By Jane Norman, CQ HealthBeat Associate Editor

July 31, 2012 -- The Obama administration and congressional Democrats worked Tuesday to promote new preventive services benefits for women that go into effect on Wednesday, saying an estimated 47 million women with private health insurance will be able to access no-cost birth control pills, breast-feeding support, well-woman visits, and more.

The launch of the benefit for an important demographic came at a key time for President Obama, as the race for the presidency heads into its last 100 days, national political conventions loom and debate over the health care law (PL 111-148, PL 111-152) continues despite an affirmative decision by the Supreme Court.

Certain preventive services already were covered without cost sharing under the law, but a long list of those specific to women begin for members of non-grandfathered health plans with plan years beginning Wednesday and later. The changes in preventive services coverage begin when a new plan year begins.

The birth control benefit in particular has been the subject of intense controversy, and 24 lawsuits have been filed across the country challenging a Health and Human Services rule requiring the coverage for businesses as well as organizations with religious affiliations. Only religious institutions like churches and synagogues are exempt, although there’s a temporary “safe harbor” for religiously affiliated institutions such as colleges and hospitals.

A Colorado judge on Friday issued a preliminary injunction on behalf of a heating and air conditioning business whose owners said the contraception requirement violates their Catholic religious beliefs—though the injunction applies only to that business and not any other organizations.

During a press conference at the Capitol on Tuesday, Health and Human Services Secretary Kathleen Sebelius, flanked by Democrats, said it was a “new day for women’s health.” Sen. Barbara A. Mikulski of Maryland, who played a key role in pushing for inclusion of women’s services during the debate on the overhaul, declared, “What a happy day.”

Taking a more partisan tone, Sen. Frank R. Lautenberg of New Jersey said there is a “maleogarchy” that is “trying to decide what women ought to be doing for themselves and for their families.” Lautenberg, referring to the presumed Republican presidential nominee, said that the “chief honcho of the maleogarchy group, his name is [Mitt] Romney and he’s resolved to repeal health care the first day . . . that he has office. Well, we’re saying, ‘Too bad.’”

Said Sen. Richard Blumenthal of Connecticut: “We will not retreat, we will not repeal.”

Senators on the floor also tussled over the preventive benefits. After Majority Leader Harry Reid of Nevada praised them, Minority Leader Mitch McConnell of Kentucky said he wanted to offer an amendment repealing the health care law to the cybersecurity bill being debated.

“Can you imagine how ridiculous the statement my friend the minority leader just made is?” said Reid. “He’s now telling me he wants to repeal all the things I just talked about—on the cybersecurity bill?”

Majority Whip Richard J. Durbin, D-Ill., said the first GOP amendment on a pending transportation bill is about family planning, and he asked whether the Senate is trying to match the House’s record in the 30 times it’s tried to repeal the law.

“I guess the answer is no,” said McConnell, though he said he would continue to seek to have his amendment voted on.
Later at a press conference, McConnell again said the Senate should vote on the health care law’s repeal. “Apparently they’re spending the week trying to convince the American people that this is a wonderful bill, that they’re really proud that they did it,” he said. “If they’re proud of it, I don’t know why they wouldn’t want to vote on it. It doesn’t have to slow the Senate down. We’d be willing to enter into a time agreement to have a very, very short debate.”

The HHS guidelines for women’s preventive services to be offered without co-pay, co-insurance or an out-of-pocket charge in non-grandfathered plans were based on recommendations made last year by the Institute of Medicine.

They include breast-feeding support supplies and counseling; screening and counseling for interpersonal and domestic violence; screening for gestational diabetes; DNA testing for high-risk strains of HPV; counseling on sexually transmitted infections, including HIV; and screening for HIV.

According to a report prepared by HHS and based on census data, as well as Kaiser Family Foundation information, 47 million women between the ages of 15 and 64 who are on private, non-grandfathered health insurance plans will be eligible for the free preventive services. Broken down by state, the largest number, 5.3 million, live in California, with large numbers also in other states: 2.4 million in Florida, 2 million in Illinois and 3.4 million in Texas.

