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March 24, 2014

Washington Health Policy Week in Review Archive 3f0fbd9a-b190-44a4-aeb7-8613ec642569

Newsletter Article


5 Million People Signed Up for Health Law Marketplace Coverage, CMS Says

By Rebecca Adams, CQ HealthBeat Associate Editor

March 17, 2014 -- At least 5 million people have signed up for coverage in the new health law insurance marketplaces since Oct. 1, Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner wrote in a blog post.

The milestone was reached in “a weekend wave of consumers signing up for new coverage,” Tavenner wrote.

The Congressional Budget Office originally estimated that 7 million people would sign up but later revised that downward to 6 million people because of the problems people had with the enrollment process.

The most recent enrollment report came on March 11, when the Obama administration announced that 4.2 million people signed up from Oct. 1 to March 1 in the new marketplace plans created under the law (PL 111-148, PL 111-152). The administration has not said how many of those people have actually paid their premiums, which is an important step to gaining coverage.

Rebecca Adams can be reached at [email protected].  

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Proposal Eases Rules on Marketplace Navigators While Adding Others

By John Reichard, CQ HealthBeat Editor

March 18, 2014 -- A proposed rule on health plan application assistance from the Centers for Medicare and Medicaid Services is a response to the torrent of criticism Republicans have rained down on efforts to help people sign up for coverage in insurance marketplaces.

One the one hand, the administration plan targets overly restrictive state laws that hamstring enrollments. On the other, it makes clear states can add additional requirements to insulate marketplace operators against criticism efforts they’re not doing enough to protect people against hucksters and con artists.

At issue are navigators and other “assisters,” who help consumers through the coverage application process in the insurance marketplaces without actually steering them to a particular plan.

For Washington and Lee Law School Professor Timothy Jost, a supporter of the law, the proposals to head off restrictive state laws were too slow in coming.

“It is very unfortunate that CMS has waited until now to move on this issue,” Jost wrote in a blog post on the proposed rule. “Had CMS laid out the rules on this issue clearly when it promulgated the original navigator, assister, and certified application counselor regulations, it is possible that far more Americans could have been signed up for coverage during the 2014 open enrollment period,” he said.

Jost blogged last Monday on the site of the policy journal Health Affairs.

The proposed rule lays out examples of state laws it said would be illegal because they would prevent assistance personnel from carrying out their required duties under the health law (PL 111-148, PL 111-152).

“This proposal does not purport to capture the complete universe of state requirements that might be preempted in this context,” CMS notes in the regulation offered.

State or local regulations requiring assistance personnel to refer consumers to agents or brokers “or to any other sources not required to provide them with impartial advice” would be preempted.

The proposed rule would also trump any requirement barring assisters from helping employers or employees with plans sold in the small employer “SHOP” marketplaces unless they are licensed insurance agents or brokers.

And it would override any state or local law that required assistance personnel to stop helping consumers who disclose they were previously insured and had received the help of an agent or broker—or state or local laws that discouraged assistance under the same circumstances.

The proposed rule would not keep a state from requiring marketplace-approved assistance personnel from having to undergo fingerprinting or background checks. CMS officials came under fire in congressional hearings last year for not explicitly including such safeguards. They noted in response that those requirements do not exist for counselors that assist Medicare beneficiaries with their coverage decisions, without any apparent abuses occurring. But now the agency is making it clear that states are free to go ahead as long as they don’t violate other federal requirements.

In his analysis, Jost noted that state laws also can’t require assistance personnel to carry insurance covering errors or omissions. But he noted that the proposed rule does not address whether states may require them to be bonded or carry liability insurance.

States couldn’t bar an entity from serving as a navigator if it does not have its principal place of business in the state he added.

Jost also noted a lengthy list of added federal requirements that would be placed on assistance personnel, however.

For example, navigators or assisters could not be compensated on a per application basis, or on a per person, or per enrollment basis. Only promotional items of nominal value, defined as $15 or less, could be provided as inducements to get people to ask for application assistance or enrollment help.

Assisters also couldn’t go door to door to offer enrollment help but they could do so to distribute outreach or educational materials. They couldn’t make robocalls. And they’d have to maintain a physical presence in their service area so they could provide face to face assistance, Jost noted.

