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March 7, 2011

Washington Health Policy Week in Review Archive 1a2354a9-b874-4b54-b347-e70a6d4cf0ab

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Obama's Support for Health Law Change Could Force States' Hands

By Jane Norman, CQ HealthBeat Associate Editor

February 28, 2011 -- President Obama’s support Monday for legislation that would let states opt out of the health law earlier than planned does not mean he is willing to compromise on the goal of making sure millions more Americans get health insurance, administration aides say. If such a measure passed, the nation’s governors would still be forced to deliver on the law’s goals.

And that’s why congressional Republicans don’t see Obama’s remarks to the National Governor’s Association as progress. They don’t see any change: The states would be implementing a law that GOP governors and lawmakers insist is a federal takeover of the health care system.

Obama told the governors, who were in Washington for their winter meeting, that he backs a “reasonable” bill (S 248) sponsored by Democratic Sens. Ron Wyden of Oregon and Mary L. Landrieu of Louisiana and Republican Sen. Scott P. Brown of Massachusetts. The measure would allow states to seek waivers from the law sooner than 2017, which is now the earliest date under which they can set up systems different from the federal approach. The waivers would be in effect for five years and could be renewed.

“I support it,’’ Obama said of the senators’ proposal. “It will give you flexibility more quickly, while still guaranteeing the American people reform.”

After Obama’s remarks, White House officials told reporters that the president is willing to be flexible on how the law’s goals are met and open to states taking more of the lead on implementation.
Republican governors have been denouncing the law and its Medicaid expansion, though most have started to implement it. If the Senate bill were passed, they could be under increased pressure to detail workable alternatives and make them succeed.

Liberal and conservative health-advocacy groups do agree on one impact of the bill Obama is now endorsing: They see it as a way to bring about single-payer systems in the states.

Senior administration officials, speaking on background to reporters, praised the progress that states are making on implementation and said today’s comments were a logical next step for Obama.

They denied that the administration is trying to provide states with a back-door way to get around the requirement that all Americans have insurance, and said they are merely trying to give states increased flexibility and innovation. The pitch to governors was in the same vein as the president’s support for repeal of a tax-reporting requirement in the law and new thinking on medical malpractice, they said.

“It’s something the president was intrigued by,” an official said of the Wyden-Brown bill. “It’s something that just made sense to come out and support now.”

Moving to center?
But Obama’s announcement again showed the administration tacking to the center on the law—and its unpopular individual mandate, which is under attack in Congress and the courts.

The administration suggested in a fact sheet that states could throw out the requirement that Americans have health insurance, the linchpin of the law (PL 111-148, PL 111-152). While the law includes a provision allowing states to opt out in 2017, the Senate bill would let them do that in 2014 when the individual mandate and other key provisions kick in. That would mean states that choose to pursue their own paths would never have to implement the overhaul.

The alternatives developed by states would still have to provide coverage that is as comprehensive and affordable as that available through the exchanges mandated by the law. And state plans could not increase the federal deficit. States would have to prove that the same number of residents would be covered as under the federal law.

It’s possible that states could come up with a way to achieve the goals of the law without the individual mandate, a senior administration official said. The mandate is “a means to an end” and it’s not yet clear how expanded coverage could be accomplished without it, the official said.

House Republican leaders said it wouldn’t do much good to move up the date when the entire law is flawed. “Our commitment is to repealing Obamacare and to delivering an alternative that really focuses on cost first,” said House Majority Leader Eric Cantor.

House Energy and Commerce Chairman Fred Upton, R-Mich., said the fact that states even have to be granted permission to seek waivers undermines the idea of flexibility. “A waiver program ensures governors remain under the thumb of unelected bureaucrats and it is highly improbable a state could receive a waiver without a massive expansion of Medicaid,” Upton said in a statement.

