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March 31, 2014

Washington Health Policy Week in Review Archive 9cb104e5-42e9-40d8-ab66-17e4e947be75

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Marketplace Enrollment Hits 6 Million, Obama Announces

By Melissa Attias, CQ Roll Call

March 27, 2014 -- President Barack Obama held a conference call last week with thousands of supporters who are working to get people enrolled under the health care law so he could personally deliver the news that more than 6 million Americans have signed up through the federal and state marketplaces, or exchanges.

The announcement appears to move the Obama administration past the Congressional Budget Office's projection that 6 million people would enroll through the exchanges in 2014, an estimate that was revised down from 7 million in February after the troubled launch of the federal exchange on Oct. 1. But the number does not filter out those who haven't paid their premiums, which would lower the total.

According to a readout from the White House, Obama while traveling in Italy hosted the call with "several thousand grass-roots volunteers, navigators and in-person assisters" who are helping individuals enroll. He also thanked them for their work and emphasized the importance of making further progress before open enrollment ends March 31, urging them to "leave no stone unturned."

The White House said the federal exchange website had more than 1.5 million visits Wednesday while there were more than 430,000 calls into the call centers. Across the country, there are more than 27,000 people who are trained to help individuals sign up in their communities, the readout added.

Although open enrollment officially ends March 31, the administration announced earlier this week that people who began their applications before the deadline would have time to finish them next month. Federal officials also released guidance on circumstances for special enrollment periods that could allow some individuals to sign up after March 31 in an open-ended timeframe.

The next open enrollment period is scheduled to begin Nov. 15 for coverage beginning Jan. 1.

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House Bill Heading for Senate Not Your Father's 'Doc Fix'

By John Reichard, CQ HealthBeat Editor

March 28, 2014 -- The "doc fix" bill has become a routine part Congress's annual to-do list. But this year's version shows how members are using it for considerably more than standard adjustments to Medicare payments.

Lawmakers also have inserted language addressing controversies such as the switch to the ICD-10 billing system and the payment levels Medicare assigns to different types of physician services. The bill (HR 4302) also takes on the "two-midnight" rule hospitals complain puts them at risk of providing costly care for free.

It addresses consumer concerns such as exposure to radiation in CT scans, and assistance to the parents of children with complex medical conditions as they try to line up services to meet their needs. The bill even tinkers around the edges of the health law (PL 111-148, PL 111-152), despite the widespread belief the law can't be tweaked without procedurally exposing it to wholesale changes.

The most pressing piece of business is heading off the 24 percent cut in Medicare payments to physicians scheduled to take effect April 1. The bill does that by delaying any cut through March 31, 2015, offsetting the $15.8 billion cost of this one-year doc fix and the other extensions in the measure with $22.1 billion in health-related spending reductions.

The House passed it by voice vote last week and the Senate plans to take up the measure this week. Although it appears headed toward congressional approval, its road has been rocky. To get it through, House Republican and Democratic leaders struck a closed-door deal to bring up the measure and pass it by voice vote while many members were not in the chamber. Late last week the American Medical Association (AMA) and the American College of Surgeons urged senators to reject the House bill, instead backing a complete overhaul of Medicare's physician payment formula.

The AMA said that if Congress has to enact another patch, it should be limited to the period needed to work out an agreement on offsets for a complete overhaul.

With uncertainty about whether Congress will pass the one-year patch and prevent the 24 percent cut by April 1, Medicare officials have instructed their payment contractors to hold Medicare claims for physician services filed after March 31 for two weeks.

The bill would repeal section 1302(c) of the health law, which caps allowable deductibles for small group insurance plans. The caps currently are $2,000 for individual coverage or $4,000 for family policies starting Jan. 1, 2014. But employers complain that only about a third of small group customers choose plans with deductibles lower than the caps. That means the rest would be forced to raise premiums, increase copays or strip benefits to comply with the cap, according to the National Retail Federation and a coalition of other groups.