John Reichard can be reached at [email protected].  

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Health Law Delivers Mixed Results Spurring Insurer Competition, Study Finds

By John Reichard, CQ HealthBeat Editor

March 17, 2014 -- Competition in insurance markets has increased in some states under the health law but fallen off in others, according to early data from a limited study of the subject.

California and New York “appear to be noticeably more competitive than their 2012 individual markets as a whole,” according to the study released  last Monday by the Kaiser Family Foundation. It noted that insurance exchanges in Connecticut and Washington state saw a drop-off from 2012.

The authors of the study said the findings aren’t representative of the nation. All seven of the states examined set up their own insurance exchanges in the individual market, while most others did not. The seven states are California, Connecticut, Minnesota, Nevada, New York, Rhode Island, and Washington.

The study found New York’s exchange market is the most competitive when measured against the other states and also compared to the state of play before the law was enacted. The state’s individual market was moderately concentrated, but its exchange market is now considered unconcentrated, the study found.

The authors of the study are Cynthia Cox, Rosa Ma, Gary Claxton, and Larry Levitt.

The health law (PL 111-148, PL 111-152) has brought an influx of new insurers into some states’ individual markets but has prompted existing plans to avoid participating in some exchanges. The latter was especially noteworthy in Connecticut, where insurers with deep pockets such as Aetna, United HealthGroup, and Cigna all declined to participate despite various provisions in the law to buffer against early losses in the exchange market.

Newcomers include co-op plans and Medicaid HMOs, the study noted. While the number of competitors can signal greater competition, one payer may continue to have dominant market share so consumers may not benefit. But in a number of cases, insurers charging low premiums have been able to pick up sizeable early market shares.

“New York’s exchange acts as an active purchaser, meaning the state selectively contracts with plans, rather than allowing any qualified insurer to participate,” the study noted. “Even so, the state has 16 parent companies offering plans in the exchange in various parts of the state, seven of which hold market shares greater than 5 percent.”

The other success story in the study was California. Its exchange “is shaping up to be more competitive than its 2012 individual market,” according to the study. Indicators included the market share of the largest insurer and the number of insurers with greater than 5 percent market share. The study found California’s market, deemed highly concentrated in 2012, was now moderately concentrated.

In Connecticut only three insurers participate in the state’s exchange. But its products are attractive.

“Exceeding the state’s own expectations, it is currently ranked second in the nation of states that have enrolled the largest portion of their potential exchange enrollees,” the analysts noted, adding Vermont No. 1. Connecticut’s success could be attributed in part to its usage of Apple-inspired storefronts in enrolling residents through the exchange. Patrons get extensive individual help to guide them through the enrollment process in those venues.

In the state of Washington, the exchange is shaping up to be as highly concentrated as its individual market was before the exchange was launched. One notable aspect of the market is the entry of a Called Coordinated Care, a subsidiary of Centene. The company offers a Medicaid HMO but through the coordinated care plan, it is able to offer coverage that lessens disruptions in access to providers when enrollees switch back and forth between Medicaid and exchange coverage because of fluctuating incomes. It has picked up substantial market share and offers the lowest premiums in the “silver” tier of coverage, the most popular nationwide of the tiers denoting levels of coverage.

Minnesota’s exchange market also is notable because of the popularity of a narrow network plan called Preferred One.

“With some of the lowest exchange premiums in the country, PreferredOne was able to seize a significant portion of the exchange market and has clearly had a noticeable effect on the competitive landscape in the state,” the study said. “PreferredOne currently controls more than half (58 percent) of the exchange market, whereas it held just 3 percent of the 2012 individual market.”

It’s still too early to draw final conclusions on the long-term effects of competition, the analysts cautioned.

“With the first open enrollment period not yet completed, it is too soon to tell how well the exchanges will work to improve competition in the individual insurance market, which historically has been highly concentrated and dominated by a small number of insurers in most states,” the authors wrote. “Exchange enrollment will certainly change – especially during this last month of open enrollment, but also throughout the year as enrollees gain and lose eligibility. . . it will be several years before we can truly evaluate the success of the new markets.”

