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November 7, 2016

Washington Health Policy Week in Review Archive a91582d1-bd67-4c02-b38e-7d66e1a2ac74

Newsletter Article


Uninsured Rate Ticks Down Again

By Erin Mershon, CQ Roll Call

November 3, 2016 -- The nation's uninsured rate fell to 8.9 percent in the first six months of this year, according to new Centers for Disease Control and Prevention (CDC) data.

The low is not significantly different from the record lows at the end of last year, when the rate was 9.1 percent. The new survey results show that about 28.4 million people remain uninsured, which is 20.2 million fewer than in 2010, before the health law passed.

The 8.9 percent uninsured rate is the lowest rate that the CDC has reported for a six-month period. The CDC previously published data showing an uninsured rate of 8.6 percent in just the first three months of 2016.

The Obama administration has touted the ongoing and historic drops in the uninsured rate as one of the major successes of the 2010 health care overhaul, amid ongoing criticism that coverage under the law is unaffordable.

But the new data don't show a major change in the number of people who signed up for insurance coverage on the law's health exchanges between 2015 and 2016. About 9.4 million adults aged 18 through 64 got their health insurance on the exchanges in the second quarter of 2016, up from 9.3 million in the same period the year before.

The administration hopes to sign up 13.7 million people for 2017 plans during the open enrollment period that started this week, about a million more people than during the last sign-up period. Officials expect average monthly enrollment for 2017 to be 11.4 million. Later in the year, enrollment numbers are often lower because people drop or switch coverage, or fail to pay their premiums.

The CDC figures break out the uninsured rate among adults who are 18 to 64 years old, which is 12.4 percent. For children, about 5.0 percent are uninsured.

The survey also found that across all types of insurance, Americans are increasingly enrolling in high-deductible health plans, which are often cheaper but cover fewer services upfront. Now, 38.8 percent of Americans with private coverage are enrolled in high-deductible plans, up from 25.3 percent before the health law passed.

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Newsletter Article


Congress Faces Complex Fight Over Children's Insurance Program

By Erin Mershon, CQ Roll Call

October 31, 2016 -- Renewal of the Children's Health Insurance Program (CHIP) could be among the first major pieces of health care legislation to come before Congress next year, and advocates are already concerned that the traditionally popular program's funding extension could become bogged down with more partisan health proposals.

Funding for the CHIP program expires at the end of the 2017 fiscal year, but state officials and governors are preparing to push Congress to reauthorize the program earlier to give state legislatures, many of which adjourn in the spring or summer, time to incorporate funding into their budgets for the year.

Children's health advocates and state officials have already begun meeting with relevant congressional committees and one another to discuss the pending funding extension, they said in interviews. A coalition of more than 50 groups sent a letter to congressional leaders calling for "swift congressional action" earlier this month.

That optimistic timeline, however, would put the CHIP program on the legislative agenda during the new presidential administration's first 100 days—a time when the new administration is likely to push for campaign agenda items. Lawmakers may seek legislative "fixes" to the struggling 2010 health law or efforts to address financial shortfalls in Puerto Rico's struggling Medicaid program—and advocates are already concerned that a must-pass health care bill could become a vehicle for those efforts.

"We're not excited that CHIP could become the train. That does worry us, that people will try to Christmas tree this package," said Bruce Lesley, president of the children's health group First Focus, referring to efforts to hang other legislation on CHIP. "The policy is just complicated enough that it's not going to be simple" even without the addition of other partisan policies, he said.

"We're always concerned that something could bog down a bipartisan program like CHIP. . . . That's in the back of my head for sure," said Peter Eckrich, legislative director for the health and human services committee at the National Governors Association.

Congressional staffers for key committees in both chambers said it was too early to describe the outlines of the CHIP reauthorization package, but several lobbyists told CQ that Republicans on the Hill hoped to pass a relatively "clean" CHIP package.

"What can't happen is to have kids kind of caught in the grinder of healthcare political dysfunction we've had for the past couple years," said Larry McNeely, policy director for the National Coalition on Health Care.

Key CHIP Provisions

Even without controversial additions, the CHIP reauthorization itself could be complex. The easiest path would be a clean extension of the program's funding for two years. That would sidestep the need to reevaluate its funding levels, which were set by the health law and expire in 2019.

But many children's health advocates plan to push for at least a four-year extension, in part because the other options for children seeking health insurance, such as the public exchange plans created by the health law, typically provide coverage that is more expensive and less comprehensive for children. Officials for the exchanges are also struggling to build competitive insurance markets and constrain costs.

