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June 30, 2014

Washington Health Policy Week in Review Archive 2f85fcdc-4955-4fed-b870-4b71f07d7771

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All Eyes on Premium Rates as Insurers Prepare for Next Health Law Sign-Ups

By Rebecca Adams, CQ HealthBeat Associate Editor

June 27, 2014 -- Wellpoint Inc., the nation's biggest managed care company, has seen a slight uptick in sign-ups since the health law's open enrollment period ended in April and projects that it will cover about 750,000 people this year, according to federal affairs vice president Elizabeth Hall.

Hall spoke at an Alliance for Health Reform briefing on 2015 rates. She said that the Indianapolis-based company, which operates in 14 states under the Blue Cross/Blue Shield brand, has proposed 2015 premiums for individual coverage in every state that it operates in, but that not all are public yet. Many customers will see premium hikes but some will see their costs cut.

So far, premium rates for the individual market in 2015 have been disclosed in 15 states, according to Rachel Nuzum of The Commonwealth Fund.

The McKinsey consulting firm is tracking rate filings and estimates that 77 percent of people who received subsidies this year will see increases in the premiums of the lowest-cost silver plans. Some 23 percent will see decreases, according to the firm.

McKinsey also examined the biggest increases and decreases by the level of coverage in 12 states. For bronze-level plans, which cover about 60 percent of patients' costs, the lowest-price plan will have a maximum decrease of 28 percent and a maximum increase of 27 percent.

For the lowest-price silver plans, which cover more costs than bronze plans, the biggest drop in premium costs was a 29 percent decline while the largest increase was a 17 percent bump. The second-lowest price silver plan, which is the level to which additional cost-sharing subsidies are linked, saw a maximum decrease in costs of 30 percent and a maximum increase of 15 percent.

McKinsey said that 18 new companies will enter the market in 2015. The company also provides state-by-state information.

It will take time to get a national perspective on premium changes, said Massachusetts Institute of Technology professor Jonathan Gruber, a supporter of the health care law (PL 111-148, PL 111-152). The biggest disclosure of information will come when rates in the federal marketplace are released.

Gruber noted that before the health law was enacted, insurers did not have to provide a minimal level of benefits and rate increases of 10 percent or more were common. Earlier this month, The Commonwealth Fund published a study by Gruber that analyzed rate increases from the three years before the law passed.

Hall and panelist Cori Uccello of the American Academy of Actuaries emphasized that insurers faced tremendous uncertainty in 2014 as they priced their insurance offerings, and that insurers still don't have a lot of claims data that would help them predict future medical costs by their customers. Insurers have fragmentary medical claims data and more pharmacy claims data, said Hall, but it will be three or four years before the companies will feel as if they really understand the new market.

Federal programs such as the reinsurance program help insurers quite a bit, said Hall. Under that program, the federal government picks up some of the costs of expensive cases.

"Very clearly, you can see it in our filings," said Hall of the reinsurance program. "It is something that I think all insurers factor into the pricing."

Other efforts to insulate insurers, such as risk adjustment and risk corridor payments, are a little harder to predict, Hall said. The reconciliation process for insurers to get estimates of their payments from those programs will not occur until next spring, she said, and payments will not come until next summer.

The risk adjustment program shifts money from insurers that have a lot of healthy customers to companies that enrolled a higher share of sicker, more costly patients. The risk corridor program limits insurers' losses and profits.

Uccello noted that because risk adjustment shifts money between insurers, the companies insurers have to figure out for their estimates how healthy the consumers in the market as a whole will be. The complexity of those calculations is "exacerbating the uncertainty" for insurers.

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Automatic Renewal in 2015 Proposed for Users of Health Law Website

By Rebecca Adams, CQ HealthBeat Associate Editor

July 26, 2014 -- About 95 percent of people who signed up in a health plan through the federal website will be notified that their insurance will automatically renew and keep them enrolled in 2015 under a proposed rule and guidance memos released Thursday.

