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April 20, 2015

Washington Health Policy Week in Review Archive ed87a639-4a7d-4f3c-ac43-f7d84e51d49b

Newsletter Article


'Doc Fix' Deal Opens Health Battles Ahead

By Melissa Attias, CQ Roll Call

Congress may have finally put an end to the cycle of 17 short-tem "doc fixes" with the passage of legislation that would change the way Medicare pays doctors. But the bill's handling, or sidestepping, of other programs sets the stage for future fights.

The Senate cleared the package to replace Medicare's sustainable growth rate formula, or SGR, last week in a 92–8 vote and President Barack Obama said in a statement that he "will be proud to sign it into law." While most physician lobbyists are basking in their successful effort to do away with the SGR, it won't be long before those groups and other players turn to issues that are still unresolved.

At the top of the list is the effort to permanently repeal caps on Medicare spending for therapy services, which the Senate came close to accomplishing in one of the tightest votes of the night. Maryland Democrat Benjamin L. Cardin's amendment fell two votes short of the 60 required to overcome a budget point of order, a defeat that may have stemmed more from concerns about sending the bill back to the House rather than problems with changing the policy.

"I think there was a lot of discomfort with the idea of the bill actually getting amended," said Mandy Frohlich, vice president of government affairs for the American Physical Therapy Association. "My sense was the votes were there."

Senate Finance Chairman Orrin G. Hatch alluded to the conundrum when he raised the budget point of order against the amendment. The Utah Republican said House leadership wouldn't pass another bill. He acknowledged that the caps "may not be the best policy" but said they rein in unnecessary Medicare spending.

"Congress should use the next two years to find a solution to this problem and work for pay—to pay for that solution, and I intend to do that," Hatch said. "But to have that on this bill would just be a catastrophe at the end of what has been a really, really, very, very tough-fought bill all the way through."

The physician payment package extends a process that allows patients to receive medically necessary services beyond the annual limits through the end of 2017, although Frohlich noted that she would prefer action on repeal sooner.

Supporters have said permanently scrapping the caps would cost between $8.8 billion and $13 billion. The influential seniors lobby AARP made the Cardin amendment a key vote.

Another issue, also the subject of an unsuccessful amendment last week, will be the effort to extend funding for the Children's Health Insurance Program (CHIP) beyond fiscal 2017. Democrats wanted to see four more years of funding rather than the two included in the bill. Republicans want to overhaul the program.

Bruce Lesley, president of the First Focus Campaign for Children, hinted at the fight ahead in a statement thanking Colorado Democrat Michael Bennet for offering the amendment. The program is designed for children whose families make too much to qualify for Medicaid but not enough to afford private coverage.

"As we redouble our efforts to extend CHIP again in 2017, it's good to know that we can count on leaders like Senator Bennet," Lesley said in a statement.

Two issues that were broached in an amendment from Washington Democrat Patty Murray, meanwhile, represent future spending battles on the primary care front.

The first is a now-expired provision in the health care law that provided two years of elevated funding for Medicaid primary care doctors in an effort to match higher Medicare payment rates. Murray's amendment proposed renewing and expanding the provision and advocates are expected to continue to press the case. They face an uphill battle in a Republican Congress.

The second is money for community health centers, the National Health Service Corps and teaching health centers, which are funded through fiscal 2017 in the physician package. The programs were slated to lose mandatory money at the end of September in what had been dubbed the primary care cliff. Murray unsuccessfully tried to extend funding two more years through fiscal 2019.

Of course, Congress will also grapple with other Medicare and health policies that will be losing their legislative vehicle with the elimination of the SGR. Two of those include extra money for hospitals that have a low-volume of discharges and small, rural hospitals with a high percentage of Medicare patients. Both expire Oct. 1, 2017.

Lobbyists will also be closely following the implementation of the new physician payment system, particularly provisions designed to measure quality. James L. Madara, CEO of the American Medical Association, said on a call with reporters that the organization will be working with the federal government to ensure it pans out correctly.