Meanwhile, pollsters at the Democratic polling firm Greenberg Quinlan Rosner said that in research they’ve done for the Women’s Voices Women Vote Action Fund, they’ve found that there are 55 million unmarried women in the United States and they are an important electoral group. But Stanley Greenberg said polling finds this group’s support for Obama is lagging compared with 2008, even though unmarried women stand to benefit from the health care law. Greenberg also challenged other polling that’s shown the law is viewed unfavorably by majorities. He said that “the country is split evenly on the law” and Democrats can gain by talking about the benefits of the overhaul.

Emily Ethridge contributed to this report.

Jane Norman can be reached at [email protected].  

By John Reichard, CQ HealthBeat Editor

August 2, 2012 -- It’s August and time for vacation, but better bone up on some summer reading. Two papers just published in the New England Journal of Medicine could prove seminal in framing an upcoming historic debate about how to reduce health care costs.

Several of the left-leaning luminaries who authored one of the two papers were at a forum Thursday sponsored by the Center for American Progress (CAP). They outlined an approach that uses the combined power of government and business to frontally attack the prices charged for health care services, among other features. Appearing later Thursday at an American Enterprise Institute forum were the authors of a competing vision. They urged Medicare and private employers to set a fixed dollar limit for what they’ll pay each year for a health plan—the so-called defined contribution approach.

The ideas outlined are likely to stir intense discussion, not only next year as lawmakers consider a new deficit reduction deal, but also over the next decade as the United States struggles with a potentially disastrous rise in debt fueled by growing health costs. In some respects the two plans floated Thursday differed fundamentally, but in other ways they overlapped significantly, analysts said.

In their paper, former Obama administration officials Ezekiel Emanuel and Peter R. Orszag, former Senate Majority Leader Democrat Tom Daschle, and 20 other policy leaders urged a set of solutions that would cut both the price and quantity of medical services for both public and private purchasers of health care. “Focusing in on prices is very important,” Emanuel stressed. “It’s obviously a serious concern if you’re looking to bring down overall inflation.”

“The United States pays a substantially higher price for many of the services that we do,” Emanuel said at the CAP forum. For example, Medicare pays $1,100 for MRI scans in the U.S. but in France they cost $300. “Even in Switzerland, which is much more expensive, they’re $900,” a 20 percent savings, he said. Coronary bypass procedures cost $60,000 in the U.S. compared to $17,000 to $18,000 in Germany and France, he added.

The proposal would try to lower prices by giving consumers information on the price and quality of procedures and by tailoring their health plans so they would pay more out of pocket if they went to providers offering lousier deals on medical services.

It also would quickly and dramatically spread the use of competitive bidding, which in Medicare has been used in some markets to sharply lower the costs of wheelchairs, hospital beds and other so-called durable medical equipment.

That program is supposed to go national by 2016. But “we suggest that Medicare immediately expand the current program nationwide,” the authors said. “Medicare should extend competitive bidding to medical devices, laboratory tests, radiologic diagnostic services, and all other commodities,” they wrote. “Medicare’s competitively bid prices would then be extended to all federal health programs.”

“To oversee the process, we recommend that Medicare establish a panel of business and academic experts,” they said in the paper. “Finally, we recommend that exchanges—marketplaces for insurance starting in 2014—conduct competitive bidding for these items on behalf of private payers and state employee programs.”

Global Budget
The authors also called for an independent council of providers, payers, businesses, consumers, and economists to set and enforce a global spending target for both public and private payers in a state.

Payment rates would be set to meet the target. “Under a model of self-regulation, public and private payers would negotiate payment rates with providers, and these rates would be binding on all payers and providers in a state,” the paper said.

“After a transition, this target should limit growth in health spending per capita to the average growth in wages.” Emanuel emphasized this as an enormous boon to workers who for years have lost pay increases to rising health costs.