The Medicaid and CHIP Payment and Access Commission is set to consider its own recommendations to Congress on this issue later this week, and could vote on an official recommendation by December, staff said. Several advocates expect the commission will vote this year for an extension longer than two years, in part because of the troubles the exchanges currently face.

"CHIP was designed with kids in mind. That's the key to this," said Jim Kaufman, vice president of public policy at the Children's Hospital Association. "When you look at some of these other potential coverage options, there's big gaps in networks, benefits, affordability. That's why we've got to keep CHIP in place while you look at improving these other potential coverage options for kids."

A longer extension, however, would need to be paired with a full reauthorization of the program that will force lawmakers to consider whether they want to extend the 23 percentage point increase in CHIP funding that was in the 2010 health law—a provision popular with states, but one that will increase the package's price tag.

A longer extension would also open up a controversial debate over so-called maintenance of eligibility requirements, a part of the health law that will also expire when the CHIP authorization does. That provision prevents states from imposing any new eligibility requirements or enrollment limits on their Medicaid or CHIP populations.

Some states, especially those facing budget shortfalls, would like to see more flexibility on their eligibility requirements. Consumer advocates, however, warn that such changes could limit access to care.

Last year, Republicans offered a draft measure that would have eliminated both the enhanced funding levels and the health law eligibility requirement provisions. Democrats, meanwhile, offered bills in both chambers that would have extended both (HR 919, S 522).

The availability of offsets will also play a large role in determining what Congress does and does not add to the package. The last CHIP funding extension, which permitted the enhanced matching rates for two years, cost $7 billion, according to the Congressional Budget Office. Estimating the 2017 extension, however, could be much more complicated, since the CBO director would be relying on assumptions about whether changes to the maintenance-of-effort requirements or the enhanced funding rates would cause some states to push more children onto the exchanges, which offer more expensive coverage.

Other Expiring Provisions

Even if the package isn't bogged down with partisan health law changes, it may nevertheless act as a vehicle for other popular—but costly—health care provisions often referred to as "health care extenders." That list of provisions includes funding for community health centers and rural hospitals, as well as a repeal of the so-called Medicare therapy caps.

Until now, many of those provisions were repeatedly addressed when Congress tackled the so-called "doc fix" to repeal the much-maligned sustainable growth rate (SGR). But Congress passed its permanent repeal of the SGR last year—without making permanent all of the extender provisions at the same time. Instead, many of the provisions are set to expire at the end of the 2017 calendar year.

That doesn't make their inclusion on the CHIP package inevitable, especially since the expirations are several months apart. But advocates for the various provisions are nonetheless beginning to meet and discuss their strategies for next year, several told CQ Roll Call. All said they want to make sure Congress doesn't feel it has to choose between the popular programs. 

Regardless of the full scope of the eventual package, advocates said they remain confident Congress will act on CHIP before it expires.

"There's a lot of strong, bipartisan support for CHIP," Kaufmann said. "Some of the details like what's going to play out with whether MOE is extended, is [the enhanced funding rate] fully funded—I think some of those things still need to be discussed. But 'yes, we have to do CHIP next year' is the overarching comment we're hearing."

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Newsletter Article


Medicare Posts 2017 Rule on Doctors' Pay, Diabetes Program

By Kerry Young, CQ Roll Call 

November 2, 2016 -- Medicare on Wednesday released the final version of its 2017 update on payments for physicians, along with new policies to expand the giant federal health program's efforts to prevent diabetes.

The rule also expands the use of telehealth services for people enrolled in Medicare, which serves senior citizens and people with disabilities. CMS is adding new codes to cover telehealth for discussions related to how people want to be treated near the end of their lives, known as advance care planning. Medicare payment for end-of-life discussions is relatively new. Last year's rule created payments for the time doctors spend counseling patients on their treatment options in case of terminal illness or severe declines in health.

CMS also added a telehealth code related to consultations for people undergoing dialysis.

The regulation increased reimbursements for doctors who care for patients with multiple chronic conditions and mental and behavioral health issues.

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MedPAC Hones in on Hospital Doctor Pay Disparity

By Kerry Young, CQ Roll Call

November 3, 2016 -- An influential federal advisory panel on Thursday discussed ways to adjust Medicare policies so hospital-owned practices are not paid more than independent practices.

Medicare's "current policies have been a major contributor to the degree to which hospitals are employing physicians," said Paul Ginsburg, a member of the Medicare Payment Advisory Commission (MedPAC) and a researcher at the Brookings Institution, at Thursday's meeting. "It's a trend that really concerns me."