But Madara also sees the end of the payment formula as a liberating moment, maintaining that it will allow "a brighter light to be shined" on his organization's work to advance payment delivery systems. "At times I fear it was overshadowed by the attentiveness to the SGR flawed payment system itself," he said.

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State Health Insurance Marketplaces Pursue Revenue from Insurers

By Marissa Evans, CQ Roll Call

April 16, 2015 -- State health insurance marketplaces seeking financial stability after their federal support expired on Jan. 1 turned to the companies selling polices on their websites to fill in the gap. But the revenue from fees on insurers may not be enough.

While the Affordable Care Act requires that the marketplaces, also known as exchanges, be financially viable, their revenue from year to year is unpredictable because of swings in enrollment numbers. And the cost of running the marketplace is little affected by the enrollment variances.

The fee revenue from insurers, on the other hand, rises and falls with the number of signups. That means marketplace directors must set fees based on enrollment projections that may or not be realized, according to Jennifer Tolbert, director of state health reform for the Kaiser Family Foundation.

One solution, said Tolbert, may be to impose a broader assessment on insurers—whether or not they have policies listed on the marketplace.

"In some cases this is a little bit better because it's a broader assessment and not so driven by enrollment in the marketplace," Tolbert said.

When that approach was tried in the District of Columbia, insurers sued.

The district and 13 states are running their own marketplaces, where residents can purchase health insurance. New Mexico, Nevada, and Oregon run outreach and customer service for their marketplaces, but asked the federal government to manage the information technology supporting the website.

The board that oversees DC Health Link, the district's marketplace, approved in May 2014 a broad-based assessment on all firms selling insurance in the district, even those not listed on the marketplace. It includes several other forms of insurance outside health care.

In July 2014, the American Council of Life Insurers (ACLI) filed suit in the U.S. District Court for the District of Columbia, claiming that the broader assessment was illegal. The court dismissed the complaint in November but ACLI filed an appeal one month later.

"Because these products are prohibited from even being sold on the exchange, the assessments amount to a user fee on non-users," said Gary Hughes, executive vice president and general counsel, for ACLI in a Dec. 2014 news release announcing the appeal. "In addition, the cost of the assessments will likely and unfairly impact the affordability of these products for consumers in the District of Columbia."

The marketplace board has said in statements that "insurers selling supplemental coverage directly benefit from an expanded number of district residents who now have comprehensive health insurance." The thinking is that people with health insurance are more likely to purchase supplemental insurance.

"Our position is that this is an issue of basic fairness," said Mila Kofman, executive director of the DC Health Benefit Exchange Authority. "Insurers who benefit and profit—not the taxpayers—should pay."

Marketplaces elsewhere are sticking with fees on listed insurers.

For each enrollee on the Covered California marketplace, insurers pay $13.95. The marketplace has budgeted for $197.4 million in fee revenue for fiscal year 2014-2015.

The "per-member per-month charge. . .will serve as the sole revenue source once the federal funding is completed," said James Scullary, spokesman for Covered California.

Washington Healthplanfinder, the state marketplace for Washington state residents, has three sources of revenue: an existing 2 percent tax on insurers for plans sold on the website, payments from the state's Medicaid program for helping the agency enroll beneficiaries, and an as-needed fee for insurers on the marketplace if the 2 percent tax doesn't meet projections.

Noting that fees on insurers may be passed onto consumers, Washington marketplace spokesman Michael Marchand said, "We realize even a fluctuation of a few dollars here and there can create difficulties for consumers based on what they see as affordable particularly given the income levels and people we're working with."

In Nevada, it takes $6.2 million to run the state's health marketplace, which relies on user fees on insurers. Bruce Gilbert, executive director for the Silver State Health Insurance Exchange, said he doesn't anticipate that changing.

But Nevada was among the handful of states to set up an exchange that relies on the federal exchange,, for much of its back-end operation, and was recently told by the Centers for Medicare and Medicaid Services that it will have to start paying for the support in 2017. Marketplace officials are in ongoing talks with CMS over the cost.

