By John Reichard, CQ HealthBeat Editor

February 7, 2011 -- To those accustomed to hearing Centers for Medicare and Medicaid Services administrators rattle off the dry details of policy initiatives when they deliver speeches, Donald M. Berwick's remarks may have seemed startling.

Berwick did talk policy, announcing that his agency will soon unveil "the largest national effort on patient safety that we've ever seen." He wasn't prepared to discuss the details; in fact, he used the issue as just one example of his efforts to create a culture at CMS that is committed to more than just processing claims and pushing paper.

To a large extent, Berwick focused on what he's doing to motivate the 4,500-person CMS workforce. He named as a key goal achieving "unprecedented pride and joy in work in the entire CMS workforce, and a reputation in government and the private sector for speed, responsiveness, reliability, and cooperation."

Berwick said CMS has recently been developing a strategy for the coming months. He summarized the fruits of that effort as follows: building operational excellence; improving care for individuals; integrating care for populations, and improving the health of populations and communities.

But "strategy doesn't matter until you've touched values," he said. When employees' values are strong, rules aren't needed to drive behavior, he said. And when values are weak, rules aren't sufficient.

It isn't the first time Berwick has talked at length in public about matters of the heart rather than the head. Previously, he described the example his father set as a small-town physician in Connecticut of the kind of medicine he wanted to practice.

Motivational efforts and inspirational talk may seem more the bailiwick of Super Bowl coaches than government bureaucrats. But when one considers that Berwick's successful career as a national leader in health care quality improvement boiled down to fostering an internal drive on the part of individuals and organizations to do better work, the efforts perhaps are no surprise at all.

On patient safety, Berwick said he's meeting regularly with Carolyn Clancy, administrator of the Agency for Healthcare Research and Quality, on the coming campaign. He said the pair are "talking hard" about how to build momentum behind the project of the kind that motivated the nation to land a man on the moon.

"We do have tremendous knowledge about how to make care safe," he said. Some organizations have tremendous records in patient safety, but there are only "pockets of excellence." Berwick says he wants to "bring excellence to scale" and says CMS is up to the job.

And that's where motivation comes in.

Berwick said the self-image and vision he wants to foster at CMS is that "we are here to make health and health care better for people." He said his job is to connect each of the 4,500 workers at CMS to this self image. "It all comes down to pride and joy in work," he quoted quality guru W. Edwards Deming as saying.

"We can do well with a joyous work force, we can't without it," he said. And, Berwick said, "I myself will be teaching the first four 90-minute classes on improving the work."

By Jane Norman, CQ HealthBeat Associate Editor

February 9, 2011 -- Supporters of the much-criticized individual mandate in the health care law fought back with a report saying that fewer of the uninsured would be covered and costs would not be reduced if the mandate were dropped.

Meanwhile, the Obama administration is underlining its backing for the requirement—which says individuals must have health insurance or pay a fine.

Jonathan Gruber, a Massachusetts Institute of Technology professor, said in a conference call with reporters that he looked at two alternatives, one that would have people automatically enrolled in health insurance unless they opted out, and a second in which people would be penalized if they signed up late. Gruber is a longtime advocate of the mandate who pushed for its inclusion in the health care law (PL 111-148, PL 111-152).

"The bottom line is there is not an alternative to the mandate that would give us close to comparable results," he said on the call organized by the liberal-leaning Center for American Progress.

Some moderate Senate Democrats are looking at alternatives that involving charging higher insurance premiums later to those who do not sign up for coverage right away, similar to the approach in the Medicare Part D prescription drug program. Bipartisan legislation also has been introduced in the Senate by Republican Scott P. Brown of Massachusetts and Democrat Ron Wyden of Oregon that would allow states to opt out and design their own health care systems as soon as 2014, with the requirement that the state entities would have to meet the same standards as laid out in the federal law.

Two Senate Republicans, John Barrasso of Wyoming and Lindsey Graham of South Carolina, are pushing to allow states to opt out entirely.

