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February 16, 2010

Washington Health Policy Week in Review Archive e0850f64-1665-4115-b61b-04f4d1b68b12

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HHS and Labor Dole Out $1 Billion for Health IT Awards

By Jane Norman, CQ HealthBeat Associate Editor

Feb. 12, 2010 -- More than $1 billion awarded under the economic stimulus law and designed to push health information technology into high gear was announced Friday by two Cabinet secretaries.

Health and Human Services Secretary Kathleen Sebelius and Labor Secretary Hilda L. Solis, in a call with reporters, emphasized that the money will flow out across the country and train U.S. workers for jobs in health IT, as the Obama administration continues to stress the link between health care and employment. With the health care overhaul stalled in Congress, it's a way for the administration to continue to push advocacy for change in the system tied to both efficiency and quality of care.

Sebelius and Solis said the aim is to make health IT expertise available to more than 100,000 hospitals and primary care physicians by 2014, and, separately through the Department of Labor, train thousands of people in the skills needed to build careers in health care IT.

Sebelius said the awards will help the health care industry cut costs and reduce paperwork, and assist doctors in delivering high-quality health care. Only about 20 percent of doctors and 10 percent of hospitals currently have even basic electronic health records, she said. "We have some distance to cover," said Sebelius.

Also in on the call were Jared Bernstein, executive director of the "Middle Class Task Force" at the White House and chief economist to the vice president, and David Blumenthal, national coordinator for health information technology.

The $750 million coming from HHS will be divided up, with $386 million going to 40 states and qualified "State Designated Entities" to make electronic information more readily shared securely at the state level through "Health Information Exchanges." Awards will go to entities such as state Medicaid agencies, departments of health and governors' offices. States are frequently large providers of health care services and also regulate local health services.

Such information sharing, though, also raises concerns about patient privacy when records can be accessed across providers and agencies. "I want to make sure everyone understands as we look at health IT, patient privacy is a priority," said Sebelius.

Blumenthal said privacy is a foundation for the success of the health IT effort. Security and privacy protections are required under the law, and firms that allow a breach can be fined up to $1.5 million in a year, he said. A chief privacy officer is expected to be appointed soon at HHS, and the agency is studying new ways of using encryption, a system to block unauthorized access, said Blumenthal.

The second chunk of HHS money, $375 million, will be awarded to 32 nonprofits to support the development of "regional extension centers" to help health care providers. The centers, much like the agricultural extension offices that advise farmers, will offer help to doctors, hospitals and other providers as they adapt to electronic record- keeping. The awards went to organizations such as the Fund for Public Health in New York, Northern Illinois University and the District of Columbia Primary Care Association, and it's expected that overall some 3,000 people will obtain jobs working at the centers.

Health care providers don't have time to research various computer systems and will be assisted by the grant recipients, said Sebelius. "The centers will be a great sort of boots-on-the-ground resource," she said. The aim is to build a national network eventually.

The third pot of money will flow from the Department of Labor. Solis said that $225 million will be used to funnel grants to 55 programs and educational institutions in 30 states that will train workers in the skills they need to obtain employment in health IT. The expectation is that jobless people will be able to land stable, long-term jobs as nurses, pharmacy technicians or information technology specialists, officials said. Some $25 million is reserved for communities affected by auto plant job reductions and layoffs.

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Hope Still Alive for Comprehensive Health Care Overhaul, Democratic Aides Claim

By John Reichard, CQ HealthBeat Editor

Feb. 9, 2010 -- Democratic health aides asserted at a Washington conference Tuesday that they remain hopeful that Congress will still pass a comprehensive overhaul of the health care system this year, with Wendell Primus, senior health aide to Speaker Nancy Pelosi, D-Calif., saying approval could be completed by "close to the Easter recess."

But two Democratic aides implicitly acknowledged that their expressions of optimism are not widely shared in the current political climate. They described themselves as playing the "role" of optimists on a panel that at times came close to describing the health care overhaul effort in the past tense.

The aides spoke at a conference sponsored by the health policy magazine Health Affairs and the health services research organization AcademyHealth. All but one of the aides requested anonymity in order to be able to speak more candidly.

"I do think that there is still the possibility that Congress can move on health care reform this year," a top Democratic health policy aide on the Senate Finance Committee said. "It will take both the House and Senate pulling together."

