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June 16, 2014

Washington Health Policy Week in Review Archive bac1757c-a7b9-4616-b813-df37ceb5082c

Newsletter Article


Exchange Customers Have Access to Broad Network Plans, Survey Shows

By John Reichard, CQ HealthBeat Editor

June 10, 2014 -- The overwhelming majority of health insurance exchange customers have a choice between large and more costly provider networks and smaller more affordable ones according to a new survey by the McKinsey and Co. consulting company.

Critics of the health law have complained that exchange products limit choice of providers, even though in many instances shoppers in the marketplaces have no prior insurance and therefore had little or no choice of providers at all.

But McKinsey, which said its findings come from examining exchange insurance products in all of the "metal" tiers of coverage in the 501 rating areas in the nation, concluded that broad networks are available "to close to 90 percent of the addressable population."

In addition, narrower networks are available to 92 percent of that population; they make up about half (48 percent) of all exchange networks across the U.S. and 60 percent of the networks in the largest city in each state, the report found.

Compared to plans with narrowed networks, products with broad networks charged 13 to 17 percent more on average.

Nationwide, "close to 70 percent of the lowest- price products are built around narrow, ultra-narrow, or tiered networks," McKinsey stated.

The survey found "no meaningful performance difference" between broad and narrow exchange networks on federal measures of hospital care that take into account the outcomes of treatment and patient satisfaction. "However, broad networks have higher rates of academic medical center participation," it said.

Fourteen percent of all acute care hospitals participate in very narrow networks offered by exchange plans.

The survey found that consumers weren't always aware that their plan had a narrow network. And typically the exchange plans with narrow networks didn't offer access to all of the hospitals within a participating health system.

When it surveyed consumers in April, McKinsey found that 26 percent who said they'd enrolled in a plan offered under the health law were unaware of the network type they selected. And in 75 percent of silver-tier products with very narrow networks, the plans only offered some of the hospitals in a participating health system.

McKinsey said the database it examined for the study includes all 282 payers filing on 2014 exchanges and all 4,773 acute care hospitals in the U.S. The payers offered a total of 20,818 exchange products, which included 2,366 unique individual exchange networks.

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Newsletter Article


HHS Allows 18 States to Delay Employee Choice SHOP Feature Until 2016

By Kerry Young, CQ HealthBeat Associate Editor

June 10, 2014 -- The Department of Health and Human Services (HHS) will allow 18 states to put off a feature that allows workers in a small business to individually choose which health plan they want rather than leave that choice to the owner. 

HHS released a list of the states last week that can delay this feature in the insurance exchanges they offer for small businesses under the health care overhaul law (PL 111-148, PL 111-152). 

The health law program involved is the Small Business Health Options Program (SHOP). 

"This transitional policy applies to 2015," the department said." HHS expects that states and issuers will be able to learn from the experiences of issuers in those SHOPs that have decided to implement employee choice in 2015 to prepare for 2016," HHS said in a web posting. 

Despite the delays, HHS said that in 2015 about two-thirds of Americans will live in states where small business workers can choose a health plan through the SHOP option instead of the employer picking the plan. The states given the reprieve were Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, and West Virginia.

A final rule published by HHS May 27 gave state insurance commissioners a chance to recommend against implementing employee choice in 2015. They had to do so by June 2. Commissioners could take that step if they thought adopting the feature would cause insurers to charge higher premiums out of fear that an unusually large number of bad insurance risks would enroll in their plans.

The states involved are those that offer a SHOP exchange through the federal marketplace. Fourteen of the states relying on the federal exchange chose to go ahead with employee choice, doubling the number of states offering this option.

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Uninsured Rate in Minnesota Falls from 8.2 Percent to 4.9 Percent

By Rebecca Adams, CQ HealthBeat Associate Editor

June 11, 2014 -- Coverage under the health care law helped lower the number of Minnesotans who lack health benefits by 40.6 percent, University of Minnesota researchers said last week.

The number of people without insurance in Minnesota fell from 8.2 percent of the population on Sept. 30 to about 4.9 percent on May 1. That is a drop from 445,000 uninsured people to 264,500 people.

The state broadened Medicaid coverage for adults with incomes of up to 138 percent of the federal poverty level. Minnesota also operated its own marketplace, known as MNsure, under the health care law (PL 111-148, PL 111-152).

The study is the first known report to offer an independent measure of the decline in the number of uninsured people in a state since open enrollment started on Oct. 1.