Gruber said the idea of automatic enrollment in health insurance is attractive because it has worked well for 401(k) plans. But he said there are more obstacles when it comes to health insurance, including basing the enrollment on employment, since not all of the uninsured are employed. He said he estimated that at most, 24 million uninsured people would be covered, as opposed to 32 million Americans under the health care law in its current form. Premiums would increase and the government's costs would not be reduced, he said.

As for penalizing those who don't sign up right away, Gruber said he could see ethical problems with one idea, that of barring people from enrolling at all for five years if they don't sign up. It would be difficult to tell a 30-year-old with cancer that he can't get insurance because he did not sign up at 27, Gruber said.

Many healthy young people would decline to sign up, he predicted. Government costs would fall by about a quarter, but only 12 million of the uninsured would gain coverage. White House Press Secretary Robert Gibbs made it clear that the Obama administration is standing behind the mandate. "The president had to make a conscious decision about how to ensure that the legislation would prevent the problem that we've seen with free-riders; in other words, people that never think they're going to get sick and don't get sick, but they get hit by a bus and show up at the emergency room, and then they charge us basically to pay for it," said Gibbs.

"The president supports it," Gibbs said. "We've gone to court to maintain it."

He said that Obama will work with those who want to see improvements in the law, but "we believe that individual responsibility is a foundation for this."

Talk about alternatives has increased following two federal district court rulings that found the law unconstitutional, one on Jan. 31 in a multistate suit in Florida and the second in a challenge by the commonwealth of Virginia. Two other court decisions on the merits of the law found it constitutional. The issue is expected to make its way to the Supreme Court.

By CQ Staff

February 10, 2011 -- Students who are insured through their college or university would be covered under the health care overhaul law under a proposed regulation issued by the Department of Health and Human Services.

Currently, many university-based plans don't offer the same benefits as commercial insurance plans or that are called for under the health law. Their lifetime caps are often lower and benefits limited.

The proposed rules include such features as:

• Insurers would no longer be able to impose lifetime dollar limits on the amount they spend on health benefits in student plans.
• Insurers could not drop a sick student from a college plan if the student made an "unintentional mistake on an application."
• Insurers could not deny or exclude coverage for students under age 19 because they have a preexisting condition.

The rule would allow some differences in student plans from other commercial health plans. For example, student health insurance plans would be able to have annual dollar limits on essential health benefits of no less than $100,000 for policies in effect before Sept. 23, 2012. After that date, student policies must conform to the rules in the health care law (PL 111-148, PL 111-152).

The new rules would also provide more transparency in the student health center marketplace, HHS officials said. Insurers would have to tell students enrolled in such plans whether they meet the requirements of the health care law.

HHS is asking for comments on the law and specially wants input on how other health care law protections should apply to student plans, including the choice of medical provider and how the new medical loss ratio rules should apply.

By Jane Norman, CQ HealthBeat Associate Editor

February 7, 2011 -- Health and Human Services Secretary Kathleen Sebelius outlined changes for a long-term care insurance program, included in the health care overhaul law, that has come under fire as financially unsustainable.

In remarks at the Kaiser Family Foundation, Sebelius said she has been meeting with the program's supporters and critics for months to come up with improvements. She called the program "certainly far from perfect," an acknowledgement of criticism by the bipartisan National Commission of Fiscal Responsibility and Reform in its 2010 report to President Obama. Among the commission's recommendations was to revamp or repeal the Community Living Assistance Services and Supports (CLASS) program.

Under the health care overhaul law (PL 111-148, PL 111-152), the long-term care insurance program would be offered by participating employers to workers automatically, though employees could choose to opt out. There would be no underwriting, which means no one could be excluded for a preexisting condition. Participants would not be eligible for benefits until five years after enrolling, and the benefit would be at least $50 a day.

Sebelius said the program needs to be able to attract a broad base of enrollees without discriminating against sick people. She said solvency would be questionable without that broad base, and a first step is to raise public awareness that the program even exists.