"We recognize it will have an impact on our operation and viability but until we know how much of an impact it's difficult to get concerned," Gilbert said.

Clare Krusing, director of communications for America's Health Insurance Plans said the state marketplaces need to be financially stable so there aren't fluctuations in premiums each year. 

"There needs to be consistency for consumers," Krusing said. "There needs to be transparent information about exchange operations for insurers and for the public to understand the expenses for operating it. It's doing what is necessary to make sure that the exchange functions well for consumers and to make sure that the assessments are fair and reasonable."

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Medicare Officials Reveal Star Rating System for Hospitals

By Rebecca Adams, CQ Roll Call

April 16, 2015 -- Consumers intent on comparing the quality of hospitals now have more data. The Centers for Medicare and Medicaid Services (CMS) has released the first-ever star ratings for more than 3,500 U.S. health facilities.

The ratings are on a scale of one to five, with five being the highest possible rating. Of the hospitals surveyed, 1,414 received a summary rating of three stars. Another 1,205 achieved four-state status. Only 251 got the highest grade.

A total of 582 hospitals got two stars while 101 received one star. Some 1,102 hospitals were not scored because there was not enough data.

The ratings system joins similar rankings for nursing homes, physicians' groups, dialysis facilities and Medicare Advantage plans. CMS officials plan to release star ratings for home health later this year.

An average consumer may have a hard time comparing star ratings for a large number of hospitals at a time. People using the agency's Hospital Compare tool can only look at side-by-side information for a few facilities at once. More detailed information is online in data sets, but it may be difficult for the uninitiated to digest.

Hospitals raised some questions about the release of the data, which had been in the works for years. Administrators also want the public to understand that the ratings are based on patient surveys. The Hospital Compare tool also has information about other quality measures, such as whether patients received the right type of care for conditions such as a heart attack or pneumonia and how many patients were readmitted after being discharged. 

"While star ratings could be an effective way to make quality information easier to understand, the devil is in the details," said Akin Demehin, American Hospital Association senior associate director of policy. "There's a risk of oversimplifying the complexity of quality care or misinterpreting what is important to a particular patient, especially since patients seek care for many different reasons. Hospital rating systems also need to keep up with the rapidly evolving nature of the quality measures underlying them."

The ratings are based on a survey that has been used since 2006 to measure patients' perspectives of hospital care.

The new ratings are based on responses from patients who were hospitalized between July 2013 and June 2014. The summary score is based on 11 different measures. Patients rated hospitals on questions such as how well nurses and doctors communicated with patients, whether the hospital was quiet at night, how quickly medical professionals responded to patients, how well patients' pain was managed, how clean the facility was, and whether patients understood what to do to take care of themselves after leaving the hospital.

CMS and Yale University also are creating a methodology for an overall hospital star rating that will include all of the quality measures reported on Hospital Compare. That overall hospital rating is planned to be available starting next year.

The information about patients' experiences is part of a broader effort by the federal government to pressure providers such as hospitals to provide higher-quality care and reward those that achieve goals on quality.

Patrick Conway, Acting Principal Deputy Administrator for CMS, said that the star ratings "encourage hospitals and clinicians to strive to continuously improve the patient experience and quality of care delivered to all patients."

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Bipartisan Fix Possible on Obamacare Employer Requirements

By Rebecca Adams, CQ Roll Call

April 14, 2015 -- Something unusual happened last week at the House Ways and Means Health Subcommittee: The top Democrat on the panel, one of the most liberal members of Congress, requested a hearing on a GOP bill by a leading conservative critic of the health care law.

Rep. Jim McDermott, the Washington congressman who would prefer a publicly run health care system, called for a hearing on a bill by Rep. Diane Black, R-Tenn., who isn't shy in public criticisms of the health law and wants to revise the reporting requirements for employers who offer coverage to their workers. 

