

Obesity Rate Could Top 50 Percent by 2030

This week, the Robert Wood Johnson Foundation, in cooperation with the Trust for America's Health, released its most recent edition of "F as in Fat: How Obesity Threatens America's Future,"  which found that every state could have an obesity rate above 44 percent by 2030, and most states could have rates higher than 50 percent if current trends continue. Mississippi, which currently has an obesity rate of 34.9 percent, is projected to have the highest rate of obesity in 2030, at 66.7 percent. The report predicts that these obesity trends will increase the instance of health problems like type 2 diabetes, heart disease and hypertension, which could increase 10 times by 2020, at an estimated cost increase of $48 billion to $66 billion per year.

Medicaid and CHIP Payment and Access Commission (MACPAC)

Meeting to Discuss Emergency Department Utilization, Enrollment Data

This week, the Medicaid and Children's Health Insurance Plan Payment and Access Advisory Commission (MACPAC) -- the body charged with reviewing state and federal Medicaid and CHIP access and payment policies and making recommendations to Congress -- will meet to discuss issues including emergency department utilization and enrollment data. A summary of the discussion will be available in next week's Weekly Washington Health Care Newsletter. The meeting agenda and associated documents will be available at the MACPAC website.

Bipartisan Policy Committee (BPC)

BPC Identifies 15 Health Care Cost Drivers

On Thursday, the Bipartisan Policy Center (BPC) released a report identifying 15 primary drivers of health costs in the U.S. The bipartisan group of debt and health care experts will issue recommendations early next year to address the drivers, which include the fee-for-service reimbursement system, delivery system fragmentation, lack of cost transparency and the tax treatment of health insurance.


If you have any questions, please contact Stephanie Kennan, Senior Vice President, or Brian Looser, Assistant Vice President, at McGuireWoods Consulting.

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering state and federal government relations, national/multistate strategies, infrastructure and economic development, strategic communications and grassroots issue management services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and in 2010 was ranked in the Top 20 of The National Law Journal's "The Influence 50," an annual report of the top public affairs firms in Washington, D.C.

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