And a spokesman for House Ways and Means Chairman Dave Camp, R-Mich., said that “changing the messenger doesn’t change the message” and all the change would do is “deputize the states to carry out the same mandates that they don’t want to enact in the first place.”

Change measure a ‘correction’
Brown has characterized the bill as a “correction” to the health care law to ensure states are doing what’s best for their specific situations, rather than a repeal of the law. “The legislation provides flexibility and says that a one-size-fits-all health care system doesn’t fit the needs of every state,” Brown said.

He said in an e-mailed statement that he “strongly” opposes the health care law and “believes states should have the ability to implement their own plans that provide quality care for all their citizens. He added that he is “pleased President Obama is joining his effort to give states the tools they need to innovate.” Brown’s home state of Massachusetts already has enacted its own health care overhaul that covers nearly all the state’s citizens.

Wyden said when he introduced the bill on Feb. 1 that he and Brown were looking for a way to encourage innovation by the states and promote choice and competition in health care. Wyden and Brown had first raised this idea in November 2010.

Wyden also pointed out that unless the date is moved up, states would be faced with setting up one health care system that would go into effect in 2014 but would have to devise a second system if they wanted a waiver in 2017.

“It is going to put us through a lot of bureaucratic water torture to try to figure out how to synchronize those two dates,” said Wyden. “So it only makes sense to speed it all up and make it possible for everybody to get started in 2014.”

Wyden said the bill also would require the Department of Health and Human Services to begin reviewing state waiver applications within six months of enactment of the legislation. This would allow states to find out sooner whether their state waivers have been approved and would give them adequate time to roll out their state-specific plans, he said.

Obama told the governors he is “not open to refighting the battles of the last two years” over health care but he is “willing to work with anyone to make this law even better,” comments similar to those he made in his State of the Union address.

But some observers of the health policy scene saw a new route to a single-payer system. Michael Cannon of the conservative Cato Institute said that no state plan could begin to affect rising health costs in the Medicare and Medicaid programs. “Therefore, the only way that states could cover as many people as ObamaCare does is by using ObamaCare’s tactic of forcing people to buy exorbitantly costly health insurance,” Cannon wrote in a blog post. “And if they’re not going to use an individual mandate, the only remaining option is a single-payer health care system.”

At the same time, the liberal-leaning Consumer Watchdog group agreed that the idea would essentially put single-payer back on the table. “Obama is giving those of us who favor a public insurance option to the private insurance market an opportunity to move our states forward,” said Jamie Court, president of the group.

And the three-member Vermont congressional delegation, which wants to bring single-payer to Vermont, hailed the endorsement. “At a time when 50 million Americans lack health insurance and when the cost of health care continues to soar, it is my strong hope that Vermont will lead the nation in a new direction through a Medicare-for-all, single-payer approach,” said Sen. Bernard Sanders, an independent.

Meeting a waiver test
According to the administration’s fact sheet, some proposals that could qualify for state waivers and still meet the intention of the law include:

  • A system in which tax credits for small business are linked to tax credits for low-income families.
  • "Alternatives to the individual responsibility provision" such as automatically enrolling people in health plans, as long as the same outcomes are achieved. 
  •  Alternative plans that would “increase competition and provide consumers with additional choices.”
  • Increases in the number of benefit levels that would provide more choices for individuals and businesses in the health plans they have to choose among.
  • Allowing large businesses to immediately buy health insurance through the exchanges.

The administration also noted that states could submit a single application that includes Medicaid waiver requests that could, for example, allow people eligible for Medicaid to enroll in exchange plans.
Obama also plans to later this week issue a memorandum directing executive agencies to work with state and local governments to “reduce unnecessary regulatory and administrative burdens,” the administration said.

Jane Norman can be reached at [email protected]  

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Vinson Gives Health Care Law a Reprieve but Demands More Federal Action

By Jane Norman, CQ HealthBeat Associate Editor

March 3, 2011 -- Implementation of the health care law will move forward following an order by a federal district court member in Florida on Thursday, but a clearly impatient Judge Roger Vinson also ordered the government to move more quickly toward a definitive decision by the Supreme Court on the law’s constitutionality.