The auto-renewal will apply to people whose income fell below 500 percent of the federal poverty line in 2013. The health care law (PL 111-148, PL 111-152) provides subsidies for people with income between 100 percent and 400 percent of the poverty line, which is $11,670 for a single person in 2014.

People who want to switch plans or have seen their incomes and subsidies change will need to take the step of notifying federal officials and their insurers. The consumers will get a renewal notice from the marketplace advising that they should contact federal officials if they are not getting the correct amount of subsidy.

If officials determine from the most recent tax returns that a consumer's income has risen above 500 percent of the poverty line, the marketplace will stop providing subsidies at the end of 2014 and renew the person's coverage. Consumers who believe that they still qualify for subsidies will have to send documentation to the marketplace.

Republican lawmakers have raised questions about the accuracy of subsidies. They worry that consumers will not remember or take seriously the need to alert federal officials and insurers about changes in their income. If a taxpayer gets higher subsidies than he or she should, the consumer will have to pay back the additional subsidies with their taxes.

About 100,000 people out of the more than 5 million people who bought coverage through will have to reapply for subsidies, according to a Centers for Medicare and Medicaid Services (CMS) official. That group opted out of a process that allows federal officials to check updated tax return information to see if recipients appear to continue to qualify for subsidies. Those individuals will get a notice telling them that their federal subsidies will end on Dec. 31, 2014, and their coverage will be renewed without any subsidies unless they prove eligibility.

The CMS documents spell out the information that insurers will have to include to let their customers know if their plans are being discontinued or renewed. Health plans will have to send consumers information, in addition to a notice from CMS. The companies will notify consumers of their expected premiums and the amount they are eligible to save on their monthly bill.

"As we plan for open enrollment in year two and continue to build a sustainable long-term system, we are committed to simplifying the experience for consumers by allowing auto-enrollment," said Sylvia Mathews Burwell, Secretary of Health and Human Services (HHS). "We are working to streamline the process for consumers wishing to remain in their current plan."

CMS officials said that about 88 percent of federal workers that get insurance through the Federal Employee Health Benefits Program don't choose to change plans and are auto-enrolled in their current plan with updated premiums and benefits.

The federal marketplace will not inform customers what their new premiums will be. Instead, officials are requiring insurers to do that.

Insurance industry officials did not express any concerns.

"While we're still reviewing the details, we appreciate that HHS is taking steps toward simplicity and stability for consumers," said Clare Krusing, a spokeswoman for the trade association America's Health Insurance Plans.

The proposed rule is open to public comment for 30 days.

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Tech Companies, Congress Look to Health Data to Create New Patient Tools

By Kerry Young, CQ HealthBeat Associate Editor

June 25, 2014 -- Silicon Valley entrepreneur Anne Wojcicki had to halt sales of her company's genetic tests for medical uses last year after the Food and Drug Administration voiced concerns over how the data would be used and its accuracy.

That experience hasn't soured Wojcicki's outlook on the role that the government may play going forward in transforming a growing wealth of data into practical tools for improving the health of Americans. In fact, in a Tuesday interview, she was enthusiastic about the steps that officials within the Department of Health and Human Services (HHS) are taking to make personal health information and broader health trends accessible.

"They get it. They get the fact that it is critical to unlock data and empower consumers," said Wojcicki, who spent a decade in the field of healthcare investing before founding Mountain View, California-based 23andme in 2006. "That the government now is focused on unlocking data is transformative."

House Energy and Commerce Committee Chairman Fred Upton, R-Mich., intends next year to advance a bill that would update many federal regulations to aid in the development of new health products. This planned legislation is meant to aid with efforts to bring to market new health data tools, as well as drugs and medical devices.

Wojcicki, who was a panelist on a roundtable convened by the committee on Tuesday, cited the federal Blue Button Initiative as an example of significant work already underway. Through the initiative, HHS and the Defense and Veterans Affairs departments have allowed people enrolled in Medicare, the VA and the military's Tricare system to fairly easily download data such as medications, lab results, blood pressure readings and known allergies.

"There's an entire ecosystem of companies that could flourish based on thinking of interesting ways to help you understand, to process that," Wojcicki said in an interview after the session.