At the start of the hearing, McDermott said it was time to move on from complaining about the law to trying to fix it. He said it's not the law he would have written and invited Republicans to "move beyond the cynical attacks on this law and join me in making it better."

McDermott added in an interview, "I'm just pleased she's talking about doing something positive."

Black is shopping the legislation around to Democrats in both the House and Senate. She is getting input from the Department of Treasury before finalizing the details. 

"We hope that the bill will have a Democratic lead cosponsor because this issue cuts across party lines and impacts businesses in every district," said Black spokesman Jonathan Frank. 

It's not clear whether McDermott will sign on. But he's encouraging other Democrats to hear out Black. 

The issue could eventually become one of only a handful connected to the health law that have attracted bipartisan support. Soon after the law was enacted, Republicans and Democrats passed a law in 2011 (PL 112-9) that got rid of a paperwork requirement mandate that would have required businesses to report to the IRS all of their transactions with vendors totaling $600 or more in a year. Many Democrats have supported GOP efforts to repeal a 2.3 percent tax on medical devices and change the definition of full-time employment from the law's 30 hours a week to the more standard 40 hours. 

That doesn't necessarily mean that President Barack Obama will sign any of those bills, but the growing list of bipartisan requests for changes could get more attention in the future.

Under the law, companies have to report which workers have medical coverage. 

Restaurant chain owner Scott Womack, testifying for the U.S. Chamber of Commerce, said at the hearing that he did not initially track the details that the health care law requires. Employers must report to the IRS the personal information of every covered person, including the birthdates and Social Security numbers of workers' children. 

Womack said his accounting team spent hundreds of hours trying to figure out what they needed to report, and it's still unclear to him whether the federal government can use the data. His company collected the information on a monthly basis so that it is current for all of the workers in his high-turnover restaurant business. The company will then report all the information at the end of every year.

"The reporting required is costly, complex, and confusing," said Womack. "All employers have had to either create or buy new software as we have, or contract with a service to do so."

Womack spent $8,000 on software that he hopes will comply with reporting requirements. 

Black is trying to ease the reporting for employers and create a system that will prevent some people who are not eligible for subsidies—such as workers whose companies offer coverage—from getting subsidy payments. The congresswoman is still working on the details of her bill but hopes to introduce it within the next month or two.

Black wants to allow companies to report to the federal government at the beginning of a year whether they offer coverage. If a worker went to sign up for individual coverage in the new health care marketplace, the person would get an alert that the employer offers health insurance that the worker might want to enroll in. 

The health law does not allow workers or their families to get federal subsidies if their companies offer affordable coverage that meets coverage requirements in the law. But many workers don't realize that. 

Under the current system, workers may mistakenly get subsidies that they are not entitled to receive and then have to pay back the money when they file their taxes. Some who have to repay subsidies may be frustrated at their employers as well as the federal government. 

McDermott said in the interview that it's nice to see that Republicans are "at least doing something different than they've done before" and offering ideas about fixing the law instead of focused solely on repealing it. 

"I was trying to be at least sort of reaching out to be nice to see if we could get something done around here," he said. "We've certainly had our troubles getting something done, so it's really a situation that when someone does something positive you want to acknowledge it."

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Study: Some Insurers Duck Obamacare Contraception Mandate

By Melanie Zanona, CQ Roll Call

April 16, 2015 -- Some private insurers are ducking the health care overhaul's requirement that they provide a wide range of birth control options to women at no cost, according to the nonprofit Kaiser Family Foundation.

Although a recent study found many health plans are observing the spirit of the contraceptive mandate in the law, some are declining coverage or requiring cost-sharing for certain methods. Under the law, Food and Drug Administration–approved forms of birth control that are prescribed by a health care provider generally must be provided to women without a copayment.

FDA lists five different categories as approved types of contraceptive products: barrier methods, hormonal methods, emergency contraception, implanted devices, and permanent methods.