His demand contributes to the push among Republicans in Congress, governors and state attorneys general to see the constitutionality of the law settled by the high court at least within the next year — certainly before the next presidential election.

“It should not be at all difficult or challenging to ‘fast-track’ this case,” Vinson wrote in issuing a stay of his own Jan. 31 ruling that the entire health care overhaul law is unconstitutional. He said that his stay was conditional on the Department of Justice filing an appeal of his decision to the 11th Circuit Court of Appeals in Atlanta within seven business days.

“The sooner this issue is finally decided by the Supreme Court, the better off the entire nation will be,” wrote Vinson. “And yet, it has been more than one month from the entry of my order and judgment and still the defendants have not filed their notice of appeal.”

The order in the challenge to the law allows implementation to continue in the 26 states involved in the suit because otherwise, Vinson said, it would be “extremely disruptive,” echoing an argument by the Justice Department. Some state officials had said they were halting implementation because their interpretation was that the law (PL 111-148, PL 111-152) was no longer in effect in their states as a result of Vinson’s Jan. 31 ruling.

Alaska responds
The judge’s order had an immediate impact in Alaska, where GOP Gov. Sean Parnell said his state would “treat the federal health law as being in place.” Parnell had earlier said that since Alaska was one of the parties to the suit, the law was not in effect in that state.

“Going forward, Alaska will make decisions on a case-by-case basis whether the state will undertake with our own money or with federal money how to implement the provisions of the law,” Parnell said in a statement. “I continue to strongly prefer to use state resources for state-based health care solutions to increase access and improve affordability.”

Both sides found something to like in Vinson’s order. Tracy Schmaler, a Justice Department spokeswoman, said the government appreciated that Vinson considered the disruption that would be caused by halting action on the law and that it will “promptly’ comply with his order.

“We welcome the court’s granting of a stay to allow the current programs and consumer protections, including tax credits to small business and millions of dollars in federal grants to help states with health care costs, to continue pending our appeal in the Eleventh Circuit,” Schmaler said in a statement. But she added that the government strongly disagrees with the original ruling and continues to believe the law will stay intact.

“Today Judge Vinson did the responsible thing,” said Adam Winkler, a constitutional professor at the UCLA School of Law and a backer of the health care overhaul.

On the other side, Florida Attorney General Pam Bondi, who’s leading the case on behalf of the states, also hailed the order, saying states “are assured that there will be no more stalling from the federal government.” She added: “While we are disappointed that the stay was granted, we are satisfied that DOJ now has only seven days to file their appeal and seek expedited review or they will lose the stay.”

Legal experts who support the law acknowledged Vinson took shots at the Justice Department in his order about the government not moving quickly enough. But the government decided to first ask Vinson to clarify his ruling, and that lengthy brief was filed on Feb. 17.  “That took a bit of time but it took a bit of time for a good reason,” Winkler said.

It was not immediately clear how states would react to the ruling, experts said.

Among supporters of the law, Ron Pollack, executive director of the health advocacy group Families USA, called Thursday’s order a “victory for common sense” and said it would have been “bizarre and inappropriate for one judge to halt implementation of the entire law while appeals continue.”

But the National Federation for Independent Business, a party to the suit along with the 26 states, said a faster appeals process is good news for the plaintiffs as well.

“The government’s attempts to stymie the judicial process are simply prolonging the uncertainty surrounding the law and do a disservice to the states, small business owners and individuals who are seeking resolution,” said Karen Harned, executive director of the NFIB Small Business Center.

Judge details his thought process
Vinson said he weighed the four factors traditionally considered by courts in whether to grant a stay pending appeal:

  • Whether the applicants have made a strong showing they are likely to prevail.
  • Whether the applicants will be irreparably injured if a stay is not granted.
  • Whether issuing a stay will substantially injure the other parties interested in the case.
  • Where the public interest lies.