The plan also makes a pitch for an aggressive move away from fee-for-service payment to reduce excessive care. “Instead of paying a fee for each service, payers could pay a fixed amount to physicians and hospitals for a bundle of services,” the paper said. They could adopt such payments for 37 cardiac and orthopedic procedures as soon as possible. Within five years Medicare should make bundled payments for at least two more chronic conditions, such as cancer and coronary artery disease. Within 10 years, Medicare and Medicaid should base at least 75 percent of payments on alternatives to fee-for-service payment.

The plan would require exchanges to offer at least one plan with tiered co-payments that would charge lower out-of-pocket costs if enrollees went to higher value providers. Exchanges would be required to be active purchasers excluding plans offering unattractive rates. Administrative costs would be saved by having providers and payers electronically exchange eligibility, claims and other administrative information.

The federal government would pay bonus payments to states that ease scope-of-practice laws to allow non-physician providers to practice to the full extent of their training. “For instance, 34 states do not allow advanced-practice nurses to practice without physician supervision,” the paper said. “Making greater use of these providers would expand the workforce supply, which would increase competition and thereby lower prices.”

New limits would be placed on the ability of doctors to refer patients for imaging and other services to facilities in which they have a financial stake.

Medical Malpractice Overhaul
The medical malpractice system would be overhauled to provide a “safe harbor, in which physicians would be presumed to have no liability if they used qualified health information technology systems and adhered to evidence-based clinical practice guidelines that did not reflect defensive medicine.”

One point made at the forum is that doctors and hospitals can’t move away from a fee-for-service system unless both public and private payers adopt such reimbursement changes. As a result, the plan recommended that the eight-million-enrollee Federal Employees Health Benefit Program align with Medicare by requiring plans to transition to alternative payment methods.

Speakers at the forum urged against a “cut and shift” approach in which government cuts payments and shifts health costs to employers, individuals and states. That doesn’t really get at the underlying costs of health care and ease the burden of health costs on both government and business, they said. And they were careful to praise the health care law as providing a solid start in controlling health care costs—but only a start.

Outlook
The authors sought to appeal to Republicans by making the medical malpractice overhaul a part of their plan along with “price transparency,” a GOP mantra in trying to create a system under which consumers are more on the hook for health costs and have a pocketbook incentive to shop carefully for the best health care deals. They also share common ground with Republicans in that both favor a move away from fee-for-service payment and greater use of information technology and bundled payment. But the proposal would not cap malpractice awards as Republicans would. And there’s also a gulf with Republicans when it comes to the issue of defined contributions.

Orszag discussed defined contributions in the context of Medicare and specifically the GOP plan to overhaul that program with a premium support system. In an interview after the forum he noted that premium supports are one form of defined contribution—they put health plan enrollees on the hook for premium amounts above the level the government is willing to pay. “The first clear thing is that it does shift risk onto individuals,” he said. “That’s the whole point. It. . .saves money for the federal government if the payment amount—the defined contribution or premium support payment—is indexed to a slower growth rate” than Medicare spending. “The whole goal though is that by shifting risk onto individuals you want them to become better shoppers, and thereby to reduce the total cost for themselves and the federal government combined. There is some limited evidence that more cost sharing does help to reduce cost,” he said. “The question is how big is it? And the answer is it’s not very big.”

“The reason is that even under these kinds of approaches you still provide insurance against catastrophic costs and the vast bulk of health care costs come from those catastrophic cases. So you don’t get as much traction from that cost sharing method. And then against that you’ve got less negotiating leverage with hospitals and doctors because you’re splintered across multiple providers and you also have higher” administrative costs.

In other words, Medicare beneficiaries are in multiple plans, which means lower negotiating pressure to obtain favorable rates, Orszag said. And administrative costs are higher because plans have to figure in a profit. Orszag said that according to the Congressional Budget Office, the Medicare premium support plan offered by Rep. Paul D. Ryan, R-Wis., actually sharply increases health care spending for Medicare patients when both their share of the costs and the government’s share are added together.