John Reichard can be reached at [email protected].

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MACPAC Report Opens Debate on Children's Health Coverage

By Rebecca Adams, CQ HealthBeat Associate Editor

March 18, 2014 -- The Medicaid and CHIP Payment and Access Commission recommended in its March report that Congress get rid of waiting periods for the Children’s Health Insurance Program and ban any premiums that the poorest children in the program face.

The recommendations are among a handful of suggestions that the commission put forward in the report, which was released Friday.

Eliminating waiting periods would reduce complexity and promote continuous coverage for kids, said the commission, which is known as MACPAC.

The second recommendation called for lawmakers to ensure that children from families with incomes below 150 percent of the federal poverty level would not have to pay CHIP premiums. The commissioners said that this would ensure fairness across the nation. States can choose whether to provide CHIP coverage by establishing separate programs for children’s care or by expanding their current Medicaid programs. States that broaden Medicaid typically do not charge premiums to families with income less than 150 percent of the federal poverty line.

If Congress banned premiums for people in that bracket, it would affect about 110,000 children in eight states.

The commissioners said the change would not significantly affect state spending.

“The CHIP premiums charged in this income range, generally less than $10 per month... are so small that they would not represent a significant revenue loss to states if they were eliminated—especially as this also removes states’ burden in collecting and administering these premiums,” the report states.

However, some states might wind up spending more if a bigger number of families enroll because of the change.

The commission said it would continue to examine the CHIP program, whose federal funding runs out after fiscal year 2015. The panel plans to broaden its analyses of CHIP in a June report to consider aspects including cost sharing, benefits, network adequacy, enrollment, and financing.

“The Commission saw an opportunity to consider a long-term vision for children’s health coverage,” said MACPAC Executive Director Anne L. Schwartz.

The two MACPAC reports examine issues in two growing programs. Medicaid and CHIP combined touch about one-fourth of the U.S. population, the authors noted, with Medicaid covering more than 70 million people for at least part of fiscal year 2013 and CHIP covering more than 8 million. The programs currently account for about 15 percent of total U.S. health care spending.

Rebecca Adams can be reached at [email protected].

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Improvements in Medicare's Handling of Post-Acute Care Proposed

By Emily Ethridge, CQ Roll Call

March 18, 2014 -- A bipartisan group of House and Senate leaders took a first step Tuesday in improving how Medicare handles post-acute care, releasing a discussion draft focused on standardized assessment data and payment policy changes.

Lawmakers of both parties have long said that the post-acute care system, including nursing homes and some hospitals, is in need of improvements. The Medicare Payment Advisory Commission (MedPAC) says the current system involves varying payment systems and rates, and high rates of fraud.

House Ways and Means Committee Chairman Dave Camp, R-Mich.; ranking Democrat Sander M. Levin of Michigan; Senate Finance Committee Chairman Ron Wyden, D-Ore.; and ranking Republican Orrin G. Hatch of Utah hope their discussion draft will serve as a building block for future improvements to the system.

They said in a statement that they will continue to work with stakeholders and lawmakers to improve the draft with an aim to introduce consensus legislation in the future.

The “resounding theme” in recommendations from more than 70 stakeholders was the need for standardized post-acute care assessment data across provider settings, according to a summary of the draft. Post-acute care providers include home health agencies, long-term care hospitals, inpatient rehabilitation facilities and skilled nursing facilities.

“The lack of comparable information across PAC settings undermines the ability of policymakers and providers to determine appropriate care settings for patients based on clinical evidence and quality metrics and differentiate between PAC providers,” the summary says.

The draft would require the collection and analyses of assessment data so Medicare can compare quality across the different settings. It also would require hospitals to report patient assessment data gathered prior to discharge, and require the use of that data by 2016 to help providers do discharge planning.

MedPAC has recommended creating a unified assessment instrument for getting information on patients, regardless of what type of facility they are in. Currently, different facilities have different ways of determining patients’ conditions, so payments and outcomes can’t be compared across settings.

Under the draft, the assessment data would be used to inform how Medicare makes post-acute care payments. Possible payment overhauls include using bundled payments, in which the reimbursement for a number of services is included into one payment. MedPAC has suggested using bundled payments so providers have an incentive to coordinate care and provide only clinically necessary services.