Senate Finance Committee Chairman Max Baucus, D-Mont., issued a statement later in the day reiterating that an overhaul must be completed this year. "Over the past 10 years, health insurance premiums have doubled while wages for middle-class workers have remained flat," he said. "That's no coincidence — every dollar a business spends on insurance premiums is a dollar that cannot be used for wages or hiring. Passing health care reform will help boost our economy, create jobs and lift the burden of higher costs off American families, businesses and the federal budget, which is why we must pass reform this year."

The predominant view among the aides seemed to be that the only way a comprehensive overhaul would occur would be through use of the controversial budget reconciliation process that would allow overhaul legislation to move through the Senate with 50 votes and an "aye" vote by Vice President Joseph R. Biden Jr. But Republicans may have the power to offer amendment after amendment to stymie the effort.

"I don't think comprehensive health care is done by any means," Primus said. He quoted his boss as saying that if the fence is too high "we're going to pole vault in or if it's way, way, too high we're gonna parachute in." It's "quite rare" in the legislative process to get both House and Senate passage and then the legislation fails, he added.

But Primus outlined a complex process that would be required to get the legislation through using reconciliation. The House would have to pass some fixes to the Senate bill (HR 3590) that, when taken up by the Senate, would entail the use of reconciliation, he said.

These would have to include changes to Senate provisions taxing health plans with "Cadillac" benefits; increasing "affordability credits" to increase subsidies for buying coverage; "fixing the Ben Nelson fix" that would give Nebraska alone full federal coverage of Medicaid expansion costs; and closing the gap in Medicare prescription drug coverage known as the doughnut hole.

"We could have a pre-negotiated package [of fixes to the Senate bill], much like a conference report," he said. "The House would have to take that up first because it would involve revenue changes and then the Senate would pass it." With the conclusion of that legislation, "the House only then would take up the Senate health bill [HR 3590] and pass it. The trick in all of this is that the president would have to sign the Senate bill first and then the reconciliation bill would be signed second and the parts of the reconciliation bill would trump the relevant portions of the first-signed bill." That, along with "maybe a few tricks in the drafting process," would allow a big overhaul to occur.

A Senate GOP health aide noted polls showing the unpopularity of Democratic overhaul efforts and said Democrats misread the lessons of the failed 1993-94 health care overhaul effort. Democrats thought they needed to get legislation done quickly and to let Congress rather than the White House write the bill. But the aide said other lessons should have been drawn and heeded from the earlier effort.

One was that a comprehensive overhaul is too large and too worrisome given the possibility of unintended consequences and unexpectedly high costs. Another is that an overhaul must be bipartisan. He quoted the late Democratic Sen. Daniel Patrick Moynihan as saying "Never pass major legislation that affects most Americans without real bipartisan support. It opens the door to all kinds of political trouble."

The aide said there is common ground on such issues as bundling payments to increasing efficiency of care, spurring provider teamwork through "accountable care organizations," tax credits to help the chronically ill pay for health coverage, and ending exclusions from coverage based on pre-existing medical conditions.

A House GOP aide suggested that Congress would yet pass scaled-back health care legislation. "I don't think it's that people don't know what's in it" and can be brought around to a big overhaul by educating them about its provisions, the aide said, it's that they don't like what's in it. The 85 percent of the public with coverage wonder "what's in it for me" and their concerns differ from those without coverage, he added. Republicans do in fact have alternative legislation (HR 4038) that would widely lower premiums even though it only would cover 3 million people, he said, citing a Congressional Budget Office estimate.

A House Democratic aide objected to complaints that Democratic legislation does not do enough to control costs. There are "tremendous delivery system reforms" in both the House (HR 3962) and Senate Democratic bills, the aide said. "We really can't do more until and unless more people are covered and some of the other building blocks from the bills are in place," the aide later explained.

Political opponents of the overhaul and "defenders of the status quo" decided it was best to "demagogue" the effort, the aide said. But "where there's a will there's a way and there is a way — so hopefully there is a will."

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Nation's Largest Insurers Register $12.2 Billion in Profits, Report Says

By Jane Norman, CQ HealthBeat Associate Editor

Feb. 11, 2010 -- The nation's five largest health insurance companies reported historic profits in 2009 but at the same time dropped 2.7 million Americans from private plans, according to a report released Thursday by advocates for Democrats' health care overhaul.