Vinson said that both sides have a likelihood of prevailing on appeal and the individual mandate provision has raised novel issues about the constitutional role of government on which there is sharp disagreement.

In addition, he said the law is “very complicated and expensive” to put in place, and the Justice Department argued it would be disruptive to halt its implementation. Vinson said he agreed on that point, though he explored arguments that it’s part of the strategy of supporters to make the law so entrenched it can’t be undone. Nonetheless, “it would be extremely disruptive and cause significant uncertainty” to grind to a halt, he said.

States argued the law is causing them to spend money to comply and so they should not have to implement it while the case is pending. But Vinson said “several unusual factors” argued in favor of a stay.

He noted that his original decision applied to the 26 states that joined the case. Michigan is one, yet a federal district court judge in Michigan has declared the law constitutional in a separate case now on appeal, with oral arguments set for May.

Secondly, states in the suit are taking different approaches on what the ruling means for implementation, he said. And there are states in which the governor and attorney general have taken opposite positions on the suit, he said. That includes Washington and Iowa.

"At this point in time and in light of all this uncertainty, it would be difficult to deny the defendants a stay pending appeal,” Vinson said, but he wanted it to be short.

“As I wrote about two weeks after this litigation was filed: ‘the citizens of this country have an interest in having this case resolved as soon as practically possible,’” Vinson said. “That was nearly eleven months ago. In the time since, the battle lines have been drawn, the relevant case law marshaled, and the legal arguments refined. Almost everyone agrees that the constitutionality of the Act is an issue that will ultimately have to be decided by the Supreme Court of the United States. It is very important to everyone in this country that this case move forward as soon as practically possible.”

Jane Norman can be reached at [email protected]  

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Medicaid Expansion Leaves States Asking for Creative Ways to Stretch

March 4, 2011 -- Arizona Gov. Jan Brewer wants to freeze the enrollment of childless adults in Medicaid. Pennsylvania Gov. Tom Corbett has dropped more than 40,000 adults from the state-federal program. The two are among Republican governors demanding Congress give them more flexibility to make changes under the health care program for the poor.

Their requests gained momentum in Congress last week as Republicans promised legislation to help states ease budget crises that governors say will only be exacerbated by the health care overhaul’s expansion of Medicaid.

House Republicans are floating proposals to cull Medicaid’s rolls by converting it into a block grant program—a priority for GOP governors—and tightening eligibility standards, known as maintenance-of-effort requirements, that were included in the health care overhaul.

Democrats and health law advocates are resisting. But President Obama signaled last week that he’s listening when he said he supports bipartisan legislation to move up the date when states could opt out of the health law as long as they meet its goals.

Block grants might not make it through Congress any time soon. The opt-out measure (S 248) sponsored by Democrat Ron Wyden, Ore., and Republican Scott Brown, Mass., also isn’t given much of a chance.

But the debate gives Republicans another chance to air criticisms of the health care law (PL 111-148, PL 111-152). The efforts also show that the traditional federal-state Medicaid partnership is in upheaval. Many Republicans who have taken over statehouses have close ties to Congress and big ambitions beyond their capitals. Ohio Gov. John R. Kasich is a former House Budget Committee chairman. Mississippi Gov. Haley Barbour is a potential presidential candidate.

Democratic governors are struggling as well but are not as openly critical. New York Gov. Andrew M. Cuomo did propose a 2 percent across-the-board Medicaid cut for hospitals and nursing homes. But Massachusetts Gov. Deval Patrick told a congressional panel last week that rising health care costs pose the most problems for his state.

Flexibility has become the buzzword for governors. States determine in general what services to deliver through Medicaid, how care will be delivered and how much providers will be paid. Who is covered, though, is a federal requirement and that’s what they’re complaining about. The health law’s eligibility section requires states to keep their current guidelines for most adults until 2014 and children until 2019.