MedPAC has for several years been calling attention to the cascading effects of hospitals' acquisitions of physician practices. The giant federal health program pays more for similar or identical care when hospitals own doctors' offices because hospitals can bill for services under Medicare's outpatient rules, while independent practices rely on Medicare's less lucrative physician fee payments.

"We often hear that physicians' productivity falls when they become part of a hospital," Ginsburg said, adding that the acquisition of doctors' practices often is driven by an interest in boosting business and not necessarily to improve the quality of care or lower costs.

MedPAC members and staff noted both the immediate cost and long-term effects of having two payment policies cover the same kinds of care. The Congressional Budget Office last year said blocking higher hospital payment rates for many new off-campus departments through last year's budget deal (PL 114-74) could save $9.3 billion over a decade.

Medicare in a single year, 2015, paid $1.6 billion more for certain services, known as evaluation and management, because the practices providing them were owned by hospitals, MedPAC analyst Jeff Stensland on Thursday told the panel. In his presentation, Stensland noted concerns about hospitals seeking to game the system to boost their payments. He did not elaborate.

MedPAC members seemed unimpressed with a step that Congress took last year to reduce hospitals' incentive to continue to acquire doctors' practices. The Centers for Medicare and Medicaid Services on Tuesday unveiled its initial plan for implementing a mandate of last year's budget deal. It cuts off the higher pay for many off-campus physician offices that hospitals may open in the future. Satellite physician offices that were running when the law took effect can continue to collect Medicare's higher outpatient pay, instead of the lower reimbursement rates for physicians.

"I don't think what Congress did late last year was really that much compared to what the commission worked out before as policy recommendations," Ginsburg said. "I'd like to see us get back to that" topic.

MedPAC in 2014 recommended reducing or eliminating differences in payment rates between outpatient departments and physician offices for many services. The panel staff and members on Thursday indicated strong continued support for this direction.

MedPAC could touch on some of these themes next month as it crafts detailed suggestions addressing the 2018 payment rates for hospitals and a wide variety of health services. The panel tends to vote on specific recommendations in January for a March report to Congress.

MedPAC also present Congress with reports in June that examine broader trends and issues for Medicare. Aspects of the Thursday discussion on consolidation might be contenders for a future June MedPAC report.

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Newsletter Article


MedPAC Examines How Medicare Premium Support Might Work

By Kerry Young, CQ Roll Call

November 3, 2016 -- Congress's advisers on Medicare are studying what steps would be needed if lawmakers eventually were to shift the giant federal health entitlement program to a so-called premium support model designed to restrain spending. House Republicans have called for making such a change.

The Medicare Payment Advisory Commission (MedPAC) intends to offer lawmakers a review of these options in its June 2017 report, said Eric Rollins, an analyst with the panel. MedPAC will not make formal suggestions to Congress on this topic next year.

"We are not going to recommend for or against premium support," said Paul Ginsburg, a MedPAC member and healthy policy researcher with the Brookings Institution and the University of Southern California.

Ginsburg said he expects Congress at some point to take a serious look at the concept of premium support, although it's currently unlikely to do so at this time. MedPAC's work this year will help prepare lawmakers for eventual discussions of this approach to managing Medicare, he said.

MedPAC intends to outline possible paths and pitfalls toward a more competitive system for administering health benefits for senior citizens and people with disabilities. Traditional fee-for-service Medicare might compete with insurer-run Advantage plans under this system, Rollins said in his briefing. People enrolled in Medicare could avoid higher premiums by seeking out plans with lower costs in this new model, MedPAC's Rollins said.

House Republicans earlier this year called for a move toward premium support as part of their policy paper on health care. In the House GOP model, people on Medicare would be given a choice of insurer-run plans and traditional Medicare starting in 2024. In the paper, House Republicans note that the idea of premium support "is based on a long history of bipartisan reform plans, including the 1999 Breaux-Thomas Commission and the 2010 Domenici-Rivlin Report."

Many Democrats oppose the notion of a move to premium support. At this time, the majority—or about 70 percent—of people enrolled in Medicare have stuck with the fee-for-service program that allows them to visit any physician or provider that accepts Medicare payments, although insurer-run Advantage plans often offer additional benefits such as dental care.

The prospect of more out-of-pocket costs for beneficiaries likely will prove a hurdle for lawmakers who want to shift to premium support. Willis D. Gradison Jr., a MedPAC member who represented an Ohio district in the House from 1975 through 1993, raised this political consideration.