The companies' earnings combined with "skyrocketing" premiums demonstrate the need for change, said Rep. Rosa DeLauro, D-Conn., who took part in a conference call with reporters organized by the group Health Care for America Now (HCAN). Negotiations on health care measures are continuing and President Obama has called a meeting for the end of the month, she said, referring to a bipartisan health care summit set for Feb. 25.

"What we need to do is press forward to have health insurance reform to provide economic security for America's families," DeLauro said.

DeLauro's comments came as lawmakers continue their search for a route to success on a health care overhaul that the president continues to say is a top domestic priority. Obama has said he won't abandon separate measures approved by the House and Senate, but is open to ideas on how to meet the "core goals" of the overhaul. While both Democrats and Republicans agree costs are too high already and rising too rapidly for families and businesses to bear, there's not much more consensus between the parties.

In the past few days the debate also has been roiled by news that Anthem Blue Cross proposes to raise premiums for California customers in individual plans by as much as 39 percent. Anthem was not included in the HCAN report.

The report by HCAN focused on the five largest for-profit health insurers — UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp. The combined profit from the five companies hit $12.2 billion, a 56 percent increase from 2008, the report said. All but one of the companies — Aetna — saw earnings increase from 2008. Three of the five spent a smaller proportion of premium dollars on actual health care expenses, as opposed to administrative costs and profits, the report said.

Meanwhile the cost of health insurance is forcing Americans to drop private plans, the report said. "The shedding of 2.7 million members from private health plans is part of the industry's long-term shifting of responsibility for the care of sick, older or lower-income customers to taxpayer-supported health insurance" such as Medicaid, Medicare or the Children's Health Insurance Program, HCAN said.

But Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said health plan profits are well below profits for other segments of the health care industry. "For every dollar spent on health care in America, less than one penny goes towards health plan profits," Zirkelbach said.

Insurers also contend that premiums go up when prices of medical services go up, pointing to a recent report by Centers for Medicare and Medicaid actuaries showing that national health care expenditures are projected to have consumed more than 17 percent of Gross Domestic Product in 2009. "The real focus needs to be on the increase in the underlying cost of medical care, which is putting health care coverage out of reach for many families and small businesses," said Zirkelbach.

The number of people health insurers cover is dropping because workers are losing jobs and their employer-provided insurance, both advocates and insurers agree. But Richard Kirsch of HCAN said there's also a trend away from private insurance that has continued for years, even in good times, as rates go up. There's a pattern in which companies try to purge customers who are sicker and more expensive, he said.

Judy Feder, a professor of public policy at Georgetown University who took part in the HCAN call, said that when prices and profits rise, "you know you've got an industry that's not working." The health care overhaul will stop discrimination based on pre-existing conditions and implement new rules requiring premium dollars be spent on health care rather than profits or administration, she said.

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Obama Challenges Republicans on Health Care Talk

By CQ Staff

Feb. 9, 2010 -- President Obama on Tuesday pushed back against Republican demands that he "start over" on health care, pressing GOP leaders to acknowledge that they cannot dictate the shape of an overhaul.

After a White House meeting with top House and Senate leaders from both parties, Obama said all sides agree that the status quo is unacceptable, with health insurance premiums rising sharply and health costs adding to the federal deficit each year. But it was clear that the agreement ends there.

Obama has called for a bipartisan health care summit Feb. 25, a call that has brought a chilly reaction from congressional Republican leaders. Not long after Tuesday's meeting, the office of House Minority Leader John A. Boehner, R-Ohio, sent out an e-mail alert headlined, "White House Health Care Summit: Honest, Bipartisan Conversation or Set-Up for Another Democratic Backroom Deal?"

Obama made clear he does not intend to scrap the work that went into the stalled health care bills passed by the House and Senate last year (HR 3962, HR 3590), as Republicans demand. But he said he was open to new ideas on how these "core goals" could be met.

He said Republicans need to offer suggestions that can be "measured against this test: Does it bring down costs for all Americans, as well as for the federal government, which spends a huge amount on health care? Does it provide adequate protection against abuses by the insurance industry? Does it make coverage affordable and available to the tens of millions of working Americans who don't have it right now? And does it help us get on a path of fiscal sustainability?"

