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March 3, 2014

Washington Health Policy Week in Review Archive 1e24571b-c128-4395-b18d-069ad67b54d4

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CMS Says 4 Million Have Signed Up for Insurance Through Marketplaces

By Kerry Young, CQ HealthBeat Associate Editor

February 26, 2014 -- About 4 million people have signed up for insurance through federal and state health marketplaces, the head of the Centers for Medicare and Medicaid Services (CMS) said last week.

In a blog post released in the evening, CMS Administrator Marilyn Tavenner announced the latest enrollment estimate, reflecting activity since October.

A full enrollment report for February will be released in mid-March, CMS said.

"Our outreach efforts are in full force with community partners and local officials participating in hundreds of events each week and enrollment assistors are helping more and more people enroll in coverage," Tavenner said.

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January Brings Uptick in People Declared Eligible for Medicaid, CHIP

By Rebecca Adams, CQ HealthBeat Associate Editor

February 28, 2014 -- More than 2.4 million people were determined in January to be eligible for Medicaid or the Children's Health Insurance Program (CHIP), said a new report released by the Centers for Medicare and Medicaid Services (CMS).

That's about 143,000 higher than in December.

Most of the determinations were in the 26 states that expanded Medicaid to people with incomes up to 138 percent of the federal poverty level under the health care law (PL 111-148, PL 111-152).

The data are incomplete in many ways. The report does not include people who applied for coverage through the federal website It also does not break out how many of the applicants are eligible under new Medicaid rules that took effect on Jan. 1 and how many are eligible under the previously existing Medicaid system. Information from many states also is incomplete or in some cases, includes applications from people who are already enrolled but need to renew their coverage.

In January, Medicaid and CHIP agencies nationwide got almost 2.3 million applications. That is up from about 1.9 million in December. An application isn't necessarily for one person. It could also be for a family.

"The number of Medicaid determinations across the country is encouraging, but more work is left to do," said a blog post on the Health and Human Services website touting the numbers.

Since the open enrollment period started on Oct. 1, about 8.9 million people have been determined to be eligible for Medicaid or CHIP. But it is unclear how many of those people would have been eligible under the traditional Medicaid system and how many gained coverage because of the health care law.

The enrollment numbers come as the discussion about whether to expand Medicaid moves ahead in several states. Utah Republican Gov. Gary Herbert recently unveiled his plan to expand Medicaid through a block grant waiver. The plan, which would use Medicaid dollars to buy private plans through the new marketplace, mirrors programs that have been approved in Arkansas and Iowa.

Herbert would provide different levels of assistance to people based on their ability to work, household income, access to employer or family health insurance, and individual health care needs. The people would have to make co-payments to help pay for the cost of their care.

"I am prepared to pursue a block grant from the federal government to bring Utah taxpayer dollars back to our state to fulfill our responsibility to care for the poorest among us," he said in a statement.

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Policy Allows People Who Did Not Get Subsidy Information to Receive Credits Retroactively

By Rebecca Adams, CQ HealthBeat Associate Editor

February 28, 2014 -- Insurers may have a hard time implementing a new federal policy designed to accommodate people who tried to obtain coverage through the new health law marketplaces but could not get information about their eligibility for subsidies because of technical problems. Federal officials recently said that the individuals could get subsidies retroactively for certain policies inside or outside the marketplaces.

The subsidies have been one of the major attractions of the new exchanges because the Obama administration had said that taxpayer-subsidized coverage was only available for marketplace plans.

But the new policy, outlined in a three-page guidance memo published without notice on a federal website, provides flexibility for people who submitted an application but did not get prompt information about their eligibility for subsidies. The policy does not appear to apply to people who started applications but did not submit them.

The change could be especially helpful in places where state officials decided to run their own websites but faced technical problems. Those include Hawaii, Maryland, Massachusetts, Minnesota, Nevada, and Oregon.

The new guidance provides a way for states that covered the costs of subsidies for people who otherwise would have been eligible to get reimbursed by the Centers for Medicare and Medicaid Services.

The policy probably covers a small number of people but translates into significant administrative costs for insurers, said Brian Haile, senior vice president for health policy at the Jackson Hewitt Tax Service Inc. It only applies to insurance that meets the federal standards required to be a "qualified health plan," instead of cheaper and less comprehensive coverage.

"The effect on the insurance industry is substantial," Haile said in an email. "The guidance requires insurers to re-process eligibility and enrollment files, bill the federal government for subsidies, re-adjudicate past medical claims, refund enrollees premiums and cost-sharing that exceed subsidy amounts, and repay any tax credits funded by state governments during this period."

A spokeswoman for America's Health Insurance Plans said the trade association is still reviewing the guidance.

