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April 7, 2014

Washington Health Policy Week in Review Archive 7b64189b-7f32-408e-936b-d63065e1460b

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Medicaid, CHIP Enrollment Grew by 3 Million Since Oct. 1

By Rebecca Adams, CQ HealthBeat Associate Editor

April 4, 2014 -- Enrollment in Medicaid and the Children's Health Insurance Program (CHIP) rose by more than 3 million people from the average enrollment level before Oct. 1 to Feb. 28, according to a report recently released by the Centers for Medicare and Medicaid Services (CMS).

The enrollment in February was 5 percent higher than for the period from July to September 2013, CMS said.

More than 62 million people were enrolled in Medicaid and CHIP in the 48 states that provided preliminary data for February. Data for three states—Connecticut, North Dakota, and Maine—were not included.

Samaia M. Hernandez, press secretary for Connecticut Gov. Dannel P. Malloy, said that 20,138 people enrolled in Medicaid or CHIP in Connecticut in February. That brought the state's total enrollment to 670,932. Numbers were not immediately available for North Dakota or Maine.

The Congressional Budget Office projected in its revised estimates that 8 million would enroll in Medicaid and CHIP in the first year after changes in the health care law took effect. Medicaid and CHIP enrollment occurs year-round and is not limited to special sign-up periods.
Enrollment in states that adopted the Medicaid coverage expansion increased five times more than states that opted not expanding to Medicaid under the law (PL 111-148, PL 111-152).

"The increase in Medicaid enrollments across the country is encouraging, but more work is left to do to ensure that the millions of uninsured Americans eligible for these programs gain coverage," said Health and Human Services Secretary (HHS) Kathleen Sebelius in a blog post. She said that federal officials expect enrollment in March to be even higher.

The states with the largest reported gains in enrollment were Oregon, West Virginia, and Vermont. Some of the states that reported a reduction in enrollment were Nebraska, Illinois, Alabama and Alaska.

Medicaid enrollment typically fluctuates throughout the year. But the increase is encouraging to advocates because the economy has improved. Medicaid and CHIP enrollment typically declines as economic conditions rise because some beneficiaries get jobs that offer health insurance or increase their income above the Medicaid eligibility threshold.

"Given that the economy has been improving and the trend should've been for enrollment to be leveling off, the bump has to reflect some of the increased activity" due to states' work in streamlining eligibility processes and the publicity about the health care law, said Kaiser Family Foundation Executive Vice President Diane Rowland, who also chairs the Medicaid and CHIP Payment and Access Commission.

Because enrollment levels bucked the expected trend, health policy analysts say that presumably the health care law is helping many more people get coverage.

"If the economy had plummeted, it'd be very hard to tease out what the increase is due to —whether it's due to economic forces or due to the promotion of eligibility," said Rowland.

The report showed that the 2.2 million people who were determined to be eligible for Medicaid or CHIP in February was almost 789,000 more than the number eligible in October.

The numbers for determinations represent all of the people who have applied through state agencies, including marketplaces in states that are operating their own health insurance exchanges.

The figures for determinations do not include people who have applied through, the federal website handling enrollment in 36 states. However, some of the Medicaid-eligible people who tried to sign up on reapplied through state agencies because the federal marketplace was unable to quickly transfer many of the applications for people who qualified for Medicaid to state officials.

The numbers reported by CMS officials are preliminary and may increase as all of the states provide data.

The total also may rise since some people also may have received coverage that retroactively took effect in February. States are working through a backlog of applications.

"The three million number is only likely to go up," said Joan Alker, the executive director of the Georgetown University Health Policy Institute Center for Children and Families.

Lots of questions about Medicaid enrollment remain. The report does not break out how many people became eligible under an expansion of Medicaid in states that broadened eligibility to people with income of up to 138 percent of the federal poverty line.

Federal officials also do not know how many people who enrolled were previously uninsured. And in many cases, the data also included renewals of people who were previously enrolled.