Not only should any legislative proposals meet those goals, Obama said, but an impartial arbiter such as the Congressional Budget Office needs to confirm that they would do so.

The president said bipartisanship doesn't mean surrender. "I'm willing to move off some of the preferences of my party in order to meet them halfway, but there's got to be some give from their side as well," he said of the Republicans.

"Bipartisanship can't be that I agree to all of the things that they believe in or want, and they agree to none of the things I believe in or want, and that's the price of bipartisanship, right? But that's sometimes the way it gets presented," he said.

One area where Obama indicated he was open to compromise was medical malpractice and tort reform — a cause Republicans have championed for years against stiff Democratic resistance. GOP lawmakers say defensive medicine, designed to ward off malpractice suits, drives up health care costs significantly.

"If it's established that by working seriously on medical malpractice and tort reform that we can reduce some of those costs, I've said from the beginning of this debate I'd be willing to work on that," Obama said.

"On the other hand, if I'm told that that is only a fraction of the problem and that is not the biggest driver of health care costs, then I'm also going to insist, "OK, let's look at that as one aspect of it, but what else are we willing to do?'"

Obama acknowledged that the public has grown hostile to the Democrats' health care overhaul, but he blamed that on process rather than substance.

"What I agree with is that the public has soured on the process that they saw over the past year. I think that actually contaminates how they view the substance of the bills."

He did not mention that the "process" that proved so unpopular was the decision by Democratic leaders to draft the final House and Senate health bills behind closed doors, with deals made in the Senate to pick off the votes of particular Democratic centrists.

"I think it's important for all of these issues to be aired, so that people have confidence if we're moving forward on such a significant part of the economy as health care that there is complete transparency and all of these issues have been adequately vetted and adequately debated," Obama said.

He said the Feb. 25 health care summit would provide that opportunity.

"Let's establish what the issues are, what the problems are, and let's test out in front of the American people what ideas work and what ideas don't. And, you know, if we can establish that factual accuracy about how different approaches would work, then I think we can make some progress."

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Plans Announce Pilot to Ease Paperwork Headaches at the Doctor's Office

By John Reichard, CQ HealthBeat Editor

Feb 11, 2010 -- The nation's largest health insurance lobby announced Thursday a pilot program in New Jersey to make it easier for the staff in doctor's offices to verify insurance coverage, determine what out-of-pocket payments the patient owes and get paid faster by the insurance company, among other efficiency gains.

The group of insurers and doctor groups that announced the pilot said it would reduce the big chunks of time and money doctor's offices spend in dealing with insurers.

The pilot is the latest effort by insurers to highlight their efforts to control health costs by reducing the big part of the health care dollar that goes for administrative costs rather than directly for health care.

America's Health Insurance Plans (AHIP), the lobby that announced the pilot, recently announced a similar pilot program in Ohio. Both efforts are in their early stages but are "pilots" in name only, AHIP officials stress. The programs involve most of the doctors and insurers in both states and are designed to be permanent, they say. The term pilot is meant to convey that the programs will include a period of evaluation to work out kinks in the program.

The officials add that the two pilots will show other states how insurers and doctors can work together to make changes that are "a very big deal" in doctor's offices, one of the AHIP officials noted.

Tens of billions of dollars can be saved in the health care system through such changes, they say, likening them to the advent of the ATM system in banking in which inserting a card in a machine virtually anywhere in the world produces cash.

But it may take a number of years before a similar streamlining of health care payment transactions occurs throughout the entire United States. Doing so involves completing the computerization of doctor's offices, the adoption of common standards for payment-related transactions and an umbrella organization willing to prod insurers and doctors to work together to create such a system.

Meanwhile, the Obama administration is highlighting soaring premiums charged by some insurers and blaming them on industry profiteering.

The White House hopes that public distress over unaffordable premium increases will prod lawmakers to move ahead on a big overhaul of the health care system. To the extent opponents of a big overhaul can say that marketplace changes are occurring outside of legislation to control health care costs they may be able to deflect a bit of that pressure. But insurers didn't tie the pilot programs specifically to lower premiums.

AHIP President Karen Ignagni said in a telephone news briefing announcing the New Jersey pilot that "health reform is going to be dependent on collaborations of this sort."

The average office of a primary care physician spends about $68,000 a year on administrative tasks, Ignagni said. The initiative can bring those costs down and slow the growth of health costs, she said.