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Compromise 'Doc Fix' Bill Scored by CBO

By Emily Ethridge

February 27, 2014 -- The bipartisan, bicameral compromise measure to replace how Medicare pays physicians would cost $138.4 billion for 2014 through 2024, according to the latest Congressional Budget Office (CBO) estimate, and lawmakers are struggling to find a way to pay for it.

The score is on the lower side of cost estimates for various measures that would repeal Medicare's sustainable growth rate and replace it with new payment systems. The bill (HR 4015, S 2000) represents a policy agreement among three committees—Senate Finance, House Energy and Commerce and House Ways and Means—and has the backing of several provider groups.

The CBO noted that this most recent estimate is an 11-year score and includes a cost for fiscal 2024, whereas all the previous scores included costs only through fiscal 2023. Through fiscal 2023, the compromise bill would cost $122.3 billion.

Previous versions of replacement legislation approved in committee had CBO cost estimates ranging from $121.1 billion over 10 years to $153.2 billion over 10 years.

But a more immediate problem looms—lawmakers have only one month before the current "doc fix" patch (PL 113-67) expires and physicians face a 24 percent cut in their Medicare payment rates beginning April 1.

Rep. Charles W. Boustany, R-La., has said that lawmakers are working on a "parallel track"—continuing to work on moving the replace bill forward while also coming up with another short-term patch that could perhaps last through the rest of 2014.

"What's complicating things right now is the discussion on payfors," said Boustany, noting that new Senate Finance Committee Chairman Ron Wyden, D-Ore., is still "staffing up." Wyden became chairman earlier this month when Max Baucus, D-Mont., left the Senate to become ambassador to China.

The CBO's score shows lawmakers the exact parameters of that discussion, and the major challenge of offsetting the bill's cost. The CBO estimate says that nearly all of the bill's estimated increase in spending would come from updates in rates paid for physician services.

The bill would maintain current rates for 2014 and give providers 0.5 percent annual payment updates for 2015 to 2018. After that, individual providers' payments would be adjusted based on whether they participate in an approved alternative payment model or a new Merit-Based Incentive Payment System.

Establishing those two programs would increase Medicare spending by $6 billion for fiscal 2014 through fiscal 2024, the CBO said, with the expectation that most providers will choose the program that is most financially rewarding for them.

Boustany said he is "still optimistic" about the replacement bill's chances, even with time running low and the offset challenge ahead.

"We have an opportune moment now to do this. We really should seize it and do everything we can to make it happen," said Boustany. "Cause if we don't, I'm afraid we'll be stuck with patches for a long time in the future and we'll have missed a historic opportunity."

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Some—Not All—Analysts Lower Estimates of Medicare Advantage Cuts

By John Reichard, CQ HealthBeat Editor

February 24, 2014 -- After a more thorough evaluation of preliminary 2015 rate changes announced last week in the Medicare Advantage program, industry analysts in some cases have said the hit won't be as big as they thought.

Industry forecasts prior to the announcement forecast that Medicare officials would propose cuts to Medicare Advantage plans of 6 percent to 7 percent next year. But now some stock seers see the reductions coming in at closer to 4 percent. Others stuck to higher estimates, however.

The Centers for Medicare and Medicaid Services (CMS) issued a statement last week suggesting the cuts would total 1.9 percent. But industry sources and stock analysts said the figure failed to account for all the factors affecting reimbursement.

"Reports from leading industry analysts show broad consensus that the CMS proposal, if finalized, would result in Medicare Advantage payment cuts of at least 4 percent in 2015 and likely much higher once other changes are factored in," America's Health Insurance Plans (AHIP) said in a recently issued statement.

Meanwhile, CMS issued a statement linking cuts to lower premiums, suggesting that beneficiaries are helped, not hurt, through cuts.

Republicans are stepping up their attacks on the health law on the grounds that cuts to Medicare Advantage under the overhaul (PL 111-148, PL 111-152) are driving up out of pocket costs to seniors. As plans tighten networks to lower their costs, more seniors are losing access to their doctors, they charge.

Humana, a big player in the Medicare Advantage market, said in a Securities and Exchange Commission filing last week that it now expects cuts in 2015 to be in the 3.5 percent to 4 percent range. Before the announcement it put them in the 6 percent to 7 percent range.

An AHIP roundup of excerpted quotes from investment firms put the cuts as high as 8 percent to 9 percent.

But defenders of the cuts noted they are part of health law changes that gradually bring down payment rates to Medicare Advantage plans to the same level as those for other Medicare providers. The private plan program in Medicare was originally created to bring savings to Medicare, not to add to its outlays.