"We have to be patient to figure out the impact of the Affordable Care Act, both with respect to how Medicaid and CHIP enrollment has gone for currently eligible people and the newly eligible, and what impact this has on the uninsured rate," said Alker. "We really cannot answer those questions yet."

But since states traditionally have not publicly provided enrollment data on a monthly basis, the reporting by states will give policymakers a better sense of what is happening with enrollment once the information is more complete.

Alker said it is "terrific that CMS is getting this data in more real time than we ever had before but it's a work in progress."

Rowland called the report "commendable."

"It's a good start," she said. "It's not totally complete but it begins to give us a picture. But there's still a lot more digging that needs to go on."

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Enrollment Surge Exposes Health Exchange's Strengths, Weaknesses

By John Reichard, CQ Roll Call

April 1, 2014 -- The administration confirmed that 7.04 million Americans applied for health insurance coverage through federal and state marketplaces by last week's deadline, and President Barack Obama took a victory lap in a recent speech celebrating the late surge.

Republicans predicted that the law's insurance exchanges would charge such high prices and work so poorly that the venture would be a bust. But the 7 million figure was announced by White House Press Secretary Jay Carney, matching an early estimate by the Congressional Budget Office that didn't anticipate the technical malfunctions that turned the launch of the federal marketplace into a near disaster.

CBO later downgraded the estimate to 6 million to account for the impact of the breakdowns. But the late surge of sign-ups beat that figure. And it meant that the total nearly doubled the 4.2 million applications that had been completed at the end of February.

Obama said in remarks at the White House that working Americans deserve the economic security brought by having health insurance, "all of which makes the constant politics around this law so troubling." He said the federal website has had "its share of problems" and critics, but "change is hard, fixing what is broken is hard, overcoming skepticism and fear of something new is hard."

Obama said the law is helping millions of Americans despite its critics and asked, "Why are they so mad about the idea of folks having health insurance?"

The debate over repeal is over, and "the Affordable Care Act is here to stay," he said. There will be more days when the website stumbles, he said, and moments when its failures make front-page news. "But today should remind us the goal we set for ourselves, that no American should go without the health care they need," has been met, he said.

The Obama administration reported record traffic to the health care law's federal insurance marketplace on the last day of open enrollment, with more than 3 million visits to the website and 1 million calls to a call center as of its evening deadline.

The long lines at enrollment centers and the flood of calls and site visits – the previous HHS one-day record was 646,000 calls on the last day of the Medicare prescription drug coverage open enrollment period – energized the White House.

"Given how gloomy I think everybody's assessment was back in the middle of November, I'd say that we're on our way to making sure that no American ever has to go without health care," President Barack Obama said on the CBS Evening News.

White House officials and their allies are planning a big get-out-the vote campaign to make sure newly insured Americans turn out cast ballots in the fall midterm elections, the New York Times reported.

But the site, despite major improvements since its dysfunctional launch, at times on the final day could not keep operating under the strain of heavy traffic. The site was down an estimated eight hours early in the day. At times, visitors were routed into virtual waiting rooms where they were told they could leave email addresses to be notified when they could again use the site. During a period later in the day the site was not able to create new accounts.

There continued to be apprehension about whether people caught in limbo would be able to get coverage, despite administration assurances they would be permitted a limited grace period if they could show they had attempted to complete the enrollment process by March 31.

And even as White House officials took heart from the latest numbers, they faced the daunting prospect of sharply building enrollment in 2015 and 2016. The Congressional Budget Office (CBO), whose enrollment projections have become a widely followed proxy for the success of the health care law, has forecast exchange plan enrollment of 13 million in 2015 and 22 million in 2016.

Senate Republican Policy Chairman John Barrasso, R-Wyo., told Fox News that the 7 million figure was meaningless. "The reality is they're not going to have that many people who actually have insurance. To me, they're hiding the ball on this. They won't tell you how many people have actually paid for the insurance. And we know in states that follow this closely, in a number of those states, fewer than six in 10 who sign up actually pay for the insurance."