The Centers for Medicare and Medicaid Services is currently implementing two bundled payments models focused on changing payments for post-acute care services.

Another possible payment system change would be to move to site-neutral payments, which MedPAC has also recommended. That system would equalize payment rates for some services regardless of the setting in which they were performed. For example, experts have said many services provided in inpatient rehabilitation facilities could be provided at skilled nursing facilities at equal quality but for less cost.

The discussion draft also notes that value-based purchasing, in which payments are based on how providers score on a certain set of measures, could be used for post-acute care.

The discussion draft would require MedPAC and the Department of Health and Human Services (HHS) to send reports to Congress by 2022 using the assessment data to create payment system prototypes.

It also would direct the HHS secretary to develop regulations encouraging the use of quality data in patient discharge planning, while continuing to take into account patients’ preferences for care.

Emily Ethridge can be reached at [email protected].  

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Senators Question FDA Approach on Mobile Medical Apps

By Emily Ethridge, CQ Roll Call

March 18, 2014 -- A bipartisan group of six senators is asking the Food and Drug Administration (FDA) for more transparency in its oversight of mobile medical applications, and whether legislation is needed to assist the agency.

The FDA has said it will focus its oversight activities on medical software applications that could pose a risk to consumers if there is faulty or imprecise functioning, and not on consumer-oriented functions such as calorie counters. Some lawmakers, however, have called for legislation further clarifying the agency’s regulatory framework.

The senators, five of whom serve on the Senate Health, Education, Labor and Pensions Committee, did not propose their own legislation, but asked whether the FDA needs more legislative tools to oversee mobile medical applications. They also asked what effect legislation establishing categories of medical software would have on the agency’s oversight of applications.

“While the FDA’s final guidance has provided clarity on the agency’s approach to regulation of mobile medical applications, we believe more transparency is needed to avoid stakeholder confusion over how a wider range of medical software might be appropriately regulated,” the six senators wrote in a letter to FDA Commissioner Margaret Hamburg.

In the letter, the lawmakers asked for more clarity on the rules for software application developers, and requested that the FDA continue working with Congress to ensure proper oversight.

“It is important for the FDA to be well-equipped with the proper tools to be able to advance public health while taking care that innovation is not stifled through uncertainty or over-regulation,” they wrote. Senate HELP Committee Chairman Tom Harkin, D-Iowa, ranking Republican Lamar Alexander of Tennessee, Utah Republican Orrin G. Hatch, Colorado Democrat Michael Bennet, North Carolina Republican Richard M. Burr, and Virginia Democrat Mark Warner signed the letter dated Tuesday.

In the House, Rep. Marsha Blackburn, R-Tenn., has introduced a bill (HR 3303) that she says would detail the FDA’s oversight responsibilities and ensure that “low risk” applications are not subject to the agency’s regulation. Sen. Deb Fischer, R-Neb., has introduced similar legislation (S 2007) with Maine Independent Angus King.

Last year, Jeffrey E. Shuren, director of the FDA’s Center for Devices and Radiological Health, said such legislation might inadvertently stifle innovation in the medical mobile application marketplace.

He said the FDA’s final guidance, issued last year, allows for flexibility and focuses attention on the high-risk products. The agency said it will look to monitor applications in cases where mobile devices are being designed to deliver services that have long been regulated, such as heart rhythm monitors.

The senators applauded that approach, but said more transparency in the FDA’s oversight plans is necessary.

They asked about the FDA’s approach to regulating complex software with multiple and separate functions, and what procedures the agency uses when an application presents a novel function the agency has not yet classified.

They also asked how the FDA determines which types of software updates change an application’s function or add a function, and require agency review. They asked about what policies the agency has established to help companies, including questions about its special email address devoted to answering questions about specific applications.

In addition, the senators asked about how the FDA has coordinated with the Office of National Coordinator and Federal Communications Commission to address the concerns over interoperability.

The senators requested a response within three weeks of the letter’s receipt.

Kerry Young contributed to this report.

Emily Ethridge can be reached at [email protected].  

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