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Consumer Advocates Join Rockefeller Push for Four More Years of CHIP Funding

By Rebecca Adams, CQ HealthBeat Associate Editor

June 11, 2014 -- Retiring Democratic Sen. Jay Rockefeller is seeking to influence the fate of the Children's Health Insurance Program (CHIP) he championed during his career by introducing a bill to keep money flowing into the program for four more years.

The funding for CHIP is currently set to expire on Sept. 30, 2015. The West Virginia Democrat's bill would extend the money through Sept. 30, 2019. That would match the time frame for when the legislative authority for the program would need to be reauthorized under current law (PL 111-148, PL 111-152).

If CHIP funding ends, then many children would probably end up on their families' private coverage, such as plans that they buy through the new marketplaces created by the overhaul law. But Rockefeller predicted that nearly 2 million kids would end up uninsured.

He also noted that the rest of the more than 8 million children who are now covered by CHIP might get more limited coverage or face higher out-of-pocket costs in private insurance. A study by the Georgetown University Center for Children and Families found that Arizona children who had to leave CHIP and get their coverage through the new marketplace often faced higher costs. That was especially true for families at the lowest income levels, those with more than one child and those with children who had significant health care needs.

Rockefeller's bill would go beyond the recommendation of the Medicaid and CHIP Payment and Access Commission, known as MACPAC. It voted April 11 to recommend to Congress that it extend CHIP funding through fiscal 2017. Commissioners said it is "unclear whether or not exchange plans are ready to serve as an appropriate alternative."

Families USA Executive Director Ron Pollack said in an recent interview that dental benefits in particular are much less generous in private insurance than in CHIP.

"At a time in which we as a nation are moving forward in improving coverage, it'd be a huge step in the wrong direction to go backwards with respect to coverage for low-income children," he said.

Children's health advocates issued statements supporting Rockefeller's bill. The supporters included the National Health Law Program, First Focus Campaign for Children, the American Academy of Pediatrics, March of Dimes, Children's Dental Health Project, Children's Defense Fund and Children's Hospital Association.

However, getting significant health care legislation through Congress could be difficult, even on an issue like CHIP, which has often had bipartisan support in the past.

In the House, lawmakers have not yet reached agreement on a different CHIP bill.

"We all agree CHIP is critical, which is why I have been reaching across the aisle to work [with] my colleagues in the majority on a bipartisan bill in the House," said Frank Pallone Jr. of New Jersey, the top Democrat on the Energy and Commerce Health Subcommittee, in a statement to HealthBeat. "Ensuring the health of our nation's children must be a top priority for Congress and continuing the CHIP program will help millions American kids and their families."

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DeSalvo Aims to Get Feds Out Front on Health IT Interoperability

By John Reichard, CQ HealthBeat Editor

June 9, 2014 -- Fresh off a reorganization emphasizing "interoperability," federal health IT overseer Karen DeSalvo is now summoning a wide spectrum of feedback on how the government should best fulfill this goal of freely exchanging online medical data across the health care system.

It's an effort that naturally invites skepticism because health care purchasers and consumer groups are critical of a recent Department of Health and Human Services decision to delay the deadlines for regulations requiring interoperability that are linked to higher Medicare and Medicaid payments.

But DeSalvo, recently appointed to head the Office of National Coordinator for Health Information Technology at HHS, aims to get the government back out in front on the issue.

The "10 Year Vision to Achieve an Interoperable Health IT Infrastructure" her office released last week invites clinicians, consumers, hospitals, public health, technology developers, payers, researchers, policymakers and others to help develop "a defined, shared roadmap," she said.

"There is much work to do to see that every person and their care providers can get appropriate health information in an electronic format when and how they need it to make care convenient and well-coordinated and allow for improvements in overall health," DeSalvo said in a June 5 blog post. We have heard loudly and clearly that interoperability is a national priority."

DeSalvo wants to develop a shared agenda on five critical building blocks: core technical standards and functions; certification of products as interoperable; privacy and security of medical data; "supportive" business, clinical and regulatory environments, and the development of governance structures. The collaborative approach will establish three, six, and 10-year goals in each of the areas, she said.

To get everybody on board she'll have to convince critics that the slower regulatory move to interoperability will result in genuine gains in the efficiency and quality of care. And she'll have to persuade providers that they can't keep pushing for delays despite the technical hassles involved.

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MedPAC Issues Report on Doctor Pay, Benefit Design

By Rebecca Adams, CQ HealthBeat Associate Editor

June 13, 2014 -- Congress should continue to pay extra to primary care physicians in the Medicare program and not allow bonuses to expire as scheduled next year, according to one option in a report recently released by the Medicare Payment and Advisory Commission (MedPAC).