Barrasso also questioned how many sign-ups were people whose policies were canceled under the health law's coverage requirements.
Health and Human Services (HHS) Secretary Kathleen Sebelius said that 80 to 90 percent of customers who sign up pay their premiums.
Despite the close of the federal open enrollment period the site will continue to operate until the start of the next open enrollment period, on Nov. 15. And a number of state-run insurance exchanges have open enrollment periods extending into April.

A new home page of the site will be posted this week that "will clearly indicate that open enrollment for 2014 is over," a Centers for Medicare and Medicaid Services (CMS) official said. It will tell consumers how to enroll if they qualify for coverage outside of the open enrollment period.

Enrollment in Medicaid and the Children's Health Insurance Program continues throughout the year, as do sign-ups for coverage in the so-called SHOP exchanges that serve small businesses under the health care overhaul. Also, consumers with "life changes" such as marriage, divorce, births, or job loss will be eligible to enroll in the marketplaces throughout the year.

The CMS official added that "the marketplace call center will continue to serve consumers 24/7 outside of open enrollment to meet their needs."

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Medicare Doctor Payments to Be Made Public

By Adriel Bettelheim

April 3, 2014 -- The Obama administration plans to publish data on what Medicare paid doctors in 2012, reversing a longstanding curb on making such information public.

The Centers for Medicare & Medicaid Services (CMS) said last week that it would release billing information for more than 880,000 health care providers who collectively received $77 billion in payments under the Medicare's Part B fee-for-service program. The data, which will be published on or soon after April 9, will contain details including the frequency with which procedures were done, the average price charged to Medicare and whether the work was done in office settings or medical centers.

The move comes after a federal judge in Florida last June lifted an injunction that had been put in place in 1979 on publishing the information. Dow Jones & Co. Inc., the publisher of the Wall Street Journal, had challenged the injunction, backed by the Department of Health and Human Services (HHS). The American Medical Association, the influential doctors' lobby, opposed the release.

"Data like these can shine a light on how care is delivered in the Medicare program," CMS Deputy Principal Administrator Jonathan Blum said in a blog post. "They can help consumers compare the services provided and payments received by individual health care providers. Businesses and consumers alike can use these data to drive decision-making and reward quality, cost-effective care."

CMS said it won't release individual claims, citing privacy concerns.

AMA President Ardis Dee Hoven said in a statement that the administration's approach "will mislead the public into making inappropriate and potentially harmful treatment decisions and will result in unwarranted bias against physicians that can destroy careers."

The doctors' group is recommending that physicians be permitted to review and correct their information prior to the data release.

The CMS move was cheered by data transparency advocates in Congress, such as Sens. Charles E. Grassley, R-Iowa, and Ron Wyden, D-Ore. The government last year similarly released data on Medicare hospital payments for the most frequently billed discharges.

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What's the Matter with Blue State Exchanges? Experts See a Pattern

By John Reichard, CQ HealthBeat Editor

April 2, 2014 -- Maryland ... Oregon ... Massachusetts ... Hawaii ... Minnesota ... it's hard to think of a group of states with a politically stronger commitment to expanding coverage under the health law.

But the marketplaces they set up to get that accomplished either malfunctioned mightily, underperformed, or didn't work at all.

This despite the fact that the federal government has poured hundreds of millions of dollars into establishing state-based exchanges. And now, the federal government is being asked to spend more to bail out the floundering state efforts.

Overly ambitious website designs, tangled lines of authority and incompetence and bad luck in picking contractors are among the reasons.

The freshest example of Blue State website woes is in Maryland. Officials aspired to be national leaders in exchange design almost since Congress enacted the health law in September 2010. But recently, the board of Maryland Health Benefit Exchange voted to follow the lead of Connecticut by adopting its simpler website design and hiring its IT vendor, Deloitte LLP.

"Our administration has not succeeded at every first try, but we have never given up," Maryland Democratic Governor Martin O'Malley said after the board acted. "The vendors we hired failed to build us the platform they promised." O'Malley expressed confidence that the state's new partner will have the website upgraded by the time the next open enrollment period begins in November.