States that expanded eligibility during better economic times now want to scale it back. Administration officials say they’re reviewing whether they have the legal authority to waive the requirements — but that big of a concession seems unlikely.

Republican governors want federal Medicaid money as block grants that would allow them to manage their own spending. Medicaid will expand in a big way in 2014 when the health law opens the program to nearly all Americans under 65 who earn up to 133 percent of the federal poverty level. Though the federal government will foot the bill for 100 percent of the expansion through 2016, scaling back to 90 percent by 2020, Republican governors say they’re facing staggering costs.

Democrats warn that block grants could lead the vulnerable to lose coverage. California Rep. Henry A. Waxman says Medicaid is “extremely efficient” as it is and spending growth for each enrollee is less than increases in private insurance premiums.

Rep. Joe Pitts of Pennsylvania, the Republican chairman of Energy and Commerce’s health subcommittee, says he will introduce a bill to change the eligibility or maintenance-of-effort rules and make Medicaid a block-grant program. Sen. Orrin G. Hatch, the top Republican on the Finance Committee, bluntly says that block-grant legislation “isn’t going to go anywhere this year,” though Republicans are “trying to get people to wake up and realize that the principles of federalism work better if you get the states really involved.” In line with that, Hatch also will soon introduce eligibility legislation, aides say.

Curbing Medicaid spending is enormously difficult. Just 1 percent of all Medicaid beneficiaries account for 25 percent of all expenditures. The elderly — many in nursing homes — and people with disabilities are the most costly enrollees, even though children and their parents make up most of the program’s population. States asking for waivers to cut costs complain the Centers for Medicare and Medicaid Services is slow to respond, taking a year or more for a green light.

The White House says it’s heard the clamor. Obama asked members of the National Governors Association to name a bipartisan contingent to work with the federal government to lower costs for people who qualify for both Medicare and Medicaid. Teams of officials have been sent to states to comb through Medicaid costs. Obama said the health care law ultimately will rein in costs. “But we understand the pressures you’re under,” he said.

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First Steps on Comparative Effectiveness Grants Expected Next Week

By Rebecca Adams, CQ HealthBeat Associate Editor

March 4, 2011 -- The new nonprofit institute that will provide federal funds for comparative effectiveness research may be ready to move forward on some grant awards after a two-day meeting that starts Monday, March 7, in St. Louis.

The Patient-Centered Outcomes Research Institute (PCORI) was created last fall under authority in the 2010 health care law (PL 111-148, PL 111-152) to provide a stable source of funding for studies that compare the effectiveness of various treatments and ways of delivering care for the same condition. During the health care debate, the topic of comparative effectiveness research became controversial. Republicans feared that Medicare officials eventually will use study findings to deny care for treatments that are seen as less effective for most people than other alternatives.

At the meeting next week, members of different committees on the board will propose work plans to the rest of the panel members. The program development committee, which is the group that will guide the research agenda of the institute after gathering public input, will present its initial plans for the next six to 12 months on Monday afternoon.

Board of governors vice chairman Steven Lipstein said in an interview that the program development committee will probably recommend that PCORI make some initial grants to groups that can help the institute decide such issues as how to best disseminate research findings and increase the likelihood that clinicians will use the studies as they are weighing different treatment options for patients. The idea is that even before the institute starts handing out funding for research on specific treatments or delivery of care models, officials should commission some work that could inform the process of setting a research agenda and helping the public understand how to use findings.

Lipstein predicted that the board of governors could reach a consensus either at this two-day meeting or at the next one about what types of grants to pursue. Lipstein said that the awards could go to a variety of organizations—potentially including patient advocacy organizations, stakeholder groups for discussion forums, researchers, market research experts for focus groups.