Among the early entrants in the field is Del Mar, California-based Humetrix, which in 2012 won a federal competition known as the Blue Button Mash Up Challenge with its iBlueButton app. Christopher R. Burrow, a doctor who joined the Humetrix executive team in 2010, has said that making people's prescription history easily available through the app will help reduce the number of deaths and emergency room visits that occur due to medication errors. These contribute to about 700,000 emergency department visits and 120,000 patients hospitalizations caused each year for adverse drug events.

"Just having your mom's medication record available to her when she sees her doctor, or you yourself having your own, goes a long way to preventing adverse drug reactions," Burrow told a recent Federal Trade Commission conference on the privacy of health data. "This really can be critical, crucial information and we are passionate about delivering this service to our users."

As the executive vice president for medical affairs for Humetrix, Burrow also has served as the company's principal data security and privacy officer. He said new federal standards incorporate a secure email protocol called Direct to send a readable summary of a patient's encounter or hospital discharge to an email address.

Even with security steps taken by HHS and developers like Humetrix, deep concerns about protecting the privacy of medical data remain. Burrow noted a federal guidance regarding a process of masking, or de-identifying, health data.

"It states very clearly that gender, five-digit zip code, and date of birth, month, day and year can identify 50 percent of all Americans. That's pretty extraordinary," Burrow said. "So there is a real need to have ways of avoiding putting those three, just those three simple facts together."

Privacy was a concern too with the recent releases of large amounts of Medicare data, which are intended to allow researchers and journalists to study in depth how the program works. The Centers for Medicare and Medicaid Services (CMS) has said that it has taken steps to scrub the identity of patients from the large releases that it has made in recent months, such as the posting of information about payments to doctors. One safeguard is redacting all data that covers fewer than 11 beneficiaries.

When it came to doctors, though, CMS found that the benefit to be gained through study of payment patterns outweighed privacy concerns. CMS aided in efforts to examine this data by posting interactive "dashboards" permitting analysts to compare how per capita spending varies down to the county level and pinpointing the sharply varying burden of chronic diseases in the Medicare population across different parts of the United States.

CMS in general has pushed in the past five years to get more data out to the public to help divine broad trends, said Tricia Neuman, senior vice president of the nonprofit Kaiser Family Foundation and director of its program on Medicare policy.

"Assuming the data are correct, it's hard to see any downside to the public," she said, adding that she has talked about this increased flow of CMS information with doctors, fellow researchers and officials from health plans. "There is a real interest in exploring the data to try to get a better feel for what it going on inside the Medicare program, and how things can be improved."

There may be no more clear proof of both the interest from the health community, and the willingness of HHS to work with it, than the quick rise of Health Datapalooza.

In 2010, HHS and the Institute of Medicine first brought together business leaders and academic researchers with officials from the White House and federal agencies for the event, a kind of trade show for vendors, government officials and assorted technology geeks.

"It started from very humble roots," Niall Brennan of CMS recalled in a 2012 talk. "It wasn't a palooza. It was a meeting with 50 people."

The fifth Datapalooza, held earlier this month, drew some 2,000 entrepreneurs, investors and researchers to Washington. Brennan, now acting director of the Offices of Enterprise Management at the CMS, has stressed that the agency is anxious to work with the public in making the most of its data.

CMS is in the midst of "an evolution cycle," moving away from the role it once has as being in general primarily a payer of claims, Brennan said. Much of the work that that agency officials want to do through the Center for Medicare and Medicaid Innovation will require increased understanding of the messages to be found within the agency's data, he said.

This will be critical, for example, to helping set standards for accountable care organizations, a model of delivering medical care seen as likely to better coordinate the services that people receive. Researchers have said that this could both improve the health of patients, and save CMS money, especially in the cases of older people who may have several chronic illnesses.

"All of the levers that we are trying to pull to transform health care systems are predicated, not entirely on data, but largely on data," Brennan said. "You can't hold an ACO to a threshold without understanding what that ACO population has been like for the last three years."