People in their 40s and 50s don't think about the need for long-term care "so we have to work aggressively" to drive home the point that they should plan for such needs, she said. The program also has to be appealing to employers and employees and it must be easy for workers to enroll and pay premiums, she said.

The program currently has a cutoff point for earnings above which people are allowed to enroll, but officials are looking at whether to modify that. The agency is also looking at how to ensure that people don't drop out and then re-enroll when they get sick, Sebelius said.

As written, premiums stay flat while benefits would rise with inflation. But there is discretion in structuring premiums, so the agency is looking at options for indexing them so they would rise with benefits, Sebelius said, adding that the system would have to be transparent so no one is surprised by sudden increases.

The program also will have to be tailored to individual preferences, whether people using it are at home or in institutions, she said.

"They're tough goals," she said, but necessary for a strong program.

Sebelius said she would not ask Congress to kill the program, the longtime vision of the late Sen. Edward M. Kennedy, D-Mass. "We continue to believe it has the potential to make a huge difference in the lives of working families," she said. The law provides HHS with the flexibility to make changes that will guarantee the program is fiscally sound while still ensuring it is helpful for the people it's supposed to serve, she said.

The law says no taxpayer dollars will be used to pay for benefits and that won't change, the secretary said. "This is non-negotiable."

Also, there can't be underwriting of the program and it must remain open to any American regardless of health history, she said.

Earlier this month, Sebelius announced she would be putting the Administration on Aging in charge of implementing the long-term care measure. The office would oversee the setup of the voluntary, federally administered long-term care insurance plan; set premiums; set rules for enrollment; and specify and design the benefit.

Advocates say Americans need better choices for obtaining long-term care when needed, though such insurance is often expensive and may not cover much.

By Jane Norman, CQ HealthBeat Associate Editor

February 10, 2011 -- The White House pushed back at Republican governors who are demanding more flexibility in setting up health insurance exchanges. But GOP Gov. Gary R. Herbert of Utah, in turn, is slamming the administration for failing to respond to states' concerns over the new health care law.

"I think it's time for states to stand up and assert themselves more aggressively." Herbert said in remarks at the conservative Heritage Foundation, where he complained about a lack of clarity from Health and Human Services officials about implementation of the state high-risk pools required by the law.

States need to run the exchanges as they see fit, Herbert said, and what works in Utah might not work in other states. "We need to get away from this one-size-fits-all mentality," he said. "The states are not dumb. They want to keep their people happy."

The back-and-forth represented a rising level of tension between administration officials defending the law (PL 111-148, PL 111-152) and a cadre of Republican governors who have taken over statehouses and are also involved in the multi-state lawsuit challenging the constitutionality of the overhaul. It comes as state legislatures begin working on measures to implement the exchanges, but also as the lawsuit casts a veil of uncertainty over whether the law will survive its journey through the courts.

In a document circulated by the White House, administration officials say that state-based exchanges created by the health care law "will give states substantial flexibility to establish exchanges that meet the needs of their residents."

The document surfaced three days after 21 Republican governors, including Herbert, wrote Health and Human Services Secretary Kathleen Sebelius saying states need "complete flexibility" in operating their exchanges.

The administration says in the document that states will determine which insurers will offer products in the exchanges, choose benefit rules that meet the needs of citizens and exercise discretion over the Medicaid package structure. They will receive planning funds to cover the costs of establishing exchanges and can get money to update antiquated systems that determine eligibility for public health programs.

The document specifically refers to Utah, saying that while its already-established exchange system is different from the one in place in Massachusetts, "both models could meet the goals of the law."

Sebelius also wrote an op-ed published in the Washington Post that said the law puts states "in the driver's seat" when it comes to fulfilling the law. "States are the laboratories of our democracy, and I will continue to welcome their ideas about how to improve the law or implement it more effectively," she wrote.