Though the Department of Health and Human Services (HHS) will allow plans to exceed the statutory cap when there is no other reasonable way to provide an actuarial value at a given tier of coverage, the waiver applies only for three years and can be modified or rescinded at any time, the groups charged in a letter last year. The language in the House bill would drop the cap as a matter of law.

The exposure of patients to radiation in CT scans has become a growing concern in recent years amid reports that the technology is overused and can't keep excessive doses of radiation from being administered. The bill would require doctors ordering CT scans to state in their Medicare payment claims whether they have consulted HHS-approved guidelines developed by specialty societies in deciding whether to order an image. Those who repeatedly order scans counter to those guidelines may be required to obtain prior authorization from Medicare in order to be paid.

The House bill would cut Medicare payments by 5 percent in 2016 to doctors who use equipment that didn't have "dose optimization" features and by 15 percent in 2017 if they lack equipment with such features. Combined, the guideline and equipment provisions will save an estimated $200 million over 10 years.

Another provision of the bill extends funding for six months of a health law program called the Maternal, Infant, and Early Child Home Visiting Program." The voluntary program provides grants for visits to the homes of pregnant women, expectant fathers or primary caregivers of children to improve parenting skills and prevent child injuries and child abuse.

And the House bill also extends through fiscal year 2015 "Family to Family Health Information Centers." The centers are non-profit, family staffed organizations in which families of children and youth with special health care needs help each other navigate the maze of programs and services to assist such children.

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Senate Democrats Roll Out 'Fixes' to Health Care Law

By Melissa Attias, CQ Roll Call

March 27, 2014 -- Five Senate Democrats and Maine independent Angus King announced recently that they are proposing a series of nine bills—some of which have already been introduced—that would make changes to the 2010 health care law.

The measures includes proposals that would create a new high-deductible coverage option known as a copper plan in the health insurance exchanges, expand the law's small business tax credit and narrow the requirement for businesses to offer coverage or pay a penalty to employers with 100 or more workers, rather than the 50-employee threshold under current law.

Democrats Heidi Heitkamp of North Dakota, Mary L. Landrieu of Louisiana, Mark Begich of Alaska, Mark Warner of Virginia and Joe Manchin III of West Virginia joined King in announcing the legislation. Begich, Landrieu, and Warner all are up for re-election this year.

According to a Senate Democratic aide, the proposals that have not already been introduced will be dropped soon and Senate leadership is aware of the proposals.

Majority Leader Harry Reid said earlier this year that he would consider allowing votes on Democratic bills to make fixes to the overhaul, but a spokesman for the Nevada Democrat did not immediately return a request for comment.

Although King is not currently listed as cosponsor of every measure, all six senators laid out the proposals in opinion piece published in Politico. They also released statements emphasizing that the 2010 overhaul (PL 111-148, PL 111-152) is imperfect, with many expressing hope that lawmakers would work together to move forward with adjustments.

"I have long said there are some good pieces of the health care reform law and some pieces that need to be fixed," Heitkamp said. "Today, we're announcing needed fixes to improve the parts of the law that could work better for families and businesses across North Dakota–as I pledged to do since before joining the Senate. It only makes sense that we continue to improve on the law so it can help more families access affordable, quality health care."

According to a list of the proposals released by the senators, one bill (S 1729) that has already been introduced would add a copper plan to the platinum, gold, silver and bronze options already available on the insurance exchanges. Those categories are based on the percentage of the cost that the plan pays, and the copper plan would create a new lower-cost option with a high deductible that still meets the benefits requirements in the law.

The summary said the new plan "would give consumers more control over their own coverage, spur competition, and, most importantly, increase affordability."

The series also includes legislation (S 2069) that would make the law's small business tax credit available for a longer time frame and accessible to businesses with fewer than 50 employees rather that the current 25-employee threshold, the release says.

Another measure (S 1333) would restore startup funding for the non-profit health insurance cooperatives created under the law, which currently operate in 23 states.