The institute is still in the early stages of its work. The board of governors has met twice since October and has established a committee to guide research methodology. The board hopes to hire a director by the end of April.

Rebecca Adams can be reached at [email protected]  

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Early Retiree Insurance Subsidies Reach 5,000 Employers

By CQ Staff

March 2, 2011 -- More than 5,000 employers have kept 61,000 retirees on their health insurance plans as a result of the subsidies they’ve gotten from the Early Retiree Reinsurance Program, created by the health law as a bridge to 2014 when the health exchanges will give them easier and more affordable access to insurance.

Health and Human Services (HHS) officials released a report Wednesday detailing the results of the program. As of the end of 2010, the federal government had distributed $535 million to companies, state and local governments, educational institutions, unions and nonprofit organizations.

“The Early Retiree Reinsurance Program is helping to control health care costs and protect coverage for early retirees and their families,” HHS Secretary Kathleen Sebelius said in releasing the report. “This program is providing critical financial relief to help states, private employers and other organizations preserve access to affordable health coverage for millions of Americans.”

HHS officials said beyond the 61,000 retirees who might not have been able to stay on their former employers’ plans without this program, there are indirect benefits to existing employees, dependents and spouses because of lowered health care costs. HHS estimated that the subsidies have helped to benefit more than 4.5 million Americans.

The report also points out that the percentage of large firms that provide retiree health coverage dropped from 66 percent in 1988 to 29 percent in 2009. Health insurance premiums for older Americans cost four times more than for young adults. The deductibles for these enrollees pay is, on average, almost four times that in a typical employer-sponsored insurance plan, HHS officials said.

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Central Line Infections in ICUs Down But Progress Needed Elsewhere

By Dena Bunis, CQ HealthBeat Managing Editor

March 1, 2011 -- Collaborations between hospitals and public health officials at all levels have led to a sharp decline in the number of bloodstream infections in intensive care unit patients with central lines. Such efforts now need to be expanded to include patients who get care in other settings, say officials at the Centers for Disease Control and Prevention (CDC), commenting Tuesday on the release of a new Vital Signs report.

The report showed that ICU central line infections decreased by 58 percent from 2001 to 2009. It also says that the reduction represents a savings of as many as 27,000 lives and $1.8 billion in excess health care costs. According to the CDC, bloodstream infections in patients with central lines can kill as many as one in four patients who get one.

Beyond the ICU findings, the report estimates that about 60,000 bloodstream infections occurred in patients with central lines in non-ICU health care settings such as hospital wards and kidney dialysis clinics. About 23,000 of these occurred in non-ICU patients in 2009 and about 37,000 infections occurred in dialysis clinics patients in 2008.

“What this shows is when you have clear evidence-based practices and you have a way to measure the outcome, progress can be made, especially when the government and the CDC focus on it,’’ said Donald Goldman, senior vice president at the Institute for Healthcare Improvement in Cambridge, a professor of pediatrics at Harvard Medical School and of immunology and infectious diseases at the Harvard School of Public Health.

Goldmann said this problem of infections from central lines has been known for some time and that beyond the federal push to contain it many states now have mandatory reporting for this type of infection.
Translating the ICU success to inpatient hospital wards and dialysis clinics will be somewhat tougher, he said. "The evidence is still accumulating. Dialysis patients are tough," he added, “because those catheters are in for a long time and it’s tough to control those infections."

Infections are one of the leading causes of hospitalization and death for hemodialysis patients, CDC officials say. At any given time, about 350,000 people are receiving hemodialysis treatment for kidney failure. Seven in 10 patients who receive dialysis begin that treatment through a central line.

“Preventing bloodstream infections is not only possible, it should be expected,’’ said CDC Director Thomas R. Frieden. “Meticulous insertion and care of the central line by all members of the clinical care team including doctors, nurses and others at the bedside is essential. The next step is to apply what we’ve learned from this to other health care settings and other health care–associated conditions, so that all patients are protected.”

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