Among the other authors of the paper were Stuart Altman of Brandeis University; Scott Armstrong, an executive with Group Health Cooperative in Seattle; Donald Berwick, former administrator of the Centers for Medicare and Medicaid Services; Princeton economist Uwe Reinhardt; Michael Chernew of Harvard University, who serves as vice chairman of the Medicare Payment Advisory Commission; Harvard economist David Cutler; Stanford University professor Arnold Milstein, who also is medical director of the Pacific Business Group on Health; and Stephen Shortell, dean of the School of Public Health at the University of California, Berkeley. 

Paper (pdf)

John Reichard can be reached at [email protected].  

By John Reichard, CQ HealthBeat Editor

July 31, 2012 -- A one-year Medicare physician payment patch that would block a scheduled 27 percent reimbursement cut Jan. 1 and instead continue the same rates doctors now receive would require offsets totaling $18.5 billion over 10 years, says the Congressional Budget Office (CBO).

If Congress wanted to block the 27 percent cut and hold rates flat for two years—2013 and 2014—it would require offsets totaling $48 billion over the period of fiscal 2013 to 2022, CBO says in a new scoring document.

The estimates are important because they represent the amount of money lawmakers would try to cut elsewhere in Medicare unless they decided to let deficit spending grow, raise taxes or cut federal spending outside of health care program for seniors and the disabled.

Congress hasn’t decided how long the next patch will be. Senate Finance Chairman Max Baucus, D-Mont., has said he wants it to last at least a year.

Both estimates assume a “cliff” approach that involves overriding the existing Sustainable Growth Rate (SGR) formula during the period of the physician payment patch but not doing away with the formula entirely.

“The payment rate in the year immediately following the period of the override would be set as if the override had not happened,” the document says.

As a result, there would be a sharp cut—a so-called cliff—that would vary from 22 percent to 26 percent in the year after the patch, it added.

Physician groups have expressed support for a period of three or more years during which rates aren’t cut or rise modestly while Medicare experiments with approaches to paying doctors other than the SGR. The groups say that would help identify the best approach to scrapping the SGR. To do that, Congress would have to find offsets totaling $72 billion in fiscal 2013–22 to block the 27 percent cut and let rates rise modestly with medical inflation in 2013, 2014, and 2015.

If Congress took the same approach, but limited the expected inflation update to 2013 and 2014, the cost would total $45.5 billion. The inflation updates would be 0.6 percent in 2013, 1.7 percent in 2014, and 2.2 percent in 2016, by CBO’s reckoning.

A different approach called the “clawback,” which would recapture the additional money spent on physician payments during the period the SGR was overridden, would require much larger offsets. For example, blocking the 27 percent cut only for the year 2013 would cost $94 billion in fiscal 2013-2022, the document says. The CBO document does not detail why the clawback scenario would cost so much more.

A health care lobbyist who requested anonymity predicted that the next payment patch would last no more than six months to one year. “They can’t afford any more than that,” the lobbyist said, adding that lawmakers would choose the less costly cliff approach.

CBO also estimated the cost of scrapping the SGR entirely or of keeping it, but doing a “reset.” A reset would in essence say the formula going forward would not try to recoup the past accumulation of money by which actual Medicare spending on doctor payments exceeded yearly spending targets set under the SGR.

The reset approach would recognize that Congress isn’t going to bite the bullet and make huge spending cuts or adopt big tax hikes to offset the accumulated above-target spending. “It makes sense because everyone knows the big hit isn’t going to happen,” says Julius Hobson, a senior policy adviser with the law firm Polsinelli Shughart. That above-target accumulation would, in effect, become part of the federal debt.

But the reset tactic would eventually lead to another accumulation of above-target spending leading to doctor payment cuts.

CBO estimated the cost of six different approaches to scrapping the SGR or resetting it. The proposals range in cost between $254 billion in fiscal 2013–2022 and $377 billion over that period. The lowest cost option that costs $254 billion would involve doing a reset and would entail making payment cuts again starting in 2016.