The senators are also proposing legislation that would instruct state insurance regulators to develop models for selling insurance across state lines. The release said that would "help us discern the benefits and challenges of selling health insurance in this manner, and determine if it is a means to increasing choice and competition among plans–potentially driving down costs while maintaining quality and value."

Another measure would make the employer mandate requirements voluntary for employers with fewer than 100 employees, which the summary said is about 98 percent of businesses. Under current law, businesses with 50 or more employees generally have to provide coverage to their full-time employees or pay a penalty.

Other proposals in the series are aimed at simplifying businesses' reporting requirements for coverage and adjusting how family members working for the same employer are counted under the employer mandate.

The list also includes bills to provide "a permanent path for consumers to seamlessly enroll directly through insurers or certified web-based entities" in addition to the federal exchange website, and to boost access to agents and brokers on the exchanges.

"Beyond these proposals, there are more steps to take to help the health care reform law work better for employers and to continue to make sure premiums are affordable for all Americans," the senators wrote in Politico. "But let's stop trying to score political points by turning up the rhetoric and instead roll up our sleeves and get to work."

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New Hampshire Governor Signs Medicaid Expansion Bill

By Rebecca Adams, CQ HealthBeat Associate Editor

March 27, 2014 -- New Hampshire Democratic Gov. Maggie Hassan signed a bill last week that would expand the state's Medicaid program.

Twenty six states and the District of Columbia have now broadened eligibility for Medicaid, as the health care law (PL 111-148, PL 111-152) allows.

That does not count Pennsylvania, where GOP Gov. Tom Corbett is negotiating with the Centers for Medicare and Medicaid Services on a waiver proposal to expand eligibility. Corbett says that his plan does not require the approval of the legislature.

The New Hampshire state Senate cleared the bill.

The measure will expand coverage to about 50,000 New Hampshire residents.

"We are signing into law the most significant piece of health care legislation that the state of New Hampshire has seen in decades," said Hassan.

The state estimates that 10,000 to 12,000 adults could begin getting Medicaid subsidies to help pay for employer-based coverage under an existing state program within the next few months. Another 38,000 people would receive coverage through the state's Medicaid managed care program starting July 1 or as soon as possible after that.

Starting in 2016, the state will transition beneficiaries to a program modeled in part on similar programs approved in Arkansas, Iowa and Michigan. The state would use Medicaid dollars to buy marketplace plans. The state law would sunset that year unless the state legislature extended it.

If federal officials do not approve a waiver, then the temporary program that uses Medicaid dollars to subsidize employer-based coverage would end on June 30, 2015.

"Helping low-income workers purchase private coverage through the health insurance marketplace will support our efforts to attract competition in order to improve affordability and increase choices for coverage for all New Hampshire citizens," Hassan said.

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Odds May Be Growing of Full Appeals Court Review of Health Law Subsidies

By John Reichard, CQ HealthBeat Editor

March 26, 2014 -- Given the way oral arguments recently went in a case challenging subsidies issued under the health law, the administration may be especially glad that Senate Democrats last year exercised the "nuclear option" to ease appointments to the federal bench.

The move could wind up heading off a ruling by the influential U.S. Appeals Court for the District of Columbia that would be devastating to the health law—namely, that its subsidies to help low and moderate income Americans buy health insurance can only legally be granted to the residents of the 14 states and the District of Columbia that operate their own insurance exchanges.

Two members of the three-judge panel that heard the arguments in Halbig v. Sebelius seemed open to ending subsidies to the residents of the other 36 states and effectively wiping out an estimated $800 billion in federal dollars to help residents over the next decade defray the cost of insurance.

If the panel rules to limit the subsidies, the administration will be able to appeal the decision to the full 11-member court, which includes seven judges nominated by Democratic presidents.

The change in the Senate rule engineered by Majority Leader Harry Reid, D-Nev., had the effect of freeing three of Obama's nominees to the court who had been held up by Republican filibusters. Instead of a four-four split among judges appointed by Democrats and Republicans, the court now includes four jurists nominated by Obama.