The key to the new program in New Jersey is the so-called NaviNet Web portal. Its boosters say that in essence, it allows the staff in the doctor's office to go to one Web site to handle the multiple steps involved in filing a simple insurance claim.

For example, the office worker first has to verify that the patient has the insurance he says he does. The patient might have switched jobs and be confused about who his insurer is. Claims might then get filed with the wrong insurer and be rejected, requiring that they be refiled with the new insurer.

Because the portal accesses multiple insurers in New Jersey, a visit to the portal can determine who the actual insurer is, avoiding the misstep of filing with the wrong company.

Once coverage is verified, the office worker can find out right away what deductibles and co-payments are involved and so determine what the patient owes out of pocket. That payment can be collected right away, avoiding the time and expense of billing the patient to get paid later— and uncollected revenue if the patient doesn't later pay.

The portal also allows claims to be filed electronically.

Physician staff also can check on the status of a claim filed previously. Now, one of the big reasons claims are rejected is that an office files a claim, waits a number of days without getting paid and decides to refile the same claim. The insurer kicks both claims out of the system, paying neither. The doctor's office must then refile using a paper claim. A visit to the portal would confirm that the insurer had the first claim in its system and avoid the wasted effort involved in refiling.

Another advantage outlined by insurers is that an office can more efficiently document that a patient referred by another doctor has the proper referral. Sometimes treatment gets delayed and office time consumed because the patient doesn't have the needed slip of paper and efforts must be made to verify the referral. But the New Jersey pilot is testing "real-time referrals" through the portal, meaning they are done electronically, saving office staff time and money.

Insurers sometimes have their own Web portals allowing these functions to be performed but each has its own process that also may involve use of phone calls to get information. NaviNet allows all the big insurers in the state to be accessed using the same portal and the same procedures.

"What we are producing through NaviNet is the gateway, a one-stop shop, in which physicians and their offices can contact all of the health plans they're dealing with, doing away with different numbers, different codes, different Web sites — one gateway through which they can contact the health plan directly and through which their physician management systems can link in," Ignagni said.

A reporter on the call pressed Ignagni about how new the program really is, saying that NaviNet use by insurers in New Jersey is not new. However, Christy Bell, an executive with Horizon Blue Cross Blue Shield of New Jersey, said the insurer is shifting all of its enrollees to the NaviNet portal for the first time. All of the insurers involved in the announcement will make transactions through the portal and with all involved can work toward adopting the same standards to avoid confusion by physician office staff, officials said.

The companies involve account for 95 percent of the privately insured patients in New Jersey, officials said. The insurers involved are Aetna, AmeriHealth New Jersey, Cigna, Horizon Blue Cross Blue Shield of New Jersey and UnitedHealthcare.

The doctors involved are members of the Medical Society of New Jersey, the New Jersey Academy of Family Physicians, the New Jersey Association of Osteopathic Physicians and Surgeons, the New Jersey Medical Group Management Association, and Partners in Care Corp.

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Sebelius, Vilsack Combine Forces to Cover More Uninsured Children

By John Reichard, CQ HealthBeat Editor

Feb. 8, 2010 --Two Cabinet secretaries said last week they were launching a five-year campaign to build on the increase of 2.6 million over the past year in enrollment of uninsured children in Medicaid and the Children's Health Insurance Program.

Marking the first anniversary of the expansion of CHIP signed into law by President Obama, HHS Secretary Kathleen Sebelius and Agriculture Secretary Tom Vilsack said another 5 million uninsured children are eligible for Medicaid or CHIP but are not enrolled.

The secretaries described the "Connecting Kids to Coverage" campaign as a five-year effort that "will challenge federal officials, governors, majors, community organizations, tribal leaders and faith-based organizations" to enroll uninsured children.

The two departments will work with state officials to use data from state "Supplemental Nutrition Assistance Programs" — food stamp programs — to identify uninsured kids who might qualify for Medicaid or CHIP coverage.

Vilsack said, "The partnership we are announcing today will bring new cooperation between HHS and USDA so that families who qualify for food assistance can better access affordable health insurance for their children." The officials also announced that $10 million in "outreach" funds to enroll more uninsured children will be disbursed in April, targeting American Indian and Alaska Native populations.

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