John Reichard can be reached at [email protected].

By Rebecca Adams, CQ HealthBeat Associate Editor

July 30, 2012 --The top federal Medicaid official said Monday that it will probably take states “several months” to decide whether they want to expand their Medicaid programs in 2014.

Cindy Mann, the deputy administrator of the Centers for Medicare and Medicaid Services (CMS), said that she wants to be careful about responding to the hundreds of questions state officials and health policy experts have pelted her with since June 28 when the Supreme Court ruled that states would not lose any existing federal Medicaid money if they refuse to expand Medicaid as the health care law envisions.

The law (PL 111-148, PL 111-152) called for states to expand coverage for anyone who earns less than 138 percent of the federal poverty level. Under the law as written, it would have cost states all of their federal matching rates for their current and expanded Medicaid programs if they turned it down. But the court decided that states would not have to lose matching funds for the existing programs, thus giving them a penalty-free option of not expanding the federal-state health program for the poor.

Mann said that she wants to think through all of the questions comprehensively rather than answer each inquiry in a piecemeal way.

“We’re still sorting through the implications of the Supreme Court decision,” Mann said at a forum sponsored by the Bipartisan Policy Center.

She reminded the audience that “there is not a particular deadline by which a state has to declare its intention” about whether it plans to expand Medicaid, unlike the deadlines states face this November for informing federal officials about whether they plan to create their own state-based exchanges. Mann noted that in many states, legislators will want to weigh in on the decision. And in many states, their legislatures do not reconvene until January.

Governors in five states have said that they intend to expand Medicaid, while those in a half dozen others said that they do not plan to expand the program. The rest are undecided, with many governors saying that they plan to wait until after the November elections to announce a decision.

Expansion Implementation Proceeding
In the meantime, Mann said the federal government is moving ahead on efforts to push states to establish new eligibility systems, expand integrated care and coordinate with other coverage programs to create a seamless system.

Whether or not a state chooses to expand Medicaid, Mann is trying to get out the word that under the current Medicaid system, a higher federal matching rate of 90 percent, compared to the average of 57 percent for many other Medicaid expenses, is still available to states if they update their eligibility systems.

CMS officials are also encouraging states to experiment with integrated models of delivering care, through initiatives similar to accountable care organizations (ACOs) or medical home projects. States do not have to get a waiver to test out these models. CMS officials sent out a letter on July 10 to state Medicaid directors explaining their goals.


Mann said that in the past two months, CMS has created state operational technical assistance (SOTA) teams so that each state will work with a specific group of close advisors from the regional and federal CMS offices. The goal, said Mann, was to have a “consistent group of people who know what’s going on in that state.”

At a panel discussion following Mann’s remarks, National Governors Association Executive Director Dan Crippen said that governors are not just weighing whether expanding Medicaid makes sense in the short term. For the first three years, the federal government is expected to pick up all of the costs for the newly eligible population. But Crippen said governors are nervous about whether Congress may, in future budget deals, reduce Medicaid matching rates.

That wariness, and the desire of the Obama administration to see states expand their programs, may lead to some negotiations and dealmaking between CMS officials and some states.

Crippen said that there is the “potential for more flexibility, our code word,” as governors discuss the future of Medicaid in their states with federal officials.

Matt Salo, the director of the National Association of State Medicaid Directors, predicted that state officials would “use any kind of leverage, any kind of advantage” they have to get better deals and more control over their Medicaid programs than they normally would.

Meg Murray, the CEO of the Association for Community Affiliated Plans, which represents Medicare and Medicaid managed care plans, predicted that state officials might ask for the ability to charge higher cost-sharing, such as co-payments for people in Medicaid in exchange for agreeing to expand the program. The insurers that Murray represents support the Medicaid expansion.

One question is whether federal officials will allow states to partially expand Medicaid, in other words, to expand coverage to a group earning less than 133 percent of the federal poverty level. Crippen predicted that federal officials will see it as in their interest to take a hard line and push states to cover the entire expansion group in order to get the full federal matching rate of 100 percent initially.