Herbert, however, expressed frustration. For example, Utah officials waited for eight months to find out if the state would be allowed to use e-mail rather than paper to communicate with Medicaid recipients and save $6 million a year, he said.

"They sent us a denial by e-mail," Herbert said. "The irony is rich." The state is continuing to pursue that Medicaid waiver and several others.

Herbert said governors were not invited to the table while the federal law was being written but are expected to remain partners with the federal government and carry out the law. Utah already has responded to concerns about health care costs and access by setting up its own exchange prior to enactment of the federal law, he said. Utah allows all insurers to participate.

He also said the state is struggling with so-called "maintenance of effort" rules that prevent states from dropping Medicaid enrollees, "taking away my ability to manage the budget."

States must step up or "the federal government will see a vacuum out there and in fact will intrude and usurp the states' responsibilities," Herbert said. "Democrats and Republicans need to understand states' rights. It's not supposed to be master to servant."

But Sebelius said she's frustrated to hear opponents of the law refer to it as "nationalized health care" and a top-down mandate.

"The truth is that states aren't just participating in implementation of the law; they're leading it," she wrote.

By Jane Norman, CQ HealthBeat

February 10, 2011 -- Two legal experts who have opposing views on the challenges to the health care overhaul law agreed on one thing—that the U.S. Supreme Court won't throw out the entire measure.

Instead they raised the possibility that the high court will decide only on the constitutionality of the law's requirement that Americans have health insurance—as well as provisions that seem clearly related, such as the ban on denial of insurance to people with preexisting conditions.

That would leave the rest of the massive law intact, including its Medicaid expansion, many other consumer protections and the creation of state-based exchanges to sell health insurance. Simon Lazarus, public policy counsel for the National Senior Citizens Law Center and a supporter of the law, said he views those exchanges as "tremendously important" for many Americans and likely to survive the court challenge because they have nothing to do with the mandate.

"The idea that Congress wouldn't have passed any of these things without the mandate is nuts," he said.

Lazarus and Ilya Shapiro, senior fellow in constitutional studies at the libertarian Cato Institute, spoke to the American Medical Association (AMA) advocacy conference.

Lazarus said he would be "absolutely shocked" if the Supreme Court follows on a ruling by a Florida district court judge and deems the whole law unconstitutional. Another federal district court judge in Virginia has ruled against the individual mandate and its directly dependent provisions. According to Lazarus, there are no dependent provisions.

Uncertainty about how courts might proceed is heightened because the law does not include a severability clause, which would specify that the entire law would stay in place even if one part is knocked out in the courts.

Both federal court rulings have given rise in recent days to discussions of what could replace the individual mandate and still provide for the enrollment of both healthy and sick people in health insurance, spreading out the risk.

Lazarus, a supporter of the law, said he believes the court will uphold it, but "there's absolutely no basis" for throwing out portions of the law that are not connected with the mandate.

Shapiro, who said he agrees with the rulings that the law is unconstitutional, predicted that the court will consider what is in the law that is related to the individual mandate, including the ban on denials of insurance coverage for people with preexisting conditions. Shapiro said that once the individual mandate is tossed, "what can remain in place" then will likely be the issue for the court.

Meanwhile, politicians continue to vie to make themselves heard about the lawsuit. A group of Republican governors sent a letter to President Obama asking that he direct the Justice Department to support an "expedited appeals process" for the Florida and Virginia suits.

The administration already has declined to participate in a petition by Virginia Attorney General Kenneth Cuccinelli to the Supreme Court asking that the appeals courts be bypassed.

Justice Ruth Bader Ginsburg said in an appearance at George Washington University on Feb. 3 that Americans should not expect the case to be fast-tracked to the Supreme Court, according to the university newspaper. She said that challenges will have to work their way up through the "ordinary route."

Also, more than 70 House Democrats led by Anthony Weiner of New York sent a letter to Justice Clarence Thomas asking that he recuse himself from deliberations on the constitutionality of the law because of his wife's connections with a lobbying group with clients who want to overturn the law.