Two of the three judges hearing the case involving the health law subsidies were appointed by Republicans and both appeared sympathetic to striking down the current system of subsidies.

A so-called "en banc" review by the full roster of judges at the court was tough to obtain prior to the three appointments, according to a 2012 CQ Weekly analysis.

A majority of the D.C. court has to approve en banc reviews, and in only one instance has it done so in its two prior terms.

"Almost certainly the Obama administration will go for en banc review with the post-nuclear option D.C. Circuit," Josh Blackman, an assistant professor at the South Texas College of Law, wrote in a recent blog post.

Blackman, the author of a book on the constitutional challenge to the health law, called the Halbig case "the more important case" argued last week, trumping the more highly publicized U.S. Supreme Court review of the law's contraceptive coverage requirement.

But Blackman also wrote that en banc review may very well not keep the Halbig case out of the Supreme Court. And he opined that if it gets there, the health law could be changed substantially.

"Even a divided en banc court is bound for One First Street," Blackman predicted. "I can see Breyer and Kagan having a problem with the government's position here," he said concerning Justices Elena Kagan and Stephen Breyer, both of whom were nominated by Democratic presidents. "NFIB deja vu? A compromise that allows states to receive the subsidies if they want them?" His reference was to the Supreme Court's June 2012 ruling that states under the Constitution can't be punished by the full withholding of Medicaid funds if they choose not to expand their programs.

Carrying that logic over to exchange subsidies means states would have to create their own exchanges if they wanted to get the subsidy dollars. One of the members of the three-judge panel, A. Raymond Randolph, explored that possibility during the recent arguments, asking whether states are free to open their own exchanges if they haven't done so.

Under the health law (PL 111-148, PL 111-152), they are—though the states as a general rule have to run them on their own without federal financial assistance starting in 2015. So the result could be either refusal by states to set up exchanges, or a slow movement across the country to exercise the option and qualify for subsidies.

That would resemble the battle over expanding Medicaid, another health law initiative that's now being fought state by state.

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Federal Website Glitches Hinder Medicaid Applicants from Gaining Coverage

By Rebecca Adams, CQ HealthBeat Associate Editor

March 25, 2014 -- More than 400,000 people who appear to qualify for Medicaid or the Children's Health Insurance Program (CHIP) are still waiting for their applications to be sent from the federal insurance exchange website to states for processing, according to state officials. Hundreds of thousands more whose applications have been sent to the states are in limbo as officials sift through duplicate applications and try to fix errors.

The consumers are among the approximately 1.3 million people nationwide whose applications were delayed since Oct. 1 because of technical glitches with the federal website, The site was supposed to seamlessly exchange information with states when it was launched six months ago. But despite administration assurances it would be ready in November, the start date was delayed months longer.

Most of the technical problems with were fixed by late November, to the relief of a White House trying to boost sign-ups during an open enrollment period. But the function that sends states any applications from people who appear to qualify for Medicaid or CHIP took months longer to fix.

As a result, applicants with the lowest incomes—including people unable to work because of chronic medical conditions, adults in low-wage jobs and poor families with children—either had to reapply with state agencies or wait for coverage confirmation that in some cases, never came. Some who didn't resubmit applications to states have waited to get their Medicaid coverage cards since October, the state Medicaid officials said.

States such as Georgia and Michigan still have not gotten any applications from the federal marketplace, nearly six months after people started applying, said state officials. The wait became so long that federal and state officials urged people to start the application process over with state agencies, a workaround that created duplicative applications and administrative headaches for local officials.

"Without a doubt, it's created a hardship for consumers," said Jeremiah Samples, assistant secretary for the West Virginia Department of Health and Human Resource. "We wish it didn't happen. We have done all we can to assist our consumers."

CQ HealthBeat contacted 24 of the 36 states connected to the federal site who are affected by the technical problem, focusing on those with at least 10,000 people whose income appeared to qualify for Medicaid, as federal officials reported in March. The states that discussed the data were Arizona, Arkansas, Florida, Georgia, Iowa, Illinois, Indiana, Michigan, New Mexico, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Utah, Virginia, and West Virginia.