“My best guess is HHS will say no” to questions about whether states could supplement premiums for adults who earn, for example, 100 percent of the poverty level rather than 133 percent. Crippen said that a recent estimate by the Congressional Budget Office about the number of people who would be covered by the Medicaid expansion was reasonable, given what CBO analysts know now, but that there are “important questions that HHS is grappling with that the estimate somewhat begs.”

Crippen said that to provide a more precise estimate, CBO analysts would have to have information in regulations that “we haven’t seen and don’t know when we’ll see.”

CMS Guidance on Integrated Care (pdf) 

Rebecca Adams can be reached at [email protected].

By Emily Ethridge, CQ Staff

August 2, 2012 -- Generic drugs saved consumers more than $1 trillion over 10 years and offer a prime area in which to find savings in health care, the generic drug industry and Democrats said Thursday.

A study by the IMS Institute for Healthcare Informatics, a market research company, showed that savings from generic drugs amounted to $1.07 trillion between 2002 and 2011, including $193 billion in 2011 alone.

Generic drugs now account for nearly 80 percent of all prescriptions written, and increased use in Medicaid and Medicare could lead to more savings, said Ralph G. Neas, president of the Generic Pharmaceutical Association, which requested the study.

“We’re part of the solution of making sure of the sustainability of the health care system, and, with respect to the national economy, I’m optimistic that we are going to be a part of this solution,” Neas said.

Democratic Reps. Peter Welch of Vermont and Henry A. Waxman of California agreed.

“This is literally money on the table where we can get good health outcomes and taxpayer and consumer savings,” Welch said. He noted that a 5 percent increase in generic drug use in Medicaid would result in $3.4 billion in savings.

In addition, Neas cited the new marketplace for generic biologic drugs, also known as biosimilars, as a “game changer.”

The 2010 health care law (PL 111-148, PL 111-152) gave the Food and Drug Administration authority to approve biosimilar drugs, and a recent measure (PL 112-144) allowed the agency to collect user fees for its review of biosimilar drug applications.

Waxman, one of the co-authors of the 1984 law (PL 98-417) that is credited with streamlining the generic drug approval process, also praised the increased use of generic drugs. He said he would continue to conduct oversight over the next few months to ensure generics are getting to market in a timely way.

He also noted he would like to shorten the period of data exclusivity that biologic drugs have, currently set at 12 years under the health care law. President Obama and other Democrats have also advocated for reducing that time period.

Another potential place for savings, Neas said, is a proposal that was included in a Senate version of the FDA user fee bill but left out of the final conference version. The provision would have prohibited brand-name companies with a Risk Evaluation and Mitigation Strategy—required by FDA to manage a known or potential serious risk with a drug—from denying samples of drugs to generic companies.

Neas said the provision would have earned $750 million in savings, and savings could add up to more than $1 billion by the time Congress looks at reauthorizing the user fee program five years from now.

“I think that there will be a lot of bipartisan support for this,” he said.

In addition, Neas said his group wants to continue to work on increasing safety throughout the drug supply chain.

The IMS study found that savings from generic drugs increased by 22 percent from 2010 to 2011, the largest year-over-year increase since 1998. In addition, savings from generic drugs that have entered the market since 2002 totaled $481 billion over 10 years.

By John Reichard, CQ HealthBeat Editor

July 30, 2012 -- Michael Hash, the top Centers for Medicare and Medicaid Services (CMS) official in charge of implementing health insurance exchanges, elaborated on that effort Monday, telling a Washington, D.C., forum that within a few weeks virtually all states will be getting money to set up the new marketplaces.

Hash addressed a meeting sponsored by the Bipartisan Policy Center on the health care law; the center also announced a new effort to control health care costs. Former Senate Majority Leader Democrat Tom Daschle, who co-chairs the Center along with former Senate Majority Leader Republican Bill Frist, called the new project “an urgent and absolutely essential endeavor.” Daschle said that “bending the health care cost curve will require leaders from all sectors of the health care marketplace to come together.”