The study examined 20 different insurers in five different states and found vaginal rings were the least likely method to be covered. Five plans required cost-sharing for the NuvaRing, while one did not cover it all and three required step-therapy or prior authorization. Some plans placed limitations on coverage of implants and the patch. Most of the insurers covered at least one type of long-acting intrauterine device, but varied slightly by brand.

"There are still some women who are not fully benefiting from this huge advance in women's health," said Gretchen Borchelt, vice president for health and reproductive rights at the National Women's Law Center, at a briefing on the report. "I don't think these are just barriers [to contraception,] these are violations of the law."

Insurers are permitted to use "reasonable medical management" to determine coverage limitations of any preventive services. But the term was not explicitly defined by law, which has caused variations among plans.

"There are some exceptions that appear to be attributable to the carriers' interpretations of the HHS regulations," the report stated. "In particular, some of the plans did not differentiate between similar hormonal formulations that had different delivery mechanisms."

When it comes to emergency contraception, most insurers covered Plan B or its generic equivalent, but over half did not also cover the ella EC pill, which has a longer window of effectiveness. Recent reports suggest that women with higher BMIs might have better success rates with ella.

If a woman has a medical reason to obtain a preventive service not normally covered by their plan, the Department of Labor said insurers can provide it with no-cost sharing through a "waiver process." However, the study did not find a single plan that had established a formal process.

"A substantial number of plans were reluctant to be interviewed," said Edward Anselm, consultant medical director for Health Republic Insurance of New Jersey. "It reflects the inherent controversy around contraception."

Another facet of the birth control mandate that is not unfolding as supporters envisioned is the religious accommodation provided by the Health and Human Services Department. The Kaiser study found that "few, if any" religious organizations with objections to contraceptives have requested a workaround, which has been the subject of recent legal scrutiny and debate in Congress.

Insurers can provide no-cost birth control for workers of nonprofit religious hospitals, universities, and other groups that ask for exemptions.

But religious organizations were unsatisfied with the accommodation, arguing that it still forces them to facilitate their employees' access to contraception, and several have filed lawsuits that are still pending in lower courts across the country.

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Wachino Appointed Permanent Head of Medicaid Program

By Rebecca Adams, CQ Roll Call

April 17, 2015 -- Vikki Wachino, who became the acting federal Medicaid director in January, has been named the permanent director of the health program for the poor.

"I could think of no one more qualified," said Centers for Medicare and Medicaid Services (CMS) Acting Administrator Andy Slavitt in an internal email sent to staff late last week.

Wachino is now the Director for the Center for Medicaid and Children's Health Insurance Program (CHIP) Services. A CMS spokeswoman said Wachino will not have the additional title of Deputy CMS Administrator that her predecessor, Cindy Mann, had.

Wachino is well-known for her decades of work on Medicaid. She previously worked at the Center on Budget and Policy Priorities, the Kaiser Family Foundation's Commission on Medicaid and the Uninsured and the White House Office of Management and Budget before working closely with Mann as a top federal Medicaid official early in the Obama administration. After she left CMS, she worked for more than a year at the NORC at the University of Chicago, a research organization, before returning to CMS last year.

The National Association of Medicaid Directors applauded her appointment.

"Vikki has demonstrated the strength of her commitment to Medicaid throughout her career and her ability to work well with state Medicaid Directors as partners," the group said in a statement. "Medicaid Directors look forward to continuing to work with Vikki and her team to improve Medicaid on behalf of the tens of millions of Americans who rely on the program."

Slavitt praised Wachino's work.

"Those of you who know Vikki know her as a strong voice for consumers, committed and trustworthy partner to states, and consistent advocate for the long-term success and fiscal stewardship of the Medicaid and CHIP programs," he said in the email to staff. "Vikki also shares the department's ongoing commitment to strengthening the quality of care and the patient experience while also better managing costs in the program. Those qualities are more critical than ever as we continue to work on expanding Medicaid, modernizing the program, and building strong delivery systems."

Wachino holds a master's in public policy degree from Harvard University's Kennedy School of Government and a B.A. from Mount Holyoke College.

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