Three of the 24 states—New Jersey, Tennessee, and Wisconsin—reported the number of applications received and processed but didn't have estimates of the people who were waiting. Kansas and Missouri officials did not respond.

Estimates of how many applications have not been sent to states are probably conservative. They do not include all the affected states and several only discussed the number of files they are expecting, not the number of individuals covered by the application.

In states that provided data for both applications and individuals, the average number of people represented by an application ranged from 1.5 individuals to 2.3 individuals.

The health care law offers expands medical coverage for low-income people and took steps to educate the public about benefits that existed before the law was enacted. But the technical problems and the resulting backlogs have slowed some consumers' ability to confirm enrollment.

The delay also affects state officials trying to administer health services, medical providers who expect to be paid for services provided and policymakers trying to understand the effects of the health law (PL 111-148, PL 111-152).

Federal officials envisioned a "no wrong door" approach that would enable people to apply for coverage at the federal or state level without having to worry whether they were eligible for subsidized plans in the health exchanges or Medicaid. But at least initially, the federal portal became the wrong door.

After it became apparent that the problems with the federal marketplace would not be fixed quickly, individuals were urged to reapply for coverage through state Medicaid programs, despite the extra administrative burden. The federal Centers for Medicare and Medicaid Services (CMS) officials offered to have a call center representative contact every person affected and use a script to encourage people to reapply through the state. Twenty-one states took the agency up on the offer, said a CMS spokeswoman, an acknowledgement that waiting to get enrolled through would likely take too long.

Some states that track the number of duplicate applications, such as Utah, said that about 20 percent of the applications that they are getting from are from people who are already enrolled in Medicaid. In Virginia, 35 percent are duplicates. In South Carolina and Texas, about 40 percent of the people are already enrolled or applied again at the state.

The data underscore how difficult it is to know how many people are actually enrolling in Medicaid or CHIP for the first time under the health care law.

Consumers who did not reapply through their state agencies could have seen their medical problems worsen during the months spent waiting. And though Medicaid coverage can be made retroactive as long as 90 days prior to when an individual applies, many eligible people are unaware of the feature. Some may also not want to seek out treatment, fearing high out-of-pocket costs. And doctors are generally wary of providing care to people who can't show a Medicaid card.

Most states started getting access to a backlog of applications in mid-January, after the technical glitches with the federal site were worked out. CMS officials in January notified states of 10 technical errors in the applications that had affected people who appear to qualify for Medicaid. Those errors have been fixed.

Though states were unable to access applications made with from the federal marketplace, local officials say they were able to send federal officials applications they received from people who appeared to qualify for marketplace plans.

Even now, some applications are hard to use. Some state officials say that the data contains extraneous information that's hard for their data systems to process, or that the transferred applications will not flow into the state data networks because of technical errors. Almost all the states said some applications contain errors or lack information that is needed to complete the application process, such as complete names and addresses.

Working through all of the backlogged files can take some time.

"It's been a problem," said Stephanie Goodman, the spokeswoman for the Texas Health and Human Services Commission. "The delay meant that a huge backlog of cases hit the state system all at once. Even worse, people have had to wait too long to get a decision and some families received bad information from the federal government. There were families applying for help through the marketplace who were mistakenly told they could get Medicaid even though they knew their incomes were too high to qualify."

Some states are trying to clean up the files and remove applications of people who are already enrolled. That is the case in Ohio, which is working on 106,624 applications from

In Arizona, more than 60,000 cases are in limbo as state officials work on converting and grouping the applications into a format they can use. Monica Coury, assistant director of intergovernmental relations at the Arizona Health Care Cost Containment System, which runs the state's Medicaid program, compares the process to one in which files are placed into a virtual "parking lot" until the state can upload them without technical errors.

"There is no end to the complexity of this project," said Coury. "But ultimately, this will all get worked out. It is just a slower process than anyone would have liked."

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