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Employers May Delay New Hires' Health Coverage for Up to 4 Months Under Rule

By John Reichard, CQ HealthBeat Editor

June 24, 2014 -- Employers in some circumstances will have up to four months to delay the start of health benefits for new hires, according to a new rule jointly issued by three federal agencies.

The rule, set to take effect August 25, addresses the effects of "orientation periods" for new employees in determining how long they must wait for health coverage to begin. It applies to coverage beginning in "plan year" 2015. Employers and insurers differ in what they interpret as the start of a plan year.

A provision of the health care law (PL 111-148, PL 111-152) states that insurers or employers offering group coverage can't apply a waiting period that exceeds 90 days. The requirement applies to all group health coverage, including that offered by "grandfathered" plans otherwise exempt from some of the law's requirements.

The rule states the start of the 90-day waiting period can be delayed during orientation periods that give both the employer and the employee a chance to determine whether they want to proceed with employment. However, the orientation period can't last more than a month, according to the rule issued by the Treasury, Labor and Health and Human Services departments.

"Orientation periods are commonplace and the departments do not intend to call into question the reasonableness of short, bona fide orientation periods," the rule states. "The danger of abuse increases, however, as the length of the period expands."

The rule explained that if the orientation period lasts no more than a month it wouldn't be viewed as an attempt to dodge compliance with the 90-day maximum waiting period.

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New CMS Spokesperson Will Be in Place Before Next Health Law Sign-Up

By Rebecca Adams, CQ HealthBeat Associate Editor

The Centers for Medicare and Medicaid Services (CMS) will have a new public face when the next open enrollment period to sign up for insurance under the health law begins on Nov. 15. CMS Director of the Office of Communications Julie Bataille will leave the administration this summer, joining a long list of departing health officials.

Following the glitch-filled launch of the federal website in October, Bataille engaged in almost-daily updates with reporters, some of which turned into jousting matches when the journalists felt she was dodging their questions.

"It is with mixed emotions that I let you know that Julie Bataille, has decided to leave CMS this summer to pursue new opportunities," wrote CMS Administrator Marilyn Tavenner in an email to staff on Monday afternoon. "Under Julie's leadership, CMS ran the largest public education campaign in the agency's history – to help millions of Americans access new healthcare through and the Health Insurance Marketplace."

Tavenner noted that Bataille also oversaw communications for Medicare, Medicaid, and the Children's Health Insurance Program, including Medicare's annual open enrollment campaign.

"This time has been one of extraordinary change and growth for our agency and her work has gone a long way to enhance the agency's ongoing efforts and further its mission in an age of rapidly changing communications, customer service and technology," wrote Tavenner.

Before coming to CMS, Bataille was the Associate Vice President of Communications for Georgetown University. Earlier in her career, she worked as the Deputy Director of Communications for Vice President Al Gore and the Gore 2000 Presidential Campaign. She also worked as the main press secretary at the U.S. Department of Education during the Clinton administration and as a Clinton-era White House assistant press secretary.

A number of Obama administration communications officials as well as policy experts have left the administration. CMS media relations officials who recently left include Emma Sandoe, who will pursue a graduate degree at Harvard, and Richard Olague, who returned to the Health Resources and Services Administration. Health and Human Services (HHS) spokeswoman Joanne Peters left to work for the re-election campaign of Virginia Democratic Sen. Mark Warner. CMS spokeswoman Tasha Bradley, a veteran who is well-versed in the details of the new marketplace, is temporarily replacing Peters on a three-month detail.

A new deputy press officer will be joining CMS soon and the agency will work to fill the other openings shortly, said a federal official.

Former Obama administration health care officials who have left or will soon leave include HHS Secretary Kathleen Sebelius, principal CMS deputy administrator Jonathan Blum, CMS Center for Insurance Information and Insurance Oversight (CCIIO) Director Gary Cohen, CMS CCIIO Deputy Chiquita Brooks-LaSure, White House aide Chris Jennings, tech guru Kurt DelBene, and HHS Office of Health Reform Director Michael Hash.