The state also released a memo from its top officials that ruled out dropping the state marketplace altogether and letting the federal government handle enrollment through

Switching to the federal exchange "does not adequately support our business model or Medicaid," said the memo written by Isabel FitzGerald, secretary of the Department of Information Technology, Joshua M. Sharfstein, secretary of the Department of Health and Mental Hygiene, and Carolyn Quattrocki, acting director of the Maryland exchange.

At the same time, the existing IT system despite hundreds of fixes is still "deeply flawed," they said. Fixing it would take a year and cost more than $66 million. Even then, the site probably wouldn't be stable.

Using the Connecticut IT platform allows Maryland to be ready for the fall. And it "maximizes re-use of existing software licenses and allows us to re-use hardware components of a value that exceeds $8 million," the officials said.

But it also means spending another $40 million to $50 million, they noted. Although that's about what Maryland would have to spend to develop a Medicaid eligibility and enrollment system that would work with the federal exchange, that option would cede management control and the ability to customize IT. Choosing the Connecticut model would permit "an effective foundation for future growth," the officials said.

Federal officials appear willing to cough up the extra cash, according to the Maryland memo.

"CMS [the Centers for Medicare and Medicaid Services] will review this plan, and, we anticipate, approve the plan, which would then make Maryland eligible for continued funding for IT development in 2014," the memo stated. "Maryland would also share costs recovered through litigation." Maryland terminated its contract with the original vendor it hired to set up its exchange, Noridian Healthcare Solutions, earlier this year.

Ambitious Plans

Other Democratic states such as Oregon and Minnesota also got very ambitious in their exchange planning. Oregon never was able to launch the website enrollment process it designed and had to rely heavily on outside brokers and paper applications.

In a glowing December 2010 report to the state legislature officials said they would build a "high value" exchange offering consumers apples-to-apples comparisons of plans, easy shopping and choice, smooth enrollment processing and easy payment processing, along with customer service, and "clear value for the premium dollar." Insurers "will have access to easy enrollment, billing and payment processing," the report stated.

But news reports and an independent audit chronicled what turned out to be an overly ambitious project hampered by feuding state agencies, lax contracting and a lack of authority and accountability in project oversight.

"Though it has spent more than $200 million on its exchange, Oregon's is the only exchange in the country where the public cannot self-enroll in a single sitting," the news website Oregonlive reported March 20.

A March 19 independent analysis of the state's website fiasco noted that it was a "complex, multi-agency project."

"There was no single point of authority," said the report prepared for Oregon Gov. John Kitzhaber (D) by FirstData. That "slowed decision making and contributed to inconsistent communication."

The project relied on a commercial, off-the-shelf product from Oracle, rather than a more customized approach. To save money, Oregon decided it would serve as its own systems integrator.

The decision not to hire an outside integrator "departs from best practices," according to the independent report and caused a lack of accountability on the project. That, in turn, contributed to more trouble, including a delay in requirements definition, and unrealistic delivery expectations. The report noted that one state official described Oregon as having "the most robust scope of any exchange."

The report also found poor communication with Kitzhaber's office about problems. Kitzhaber was told on July 31 that a "staged launch" may be needed on Oct. 1 but that the project remained on track. But on Sept. 30 Kitzhaber's office was told the website would not be up and running on Oct. 1. Oregon is now weighing whether to scrap its marketplace and switch to the federal exchange.

Officials in Massachusetts, Hawaii, and Minnesota ran into similar problems.

More Money Needed

Joel Ario, a consultant with Manatt Health Solutions, sees a couple of common threads in the five troubled Blue State exchanges. Ario ran exchange development efforts at HHS early in the Obama administration.

"One, they were too bold," Ario said in an interview last week. "They tried to do too much in year one." He added another variable was some contractors performed much better than others.

"I think if we've learned one lesson here it's that large IT projects are very difficult," he said. It's why in the literature on such efforts the advice is "test, test, test."