Hash expanded on remarks he made last week outlining federal progress toward establishing insurance exchanges. Thirty-five states have grants to establish an exchange and another nine applied for those funds at the end of June. “We’re expecting to announce awards for those establishment grants sometime in August,” he added. That means that only a handful of states aren’t at least beginning the process of setting up exchanges, even though a slight majority of state governors are opposed to the health care law (PL 111-148, PL 111-152).

Hash said that 19 states now have authority either through legislation or an executive order to operate a state-based exchange.

One of the most complex challenges for states that want to set up their own exchanges is information technology. “States are moving forward aggressively concerning their IT build,” Hash asserted, although he did not specify how many states are doing so. “At CMS our information technology team has been busy supporting a number of states who are on track,. . .building the infrastructure for the state-based exchange.”
Hash, who serves as interim director of the CMS Center for Consumer Information and Insurance Oversight, said his staff has been conducting “planning, design, and implementation” reviews of states as they go about the work of creating the marketplaces.

The CMS reviews allow “for a kind of dialogue and mutual feedback about the status of each state-based exchange and ultimately will facilitate the approval process,” he said. Twenty-three states have completed their planning review, six states have completed their design review “and we have another six states that are scheduled for design review over the next several months.”

CMS is “engaging states in what we refer to as user groups, which are technical assistance work groups to hammer out issues across the exchanges including eligibility and enrollment activities, plan management, outreach and consumer education,” Hash added.

To obtain CMS approval for an exchange states must file a “blueprint” — and more are interested in doing so since the Supreme Court issued its June 28 ruling upholding most of the law as constitutional, he suggested. After releasing last May a draft of the blueprint states must file to apply for approval, CMS launched webinars to educate them about what their applications should include. Since the Supreme Court rules, CMS has begun hosting “jump-start” webinars “for states that are now fully engaged in building a state-based exchange,” he said.

States that won’t be ready to run their own exchanges will rely on a “federally facilitated exchange.” Hash repeated his prediction of last week that the federal exchange will be ready by next October.

“We have a prime contractor that’s already building our IT infrastructure and we’re deep in the design for those business processes,” he said. Those processes cover the major operational functions for an exchange—“plan management, eligibility and enrollment, consumer assistance, calculation of tax credits and cost sharing reductions, and financial management functions.”

Hash said “we are already beginning to test some pieces of the infrastructure with the states and with insurance carriers, and so we are obviously moving ahead on that front.”

Hash said an interagency committee is at work on issues relating to the federal data hub, which establishes eligibility for subsidies to buy insurance and determines the amount. “This group is now meeting regularly to establish the governance structure, the hours of operation and the IT policies of the federal hub and working with others to make sure that there’s a connection with each and every new marketplace,” Hash said.

He added that CMS is building an actuarial value calculator that will determine what percentage a health plan pays of the costs of health care services for a given population. Plans must cover a fixed percentage of costs to be offered on an exchange. The calculator will make it easier for states to calculate actuarial value of health plans,” he said.

Hash has been named interim director of CCIIO pending a search for a permanent leader. But he said in an interview after his remarks that he wants to stay on the job. “It’s a good group of people,” he said. “Hard working. You know it’s an exciting time. As an old guy who’s waited a long time to see something like this it’s pretty gratifying.” Asked how long he’ll serve in the post he said “I don’t. As long as the secretary [Health and Human Services Secretary Kathleen Sebelius] wants me.”

Daschle said in his remarks that now that the Supreme Court has ruled, “we have the opportunity now to move the law forward but if we do it will require working across the political aisle.”

The new cost control program will enlist the efforts of former Congressional Budget Office Director Alice M. Rivlin and former Sen. Pete V. Domenici, R-N.M. who already head a deficit reduction task force for the Bipartisan Policy Center.

The pair “will seek strategies to promote rational, competitive, accessible and affordable health care programs,” Daschle said.

John Reichard can be reached at [email protected].