After the launch, CMS Chief Operating Officer Michelle Snyder retired and was replaced by Tim Love. The chief information officer, Tony Trenkle, left abruptly and was replaced by Dave Nelson.

Last week, new HHS Secretary Sylvia Burwell announced that Andy Slavitt will serve as the new CMS principal deputy administrator and that the agency will hire a marketplace CEO and chief technology officer that will be in place before the next sign-up period begins on Nov. 15. Slavitt had worked with the administration to fix as group executive vice president for the federal contractor Optum, part of UnitedHealth Group Inc.

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Medicare Anti-Fraud Efforts Said to Be Dwarfed by Scope of Problem

By Rebecca Adams, CQ HealthBeat Associate Editor

June 24, 2014 -- Medicare officials recovered about $19.2 billion in fraudulent payments over the past five years, including $210 million through a new system that tries to predict and stop fraud before it occurs, according to a federal report issued Wednesday. But the recovered sum is dwarfed by the size of the problem: Medicare makes up to $50 billion per year in improper payments, including fraud, a Government Accountability Office (GAO) official testified at a House hearing.

The Centers for Medicare and Medicaid Services (CMS) needs to do more to curb fraud and wasteful spending, according to GAO Director of Health Care Kathleen M. King, who appeared before the House Energy and Commerce Subcommittee on Oversight and Investigations hearing.

CMS "has made progress in implementing several key strategies GAO identified or recommended in prior work as helpful in protecting Medicare from fraud," she said. "However, implementing other important actions that GAO recommended could help CMS and its program integrity contractors combat fraud."

In 2013, Medicare paid for medical care for approximately 51 million people at a cost of about $604 billion. That year, the program made almost $50 billion in payments that should not have been made or were incorrect. That includes overpayments, underpayments, payments that were not documented as they should have been and fraud.

"This is a shocking amount of taxpayer money to lose every year, especially considering that some experts tell us that we don't even know the full extent of the problem," said Tim Murphy, R-Pa., chairman of the subcommittee. "These financial losses are simply unacceptable."

Murphy cited an HHS Office of Inspector General finding that a few years ago, Medicare paid out $23 million to dead people. He also called attention to news reports this year that a California doctor billed about $22 million in inappropriate Medicare payments for wheelchairs.

GAO has designated Medicare as a high-risk program since 1990. King suggested three major ways to improve protections of Medicare funding.

One would bolster efforts already underway by CMS to check the credentials of medical providers. Under the health care law (PL 111-148, PL 111-152), CMS hired contractors to make sure medical providers and suppliers have valid licenses and are at legitimate locations. King said that CMS could further strengthen screenings by issuing a rule to work on compliance programs and require additional information, such as a notification of any suspension of payments from a federal health care program.

GAO also suggested better oversight of prepayment reviews to deny improper claims before they are paid and postpayment reviews to recover improperly paid claims.

And King said that Medicare should take common-sense steps to make it harder to commit fraud. For example, GAO has pushed CMS several times to remove seniors' Social Security numbers from their Medicare cards to help prevent identity theft and fraud. CMS agreed with the concept, but hasn't followed through. Officials said funding limitations and other problems made it hard to implement the recommendation.

CMS Center for Program Integrity Deputy Administrator and Director Shantanu Agrawal said that the agency put in place additional screening tools in March 2011. Of the 1.5 million suppliers and providers who participate in Medicare and need to be revalidated under the new screening requirements, more than 930,000 providers and suppliers have faced the new screening requirements and more than 350,000 provider and supplier practice locations had their billing privileges deactivated because they didn't respond to information requests.

Agrawal said that 20,218 providers and suppliers have had their privileges revoked so that they can no longer bill the program because they have been convicted of felonies, are not licensed or otherwise don't pass the screening tests.

The agency is working to develop ways to better ferret out wrongdoing. For instance, Agrawal said that CMS is creating a process to match enrollment data against public and private databases to get more updated felony conviction information.

"Although we have made significant progress by implementing important policies to improve provider screening, we are continually refining our policies and processes," Agrawal said.

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