Maryland and Oregon both planned aggressive integration of the Medicaid and exchange programs, and added more bells and whistles to the IT system as they went. The states also mounted ambitious outreach campaigns, Ario said.

Connecticut and Kentucky kept things simpler and had fewer problems. Kentucky "started a little bit later, but they outsourced as much of this as they could, they did it all out of one agency," he said.

On the contractor side, "Deloitte and Accenture showed up as success stories in several places and CGI showed up as a problem in several places," Ario said. Accenture did well in California, while CGI had trouble not only on the federal level but in Massachusetts and Hawaii, Ario noted.

He predicted that the troubled states eventually will "come back into leadership on ACA implementation" as they fix their exchanges. The first enrollment period showed that demand is strong for exchange plans and persists despite exchange malfunctions, he added.

But to get things fixed requires more money and that's going to stir controversy.

Republicans Seek Cutoff

States such as Maryland must convince CMS to keep funding them despite growing pressure from House Republicans to cut off funding. Subcommittees of the House Oversight and Government Reform Committee plan a joint hearing probing the difficulties in Maryland, Oregon, Hawaii, Massachusetts and Minnesota and looking at what worked in California. The notice for the hearing notes that the federal government has spent $4.7 billion to set up state exchanges.

Maryland's Sharfstein emphasized in a recent interview that the exchange and the website are two different things.

"The exchange is how we structure the policies in order to get rates, it's the community assistance workers, it's the call center, it's our relationship with carriers—there are so many aspects to running the exchange beyond the website," he said.

For all its problems, Maryland beat its combined private plan and Medicaid enrollment projections "because the exchange is more than a website," he said.

Sharfstein disputes critics' contention that the $125 million Maryland has spent on its exchange—$90 million of which was federal money—has gone for naught. He said the sum spent for the development of its troubled website with its prime contractor was about $55 million.

Republicans lie in wait, however.

"The Maryland exchange is a disaster," Rep. Andy Harris, R-Md., told Health and Human Services Secretary Kathleen Sebelius during a March 13 appropriations subcommittee hearing.

He pressed Sebelius on whether her agency would approve more money for an exchange the HHS inspector general had agreed to inspect and audit.

Sebelius was noncommittal.

"We have all of the IT funding for IT that isn't working under specific restrictions and we will look at their proposal," Sebelius replied.

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Health Law Open Enrollment Should Coincide with Tax Filing, Group Says

By John Reichard, CQ HealthBeat Editor

April 1, 2014 -- The open enrollment period to sign up for coverage under the health law should be rescheduled so that people who opt out and face a tax penalty will better understand the consequences, an advocacy group urged last week.

"Fully aligning the open enrollment period with the tax filing period would significantly increase enrollment," Families USA said in a set of 10 recommendations aimed at boosting future enrollment totals.

The change "would enable professional tax preparers to play a much larger role in enrollment efforts, and it would help people have a better understanding of the tax consequences they would experience if they don't enroll in health insurance," according to the recommendations.

Open enrollment for 2015 runs from Nov. 15 through Feb. 15. Many of the people who remain uninsured this year aren't aware they face a tax penalty when they file taxes next year, the group noted.

When they find out – presumably after Feb. 15 in many cases – it will be too late for them to avoid having to pay another penalty in 2016 for failing to have coverage in 2015.

Making the change would allow the affected group to avoid a second penalty, Families USA said. "If the administration creates a special enrollment period for the tax filing period between Feb. 15 and April 15, 2015, this time could be used to educate uninsured consumers and increase enrollment," the group said.

It may be too late to do more, but Families USA also encouraged the Department of Health and Human Services (HHS) to also consider starting enrollment after Nov. 15 and ending at or around April 15.

Failure to comply with the individual mandate in the health law (PL 111-148, PL 111-152) this year could result in penalties of up to $285 per family or 1 percent of taxable income. In 2015, it would be $975 per family, or 2 percent of taxable income.

In other recommendations, Families USA, which supports the health law, said HHS and the states should allocate more administrative funds to increase the number of navigators and others who help people get enrolled.