The money might be more effective if it is provided through a monthly or annual payment for each Medicare beneficiary, the report suggested.

In 2008, MedPAC recommended that Congress give primary care doctors bonuses funded by a reduction in payments for specialty services. Lawmakers did approve bonus payments of 10 percent from 2011 through 2015 but did not include the MedPAC-recommended cuts for services other than primary care.

"The commission believes that the additional payments to primary care practitioners should continue," said the 177-page report. The idea is not a formal recommendation that commissioners approved, but rather an idea that the panel will continue to discuss.

"Replacing the primary care bonus payment with a per beneficiary payment could help move Medicare away from a [fee for service] volume-oriented approach and toward a beneficiary centered approach that encourages care coordination," including the communication with other medical providers and other activities that physicians would have to do to truly manage a patient's care as a team, according to the report.

The advisory commission's executive director Mark E. Miller will testify before the House Ways and Means Health Subcommittee on June 18 about the recommendations.

Lawmakers are interested in care coordination, as well as several other approaches covered in the MedPAC analysis. The commission's recommendations are non-binding, and Congress often doesn't act on changes suggested in the reports.

The report takes up the long-running question of adjusting the way Medicare benefits are designed, a topic of interest to Ways and Means Health Subcommittee Chairman Kevin Brady of Texas and others concerned that seniors get more protection against out-of-pocket costs when they need catastrophic care. That could mean beneficiaries will face higher upfront costs when they start using services.

MedPAC in 2012 recommended big changes to the design of the Medicare benefit so that patients would get a cap on their out-of-pocket costs, which would benefit sicker seniors. To balance out the burden, people in Medicare would pay a new fee on their Medigap supplemental plans.

That recommendation was designed to encourage seniors to use discretion when getting care and avoid overusing unneeded treatments. It would replace coinsurance with copayments, and give federal officials the ability to change or get rid of cost-sharing for high-value services. The goal was that seniors' overall cost-sharing expenses would not change.

The recommendation, again broached in the report released today, would help low-income beneficiaries who might put off care because of the cost of copayments. MedPAC has suggested that Medicare increase outpatient premium subsidies, which are currently given to people with income of up to 135 percent of the federal poverty level, so that they match the subsidies for prescription drugs, which go to people with income of up to 150 percent of poverty.

That would save more people about $1,300 a year in Part B premium costs, which they could use to pay other out-of-pocket costs.

"I am pleased that the commission continues to call attention to the need to improve Medicare's benefit design," said Brady in a statement about the upcoming hearing. "This commonsense step would modernize the Medicare benefit so it looks more like other health plans."

Another part of the report questions whether Medicare should be paying different for rehabilitation services depending on the setting where the care is delivered, even when patients' conditions and care is similar.

Inpatient rehabilitation facilities often are paid more than skilled nursing facilities for certain conditions. The commission looked closer at patients with different conditions—stroke, joint replacements,and hip and femur procedures—to determine whether needs were similar. The evidence was that people with orthopedic procedures were similar and that it may make sense to narrow the differences between the payments for the two types of facilities.

Since 2007, proposals that were put forward by both the Bush and Obama administrations suggested ways to reduce the price differential between inpatient rehab facilities and skilled nursing facilities for some conditions treated similarly. The commission is expected to continue examining the issue.

The report also is intended to spark a conversation about how to synchronize payment policies. Currently, private Medicare plans and networks of providers known as accountable care organizations are paid in different ways, even when they are in the same region. MedPAC is considering creating a common benchmark that would be tied to local fee-for-service spending for both the private Medicare Advantage plans and ACOs.

The debate will probably be a long-running discussion that won't be finalized by next year, but Brady applauded the panel for starting the conversation.

"I commend the commission for highlighting the need to compare fee-for-service to Medicare Advantage and other payment system options," he said. "We owe it to our seniors to provide an apples-to-apples comparison of quality and cost of these options in their geographic area."

Other issues in the report include:

  • Ways to improve the way that Medicare compensates health plans for providing care for sicker and more costly patients through risk adjustment payments.
  • Changes to Medicare quality measurements. The report said that Medicare quality metrics are too focused on process, and that there are too many of them.
  • The effect of drug adherence on health spending. The commission found that better adherence to a medication regimen that a doctor prescribes does lower health care spending—but that the effects vary by traits such as age and the effects are not as strong over time.

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