"I don't see how you are going to get anymore from Miami, Florida, to vote for this," said Gradison, citing an area with historically high Medicare costs. Gradison was a member of the Health Subcommittee of the House Ways and Means Committee.

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Newsletter Article


Seniors Opt Out of Full Coverage, Lower Medicare Plans' Profits

By Kerry Young, CQ Roll Call

November 4, 2016 -- Medicare may be shortchanging insurers because its calculations ignore the growing number of wealthy and working senior citizens who chose not to fully enroll in the giant health program, the staff of a federal advisory panel said Friday. They estimated that insurers would gain $20 billion over a decade if Medicare rules were to better reflect the number of people opting out.

"We think what's happening right now is not fair to the managed care plans," said Mark E. Miller, the executive director of the Medicare Payment Advisory Commission (MedPAC), at a Friday meeting. "There are some dollars that should go back into the baseline to benefit the plans."

MedPAC is working on its 2017 suggestions to Congress regarding the continual financial battles between the insurance industry and Medicare. MedPAC on Friday also revisited concerns that some insurers may be identifying customers in their Medicare Advantage plans as sicker than they are to secure extra pay.

Medicare sets payments for the Advantage plans by looking at how much the traditional fee-for-service program spends. These calculations factor in spending in both major components of Medicare: the Part A section that covers hospital care and Part B that covers more routine care such as visits to doctors.

A small but growing number of people opt out of Medicare Part B while remaining in Part A, MedPAC staff said Friday. This group grew to 12.4 percent of Medicare's population in 2015 from 10.2 percent in 2009. People who opt out of Part B also appear to be in better general health, reducing the hospital bills for Part A as well, said Scott Harrison, an analyst with MedPAC. This may cause further distortion in setting reimbursements for Advantage plans.

Sticker shock about Medicare Part B premiums appears to be driving the decision to opt out in many cases. Some people do decline Part B because they continue working and thus have health insurance provided by their insurers, Harrison said. More often, though, people might make this call because they can't afford Part B premiums or decide that that are a bad deal. Affluent couples with annual income topping $428,000, for example, face a premium of nearly $400 a month.

"They just decide that's it's not worth it," he told MedPAC members.

MedPAC members didn't cast formal votes or go through informal straw polling on Friday, saving these steps for later in its deliberations on 2017 recommendations.

Many members expressed support in informal discussions for addressing this disparity, such as by switching to use data from people enrolled in both Part A and Part B to set Advantage benchmarks. That would eliminate financial data regarding the people who only receive Part A coverage. There were not as many people opting out of Part B when Medicare designed Advantage plans, said Jack Hoadley, a member of MedPAC and a researcher at Georgetown University.

"There's a logic to fixing it," he said.

MedPAC member David Nerenz questioned whether it would be worth the hours needed to address the issue, given that the impact may be relatively small.

Payments to Advantage plans would rise by 1 percent, or $20 billion, over 10 years if the benchmark were limited to comparisons of people enrolled in Part A and Part B, according to MedPAC staff. In contrast, Medicare's board of trustees predicts total payments to private Medicare plans will rise to $386.2 billion by 2025 from $172 billion last year.

The increased privatization of Medicare may give extra weight to questions of Advantage payment policies. About 32 percent of people enrolled in Medicare last year opted for managed care plans over the traditional fee-for-service form of the program, up from 24 percent in 2009, MedPAC staff said.

MedPAC members also wrestled Friday with a question at the heart of efforts to expand insurers' participation in Medicare. Advocates for Advantage plans argue that insurers actively note their customers' illnesses in order to better coordinate their medical care. This approach is expected to reduce costs in the long run, as it can help people avoid some hospital stays and better preserve their health.

Still, there are questions about some insurers' intentions, as in some cases there is little follow-up for care for chronic conditions among Advantage customers. Recording these illnesses raises pay for Advantage plans through a step known as risk coding. Diagnosing congestive heart failure in an 84-year-old male customer, for example, would raised 2013 payments to an Advantage plan by $3,116 to a total of $7,924, MedPAC told Congress in a report last year.

MedPAC research suggests it may be very common for insurers to report chronic conditions such as heart failure in their Advantage plan customers and then provide little or no follow-up care. Looking at 2012 data, MedPAC found there was no documentation of care for chronic conditions noted on health risk assessments done for people in Advantage plans, the commission told Congress in a report this year.

There's open discussion among insurance officials about aggressive coding, Miller told MedPAC commissioners Friday. Industry officials talk about competitors who hire consultants to try to boost risk scores, he said.

"There are lots of managed care plans that are pointing fingers at each other," Miller said, without identifying any of the companies involved.

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