"Three out of four consumers would like in-person help with applying for health insurance," the group said. It noted an Urban Institute study that found almost half of the uninsured who did not plan to buy insurance in an exchange but who were aware of the option to do so would be more likely to do so if they had in-person help.

Also, a "substantial" public education campaign is needed to make people aware they can get financial help to reduce their cost of health insurance, the group said. "Survey research shows that about seven in 10 uninsured adults do not know about this financial assistance," the group said, adding the problem is especially acute in communities of color.

HHS also should allow states to indefinitely extend streamlined Medicaid enrollment by using information from other public programs they are enrolled in to help them apply for coverage, Families USA urged. This authority is now set to expire in 2015.

Also, applications should be provided that can be completed in languages other than English and Spanish. And HHS should assure that Medicaid eligibility assessments "are transferred to state agencies within 24 hours, and state agencies should process those applications quickly."

Other obstacles should be removed that keep people from completing applications. For example, employees who are offered coverage by their employer that is considered too skimpy or costly under the health law can get subsidized coverage from exchanges instead.

But the employer must complete an "Employer Coverage Tool" document in order for employees to qualify. This document should automatically be provided to the employee when they receive an offer of coverage. "This step has prevented many people from completing the enrollment application," Families USA said.

In other recommendations, the group said health plans should be banned from imposing premium surcharges for tobacco users, HHS should ensure that exchanges offer low-deductible silver plans and the agency should exclude from the marketplaces plans that charge excessive premiums.

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One-Year 'Doc Fix' Wins Senate Approval

By Sarah Chacko

March 31, 2014 -- Medicare's system of paying physicians would be "patched" for another year under a bill the Senate cleared last week in a 64-35 vote, a day before doctors' reimbursement rates were scheduled to be cut.

The measure (HR 4302) would avert for one year cuts triggered under the health program's sustainable growth rate formula after the current "patch" (PL 113-67) expires. Without the bill, rates would have been reduced 24 percent.

Prior to the vote, the Senate waived a budget point of order against the bill, 64-35.

A handful of senators said on the floor last week that they are disappointed Congress did not permanently replace the sustainable growth rate formula.

Finance Chairman Ron Wyden, D-Ore., pushed again for consideration of his bill (S 2157) that would permanently replace the sustainable growth rate with alternative models, including one based on performance factors. Wyden said repealing the sustainable growth rate would cost as much as the previous 16 short-term "doc fix" patches, and many are concerned additional patches will follow.

"I think there's a growing awareness that simply extending what we already have and punting on the need to fix the urgent structural problems with what we have ... it can't be ducked much longer," he said.

Wyden's legislation would be paid for with overseas contingency operations funds, which pay for, among other things, operations in Iraq and Afghanistan. That offset raised objections from Republicans. Jeff Sessions of Alabama, the ranking Republican on the Budget panel, said using overseas contingency operations funding is "the mother of gimmicks." He blocked a request to pass Wyden's measure earlier in the day.

Majority Leader Harry Reid, D-Nev., said Wyden's bill did not have the votes to pass the Senate. The patch, however, will ensure older Americans can keep getting health care while lawmakers work on a permanent fix.

"While I'm pleased with this temporary patch, I hope it's our last patch," he said.

Some House Republicans also had hoped to avoid another patch and were surprised by the sudden voice vote by which the legislation passed their chamber last week.

The House measure would continue the current rate increase of 0.5 percent through the end of the year, followed by flat payments through March 2015. It also contains extensions of several Medicare and Medicaid payment provisions, including increased inpatient payments for certain low-volume hospitals and specialized Medicare Advantage plans for individuals with special needs.

To help offset the cost of the payment provisions, the bill would modify the timing of planned cuts to Medicare under the sequester in fiscal 2024 so they are contained within a 10-year budget scoring window.

Under the bill, the cuts would be 4 percent in the first six months of the fiscal year, and zero percent in the second six months. Lawmakers used a similar sequester cut timing modification to pay for the most recent doc fix.

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