Asked to comment on the industry assessments of at least a 4 percent cut, CMS spokesman Aaron Albright said in a statement, "The proposed changes for 2015 for Medicare Advantage are smaller than those implemented in 2014. As we've seen over the past few years, efforts to reduce overpayments for medical services have corresponded with falling premiums for consumers. Since the ACA became law, enrollment in Medicare Advantage has increased by nearly 33% while premiums have fallen by 10%, and premiums for Part B have remained flat."

A consumer advocacy group, the Center for Medicare Advocacy, said in a recent statement that a 2009 study showed per enrollee payments for Medicare Advantage plans in 2009 were 13 percent higher than for traditional Medicare. "The ACA changes will bring that difference down to 1 percent by 2017. Yet even then, many private MA plans will be paid more than comparable care would cost in traditional Medicare."

It added that even with health law cuts the Congressional Budget Office has projected that enrollment in Medicare Advantage will climb from 13 million in 2013 to 18 million by 2019.

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Revisions Weighed to Model Law on Adequacy of Provider Networks

By Rebecca Adams, CQ HealthBeat Associate Editor

February 26, 2014 – The nation's insurance regulators are considering changes to their recommendations for state laws that ensure that consumers have enough providers to choose from in health insurance networks. The discussion comes amid criticism about how narrow some provider networks are in plans offered through the marketplaces created by the health law.

The National Association of Insurance Commissioners (NAIC) is expected to debate its model for provider networks during the group's national meeting in March. Any new version is expected before state legislative sessions start in 2015, to allow lawmakers to adjust existing state laws. State legislators often rely on such templates put forward by the NAIC on insurance issues.

The regulators' group may also suggest revisions that could be accomplished through regulations that could be faster and easier instead of new laws, which would be a faster and easier to enact than new laws.

The debate was prompted some insurers' decision to create narrow provider networks for coverage sold through exchanges created by the health law (PL 111-148, PL 111-152), said Kansas Insurance Department Commissioner Sandy Praeger, who chairs the subcommittee that would oversee any recommendations. Consumers in some states have complained that they are unable to see highly regarded doctors or use the biggest hospitals in their areas.

"There are some concerns that some of the plans have reduced the number of providers in plans since the implementation of the Affordable Care Act," Praeger said, referring to the health care law.

Some health insurers designed networks to exclude expensive providers because the law limits the way that insurers can hold down costs in other ways such as restricting the coverage of benefits.

"Most states don't have good protections in place and the Affordable Care Act leaves network adequacy as something that states can regulate," Praeger said, adding that federal officials are beginning to look at how effective is network adequacy at the state level. "It's important that we have the discussion and bring some recommendations forward."

Insurance commissioners do not want federal officials to dictate changes in how regulators oversee the networks that insurers use.

"I think [federal officials] are looking at it and that's why it's important for us at NAIC to make sure that we are providing proper guidance to our states around network adequacy and it stays a state issue," she said.

Praeger's subcommittee will have a conference call in March to begin discussing the issue, among other items on the group's agenda.
Some question whether changes to the model law itself are needed, said Wisconsin Deputy Commissioner of Insurance Dan Schwartzer, who works closely with the NAIC. Wisconsin Insurance Commissioner Tom Nickel is the vice chair of Praeger's subcommittee. Some state officials may prefer to be more aggressive using their existing authority or may push for revisions to their state laws on provider networks without new recommendations from NAIC.

"We have to be careful we're not taking away the ability for insurers to negotiate good rates for providers because health care costs continue to rise," said Schwartzer.

Schwartzer said that requirements in the health care law, such as preventing insurers from denying coverage or charging higher premiums to sick people, would end up raising costs for insurers. So will the law's requirements for the types of benefits that insurers have to offer. Insurers want to offset those increases somehow.

"It's a sensitive area," said Schwartzer.

The issue of whether networks are sufficient are one of several issues that are expected to come up at the NAIC meeting in Florida that starts March 29. Other topics include proposed changes to the group's model law on the financial reserves that insurers should maintain, federal officials' interest in overseeing the review of rate increases that are proposed by insurers and the regulation of the plans in the marketplaces.

The group is working on a white paper analyzing the potential impact of employer self-insurance on insurance sold to small businesses.

Commissioners also will discuss concerns about consumer issues that arose in the marketplaces, including if the federal website or a state marketplace website incorrectly listed information about a health plan's benefits so that consumers went away without coverage or allowed to enroll in a plan that was not intended to be offered in the customer's area.

Insurance commissioners are intent on retaining as much oversight as possible over the health plans in their states. As they weigh whether to update their recommendations on the rules that insurers must follow in designing their provider networks, they may consider issues such as how long it takes for patients to get appointments or how many providers are available in a particular geographic area.

Praeger said that the association wants to consider a variety of metrics that regulators could use to assess whether the number of providers in a network is sufficient.

"One size fits all doesn't work," said Praeger.

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